“It’s not the idea, however, that’s the hard part; it’s the technology and the financial infrastructure. YouTube’s solution wasn’t “hey, let’s collect money on stuff!”. That’s obvious. It was “hey, let’s make it possible so that we collect money on the proliferation of content and then spread that revenue to everyone involved in its proliferation.”—How YouTube Just Saved The Internet | Techi.com
Sen. Schumer’s new fashion bill illustrates this collective action dynamic nicely. The impetus for the bill comes almost entirely from the Council of Fashion Designers of American (CFDA). Membership in the CFDA is invitation-only, and is comprised mainly of America’s most notable designers. So the Schumer bill is the brainchild of America’s design elite. An earlier effort to pass a broader bill foundered because the larger and more proletarian American Apparel and Footwear Association refused to go along. This time, however, the two found common ground—and even issued a joint press release touting the merits of the proposed law. In a sense, all Congress is doing is anointing this marriage of convenience between two major industry groups.
Perhaps the most ironic thing about this story is that we’ve seen it all before. During the Great Depression, forces within the fashion industry tried to squelch copying. In the 1930s, that reaction took the form of an illegal private cartel. The “Fashion Originators Guild” brought together retailers and designers (much like the Schumer bill) in an effort to ensure that copies of Guild designs were not sold in Guild-affiliated stores. (Copies from Europe, though, were fair game.) The Guild accomplished this goal for several years, but in 1941 the Supreme Court declared it a restraint of trade and a violation of American antitrust law. The Guild, in short, destroyed competition–and that was illegal.
Frustrated, industry leader Maurice Rentner went to Congress, arguing that the destruction of the Guild and the resurgence of fashion copying would “write finis” to the industry, and asking for a change in the law. Congress ignored him. The result? The American fashion industry hummed along for decades, growing dramatically in size and influence. Occasional efforts to revisit this idea came and went, but none had a serious chance of passing—until now.
What the new Schumer bill does, in a basic sense, is revive the pact at the heart of the 1930s fashion cartel. While the Supreme Court had held that private actors could not squelch competition through cartels, nothing stops Congress from achieving the same end through legislation.