Low-Hanging Fruit Guarded by Dragons: Reforming Regressive Regulation to Boost U.S. Economic Growth (2015-06-22; pdf) by Brink Lindsey of the Cato Institute is very much in the vein of (and briefly mentions) that organization’s 2014 “Reviving Economic Growth” forum. At least 8 of the 51 forum participants made critical mentions of intellectual property (see analysis). IP is one of four areas of “regressive regulation” that both hamper growth and increase inequality targeted by Lindsey (the others are high-skilled immigration restrictions, occupational licensing, land use regulation).
Lindsey provides a fairly usual accounting of recent IP developments and issues and proposes 4 “ambitious” (relative to the usual) IP reforms:
- End criminal liability for copyright infringement
- End any liability for noncommercial copying
- Reduce copyright terms
- End patent protection for software and business methods
Each of these would be welcome. How does Lindsey imagine they might be achieved in the face of “dragons”, “powerful interest groups that benefit from the status quo, all of which can be counted upon to defend their privileges tenaciously”? Lindsey concludes, with respect to reforms of all four areas of regressive regulation:
The idea of a left-right coalition to push deregulation may sound farfetched, but it is not without precedent. Consider the country’s last major episode of pro-market regulatory reform in the late 1970s and early 1980s. During that brief period, price-and-entry regulation of airlines, trucking, and railroads was systematically dismantled; price controls on oil and natural gas were lifted; interest-rate caps for checking and savings accounts were removed; and the AT&T monopoly was ended, paving the way for competition in long-distance telephony. Those too young to remember can be forgiven for associating all of this with Ronald Reagan, but in fact Democrats and progressives played a major role. Jimmy Carter signed the legislation that deregulated airlines, trucking, railroads, and natural gas. On Capitol Hill, Edward Kennedy led the fight for airline deregulation, ably assisted by his aide Stephen Breyer. Yes, the rise of Chicago-school economics and especially the law-and-economics movement supplied momentum for these sweeping policy changes, but so did the activism of Ralph Nader.
History never repeats itself, but sometimes it rhymes. As in the 1970s, the U.S. economy today is delivering disappointing results. Back then the problem was “stagflation”; today we worry about a “great stagnation.” And once again, the shifting currents of political debate are bringing together unlikely allies with a common interest in reviving prosperity and a common hostility to the entrenched interests that stand in the way. With luck, contemporary reformers can follow their predecessors’ good example.
I’m very much cheering pluralistic reform for the common good but am not counting on it alone (with respect to knowledge policy; the other 3 areas are mostly out of scope for this site).
First, reform of enclosure by concentrated interests (called out as regressive regulation here, with various different names, emphasized features, and critiques elsewhere, e.g., crony capitalism) is an evergreen issue. Hoping for a repeat of some reform success after two generations seems painfully inadequate as a strategy. (Incidentally, the 1970s period of liberalizing reform Lindsey mentions did not extend to IP: to the contrary, its reach extended considerably.)
Second, if by happy circumstance reform of regressive regulation occurs, is it sustainable? Is the structure of the affected areas changed so as to increase the constituency for continued reform for the common good, or is the reform just a bump in the road for increased capture by a slightly different set of concentrated interests? My knowledge of the 1970s reforms mentioned and subsequent history of affected industries is too superficial to have an opinion. I suspect ‘it’s complicated.’ I would love to read an evaluation of the reforms’ sustainability, including whether this was a consideration in their design, and how the reforms have affected discourse since.
These two challenges, of feasibility and sustainability of reform in the face of concentrated interests, are major reasons I advocate prioritizing commons-favoring reforms. These are incremental and sustainable, and can take diverse forms which result in shrinking the profits of and constituency for freedom infringing industries and increasing the constituency and policy imagination for commons-based production.
I am again happy to see intellectual property held up for criticism as an important regulatory barrier to growth and equality. But the analysis would be greatly improved by including commons-based knowledge production as an important development (as with the aforementioned forum, Lindsey does not mention concepts like open source and open innovation or examples such as Linux and Wikipedia) and commons-favoring policy as a primary mechanism of reform.
In my recent comments on excerpts from Paul Mason’s PostCapitalism I noted:
Mason is writing from a left-wing perspective, hence equality comes first and markets viewed with skepticism at best. But one ought take on a similar pro-commons and anti-IP program if one’s commitments hold that post-capitalism implies really free markets, or if one thinks security and existential threats trump both equality and freedom.
The amazing thing about the pro-commons and anti-IP agenda is that its implementation can increase all 3 of freedom, equality, and security, and do so incrementally and sustainably. A good future depends on it.
As noted by the link, Cato (again, where Lindsey works) would be an organization for which reform of regressive regulation creates freer markets. Fortunately knowledge policy reform in a good direction should be squarely in the interest of both “sides”, despite radically different commitments regarding the role and impact of markets in society. Mason actually makes a brief mention of broad spectrum ideological appeal in his piece:
The transition will involve the state, the market and collaborative production beyond the market. But to make it happen, the entire project of the left, from protest groups to the mainstream social democratic and liberal parties, will have to be reconfigured. In fact, once people understand the logic of the postcapitalist transition, such ideas will no longer be the property of the left – but of a much wider movement, for which we will need new labels.
Low-Hanging Fruit Guarded by Dragons: Reforming Regressive Regulation to Boost U.S. Economic Growth would be much better, especially given its aim of imagining a left-right reform coalition, if it included mass criminalization and incarceration among its targets. Even viewed only through the lens of impact on labor markets, surely mass criminalization is much more regressive, exclusionary, and has a vastly greater direct fiscal cost than does occupational licensing. But in this regard it is good that the piece includes ending criminal liability for copyright infringement as a suggested reform, as this would militate against another potential input to mass criminalization.
Though this site (WIFO) is focused on intellectual freedom in relation to knowledge regulation and the knowledge economy, occupational licensing does have some bearing on broader conceptions of intellectual freedom, as does restrictions on movement, residence, and work, and criminalization and incarceration involve all kinds of grave and direct infringements of intellectual freedom, far greater than from any other issue mentioned in this post. My excuse for focusing on the narrow conception of intellectual freedom that I do is that I think it is highly leveraged, and part of that leverage is in its potential for increasing the probability of peace, which in my view is required for justice.
On a lighter note, taxpayer subsidy of private parties is another “regressive regulation” area that could be considered independently, or that elimination of could be part of the reform of other areas of regressive regulation. Subsidy does fit the narrative of the piece, as it favors politically connected and wealthy incumbents, thus hampers creative destruction and efficient allocation while also increasing inequality. Obvious knowledge policy reforms involving subsidy include eliminating film location and sports stadium subsidies (diminishing the resources available to freedom infringing industries).