Two days ago I asked whether we should extend copyright protection to folklore. Thank you all for your interesting and informative replies.

Here are some possible answers which I don’t find sufficiently forcing:

1. Folklore has already been produced. TC: Of course you could say the same for a good deal of music. Why treat folklore differently?

2. Most folklore is very old and copyright protection would have expired by now anyway. TC: Folklore is not so old and musty; rather it evolves frequently and changes rapidly. Here is one source on contemporary folklore, here is another. Here is a brief account of contemporary Haitian folklore.

3. Folklore could never have evolved in the first place, had much earlier folklore received copyright protection. TC: This point is true, but you still could have copyright protection against for-profit uses of folklore. Author Edwidge Danticat can publish and copyright a processed version of folklore. Since those books bring in money, the law could stipulate that some royalties go back to the folklore creators.

4. Copyright is an incentive for future production, and we’re not going to have much future folklore anyway. TC: Hard to disprove a claim of this kind, but I don’t believe it. Arguably folklore has never been more vital than in today’s world.

So we are left with the following:

5. With folklore it is harder to define a clear line between copying and independent discovery. Similarly it is hard to draw a clear line between general inspiration and outright borrowing. Borrowing in general is harder to trace, a given derived story could have come from numerous sources. TC: This argument carries real force with me, although how different is music, consider George Harrison.

6. A culture is better off if other cultures can borrow its tales and “memes” without restriction. TC: Copyright holders could always waive their rights if that were beneficial, though admittedly there is an externalities problem for a culture as a whole. And again, you could apply the same argument to music.

7. Folklore is collectively produced, ownership is hard to assign, and there are no relevant corporate entities in most cases. Entrusting copyright ownership to “tribes” will encourage politicization and rent-seeking behavior. TC: Hard to argue here.

8. Folklore rarely offers a final, set, canonical, or well-defined final product. TC: I wonder if digital technologies will move other art forms in this same direction.

All interesting hypotheses. Many of them might be true, I still can’t get past “I don’t trust the courts in these other countries to enforce copyright in folklore, it will just lead to rent-seeking.” See my earlier post, at the first link, for further clarification.

I hope to soon consider other angles on related problems, such as whether there is a right to cultural privacy.

More corrupt states have lower credit ratings, even after adjusting for other determinants of creditworthiness. What is the economic impact of a one standard deviation increase in the public corruption index above the national mean? Over half (0.58) of a Moody’s credit rating.

Here is the original research. Here is an earlier MR discussion on which is the most corrupt state.

Now you can get paid to hear ads and take telemarketing calls:

Adnoodle has signed up 15,000 consumers who have agreed to listen to recorded telemarketing pitches, speak with telemarketers and respond to e-mail solicitations — for a price. He says 500 to 1,000 people are enrolling daily, and he is planning a promotion campaign on college campuses this month before he “hard-launches” the program this spring.

“It’s all about getting value for the consumer — because consumers have value, right?” says Shifrin, 35, whose other company, AutoWraps, pays consumers to put advertising on their cars.

To enroll, consumers go to adnoodle.com and decide the minimum per-minute payment they would accept — generally, the lower the payment, the more companies will contact the consumer. The recommended range is 10 cents to $1.20, but registrants are advised that “bids” of 10 to 50 cents are likely to draw more ad calls. Participants also have the option of being paid in entries to a $5,000 Adnoodle sweepstakes.

Registrants also choose the ad vehicles — telemarketing, e-mails, or both — and they can choose the window times they’ll receive the ads. They complete a survey that asks gender, age, number of children, interests and consumer behavior, so companies can target products and services.

The typical Adnoodle sales call is a recording and states upfront its cash offer for listening. Not enough coin? Too busy right now? You can accept or decline — no obligation. Each ad runs a minute or more. The consumer must correctly answer a multiple-choice question at the end to get paid. “Knowing that the person who heard that message understands the content is really a leap in advertising,” says Shifrin [emphasis added].

At the end of the call, consumers can opt to receive a coupon for the advertised product or talk to a live representative — or hang up. Payment is via PayPal, the online payment company.

“For 2 1/2 minutes a day, if your average price is $1 a minute, you make $80 to $100 a month,” says Shifrin. “Not bad, right?” Actually, it’s more like $75.

In other words, it pays better than blogging. Here is the full story. Here is the website, if you want to sign up.

My take: If you think the idea can work, you have a very cynical view of human nature. You must think that people, listening to ads only to earn some money, nonetheless cannot resist buying the product. On second thought, does that sound so wrong? On the plus side, pricing ads and customer time has long been a theoretical dream of economists. That being said, I’ll bet against this project lasting, especially once word gets round and the pool of applicants changes. A sufficiently hardened idiot or curmudgeon can’t be convinced by anything. Or how about outsourcing the receipt of the phone call? And you will recall that pay-to-surf web sites bombed in the 1990s.

Recent UNESCO/WIPO proposals have called for the creation of copyright in folklore and oral culture. In other words, if a corporation drew from the native stories of a tribe, it would owe royalties or could face legal sanctions.

We all know that U.S. copyright typically protects the expression of an idea, and not the idea itself. But hey, native tales and folklore are expressions of sorts, just not durable ones in the way we are accustomed to protecting. I don’t see any principle in the pure theory of copyright itself that should rule out such an extension.

So why don’t we do protect folklore by copyright? First of all, whose courts do we trust to get it right? Presumably Ghanaian courts should decide when Disney has borrowed too much from native folklore, the incentive problems are obvious. The difficulties multiply if the “victimized” tribe crosses national boundaries.

