October 12, 2017
The same day that it ran a front page story that hyped fears of huge tariffs in the event that NAFTA is repealed, the NYT ran a column highlighting the problems of protectionism. Incredibly, the column was pushing for stronger protectionism in the form of better enforcement of copyright monopolies, without any recognition that it was pushing protectionism.
This is a great example of how elite types push protectionist policies to benefit themselves, with zero recognition that they are pushing protectionism. If anyone is confused, copyright protection is a type of protectionism, unlike the tariffs of 5–10 percent that we might see if NAFTA is repealed, copyrights raise the price of protected items by many thousand percent above their free market price.
Books, software, recorded music, movies, and other video material that could be transferred at near zero cost in the absence of copyright protection instead become hugely costly. All the models that economists use (and journalists imperfectly internalize) that show the waste caused by tariffs raising prices above the free market price apply to copyright (and patent) protection as well, except the sums involved are several orders of magnitude larger in the case of copyright protection.
Of course copyright monopolies do serve an important purpose, they provide an incentive to do creative work. However there are other more modern and efficient mechanisms that can be used. For example, I outline a tax credit system modeled on the charitable contribution tax deduction in chapter 5 of Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer (it’s free). (Seattle is doing something comparable now by giving voters vouchers for campaign contributions.)
Unfortunately, instead of considering alternatives to copyright monopolies, our elites are prepared to use ever more intrusive laws and tools for enforcement. And then they ridicule the less-educated workers who suffer from the upward redistribution caused by patent and copyright protection for not having the skills needed to succeed in the modern economy.
Comments