Wednesday, July 28, 2010

Copyright Hurts Art - or - The Reason for Justin Bieber

Perhaps this is less about “harming” art than “diluting” art, music, and film, but I wanted to come back and expand on the this topic which I originally brought up in The Rationalist Position on Intellectual Property. Essentially, by incentivizing what would generally be considered artistic endeavors in the way copyright does, the quality of art is degraded. That is, copyrights create an incentive structure adverse to the interests of the artistic community.

Before any case about the harm of copyrights can be made, it is important to look at the supposed benefits. There are two arguments you will generally hear in favor of copyright:
  1. The artist is entitled to a just remuneration for the product he produces.
  2. The consumers of art benefit from the copyright because without it, no one would produce art for them to consume.
I agree with the first and some (small) aspect of the second. However, the first statement, in being an argument for copyright, just assumes that the fair compensation of artists is dependent on copyright. The truth is far more ambiguous than that.

First, it neglects the ability of artists to generate income in the absence of copyright. This task can be accomplished through traditional means of product sales in the form of an original painting, a physical CD or high quality download. Many people feel obligated to support the artists they like and are willing to pay for the product. Second, it neglects the premium that can be generated from merchandising or live performances or “official” endorsements, etc. Third, copyright establishes a monopoly price, not a competitive price. Thus theoretically, from a fixed consumer base, copyrights function to earn more than a “fair,” socially optimal compensation. Fourth, copyright, by raising the price through monopoly, hurts distribution, thus lowering the potential revenues that would be gained from the first and second categories given wider distribution. Fifth, art is often a collaborative process building off of past art. Therefore, the product produced isn’t strictly speaking entirely produced by the artist. Finally, we have to assume that copyrights actually do prevent what they are intended to prevent: prohibited reproduction and distribution of intellectual property. But given the substitute good of pirated music in today’s tech savvy world and the high price of monopoly goods, it might be better to instead assume that copyright hurts the artist’s bottom line. For example, say someone is willing to spend $5 on an album, but if it is only available at the monopoly price of $10, they then might opt for the pirated version. Though there might be reason to doubt the ability of artists to generate a sufficient income without copyrights, there still plenty to be skeptical of.

On the art consumers’ end, things are a little different. They want the good at the best price. If the monopoly received removes the consumer surplus, then that is definitely not helpful to their cause. All the customers care about, in the narrow sense, is that the art be produced. If the art will be produced at zero cost to the consumer, that is optimal for them. So, if artists are willing produce art for the fun of it, at a personal financial loss, then customers win. And since it would actually seem intuitive that artists do produce for its own sake, as long as funds are available to cover costs, the art will be produced either way. If artists are incentivized by the money, then argument (1) in favor of copyrights takes on a positivistic, rather than normative aspect, but the considerations above remain valid because whether they will demand or are owed the appropriate compensation is irrelevant to the question of how they acquire it.

So, it’s not actually clear or demonstrable at all that copyrights are necessary. If artists can find ways of supporting their art and generating an income without copyrights and it is indeed possible that copyrights in the present environment hurt revenue streams, then there doesn’t appear to be a good case for copyrights in the first place.

But people still advocate for them. It’s important to understand who benefits and who loses because of copyrights and to look at the incentives involved.

We also want to look at quality. We should expect that both the artist and the consumer of art want to produce and consume quality, respectively.

Do money incentive actually promote creativity, artistic vision, or the qualities associated with quality art? The below video describes some interesting findings (HT: db0):

The important point to take away from the video is that money incentives have a limiting effect on creativity. As stated above, this may seem intuitive. So when we’re talking about art, money as a motivation seems to be completely at odds with the whole concept.

But since the entire point of copyright is money, this adds a very important factor to the whole equation.

There’s a couple assumptions we have to make, but they won’t be highly contentious. 1) People vary in skills and talents. There are certain people, who through natural ability or practice, are more apt artists. 2) Money acts as an incentive. As in, where money is located, people will be attracted to it and engage in the lucrative activity. 3) Just like all other markets, the amount of art consumed has a natural limit. That is to say, you can not listen to all music, all the time. Some music will be listened to more and some music will be listened to less or not at all. Some art will be consumed more and some art will be consumed less or not at all. So there’s an “efficient” level of music in terms of consumption.

The music market will provide the best example of what I’m trying to illustrate.

