Yeah, Hollywood is just a bunch of horribly left-wing liberals. Snort.

The last time I checked, it wasn't in anyone's best interest to set a precedent for content/subject matter-based censorship on political perspective grounds. Yet another reason to oust Disney's management, eh?

The European Commission has some strange ideas on "competition." Now it has gotten around to threatening musicians because they have the temerity to stand up to the music industry.

The Santiago agreement was designed as a one-stop shop for music copyright licensing, sparing users — companies selling downloads — the need for a collecting agreement in each EU state. The commission said there should be competition between the societies, which would benefit music download providers and users. Collecting societies would compete with each other to offer pan-European licences and companies could shop around for where to obtain the right to sell downloads across the 25-nation bloc.

Record companies have long been angry about the power of the collecting societies in Europe. They insist that they are more than willing to sell downloads on a pan-European basis but that the societies insist on continuing on a country by country basis. Two years ago, Universal Music complained to the commission that the societies acted as a de facto cartel and that their unfair terms were to the detriment of record companies and consumers, who end up paying more for music.

Julia Finch, "EC Warns on Music Royalty Pact," The Guardian (04 May 2004) (fake paragraphing removed for clarity).

Only someone who had no conception of language rights could accept the music industry's argument. But then, the real problem here is that the music industries want a single place that they can go to coopt the artists. Labor organizations have diseconomies of scale as well as economies of scale; the subtext of the Commission's position is that the "union-like" activities of the collecting societies—most of which charge a lower rate than that demanded in the US under the mechanical license system—will absorb the administrative costs that the music industries do. Then there's the problem with boycotts and refusals to deal, which are far less regulated under European competition law than in the US. The irony that an entrenched oligopoly is objecting to someone else's fragmented monopoly (the collecting societies do not get along!) seems to have escaped notice.

This Isn't an Argument; This Is Abuse

I see that the triennial posturing between the film and TV studios on the one hand and the Writer's Guild of America (West) has finally begun in earnest. WGA members simply don't know how good they have it. Neither, for that matter, do the movie studios. Perhaps most revealing in this article is this passage:

In a recent mailing to members, the union said a typical DVD sells for $16. The studios make a $10.55 profit on the sale, while writers get 5 cents, the union said. Producers concede they have reaped millions of dollars from home video sales and that DVDs have become a major source of revenue. They argue that on the TV side, DVD revenue is merely replacing money that had come from international markets that have dried up, syndication deals and licensing fees that had been increased after shows became hits.

Id. (fake paragraphing removed for clarity). If DVD revenue is "merely replacing" declining sales in another market segment, then there should be no argument. The proportion of compensation should be transparently transferred to the new sales method. But wait… that would require that the two sides even agree on the underlying accounting methods. Given that no two accountants even within the same studio can agree on accounting methods, that's about as likely as a balanced federal budget for next year—with many of the same problems. Note also, though, the critical word in that passage. It appears twice.

"the union said"

"the union said"

There is no union for print authors that is worth a damn. The "National Writer's Union" is a mere trade association; it has no collective bargaining power, no disciplinary authority, and no right to do either. The same goes for all other associations of freelance authors.

This leads to a modest proposal. Let's assume that the "writer's union" really is harming the studios with unreasonable demands (the demands aren't unreasonable—merely the negotiating tactics). How, then, can the studios undercut union power and turn things into the kind of free-for-all with essentially adhesive contracts one finds in print publishing? Well, can we do anything to limit union membership? Hmm. Are unions open to management (flip, flip, flip)? No, it doesn't look like it. One can usually claim, at least with a straight face, that independent contractors are "management," not "employees." So, what can we do to make clear that the writers aren't employees?

<SARCASM> I know! We can stop treating screenplays as works for hire! Since the definition in § 101 groups screenplays with works produced by employees in the scope of their duties, that should do the trick! </SARCASM> Oops. Wait a minute. That means we'll actually have to respect the authors' copyrights… including creative control, derivative rights, sequelization rights, the right to revise… naaaah. Not going to happen.

Taking the Bait

The Perfesser took the bait! The Perfesser took the bait!

