October 20, 2003 ·
As Michael Geist writes, it is increasingly the practice of the US government to export its copyright policy though bi-lateral trade agreements. One example is the trade agreements being concluded with Australia right now that will require Australia to increase its copyright term to life plus 70.
The Allen Consulting Group has prepared what it apparently considers an economic analysis of the proposed Term Extension. The report was commissioned by the Motion Picture Association, among others. The report is embarrassingly poorly done.
I describe some errors in the extended entry below. But I hope for the Allen Consulting Group that this report is not representative of its work in general.
While the report describes a 1989 article by Posner/Landes as the “major theoretical contribution” to the analysis of term extensions, the most striking feature of the Allen report is its failure to address the arguments made by 17 economists, including 5 Nobel prize winners, in the brief submitted in Eldred and then published by AEI-Brookings. While that brief has been smartly criticized (though I believe erroneously, as I will describe in another post) by Liebowitz & Margolis, it certainly sets the framework for any economic analysis of term extension. (The Posner/Landes piece is about the length of terms generally, not term extension).
As Akerlof, et al., frame the analysis, the fundamental distinction in any consideration of term extension is the difference between extending existing terms, and extending terms prospectively. This distinction appears no where in the Allen Consulting Group report. Thus throughout the report, one is bounced around with arguments that are true for prospective extensions but false for retrospective extensions, and false for prospective extensions, but true for retrospective extensions. While the report cites the brief in a footnote and to accompany another cite, it nowhere addresses this core question that brief raises: Whether or not you believe extending terms in the future makes sense, what possible argument is there for extending terms for works that already exist?
In America, the answer to that argument was simple: Hollywood benefited. But what is the argument in Australia?
More frustrating is the pudginess of this argument that purports to be economics. There’s lots saying that both sides exaggerate their claims, but nothing to provide any actual evidence to evaluate whether any claim is exaggerated. And then, after acknowledging there is no useful actual evidence at all, the report concludes that on balance, the effect of the extension would be neutral, and so Australia should do it.
I’ve put some notes on the report here that you might find useful as you read through their argument. No doubt I’m not a neutral in this debate. But I only hope the Allen Consulting Group got alot of money for this report. It certainly won’t help its reputation as a firm that provides objective economic analysis.