Strengthening copyright protections does two things. On the one hand, it increases the incentives for creating new works because it makes it easier to make more money off of them. On the other hand, it increases the costs of creating new works because it makes it harder to pull ideas out of the common culture. Lots of Shakespeare’s plays–The Merchant of Venice comes to mind–were pretty clearly stolen in some sense from other works floating around at the time; he stole the plots and made the writing better. Lots of Disney’s movies (and, no doubt, other studios’ movies as well) are based on traditional folk stories or other things that were for whatever reason in the public domain. Making the public domain smaller by increasing copyright terms or the scope of what’s considered infringement makes it harder to create new works.
What’s more, there’s an assymetry at play here–stronger copyright increases the incentive to create commercial works but increases the costs of creating commercial and non-commercial works alike. Consequently, when copyright is weakened or (as has invariably been the case) strengthened, you shift the balance of power between commercial and non-commercial uses. There are some real tradeoffs here and a real need for balance.
I don’t think we really disagree here. The key phrase in my original post was “well-designed.” Our current copyright system isn’t especially well designed. Most obviously, copyright terms are far too long. The courts also do a poor job of protecting fair use–especially in audio and video markets, where it’s been all but obliterated.
So I’m certainly not making an argument for further strengthening the copyright system. I agree with Matt that copyright law is too broad and ought to be reformed. But that’s not the same as saying that copyright should be abolished, which is what Mr. Levine advocates. If you weaken copyright too much, you undermine the incentive for creativity so much that you would significantly undermine the creation of certain kinds of copyrighted works.