This essay analyzes a tension between two claims frequently made in current debates over copyright policy. The first claim holds that copyright policy is skewed in favor of rights-holders, and against consumers or transformative users, because Congress has been captured by powerful firms, such as movie studios and record companies. I will call this claim the public choice critique. The second claim is that copyrighted works are different from other products because they are both the outputs of a production process and inputs to further production. I will call this the cycle of production claim. Each of these claims is widely accepted in current copyright debates.
Combined, these two claims support an inference: because media firms are both producers and consumers of works, and because they control copyright policy, that policy should reflect the socially optimal balance between producer and consumer interests. I call this the optimality inference. Hardly anyone (if anyone) agrees with it.
In Parts One and Two of this chapter, I ask why the premises behind the optimality inference are so widely accepted while the inference itself is so widely rejected. I consider whether the attacks that can be leveled at the inference are stronger than the logic behind it. The answer is that they are not, though the inference does have to be qualified in some significant ways.
My point in these parts is not to identify some group whose members’ interests are perfectly aligned with the best (highest net welfare) copyright policy. There is no such group, which is a corollary of the point that all methods of dealing with copyright problems are imperfect. But that no group’s interests are perfectly aligned with the best policy does not imply that the interests of all groups are equally well aligned, or even that traditional categories such as consumers and producers make sense as tools of analysis.
My point is that, imperfect as they are, the interests of commercial producers seem to be more closely aligned with welfare-maximizing copyright policy than the interests of other groups, such as passive (nontransformative) users or academics. The interests of commercial producers of copyrighted works, therefore, may be the best available (least flawed) proxy for socially optimal copyright policy. At a minimum, they cannot be disregarded when looking for such a proxy. The all-too-common bashing of big copyright firms is not only misguided, it is counterproductive.
Analyzing the strengths and weaknesses of the optimality inference generates some insights that may be useful for analyzing the relationship between copyright and consumer protection. Such analysis suggests that the notion of copyright consumerism is in fact incoherent, and will impede rather than advance the development of sound copyright policy. In particular, the cycle of production claim suggests that the notion of copyright consumers is incoherent to the extent that consumers of upstream works produce downstream works. That is a significant problem for a consumer-based approach to copyright.
In Part Three, I explore this problem from a different angle. Even if the distinction between producers and consumers is coherent, the notion of a homogeneous set of consumer interests is not. Consumer interests are heterogeneous. Some consumers want passively to read, watch, listen to, or execute copyrighted works. Others want to tinker with those works but not distribute them, and still others want to tinker with them and distribute them, either for free or for a profit.
These heterogeneous consumer interests are likely to conflict, as is most obvious in the case where vendors impose restrictions on the ability of consumers to tinker with works. Passive consumers would have no objection to restrictions on things they do not want to do. They would probably favor restrictions that increased the output of works available for them to consume. Other consumers might well object to restrictions on things they want to do and would not care about the interests of passive consumers.
Whether such conflicts are treated as conflicts among consumers or as reinforcing the point that the concept of a copyright consumer is incoherent, they point to the same conclusion: traditional consumer protection thinking will impede rather than advance the creation of coherent copyright policy. This fact implies that copyright policy should focus on maximizing total surplus, rather than consumer surplus, and should favor market-facilitating measures over rules that constrain market transactions, which is my conclusion.Part One: The Optimality Inference
The optimality inference is generated by combining the public choice critique with the cycle of production claim. I analyze these in turn.
Public choice theory seems tailor-made for explaining copyright policy. Relatively few firms produce a large fraction of commercially valuable works. These firms have a relatively high per capita stake in developi