Did weak copyright laws help Germany outpace the British Empire?

There's a new thesis making the rounds that has already stimulated plenty of discussion about the benefits and costs of copyright laws. It comes from the German economic historian Eckhard Höffner, his work summarized in a Der Spiegel review titled "No Copyright Law: The Real Reason for Germany's Industrial Expansion."

Höffner contends (according to the review) that the near absence of copyright law in eighteenth and nineteenth century Germany laid the groundwork for the "Gründerzeit"—the enormous wave of economic growth that Deutschland experienced in the middle and later nineteenth century.

An "incomparable mass of reading material was being produced in Germany" by the 1830s, Höffner notes. 14,000 publications appeared in the region in 1836, widely distributed thanks to the presence of "plagiarizers"—competing publishing houses unafraid of infringement suits. The result was a cheap mass book market catering to a huge reading public.

As one contemporary observer noted: "So many thousands of people in the most hidden corners of Germany, who could not have thought of buying books due to the expensive prices, have put together, little by little, a small library of reprints."

And this "lively scholarly discourse" didn't just focus on poetry and philosophy. It included endless tomes about physics, chemistry, biology, and steel production—crucial subjects a nation would need to master to launch a top flight industrial revolution.

Going medieval

Britain, on the other hand, saw "deplorable progress" at this same time, Höffner contends, with only about 1,000 new works produced annually. With stronger copyright guarantees guarding their backs, London publishers profited from the release of limited edition books. But the nation as a whole suffered.

"People were dependent on the medieval method of hearsay for the dissemination of this useful, modern knowledge," Höffner writes.

"It was the chronically weak book market that caused England, the colonial power, to fritter away its head start within the span of a century, while the underdeveloped agrarian state of Germany caught up rapidly, becoming an equally developed industrial nation by 1900," concludes Der Spiegel's summary of Höffner's theory.

Very interesting, but there's a larger picture to be considered.

Lying with wives

When historians speak of nineteenth century "Germany," they're referring to an assemblage of central European states and principalities that did not become unified until the conclusion of the Franco-Prussian War in 1871. Prior to that world-changing event, Prussia, the region's biggest power, established a copyright law in 1837. But it wasn't effectively enforced beyond Prussia's borders, Höffner points out.

Britain, on the other hand, passed its "Statute of Anne" copyright ordinance in 1710. London booksellers had been clamoring for some kind of reform. They had enjoyed a legal monopoly on publishing until 1695 via the Licensing Act. That law required all copy to be entered into the publishing guild's "Stationer's Register" and was licensed by the state. This was essentially a form of censorship, as the system's first licenser, Sir Roger L'Estrange, acknowledged:

A Public Mercury should never have My vote; because I think it makes the Multitude Too Familiar with the Actions and Counsels of their Superiours; too Pragmaticall and Censorius, and gives them, not only an Itch, but a Kind of Colourable Right, and License, to be Meddling with the Government.

The Glorious Revolution of 1688 shifted power to Parliament and indeed changed the color of British politics. Now content providers shifted their line as well. They called for copyright laws not as a way to protect the government from itchy meddlers, but in terms that Ars readers would find painfully familiar. They glommed onto a pamphlet penned by Daniel Defoe which "conveniently provided them," writes the historian Paul Starr, "with the altrustic rationale that the rights of authors needed protection."

Defoe warned that stealing "other men's Copies" was akin to "lying with their Wives, and breaking up their Houses." In other words, rightsholders warned then as now that "piracy" would cost jobs.

What the publishing industry received from Parliament was a 1710 bill that gave them 14 years legal ownership of their works, renewable for another 14 years. It also permitted authors to possess copyrights. But publishers ignored these limitations, insisting that common (judge-made) law still gave them perpetual ownership of their releases. Finally, in 1774, the House of Lords reasserted the Statute's provisions, which now became the undisputed code of the land.

Apples unt orangen

So, on the surface, we have a clear, comparative difference between Britain and Germany. And there's no question that Germany outpaced the British empire's industrial growth by the late 19th and early 20th century.

But there's a limit to that observation: so did many other countries. Consider this international Gross Domestic Product chart:

Seen in this context, the United Kingdom is an easy target. So let's make the problem a bit harder. Why, for example, did Australia also outpace the UK in terms of GDP during those years, when its publishing economy was so closely tied to Britain?

Writing about the significance of the American revolution, the historian Hugh Armory notes that had it not been for America's breakaway, "London might ultimately have dominated [American publishing] as thoroughly as it would Australia's where, even as late as 1953, 80 percent of the books sold were imports."

And how about Canada, with an even more impressive GDP? The country operated under British imperial copyright rules and was under constant pressure to conform to them up until the early 1920s.

As for Denmark and Finland, they're part of a community of nations whose copyright laws also need to be scrutinized before we can sign onto the Höffner thesis. Because let's face it, with the exception of France, which major industrial countries didn't outpace the overextended United Kingdom in its fin de siècle years?

The economic historian Angus Maddison offers this broad overview of the period:

From 1870 to 1913, world capita GDP rose 1.3 per cent a year compared with 0.5 per cent in 1820-70 and 0.07 per cent in 1700-1820. The acceleration was due to more rapid technological progress, and to the diffusionist forces unleashed by the liberal economic order of which the United Kingdom was the main architect. It was not a process of global equalisation, but there were significant income gains in all parts of the world. Australia and the United States reached higher levels than the United Kingdom by 1913. Growth was faster than in the United Kingdom in most of Western and Eastern Europe, in Ireland, in all the Western Offshoots, in Latin America, and Japan [italics ours].

Beyond London

But there are other concerns to be vetted. Even if we expand the discussion beyond Germany, it appears that we're really talking about world copyright policy versus London and its immediate environs. True enough, with the Statute of Anne in cement by the 1770s, "the general practice [among London booksellers] was to publish new books in low volumes and at high prices," historian Starr notes. "The trade was still able to restrain price-cutting."

Just about everywhere else, however, publishing was something of a free-for-all. Irish and Scottish publishers cheerfully ignored or defied the big central publishing houses—offering cheap reprints of popular works in their own regions and even selling them to book lovers in the English provinces.

Still, when we put all the legal and economic comparisons aside, we have to ask how much the United Kingdom really suffered from its allegedly stultifying copyright rules. Sure, the nation's economic growth declined compared to Germany and the US, but it certainly turned out some great literature; we're still talking about the country of Charles Dickens, John Stewart Mill, Jane Austen, Lewis Carroll, and Arthur Conan Doyle.

And don't forget that this is the nation whose scientists discovered the electron and the precise behavior of heat, explained the nervous system, electromagnetic laws, and the true nature of evolution, and whose inventors pioneered modern steel, the telegraph, the suspension bridge, and (over a century later) the theory of Internet packet switching as it is widely understood today.

Somehow, despite its IP policies, late Victorian Britain was still able to become the place that the economist John Maynard Keynes famously described in 1919:

The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery on his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprise of any quarter of the world. He could secure forthwith, if he wished it, cheap and comfortable means of transport to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference—He regarded this state of affairs as normal, certain, and permanent.

In sum, Höffner's conclusions, at least as they are outlined in Der Spiegel, may seek to explain too much with too little. Nonetheless, his questions are excellent ones. How do copyright rules extend or discourage the dissemination of knowledge and productivity in any historical period? And how would we measure this?

Further reading

Paul Starr, The Creation of the Media
Angus Maddison, The World Economy: A Millennial Perspective