The Authors of The Knockoff Economy Answer Your Questions

We want to thank everyone for their questions -- it's great to see people responding to, critiquing and, in some cases, tweaking, the ideas we set out in The Knockoff Economy. We are fascinated by the complex relationship between copying and creativity -- and we're thankful that many of you are as well.  So, to the Q&A . . .

Q. The issue that concerns my industry most is internet sales of prescription skin products such as retin-A and hydroquinone. Some might be counterfeit, but many are probably diverted products. The manufacturer sells them to a physician, the unscrupulous physician sells them on the internet at a deep discount, the patient may be hurt by expired or dangerous medications or may not use them correctly even if they are real. This hurts legitimate physicians by drawing business away from them, but also hurts a manufacturer’s reputation. (Apparently, people who have qualms about buying Viagra online don’t think twice before buying skin medications from those same sources.)

Do you plan to do any research in this area? Will you be looking at diversion in addition to counterfeits?

Excerpt from The Knockoff Economy: Tweakonomics

Here is an excerpt from The Knockoff Economy: How Imitation Sparks Innovation, which has just been published by Oxford University Press. Over the next few weeks, we'll be running 2 excerpts from the book here on the blog and taking questions from Freakonomics readers in a Q&A. We’ll also run a contest for the wackiest photo of a knockoff item. 

In The Knockoff Economy we examine the relationship between copying and creativity. Most people who study this area look at industries such as music or publishing, where intellectual property (IP) protections are central. We do something different: we explore innovative industries—such as fashion, food, fonts, and finance--in which IP is either unavailable or not effective. In these industries copying is common, yet we find that innovation thrives. In a world in which technology is making copying ever easier, we think these industries have a lot to teach us. And one of the key lessons is that copying is not just a destructive force; it can also be productive. Harnessing the productive side of copying—the ability to refine, improve, and update existing innovations—is at the heart of this excerpt.

THE KNOCKOFF ECONOMY
CHAPTER 4

Rules against copying don’t just cover outright imitation. They also address variations: works that use that some portion of another creative work but add in new stuff, and in the process transform the original work. Think of Shepard Fairey’s famous Hope poster of Barack Obama, which took an existing photograph and reworked it into an iconic image: 

Pop Culture Introspection, Part II: What Do Hip-Hop/Pop Song Mash-ups Teach Us?

Every once in a while, there is a mash-up that combines a pop-type song with a hip-hop add-on.  I’m not talking about songs like the odd new B.O.B./Taylor Swift duet, but rather, songs that exist on their own, and then get a hip-hop upgrade.

I’m sure there are many examples, but there are only two that I can think of off the top of my head.

The first is "Numb/Encore", in which a popular Linkin Park song (“Numb”) gets Jay-Z lyrics laid over it.  Here are they lyrics from the original Linkin Park song "Numb":

I'm tired of being what you want me to be
Feeling so faithless lost under the surface
Don't know what you're expecting of me
Put under the pressure of walking in your shoes
(Caught in the undertow just caught in the undertow)
Every step that I take is another mistake to you
(Caught in the undertow just caught in the undertow)
And every second I waste is more than I can take

I've become so numb I can't feel you there
I've become so tired so much more aware
I'm becoming this all I want to do
Is be more like me and be less like you

Compare the adolescent angst of those lyrics with the words that Jay-Z lays over it such as:

The Flowers That Never Fade

From a reader named Becca Levin:

Hi, I just listened to your podcast with NPR on the impact of shipping flowers. May I suggest, if you should ever air it again, you consider the song "Plastic Roses" by the Chenille Sisters. A sample line: "He sent me plastic roses, the kind that never fade ... " A touching love song about lasting memories.

The Beastie Boys Lawsuit: An Existential Question About Intellectual Property

The day before Beastie Boy Adam Yauch’s untimely death from cancer, a lawsuit was filed in New York accusing him and his bandmates of illegal sampling. What’s unusual about this case is that the samples in question supposedly appeared on the 1989 album Paul's Boutique. An obvious question is why almost 25 years went by before anyone decided to sue. 

The reason?  The alleged samples can’t actually be heard by the ordinary listener. Which raises a kind of existential question about intellectual property. If no one can tell that something is copied, is it still illegal to copy it? And if so, why?

Let’s assume for the sake of argument that the samples in question exist. They are snippets of songs by Trouble Funk, a 80s era go-go band. Trouble Funk’s complaint declares that the way the Beastie Boys sampled the tracks “effectively concealed to the casual listener” the fact that they are samples at all.  And it was “only after conducting a careful audio analysis” that Trouble Funk even knew for sure that they had been sampled. 

Copying Is Not Theft

Last week, the New York Times ran an interesting and important op-ed by Stuart Green, a law professor, who argues that although illegal downloading of songs or videos from the Internet may be wrong, it's not really "theft" in the sense that the term has been understood historically in the law. Nor is it theft according to the moral intuitions of ordinary people (as Green's own research with psychologist Matthew Kugler shows), who draw a sharp distinction between online file sharing and ordinary theft, even when the economic value of the property taken is the same. 

Comparative Advantage, Opera Edition

The American League believes in comparative advantage, and has a designated hitter bat for the pitcher.  I prefer this: I believe in comparative advantage and division of labor (and being a White Sox fan from age 5, I like the American League anyway).  

This afternoon we heard a performance of Pagliacci, before which an announcer informed the audience that the soprano was ill, but would act the role while another—the designated soprano—sang from the side of the stage. The acting was better than usual, and so was the singing—an illustration here of comparative advantage.  The overall effect wasn’t good:  Opera is both acting and singing, and it was absurd and disconcerting to separate them.  The production function for opera requires one person doing both—division of labor makes no sense in this case.  

(HT to FWH)

Nightclubs as Research Labs

Yale Fox, a former Freakonomics intern, is a Canadian DJ who studies nightclub culture. He looks at how music trends, fashion, and even perfumes are the results of codified social behavior at nightclubs. He recently gave a TED talk on the subject:

Can We Add Carmen and Gang Signs to the "Formerly Repugnant" List?

I have probably seen and listened to more opera than the median American, but that's not saying much. In other words, I am not very knowledgeable about opera itself, or its history and mores, etc. If I were, what I'm about to tell you probably wouldn't have come as a surprise.

Not long ago, in an airport far from home, I met a nice fellow who turned out to be a Spanish-born tenor now living in the States, named Alvaro Rodriguez. We kept in touch and he let me know that he'd be performing with the New York Lyric Opera, playing Don Jose in Carmen. So I bought my tickets and decided to read up on Carmen since: a) I didn't know the story all that well; and b) my French is spotty at best; and c) this would be a scaled-down production, with no subtitles, etc.

How Much Do Music and Movie Piracy Really Hurt the U.S. Economy?

Supporters of stronger intellectual property enforcement -- such as those behind the proposed new Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) bills in Congress -- argue that online piracy is a huge problem, one which costs the U.S. economy between $200 and $250 billion per year, and is responsible for the loss of 750,000 American jobs. 

These numbers seem truly dire: a $250 billion per year loss would be almost $800 for every man, woman, and child in America. And 750,000 jobs – that’s twice the number of those employed in the entire motion picture industry in 2010.

The good news is that the numbers are wrong.