Tag: settlement

How Capitalism Saved the Pilgrims

When I was growing up, my father would occasionally tell me the story around this time of year of how private property rights saved the Pilgrims from starvation.

When the Pilgrims first arrived in 1620, as my father told the story, they tried to live communally according to the spirit of the Mayflower Compact. What crops they grew were put in a common storehouse and then apportioned according to each family’s need. The small colony struggled to survive for two or three years until its leaders declared that every family henceforth would be responsible for growing its own food. The new system proved much superior at putting food on the table.

Years later, when I was writing editorials for the Colorado Springs Gazette, I would tell the story in print on Thanksgiving Day, this time quoting from Governor William Bradford’s first-hand account. One of my fellow editors objected to my version, claiming it was Squanto the friendly Indian who saved the Pilgrims by teaching them how to fertilize their crops with dead fish. We agreed to disagree and I stuck to my version.

Earlier this year, as I was reading Nathaniel Philbrick’s bestselling book, Mayflower: A Story of Courage, Community, and War (New York: Penguin Books, 2007, paperback edition), I came across a passage that weighs in decisively on our editorial dispute. It appears my father did know best after all.

From page 165 of Mayflower:

The fall of 1623 marked the end of Plymouth’s debilitating food shortages. For the last two planting seasons, the Pilgrims had grown crops communally–the approach first used at Jamestown and other English settlements. But as the disastrous harvest of the previous fall had shown, something drastic needed to be done to increase the annual yield.

In April, Bradford had decided that each household should be assigned its own plot to cultivate, with the understanding that each family kept whatever it grew. The change in attitude was stunning. Families were now willing to work much harder than they had ever worked before. In previous years, the men had tended the fields while the women tended the children at home. “The women now went willingly into the field,” Bradford wrote, “and took their little ones with them to set corn.” The Pilgrims had stumbled on the power of capitalism. Although the fortunes of the colony still teetered precariously in the years ahead, the inhabitants never again starved.

Among the many things I’m thankful for this week is that I live in a country that was founded on the solid rock of property rights and free markets.

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The Libertarian Case against the Google Book Search Deal

Five years ago, Google began scanning millions of books for inclusion in what eventually became Google Book Search. Google carefully designed the service to stay within the boundaries of copyright’s fair use provisions, at least as Google interpreted them. Still, some authors and publishers objected, and in 2005 they filed a lawsuit accusing Google of copyright infringement. The lawsuit dragged on for more than three years. Finally, in 2008, the parties announced a settlement of the lawsuit. Its text runs for 140 pages, not counting a secret termination clause available only to Google and its adversaries. The deadline for comments on the settlement was earlier this month, and on October 7 a federal judge must decide whether to approve or reject the settlement.

I was (and still am) firmly on Google’s side on the copyright claims at issue in the lawsuit. But the proposed settlement is another matter. The parties like to describe the agreement as a private agreement settling a legal dispute. But I agree with Librarian of Congress Marybeth Peters, who surprised almost everyone on Thursday when, testifying before Congress, she came out swinging against the agreement:

We realized that the settlement was not really a settlement at all, in as much as settlements resolve acts that have happened in the past and were at issue in the underlying infringement suits. Instead, the so-called settlement would create mechanisms by which Google could continue to scan with impunity, well into the future, and to our great surprise, create yet additional commercial products without the prior consent of rights holders. For example, the settlement allows Google to reproduce, display and distribute the books of copyright owners without prior consent, provided Google and the plaintiffs deem the works to be “out-of-print” through a definition negotiated by them for purposes of the settlement documents. Although Google is a commercial entity, acting for a primary purpose of commercial gain, the settlement absolves Google of the need to search for the rights holders or obtain their prior consent and provides a complete release from liability. In contrast to the scanning and snippets originally at issue, none of these new acts could be reasonably alleged to be fair use.

In the view of the Copyright Office, the settlement proposed by the parties would encroach on responsibility for copyright policy that traditionally has been the domain of Congress. The settlement is not merely a compromise of existing claims, or an agreement to compensate past copying and snippet display. Rather, it could affect the exclusive rights of millions of copyright owners, in the United States and abroad, with respect to their abilities to control new products and new markets, for years and years to come. We are greatly concerned by the parties’ end run around legislative process and prerogatives, and we submit that this Committee should be equally concerned.

The fundamental problem with the settlement is its audacious use of class action law. As my former colleague Mark Moller has argued, the aggressive use of class action law raises fundamental issues of fairness, due process, and the separation of powers. Rather than dozens of judges hearing individual cases and reaching judgments based on individual circumstances, class action law often asks a single judge to render justice on behalf of thousands of plaintiffs in a single decision. This arrangement opens the door to a whole host of potential problems. A single judge unlikely to have the knowledge required to render justice in thousands of individual cases simultaneously. And there’s a real danger that a nominally judicial proceeding will take on a fundamentally legislative character, reshaping the rights of thousands of people whose interests are not adequately represented by any of the parties before the judge.

This danger is especially acute in the Google Book Search case because of the incredibly broad scope of the class the plaintiffs purport to represent: all authors of books still under copyright in the United States. The settlement class doesn’t just include authors and publishers of still-in-print works, who are relatively easy to contact and can opt out of the settlement if they don’t like its terms. It also includes the copyright holders for millions of “orphan works” – works that are in copyright and whose authors cannot be located. These copyright holders are, by definition, difficult to find. The settlement effectively expropriates these absent parties for the benefit of Google and the large publishers leading the lawsuit.

The usurpation of the legislative function is especially clear in the case of orphan works because Congress has been actively considering legislation to deal with the orphan works problem. I have written in favor of an “orphan works” defense to copyright infringement. The leading orphan works proposals have two key features: they require prospective users of orphan works to make a good-faith effort to find rights-holders before using the works. And they are competitively neutral – everyone would have equal opportunity to use orphan works under the conditions set forth in the legislation.

The Book Search deal has neither characteristic. Using the legal fiction that the plaintiffs represent the interests of millions of absent copyright holders, the settlement would give Google carte blanch to use these orphan works without making a serious effort to contact their owners. This deprives some copyright holders of royalties to which they might otherwise be entitled. And it gives Google a permanent competitive advantage by giving Google an immunity to litigation that would not be available to competitors if they entered the same market. Not surprisingly, Google’s leading competitors, including Microsoft, Yahoo! and Amazon.com, have all urged the judge to reject the agreement.

Our system of government is based on the principle of the separation of powers. Congress, not the judicial branch, is responsible for making broad changes to rules of copyright. The Google Book Search settlement, if approved, would use the legal fiction of the class action lawsuit to re-write copyright law as it applies to the online book market. While the settlement includes some laudable provisions, it’s more important that the judge respect the separation of powers and reject the settlement.