The stupidity of our copyright laws is finally laid bare

Arrested development: currently, if you transfer a legally purchased CD to your iPod you are breaking the law. Photograph: Paul Sakuma/AP

Watching British politicians engage with technology companies is a bit like listening to maiden aunts wondering if they would look better in thongs. Tony Blair and Gordon Brown, to name just two such aunts, fantasised that Microsoft was cool, and spent years trying to associate themselves (and New Labour) with Bill Gates – even going to the lengths of making the Microsoft boss an honorary knight. Then we had the equally ludicrous spectacle of Cameron and co believing that Google is cool, which is why its CEO, Eric Schmidt – who for these purposes is the Google Guys' representative on Earth – was an honoured guest at Cameron's first party conference as leader. Given that, it's only a matter of time before Ed Miliband discovers that Facebook is the new cool. And so it will go on.

Cameron's worship of Google did, however, have one tangible result. Mortified by the Google Guys' assertion that the UK's intellectual property regime would have made it impossible to launch their company in the UK, he decided to commission an inquiry into said regime under the chairmanship of Professor Ian Hargreaves. This was a mite puzzling, because the previous government had in 2005 commissioned a similar inquiry under the former FT editor Andrew Gowers. His report had concluded that the UK's intellectual property was fundamentally sound but made 54 specific recommendations about possible improvements. Most interestingly, though, Gowers also concluded that copyright on music recordings should not be extended from its current limit of 50 years after the date of recording, a finding that reawakened Cliff Richard's fears that his heirs and descendants would be reduced to penury. For the copyright industries, therefore, Gowers had clearly reached the wrong conclusion, a fact that their representatives lost no opportunity of pressing upon Lord Mandelson on various luxury yachts moored off the coast of Greece.

Some of us feared, therefore, that Hargreaves would be pressured into being more sensitive to the needs of hard-pressed pop stars and their agents. His report, published this week, suggests that we seriously underestimated him. What he has produced is a tough, intelligent and radical analysis of our current IP regime. "Could it be true," he asks, "that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators' rights are today obstructing innovation and economic growth? The short answer is: yes."

Hallelujah! At last we are getting somewhere. The notion that laws framed in an era when copying was difficult, imperfect and expensive could work in an era when copying was effortless, perfect and cheap was a proposition that only imbeciles and industry lobbyists could entertain. But up to now, our politicians subscribed to it.

Hargreaves usefully explains why this ludicrous state of affairs has persisted for so long. "Lobbying," he writes, "is a feature of all political systems and as a way of informing and organising debate it brings many benefits. In the case of IP policy and specifically copyright policy, however, there is no doubt that the persuasive powers of celebrities and important UK creative companies have distorted policy outcomes. Further distortion arises from the fact (not unique to this sector) that there is a striking asymmetry of interest between rights holders, for whom IP issues are of paramount importance, and consumers for whom they have been of passing interest only until the emergence of theinternet as a focus for competing technological, economic, business and cultural concerns."

It's a measure of the ludicrousness of our intellectual property regime that some of the most mundane, commonsensical recommendations in the Hargreaves report read like great leaps forward. Take, for example, for example, the idea that henceforth none of us – or at any rate, none of us who use an iPod – should be criminals. Eh? Well, under current arrangements, if you copy music from a legally purchased CD and transfer it to your iPod, then you are, technically, breaking the law.

Then there's Hargreaves's proposal that, in future, British lawmaking on intellectual property should be "evidence-based". As opposed to what,asks the legal scholar James Boyle: "Astrology-based?" But our lawmaking in this area has been so weird that the idea that we might try rationality for a change seems genuinely radical.

Hargreaves is also very good on the thorny problem of "orphan" works – works still technically in copyright but for which no rights-holder can be traced. He wants the government to legislate to enable the licensing of these works – a commonsensical idea but one that in the insane world of IP lawyers sounds like revolutionary talk.

No doubt there will be lots of expert cavilling about this report. But overall it's a refreshingly intelligent and welcome document. I've a good mind to start a Facebook page for it – and invite Ed Miliband to click on "Like".