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Don’t Invest in Copyright-Protected Companies, by Gary North

From LewRockwell.com, Nov. 5, 2003, a good article by Gary North, “Don’t Invest in Copyright-Protected Companies,” which also contains a fascinating history of the origin of copyright censorship. An excerpt is below:


New technologies are now making it very expensive for monopolists who possess the legal right to distribute copyrighted ideas and images to retain rents created by this monopoly grant of privilege. This development is seen by some people — perhaps even tens of millions — as an assault on private property. At the same time, most of these millions shrug their shoulders and conclude, “So what?” They don’t care. They want digital copies of movies and music. Soon, they will be able to download best-selling books from servers located in copyright-ignoring nations.

Self-regulation is not working. The cost of suing 60 million Americans, one by one, is too high. All such talk is nothing but public relations fantasy. Similarly, the cost of suing companies that are incorporated in island tax havens, with site-servers set up in copyright-ignoring countries, is astronomical. Lawyers hired by American companies — not exactly beloved in foreign nations — will have to seek convictions in two or more jurisdictions for each violation. This will take many years for each case. If successful, which is unlikely, the convicted company will be found to have no assets. A mirror image of its site will then appear, overnight, in some other nation. The legal process will have to start over.

Copyright is just about over, short of a one-world state.

The defenders of copyright privilege present their moral case as defenders of private property. Most people who pay any attention to copyright laws — a small group — think of copyright as originally designed to protect authors. This legal protection, we are assured by many economists and all publishers, promotes the free flow of ideas to the public. We are assured that if writers were not able to establish property rights over their words, most of them would cease writing.

This moral defense of copyright was not always popular. In fact, the opposite was true. Copyright was an unpredicted outcome of government policies to restrict the free flow of ideas.


Prior to about 1700, there was no copyright protection for authors in the English-speaking world. An author could not keep his books from being reprinted. He saw his ideas spread if he was successful, but he collected no income as a result.

Beginning on Oct. 31, 1517, Martin Luther transformed northern Europe by means of his uncopyrighted pamphlets. He launched what soon became the Protestant Reformation by means of a list of 95 questions for formal academic debate, written in Latin, which he posted on the door of the Wittenberg church on Oct. 31. The questions dealt with papal indulgences — a means of purchasing immunity from posthumous punishment for certain past sins. He did not predict or plan what happened next. No one could have. Without Luther’s permission, a printer translated these 95 questions into German and published them. They sold well. Other printers stole the book.

Today, nobody reads the 95 theses other than specialists in Reformation history. That they could become best-selling booklets seems inconceivable to modern readers, few though these readers are. That today’s government-funded school system never assigns them in textbooks or as term papers or any other form, despite their centrality to a crucial historical development, indicates how little education in Western history goes on inside their walls.

Within a few months after his theses were translated and sold to the public, Luther was famous in Germany. He spotted the new opportunity. He began to write pamphlets. He became a master of the pamphlet. He knew that the greed of printers would work for his budding religious reform movement. Within a decade, he was the best-known author in Europe. Within three decades, at the time of his death, he had transformed northern Europe. Nothing like this had been seen before or since. Yet when he posted his 95 theses, the printing press with moveable type was 70 years old. No one had successfully employed it as a tool of social reform.

Fast-forward a century after Luther’s death. England was in the midst of its Civil War, which began in 1642, but which had been simmering in a struggle between Charles I and Parliament for two years. Pamphlets began appearing by the hundreds of titles, either pro-monarchy or anti-monarchy. Pamphleteers began writing directly to readers, skipping both king and Parliament. This continued throughout the Civil War era (1642—46) and during Oliver Cromwell’s Protectorate (1653—58).

By the time Charles II returned to the throne in 1660, he was determined to put a stop to the Puritan writers. In 1662, he did two things. He re-established the bishops’ control over the Church of England, requiring pastors to sign an Act of Uniformity, which thousands of Puritan pastors refused to sign, and were then thrown out of their pulpits. Second, he established the Licensing Act, which confirmed a monopoly for printers, but which also established the king’s authority over what they printed.

For over a century prior to the American Revolution, Cambridge University and Oxford University possessed a government-created monopoly over printing English-language Bibles. This is why the only Bible published in North America until the American Revolution broke out was the one in the Algonquin language, translated by the evangelist John Eliot and published in two parts in 1661 and 1663.

