The History of Trade and Copyright

by on April 25, 2008 · 5 comments

Dingel points to a paper (non-paywalled draft here) exploring the historical connection between the free trade movement and the movement for worldwide copyright harmonization:

Free traders failed repeatedly for sixty years after the end of the Civil War to reduce the average tariff to its immediate prewar level. They failed despite making a case that, by comparison with the one made for free trade today, was compelling. Speci?cally, the principles of free labor engendered an antimonopoly argument for trade. Free trade, its advocates argued, would eliminate the special privileges granted to producers in speci?c industries, most notably cotton goods, iron, and steel. It would promote competition, lower prices, and raise consumers’ real incomes…

Carey attempted to turn the tables on the free traders: he argued that free trade promoted monopoly, and protection mitigated it. His conviction was sincere—but that particular part of his argument was unpersuasive, and relatively few of his followers bothered to repeat it. He was much more persuasive in arguing that international copyright promoted monopoly. In the face of the latter argument, the proponents of free trade and international copyright were put on the defensive…

One wonders whether the tireless advocacy of international copyright by free traders like Bryant—who framed the cause as one inextricably related to free trade—hindered the advancement of their principal cause. The long-awaited sweeping tariff reductions were deferred until 1913. Might the wait have been shorter if the antimonopoly credentials of the free-trade advocates had not been called into question?

This is a fascinating question. One of the things I find really interesting about the 19th century political debate is that the opposing political coalitions were more sensibly aligned, perhaps because people had a slightly clearer sense of what was at stake. My impression (which may be wrong in its details) is that the free traders tended to be liberals and economic populists. They clearly understood that protectionism brought about a transfer of wealth from relatively poor consumers to relatively wealthy business interests. In the opposing coalition were a coalition of business interests and xenophobes making fundamentally mercantilist arguments about economic nationalism.

Today’s free trade debate is much weirder, because there are enough businesses who want to export things that significant parts of the business community are for freer trade. On the other hand, the liberals who fancy themselves defenders of relatively poor consumers find themselves in bed with predatory industries like sugar and stell that have been using trade barriers to gouge consumers. And the “trade” debate has increasingly come to be focused on issues that don’t actually have much to do with trade, whether it’s labor and environmental “standards,” copyright and patent requirements, working retraining programs, cross-border subsidies, etc.

I suspect part of what’s happening is that in the United States, at least, consumers are so rich that they really don’t notice the remaining costs of protectionism. A T-shirt at Target might cost $10 instead of the $8 it would cost if there were no trade barriers with China, but this is such a tiny fraction of the average American’s budget that they don’t really care. Likewise, if the domestic price of rice or flour were to double, a significant number of Americans wouldn’t even notice. In contrast, in the 19th century, we were still poor enough that a 10 or 20 percent increase in the price of basic staples might be the difference between being able to afford meat once a week or having to skip meals once in a while to make ends meet. We may now be rich enough that we can afford to be politically clueless.

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