Classic article by Samuel Edward Konkin III, reprinted on LRC today (see also Lew’s post Remembering Samuel Edward Konkin III). My favorite part? “Is not a producer entitled to the fruit of his labor? Sure, that’s why writers are paid. But if I make a copy of a shoe or a table or a fireplace log (with my little copied axe) does the cobbler or wood worker or woodchopper collect a royalty? … A. J. Galambos, bless his anarchoheart, attempted to take copyrights and patents to their logical conclusion. Every time we break a stick, Ug The First should collect a royalty. Ideas are property, he says; madness and chaos result.”
by Samuel Edward Konkin III
Having done every step of production in the publishing industry, both for myself and others, I have one irrefutable empirical conclusion about the economic effect of copyrights on prices and wages: nada. Zero. Nihil. So negligible you’d need a Geiger counter to measure it.
Before I move on to exactly what copyrights do have an impact on, one may be interested as to why the praxeological negligibility of this tariff. The answer is found in the peculiar nature of publishing. There are big publishers and small publishers and very, very few in between. For the Big Boys, royalties are a fraction of one percent of multi-million press runs. They lose more money from bureaucratic interstices and round-off error. The small publishers are largely counter-economic and usually survive on donated material or break-in writing; let the new writers worry about copyrighting and reselling.
Furthermore, there are a very few cases of legal action in the magazine world because of this disparity. The little ‘zines have no hope beating a rip-off and shrug it off after a perfunctory threat; the Biggies rattle their corporate-lawyer sabres and nearly anyone above ground quietly bows.
Book publishing is a small part of total publishing and there are some middle-range publishers who do worry about the total cost picture in marginal publishing cases. But now there are two kinds of writers: Big Names and everyone else. Everyone else is seldom reprinted; copyrights have nothing to do with first printings (economically). Big Names rake it in – but they also make a lot from ever-higher bids for their next contract. And the lowered risk of not selling out a reprint of a Big Name who has already sold out a print run more than compensates paying the writer the extra fee.
So Big Name writers would loose something substantial if the copyright privilege ceased enforcement. But Big Name writers are an even smaller percentage of writers than Big Name Actors are of actors. If they all vanished tomorrow, no one would notice (except their friends, one hopes). Still, one may reasonably wonder if the star system’s incentive can be done away without the whole pyramid collapsing. If any economic argument remains for copyrights, it’s incentive.