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Incentives, Food on the Table, and Cake

The cake is a lieI’m a bit slow in posting this, but last Friday I heard this interesting interview with John McCrea of the band “Cake” on NPR’s All Things Considered. This part caught my attention: the host, Melissa Block, noted that Cake’s album “Showroom of Compassion” debuted on the Billboard 200 chart at No. 1—the catch being that it was the lowest No. 1 ever.

BLOCK: [W]hat does that tell you about where the music industry is right now and what the, you know, what the future of recorded music is?

McCREA: Oh, I’m very pessimistic about it. You know, can you put food on your table with music? Probably not. I think I see music as a really great hobby for most people in five or 10 years.

I think there will always be a level of, like, Lady Gaga and, you know, that sort of celebrity artist. But I don’t know, like, the middle class of music. I see everybody I know, who I think, you know, some of them really important artists, are studying how to do other jobs.

This supports an important point: the standard incentive story we tend to bat around in U.S. copyright and patent circles is more complicated than it’s typically given credit for.

I often have fun on the first day of my Copyrights class, as I suppose many IP professors do, talking about the standard utilitarian rationale for copyright—that it’s necessary in order to incentivize authors to create—and then immediately deflating it, at least in part. Obviously it’s not the case that without copyright there would be no creative works. There were plenty of them before copyright, and lots of people produce lots of stuff now without any expectation of remuneration. The idea is that copyright produces some additional number of works at the margin. There’s a line of scholarship currently being written in this vein demonstrating the various motives even successful authors and artists tend to have (to say nothing of professors) in creating something, of which financial rewards may for some be only a small part.

But adding epicycles on epicycles, even authors who might originally produce works without much expectation of financial reward nevertheless will find it difficult to keep producing without it. That is the point that I think the McCrea excerpt demonstrates. There’s only so long you can live as a starving artist before you have to, well, spend some substantial chunk of your time doing non-artist things, like waiting tables. And that’s just the archetypal single-artist model. There are works that are probably impossible to create without the promise of required remuneration, such as large-scale film production or video games. And we’re not even talking about distribution, which, while cheaper now than it once was, is still far from costless. I therefore think that while the “authors have a lot of different motives to create” literature is interesting, its policy implications are somewhat limited, at least until we know more about the role of compelled compensation to the whole system.

8 thoughts on “Incentives, Food on the Table, and Cake”

  1. On the video game front:

    But more broadly, I think what you’re saying is “we don’t know what would happen to the scope of creative production if it were not coupled to copyright’s provision for a means of obtaining economic rewards.”

    So, e.g., EA or Universal Studios folds because it isn’t profitable. Following that, what does the landscape of cultural production look like? Is it better or worse? Is the answer to that entirely obvious?

  2. Why wouldn’t it be worse? I suppose that smaller organizations might step in fill some of the gap resulting from unmet demand. But by definition they’re going to have less in the way of resources to meet that demand in various ways. And I’m not sure why non-monetarily-incentivized creators would change their behavior at all. Or if you want to look at the user end, wouldn’t users who only use such cheaper and/or free works when the more expensive ones aren’t available be settling for second-best?

  3. What is worse and what is better when it comes to the cultural landscape? I understand that we would rather have 1000 barrels of oil instead of 100. Is more always better for cultural production? Or is there something to be said about the nature of the productive process as opposed to its outputs?

    Just a thought.

  4. Re the mine craft post: yes, quite right. It is not your ordinary game. Arguably, it is not a game at all!

  5. Thanks Greg. I don’t think I understand the thought, though. Let’s say that there is 100 units of works being produced for which financial reward is necessary for continued production and distribution, and 50 units of smaller-scale works for which financial reward is unnecessary. Due to changes in the market and society 100 units is unsustainable and that falls to 70, whereas we still have 50 units of the other stuff.

    Is the idea that the producers of those 30 units will now go out and do things that on net have more societal benefit, e.g. become teachers or something? Or that the producers of the 50 units now have more fun doing it? Or that society in general is better off with only 120 units of works instead of 150, despite the prior support for 150, i.e. we need to get outside and play more.

    One thought that occurs to me is that it’s conceivable that the causal arrow is going the other way, that non-monetary works are *substituting* for the first type of works, i.e. that they spiked to 80 and so the appetite for 100 units of Type I works concomitantly decreased. But I’d be curious if there is evidence to support that, i.e., if there is *significant* substitution of amateur YouTube videos for television and movies, or unsigned bands for professionally produced music.

  6. Well, I think your thoughts there are really interesting. I do think, given limited leisure time and attention, the time we devote to amateur content (e.g. reading blogs and Facebook posts, watching YouTube videos and skimming through lolcats) must displace time that we would be doing something else — e.g. watching television. So amateur content must compete with professional content. In the world of F/OS software that is clearly the case.

    But that wasn’t really where I was headed. What I meant by “the nature of the productive process as opposed to its outputs” had to do with the difference between an amateur creative ethos, where creative work is intrinsically rewarding and therefore performed with substantial artistic autonomy, and a professional creative culture, where economic markets drive the permissible shape of content and potentially alienate the artistic laborer from the commercial product she creates.

    The thought is, perhaps, that 50 units of Type II work + 70 units of Type I work might actually be better than 50 units of Type II work + 100 units of Type I work.

    Yes, there’s the math: 150 is more than 120, not less. But if the world of 120 is a world where, to get semi-Habermasian about it, the public sphere is characterized by creative freedom and authenticity, I could see where some might argue that 120 provides a better outcome than 150.

  7. I’d go with the “the outside and play more” interpretation in a slightly different sense than Greg uses. There’s a good possibility that some number of the 100 works for which the system currently provides financial reward are socially value-less and perhaps wasteful. The fact that society is currently willing to pay for 100 works is evidence of “demand” for those 100 works in the sense of what people were willing to buy but not necessarily in the sense of what the market asked for. One could argue, for example, that the market did not ask for both the Beverly Hillbillies and Gilligan’s Island, even though the market accepted both. Commercially-produced entertainment is replete with examples of producers stoking the supply channel with copy-cat film, television, and music. Is that evidence of unmet demand? Or evidence of waste and inefficiency in noncompetitive markets? Sometimes consumers are sheep. I know that I am.

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