The Review of Austrian Economics

, Volume 29, Issue 2, pp 121–137 | Cite as

The perils of copyright regulation

  • Ryan Safner


The most robust framework for understanding the evolution and consequences of copyright statutes in the United States is the dynamics of interventionism. I apply the framework of Kirzner’s (1985) perils of regulation to the general revision of copyright law in 1976, and explore its effects on entrepreneurship and discovery processes. Critics of copyright commonly recognize the distortions of rent-seeking, but I emphasize the utility of interventionism to explain the “unsimulated” and the “stifled” discovery processes set in motion by copyright interventions, which use legal processes to allocate resources, and deter future discovery by raising transaction costs.


Copyright Regulation Intellectual Property Market Process Interventionism 

JEL Classification

B25 N42 K39 



I am very grateful to Benjamin Powell for his patient suggestions, and would also like to thank Christopher Coyne, Peter Boettke, Vlad Tarko, Santiago Gangotena, Lotta Moberg, Mark Lutter, two anonymous reviewers, and participants of the 2013 Southern Economics Association Annual Conference in Tampa, FL for helpful comments. I also gratefully acknowledge the financial support of the Dunn Foundation and Earhart Foundation. All remaining errors and opinions are my own.


  1. Arrow, K. (1962). “Economic Welfare and the Allocation of Resources for Invention.” In UMI (Ed.), The Rate and Direction of Inventive Activity: Economic and Social Factors. Universities-National Bureau.Google Scholar
  2. Becker, G. S. (1968). Crime and punishment: an economic approach. Journal of Political Economy, 76(2), 169–217.CrossRefGoogle Scholar
  3. Bell, T. W. (2014). Intellectual privilege: Copyright, common law, and the common good. Arlington: Mercatus Center at George Mason University.Google Scholar
  4. Besen, S. M., & Raskind, L. J. (1991). An Introduction to the law and economics of intellectual property. The Journal of Economic Perspectives, 6(1), 3–27.CrossRefGoogle Scholar
  5. Boldrin, M., & Levine, D. K. (2008). Against intellectual monopoly. New York: Cambridge University Press.Google Scholar
  6. Bracha, O. (2008). “Commentary on the U.S. copyright Act 1831.” In L. Bentley & M. Kretschmer (Eds.), Primary Sources on Copyright (1450–1900). (
  7. Bradley, R. L. (2005). “Interventionist Dynamics in the U.S. Energy Industry.” In P. Kurrild-Klitgaard (Ed.), Advances in Austrian Economics Volume 8: The Dynamics of Intervention: Regulation and Distribution in the Mixed Economy (p. 21–58). Elsevier.Google Scholar
  8. Brito, J. (Ed.). (2012). Copyright unbalanced: From incentive to excess. Arlington: Mercatus Center.Google Scholar
  9. Buchanan, J. M. (1982). Order defined in the process of its emergence. Literature of Liberty: A Review of Contemporary Liberal Thought, 5(4).Google Scholar
  10. Buchanan, J. M., & Yoon, Y. J. (2000). Symmetric tragedies: commons and anticommons. Journal of Law and Economics, 43(1), 1–14.CrossRefGoogle Scholar
  11. Cosgrove-Mather, B. (2009). “Poll: Young say Filesharing Ok.” (February 11, 2009).
  12. Delgado, R. (2004). “Law professors examine ethical controversies of peer-to-peer file sharing.” Stanford Report. (March 17, 2004)Google Scholar
  13. Dourado, E., &Tabarrok, A. (2014). “Public choice and Bloomington School perspectives on intellectual property,” public choice, forthcoming.Google Scholar
  14. Envisional (2011). Technical report: An estimate of infringing use of the internet (Tech. Rep.). informationtechnology & innovation foundation. (January 2011).Google Scholar
  15. Gain, B. (2011). “Special report: Music Industry’s Lavish Lobby Campaign for Digital Rights.”
  16. Gilbert, R., & Shapiro, C. (1990). Optimal Patent Length and Breadth. RAND Journal of Economics, 21(1), 106–112.CrossRefGoogle Scholar
  17. Hayek, F. A. (1945). The Use of Knowledge in Society. American Economic Review, 35(4), 519–530.Google Scholar
  18. Heller, M. A. (2008). The gridlock economy: How too much ownership wrecks markets, stops innovation, and costs lives. USA: Basic Books.Google Scholar
