Socially Optimal Copyright Infringement

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Tim Lee argues that it’s appropriate that the burden of enforcing copyrights is on the rights-holder. I agree with what he says. As a further consideration, it’s also worth recalling that the socially optimal level of copyright enforcement is higher than zero. A rights-holder is going to price access to his works at the profit-maximizing level. But there will always be people for whom access to the work is worth more than $0 but less than the profit-maximizing price. When those people infringe they gain a real benefit, but the rights-holder incurs no real loss.

Yesterday, for example, I linked to what I take to be a pirate copy of Michael Dummett’s article “Bringing About the Past” and I’m fairly certain that none of the people who clinked the link and downloaded the paper yesterday (myself included) would have done so had there been no alternative to paying the copyright holder for the privilege. Completely eliminating copyright infringement in the digital age would not only be difficult, it would represent a massive loss of social welfare. Forcing the burdens of enforcement onto rightsholders has, among other things, the impact of ensuring that copyright enforcement remains imperfect. In particular, it makes it relatively likely that instances of infringement that aren’t really costing copyright owners significant revenue will go unpunished. This is a good thing.

I would note that one of several reasons to resist the effort to analogize copyright infringement to piracy is that it completely collapses this fact. The socially optimal level of robberies undertaken with violence and the threat of violence is zero. There are practical questions about the feasibility of perfectly enforcing laws against robbery, and also questions about enforcement costs. But in principle, the less robbery the better. This is not the case with copyright infringement. Some instances of infringement represent genuine losses to copyright owners and there’s a debate to be had about the extent to which such transactions are socially harmful. But over and above those instances, there are many instances of infringement such that non-infringement would represent deadweight loss rather than a benefit to the copyright owner.