Re: Fear of Life (was Microsoft, Automation)

Warrl kyree Tale'sedrin (
Sat, 2 May 1998 16:48:44 +0000

> From: Dan Fabulich <>
> Warrl kyree Tale'sedrin wrote:
> >These industries are not "kept in place" by government coercion,
> >except in the sense that any business is protected by keeping looters
> >away.
> No, there is a distinct difference. Consider it in terms of economic
> supply and demand curves. The very first copy of a book is quite expensive
> to produce, but subsequent copies are quite cheap. The first copy of a
> book requires time, creative energy and artistic skill, whereas subsequent
> copies can be produced in bulk and require considerably less innovation.
> And perhaps most important of all, the artist very rarely actually DOES any
> of the work involved in making copies of the book; this is a job best left
> to printers.
> We should expect, then, that the artist should be paid for the services
> rendered, for creating the very first copy of the book, because THAT copy
> actually required the artist's services. Art by commission is one such
> example of an artist being paid for creating art, rather than for producing
> copies of art. Auctioning the first copy to the highest bidder would be
> another strategy.
> However, once multiple people have a copy, the artist and anyone else who
> has a copy of the book fall into nearly perfect competition. If the artist
> offers a higher price for a copy of the book than anyone else, there is no
> reason to buy from the artist; other copies are perfect substitutes. Since
> we're in nearly perfect competition, the market price for the book should
> be no greater than the marginal cost, the cost to make one more book. This
> cost, of course, is no greater than the cost of printing.
> Since an individual copy of a book costs almost nothing when it is in the
> hands of many, but costs much more when it is only in the hands of the
> artist, then it seems reasonable that the artist should make a profit
> EARLY, when the book is being created, rather than later, when the book is
> being printed.

In other words, the artist should get paid a certain amount for
writing the book (who pays, and why?) without regard to whether many
people prove they like it by, for example, buying copies.

And in general it is never reasonable to spread the cost of
production facilities (the author's work is an essential part of
producing a book) over the entire production run. The author must
get his entire compensation for producing the book out of the sale
price of the first book; the printer must get his entire
compensation for creating the printshop out of the first item he
prints. The cost of building an auto manufacturing plant should be
tacked IN ITS ENTIRETY onto the FIRST car that plant produces.

Under that system it is painfully obvious that there will be very few
auto plants built, and therefore very few cars made. That there will
be very few printshops built, and therefore very little printed. Yet
you assume that this will somehow INCREASE the number of books being

> >Eliminate copyrights and patents, and indirect payment ceases to
> >exist; so the artists who live off that indirect payment -- the large
> >majority of those who can live off their art at all -- must turn to
> >other fields. They will produce less art, or no art at all.
> Less art, but at a higher price, thanks to auctioning/commision. It is not
> clear, then, that the artists' revenues will contract.

Higher price?

It is true, if you want to hear the group Sublime, you will have to
hire the group to come to you, and this will cost more than if you
could just run down and buy a CD. However, it is also true that the
maximum you are likely to pay is far, far less than their portion of
the sales price of a quarter million CDs.

So, YOU pay a HIGHER price, but THEY collect a LOWER price.

Not to mention that all the people involved in producing, shipping,
and marketing the CDs, must seek some other source of income -- not
because their jobs are obsolete, but because we deny creative people
ownership of their creations.

> >How does driving artists away from art and into other fields, produce
> >more art?
> See above.

The above does not answer the question.

> Poor example. How about this one: The aviation industry, having a hard
> time cartelizing, convinced the government to do it for them, setting up
> the Civil Aeronautics Administration in 1938. (Later to become the Civil
> Aeronautics Board, CAB.) Until deregulation in the 70s, it was allowed to
> set interstate airline rates and prevent new interstate airlines from
> forming. By setting a minimum price which no member of the cartel could
> legally break and by preventing new airlines from forming, the cartel had a
> coerced monopoly over interstate aviation.
> Were passengers receiving the benefit of interstate transportation?
> Obviously. Were they paying a fair rate for this benefit? No, absolutely
> not.

You are entirely free, today, to write books and give them away if
you choose. You were not free, then, to open an airline and give
away air transportation.

> In this case, by not allowing new companies to make copies, the artist
> gains a coerced monopoly over book copies; as a result, the artist can set
> a much higher price than the copies are actually worth.

