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History of Copyright

Copyright and Its Consequences


Some Economic Problems

The Long History of Copyright and Its


Consequences

Comparison between a System with and without Copyright

Eckhard Höffner
Pictures: Wikipedia, Geschichte und Wesen des Urheberrechts

London, British Academy, 27th October 2010

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Table of Contents

1 History of Copyright

2 Copyright and Its Consequences

3 Some Economic Problems

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Great Britain was the leading economic power

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Population
Great Britain (wealthy country)
1770 – 8.4 millions
1800 – 12 millions (50 % living in towns)
1830 – 22 millions (incl. Ireland)

Germany (poor country)


1770 – 21 millions
1800 – 24 millions (20 % living in towns)
1830 – 30 millions

Ability to buy and read books.


Despite a larger population it is not obvious, that in Germany more
people (in numbers) could afford books than in Great Britain.
Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Population
Great Britain (wealthy country)
1770 – 8.4 millions
1800 – 12 millions (50 % living in towns)
1830 – 22 millions (incl. Ireland)

Germany (poor country)


1770 – 21 millions
1800 – 24 millions (20 % living in towns)
1830 – 30 millions

Ability to buy and read books.


Despite a larger population it is not obvious, that in Germany more
people (in numbers) could afford books than in Great Britain.
Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Population
Great Britain (wealthy country)
1770 – 8.4 millions
1800 – 12 millions (50 % living in towns)
1830 – 22 millions (incl. Ireland)

Germany (poor country)


1770 – 21 millions
1800 – 24 millions (20 % living in towns)
1830 – 30 millions

Ability to buy and read books.


Despite a larger population it is not obvious, that in Germany more
people (in numbers) could afford books than in Great Britain.
Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Great Britain
1710 – Statute of Anne: 14/28 years copyright from the time
of the first publication.
1801 – The effect of Statute of Anne was extended to Ireland.
1814 – Prolongation of copyright duration to 28 years or
lifetime of the author.

Germany
The Holy Roman Empire of the German Nation was divided in
over 300 states (having legislative power).
1805 – Napoleonic Wars.
1815 – German Confederation consisting of 35 states, 4
towns. No wars for half a century.
Pirate publishing was virtually allowed until about 1835/40.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Great Britain
1710 – Statute of Anne: 14/28 years copyright from the time
of the first publication.
1801 – The effect of Statute of Anne was extended to Ireland.
1814 – Prolongation of copyright duration to 28 years or
lifetime of the author.

Germany
The Holy Roman Empire of the German Nation was divided in
over 300 states (having legislative power).
1805 – Napoleonic Wars.
1815 – German Confederation consisting of 35 states, 4
towns. No wars for half a century.
Pirate publishing was virtually allowed until about 1835/40.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

English Short Title Catalogue (ESTC)

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Ficton in the ESTC (UK)

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

What can we learn from the ESTC

The ESTC is a database holding every surviving copy of


letterpress produced in Great Britain or any of its
dependencies in any language, worldwide, from 1473-1800.
Not only books are included, but also form sheets, invitations
to events of any kind, or advertisments. The ESTC comprises
e.g. 619 prints of Mr. James Christie. He was not an active
author, but the founder of the auction house Christie’s.
The printing press was used more and more, however, the
number of newly written and published books did not increase.
One of the goals of the Copyright Law (»Statute of Anne«)
was the »Encouragement of Learned Men to Compose and
Write useful Books«. This target was missed.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

New books published per year

Zahl
13000
Copyright in Germany
12000
11000
10000
9000
8000
Germany
7000
6000
5000
4000
3000
2000
Great Britain
1000
70

80

90

00

10

20

30

40

50

60

70
17

17

17

18

18

18

18

18

18

18

18
Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Significant dates
Copyright Law shows no positive impact

1642: Civil War


1648: Second Civil War
1688/89: Glorious Revolution
1695: Lapse of Guild Monopoly – no significant effect
(periodicals are not included in the ESTC)
1710: Statute of Queen Anne – no significant effect
1774: Donaldson v. Beckett – maybe a small effect
1814: Prolongation of copyright duration, end of the war with
France – no significant effect

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

High prices with Copyright


The monopolists, by keeping the market constantly understocked,
by never fully supplying the effectual demand, sell their
commodities much above the natural price, and raise their
emoluments, whether they consist in wages or profit, greatly above
their natural rate.
The price of monopoly is upon every occasion the highest which
can be got. The natural price, or the price of free competition, on
the contrary, is the lowest which can be taken, not upon every
occasion, indeed, but for any considerable time together. The one
is upon every occasion the highest which can be squeezed out of
the buyers, or which, it is supposed, they will consent to give: the
other is the lowest which the sellers can commonly afford to take,
and at the same time continue their business.

