What I’ve been reading

1. Habibi, by Craig Thompson.  I don’t enjoy most graphic novels, but this is my favorite of the ones I’ve read.

2. Roger Farmer, “The Stock Market Crash of 2008 Caused the Great Recession: Theory and Evidence.”  I don’t agree with every part of the model, but it focuses our attention on what has become the #1 question of the American macroeconomy: to what extent can a boost in nominal flow make up for a shortfall in wealth?

3. Robert Levine, Free Ride: How Digital Parasites are Destroying the Culture Business, and How the Culture Business Can Fight Back.  An important book in cultural economics, this clear, energetically written tract is perhaps the best critique of where our culture is at today.  It’s about parasitism more generally, not just copyright violation.  Everyone who follows cultural economics should read this book.

4. Robert L. Bradley, Jr. Edison to Enron: Energy Markets and Political Strategies, home page here.  The second part of a three-volume series on the history of American energy, told through the distinction between productive and predatory capitalism.  Bradley is a very much underrated economic historian, largely because of his “amateur” status, but there is a remarkable amount of learning in his books..

5. Douglas A. Irwin, Trade Policy Disaster: Lessons from the 1930s, self-recommending.  Another new and self-recommending book is Mark Miller’s Salsas of the World, he is one of my cooking and restaurant heroes.


If a producer get sufficient utility from producing a good with zero marginal cost to reproduce, it becomes free. This is roughly what youtube and open source do.

I see it as a flowering of culture not a destruction of culture.

The blurb for Levine's book is especially annoying. He puts a negative spin on things that a vast majority of people would see as positive developments. e.g.

> music sales have fallen by more than half since file sharing became common,
+ Has music creation slowed down? Do listeners listen to less music?

>TV ratings are plum­meting as viewership migrates online,
+ So what? Is there some fundamental reason to preserve TV over other modes?

>publishers face off against Amazon over the price of digital books.
+ Would it be too sad if the publisher disappeared out of the equation totally? Does the publisher create content or the writer?

>Levine charts how the media industry lost control of its destiny
+.....or how media companies lost their monopoly and rents over content.

>and suggests innovative ways it can resist the pull of zero.
+ i.e. how to lobby for laws that can return the age-old rents back to publishers.

I do watch considerably more YouTube and listen to more Podcasts than anything else, but I do worry about the short-fat tail to some extent.

Agreed. My paid consumption has increased every year over this period due to new distribution. The media monopolists have repeatedly failed to see the opportunities.

Does the publisher create content or the writer?

It's not quite that simple, although black and white povs are appealing. (We all know that vanity publishing is where *all* the best content comes from.)

You are conflating a lot of functions (and many different kinds of publishing models) with the single word "publishing". An editor could help you with that.

and this is a +1 for anon.

I can't speak for every publisher--as anon points out, this category untidily encompasses everything from vanity presses to top-of-the-line prestige imprints--but if you people had any idea what most manuscripts (and I'm including the works of best-selling writers with great reputations) looked like before they went through the editorial process, you wouldn't be yearning for a world of unmediated publishing.

Of course we need editing, typesetting, designers, proofreaders, printing and all the other technical components of a publishing house's payroll. The issue is that we'd be better off with those as a services-model than the existing monolithic publishing infrastructure.

The services a publishing house provides are only a part of what it does.The publishers are the dominant part of the chain and apportion the major share of the revenues accruing from that process. That's the iffy part that gives them excessive rents and undue (perverse) influence on the whole process.

When you buy a $40 book just think about how many dollars of your money actually reach the author and then about how many dollars you ought to think reach the author.


That +1 was for Rahul.

I agree that publishing houses can add value, eg in pre-selecting what is good content. I'd be more likely to try a new author published by Baen than self-published, for instance.

Of course, Baen is anti-DRM and makes a selection of books available on their website for free, from a variety of their authors, with the authors' permission. Seems to be working.

And Baen doesn't just offer the worst stuff for free. Generally, it's some of the best books, often the first book in a popular series. And they often throw a bunch of the content on a DVD and give it away with the hard backs they are selling.

"Publishing" is not monolithic.

Baen is one publishing house of tens of thousands (hundreds of thousands?) with a model that works for them. That model won't work for every market or for all types of content.

