Tuesday, January 06, 2004

A Taste of Our Own Poison
A modest proposal: Hold Hollywood hostage till we kill farm subsidies.

By Lawrence Lessig


When America was poor, its citizens "stole." We took the intellectual property of Dickens and other foreign artists without paying for it. We didn't call it stealing, but they did. We called it a sensible way for a developing nation to develop. Eventually, we saw it was better to protect their rights as well as ours - better because we had rights to protect elsewhere, too. But we only imposed this burden on ourselves when it made sense to do so. Until 1891, we were a pirate nation.

Things have changed. Now that we're the world's leading exporter of intellectual property, we're also the most self-righteous about the importance of protecting it globally. Indeed, we can be vicious in our self-righteousness - threatening trade wars with developing nations for the crime of being just like us. Recently, through a series of trade agreements, we have demanded stricter protection for intellectual property internationally than US law would allow domestically. (Fair use, for example, is mandated by our constitution but invisible in these agreements.)

This push to protect intellectual property is defended as just one aspect of free trade - the aspect that benefits Hollywood. Since Adam Smith penned The Wealth of Nations, we've understood that borders are best when opened and when property from one country is respected in another. Free trade so enabled is the promised elixir for the woes of developing nations. Open your borders, protect property rights, and prosperity, the Smithies say, will quickly follow.

The dirty little secret, however, is that we don't respect the free trade rules that we impose on others. While the US sings the virtues of free trade to defend maximalist intellectual property regulation, we poison the free trade that developing nations care about most - agriculture - by subsidizing farming in the industrialized world to the tune of $300 billion annually. Rhetoric about family farmers aside, most of that money passes quickly to agribusiness. This is not Adam Smith; it is corporate welfare par excellence.

There's little developing nations can do about this - individually. But increasingly they are acting together. One group recently walked out of trade talks because agribusiness subsidies were not on the table. Others are openly discussing ways to get US attention.

What developing nations need is better lobbyists. In particular, advocates as persuasive as Hollywood's lobbyists, who've managed to defend the entertainment industry's intellectual property rights extremely well. Here's one way to get power (or the Man) on their side.

A block of powerful developing nations should first take a page from the US Copyright Act of 1790 and enact national laws that explicitly protect their own rights only. It would not protect foreigners. Second, these nations should add a provision that would relax this exemption to the extent that developed nations really opened their borders. If we reduce, for example, the subsidy to agribusiness by 10 percent, then they would permit 10 percent of our copyrights to be enforced (say, copyrights from the period 1923 to 1931). Reduce the subsidy by another 10 percent, then another 10 percent could be enforced. And so on.

The mechanism is clumsy, but the message is clear: Both the subsidy of agribusiness and the subsidy of local culture and science violate the principles of free trade by ignoring American intellectual property laws. Both violations are bad. But the two bads should be resolved together. Indeed, if anything, American subsidies should be ended first. The actual loss to US firms from piracy worldwide is not terribly high - if "actual loss" means the amount Americans would get if the piracy ended. (Would Microsoft be better off if China ended its piracy of Windows and instead used GNU/Linux - the only OS they could then afford?) But when crops grown by farmers in Peru rot in the field because the US House of Representatives cares more about agribusinesses than about Adam Smith, then there is real harm. The resentment and anger at this American hypocrisy festers as poisonously as moldering crops in the hot sun.

Of course, this solution won't work unless enough developing nations join together. But if they do, their message will have meaning. A principle is a principle. And a content industry keen to defend its "property" on the basis of that principle would then have an interest in defending principle more generally.

The world is already skeptical enough about Adam Smith's magic. Throwing hypocrisy into the bargain can't help.

Lester Thurow - Patents' Raging Bull


In Fortune Favors the Bold, MIT professor Lester Thurow - known for his "new rules for the knowledge-based economy" - says a global economy is emerging and the time to shape it is now. His formula for building lasting prosperity? A universal patent system that encourages companies to apply for more patents and prod governments into enforcement, among other things. Sounds like either a great idea or a bureaucratic nightmare of ever bigger corporations and ever bigger government.

WIRED: You want the government to buy corporate patents to encourage innovation?

THUROW: You need incentives where there's a big up-front investment. Look at the pharmas. They're putting all their efforts into developing Viagra and fat pills. No one wants to develop a cure for malaria. So let the government come in, buy the intellectual property rights for a malaria pill, and give it away.

Are more patents a good thing?

If we're really going to be the knowledge economy, you can't make it work unless you know who owns what knowledge. Take music. If they can't find some way to lock up music, music is going to end. Eventually, there will be no professional musicians, because there's no way to make money, and we're left with a world full of amateurs.

So every decent idea should have an official piece of paper behind it?

Obviously, there's a limit. I'm dubious about business patents. Dell has something like 36 patents on the supply chain. And what we did for Disney was reprehensible: They get Mickey Mouse for 75 years, and then they have the political clout to get it extended. There must be a point where copyright runs out and stuff drops into the public domain. Descendants of Shakespeare shouldn't be able to claim royalties - and they can't.

What's the enforcement component?

There are two ways to violate a patent. One is China, which doesn't have a system. The other is Israel, which has a system but doesn't enforce it. We have to figure out the dollar value and keep track of all the violations in Israel. Then we say to US companies, we'll give you carte blanche to copy that amount from Israeli companies.

Sounds like an awful lot of government.

In a globalized world, governments become more important than they used to be. You have to think of them not as air traffic controllers but as airport builders.

- Jeffrey M. O'Brien

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