Corporate Might (Let Them Fight)

Up until recently, I used to say that it was more likely that artistic works from 1920 would be taken out of the public domain than artistic works from 1930 would ever be put in the public domain. It turns out, my pessimism may have been unfounded:

Will Congress [extend copyright terms] again this year? To find out, we talked to groups on both sides of the nation’s copyright debate—to digital rights advocates at the Electronic Frontier Foundation and Public Knowledge and to industry groups like the Motion Picture Association of America and the Recording Industry Association of America. To our surprise, there seemed to be universal agreement that another copyright extension was unlikely to be on the agenda this year.

“We are not aware of any such efforts, and it’s not something we are pursuing,” an RIAA spokesman told us when we asked about legislation to retroactively extend copyright terms.

“While copyright term has been a longstanding topic of conversation in policy circles, we are not aware of any legislative proposals to address the issue,” the MPAA told us.

The article cites organized grassroots opposition the likes of which Disney and company have never dealt with before. It’s certainly true that the Internet has successfully brought together people to rally behind what used to be a bunch of libraries and art buffs.

I would argue, however, that something more significant happened: There emerged corporate interests against copyright terms. It has ceased to be any sort of David vs Goliath battle, and is instead a battle between some goliaths and other goliaths. Google in particular was instrumental in fighting some increased measures in fighting copyright law. Google has found itelf on the opposite side of content creators on copyright that it is in their interest to have a regular army of opposition, and to help fund one. Amazon has some similar incentives. Both Google and Amazon have tried to incorporate public domain works into their business models.

From a bellyfeel standpoint, this is actually something of a mixed bag. People like to think of themselves as being with David standing up against Goliath. You could feel it in the attempts to frame Net Neutrality as Big Internet against the little guy, when it was mostly these corporations (internet providers of various types) against those corporations (content producers and sellers who stood to lose). But it’s incredibly important to have strong allies, no matter how much it complicates the narrative. If works do start moving into the public domain, we will probably have Corporate America to thank for that.

Uneasy alliances with corporate America are forming everywhere, and it’s changing comfort zones. After the shooting in Parkland, corporate America was one of the first places that gun control advocates turned to. One of the early voices was Aaron Sorkin imploring banks to intercede in private commercial behavior, something that might have felt very awkward. And one by one, activists targeted one business partner of the NRA’s after another, trying to get them to cut ties. Starting at the reasonable (Does Hertz really need to give them a membership discount?) to the unreasonable (Roku/Amazon/Apple/Google should change their entire content policies to deplatform NRAtv!).

And why not? Up to a point, they were pretty successful. A lot of people made it seem like capitalism and markets, and while there was some of that there was something else going on: The people who made those decisions were sympathetic. Delta didn’t run thorough cost-benefit analyses. They didn’t do market research on which paths would have helped and hurt them. They made their decisions quickly. Corporations are made of people, and people make the decisions. Delta and FedEx had pretty similar sets of incentives. One made one decision, one made the other. Increasingly, though, the people in important corporate positions are sympathetic to the social causes of the left. As they have burned all of the bridges from their island to the mainland, this is going to be an increasing problem for the right. But for the left, it’s a windfall.

How should we feel about it? Well, up to a point I am okay with it. There have now been a few instances of reasonable demands on the first day and then by the third day Amazon is removing Civil War books from their library (see also the NRAtv example above), but markets can market, for the most part. As with many things, it only becomes a problem when the market starts acting too much in uniform, or when the government gets involved. I am watching Citi’s recent decision to pull business with some gun companies with interest in part because they seem to be encouraging other banks to do the same. Unbanking is serious business, which brings me to the next one:

Attempts by the government to use corporate influence to enact policies they can’t enact politically is going to become intense. And this is where “government by waiver” becomes a real concern.

In recent decades, we have seen several distinct paths by which the broad use of administrative waiver power can compromise our system of government. First, broad discretion and waiver authority can be used as alternatives to legitimate policymaking, with unfortunate results for both the regulated market and the rule of law. The best example may be the history of telecommunications regulation in America — most notably the regulation of the radio-frequency spectrum. The initial (but modest) use of the spectrum at the beginning of the 20th century took place under a decidedly privatized regime: Individuals were given ownership of the portion of the spectrum that they first used to broadcast. In time, that system ran into problems of over-claiming and interference, and so the Radio Act of 1927 — enacted during the Coolidge administration under the leadership of then-secretary of commerce Herbert Hoover — took the sensible step of requiring all parties to obtain licenses to their frequencies from the federal government. {…}

Another danger inherent in the government’s waiver power is that it will be used to extract concessions from private actors. And for an example of how this danger plays out in practice, one need only look at the regulation of construction and real-estate development. These days, to begin any new building project, every developer must obtain a sheaf of permits that go far beyond the relatively mundane functions of avoiding falling bricks or aligning curb cuts to secure entryways for indoor parking. Indeed, today’s new norm calls for exhaustive hearings before planning commissions and community boards; these investigations are intended to probe the size of a project, its exterior design, the number and type of apartment units, access for the disabled, the amount of affordable housing (with complex subsidies from both the government and the developer), project financing (with government guarantees), proper hiring practices (with appropriate set-asides for women and minority workers), and multiple inspections for just about everything.

The article cites a couple of cases of the Obama Administration relying heavily on this sort of thing, for labor arrangements and PPACA. As long as you unionize we’ll let some infractions go. You can’t meet our benchmarks, but that’s okay because at our discretion we can let you not meet them. Could this be used to encourage businesses not to do business with other businesses? We’ve already gone there:

When it got its start in 2013, with help from a presidential task force working with several banking agencies, Choke Point wasn’t announced to the public or its intended targets.

Among the first to notice something amiss were porn actresses and payday lenders whose banks announced the sudden closing of their longstanding accounts without explanation.

Asking their bank why this had happened, even though they had caused no overdrafts or other problems, they got either no clear answer or vague talk about being “high risk.”

More reports began coming in of account closures — from the firearms business, in particular. {…}

Eventually, a list of 30 disfavored businesses surfaced. They included online gambling, fireworks dealers, “Home-Based Charities,” “As Seen on TV” sales lines, and online sellers of tobacco and pharmaceuticals. Maybe some of these categories are especially likely to skip town or default and leave bank lenders holding the bag.

But others, such as many firearms dealers and pawn shops, are stable local businesses that rely on community reputation. Do they really carry a risk of large losses when banks lend to support their inventories or cash flow?

Yet the Federal Deposit Insurance Corporation, one of the banking agencies involved in the crackdown, had warned banks of “unsatisfactory Community Reinvestment Act ratings, compliance rating downgrades, restitution to consumers, and the pursuit of civil money penalties” if they ignored relevant guidelines.

The policy has been discontinued, but the temptation will be there in the future. One of the apparent goals of the Obama Administration’s policy on ecigarettes was to reduce the number of suppliers to something more manageable, from a regulatory standpoint. I objected because of course I did, but I could definitely understand the appeal of manageability. And in the case of ecigarettes there are a lot of benign reasons for it. Banking, too. But “too big to fail” can easily become contingent on the good graces of the government, which can itself be contingent on good behavior. However defined.

As corporations become ever larger and more powerful, their ability to extend their influence beyond that of simple employer/employee or merchant/customer will itself become stronger. The government itself can provide little defense because they may be the hockey puck getting slapped around the rink or alternately they may themselves be a player. Perhaps the best we can hope for is that, as in the copyright battle and net neutrality, they simply offset one another. Or that they are or remain on the side of the angels. However defined.