The "fair use economy" is enormous, growing, and endangered by the relatively tiny entertainment industry

The IT industry's US lobby group has released a report calculating the size of the "fair use economy" in the US -- all the businesses that rely on fair use, including web hosting companies, private schools, search engines and many others. The total for 2007 (the last year for which stats are available) is a whopping $4.7 trillion -- one sixth of US GDP -- with over 17 million people employed.

The report is a counterpoint to those crazy Hollywood stats that show that every job in America will disappear unless copyright is extended to infinity, all network connections are surveilled, and every infringer is fined her entire net worth and stuck in jail.

Industries benefiting from fair use have grown dramatically within the past 20 years, and their growth has had a profound impact on the U.S. economy.8 The development and spread of the Internet as a medium for both business and personal use has been creative and transforma- tive. The creation of new businesses (e.g., Google and Amazon) and business activities has in turn fueled demand from other sectors of the U.S. economy (e.g., fiber optics, routers and consumer electronics) and transformed a host of business processes (e.g., communications and procurement).

The advent of the Internet and networking technology also has been widely credited with reviving U.S. productivity growth after two-decades of below-trend productivity.9 As higher productivity is an important source of income to labor and capital resources, the "new economy" has helped spur overall growth and offset structural declines in other sectors of the economy.

FAIR USE IN THE U.S. ECONOMY (PDF) (Thanks, Ryan!)

• [Anonymous]

  There’s nothing wrong with Comment #1 because he’s advocating co-ops. If you want to get together with a bunch of other workers and form a limited liability partnership, you are welcome to try it, and you are welcome to the fruits of your labors if you succeed. The mistake he’s making is that it is not businesses driving up prices (which is the source of real wage stagnation), but rather, government driving up prices with endless regulations.

• [Anonymous]

  I feel like saying this study is the counterpoint to wanting to fine infringers is a disingenuous statement, seeing as copyright infringement is not fair use and thus is not covered in this report.

• [Anonymous]

  Thanks to the digital economy both individuals and small groups (bands for example) can be competitive against corporate entities. However as scale and capital needs increase the corporate form becomes dominant.

  The whole idea that wealth is being stolen by capitalists is however false. Wealth is being stolen at a much faster rate by the politicians that any other group in the American economy.

• [Anonymous]

  Er, private school jobs and ISPs depend on fair use? One could equally argue they depend on copyrighted content (textbooks, msnbc.com, etc).

  I’m sympathetic to the cause, but this is a silly statistic.

  - Mala

• [Anonymous]

  Productivity, working hours, and output (GDP) have all grown due to the IT revolution. However, real (inflation adjusted) wages are flat (or in the case of white males with a high school or lower level of schooling, declining). We are working smarter and harder, but our wealth is being stolen from us by the capitalists.

  Only when workers own and control our contemporary “means of production”, can we possess what we produce. We already basically control software and content in the form of FLOSS and CC, but we don’t own the brand identities (trademarks) to effectively market and deploy our output independent of corporations.

  If the modern labor movement were forward thinking, they would be promoting worker-self-managed enterprises and establishing a union brand identity via service marks that ensure quality output, sane working conditions, and lack of wasteful management/shareholder overhead.

  • [zyodei]

    Umm…so, did you just get done reading Dis Kapital and couldn’t wait to find a relevant post to share your newfound enlightenment about how “it’s impossible to market without corporate trademarks” on?

    The problem is, that the people who benefit from fair use, not being crooks by nature, aren’t inclined to manipulate the political system to realize their ends…

    • [Pantograph]

      Dis Kapital? Sounds like a Marxist rapper.

• [Fluffy Merengue]

  I had the same thought, zyodei — sophomore year should be for drinking beer, not coffee.

  Hey, anon, that “wasteful management/shareholder overhead” is called “liquidity,” and without it you’d be trying to figure out how to make your own shoes right now. I suggest you read the “Foxfire” series instead of Marx; you might be able to survive the progressivist utopia you yearn for.

• [Anonymous]

  Actually it seems even more disingenuous to claim that this study has no bearing on the issue of fines for copyright infringement, since copyright infringement claims are currently being heavily overused to an abusive extreme. These claims harm the fair-use economy, and it is useful to know the size of the sector that is being harmed.