Jason Soon at Catallaxy Files writes

A new paper with a completely different spin on things can be found on the excellent AEI-Brookings Joint Centre for Reg. Studies website. The paper, by Mark Nadel, argues that there is little economic justification for laws against unauthorised copying because the higher revenues this generates for popular creations, are in ‘winner take all’ entertainment markets, generally used for promotional efforts and that such efforts crowds out many borderline creations.

In one of my first forays into this debate, in the AFR in 1998, I took an almost identical line, arguing

Turning to the intellectual property arguments, the key difficulty here is the failure to recognise the network externalities associated with fashion-driven markets like that for poular music. The popularity of, say, the Spice Girls, is not due to the fact that they are more talented than the next-best group or that their songs are better written, or even that their marketing is cleverer. Rather, the Spice Girls are popular primarily because they are popular. People, especially teenagers, want to listen to the same music their friends are listening to. Allowing record companies to extract the maximum possible rent through discriminatory pricing will not lead to the greater support for new and innovative music. Rather, it will encourage the dissipation of yet more resources in attempts to capture control of the next big hit.

I will read Nadel’s piece more carefully and perhaps post some comments.