A paternalistic balance

I started off the quarter with a post pushing back on the glories of utility computing.  I shared some concerns that under Carr’s description of utility computing, we could end up in a society separated by technology and providing people with too much privacy.  The result would be detrimental to the civic participation and ongoing conversations we need for a well-functioning democracy.  (Many did not share my concerns, which I was happy to see.) Therefore, I definitely sympathize with Netanel’s concerns about reigniting the public conversation by limiting the chilling effects copyright can have on subsequent expression.  Netanel wants First Amendment rights to win more of the battles against copyright’s limiting effects on expression.

Netanel’s underlying assumption, however, is that people will speak—namely, that they will create and otherwise will have the ability to create—as long as copyright is not an impediment.  Furthermore, we will want this type of creation for the diversity of viewpoints necessary in a marketplace of ideas that leads to the best democratic policies.  He also assumes that people will want to listen and be able to listen to these diverse viewpoints.  Lastly, he argues (or assumes) that the best method to reignite this conversation is to limit copyright and allow more freedom in creating secondary or derivative works.

I argue that while Netanel is probably right that copyright is a strong limiting factor today for producing new works, his assumption that people will listen, and which will lead to better democracy, is flawed.  I propose an alternative regime (“a paternalistic balance”) that may be better at alleviating his concerns while not resting on faulty assumptions.

Who’s listening?

I think Netanel is right that today one of the greatest impediments for creators is copyright (and its licensing regime).  Technology has made production of content and information cheap and ubiquitous.  Computers, cameras, communication, and collaboration have all become very cheap.  Distribution to a potentially large audience can also be done cheaply.  Assuming that most creation builds on prior creative works, copyright does seem to function as a wall.

The problem is not with creation or distribution, which Netanel seems to have gotten right, but with what happens afterwards.  The proliferation of information overloads our ability to sift through it all and we choose metrics that in the long run probably unhinge this marketplace of ideas full of people interacting with a diversity of viewpoints (the central purpose of the First Amendment).  Furthermore, as I argued in my first post, the shift to all this technological connectedness may be making us into more solitary creatures.  The combination of these two factors is the likely effect that implementing Netanel’s ideas is at best unlikely to foster the necessary democratic conversations and at worst is likely to reduce them.  And Netanel is certainly concerned with these types of conversations: “Robust public debate, the spread of knowledge, and the questioning of cultural hierarchy are of paramount importance to a democratic society.” (p.162)

Polarization: more is not better

Just yesterday, I discovered that a friend on facebook has posted a link to the following video: http://thinkprogress.org/2008/05/15/kevin-james-appeaser/.  It’s a political video of Chris Matthews allegedly embarrassing a Republican radio host regarding recent statements by President Bush.  If I am the original blogger wanting to engage in political dialogue with others, I could just describe the video and its contents, but it is probably more effective for people to simply watch the video.  That reduces costs to me of having to describe the video in great detail and to the reader of having to read a lengthy description.  Using descriptions rather than the video would also reduce the overall impact of the situation on the reader.  This seems like a prime situation in support of Netanel.  The posting of the video is unlikely to take away from MSNBC’s market; the video is political and discusses the state of our democracy; and it creates a forum for people to participate in political conversations.  Use of the First Amendment is at its highest.  If the original poster of the video had to acquire a license from MSNBC before posting the video, then that probably would have simply prohibited him from doing so.  (He may actually need to under our current regime and is simply committing piracy.) Conclusion: we should limit the extent of copyright in order to facilitate such conversations.

But let’s reevaluate.  That video is posted on a seemingly very liberal website.  The hundreds of comments following are a chorus of people cheering the embarrassment and simply echoing each other.  The few people who disagree or challenge these statements are yelled at and are labeled “trolls” in order to diminish any contribution they may make.  It isn’t long before the commentators are calling Bush and these trolls “Nazis” and murderers.  Is Netanel right that more expression will mean more diversity of expression?  That may be, but the crucial question is who will be listening (or reading or watching).  As I mentioned in my first post, research tends to show the polarizing effects of the Internet.  People visit the blogs and news websites with which they agree.  This seems to be a result of the proliferation of content and not the lack of it. 