With that said, DRM is not a good idea for most publishers. But to not use DRM requires a huge leap of faith for most publishers. Change is hard for most people and consequently for most organisations, maybe especially for successful organisations.

Robert Levine is a known strong copyright chauvinist. I have read his work before and frankly, I think he gives much too little consideration to the practicality of his solutions and the negative effects on personal freedoms afforded by legal restrictions. Simply making a practice that gives a strongly positive benefit to personal utility illegal works only on those few of us that are strict legal positivists. The other aspect, of course, is Levine's penchant for conspiracy theories, with everything ultimately leading to Google.

I would also like to point out that his criticism of the DMCA safe harbor provisions are probably the most asinine arguments I have ever read. He wants to make a civil violation between two parties a criminal violation, and get the Federal government involved? To minimize judicial oversight in favor of speed? Where does the blending of such private and public interests promote the national interest? And more importantly, how hypocritical is it to advocate regulatory capture of such a scale while simultaneously heaping shit on Stanford, Google, and other organization's modest practices?

While I dislike the strongly partisan position (on the other side) of such activists as Cory Doctorow, the point they are making is right: the content and media industries must adapt - and they can. But to adapt, in part, they must shrink, as the services they provide (not editorial, but certainly publicity) have been co-opted by the masses.

There's an excellent review of Free Ride in the Guardian that points out many of the inaccuracies of the book:

It's not conspiratorial to point out that Google funds massive lobbying campaigns against copyright; it's reporting.
Also, I'm not aware of any "inaccuracies" in the book - just a reviewer who disagreed with my points.
It must drive you nuts that the reviews have been so good.

Morozov didn't really point out inaccuracies so much as you putting a spin on certain reports that isn't really justified. Such as his point about how the 2010 report on piracy-related web traffic also showed that films available for purchase and viewing online are far less likely to be pirated (which actually fits with a more recent report about digital piracy in America).

Agreed. Robert Levine seems to be a Troll; ignore him.

I vote troll because:
A) Levine offers no novel algorithm. Instead he says make it illegal. We already tried that with spam; how will this be different?

B) What's the business case? Levine does not estimate the cost of making the Internet "safe" in order to contrast that with the benefit of saving a business model, nor as NAME REDACTED (lol) indicates, does Levine estimate the benefits of the current "chaos".

'It’s about parasitism more generally, not just copyright violation'
And to consider that this message was brought to you mainly through GPL based/free software - while the idea of copyright promoting the public domain has been strangled for the continued benefit of Disney's cast of characters.

Sharing seems to be a real problem for some people - even as they use the work that others freely share to decry how sharing is bad.

*Disney's initial success derived directly from its use of public domain material - its present business model is based on ensuring that nothing will ever enter the public domain again.

Ironically the noisiest protesters are never the content creators themselves but the middlemen.

Tell that to Harlan Ellison or Lars Ulrich.

>>>*Disney’s initial success derived directly from its use of public domain material – its present business model is based on ensuring that nothing will ever enter the public domain again.

I debunk this piece of Lessig propaganda in my book. First, while Disney used public domain stories to create some movies, he licensed the properties behind others - including Peter Pan, Bambi, 101 Dalmations, Song of the South, and others. Second, while I believe that today's copyright terms are too long, _even by today's standards_ the Brothers Grimm would have been dead long enough for Disney to use their material when he did. Third - and perhaps most important - I'm really not clear on how this excuses rampant file-sharing.

More generally, one of the things I cover in my book is how dependent new media is on the investments of old media companies. Of the 10 most popular clips on YouTube, *8* are major label music videos - and *3* are by Justin Bieber. (These are now licensed.) The idea that new media models can pay for the kind of content we now enjoy simply doesn't hold up - which is one reason why we've never seen a sustainable hit made for YouTube. Now, obviously, YouTube is an important social phenomenon - just look at the skateboarding dog! But I think we can - indeed, we must - separate its social utility from a business model that depends on using professional content without paying a market price for it.

