The John M. Olin Center

Paper Abstract

356. Barak Y. Orbach, The Law and Economics of Creativity at the Workplace, 03/2002.

Abstract: Technological and legal developments led to the rise of employed creativity in the last quarter of the nineteenth century. The new class of employers claimed the rights in the creative products produced by artists and inventors employed by it and after a short struggle its demands were satisfied: by and large the law acknowledges the rights of employers in creative products produced by workers (employees and contractors), just as it acknowledges the rights of employers in any other products. This legal victory, although took place almost a century ago, is still fiercely debated among scholars and participants in creative industries. In the past century, thousands of disputes between employers and workers over rights in creative products were brought before the courts and inspired voluminous commentary on the topic. Nonetheless, the study of the nature and structure of the law that allocates the rights between employers and workers has generally been neglected. This paper studies the organization of creativity at the workplace, presents a general framework for understanding the present allocation rules, evaluates these rules, and offers simple guidelines for designing better rules, when needed. The paper also examines the myths of the starving artist and the hero inventor and their inputs into the production of creative products. The paper concludes that the differences between the production of creative products and non-creative products do not call for unique allocation rules for the creative production. More specifically, I argue that the distinctive properties of creative workers and the characteristics of their employment do not justify workers' ownership.

356: PDF