OpenFiction [Blog]

Monopoly interests

Posted in Uncategorized by scarsonmsm on September 11, 2005

I came to Boston–and to graduate school at Emerson–in part to study the history of a building, and of a monopoly built by Edward Albee (grandfather of the playwright). Albee, along with his business partner Benjamin Franklin Keith, had built a vaudeville empire that controlled the east coast and much of the middle of the country. The circuit was named for Keith, and the “K” lives on as the middle letter in RKO (Radio-Keith-Orpheum). In 1923, as tribute to his then-deceased business partner, Albee broke ground on an elaborate flagship theater for the chain, richly decorated in marble and gold. By 1925, when the theater opened, the empire had fallen to the onslaught of motion pictures, and the chain had been bought by one of the greatest monopolists of the early 20th century, Joseph Kennedy. Kennedy would–after making his fortune–help write the laws that would break the remaining monopolies of the era. I came to Boston, to explore this compelling story, but it was too expansive to complete as a thesis, and I set it aside for the novel. I hope to come back to the project as my next book.

I had followed the history of monopoly industry to that point, when the Sherman Act was signed, at which point it seemed to diverge from the project at hand. Eight years later, in pursuing open sharing, I’ve come back to the story of industrial monopolies at exactly the place I left off. Peter Drahos and John Braithwaite, in Information Feudalism do a wonderful job of tracing how, when the Sherman Act deprived industries of the old tools of monopoly control, they turned to copyright and patent to control markets. Copyright, in fact, is the tool the motion picture industry–which eclipsed vaudeville–has used to great effect. Lessig’s Free Culture shows that not only has this had direct anticompetitive effects, but has produced a tremendous amount of collateral damage, locking up intellectual property no-one wanted locked up to begin with.

I am beginning to recognize there is a great deal of similarity between the current moment and 1923 (Lessig points to some of this in broader scope). Radio and movies were rapidly supplanting the old forms of entertainment, and the legal ground controlling industry was shifting. I’m interested to go back to some of my readings from that project with an eye toward how the changes in that era might inform the open sharing movements underway today. It’s clear, though, that many of open sharing movements come into direct conflict with powerful monopoly interests. Open access journal publishing is a direct challenge to commercial journal publication, and open scientific sharing threatens the ability of many industries to control research and development done in higher education institutions. Clearly, P2P threatens the recording and film industries–less I think from the piracy angle and more because is allow for low-cost distribution. One of the reasons sharing open educational resources may gain traction faster than these other movements is that it does not threaten a well-established monopoly interest. Regardless, across the board as modes of production shift and decentralize due to new technologies, patent and especially copyright may lose some of their power to control markets.

As with 1923, it may be that these new technologies will naturally supplant the old, but one lesson from that era is that new methods for controlling new markets are likely to emerge. It’s probably not unreasonable that–left alone–industries will reorganize and find new levers of control, and it will be important to pay attention to these. Regardless, I think an important antidote for the lobbying of some of the forces opposing open sharing is to call their use of intellectual property law what it is–anticompetitive and market-controlling behavior. Yes, some extremes of open sharing lead to piracy, but extremes of copyright and patent law in the service of a few powerful monopolies also have their costs. I’m no economist, but I’m willing to venture the costs to consumers of monopoly control are quite a bit higher than the lost revenue to industries with ip-supported locks on markets.


2 Responses

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  1. David said, on September 13, 2005 at 7:14 am

    All this time… I never knew where the Keith Albee Theater in Huntington, WV got its name. Now I know!

  2. […] Bhagwati does finally come around to discussing the issue of international intellectual property laws and trade, and in contrast to his generally upbeat assessment of free trade, he holds a dark opinion here. He tells in much more condensed form the story that is chronicled in Information Feudalism, how pharmaceuticals and media companies grafted IP issues (via TRIPs) onto trade policy, and used trade sanctions and bilateral negotiations as the big stick to coerce countries into accepting really awful intellectual property regimes as the price for trading with the US. Bhagwati’s view is that intellectual property has no place on the WTO agenda. […]

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