Bye Bye Willie: The Political Rent-Seeker

By David Brady, Jr., The Mises Institute | January 22, 2024

On January 1, 2024, the famous Steamboat Willie entered the public domain. The intellectual property that is the original Mickey Mouse design has been controlled by the Walt Disney Company since 1928. The internet blew up in excitement as a result. Within minutes of the world waking up to the news, horror games were announced based on the design of the famous mouse. The editors of Wikipedia were practically Olympic racers, waiting for the moment it hit midnight to upload the entirety of the cartoon to Wikimedia Commons.

This cartoon, under eight minutes long, and its long-awaited release to the public domain is a perfect example of political rent seeking and corporate protectionism.

American copyright and patent law has a long history that goes back to the colonial period. The 1623 English Statute of Monopolies barred the institution of monopolies. However, it offered an exception for the king to grant exclusive rights to new inventions for no longer than fourteen years. The colonies would soon follow in issuing patents for as few as two years to the fourteen years described in the statute.

Eventually this morphed into what is often dubbed the “intellectual property clause” of the Constitution. The clause granted Congress the power to “promote the sciences and useful arts” through granting monopoly privileges over their creations. This clause was not necessarily a pure creation of liberalism and limited government. American author Noah Webster, in his own interest to keep control over his works, can be identified as an early lobbyist for this clause.

The earliest instances of intellectual property appearing in the United States’ governance can be directly traced to what Murray Rothbard and Dr. Patrick Newman have appropriately dubbed “cronyism.” Rather than ground the principles in classical liberal values of legitimate property rights, this legislation was grounded in the personal interests of these intellectual property monopolists.

Lobbying for monopoly privileges is a time-honored tradition in statecraft-business relations. The very term monopoly can only be properly understood through its original definition as Rothbard argues in his magnum opus Man, Economy, and State: “Monopoly is a grant of special privilege by the State, reserving a certain area of production to one particular individual or group. Entry into the field is prohibited to others and this prohibition is enforced by the gendarmes of the State.”

It is easy to deduce that the possession of a monopoly privilege is a valuable one. The East India Company, being the most famous example, lobbied heavily for its exclusive Crown-granted rights to engage in foreign trade with the rest of the world. Members of parliament became investors, thus having a vested interest in maintaining this privilege through legislation. The company offered high loans to the Crown itself. This expanded into an eventual bailing out of the company.

Political rent seeking becomes a profitable venture so long as the projected revenue of the obtained privileges is higher than the costs of lobbying for legislation that grants the privileges.

But what does this have to do with Steamboat Willie?

Disney happens to be such a political rent seeker. Ownership over the characters that it creates proves profitable for Disney. Mickey Mouse has earned the Walt Disney Company over $171 billion in revenue over one hundred years. Preventing others from utilizing the characters in their own merchandise or creations means that Disney has an exclusive right to make use of this character. One cannot imagine the possible stories that could have been told, the entertainment provided, had free society been allowed to experiment with it. Disney has lobbied many times in Congress to extend the length of their copyright claims on characters.

Other examples in the modern age demonstrate the absolute failure that monopoly rights over characters and stories provide. Take, for example, the Tolkien Estate’s selling of the rights to The Rings of Power to Amazon. While the famed Lord of the Rings trilogy is widely renowned and loved by fans of J.R.R. Tolkien, The Rings of Power is hardly the same. Audience ratings on the review site Rotten Tomatoes give the series a 38 percent average rating. Where a fan base had already existed with a rich story to draw from, the monopolists left a ruin.

Another example is a Disney adaptation that notoriously flopped on its face: the Star Wars sequel trilogy. Long time fans of Star Wars know firsthand the ability of a monopolist to destroy a brand. Disney’s Star Wars sequel trilogy is famously horrible, but there is little incentive to provide quality when it can bar competitors from providing better stories with the intellectual property. Mediocre content is not forced to compete within a marketplace as it is given monopoly rights. Imagine what could be done with the Star Wars universe if fans could create content that would earn them revenue.

Intellectual property laws, especially pertaining to entertainment, simply enshrine mediocrity. These monopoly privileges to certain stories and characters grant giant corporations the backing of the state in their creation of entertainment. Whereas in most any other industry we would encourage competition to create the best quality product for the cheapest price, the government protects failing businesses from experiencing market pressure that would force better care of their product.

As long as we enshrine intellectual property, political rent seekers like Disney will lobby to protect their mediocrity. It is only through open competition along well-defined private property rights that quality will be placed above political expediency.

David Brady is a Catholic libertarian and economics and finance undergraduate student at Florida Southern College. He is a co-host of the “Every Week is Chaos” podcast and a Mises Apprentice.