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Harmonization


Mickey Davis

For two weeks we, eight American law professors and lawyers, lived in dormitories nestled in the forested suburbs of Lodz, Poland, with two dozen young law professors from across Eastern Europe. We were part of CEELI, the Central and East European Legal Initiative. CEELI is nominally an American Bar Association program to bring legal reform to those emerging nations, and part of an obscure but enduring multi-national project aimed at "harmonization" -- establishing greater legal uniformity across national boundaries. But it is also, and perhaps more importantly, part of the US response to the dramatic collapse of Russian communism -- a State Department-funded effort to safeguard the victory of capitalism over the former police states of Eastern Europe.

In its most benign form, harmonization would mean that the nations of the world would adopt, for example, a unitary system of air traffic control in place of the dozens that now exist. The advantages of a common system are clear -- we all benefit from safer and more orderly skies. Moreover, a unitary system would have few, if any political effects -- it creates no division between winners and losers. It is like deciding whether everyone in a country should drive on the left (or right) side of the road. The important thing is to get everyone on the same side; it does not matter which side they are all on.

The CEELI meeting I attended was not about air traffic control; it was about intellectual property -- patents, trademarks, and copyrights. In this field, harmonization is urgently sought, at least by the multinationals. In the name of harmonization and democracy, they want to see all countries adopt the same legal model to enforce and impose patents, trademarks, and copyrights. But in the case of intellectual property, the choices are highly political -- there are winners and losers. Companies such as IBM would like all countries, including the struggling nations of Eastern Europe, to have laws that forbid children from copying programs from one another, prevent programmers from discovering the basis of fundamental computer systems, prohibit the rental of videocassettes as well as computer programs, and require universities and other educational institutions to pay royalties for what they have always copied for free. But experts agree that different intellectual property regimes are best suited to different levels of economic development. So harmonization in this field would saddle developing countries with laws that are suited only to countries with more highly developed economies.

A few examples will help to show how the imposition of American-style intellectual property laws upon undeveloped countries amounts to imperialism of a subtle -- and dangerous -- sort.

Consider the rental of audio, video, and computer disks. A wealthy country might decide to prohibit such rentals absent the copyright owner's permission -- usually through the payment of royalties to the owner -- because its nationals can afford to buy a separate copy of each work, and the industry will benefit from increased sales. A poor country, however, might choose the "first-sale" doctrine under which any sale of a disk exhausts the copyright owner's rights in the disk itself, and the new owner can keep or rent the disk as she wishes. In such countries a first-sale policy makes sense because the free transfer of information is considered more important than the increased sales to the original copyright owners.

The United States has been insisting that the countries of Eastern Europe give copyright owners complete rights to restrict rentals of these disks, in effect forcing them to accept the economic values of the most powerful country in the world. Ironically, US doctrine only recently shifted from first-sale to prohibitions on rentals of audio and computer disks -- until the mid-80s it was perfectly legal. Moreover, because of the influence of our video rental industry, we still do not restrict the free rental of video disks and tapes. Nevertheless, we are demanding that Eastern Europeans refrain from renting this material. And we frame those arguments in property terms, saying that anything less would promote "piracy" or "theft." Clearly, harmonization of intellectual property laws has nothing to do with democracy, but everything to do with profits.

Or consider the important differences between national technological policies. Nobody argues that technological progress would disappear in the absence of intellectual property laws. In fact all experts agree that inventions, books, and marketing will continue, even without patents, copyrights, and trademarks. The most that experts even speculate is that intellectual property laws might help to accelerate the rate of progress. But many Third World countries would rather have free use of pharmaceuticals and risk a slightly slower pace of innovation, than gamble on patent protection that might accelerate progress at the cost of making health care prohibitively expensive. As a result, many countries do not offer patent protection at all to medicines. We, on the other hand, are able to afford (though less and less, it seems) such expensive pharmaceuticals. Instead of understanding the differences, we accuse the rest of the world of piracy and require that they either adopt our technological philosophy or lose valuable tariff and other benefits.

So last fall, with overt and perhaps benign support from the American Bar Association and less visible and also less unselfish support from the State Department, my colleagues and I were sent to Poland and Bulgaria to encourage harmonization -- and, of course, democracy.

In daily seminars, we lectured our Eastern European "students" (all of whom are highly accomplished law professors in their own countries) on American theories of copyright, trademark, and patent law, and American methods of teaching law to law students. Except for my dissenting voice, they were besieged with arguments about the superiority of US intellectual property laws, and how similar laws would furnish their countries with the tools necessary to become First World nations.

While my colleagues explained how IBM would not invest in Hungary unless Hungary protected software in the same way as it is protected here in the United States, I tried to explain how intellectual property laws are completely context-sensitive. A copyright law suitable to an advanced nation which produces large quantities of copyrightable products is simply inappropriate to a country that, comparatively, consumes rather than produces such products. I tried to explain that the United States had been a pirate nation for decades -- unashamedly so -- and only slowly started to protect various forms of expression as it developed and started to produce its own copyrightable wares. I tried to explain that copyright, patent, and trademark laws are not right or wrong in the abstract but appropriate or inappropriate, and that politics, not morality, decides these issues.