  19. Heller, M. A., & Heisenberg, R. S. (1998). Can patents deter innovation? The anticommons in biomedical research. Science, 280, 1–35.CrossRefGoogle Scholar
  20. Ikeda, S. (1997). Dynamics of the mixed economy: Toward a theory of interventionism. New York: Routledge.CrossRefGoogle Scholar
  21. Ikeda, S. (2005). “The Dynamics of Interventionism.” In P. Kurrild-Klitgaard (Ed.), Advances in Austrian Economics Volume 8: The Dynamics of Intervention: Regulation and Distribution in the Mixed Economy (p. 21–58). Elsevier.Google Scholar
  22. Johnson, E. E. (2012). Intellectual property and the incentive fallacy. Florida State University Law Review, 39, 623–679.Google Scholar
  23. Kastenmeier, R. (1976). “Copyright Law Revision: House Report No. 94–1476.” (September 3, 1976).Google Scholar
  24. Kinsella, N. S. (2008). Against intellectual property. Auburn: Ludwig von Mises Institute.Google Scholar
  25. Kirzner, I. M. (1985). Discovery and the capitalist process. Chicago: University of Chicago Press.Google Scholar
  26. Klemperer, P. (1990). How broad should the scope of patent protection be? RAND Journal of Economics, 21(1), 113–130.CrossRefGoogle Scholar
  27. Leibowitz, S. J. (2006). File sharing: creative destruction or just plain destruction? Journal of Law and Economics, 49(1), 1–28.CrossRefGoogle Scholar
  28. Lessig, L. (2004). Free Culture. USA: Penguin Publishing.Google Scholar
  29. Lessig, L. (2006). Code version 2.0. New York: Basic Books.Google Scholar
  30. Lindenbaum, J. (1999). “Music Sampling and Copyright.” Unpublished master’s thesis, Princeton UniversityGoogle Scholar
  31. Litman, J. (1987). Copyright, compromise, and legislative history. Cornell Law Review, 72, 857–904.Google Scholar
  32. Litman, J. (2006). Digital copyright. New York: Prometheus Books.Google Scholar
  33. Lohmann, F. V. (2010, February). “Unintended Consequences: Twelve Years Under the DMCA.” (Tech. Rep.). Electronic Frontier Foundation. −12-years 0.pdf
  34. McLeod, K. (2005). Freedom of expression(r): Overzealous copyright bozos and other enemies of creativity. USA: Doubleday.Google Scholar
  35. Nordhaus, W. (1969). Invention, growth and welfare: A theoretical treatment of technological change. Cambridge: MIT Press.Google Scholar
  36. Olson, M. (1965). The Logic of Collective Action: Public Goods and the Theory of Groups. Cambridge, MA: Harvard University Press.Google Scholar
  37. Patry, W. F. (1996). Copyright and the legislative process: a personal perspective. Cardozo Arts & Entertainment Law Journal, 14, 139–152.Google Scholar
  38. Patterson, L. R. (1993). Copyright and the ‘exclusive right’ of authors. Journal of Intellectual Property, 1(1), 1–41.Google Scholar
  39. Rudd, B. W. (1969). Notable Dates in American Copyright 1783–1969. Copyright Office.
  40. Smith, A. (1776). An Inquiry into the Nature and Causes of the Wealth of Nations (5th ed.).: E. Cannan, ed. London: Methuen & Co., Ltd.Google Scholar
  41. Stigler, G. J. (1971). The economic theory of regulation. The Bell Journal of Economics and Management Science, 2(1), 3–21.CrossRefGoogle Scholar
  42. Tabarrok, A. (2011). Launching the Innovation Renaissance. TED Books.Google Scholar
  43. Time Magazine (1976). “The Law: Righting copyright.” Time Magazine. (November 1, 1976).Google Scholar
  44. U.S. Copyright Office (1973). Copyright Enactments: Laws passed in the United States since 1783 relating to copyright (Tech. Rep.). (Bulletin No. 3).Google Scholar
  45. U.S. Copyright Office (1998). The Digital Millennium Act of 1998 - U.S. Copyright Office Summary.
  46. United States Congress. (1790). Copyright Act of 1790. (1 Statutes At Large, 124).Google Scholar
  47. Valenti, J. (1982). Home Recording of Copyrighted Works: Hearings on H.R. 4783, H.R. 4794, H.R. 4808, H.R. 5250, H.R. 5488, and H.R. 5705 Before the Sub-committee on Courts, Civil Liberties, and the Administration of Justice of the committee on the Judiciary of the House of Representatives. (Testimony of Jack Valenti).Google Scholar
  48. Warren, S. E. (2009). “Controlling the costs of intellectual property litigation.” Metropolitan Corporate Counsel. December 2009.

Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Department of EconomicsGeorge Mason UniversityFairfaxUSA

Personalised recommendations