The point of copyright is monetary and the copyright itself is monopolistic. Let’s say someone records a single that becomes really popular and people are willing to pay a decent amount for it. Eventually the single will amass a large total revenue, most of which will be profit -- the point of the monopoly in the first place. Now think about what this does. Having seen this single make lots of money, others, not necessarily interested in or talented with regard to music, will see it as a profit making vehicle. This, of course, does not affect everybody, but it does draw some in.

Thought of a different a scenario, say there are people skilled at arguing and thus suited more for lawyering and others skilled at math and thus suited more for engineering. Under normal conditions, supply and demand for the services of lawyers and engineers will keep their services reasonably priced, floating somewhere around the cost of provision. However, if one of these professions were to be subsidized at the expense of the other, say lawyers at the expense of engineers, you would likely see a shift in specialization from engineering to law. As a result, there will be a shortage of engineers who now command a high price and a glut of lawyers without anyone to purchase their services.

So we can say subsidization of an outcome results in an incentive to achieve that outcome. The result is a glut. In the case of musicians, it’s quite obvious that there are far more musicians than people willing to listen to them. Whether they are genuinely interested in creating art or if they are in it for the money doesn’t matter because they are swimming in a larger pool of musicians. That makes it more difficult for quality musicians to be found as they can become lost in the flood. It also raises the barrier to entry because the effort needed to become found is greater than it would otherwise be. Whether it’s unemployed actors/actresses, starving artists, or homeless musicians, there’s a noticeable abundance. And at the end of the rainbow is often that hit single or once in a lifetime movie role just tempting more people to follow the dream.

But explaining why copyright leads to the attraction of less talented, less artistically committed people to the industry isn’t enough. The alternative title to this article is “The Reason for Justin Bieber” after all. So, does copyright help the chaff rise to the top?

There are several important steps in music production. Four of which are discovery, marketing, distribution, and legal support. Assuming that they are in it for the money, who will those offering these services likely offer them to? Those who can generate the largest returns. Record labels will want the musicians who can be the most proactively sold to music consumers thus artists least likely to offend public sensibilities. This means that record companies will commonly get behind musicians already most likely to make music for the masses: the one who got into the industry, not to make art, but to make money or get famous, the latter of which may very well be promoted by the former.

This means that the ones least in it for the art will be marketed the most by labels most in it for the money. And as Ludwig von Mises seems to agree...
Advertising is shrill, noisy, coarse, puffing, because the public does not react to dignified allusions. It is the bad taste of the public that forces the advertisers to display bad taste in their publicity campaigns. The art of advertising has evolved into a branch of applied psychology, a sister discipline of pedagogy.

Like all things designed to suit the taste of the masses, advertising is repellent to people of delicate feeling.
... the masses are not very discriminating. They’ll consume entertainment that is most available, not necessarily that which is most meaningful.

The ultimate result is that those least interested in making art are the most capable of generating revenue from it. And those who care are pushed into relative obscurity. Of course, there’s always exceptions. Plenty of committed artists get recognized and are successful, while, conversely, there are plenty of musicians uninterested in art that never get anywhere. The point was that copyright, a tool designed to bring money into art making, corrupts and dilutes the original purpose of art making. Sure you might get more quantity, but it’s at the expense of quality especially at the popular culture level. And this may be a factor that feeds a culture of celebrity idolization as well. Perhaps one reinforces the other or they are separately evolving but complimentary nonetheless.

How can the problem of copyright be fixed without hurting genuine artists? If it is a problem, which it could possibly be, then there are two solutions I have to offer. The first is to provide mediums in which artists can connect directly with their fans in order to finance their projects directly through customers. I had a plan for such an idea and Kickstarter has implemented it pretty closely. Bandcamp also implements a similar strategy by connecting artists directly with their fans. Alternatively, mutual aid and voluntary social safety nets could provide security for those engaging in artistic or intellectual pursuits. This latter option would, however, would require a more libertarian, anarchistic, or decentralized society to function over time. But I really don’t see there being a problem. People want art and there’s no solid reason to believe that there won’t still be those out there who are interested in supplying and purchasing it in the ways that emerge in copyright’s absence.

Note: this is a hypothesis and how great or pernicious this effect really is is quite ambiguous and non-calculable. It seems to make theoretical sense to me, but any criticism would certainly be welcome.