Actually, I'm just saying that because technically, I can. What he actually did was make the underlying point of my posting of Thursday for me; if I say this kind of thing, it looks like I have an irrational prejudice against unpublished authors (given that I represent a fair number of authors who have not achieved commercial publication, that's a bit odd).

CE Petit makes publishing on demand sound like a sucker's bet. But what about the nonpecuniary psychic benefit to a frustrated author of actually seeing a book in print?

Actually, this is precisely the point. There is a substantial—and perhaps controlling—desire to "see the book in print." Even that, though, should be tempered by the number of people who will see it in print.

Time for some more math. Other data from XLibris indicates that only about 350 of its titles have sold more than 500 copies, and only about 1400 of its titles have sold more than 200 copies (sources leave unclear whether this includes those 350). This is much flatter a sales curve than one finds in commercial publishing—but it exposes the equal probability fallacy of using means bounded on one side. Since one can't sell less than zero copies, sales of zero is a bound to the data. On the other hand, the theoretical limit of sales is four or five orders of magnitude greater (at least if one believes the various boosters of "POD publishing"). Let's factor the minimum possible effect of those sales in to see what happens:

• Mean XLibris sale per title = 1,300,000/10,300 = 130 copies
• 1,300,000 total - (350 * 501 copies) - ((1,425-350) * 201 copies)
  = 1,300,000 - 175,350 - 216,075 = 908,575 copies of books that sold < 200
  1 - (1,425/10,300) = 86% of population is in the remaining group
  908,575/(10,300-1,425) = 102 copies mean in this population
• 1,300,000 total - (350 * 501) - (1,425 * 201)
  = 1,300,000 - 175,350 - 286,425 = 838,225 copies of books that sold < 200
  1 - ((1,425+350))/10,300 = 83% of population is in the remaining group
  838,225/(10,300-(1,425+350)) = 98 copies mean in this population

Of course, every copy over 501 depresses things further for the remaining population, as does every copy between 201 and 501.

This is exactly what a sucker's bet is: A bet that the "nonpecuniary benefit" will make up for the financial cost. In this case, the "nonpecuniary benefit" is "seeing the book in print." However, "seeing the book in print" had better mean that 100 or fewer others will also see it in print, because that is the expectation value for the vast majority of participants in this market. I can think of few clearer demonstrations of irrational economic behavior than vanity publishing. The main "attraction" of POD vanity presses is their alleged chance for economic reward; one can readily infer such from the emphasis that they place on financial aspects of "publishing" with them, as opposed to more than lip service to even the "satisfaction of seeing your book in print!" (direct quotation; source withheld to protect the guilty).

POD is a printing technology. It changes the price points of the vanity publishing model from investment of from $5,000 to $15,000 (or even more) resulting in a breakeven point in excess of 2,000 copies of a typical 2,500 copy print run—an astounding, and almost never achieved in the history of publishing, sell-through of 80%—to a breakeven point of between 150 and 200 copies (assuming that the author will buy a few copies, for no royalty, as gifts for friends, for reviews, and for marketing). What does not change is that the money flow still points away from the author; the distinction in degree is not nearly significant enough to make it is distinction in kind. This is still vanity publishing.

So, then, the Perfesser is right. His question goes to the core of why so many economic models don't work in the real world: Once one admits that valuation cannot be perfectly converted to utils (or any other dimensionless unit, such as "dollars"), both the individual actors and the market being studies have substantial "irrational" behavior. In the vanity publishing market, "irrational" would be a very generous description indeed.

This was a busy news day. I'll just put up the news now; I have some other comments for later.

• Department of the Sublimely Ridiculous: "Darwin-Free Fun for Creationists" will probably really piss off the Inscrutable Design folks because it persistently (and correctly!) calls them "creationists." One of my favorite bits of nonsense is this one:

  At Dinosaur Adventure Land, visitors can make their own Grand Canyon replica with sand and read a sign deriding textbooks for teaching that the Colorado River formed the canyon over millions of years: "This is clearly not possible. The top of the Grand Canyon is 4,000 feet higher than where the river enters the canyon! Rivers do not flow up hill!"

