I can’t find it, though, and I wonder if I lent it to anyone. I highly doubt I would have sold it; it was too good to sell, and in any case I’m pretty sure it’s loaded with margin notes. It’s also not on the list of books I sold off when I was unemployed.

So did I lend it to anyone who reads this blog? If I don’t find it soon, I’ll probably just buy another copy.

I’m reading a very clever book right now: Landes and Posner’s Economic Structure of Intellectual Property Law. The title may sound dry, but it just makes rigorous and thoughtful what many of us have spoken about vaguely: what the proper balance between an artist’s desire to earn money and the customer’s desire to get (say) cheap music ought to be.

In the absence of any governmental controls, the market normally strikes this balance. In the classical (and naïve) model, I can’t charge you too much for a good, because there are lots of people also offering similar goods; if I stiff you, you can go to one of them. Likewise, you can’t offer me a price that’s too low, because I could always refuse to sell to you and sell to customers who offer me a more reasonable price. The model also says that the price of a good converges to its marginal cost: under certain assumptions, new competitors will enter a market to seek profits until there are no profits to make.

I have trouble with the model up to there, as I’ve noted before: if marginal cost is the thing, then what about goods with negligible marginal cost — say, music? The fixed cost of such a good is quite high, but the marginal cost is just the cost of recording and packaging a CD — and in the era of MP3s, not even much of that cost. We’re already at a point where the marginal cost of obtaining an album is $0.

The classical answer here is that the market fails on goods such as music: without some sort of legal protection, no one would produce zero-marginal-cost goods like music.

If you buy the argument so far, then we’re no longer talking about an issue of principle. It is now an issue of policy. If you believe that the economics of music make some form of governmental regulation necessary, then you are now forced to debate copyright rather than the more abstract issue of “authors’ rights.” Based on what I’ve read, the more narrow legal question never strays far from the more abstract question of principle, so it’s not much of a loss. But the legal question opens up a lot of possibilities, because we already have a whole set of analogies and case law that point the way toward an answer to the legal question.

This is where Posner and Landes pick up the topic. Their question is easy to frame: what is the optimal level of protection for “intellectual property” (trademarks, patents, copyrights, and trade secrets)? This is the sort of precise question that we should have been asking all along, but from what I can tell Posner and Landes are the first to formalize the question in a way that’s applicable to the broader debate in our society.

They do what any modeler would do in this situation: pick apart all the influences that copyright, say, has on the music industry, and take some guesses about the relative importance of each. Increasing copyright protection would help artists in some ways and harm them in others: it helps them because more protection may make something like “piracy” less likely, but it harms them because no one’s work is entirely original. As the authors point out, one of them was involved in a college play entitled My Ugly Broad, a spoof on My Fair Lady, which was itself based on George Bernard Shaw’s Pygmalion, which builds on Ovid’s “Pygmalion and Galatea.” The strictest possible copyright control would have required the authors to get permission from My Fair Lady’s author, who in turn would have had to get permission from Shaw or Shaw’s estate, who in turn would have had to seek Ovid’s descendants and get their permission.

If that last bit seems ridiculous, it’s hardly implausible. The strictest possible copyright regime would grant perpetual protection to any given work. And if you follow the logic of most ardent copyright defenders, why shouldn’t an artist get all the rights to his work in perpetuity? It’s his work after all; surely he should be able to tell the world how to use it?

The reason why the artist shouldn’t have such control is obvious from the example above: anyone who wanted to build on the artists who came before him would have to go through a tremendous amount of effort to make sure he wasn’t running afoul of previous artists. The same problem pops up, to a lesser degree, with very long (though finite) copyright terms; Walt Disney may be long dead, but I still need to get the Disney Corporation’s permission before I slip Mickey into a porn movie. Disney is actually a fairly easy case, because the company controlling the copyright still stands. What if I want to include a clip from a Buster Keaton movie in one of my own films? Who owns the copyright on his work? Where would I even start that search?

So there are obvious costs to strong copyright protection, as loads of people have been arguing for a long time. Posner and Landes just run with this line of thought and formalize a lot of our intuitions.

Their models are healthy for those who think artists should bear sole control over their work; the models might help convince the unconverted. But I’m not sure that they add much for those of us who already accepted this fact. We already accepted that one should increase copyright protection until the marginal benefit from adding more protection just equaled the costs of that protection; it was obvious to us that there was such a point, past which the marginal benefit decreases and the marginal costs increase. While Posner and Landes rigorously establish the existence of such an optimum, their models are based on hypothetical quantities that don’t seem measurable — things like the total quality of all biographies based on unpublished works, on their way to establishing a fair use right in letters under certain conditions. Again, I can buy the argument that one should increase protection for such works until the total quality of biographies stops increasing, but how would I measure such a beast?

I hope Posner and Landes’s book starts a conversation, and brings in others who weren’t part of the ongoing conversation. It’s certainly a fun read, too: I get a sense of joy knowing that someone may finally have broken through the unproductive logjam that the copyright discussion had become.