What I discovered was that most, perhaps all, of these Eastern Europeans knew the score exactly. And, contrary to what my colleagues -- and perhaps the State Department, CEELI, and the American Bar Association -- believe, they are not all committed capitalists, or even disillusioned socialists. Instead, I found, in Poland and later in Bulgaria, at least four archetypes. Some are "fatalists," resigned to what they see as the eternal domination to which their corner of Europe is condemned. Others are "capos," those appalling fellow travelers of whatever happens to be the dominant stripe. A third group are the truly "born-again" who queue up -- in lines not terribly long, I must say -- to share the booty. Finally, there are the angry resistors, the "maquis" who must postpone their ire, but in whose rage I found the only shred of hope.

Discussions in Poland were dominated by fatalists and the born-again. Here, for example, is a young Romanian fatalist: "Sometimes I am convinced that socialism is evil. How could it have done what it did to my country?"

"Do you really believe that?" I asked. "Was it really socialism?"

"Oh, no. I was the president of my young communist league youth group in school. I lived with a copy of Capital. It was not really socialism. But communism destroyed my country."

"So will capitalism save it?"

"No, it is just as bad. But we have no choice right now."

I heard the same sentiments from almost all -- except the Hungarians. They have been born-again. More precisely, they are well on their way to a Western level of computer development, and see that US-style copyright laws may be to their advantage. The rest, however, simply felt defeated and, depending upon whether they counted themselves as fatalists or as maquis, were either discouraged or angry.

One month later, in Bulgaria, I met my first capos. We were conferring with parliamentary leaders, industrial entrepreneurs, artists, writers, musicians, and journalists about the latest draft of Bulgaria's new copyright law. Where had they gone wrong, they asked us, and how could they serve us better? There were five of us in the group this time -- three American law professors, one prominent corporate leader, and, once again, an IBM executive.

The Bulgarians had not been party to our preliminary discussions weeks before in the States during which we had been briefed by Washington experts who expressed delighted amazement that the Bulgarians had agreed to terms that none of the other Eastern Europeans had been willing to accept. The Bulgarians had not only agreed to adopt a US-style copyright law, they had gone it one better. They had adopted a retroactivity clause so that thousands of old documents, computer programs, recordings, compositions, and the like -- freely copied by Bulgarians for almost five decades -- were suddenly transformed into private property to be owned by countless and frequently unidentified parties, both private and governmental. The US computer industry was obviously delighted, judging by its one representative on our panel, but plainly surprised at this stroke of legal good luck that would have been unconstitutional in our own country.

My job was obviously more difficult in Bulgaria. I cautioned them about the restorative powers of free market economics, noting that the problem with their former police state was not the absence of capitalism, but the absence of democracy. A leader of parliament -- a capo with a conscience (that is, with a strong need to rationalize) -- then lectured me.

"You know," he said, "Schoenberg, when developing his atonal style, was asked how he could function without traditional rules. He answered, `First you must know the rules before you break them.' We, too, must know the rules of the free market before we start out to break them."

"But which are the rules, and which are the exceptions?" I asked.

"You must understand that we are under great scrutiny. If we depart from free market methods, everyone suspects us."

He and many of his colleagues were former communists. I could not argue with his reasoning, no matter how dogmatic it was. Bulgaria wants international respect and the United States is insisting that it adopt free market economics and free market copyright, patent, and trademark laws. But being a capo clearly has a spiritual price.

Where were the maquis in all of this?

The previous month, in our Polish retreat, our group discussed the merits of Western intellectual property laws. The Eastern European academics asked whether new countries with little to produce but much to consume should willingly pay patent or copyright monopoly prices for things they could otherwise freely copy. They all noted that the Bush Administration had threatened to deprive their countries of most-favored-nation status if they didn't comply. Finally, amid a heated, but good-natured, class debate between the IBM lawyer and myself concerning whether Eastern European nations had any interest in preventing pirating of computer programs that are all manufactured in the West, I told the young academics, "Watch out, if you accept this argument you are just trading one form of exploitation for another. Is this just harmonization? You may simply be replacing American for Russian hegemony."

My jaw dropped as a young professor seated next to me put it all straight. "Don't worry," she said, "some day you will want something from us, and we will do the same to you." My introduction to the maquis!

So they knew the score. But was her response a rational, arms-length decision to sacrifice some short-term interest in the sure and certain knowledge of an eventual quid pro quo, or was it rather the political bravado of a young person from a young country, overwhelmed by our power and wealth? Later I asked that young law professor how she expected her country to capitalize upon these Western intellectual property rules and she told me, "You must understand we are Balkan countries. We are fatalists. You think you can determine everything in life rationally. We think you can determine nothing. That is our history and our experience." A maqui, but also a fatalist.

Fatalists, capos, born-agains, maquis. Whatever their flaws, they are what we have made of them -- they play these roles in response to our demands. It is clear to me we are taking extravagant advantage of this situation. The Eastern European states are sitting ducks and we are downing them one after another. Will they really get a chance to do the same to us one day? Not in the foreseeable future. Will we pay a price for this hasty excess? We are certainly showing the Eastern Europeans the real face of capitalism, and they seem to recognize it.

Originally published in the June-August 1993 issue of Boston Review



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