Against Intellectual Monopoly

productivity, but there is a silver lining.
On December 24, 2006, we went back to the Internet to see what happened
to these three companies. All three of them still exist, and many other
have joined the game. After years of having all its innovations mercilessly
"pirated," Red Hat is still the market leader, has a worldwide web of offices,
sells lots of Linux-based software products while also giving away lots of
others for free, and its revenues are soaring. HCI Design, in spite of the
advantage of being a legal "pirate," does not seem to have done very well; it
is still there, but it is selling very few products and all Linux-based products
are now off its shelves. Linux Emporium had a more interesting life. After
either changing its name to or having been acquired by ChyGwyn, it is
back in business under the original name and it is thriving. Indeed, it has
pioneered an entire new line of business: it sells at positive prices software
that is downloadable for free from the original companies, by claiming it
sells "high class software for the cognoscenti." The power and creativity of
competitive markets sometimes surprise even us!
Copyrightables: Books, News, Movies, and Music
    Copyright has traditionally been used for literary works and for media
ranging from newspapers to music and movies. Large media firms, such as
Disney, and industry associations, such as the Recording Industry Association of America (RIAA) and the Motion Picture Association of America
(MPAA), argue loudly and vociferously for ever-increasing control of their
"intellectual property." So, you might imagine that creative activity is low
and artists are poor when and where copyright is weak. Needless to say,
nothing could be further from the truth.
Fiction and Literature
    People find it hard to wrap their heads around the concept that ideas can
be rewarded without a copyright or patent. Without a copyright, how will
the author of a novel get paid? Consider the facts.
    Start with English authors selling books in the United States in the nineteenth century. "During the nineteenth century anyone was free in the
United States to reprint a foreign publication"10 without making any payment to the author, besides purchasing a legally sold copy of the book. This
was a fact that greatly upset Charles Dickens, whose works, along with those
of many other English authors, were widely distributed in the United States,
and "yet American publishers found it profitable to make arrangements with English authors. Evidence before the 1876-8 Commission shows that
English authors sometimes received more from the sale of their books by
American publishers, where they had no copyright, than from their royalties
in [England],"' 1 where they did have copyright. In short, without copyright,
authors still got paid, sometimes more without copyright than with it.12

    How did it work? Then, as now, there is a great deal of impatience
in the demand for books, especially good books. English authors would
sell American publishers the manuscripts of their new books before their
publication in Britain. The American publisher who bought the manuscript
had every incentive to saturate the market for that particular novel as soon as
possible, to avoid the arrival of cheap imitations soon after. This led to mass
publication at fairly low prices. The amount of revenues British authors
received up front from American publishers often exceeded the amount
they were able to collect over a number of years from royalties in the United
Kingdom. Notice that, at the time, the U.S. market was comparable in size
to the U.K. market.13
    More broadly, the lack of copyright protection, which permitted the U.S.
publishers' "pirating" of English writers, was a good economic policy of
great social value for the people of United States, and of no significant detriment, as the 1876-8 Commission report quoted above and other evidence
confirm, for English authors. Not only did it enable the establishment and
rapid growth of a large and successful publishing business in the United
States, but also, and more important, it increased literacy and benefited the
cultural development of the American people by flooding the market with
cheap copies of great books. As an example, Dickens's A Christmas Carol
sold for $.06 in the United States, while it was priced at roughly $2.50 in
England. This dramatic increase in literacy was probably instrumental to
the emergence