  No, rivers don't flow uphill. Occam's Razor tells us that it's far more likely that water levels were both absolutely and relatively higher at points in the past. Note that accepting this statement requires one to assume that the Earth as it is now represents exactly what it looked like at the "creation"—when measurements that have been made in the last 100 years demonstrate that is impossible. Even without those measurements, one need only go to Greenland to see this stuff in action.

• Maybe there's a glimmer of hope for artists, given that some people actually appear to understand the underlying issues.
• Cynical about the publishing industry? Me? Never. Except, perhaps, when it lives down to my subterranean expectations. Can you say "self-fulfilling prophecy"? See? I knew you could.

Mathematically Challenged

One of the great mysteries of life is how seemingly intelligent people become mathematically challenged when presented with big numbers. Today, we'll take a look at the "success" of POD vanity presses. Both of them attempt to impress with large numbers of titles and copies in print. However, some very simple math shows that these same numbers only reveal the futility of their business model for the author who expects "publishing success" from their services. We'll leave the blatant lies that appear on their websites and marketing materials for another time. Well, most of them; this one is just too juicy:

Is this vanity publishing?
No. Vanity publishers will charge you thousands of dollars to print box loads of books they will not help you sell. Xlibris does not require you to purchase any books. Also, since vanity publishers use the printing technology of traditional publishers, their costs are inherently high. Xlibris uses modern computer technology to keep costs down, freeing up resources to provide a wide array of services. Vanity publishers provide a one-time service.

http://www2.xlibris.com/faq/faq_aboutxl.asp#vanity (retrieved 29 Apr 2004). Note that this redefines "vanity publishing" essentially as "something other than what XLibris does." Contrary to the assertions in this passage, the test for whether a particular transaction is vanity publishing does not depend upon the magnitude of the charges, requirements to purchase books directly from the publisher, use of "traditional" printing technology, or the phantom distinction between one-time and "continuing" services. Whether one is dealing with a vanity publishing operation depends on the answers to two, and only two, questions:

1. Is the guaranteed direction of money flow, excluding speculative future sales, on the date that the first copy comes off the press, away from the author?
2. Does the publisher own the books as they come off the press (as opposed to the author)?

If the answer to both of these questions is "yes," then it is a vanity publishing operation; the other factors noted in XLibris's description merely describe just how bad a deal it is. XLibris's major competitors are no better; their statements aren't as well-written, though.

Returning to mathematical challenges, though, consider these sales figures and a few simple calculations:

Vanity POD Publisher	Titles	In Print	Mean Per Title	Resulting Royalty	Base Fee	Breakeven
AuthorHouse	>20,000	1.7 mil	85	$408	$698	146
	Assumes a 250-page 6x9 softcover sold at $16 for 30% royalty under the "standard" publishing agreement, meaning no bound galleys, no cover proofs, no marketing support, no corrections, no copyright registration ($150 for a $30 service), no Library of Congress Catalog Number (without which no library sales), no shoes, no shirt, no service.
XLibris	10,300	1.3 mil	130	$520	$500	125
	Assumes the "basic" level of service with no add-ons, meaning no bound galleys, no cover proofs, no marketing support, no corrections, no copyright registration ($150 charge for a $30 service), no CD-ROM backup. The book in question is also at $16.

I won't bother with more: they're even worse deals!

Too many people let their eyes glaze over when they see "1.7 million in print" and forget to divide by the number of titles. Further, that vastly misstates the experience of the median title, as opposed to the mean title. Just as with traditional publishing, only a few books garner a disproportionate number of sales (maybe the authors' families were just that much larger?). For example, XLibris's per-title median appears to be between 70 and 75 copies, resulting in a royalty of $300 or less—and that's assuming that every single sale is a full-royalty direct sale.

Today's "unintentional irony" award goes to the Supremes. Compare Vieth (2004) (PDF, 1.75mb) (partisan gerrymandering is not justiciable) with Bush, 531 U.S. 98 (2000) (partisan-like, outcome-determinative decision on counting votes). At least they're consistent. Consistently off the wall, but consistent nonetheless.

