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My boss came in this morning to gripe about how a media service, Mixcloud, wanted her to upload her media to their service, rather than link to where it’s currently hosted. As always, the reason was in their Terms and Conditions (snarky emphasis mine):

I assume I’m not the only person making this connection, but it’s interesting how successful the entertainment industry (and anyone with an intellectual-property axe to grind)  has been in making this rhetoric commonly accepted:

Ludvig Werner, the boss of IFPI’s local Swedish chapter, had a somewhat different perspective: The Pirate Bay is about keeping money out of creators’ hands and putting it into Pirate Bay pockets. “Copyright exists to ensure that everyone in the creative world—from the artist to the record label, from the independent film producer to the TV programme maker—can choose how their creations are distributed and get fairly rewarded for their work,” he said in a statement. [from the trial against the Pirate Bay in Sweden]

And this is from the United States’ Constitution—though obviously (I hope) not in force in Sweden:

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries

Not that I agree with the Pirate Bay’s methodologies, but as I’ve written before, this isn’t the first time that copyright rhetoric has been manipulated… all the way back to the 19th century.

I just finished reading a New York Times editorial “Is the Supreme Court About to Kill Off the Exclusionary Rule?” that ended with this line:

“Nothing can destroy a government more quickly,” the [Federal Supreme Court noted in Mapp v. Ohio], “than its failure to observe its own laws, or worse, its disregard of the charter of its own existence.”

I also just finished reading Cory Doctorow’s Little Brother (which you can download free under Creative Commons).

I found my union card today and with it was a little Weingarten Rights card—explaining my right to have union representation during an interview by my employer. I didn’t particularly like the text of it, so this is from Wikipedia:

RULE 1: The employee must make a clear request for union representation before or during the interview. The employee cannot be punished for making this request.

RULE 2: After the employee makes the request, the employer must choose from among three options. The Employer must either: grant the request and delay questioning until the union representative arrives and has a chance to consult privately with the employee; deny the request and end the interview immediately; or give the employee a choice of having the interview without representation or ending the interview.

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RULE 3: If the employer denies the request for union representation, and continues to ask questions, it commits an unfair labor practice and the employee has a right to refuse to answer. The employer may not discipline the employee for such a refusal.

In 2000, Weingarten Rights were extended to non-union employees (in the form of the right to have a coworker present during investigatory meetings). This was later rescinded in 2004.

Some protected activities still do exist for non-union employees:, including:

1. Free To Discuss Discipline, Wages and Benefits

Non-union employers cannot prohibit employees from discussing work conditions, wages or discipline. In Double Eagle Hotel & Casino, an employer violated the NLRA by promulgating a work rule that prohibited employees from sharing such information with each other or persons outside the company. Such a rule, according to the Board, “plainly infringes on upon Section 7 rights.”

2. Email Complaints About Company Policies

Non-union employers cannot terminate employees for sending mass emails complaining about new company policies. An employee’s “effort to incite other employees to help him preserve a vacation policy which he believed best served his interests, and perhaps the interests of other employees, unquestionably qualified his communication as being in pursuit of mutual aid or protection.” Even if the email does not request other employee participation and is sarcastic in nature, such communications remain protected under the NLRA.

3. Non-Union Employees Are Free to Walk Off The Job To Complain About Supervisors or Other Job Conditions

Another common trap is when non-union employees walk off a job to protest certain job conditions. Most employers naturally (but incorrectly) presume that they may terminate non-union employees for abandoning the job. But that is not always the case. If, for example, employees engage in a work stoppage due to a legitimate job complaint, the NLRA may protect such conduct. In Trompler, Inc., an employer was held liable for back pay and reinstatement for terminating six employees who walked off the job in response to unanswered complaints about their supervisor.Such a work stoppage may qualify as “protected concerted activity” under Section 7 of the NLRA.

In my last post about nonprofit structure, some interesting and important aspects of tax-exemption weren’t fully explored. Specifically, I glossed over why tax-exemption exists in the first place. Let’s rectify that.

The tax-exemption at the heart of nonprofit organizations—along with “nondistribution constraint” (i.e. one cannot profit from, or own equity in, a nonprofit; it may not inure to someone)—is the the key distinction between a nonprofit organization and any other incorporated entity. The reasons why a nonprofit organization should receive tax-exemption (and the government subsidy it implies) are varied and contested.