And how does this sound, noting that the Hague Convention allows for the enforcement of “sui generis” copyright laws as well?

…if Cuba enacted a sui generis regime and declared that the Cuban “beat” was intellectual property, it could get a judgment in Cuba against US record companies that were engaged in cultural “piracy,” and demand for example, 5 percent of the revenues from global sales of music that use the Cuban beat. Other countries could do the same thing. These judgments would be enforceable globally, under the [Hague] Convention. So too would bio-piracy judgments against US and European biotechnology and pharmaceutical companies, for “stealing” traditional knowledge, or exploiting without benefit sharing a variety of biological and genetic resources. The motion picture industry could be hit with new sui generis IPR liabilities by countries that give rights in history. Countries like China, which is a member of the Hague Conference, could use this to limit who could actually make films about China. The Hague convention would instantly create a legal framework to legitimatize all of these new IPR claims, and it would not even matter if the “infringing” party did business in the country at all, since the judgments would be enforceable globally, in any Hague member country, and the claims could be based upon shares to global (rather than local) revenues of products.

By the way, three Maori tribes are threatening to sue Lego for using Maori and Polynesian words in a computer game. Some countries are already establishing copyright protection for folklore, though not always in a Hague-consistent fashion.

OK, OK, I’ve been talked out of the idea of copyright protection for folklore. But when you boil down the criticisms, what do they really amount to? Is it much more than “we don’t trust other peoples’ courts to enforce the decisions that we enforce on other countries all the time”?

Where to go from here: Copyright is enormously useful, but its boundaries are morally arbitrary to a considerable degree. Unfortunately a too-public recognition of this arbitrariness interferes with its usefulness. By asking for copyright protection for folklore, the poorer countries are pushing on this tension in copyright law.

If you can think of a good economic reason for not allowing copyright protection for folklore, let me know, I will offer your proposals in a future post. Don’t send in “we can’t trust their courts,” I’ve already cited that argument.

Thanks to Daljit Dhadwal for the pointer to the topic and the Cuba quotation.

Gas prices are higher than in recent memory, Californians are paying $2.18 a gallon for regular gas, some industry sources are predicting $3 a gallon by summer.

Why? Oil prices are high, and many refineries are switching over to summer fuels. Other refinery operators are passing on the costs of producing gasoline with ethanol, read this account.

On the brighter side, the all-time gas price high, in real terms, came in 1981. Gas then sold for a current-day equivalent of $2.80 a gallon.

Gregg Easterbrook adds some further perspective:

The average price of gasoline during the 1950s was about $1.80 in today’s money–meaning that during the period enshrined in our collective political nostalgia as Energy Heaven, gasoline cost slightly more in real dollars than the amount now being theatrically bemoaned as a “record” price. But wait; in the 1950s, per-capita real income was less than half what it is today. That means that for the typical American in the 1950s, gasoline cost twice as much, in terms of buying power, as today’s gasoline. Adjusted for inflation and for buying power, the purported “record”-priced gasoline at your pumps now is substantially cheaper than the gasoline your parents bought.

Some consumers are calling for a boycott of major suppliers, such as Exxon. Supposedly this will force prices to fall. But no, we cannot count on this action, even if massively coordinated, to improve consumer welfare. Why not?

A boycott of this kind, in essence, imposes a price control on the market. No one will buy unless the price falls to a certain level. In theory this can force the price back down to a more competitive level. But the reality is different. Even when monopoly power is present, the record of price controls in improving consumer welfare is a dismal one.

If we wanted to organize a truly effective boycott, one that would increase consumer welfare, what should we do? Here is one of my favorite counterintuitive economics results. Buyers should tax their own purchases of gasoline. You read me right, and here is a formal treatment, what is the intuition?

Let us work backwards to the result, starting with another case, namely a country exporting oil on a perfectly competitive basis using many separate suppliers, but where the country as a whole is a major supplier with market power. That country would benefit by taxing its exports of oil, in essence forcing firms to raise their prices, thereby mimicking a collusive outcome and capturing some rents from the tax-created market power. (Of course this result assumes that the revenue from the tax isn’t wasted. And the smart aleck in the back row will observe that many countries subsidize their exports, rather than taxing them, this may simply be a policy mistake!)

OK, now say you are a dominant buyer in the world market. You want to apply the same logic in reverse. You can move the price in your direction by taxing your own transactors. By taxing your own buyers, you force them to “collude” and restrict their purchases, thereby forcing the price down from abroad (again, it is assumed that the tax revenue is not wasted but rather benefits the citizenry). The large buying country reaps a greater share of the surplus from trade, if the tax is set at the right level.

Yes, this does mean that exorbitant EU gas taxes are not as stupid as they might seem at first.

Going back to the boycott idea, every boycotter should agree to rip up, say, $3 for every $10 worth of gas she buys. If there is no coordination, this is a mere transfer and there is no loss. If there is coordination, the U.S. gains from exercising monopsony (major buyer) power and forcing the price down. Tearing up the money is like a self-imposed tax. Even better, we don’t have to worry about the government wasting the tax revenue. As people destroy their money, the money of others is worth more, thereby ensuring that no real resources are wasted.

Thanks to Erte Xiao for the original query and pointer, and to Bryan Caplan for some useful discussion.

Addendum: Air genius Gary Leff is also a gas genius, he forwarded me this link.