No company other than United Airlines ever has, or ever will, provide
you a flight on United Airlines' work. So if you ever had a United
Airlines flight, United Airlines was rewarded for your benefitting
from their work.

Anybody can go to a cheap copier and provide you a flight on Anne
McCaffrey's work. And Anne McCaffrey will receive no reward for your
benefitting from her work.

That said, I agree with you: setting a minimum price which people
*must* charge for their work, is wrong. But instead you propose to
set a *maximum* price, and that is just as wrong.

> >The novel-writer simply wants to be paid by the novel-reader.
> The novel-reader is not buying the work of the novel-writer. The
> novel-reader is receiving the work of the novel-printer.

What are those black marks on the pages? Their arrangement is the
work of the novel-writer. If you think that it is the
novel-printer's work that matters, go buy a hundred pages of notebook
filler paper and enjoy your reading.

> Think of it this way: the novel writer is making the mold from which
> millions of cheap statues can be formed. Since this is true, the writer
> should be paid for the mold, not for the statues.

The writer should be paid according to the agreement the writer makes
with the publisher. You should not have the right to dictate the
terms of that agreement, considering that you are neither the writer
nor the publisher. Sometimes the agreement will specify that the
publisher is paying only for a mold, and sometimes it's on a per-copy

What we find in general in the fixed arts (which means, pretty much
everything except live performances) is that the top artists are paid
on some form of per-copy basis, and the hacks are paid for molds.
And the hacks hope to get per-copy contracts. Some of them
eventually become top artists.

Writing specifically is a bit different, but not a whole lot
different. Magazines pay for molds. Book contracts are almost
always on a per-copy basis, with an "advance" that is non-refundable
and amounts to a payment for the mold if the book doesn't sell well.
Let me give you a clue: if you spend six months per book, and never
get any payment beyond the advance, you won't be able to live for
long as a book writer. But you propose to eliminate all other
payment, and believe that this will increase the amount of art.

Look at it further down the line: a publisher starts printing a book
in the belief that for a certain amount of time HE will be the ONLY
publisher of that specific book. On this basis he dedicates the
substantial capital of a printing plant to that book for a period of
time, and he puts some effort into marketing the book. And he
enforces his copyright to protect that assumption.

But you choose to eliminate the copyright. The publisher sends the
books out of his shop. Of the first five boxes, three go to
copy-shop chains. The publisher paid the author an advance, and put
in the capital and resources to print 25,000 copies of the book; the
next day there are 250,000 copies on the market. For every dollar
the publisher spent in marketing, $8 are spent on copies of the book,
and the publisher gets 80 cents of that. Being a publisher who
actually pays authors, is a complete loss. So publishers won't pay
authors, and this is supposed to increase the amount of art.

> >If the
> >reader chooses to not read that novel, its author expects no payment.
> > But novel-writers who receive no payment and have no reason to
> >expect any payment in the future, tend to stop writing novels.
> >Without copyrights, there would be no expectation of payment.
> Again, the writer CAN expect payment. The author can write by commission,
> or auction the work to the highest bidder.

Today, an author can auction a work to the highest bidder -- who will
probably be a publishing house and will probably pay $10,000 for a
first novel, or $1,000,000 for something from someone with multiple
previous hot sellers.

Under your system, an author can auction a work to the highest bidder
-- who will probably pay $8 for a first novel, and there will be no
such thing as a "hot seller". Why? Because being the *second*
highest bidder means you can't publish the book -- until half an hour
after the highest bidder does. And the 8,427th highest bidder can
publish at exactly the same time you can.

If you don't think writing a good novel is hard work, try it.

> >And while I am sure we all agree that 90% of all art produced today
> >is crap, we don't necessarily agree on *which* 90%.
> That's why we let the market decide.

And you want to eliminate the means by which the market communicates
its decision.

> Actually, this is the best reason of all to abandon intellectual property.
> 90% of what's written today is crap because authors don't bear the full
> cost of a failed writing enterprise.

Under the current system, authors do bear the full cost of a failed
writing enterprise: they put all the work into writing the book, and
no publisher buys it. On the other hand, if their writing enterprise
is successful, they reap the rewards.

Under your system, authors bear the full cost of a failed writing
enterprise -- ALWAYS -- even if the book is a massive success.

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