Barriers to entry

Copyright, then, may serve an important function as a barrier to entry.  It reduces this information overload by requiring the creator to think strongly about the value of the work he is creating.  Only those that are considered valuable will be created and distributed in the market.  There are of course some concerns here.  Is the creator in the best position to decide what will be valuable—especially socially?  Shouldn’t society as a whole decide—meaning let the creator create and then citizens can pick and choose.  I think the reality is that this is impossible.  There is so much information that picking and choosing becomes so difficult that people begin to use poor metrics.  In a market situation, the creator will likely consider economic value, but that value intrinsically incorporates the value to the consumer (social, political, moral, aesthetic, etc.).  Often, I think, the incentives will be aligned such that if people value these important social conversations, those types of works will be created. 

Netanel, and Professor Picker, noted that sometimes the creator cannot fully capture this social value, thus resulting in underproduction of valuable works below the social optimum.  First, I question the extent to which such social values are not already incorporated into the price.

Second, I don’t understand how limiting copyright resolves the problem.  Netanel wants to argue that limiting copyright will lower the price for the second creator to create thus fostering more creation that the consumer values but is unwilling to pay for.  He wants a transfer from the initial creator to the consumer.  But why wouldn’t the transfer end up being from the initial creator to the second creator?  The price of the license will be reduced (maybe to $0) but the second creator can maintain his market price and reap the benefits.  This will be especially true if these consumers have a very low price and simply want to be free riders.  Netanel describes them as those who “benefit from the ability of secondary authors to reformulate and challenge [] social meaning…even if [they] never personally purchase or even see the transformative work.” (p.162) If these people are unwilling to pay for these social benefits, lowering licensing fees will not do anything to expand output.  It will simply transfer income from the primary to the secondary creator.

A paternalistic balance

Netanel is in some ways self-contradictory.  He asserts that an explosion of diverse viewpoints from limiting copyright will foster good civic debates.  But he also notes that often the mass media determine people’s values and preferences.  People are highly influenced by these media forces.  It seems unlikely then that simply increasing the amount of creation—even mostly independent creation—will change the level of the debate if people will simply follow the tastes established by mass media.

This is a crucial concern.  Some paternalism is necessary if we believe people are not looking out for their best interests (or the best interests of society as a whole) over the long term.  People may not be very good at independently assessing the value of various works if (1) they are greatly affected by mass media propaganda; and (2) use inadequate metrics to sift through information.  But limiting copyright, for all the reasons I have noted, does not seem to be the answer.  More creation is unlikely to create more and better conversations.  In fact, copyright seems to serve an important function as a barrier to entry.

I would instead propose some sort of a creativity tax on major media conglomerates.  That revenue would go towards funding a small number of independent creations that would seemingly foster such debates.  There are probably millions of difficulties with this solution, but I will try to address a few here.

First is cost.  Would this system not be costly?  I don’t think it would be costlier than all the government activity Netanel advocates in Chapter 9—having courts set licensing fees and liability amounts, having Congress set up various central databases for all types of information, etc.  A tax is of course pretty cheap to implement and the grants to some creators probably would not be that expensive to implement.

The bigger concern, of course, is of government determining the political debate.  Should we be concerned about censorship?  How in the world would the government determine to whom to give such grants?  I don’t have simple responses to these problems.  I think there are ways to allay some concerns by cabining discretion.  There could be a congressionally approved rubric for all the requirements a project must meet.  Each project proposal could be made public similar to notice-and-comment procedures in agencies currently.  The administrator of the program would not be a political appointee.

The benefits are several.  First, we will not see proliferation of information that could end up overloading senses and actually harming the debate.  It will be a more controlled stream rather than a waterfall.  Second, this will be a subsidy that will fund projects that may not have been viable independently in the marketplace—presumably because of the free rider problem Netanel noted.  Some people may value democratic conversation but not be willing to pay for it.  Third, I think it would minimize disincentive effects on the initial creator.  Limiting copyright had a direct effect on the returns a creator expects from his creation.  A tax on these conglomerates averages out over all projects, therefore making it more difficult for them to allocate the costs to any single project.  It would certainly matter at the margins by reducing the return per project on some diluted basis, but I am not as concerned given how much creation there already is (and the increasingly cheaper ways to create).

Comments

[Claire Hausman]

There’s a lot I don’t understand about your post. You state that a problem is the proliferation of information that leads to a decrease in debate, as people self sort themselves into polarized groups based on their beliefs. You then state that copyright serves an important barrier to entry that reduces this information overload. Finally, you assert that your tax and subsidize proposal would further reduce the proliferation of information, and improve the debate. I’m not sure I see how either copyright or your proposal do this that well. The first problem is the rampant disregard of copyright laws. You cite the posted Chris Matthews clip as an example of failed debate. Instead of engaging each other, or challenging each other, the commenters simply pile on with one opinion. But clearly copyright law is not serving as a barrier to entry here (if we assume this is a violation of copyright). As you noted, people can produce content so cheaply, and disseminate it so easily on the internet, that copyright may do nothing to stop them. Unless you simultaneously propose a severe crackdown on all copyright violations, the information overload will remain, because people will largely continue to ignore copyright laws to create content, and in many cases, it’s not worth it for the copyright holder to enforce the copyright law, as here. Besides, even if you didn’t find the debate to be at a high level for the Chris Matthews post, do you really want that poster severely punished in a copyright law crackdown? Is no political debate really better than some? If copyright laws don’t do very well in reducing the information overload, how does your tax and subsidize proposal do so? In addition to the subsidy are you proposing that the government affirmatively censor other information it is not subsidizing, because that would clearly violate the First Amendment. If the government cannot censor outright, it would have to strengthen current copyright laws, or enforcement, in order to reduce the current amount of information. As discussed previously, that brings us back to a lot of the problems associated with overly severe and randomly enforced punishment. I don’t think we want to live in a world where citizens are severely punished for engaging in political speech, no matter how low the quality you believe that speech to be.

[Vikas Didwania]

Thanks for the critiques, Claire. My post definitely wasn't very clear. You are right that there are many violations of coypright law currently, many of which go unpunished. Furthermore, that reduces the ability of copyrights to serve as a barrier to entry.

My post wasn't directed so much at the current regime but at the regime that Netanel proposes. While I may believe that the current regime itself is producing too much creation, I don't have too much to say about that. I think we all agree (including Netanel) that copyright should not be violated and people who do violate it should be prosected. In fact, the entire foundation for Netanel's book--the copyright serves as an impediment to speech--is based on an assumption that copyright is enforced and is followed by second creators. Otherwise, it clearly could not serve as an impediment. But neither he nor I would argue for any sort of "severe crackdown." That's prosecutorial discretion and a whole another conversation about how to allocate resources towards catching violators of the law.

So you're right to say that some information overload will remain under my argument. But I was challenging Netanel's assertion that we need more creation and we need to limit copyright to get there. My argument is that I agree with Netanel that limiting copyright would result in more creation. But I don't think we need more creation. It's not a good idea because I don't think it will result in more / better democratic debate.

The tax / subsidy proposal is supposed to represent a balance (hence the post's title). Netanel's change, in my opinion, would allow too much new creation, which would exacerbate the information overload problem. But I understand his, and society's, concerns about valuable creations being left out in a purely market regime. Some social value is not incorporated into the price of the product. The tax / subsidy would be aimed at creating these valuable works so society can benefit. But it would do so in a limited way as to not exacerbate the information overload problem to the extent that Netanel's solution would.

The tax / subsidy solution already raises censorship concerns in an affirmative sense (which projects the government would fund). I certainly would not advocate any actual censoring of works already produced--and I don't think my post implied that.

Overall, I think there is probably information overload currently, but my post was not directed at that. It was directed at the marginal problem of creating more information overload if we implement Netanel's solution.

I hope I addressed your concerns.