Just a few random observations—

• Apparently, President Clinton doesn't need an editor, or perhaps even a proofreader. A little examination of the calendar demonstrates this. For simplicity's sake, let's say that My Life released eight weeks from today. Four weeks of that is in production—for 1.5 million copies casebound, plus shipping to stores, one just can't do better (or at least not much better) than that. That leaves four weeks for editorial suggestions, the author's response, review of the author's response, layout, proofreading the layout, integrating the author's own proofread, etc. Perhaps this can all be done if the book is done in "parts" (and the material that has already been turned in has already gone all the way through). It won't be a very good quality job, though, as a good edit does not even begin until one has read the manuscript all the way through at least once. I'd start a contest for "most hilarious error not ascribable to spin," but that would be shooting big fish in a little barrel.
• European competition law often presents an interesting contrast to American competition law, especially when competition and intellectual property overlap. The Advocate General's office offers advisory opinions to its members' national courts on "difficult" questions. West Publishing should be glad that the opinion in IMS Health v. NDC Health doesn't represent the law over here, or its monopolistic position and practices on case law and statutory compilations in this country would disappear. <SARCASM> What a shame that would be. </SARCASM>
• As an interesting contrast to yesterday's Supreme Court hearing on international application of US antitrust laws, consider a not-quite-published-yet WTO ruling on cotton subsidies. What I find most interesting is that traditional jurisprudence for personal jurisdiction over a tortfeasor—the stuff one actually learns in conflicts of law, as opposed to the whitewash in 1L civil procedure—makes the WTO's opinion obvious. Thus, we have yet another variety of "tort reform" at issue…

To Market, To Market

Professor Ribstein noted yesterday that the Wall Street Journal is somewhat selective in its approval of market forces.

All of this points to a more general problem with the right. Government is bad and markets good when government wants economic regulation the right doesn't want. But government is more likely to be good and markets bad when the subject is regulating values. (There's analogous problems with arguments about state law — apparently good for everything but marriage.)

"Decency and Markets." Professor Ribstein expressed disdain for recent WSJ editorials on "decency" in broadcasting. I can think of little that is more indecent than leading the news hour during before-and-after-school drive time with the latest bloody murder of someone by a non-white, but I apparently don't get a vote on defining "decency." Then, too, reading the lips of most of the players during major parts of the Super Bowl—or, indeed, virtually any other televised sporting event—is usually far less "decent" than was the flash of Janet Jackson's mammary while the kids were probably getting snacks anyway (Janet Jackson's prime audience is not the teenybopper set, and her "co-star" is a "has been").

There is another, more subtle, aspect of this neoconservative/social conservative/call it what you will selectivity of acceptable market regulation. If one takes a look in the broader sense at regulation, one can see the real difference between the postmodern right and the semimodern left: The only regulations that the right will consider as appropriate are those that have no influence on wealth distribution, or at worst have only a neutral effect. However, the postmodern right is actually pretty pro-regulation for those kinds of regulations that meet this criterion. Frequently, these are socially conservative issues, like "broadcast decency"; sometimes, they are downright loony and offensive, like the "alternatives to evolution in basic science education" advocacy. On the other hand, the regulations that the semimodern left has and continues to propose usually neglect to consider wealth distribution. This causes the left a great deal of difficulty when it must confront arguments that are orthogonal to its intent; and it creates more than a little confusion regardless.

One classic example of this failure to communicate—although it arises from an earlier era—is the Lochner regulations. The regulations were adopted to protect the health and welfare of employees in the baked-goods industry by limiting hours, both per day and per week. As laudable as this goal is, and as actually good for the manufacturers as this is in the long run (because it limits the higher retraining costs of replacing workers who are "worn out" earlier than they might otherwise have been), this kind of regulation has a pretty clear potential for influencing wealth distribution. Thus the firestorm against such regulation that culminated in Lochner itself.

