Article Title
An Unhurried View of Private Ordering in Information Transactions
Abstract
We stand at an unprecedented moment in the history of exclusive private rights in information ("EPRIs").' Technology has made it possible, it seems, to eliminate to a large extent one aspect of what makes information a public good-its nonexcludability. A series of laws-most explicitly the Digital Millennium Copyright Act ("DMCA") and the Uniform Computers Information Transactions Act ("UCITA")-are building on new technologies for controlling individual uses of information goods to facilitate a perfect enclosure of the information environment.
The purpose of this Essay is to explain why economic justifications interposed in favor of this aspect of the enclosure movement are, by their own terms, undetermined. There is no a priori theoretical basis to claim that these laws would, on balance, increase the social welfare created by information production. The empirical work that could, in principle, predict the direction in which more perfect enclosure will move us has not yet been done. Empirical research that has been done on the effects of expanded EPRIs-in the context of patents-is quite agnostic as to the proposition that EPRIs are generally beneficial, except in very specific industries or markets. We are, in other words, embracing this new legal frame- work for information production and exchange on faith. Given the tremendous non-economic losses-in terms of concentration and commercialization of information production and homogenization of the information produced--that a perfectly enclosed information environment imposes on our democracy and our personal autonomy, such a leap of faith is socially irresponsible, and, as I have argued elsewhere at great length, probably unconstitutional.
It used to be that the distribution technology of information goods was such that once they were uttered-say, a copy of a book was released--the owner could do little to prevent significant dissemination of the information by the holder of the medium of the utterance. One could lend the book to a friend, quote passages, or make photocopies, for example, without the owner being able, as a practical matter, to do anything about it. Information goods were, in this sense, partially nonexcludable-to some extent the owner could not exclude others from making valuable use of the work, and to that extent could not capture the social benefit created by the work. Goods that have this attribute are public goods in the limited sense that they will be underproduced if produced solely by private parties, because some of their social benefits are external to the producer.