The standard justification for copyright protection is the “incentive to create” theory. For obvious reasons, that theory has no application to after the fact extensions of the copyright term. If John Steinbeck felt sufficiently incentivized to write East of Eden in 1952, extending the copyright term in 1998 — absent time travel or extraordinary foresight on his part — would not have given us a better book. Extended protection for works already in existence is therefore justified by an “incentives to disseminate” theory. Paul Heald devised an ingenious experiment to test the hypothesis “that copyright law is presently necessary to prevent the under-exploitation of creative works.” He compared two sets of best sellers, one published from 1913-1922, which fell into the public domain from 1988-1997 and another set of best sellers published from 1923-1932 that remain under copyright protection presumably forever (at least until 2018). Heald finds no evidence of under-exploitation due to the public domain status of a work. To the contrary:

• In 2006 in-print status of the public domain set reached 98%, compared to 74% of the copyrighted set.
• Those copyrighted books in print were significantly more expensive than the public domain works, suggesting that the extended copyright term had no social benefits. It merely imposed a deadweight loss.

One “argument” for after the fact copyright term extensions (other than, of course, rent seeking) invokes congestion externalities. Cultural resources, or so the story goes, might suffer from over-exploitation. A book or a song might “wear out” if dozens of advertisers quote it or use it to market their products. That is plainly absurd. The tragedy of the commons requires rivalrous and exhaustible goods. Books and music and other cultural goods, however, that are commonly protected by copyrights are both non-rivalrous and inexhaustible. Here is Heald’s summary of his article:

The data presented herein clearly suggest that the public domain status of popular books does not result in under-exploitation. Although the public domain books in the data set are on the average ten years older than the copyrighted books, they are in print at a higher rate and have more editions available by more different publishers. If one considers only the sub-set of the most valuable books, then a significant difference in price can be measured, confirming economists’ suspicions about deadweight losses associated with the extension of copyright protection. The only arguable benefit to offset these losses would be the reduction of possible congestion externalities. In the context of books (unlike trademarks and perhaps celebrity personae) where the public is never forced to overconsume the product, it seems highly unlikely that the multiplicity of editions shown in the data demonstrate any such externalities. In general, the data show a highly competitive and robust market for the production of public domain books. Markets for other products, such as movies, music and software, where technology has made the cost of reproduction extremely low, are likely to behave in much the same way. Although market failure is possible, the burden should be on the party arguing in favor of central control of the production of a good in an apparently competitive market. Taking up Landes and Posner’s (2003b) call to explore analogies between intellectual property and tangible property, we should conclude with a simple point. If we trust the market to produce the optimal amount of tangible goods like string, bubble gum, and diet soda without entrusting central control of those products to a single authority, why should we treat intangible public goods like My Antonia, the color yellow, or the word “coffee” any differently? Of course, we need a property right of sufficient duration to assure that public goods get created in the first place, but extending the property right beyond that point demands affirmative proof that the market is incapable of responding efficiently to on-going consumer demand for those creative products.

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