The marketplace of ideas envisioned by the First Amendment has a simple nonregulatory correction for "bad speech": more speech. Drown out the "bad" speech with "good speech," and recognize that some "consumers" of "speech" will not be "rational actors" as the majority understands that term. One can construct a compelling argument from the premises behind the Intellectual Property Clause and the First Amendment that the Constitution does not condone regulation of speech and "expressive acts"; that any such regulation must come instead from the Necessary and Proper Clause; and, in turn, that the Necessary and Proper Clause must reflexively be read in the context of the Intellectual Property Clause and First Amendment. The Cromwellian subtext is that the majority, in this case the "pro-decency" faction, must recognize in its bowels that it might be wrong, and that its arguments (and speech preferences) must convince of their own merit—not by suppression of differing views. Then, too, there's the not-so-subtle political context of the Comstock Act and its modern descendants, largely designed to maintain political and economic power in the hands of constipated old white men of good families. But that is for another time.

A Circuit Out of Touch

One of the Federal Courts of Appeals is clearly out of touch with the others, primarily because it has adopted an extremist view of the Constitution and statutory and constitutional interpretation. I refer, of course, to the Fourth Circuit.

"The Fourth Circuit? Don't you mean the Ninth?"

Wrongo, Miranda-breath. Few cases indicate how out of touch the Fourth Circuit is better than its most recent decision in the Moussaoui carnival. Admittedly, some of the details do favor Moussaoui, such as requiring that the government grant at least some access to potential defense witnesses being held overseas. At its core, though, the opinion represents both blind deferral to insupportable government assertions, see id. at 17–19—such as the outcome-determinative bare possibility that Moussaoui's closely supervised questioning of detainees held overseas might "interrupt" interrogation two-and-a-half years after the incident in question—and refusal to defer on factual and discretionary findings to the one individual who is both tasked to and in a position to evaluate the credibility of the parties and testimony presented: Judge Brinkema, who is valiantly attempting to run her courtroom fairly despite the efforts of everyone involved.

To say the least, this is inconsistent with Padilla. The only reference to its sister circuit, in fact, is this:

We lack the record evidence of Secretary Rumsfeld's personal involvement that the Padilla court found persuasive. Nevertheless, the Government argues that the witnesses are of vital import to the war effort and to national security. Under these circumstances, it is reasonable to believe that Secretary Rumsfeld is closely involved in their detention * * * *.

Id. at 12 (ellipses in original; emphasis added). Note that this does not even go to the actual holding in Padilla. Nowhere in this decision can one find acknowledgement that the holding in Padilla would require vastly different reasoning, and perhaps even a different result, than the Fourth Circuit reached. What is most disturbing, though, is that "reasonable to believe" is even being mentioned in a death penalty case, even on the relatively trivial issue of whom to serve with process.

Perhaps we should just be relieved that Judge Williams's partial dissent was not the majority opinion:

[M]y colleagues' approach impermissibly jeopardizes the security of our Nation and its allies by intruding on the Executive's ability to perform its war-making, military, and foreign relations duties. Holding that defendants have a right to compulsory process of any alien held abroad in United States custody and control disrupts the proper balance between the coordinate branches. If access is granted, it is undisputed that the Executive's interest is irreparably lost, with the attendant consequences to the multinational efforts to combat terrorism on a global scale.

Id. at 40 (Williams, J., dissenting in part). Of course it is undisputed! The point of Moussaoui's motions and position is that he can only speculate on the testimony of these witnesses, only speculate on how obtaining that information might (or might not) impinge upon "continuing interrogations," without the opportunity to examine them. This is startlingly poor logic: it assumes its conclusion as a necessary premise. Even Chevron does not go this far!

None of this is to say that I am convinced that Moussaoui himself is an angel, that his defense has been wisely or even properly conducted, or that some persons peripherally connected to the actual interrogations might harbor fears as to "interference" with allegedly ongoing interrogations. To be just, though, we must not only provide a just result: we must provide a just process that presents the real appearance of justice. Judge Brinkema's implicit compromise—no direct testimony by potential defense witnesses means that the level of certainty required to impose the death penalty cannot be attained—received little attention, let alone cogent analysis. Perhaps she should have been more explicit that this "compromise" is the basis for her ruling—for then it clearly would be a discretionary ruling. Instead, she refused to conduct a trial in anticipation of a first-class hanging; and, under the Constitution, that is her job. The key belief is not, or at least should not, be that of a "reasonable person" (or appellate judge) reviewing the paper record; it is, or at least should be, that of the jurist charged with implementing the decision and conducting the matter in the first instance. If Judge Brinkema can "reasonably believe" that the government's negotiating posture and tactics have made impossible a compromise on witness access and statements that adequately protects the defendant's rights, that should be all that matters. Judge Gregory's closing paragraph is persuasive:

