Free Against Intellectual Monopoly by Michele Boldrin;David K. Levine Page B

the Asian edition of Penthouse, yet the newsstands in
Kowloon and Hong Kong were bursting with pornographic materials, all
from the many competitive imitators of those fading monopolies.33

    If we compare the pornographic movie and entertainment industry to its
legitimate counterpart, we find an industry that is more innovative, creates
new products and adopts new technologies more quickly, and for which the
reduction in distribution cost has resulted in more output at lower prices
and a more diverse product. We also find an industry populated by many
small producers and no dominant large firms capable of manipulating the
market either nation- or worldwide. European intellectuals and politicians,
obsessively fearing colonization by American movies and music, should take
note: strengthening copyright protection, as you are all advocating, may just
make you a couple of euros richer and a lot more intellectually colonized.
    Finally, in pornography we find an industry in which "stars," be they
actresses and actors or directors, earn a good living but are far from accumulating the fabled fortunes of the stars of its monopolistic counterparts.
The evidence shows that porn stars make many more movies and earn
between one and two orders of magnitude less, overall, than regular stars.
In other words, they work more and make less money. This may seem a bad
feature of the nonprotected industry, but from a social point of view it need
not be. Indeed, it is the other side of the fact that more and cheaper porn
movies are available. The stars of the porn movie industry are simply a lot
closer to earning their "opportunity wage" - economic parlance for what
they would be earning, given their skills and prevailing market conditions,
in their best alternative occupation - than are the stars of the legitimate
movie industry.
    Organizing markets and industries in such a way that goods and services
are provided while factors of production, either labor or capital, earn no
more than their opportunity cost is what a socially desirable policy should aim to achieve. Now, on the basis of the available evidence, we cannot rule
out the possibility that Ms. Sharon Stone or Mr. Brad Pitt - unlike Ms. Tera
Patrick and Mr. Rocco Siffredi - have such lucrative alternative occupations
that they would have given up Hollywood had they not earned the tens
of million of dollars per movie that copyright laws allowed them to earn.
Still, we cannot help but wonder if many legitimate actors and actresses
would leave the industry if intellectual monopoly protection evaporated.
Although it is clear that the dominant firms and the big players in the
legitimate industry might fear such an outcome, there is certainly no reason
for the consumers of these products, legitimate or not, to do so.

Comments
    Nobody, unfortunately, has yet written a historical book on competitive
creation, but any survey of literature and writing will enable readers to
gather an idea of how much creation took place, over two thousands years,
absent intellectual monopoly.
Notes
    1. Hints that Microsoft might sue GNU/Linux users have been widespread since it
announced in May 2007 that GNU/Linux infringes on 235 Microsoft patents. The
announcement and reactions have been widely covered in the press.
    2. Bill Gates, "Microsoft Challenges and Strategy," memo, May 16, 1991.
    3. Extensive discussion of the role of copyright and patents in the software market can
be found in Bessen and Hunt (2003). The first browser and Web server were written
by Tim Berners-Lee, of the European Organization for Nuclear Research (known
widely as CERN), who was also instrumental in persuading his superiors at CERN
to keep the code and protocols free and open. NSCA Mosaic was the first popular
browser and provided the source code for both Netscape and Internet Explorer. The
original Internet Explorer was based on code licensed from Spyglass, the commercial arm of NSCA Mosaic.