"gains to consumers vastly exceed the losses to the industry"

Can you explain this to those of us who don't know economics?

I can see how gains to consumers and the industry losses might even out, but I don't see how gains might exceed the losses.

WaPo is beginning to sound like Kudlow and his crew. You know - the stock market rises and all the important people are better off. The rest of us don't matter. It is true that those with copyright protection lose out when it is not vigorously enforced. The rest of us minions who actually work for a living and consume things are not factored into the Investor's Class GDP figures.

I think a recession will be here in Q2 , 2008.

Housing is 15% of the U.S. Economy and it is collapsing. Auto sales are poor at best.

Job growth crap as well. This all = RECESSION.

Our Trade Deficit is killing America. We will either end up being owned by foreigners or we will simply fade away..

Property Rights or Labor Rights ?

I don't equate patent, trademark and intellectual property with protectionism . Sure there is a lot of reform needed here , especiallly in the area of bogus patents (read : gene patents on traditional foods and remedies) but these are property rights not labor rights .

In the labor area what we are looking at is Cartel or Guild behavior by special interest groups .

Certainly the powerful get protected while the weak do not .

.

Question for Mr Baker ...

Do you take the Peak Oil Theory seriously ?

If not , why not ... ?

If so , why so ... ?

penalties

amalg wrote, I can see how gains to consumers and the industry losses might even out, but I don't see how gains might exceed the losses.

I think Dean's alluding to the economic analysis of monopoly. IIRC the monopolist will usually charge a price greater than the socially optimum price.

http://www.google.com/search?q=monopoly+%22socially+optimal+price%22&hl=en&start=20&sa=N

Thanks Liberal,

Yes, the monopoly status of copyrights mean as a logical proposition that the gains to consumers from ending copyright, will be greater than the losses to producers. In addition, there are also all the costs associated with enforcement (e.g. software locks, lawyers police to invade bedrooms), which are a pure loss from a social standpoint.

Dean,

You neglect to mention the long run costs that would associated with ending copyright laws. Eliminating copyright laws would lower the returns to creative production (making movies, music, books). If the returns to production fall, there will be less creative goods in the long run. You do a disservice to your readers to continually ignore such costs, Dean.

The economists have lost a lot of credibility and as a result problems which they do not favor have taken up more of the political agenda. Problems related to globalization: falling incomes, loss of manufacturing jobs, loss, loss, loss. The race to the bottom.

What the race to the bottom means for "free" market economists is: they lose political influence. The USA is (barely) a democracy still, it is to be expected.

The problem for economists is that the consequences of free trade have arrived and people are increasingly anxious. And the "solutions" which a few economists have been proposing (that education fantasy, for example) are nowhere in sight.

Until economists get real about "free" trade and the consequences of globalization in the world as we live in it, not a Ricardian fantasy, they will continue to lose influence.

Dissent,

Chicago School economist Austen Golsbee and husband/wife economists David and Christina Romer lead Obama's economics team, and Harvard economist Greg Mankiw has Mitt Romney's ear. Economist staffed and led think tanks continue to have a huge influence. From Brookings, Cato, and Hoover to Dean Baker's own CEPRI, there is no shortage of political influence by economists. Did I mention the best seller Freakonomics? How about the huge growth in econ majors? http://www.american.com/archive/2007/july-august-magazine-contents/revenge-of-the-frosh-seeking-robots
Hardly a shortage of influence.

AO,

yes, there could be a loss if creative workers did not get compensated for their published material (music and books). But it is not clear how large this would be. Most musicians get much more money from live performances than royalties. They may actually decide that it is worth making recorded music available even without any direct compensation in order to boost the audience at their live performances. There also are other mechanisms than copyrights for financing the production of creative and artistic work, which are arguably more efficient.

Dean,

Not knowing the level of the loss is not a justification for ignoring it as a cost. If some market mechanism would prevent a decline in the compensation to creative production in the event of removal of copyright laws, then you should name it. If not, than we will all suffer the cost of less creative production. If it's a new regulatory scheme you'd argue for, than it would have also have a cost. It is inaccurate of you to ignore such costs, even if their quantities are unknown.

Dean,

It is interesting that in your initial post you chose to ignore the long term consequences of not enforcing copyright protections. Sure, the gains to consumers far outweigh the losses to the industry - in the short run...

Please enlighten us to the 'arguably more efficient' alternatives to copyright law. Also, in your view should these ideas be implemented in cases of patent violations and trademark infringements?

Any other solution will have costs, as AO points out - and the only reason you acknowledged the issue of incentives is because AO called you on it.

There was art before there was copyright. And as some people have pointed out, you can't share a live performance over the Internet. Sharing music also allows smaller bands to build a following without passing through the distribution companies.

Note that patents end after 7 years.

Actually, the dollar is immediately borrowed by the Government and put to use in all the things they do. In a way the Trust Fund is a type of forced savings. The payee eventually gets back the principal with interest when he retires or is disabled. Any kind of retirement savings does the same thing, though private retirement funds obviously invest much more in the private sector.