Here, the reliability of a death sentence would be significantly impaired by the limitations on the evidence available for Moussaoui's use in proving mitigating factors (if he is found guilty). Although it has been repeated often enough to have the ring of cliche, death is different. It is the ultimate penalty, and once carried out, it is irrevocable. A sentence of death cannot be imposed unless the defendant has been accorded the opportunity to defend himself fully; it cannot be imposed without the utmost certainty, the fundamental belief in the fairness of the result. Because Moussaoui will not have access to the witnesses who could answer the question of his involvement, he should not face the ultimate penalty of death. Accordingly, I would uphold the district court's sanction to the extent that it struck the Government's death notice. On this basis, I must dissent.

Id. at 63 (Gregory, J., dissenting in part; italics in original). Note that this goes only to the particular penalty that may be imposed, not to the government's ability to prosecute.

The Writer's Couch

Just to show that Hollywood and entertainment-industry insurance companies are at most peripherally related to the human race, consider this possibility. A woman is fired from the production staff of a really awful, really popular, really long-running TV sitcom involving young adults in purportedly realistic situations that invariably boil down to sex. This being America, she sues for sexual harassment. The producer, head writer, and production company (or, in reality, the lawyers for their insurer(s)) offer the defense that certain kinds of sexual harassment are a necessary part of the creative process, claiming further that this is a complete affirmative defense. What result?

How about a split baby? Obviously, the courts in question needed to consider a more-effective method of contraception.

The trial court bought the argument in toto, granting summary judgment against the plaintiff. The California Court of Appeals reversed on its face, but allowed the defense to be presented at trial. In other words, the defense is not ridiculous—there just wasn't enough evidence for it to justify summary judgment.

Millions for defense, but not a dime for tribute. Besides, "we're special." <a snd="raspberry.wav">Snort</a>

Left Behind

The "No Child Left Behind" program reflects considerable economic ignorance to go along with its substantial political cynicism. On the one hand, it ignores the concept of the diminishing incremental return. As the focus changes from "as many as superhumanly possible" to "absolutely everyone," the additional human and financial costs per student of helping those least able to meet arbitrary standards (usually set by people who have no idea of what they're doing, either in what or how they are measuring) will vastly exceed the costs per student of meeting other children's needs to fulfill their potential. As usual, so-called "talented and gifted" programs will be the first to go—not the football team. (Aside: at the local Division I university, the head coach makes more money than the three highest-paid professors. Combined. And he was 1-10 last year.)

On the other hand, one of the assumptions behind NCLB is that resources available to public education will not grow relatively, thus requiring triage for the conditions specified in NCLB. This seems remarkably short-sighted. What NCLB essentially does is say that "you don't have enough resources to do your mandated tasks, so we're going to tell you what your priorities must be instead of considering allocating more resources." In the meantime, we're busy giving dubious tax breaks to secondary commodities trading activity when the representative volume of that activity exceeds the value of the underlying commodities, and various other questionable priorities based on special interests.

Perhaps this is unavoidable. American public education is extremely hostile to high achievement; one need only realize that all of the teachers are college graduates, many with graduate degrees, but virtually none of the teachers still in the classroom ten years after beginning were themselves true "high achievers" before college. Just how many National Merit Scholars, to use one imprecise measure, end up as career classroom teachers? Without that perspective, the soldiers in the trenches simply don't know what it takes to "educate" the "talented and gifted". Or even accurately identify them.

The sum of this idiocy and disdain will be a completely disaffected generation of artists and writers in fifteen years. In their late twenties and early thirties, they'll still remember middle school and high school—without much fondness. Assuming, that is, that they were ever able to develop their skills to a level adequate to compete with those from elite schools that did provide some support. The disdain expressed for their needs will, in many (and perhaps even most) instances, result in art and literature that reflects disdain for others.

Wait a minute; we've already got that. Those in the public education system between the late 1960s and early 1980s are reflecting exactly that result.