The copyright laws were an extension of the government’s attempt to control the content of published books and newspapers. By establishing a legal monopoly for printers, the government extended its control over ideas. The concentration of economic power into the hands of licensed printers enabled bureaucrats to control at a lower price the flow of ideas. A printer could lose his monopoly if he did not conform to the censors. This made economic self-interest a tool of political control.

What is significant for our understanding of copyright law is this: it was never established to protect the interests of authors, who are the creators. It was established to enable the government to regulate less expensively the flow of politically incorrect information into the hands of the public. Secondarily, it established what economists call an oligopoly for printers. As for authors’ economic interests, who cared? Nobody. Not at first. But this slowly changed over the years. Amy Masciola writes:

The Licensing Act of 1662 confirmed that monopoly and established a register of licensed books to be administered by the Stationers’ Company, a group of printers with the authority to censor publications. The 1662 act lapsed in 1695 leading to a relaxation of government censorship, and in 1710 Parliament enacted the Statute of Anne to address the concerns of English booksellers and printers. The 1710 act established the principles of authors’ ownership of copyright and a fixed term of protection of copyrighted works (fourteen years, and renewable for fourteen more if the author was alive upon expiration). The statute prevented a monopoly on the part of the booksellers and created a “public domain” for literature by limiting terms of copyright and by ensuring that once a work was purchased the copyright owner no longer had control over its use. While the statute did provide for an author’s copyright, the benefit was minimal because in order to be paid for a work an author had to assign it to a bookseller or publisher.

The economic basis of the enforcement of censorship was the government’s ability, at low cost, to control printers and printing presses. The censors sought to control the flow of intellectual content by controlling the technology of production. Ideas have historically required paper and ink to spread to large numbers of people. The printing press with moveable type dramatically expended the market for ideas by dramatically lowering the cost of production of printed materials. This technological development was always a huge threat to governments. Governments fought back by establishing privately owned monopolies over the flow of printed content.

Now new technologies threaten governments’ control over ideas, a system of control that has created economic beneficiaries: the owners of the technologies of production, and far more important, distribution.

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{ 1 comment… add one }
  • Crosbie Fitch September 10, 2011, 7:21 am

    There’s still subliminal ‘copyright was created for authors’ bias going on here. Are you sure Gary North isn’t a fifth columnist?

    “in 1710 Parliament enacted the Statute of Anne to address the concerns of English booksellers and printers” yes, because “Prior to about 1700, there was no copyright protection”, in other words the ‘booksellers and printers’ (not least the crown) were upset because the licensing of the press act had come to an end and restored a free market in printing (much of which was seditious).

    “The 1710 act established the principles of authors’ ownership of copyright” Eh? No it didn’t. No such principle was established, as is admitted “in order to be paid for a work an author had to assign it to a bookseller or publisher”. The only principle established is that if a monopoly is granted per original work then it follows that the monopoly arises with the work, and thus logically is initially in the hands of the author of the work.

    “The statute prevented a monopoly on the part of the booksellers” Eh? What is the writer smoking? The statute was created precisely because the crown and monopolists were suffering monopoly withdrawal symptoms and wanted another fix.

    “The Licensing Act of 1662 confirmed that monopoly” and “The 1662 act lapsed in 1695” so obviously, there was no monopoly until “in 1710 Parliament enacted the Statute of Anne to address the concerns of English booksellers and printers” suffering through lack of the monopoly they had grown dependent upon. A 15 year period of a free market and then copyright was created to prevent a monopoly? The mind boggles.

    “and created a ‘public domain’ for literature by limiting terms of copyright” Eh? Talk about doublethink! The public domain is the natural state. You don’t need a monopoly to create it! It is only in these last few years that the cartel has persuaded us to adopt the definition of ‘public domain’ as those published works not ‘protected’ by copyright. So, only in that sense does a term limited monopoly (continuously extended) ‘create’ a set of works whose copyright has expired.

    Come on Stephan, criticising these articles should be far easier for you than me.

To the extent possible under law, Stephan Kinsella has waived all copyright and related or neighboring rights to C4SIF. This work is published from: United States. In the event the CC0 license is unenforceable a  Creative Commons License Creative Commons Attribution 3.0 License is hereby granted.