Lochner in Cyberspace: The New Economic Orthodoxy of “Rights Management”

Ninety-three years ago, in Lochner v. New York, the Supreme Court struck down a maximum-working-hours law for bakers as an impermissible invasion of employer-employee liberty of contract and, by implication, of the employer’s property rights in his business. Lochner came to symbolize, and was vilified for, a vision of state power as rigidly circumscribed by the operation of judicially-determined laws of social ordering. By the late 1930s, the Court had changed course and accepted that the states’ police power – or, in the case of Congress, the commerce power – encompassed even protective regulation of the parameters of the private employment contract. Within the modem legal academy, “Lochner” has become an epithet used to characterize an outmoded, over-narrow way of thinking about state and federal economic regulation; it goes without saying that hardly anybody takes the doctrine it represents seriously. In fact, however, the economic vision embodied in Lochner is alive and well on the digital frontier. Its premises – the sanctity of private property and freedom of contract, the sharply delimited role of public policy in shaping private transactions, and the illegitimacy of laws that have redistributive effects – undergird a growing body of argument and scholarship concerning the relative superiority (as compared with copyright) of common law property and contract rules for protecting and disseminating digital works. In their contemporary incarnation, these premises are embedded in the rhetoric of economic efficiency. In place of social contract theory, their proponents argue from purportedly neutral, scientific truths about the way markets in general, and information markets in particular, operate.