(Adam Smith, 1776)

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

The Reason for the poor development


Like all other monopolies, it will unavoidably raise the price of
good books beyond the reach of ordinary readers. They will be
sold like so many valuable pictures. The sale will be confined to a
few learned men who have money to spare, and to a few rich men
who buy out of vanity as they buy a diamond or a fine coat. [. . .]
The commerce of books would of course be at an end; for even
with respect to men of taste, their number is so small, as of
themselves not to afford encouragement for the most frugal
edition. Thus booksellers, by grasping too much, would lose their
trade altogether; and men of genius would be quite discouraged
from writing, as no price can be afforded for an unfashionable
commodity.

(Lord Kames, 1773)

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

High prices

Keeping the market constantly understocked . . .


Higher prices result in fewer buyers and fewer readers. Books
were bought by the upper class and libraries.
The classical canon (known since the humanism) and novels
were published.
Luxury properties: »those who would be disposed to purchase
books, have not the means of so doing, and are obliged to be
frugal« – George Woodfall (1818).
Reading skills require practice. Development of literacy was
hampered.
The benefits of the books as vehicles of knowledge, as a
means of education, was not recognized in many social circles.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Ordinary readers do not read average books

. . . beyond the reach of ordinary readers . . .


Ordinary reader means: average income, but not average taste
and average interests.
Every profession has a particular set of training and
knowledge, that must be renewed regularly. Special literature
was missing: best practice books, know how for small
business, educational books for the masses and so on.
People start writing, because they read. A writer becomes an
author, because he is read by the consumers.
No lively scientific disputes in written form. Books are a
memory of the results of intellectual work. If one cannot use
the results, people were forced to start from the basics again
and again . . .

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Pin Makers

Adam Smith’s example of the pin makers: If the pin makers had all
wrought separately and independently, and without any of them
having been educated to this peculiar business, they certainly could
not each of them have made twenty, perhaps not one pin in a day.
On the other hand, with education and division of work it was
possible to produce four thousand eight hundred pins in a day.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

The Costumers

It is of importance that we do not look only at the increase in


productivity, but also on the other side, the costumer or the price,
a costumer has to pay. If someone produces twenty pins in a day,
he might receive twenty pounds on the market. However, if it is
possible to produce 4800 pins in a day, there is no need to pay him
4800 pounds a day. If there is no monopoly, the competition
reduces the payment for the pins and the increase of productivity
will benefit the society. The competition forces the pin maker to
pass over most of the advantages to the costumers.
On the other hand, the pin makers still receive the natural price for
their work.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Copyright fulfilled any of the objectives

The market was understocked.


The development of the society has been hampered.
The average payment for authors was below the average for
educated men (paid like beggars).
Some raised their profits, whether they consist in wages
(authors) or profit (publishers), greatly above the average.
Complete absence of the pin makers ideal.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Germany

Keeping the market constantly understocked . . .


It was impossible to keep the market understocked.
Publishers were forced to sell books to everyone, who paid a
price above the production costs.
An efficient book industry (authors, production, and
distributon) was established with increasing author fees, a
variety of novelties, efficient sales and low priced current
books.
Comparision to the internet: Because the internet is cheap,
one can find so much information;
millions of people earn their living with the net;
it is a seismograph for the interests of the masses.

Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences
History of Copyright
Copyright and Its Consequences
Some Economic Problems

Economic Problems
Economics deal with money, distribution of income . . .

In the long term, copyright (as we have it now) does not help
the authors or readers. It is a distribution rule resulting in
high incomes of the leading publishers and some best selling
artists or writers. It harms the average intellectual producer
and the consumers.
What is the »natural price« of a book or the performance of
an author? Economists don’t like Adam Smith’s term natural
price, because it includes also a fair value idea. When we talk
about a fair system, this question must be answered.
Today, authors are not the real reason for copyright, since
most have to be modest in financial terms. They are satisfied
with an apple and an egg (peanuts) and often lucky if they do
not have to pay for the publication.
Comparison between a System with and without Copyright The Long History of Copyright and Its Consequences