Blog: Libraries

Freakonomics co-author Stephen Dubner poses a thought-provoking question on the Freakonomics Blog: If public libraries didn't exist, could you start one today?

The law protects public libraries, and their right to lend books to people. But the publishing industry doesn't like that it can't control what happens to books after they are bought. Dubner analyzes the pros and cons of libraries from the point of view of the publishing industry: on the one hand, many people can read a book but the author and publisher only sell one copy. On the other hand, libraries foster literacy, expose people to new authors, make reading accessible to the poor, etc.

Dubner writes, "Perhaps they'd come up with a licensing agreement: the book costs $20 to own, with an additional $2 per year for every year beyond Year 1 it's in circulation. I'm sure there would be a lot of other potential arrangements. And I am just as sure that, like a lot of systems that evolve over time, the library system is one that, if it were being built from scratch today, would have a very different set of dynamics and economics."

Or, perhaps libraries wouldn't exist at all. We know from experience that content industries often don't act in their own long-term best interest. The RIAA shot itself in the foot with its unwillingness to find a profitable way to allow filesharing; authors and book publishers are suing Google for making it easy for people to find their books, even though the users can't read more than a few lines of copyrighted books without permission. So let's assume public libraries are good (and I believe they are) - unfortunately, we couldn't count on the publishing industry to make it possible for them to exist.

The publishers might insist on too much revenue, in an attempt to protect their margins on existing books, even at the cost of the public good and their own long-term success. This is similar to the way the recording industry is trying to kill Internet radio with royalty fees so high almost no stations could continue operating, or the way Verizon squelches wireless innovation because they won't allow applications on their phones unless they make significant profit.

The movie industry would have stopped the VCR if it could have, afraid that home video would cut into theater profits. It did, but they ultimately more than offset the loss with video rentals and sales. We have every reason to think that publishers would do the same to libraries if the first libraries were forming today.

IP laws give one participant in a market - the content rightsholder - complete monopoly power over that market. Sometimes that's the only way to make a market work so creators get compensation. But often, it just means that the market fails entirely. If we don't give the monopoly holders everything they want, sometimes that's best for them in the long run. Or maybe it's just good enough for them, while the public greatly benefits.