Without Intellectual Property

How would the world look like without Intellectual Property? What are the current success stories and possible alternatives if some or all forms of IP were repealed (or became unenforceable)? This page attempts to list a few examples.

Academic and Ideological Authors

Even today, most authors never make much money writing books, and some actually print their works with their own money. Others are willing to accept payment in copies of their works (often in the form of off-prints of journal articles). Much scientific and academic writing is of this kind. For many of these authors, writing for publication is a way to increase their “brand-name capital” in order to obtain higher incomes from other activities.

Other authors are interested in spreading their views, so they presumably have no interest in discouraging reproduction of their writings — provided their authorship is acknowledged, they would be quite happy if others were willing to reprint them with their own resources. The output of this type of writing would evidently not be much affected by the absence of copyright.

Professional Writers

Some writers do it for a living. If there is no other way to reward them, then the absence of copyright would most likely reduce their literary output. The question is whether copyright is the only way to guarantee an income for this type of writer. Plant, for one, thought that writers would find a way to sell their product, provided that a demand for it exists at all. (Copyright does not create this demand, it only provides a means to monopolize a demand once it exists.)

We cannot know a priori what kinds of market structures would dominate in a different legal setting, though possibly there would be greater reliance on salaried writers for subscription-type publications, perhaps with content more or less “given away” as loss-leaders to stimulate sales of other products. This is the business model underlying present-day journalism, which essentially hires staff writers in order to help sell the main product, which is advertising.

There are many other examples of such arrangements. Early radio broadcasters, for instance, were subsidized by radio manufacturers, who were willing to lose money on broadcasting in order to stimulate demand for radio sets.

Title "Lotteries"

In the case of book publishing, the absence of copyright protection would likely result in a smaller number of titles published. This would not necessarily be a bad thing, since what we really want is not more titles, but more good books at lower prices. Plant argues that the copyright system has a somewhat perverse consequence in that it encourages publication of more titles, but not enough copies of the books people really want to read.

Because of the nature of his business, a publisher cannot be sure of the success of a new title, and most titles do not cover their costs. However, a successful title can be quite profitable, and these profits subsidize losses from unsuccessful titles. Since a publisher cannot know beforehand which new titles will be successful, publishing has some aspects of a lottery: in order to make money on successful titles, the publisher has to take a chance on many different titles, most of which he knows will be failures.

Copyright affects this situation by increasing the profitability of successful titles: in terms of the lottery, copyright protection increases the "prize" without affecting, on the other hand, the risks involved. Ceteris paribus, we expect that, with equal risks, a larger prize will induce a player to buy more "tickets." Therefore, more titles will be published under a copyright system, but the resulting monopoly position guarantees that the books people really want (the successful titles) will be published in smaller quantities and at higher prices.

Computer software

Many claim that if software could be copied freely, then software developers would have no incentive to create it. Note, however, that hardware manufacturers would have an incentive to support software development (and perhaps even give it away), since the availability of more and better software increases the demand for hardware.

Music

There might be greater reliance on such collateral sources of income as personal appearances, lectures, consulting, live performances, etc. If musical recordings could be freely copied (which increasingly happens to be the case now), musicians would still have an incentive to compose and record music in order to stimulate the demand for live performances.

Fashion

Advocates of intellectual property say, and conventional wisdom holds, that without IP protections, artists will be without the incentives necessary for them to create. Or at least they, the artists, will not be afforded the protection to profit from their work. This is because “pirates” could come along and copy their work and underbid the prices, or another designer could pass the work off as his or her own. Either way, they argue, free riding would stand in the way of artist profits. However, Kal Raustiala, of UCLA, and Christopher Jon Sprigman, of the University of Virginia, have found that regarding the fashion industry “copying may actually promote innovation and benefit originators.” This they call the “piracy paradox.”

In The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, Raustiala and Sprigman show that indeed it is copying that provides the incentives for designers to continuously innovate. For if one producer is able to copy another, and provide the same goods at a lower cost, then in order to compete, the first producer must constantly be introducing new items. The result of such an arrangement is that more, better goods are produced, and their prices tend to fall. Jeffrey Tucker has made the same argument. He describes that the pace of innovation and creation in the industry occurs quite rapidly, and that because of emulation, consumers are continually being offered better goods at lower prices. He uses Talbot's and Walmart as an example, wherein the latter takes its cues from the former, and within a short period of time, consumers may purchase essentially the same garment at a lower price.

Directly selling information

People will pay for information they think they can make money from. That's why they paid for those stock tip newsletters, and why companies pay now for Bloomberg terminals and Economist Intelligence Unit reports. There have always been people in the business of selling information, but that has historically been a distinct business from publishing. And the business of selling information to consumers has always been a marginal one.

Owning the channel

What about iTunes? Apple controls the default path onto the iPod. They offer a convenient list of songs, and whenever you choose one they ding your credit card for a small amount, just below the threshold of attention. Basically, iTunes makes money by taxing people, not selling them stuff. You can only do that if you own the channel, and even then you don't make much from it, because a toll has to be ignorable to work. Once a toll becomes painful, people start to find ways around it, and that's pretty easy with digital content.

The situation is much the same with digital books. Whoever controls the device sets the terms. It's in their interest for content to be as cheap as possible, and since they own the channel, there's a lot they can do to drive prices down. Prices will fall even further once writers realize they don't need publishers. Getting a book printed and distributed is a daunting prospect for a writer, but most can upload a file.

Movies

Movies could evolve into advertisements. Many already feature prominent product placement.^{[citation needed]}

Or they could return to their roots and make going to the theater a treat. If they made the experience good enough, audiences might start to prefer it to watching pirated movies at home.

Keeping the physical form

There should remain some market for printed books, at least. While in the past publishers tried to produce books as cheap as possible, that worked as long as buying printed books was the only way to read them. If printed books are optional, publishers will have to work harder to entice people to buy them. There should be some market, but it's hard to foresee how big, because its size will depend not on macro trends like the amount people read, but on the ingenuity of individual publishers.

Some magazines may thrive by focusing on the magazine as a physical object. Fashion magazines could be made lush in a way that would be hard to match digitally, at least for a while. But that is probably not an option for most magazines.