Does the entertainment industry have too much power?

In America a congressional staffer gets fired, and in Britain an indie music website gets blocked, all in the name of rent-seeking.

Vested interests have too much say in most areas of public policy, but only in some do they actually have direct control. Two stories today highlight the ridiculous amount of authority which governments all over the world have ceded to entertainment industries when it comes to creating and enforcing intellectual property law.

In the USA, a Republican congressional staffer called Derek Khanna wrote a memo titled "Three Myths About Copyright Law and Where To Start To Fix It" (mirrored here). It was a strong piece, arguing that it was untrue to claim that:

  1. The purpose of copyright is to compensate the creator of content;
  2. Copyright is free market capitalism at work; or
  3. The current copyright legal regime leads to the greatest innovation and productivity.

(The first is certainly mythical, at least in the US context, where the explicit reason for copyright is "to promote the progress of science and useful arts"; arguing against the second, he attempts to appeal to his fellow Republicans by repositioning copyright protection as a big-government-bestowed monopoly; and against the third – really, where the meat lies – he points out that current US copyright law is far more concerned with rent-seeking than encouraging creation of new works.)

Khanna's paper, while no more anti-copyright than a thousand silicon valley opinion columns, was retracted less than a day later, with the executive director of the Republican Study Committee – the organisation which published it – claiming it was:

Was published without adequate review [and failed to approach the topic] with all facts and viewpoints in hand.

That's not what the insider story is, though. Techdirt's Mike Masnick wrote:

The report had been fully vetted and reviewed by the RSC before it was released. However, as soon as it was published, the MPAA and RIAA apparently went ballistic and hit the phones hard, demanding that the RSC take down the report. They succeeded.

Yesterday, Khanna was fired. The Washington Examiner's Timothy P. Carney [explains]:

The reason, according to two Republicans within the RSC: angry objections from Rep. Marsha Blackburn, whose district abuts Nashville, Tenn. In winning a fifth term earlier in the month, Blackburn received more money from the music industry than any other Republican congressional candidate, according to the Center for Responsive Politics. Blackburn's office did not return calls seeking comment.

Again, it's worth pointing out that nothing Khanna said was new, or outrageous, and his paper was picked up approvingly by other liberatarian-minded conservatives like Virginia Postrel and Alex Tabarrok. His only mistake was writing it while working in a position where the complaints of the entertainment industry could get him fired.

Meanwhile, in the UK, our music industry has been taking an even more active role in the law, hand-picking which websites are allowed to publish. Music website the Promo Bay is a side project of file-sharing website the Pirate Bay which allows independent artists to upload their own songs to be shared freely. Not only is there no copyright infringement going on, there is actually a queue to be featured.

Nonetheless, the BPI – industry body of the British record industry – obtained a court order to block the Promo Bay, listing it as a domain:

Whose sole or predominant purpose is to enable or facilitate access to The Pirate Bay website.

That block which was only rescinded after a petition and complaint from the Open Rights Group.

It is clear that the Promo Bay was wrongly blocked – possibly by accident, possibly due to an overzealous claim by the BPI. What's less clear is why we should accept a situation where a single mistaken claim by an industry group can censor, without warning or appeal, a popular, useful, and legal site. After all, the New Statesman has linked to file-sharing sites – in an effort to get round the "Great Firewall of China". Should we be fearing a court order?

The Promo Bay logo.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Love him or loathe him, Britain needs more Alan Sugar

Big business is driving down wages, failing to invest, and funnelling rewards to the richest.  Entrepreneurs - and the state - need to fill the gap. 

The business baron who loves a bust-up has just been hired by Her Majesty’s Government to tour the country inspiring the next generation of apprentices. And he’s got his work cut out for him.  

Britain is loads more enterprising than it used to be - but the truth is, we’re miles behind our rivals. The good news is that Britain boasts nearly two million more firms than at the turn of the century. Over 40 per cent of Europe’s “unicorns” (new firms worth over $1 billion) are UK based. And by the next election, there will be more self-employed people than public service workers. 

But, here’s the bad news. Globally, we’re only 48th out of 60 in the global enterprise league table - and of the top 300 companies created in the last thirty years, only a handful are British. The only two British websites in the global 100 were actually founded in America - google.co.uk and amazon.co.uk. Worst of all, according to new House of Commons library figures which I commissioned this week, over a million people have left entrepreneurial activity in the last three years. 

Yet in my new history of British capitalism, Dragons, published today, I show how we’re a nation built by some of the greatest entrepreneurs on the planet. They were the buccaneers like Robert Rich, who built the trading companies and colonies of north America. The traders like Thomas Diamond Pitt who built old multi-nationals like the East India Company. They were industrial revolutionaries like Matthew Boulton who perfected the steam engines, and capitalists like Nathan Rothschild who built the bond market. Down the ages, there were of course great rogues and fraudsters, slavers, opium dealers and imperialists, like George Hudson, William Jardine and Cecil Rhodes. And through the centuries, women were in particular, were frozen out of the power structures of the market. 

But, throughout our past, great visionaries like George Cadbury, William Lever and John Spedan Lewis not only created new wealth but invented new ways to share it, from Port Sunlight to Bournville, to the board rooms of the John Lewis Partnership. 

Theirs is the entrepreneurial spirit we are going to need to rebuild Britain. Why? Because we can no longer leave the task to big business. Big business is driving down wages, failing to invest, and funnelling rewards to the richest. Today, UK firms are sitting on an extraordinary £522 billion in cash. And that’s after they lavished out £100 billion in share buy-backs in 2014. According to Larry Fink, the head of Black Rock which is the world’s biggest investment manager, the gargantuans of the global economy are simply failing to invest in the new jobs and industries of the future. 

So we’re depending on our entrepreneurs to turn new ideas into new industries and new industries into new jobs - whether it is in big data, cyber-security, driverless cars, the internet of things, or genetic medicine. It’s not just good for progress. It’s good for jobs. In fact, if our young people today were as entrepreneurial as their counterparts in Germany or America, its estimated they would create an extra 100,000 jobs. 

The big lesson from 600 years of the history of capitalism is simple: entrepreneurs make history - by inventing the future. So we need the government to start doing an awful lot more for the enterprise economy; spreading enterprise education, investing more in science, shifting government contracts to small high growth firms, and sorting out the banking system. But if we want a better future for Britain, we need an awful lot more entrepreneurs to do well. And so we need AlanSugar to succeed.  

Dragons: Ten Entrepreneurs Who Built Britain is published by Head of Zeus today

Liam Byrne is Labour MP for Birmingham Hodge Hill, cofounder of the UK-China Young Leaders Roundtable and author of Turning to Face the East: How Britain Prospers in the Asian Century.