Business Life: As if by magic…

30th May, 2010

First published in Business Life magazine, October 2009

In the late nineteenth century, Buatier De Kolta was mesmerising audiences in Paris with his magical tricks. In one that had his fans and his rivals mystified, he produced huge bunches of paper flowers from an empty roll of paper.
One evening, a gust of wind blew one of the flowers on to the floor in front of the stage. A magician in the audience seized it and ran out. It wasn’t long before De Kolta’s trick was being performed by other magicians.
The story is told by the intellectual property expert Jacob Loshin. His research matters, if somewhat indirectly, because we need to understand how ideas are developed, emulated and protected in a world where those ideas, rather than simple objects, make of much of the wealth that is created.
Intellectual property law – which (as copyright) protects this article, and (as a patent) protects the design of the jet engines that are keeping you aloft – is clearly important. But it does not protect magicians’ tricks, nor is it much help in high fashion or in haute cuisine – all areas that Loshin describes as a “negative space” for intellectual property.
Lacking legal shelter, chefs and conjurors resort to professional norms. Modern-day magicians could hardly imagine the crude theft that De Kolta suffered, because they have developed a professional code of conduct to defend their most valuable property: their ideas.
Magicians’ norms encourage the selective sharing of techniques, limit copying, and credit the re-discoverer of a long-dormant technique with the same rights as the trick’s inventor. Interestingly, very similar norms govern the sharing of recipes among French chefs.
What enforces these rules? Social pressure. One company manufactured tricks that were protected by the magician’s code. This was perfectly legal. But magic journals would not accept the company’s ads and professional magicians would not buy its products. Bankruptcy soon followed.
These informal sanctions work well, but not perfectly, for both chefs and magicians. Magicians, of course, face a problem that chefs do not. Restaurant customers do not care if a chef’s recipe is revealed to the world, nor does his reputation suffer. But reveal a magician’s trick, and he – indeed, the entire profession – suffer from the loss of a little bit of mystery.
A notorious case was a series of 1990s television shows with the self-explanatory title, Breaking the Magician’s Code. They won big audiences by revealing the secrets behind classic illusions – and the television executives were simply immune to magicians’ social sanctions. Legal challenges, of course, did not succeed.
One magician complained that the shows were “peeing in everybody’s cornflakes”. Maybe. It is a reminder of how quirky intellectual property rights can be. Quirkiness is not usually easy for economists to deal with, but if we want to understand the intangible economy of ideas, this is a trick we shall have to master.

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