Norman Silber’s A Corporate Form of Freedom (p. 167-169) presents the following reason why nonprofit organizations—in aggregate—should receive the special privilege of tax-exemption:

• The difficulty in measuring a nonprofit’s income and assessing an appropriate tax. (Boris Bittker and George Dahdert, 1967)
• It rewards altruistic behavior in support of communities that might otherwise diminish or fail entirely without governmental subsidy. (Prof. William Ginsberg, 1980)
• Tax-exempt services offset services the government would otherwise provide directly. But, to compensate taxpayers for the benefits conferred by government exemption, taxpayers must receive services(“quid pro quo”). This would also require tax authorities to seek direct evidence of need prior to conferring an exemption.
• Tax-exemption contributes to pluralism “by providing the public goods and services that either are undersupplied by the private market or by the government or else not provided in the same socially desirable manner” (“Community Benefit” theorists)
• The nondistribution constraint necessitates that nonprofits operate where the government or market have failed and this thus justifies their tax exemption. (Prof. Henry Hansman, 1980)
• The justification for tax-exemption may be found in understanding nonprofits as part of a “sovereignty”: independent of the state rather than subservient to it. The weakness of this theory being how this quality—and by whom it is determined—is conferred upon these “sovereigns”. (Prof. Eveylyn Brody)

Of all of these theories, “none of them quantify, in the interests of equal treatment, the particular quality that would result in an exemption being granted or denied.”

Additionally, none of these theories provide rationale for why anyone would go to the trouble of forming a tax-exempt organization that inherently denies profit and ownership. The rise of the modern nonprofit sector can be traced back to the 1960s with an increase in government giving and the humanitarian, charitable and altruistic impulses that emerged in culture at that time. As to why those impulses should lead to the current expansive nonprofit field, the following reasons have been given:

• Middle-class guilt about the disparities between the affluent and the poor
• Wealth-transfer mechanisms for the rich
• Dissatisfaction with the profit motive as an incentive to extract work and induce consumption
• Greater abundance in society general
• The inability for government agencies to provide services to meet growing needs as a result of the widening gap between rich and poor

My radio program piece I posted last week generated some good discussion in the comments. In this post I would like to follow up by providing some background to the discussion that nonprofit organizations are not fully deserving of the aura they they receive. The following is a synopsis of the Nonprofit Structure training I give for AmeriCorps*VISTA members; you can also watch the 40 minute training.

Most people have heard of what I will, for the rest of this article, call nonprofit organizations, nonprofits, or the nonprofit sector. There are many terms though that people use:

• Non-profit (with a hypehen)
• Not-for-Profit
• Charity (or Charitable Organization)
• Agency
• NGO (Non-Governmental Organization)
• Social Change Agency
• Mission-Based Organization
• Community Benefit Organization
• Philanthropic Agency
• Voluntary Sector
• Third Sector (the first two being the Public and Private Sector)

Regardless of what you call a nonprofit, it’s really only but two elements:

1. A Corporation: an incorporated entity that provides limited liability for its agents and its actions
2. Tax Exemption: generated (program income) and contributed (donations) revenue are not subject to taxation

These two foundational pieces are explicitly regulated by the government: state governments determine the rules under which an entity may incorporate; the Federal Government—Congress, the Courts and especially the IRS—determine why a corporation may be tax-exempt. Important point:

By allowing certain corporations to be tax-exempt, the government, in effect, provides an indirect subsidy of about 25% of their income.

(This frame is not my own idea, but was first presented to me by Michael Davidson of Governance Matters from this post on board governance)

Why would the government provide such a subsidy? The rules for tax-exempt organizations are laid out in the 501(c) tax statute, but Nonprofit Organizations, as we think of them, lie specifically within the 501(c)3 statute. This statute lays out exempt purposes for charitable, religious, educational, and scientific purposes (as well as some very specific ones, like international sports competitions). Charitable is defined in the generally accepted legal sense as relief of the poor or distressed, lessening burdens, eliminating prejudice and discrimination and other things.

In actuality, the purposes for which a nonprofit organization can organize are near in-exhaustible. As Norman Silber argues in A Corporate Form of Freedom, court cases during the 1950s and 1960s (especially NAACP v. Patterson and Association for the Preservation of Freedom of Choice v. The Secretary of New York State

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) eroded Discretionary Conception—the legal framework under which the formative purpose of a corporation could be contested. These court decisions created a near entitlement to organize for any purported social purpose upon the grounds of liberty and the 1st Amendment.

Because of these decisions, it’s perhaps more important to look at the few reason for which a nonprofit may not incorporate, or actions an incorporated Nonprofit may not take. Here they are:

1. May not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates.
2. None of its earnings may inure to (i.e. there is no equity to be owned), or activities benefit any private shareholder or individual.

Number 2 on that list is a pretty self-evident, but Number 1 is the prime reason that nonprofit organizations are beggared in their ability to effectively change society for the better. The context and effect of this fundamental rule though will have to be left to another post.

I’ve had these notes kicking around my desktop for a few weeks and just got around to typing them up into a cohesive post.

