Bryan Caplan  

Copyright, China, and Anti-Foreign Bias

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Rationalization #787 why trade with China is bad: "They're infringing our copyrights! Their government is doing nothing to stop it. We've got to impose sanctions until they get tough."

When Americans infringe American copyrights, we throw up our hands. "What can you do in the computer age?" When the Chinese do the same thing, however, it's a massive injustice, and its existence "proves" that their government is doing nothing about it.

Yes, we've got a particularly clean example of anti-foreign bias on our hands. It's also particularly outrageous, because Chinese infringement - unlike American infringement - probably costs copyright holders very little. After all, Americans might actually be willing to pay $19.99 for a CD. But all but a handful of Chinese would choose to do without if they had to pay full price.

Furthermore, given how hard it is to enforce copyright here at home, what exactly do critics have in mind when they demand that China "get tough"? If we really wanted to crack down on American copyright infringement, we'd throw infringing teens in jail and auction their parents' homes to pay the fines. It would probably work, but almost no one wants to see such draconian policies in the U.S.

Perhaps trade opponents simply want China to adopt iron-fisted copyright policies we'd never adopt ourselves. Perhaps. But if China complied, I have no doubt that the usual suspects would cry foul - and switch to Rationalization #7: "We can't trade with a regime that brutally violates human rights."

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The author at The Undercover Economist in a related article titled Copyright, China, and anti-foreign bias writes:
    Bryan Caplan's book, The myth of the rational voter, has been making waves, and justly so. Here's Bryan in his pomp over at Econlog:Rationalization #787 why trade with China is bad: They're infringing our copyrights! Their government is doing nothing [Tracked on October 14, 2007 9:17 AM]
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Jim Bob writes:

Did any one actually say that or are you just attacking a made-up free trade critic?

TGGP writes:

From the Mises blog: Intellectual Property as a Tool for Political Repression
Bryan, as an anarcho-capitalist, how do you think intellectual property rights would be enforced without government?

Bill Stepp writes:

China is far more free-market-oriented in its reluctance to enforce the monopoly formerly known as intellectual property than is the U.S. In the 19th century, the U.S. didn't enforce foreign copyrights (but foreign authors still earned royalties on some of their American sales), which had the effects of driving down the price of books, expanding the book market. and encouraging the growth of literacy. Even domestic copyrights were enforced less rigorously. This did not impede the growth of an American authorial class.
The lying liar Charles Dickens complained about not getting royalties from his three American
publishers, but the president of Harper & Brothers wrote a letter pointing out Dickens was paid.

Vincent Clement writes:

"copyright policies we'd never adopt ourselves"

Really? The DMCA pops in mind as an example of an iron-fisted copyright policy. The RIAA and MPAA are working with their foreign counterparts to introduce similar legislation in foreign countries.

General Specific writes:

I take it you aren't a fan of intellectual property then. If so, then why is there a Copyright notice on the main page of this blog?

What is your proposal?

Lex Spoon writes:

Bryan, many countries do fail to enforce copyright law. I do not know about China itself, but here are two examples from my personal experience:
# I have Turkish friends who can buy copies of any major game for about $1 or $2 back home. The copies they show me are obviously illegal copies -- they are on CD-R's and have the name of the title written on the front.
# If you want an electronic text for a best-selling book, you can often find it by adding "" ("Russia") to your Google search.

I am sure there is anti-foreign bias mixed into people's reaction to this situation. What cannot be denied, though, is that copyright is enforced much more strongly in the U.S. and in the E.U. than in much of the rest of the world.

What to do about it is a very good question. Bryan's observation about the cost to Americans is accurate (zero), and it applies to prescription drugs as well as to computer software. I also sympathize with Bill's line of thought, though, and think that we do not need such strong copyright so much anyway. Here's what I wrote in the past:

Copyright in the Digital Age

So I would be interested in watching the natural experiment play out, assuming China is equally lax on IP protection for Chinese citizens as for foreigners.

Conley6267 writes:

It is true Americans infringe on American copyrights all the time. The access to download illegal music has swarmed the Internet; sites like Limewire and Napster have been discredited and downloader’s can face up to 3 years in prison and $250,000 in fines if convicted. However, nothing is being done to the Chinese.

According to The Financial Express, “The US Chamber of Commerce has estimated US companies lose more than $200 billion in China each year because of sales of counterfeited and pirated goods. The United States is taking the “slow approach” against the Chinese for infringing our intellectual property right laws; no complaint has been made to the World Trade Organization to enforce these infringements. So who is to blame?

Serge Fafalen, managing partner of SG Fafalen & Co., thinks that the IPR situation in China might improve even more as Chinese companies enter the world market. “At one stage, these Chinese companies will go out and face the same problem of intellectual property copying and infringement of their rights in their overseas market. That might teach them that somehow, the situation in their country must be put in order so that they can be protected outside as well.”

Like the golden rule says, “Do unto others as you would have them do unto you.” Most importantly, what goes around comes around.

8 writes:

You need to separate the different kinds of IP. For movies and songs the argument is very weak. To assume that because a Chinese guy with an income of $300 a month downloads 3 Hollywood movies a month, Hollywood has lost $60 in sales is absurd. They haven't even lost $3, because the guy wouldn't even pay that much.

On the other hand, there are Chinese manufacturers who are lifting the entire design of automobiles. Some businesses (foreign & domestic) act in an almost clandestine fashion, breaking manufacturing into many pieces in different parts of the country in order to thwart piracy. Maybe it's an argument for doing away with IP altogether, but the cost to business is far higher in the latter than the former.

8 writes:

Speaking of Chinese IP law...

Chen Shoufu, the author of Coral QQ (珊瑚虫), a popular IM add-on, was arrested at the end of August for infringing on Tencent's intellectual property.

Tencent QQ, the dominant IM service in China, annoys some users by serving up ads and keeping contact locations secret. By installing Coral QQ, users can block QQ's ads and gain the ability to see the IP address and geographical location of their contacts.

This isn't the first time that Coral QQ has tangled with Tencent. Chen (who goes by the online handle "Soff"), originally wrote Coral QQ as patched version of Tencent's software, but ran into opposition from the company. Though free, QQ isn't open source, so when Tencent complained about IP violations in 2003, Chen stopped providing downloads of his patched version of QQ and promised not to alter Tencent code in the future....

Derek Keener writes:

I agree with you to an extent. I had a buddy that went over to China and has increased his DVD collection by about 100 because DVDs are $1 or $2 on the streets of China. These DVDs sell for about $15-$20 in America. Although in our country we still rip off music artists and movies out by copying their work instead of purchasing them. Our nation is trying to crack down on this, but it is near impossible to get into everyone's computer database and see who is illegally downloading music and movies. As a college student, our university can look at every student’s computer and monitor what they do. If they have abundant number of space used then they can be taken into judicial affairs and fined for downloading music and movies. In conclusion we can attack the Chinese for ripping us off, but shouldn't we fix ourselves before attacking them?

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