Copyright as Charity

Abstract

Copyright and charity law are generally considered distinct and unrelated bodies of law. But they are actually quite similar and complement each other. Both copyright and charity law are intended to increase social welfare by solving market and government failures in public goods caused by free riding. Copyright solves market and government failures in works of authorship by providing an indirect subsidy to marginal authors, and charity law solves market and government failures in charitable goods by providing an indirect subsidy to marginal donors. Copyright and charity law complement each other by solving market and government failures in works of authorship in different ways. Copyright solves market and government failures in works of authorship by reducing ex ante transaction costs, but it increases ex post transaction costs. Charity solves market and government failures in works of authorship by reducing both ex ante and ex post transaction costs. Accordingly, the efficient scope and duration of copyright should reflect ex ante transaction costs, because charity can more efficiently reduce ex post transaction costs.