• Drop Zone trailer

I’ve an avid participant of Harvard Law School’s Berkman Center‘s Tuesday Luncheon Series. On February 27, author Matthew Pearl gave a great talk on copyright in the nineteenth century; I have reordered and summarized the content, though you can listen to the full audio. Through analysis of the writings and motivations of numerous 19th century authors, publishers and tradesman, Matthew Pearl carried an interesting theme: the intellectual property rhetoric of pirates and thievery was pure artifice until the rhetoric itself was codified as law, or still in some cases, not.

The mid-ninteenth century was a heady time for American publishers and a frustrating one for authors. The United States, while having domestic copyright law protecting the literary rights of American authors, had no International Copyright provisions. The works of foreign authors–British especially, because they were English language–could be printed or altered without royalty or the permission of their writers. The works of Charles Dickens, or , could be freely printed in America, and they were. Publishing agents would eagerly wait at the docks of Boston for transatlantic clippers to arrive with the newest novels to then reprint. The publisher Harper & Brothers, today HarperCollins, was the most notorious and proud of their unapproved additions.

The free-spirited atmosphere created by a lack of international copyright affected both foreign and domestic authors. Foreign authors did not receive royalties on books printed in America; the content was also sometimes modified from the author’s original text. Domestic books, by such authors as Mark Twain, Walt Whitman and James Fennimore Cooper, sold less because the prices were undercut by non-royalty paying foreign novels.

At this time the authors often banded together in copyright clubs or leagues to protest. James Russell Lowell, noted poet and president of American Copyright League penned this motto:

In vain we call old notions fudge,
And bend our conscience to our dealing;
The Ten Commandments will not budge,
And stealing will continue stealing.

This motto, in the same vein as many other pro-copyright writings, is interesting because of the themes it calls up. Notably, it evokes a traditionalist past implying that there was a time when literary property was respected. The motto also refers explicitly to stealing, yet at the time, there did not exist a legal framework of infringement. Indeed, courts at the time stated that there existed no common-law for the protection of literary works

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In the same vein, Rudyard Kipling published the Rhyme of the Three Captains, a long and complicated poem literalizing the theft of one of his books by Harper. Kipling moralizes the episode with the serious line “Does he steel with tears when he buccaneers? For God then why does he steal?” One reviewer even goes so far as to call them “book-aneers”.

Other works contained similar ideas of constant, instantaneous and expected crime. Edgar Allen Poe’s Purloined Letter concerns a crime that is completely in public view. Charles Dicken’s Martin Chuzzlewit is about the “false commerce” of America.

But authors, while protecting their writings, had a tightrope wire to walk with themes very American: democracy, class, culture and slavery.

Royalty-free novels made possible, for the first time, “railway station” editions that could cheaply purchased by the general public. In the past, only library quality editions could be purchased by those who could afford their high costs. Restoring high prices these could viewed as keeping knowledge or betterment from the masses. Additionally, the growth of the publishing industry was fueled by cheap foreign novels, and to be against them placed authors as elitists above the working class typesetters and bookbinders.

At this time there did not fully exist the concept of the sanctity of a creator’s work. English books were often Americanized, removing British language or themes and replacing them with more American counterparts more easily understandable or acceptable to American palates. Twain’s A Yankee in King Arthur’s Court is the archetypal American meddling with high British romance: invading, changing and ultimately destroying it.

Disallowing the modification of works was even viewed as imposing a slavery of words. When Harriet Beecher Stowe went to court to prevent an unauthorized German translation of Uncle Tom’s Cabin, she was named a hypocrite by some in calling for the emancipation of the negro yet shackling her novel.

Charles Dickens, on his two visits to America, was viewed with much animosity by the American public. On these visits he called for an international copyright but was derided as only seeking greater profits for himself.

Indeed, authors went to great lengths to not fall too heavily on either side. Walt Whitman’s Leaves of Grass contains a very measured call for stronger protections. Mark Twain, in a confusing episode before the U.S. Senate, gave strange or contradictory answers. James Fennimore Cooper would outright lie when asked about having signed petitions.

Despite all of this, there was created by authors a wholly successful fictional narrative superimposed on an actual legal regime. Today’s concepts—and laws—of copyright infringement, piracy, robbery and thievery are based upon these artificial metaphors and themes. At the time no laws existed to make the actions of publishers such as Harpers illegal, but rhetoric, poems and stories were created until a legal framework could codify them.

To learn from these episodes Matthew Pearl makes this important point:

It is easy for us to forget that at one point there existed the need to craft the rhetoric of “a shadow copyright regime”.

Today, it’s difficult for us to notice how we adjust the rhetoric, for better or worse, in the popular conceptions and legal framework of ownership and copyright protection. And when taking into account concepts like Fair Use, noticing that conceptions may be just rhetoric.