As far as middlemen, sure, they're protesting. But so is the Directors Guild of America and organizations like ASCAP and BMI, which are made up of composers. Meanwhile, the "organizations" that don't see the harm in piracy are largely funded by the technology business. Just look at Public Knowledge (which receives funding from Google) or Creative Commons (where Sergey Brin's mother-in-law is the vice-chair). The Astroturf is now on the other side of the issue. If you'd like to know more, check out the book. If you find the Kindle price unaffordable, I'm sure you can get a copy from your local library.

Thanks for correcting Tyler and indicating that your book really is only about copyright violating.

Mechanical reproduction of music is not necessary for a vibrant culture of music. People will always make great music, because the people who make the best music can't *not* make it. There was great music before mechanical reproduction became possible. There will still be great music after distribution of such reproductions becomes unprofitable.

See: http://en.wikipedia.org/wiki/List_of_best-selling_albums - In this entire list, you will not find a single album released in 2005 or later. No record will ever again sell enough copies to break into the top 10, perhaps not enough to break into the top 50. And yet we are still continually flooded with new music.

Further, even if music piracy actually posed a threat to musical culture, it can't be stopped anyway. No one has been able to stop illegal drug use, despite drugs being more expensive, harder to find, and legally and physically much more risky to the user. And that's despite billions of dollars spent. Now you want to take something that is free, ubiquitous, and risk-free, and try to stamp it out? Good luck with that.

I am not suggesting that we need a music business in order to have music. But I am suggesting that having a music business gives musicians the resources - including producers, session musicians, and songwriters - to do their best work. Without George Martin, the Beatles would have still written great songs, but they would not have been able to record some of their best work.

>>>Now you want to take something that is free, ubiquitous, and risk-free, and try to stamp it out?

I don't want to stamp it out - just limit it, and I have workable ideas for doing so. Also, the war on drugs comment is silly because drugs don't have rights, while creators do. In Continental Europe, these are fundamental rights. Even in the U.S., the Supreme Court considers copyright to be "the engine of free expression." Drugs get no such endorsement.

Lastly, as far as the Guardian review, the critic took issue with me for finding fault with Google's funding of academics - when he works at a think tank chaired by Eric Schmidt. Some of his points are smart, but I do not think he understands the economics of the media business as much as the workings of computer networks.

It's true that the Beatles' work was more widely propagated in part due to the existence of the recording industry. Do you have any evidence that fewer great artists are having their work recorded by great producers now that record sales have fallen to a small fraction of what they were 20 or 30 years ago?

You misunderstand my argument about drugs. It wasn't a normative statement, and I don't care whether you think illegal drug use is right or wrong. It was a statement specifically about the infeasibility of preventing widespread digital copying of music, which I think is a much more difficult task than preventing drug trafficking, a task which has been proven beyond all doubt to be basically impossible.

@Robert_Levine: I'm sympathetic to your frustration with the anti-IP crowd, but ...

How exactly does,

"drugs don't have rights while creators do"

refute Mark's argument that "both drugs and piracy are a difficult to stamp out as a practical matter"?

Not having massive bands like the Beatles crushing everything else before their stultifying middle of the road steamroller of rehashed dullness is a great argument for getting rid of the music industry. Music has been getting worse ever since that point in the 80s that the music industry decided selling reissues to baby boomer morons was a great way to make money.

Strange - I thought that Snow White, as a simple example, had this history -
'Snow White and the Seven Dwarfs (1937) is the first full-length animated feature (83 minutes in length) in color and with sound, one of Disney's greatest films, and a pioneering classic tale in film history-

It was the first commercially successful film of its kind and a technically brilliant, innovative example of Disney animation. It was the first film with an official soundtrack and the first film to release a motion picture soundtrack album. The story was adapted from the original Brothers Grimms' Fairy Tales, but in a bowdlerized or sanitized version, without overt sexual references or violent content. Disney's version of the Grimm Brothers' fairy tale was the second of its kind - the first was a five-minute Snow White (1933) starring Betty Boop (with an appearance by Cab Calloway).

It was the first Disney film distributed by RKO Studios (this arrangement lasted until 1953, when Disney established its own distribution company - named Buena Vista). In late 1994, Snow White was finally released on VHS home video (and laser disc) and sold 10 million copies in its first week of sale. After three weeks of availability, it sold over 17 million copies, and would soon surpass the all-time champ, