Consequentialist Thinking and Economic Analysis in Intellectual Property

Legal policy is about consequences, and assessment of consequences requires an understanding of economics. This chapter explores this proposition. Whether intellectual property (IP) satisfies normative criteria requires understanding how IP affects behaviour in meeting social needs. Economic analysis provides testable models of plausible connections between legal rules and standards and individual conduct in the creation and dissemination of innovative outputs. These models provide a conceptual basis for legal arguments and policy recommendations. Whether these models are successful rests on their ability to identify and test the consequences of law. Economic methodology, understood this way, serves as a means of explanation and of prediction to guide the persuasive power of attorneys and policy-makers. This chapter develops this case for economics by consideration of analyses of the publishing and music industries.