[Dan Jones]

Great post Vikas. A few questions: how do we know or on what basis are you asserting that there is an "information overload?" True, there is far more information available to me than I could ever read or process, but that's been true for ages--visit your local library. What you seem more concerned with, rightly, is polarization. While it is true that polarization could not exist but for a large amount of information (after all, those polarized websites need content), I'm less sure that marginal increases in the amount of information lead to corresponding increases in polarization. The causal relationship seems more complex. I understand your point that polarization functions as a sorting metric given the massive amount of information, but again, I'm not sure how that functions on the margins, and it's far too late to scale back the amount of content available online, even if such a thing were normatively desirable.

Second, don't we already have various tax/subsidy regimes, both public and private? Though I don't think the National Endowment of the Arts has flourished under this administration, they still give out a lot of money. More importantly, there are all sorts of private mechanisms for this type of funding through various nonprofits funded by user donations (NPR has a similar framework with their annoying but effective pledge drives). These mechanisms are nice because the biggest "gainers" from the funded content also bear the costs. Therefore the system is distributively neutral (for the most part, some users might not like a particular piece of content, but in the aggregate, they are probably net gainers or they wouldn't donate). True, most of this funding doesn't reach someone making a cheap youtube video, but they don't need much funding in the first place. The crucial difference in your scheme is that the media conglomerates are taxed directly for the benefit. There might be a good basis for shifting to such a scheme, but I'm not sure what it is. Thoughts?

[Dan Jones]

Sorry, a quick edit on my comment. Turns out NEA appropriations actually took a nose dive in '96, and have been increasing annually, though not back to their early-90's levels: see http://www.nea.gov/about/Budget/AppropriationsHistory.html.

[Vikas Didwania]

Dan, I think I agree with your marginality point if I am understanding it correctly. Certainly the addition of one more video to the heap of content out there is unlikely to cause much of a burden to the consumer. Thus, it is unlikely to lead to much more polarization. But what about millions more videos, websites, emails, phone calls, etc. I just think the margins are shifting quickly. And I agree that the cat is already out of the bag in the sense that there already is so much information out there. I am not necessarily opposed to that and I certainly wouldn't sanction repressing any of this creation. I am only responding to Netanel's point that we should seek ways to increase expression even more by limiting derivative rights. He thinks that would lead to better debate and a better democracy. And I argue that it won't necessarily given the overwhelming amount of expession out there.

To your private funding point, I don't quite understand how that is distributively neutral. My understanding is that a lot of it is large corporations or wealthy individuals subsidizing the arts. They may donate money to the Art Institute to keep ticket prices lower for everyone. Another example is that of famous musicians. Often, their concerts will sell out and the tickets will be scalped for many factors more than the face value. These artists probably know that they could charge much more for the tickets and still sell out, given the scalping market. They are leaving all that money on the table, probably because they want to ensure that a variety of people can attend their concerts.

Non-wealthy people may donate to the arts, such as to NPR. But if it's distributvely neutral, it seems to me like they're simply purchasing a product, rather than subsidizing anything. Or maybe this is just semantics.

Finally, I agree that some public subsidization exists. I had thought about the NEA but then failed to address that in my post. I don't know precisely how it picks its projects. If it has similar goals to the subsidization I propose in my post, then it will be even easier to implement my suggestions! The taxing of these big media companies was to impose a tax with minimal costs. Assuming Netanel is correct, these media companies are amassing very extensive copyrights that are making it difficult for second creators to express. They are imposing a cost on expression (and getting the benefits), therefore paying a tax seems to make sense. As I noted, I also don't think this tax would be highly distortionary on their incentives to create. These are, of course, very theoretical assertions without any empirical proof. That should always be a disclaimer.

[Dan Jones]

I think we're pretty much on the same page on all these points. As far as marginality goes, I didn't have in mind your incrementalist point (one video doesn't really add to the pile), but just wanted to point out uncertainty of the relationship between more information and more polarization. This is not only because we don't have a good metric for quantifying polarization, but also because I'm not sure the use of polarization as a sorting heuristic is that responsive to increases in information, even large ones.