Against Intellectual Monopoly

of copyright has been continually extended. At the turn of the century, it was twenty-eight years and
could be extended for another fourteen. Prior to the Sonny Bono/Mickey
Mouse Act of 1998, it was seventy-five years for works for hire, and the
life of the author plus fifty years otherwise, its last major extension having
been approved in 1976. So, the length of copyright term roughly doubled
during the course of the century. If this approximate doubling of the length
of copyright encouraged the production of additional literary works, we
would expect that the per-capita number of literary works registered would
have gone up. Here we present a graph of the number of literary copyrights
per capita registered in the United States in the last century.4 Apparently,
economic theory works, whereas the theory according to which extending
copyright terms boosts creativity in the long run does not. The various
copyright extensions have not led to an increase in the output of literary
work.

    While vigorously defending their "property," the big media corporations
are busily grabbing yours. The most recent copyright extension, the Sonny
Bono Copyright Term Extension Act of 1998 (CTEA), is the biggest land
grab in history. This remarkable piece of legislation extended the term of
copyright not only by twenty years for new works but also retroactively to
existing works. Copyright increased a hefty 40 percent in one quick legislative shot. Now, consider any normal economic activity, say, the amount
of effort you put in your daily work. Try to imagine what would happen
if your hourly wage went up substantially overnight. Our bet is that you
would put a lot more effort in your work, and your company would witness
a productivity explosion taking place at your desk. Did anyone notice an
explosion of artistic and cultural creations in the United States during the
past ten years? Did artists, writers, and musicians begin to migrate in flocks
from everywhere else in the world to the United States, to reap the fantastic
benefits of the CTEA? Strangely, if this amazing development took place,
both the mainstream media and the underground media seemed to have
missed it.
    How is it possible that an extension of copyright terms by 40 percent
could have zero impact on artistic production? The answer is simple, and
you probably have already figured it out: those extra years come far in the
future during the life of an author; hence, their economic value for the author
is very small. In fact, a calculation in a legal brief prepared by a number of
distinguished economists, including several with Nobel prizes, shows that,
as far as living artists are concerned, those extra years are equivalent to
increasing their expected revenues of a hefty 0.33 percent. As they explain:

    The twenty years of copyright term added by the CTEA provide a flow of additional
benefits that is very far into the future, and hence very small in present value. To
illustrate, suppose that an author writes a book and lives for thirty more years. In
this case, under the pre-CTEA copyright regime, the author or his assignee would
receive royalties for eighty years. If the interest rate is 7%, each dollar of royalties
from year eighty has a present value of $0.0045. Under the CTEA, this same author
will receive royalties for one hundred years. Each dollar of royalties from year one
hundred has a present value of $0.0012. In this example, the present value of total
additional revenues under the CTEA can be calculated by adding up the present
values of revenues from year eighty-one through year one hundred. Suppose that
the work produces a constant stream of revenues, and assume once again that the
interest rate is 7%. In this case, the present value of the total return from years
eighty-one to one hundred is 0.33% of the present value from years one to eighty.
Put differently, under these assumptions, the additional compensation provided by
the CTEA amounts to a 0.33% increase in present-value payments to the author,
compared to compensation without the twenty-year term extension.5
    The question is, then, Why all this fuss over a bill that increased revenues
for artists by just 0.33 percent? Why bother legislating if that is all that was
achieved? And why are the European countries currently discussing a similar
proposal of extending copyright term from fifty to about ninety years? We
must have gone through all this trouble