Without copyright law, authors would be unable to internalize the benefits of their writings. Copyright law reacts to this by providing authors with a period of exclusivity. The relevant legislation has a contract-like character; authors receive a period of exclusivity, and the public benefits by virtue of original writings that eventually pass into the public domain. Ideally each contract between the public and an author would be individually negotiated. Because U.S. copyright law is strictly utilitarian, authors would be “paid” the lowest amount possible to bring their works into existence. For example, popular authors may be able to internalize sufficient returns in just a few years. In other cases, a longer period of exclusivity is necessary. Huge transaction costs prohibit individual transactions and, at this writing, most works are protected for the life of the author plus 70 years. As an economic matter, the actual implementation of copyright law is hard to rationalize. Works with even a modicum of creativity are copyrightable. This can result in a disincentive to be creative and invites expensive legal disputes about works that are socially irrelevant. In addition, works receive levels of protection that are independent of their value to the public. In some instances Congress with the approval of the Supreme Court has extended the copyright term for works already in existence. Retroactive extension of the copyright term cannot have an impact on works in existence. Oddly, copyright law views authors as profit maximizers but also limits the value of their works by allowing heirs to terminate assignments after a set period of time. Finally, the remedy for copyright infringement is the damages suffered by the author plus all profits made by the infringer that can be traced to the infringement. It is not clear that this remedy is consistent with the goals of copyright law.
Jeffrey L. Harrison
Keith N. Hylton
Criminal law consists of substantive and procedural parts. Substantive law is the set of rules defining conduct that violates the law. Procedural criminal law is the set of rules regulating the process of punishment. Substantive rules apply mostly to individual actors, and procedural rules apply to public enforcement agencies and adjudicators. Economic theory of criminal law consists of normative and positive parts. Normative economic theory, which began with writings by Beccaria and Bentham, aims to recommend an ideal criminal punishment scheme. Positive economic theory, which appeared later in writings by Holmes and Posner, aims to justify and to better understand the criminal law rules that exist. Since the purpose of criminal law is to deter socially undesirable conduct, economic theory, which emphasizes incentives, would appear to be an important perspective from which to examine criminal law. Positive economic theory, applied to substantive criminal law, seeks to explain and to justify criminal law doctrine in economic terms—that is, in terms that emphasize the incentive effects created by the law. The positive economic theory of criminal law literature can be divided into three phases: Classical deterrence theory, neoclassical deterrence, and modern synthesis. The modern synthesis provides a rationale for fundamental criminal law doctrines and also more puzzling portions of the law such as the doctrines of intent and necessity. Positive economic theory also provides a rationale for the allocation of enforcement responsibilities.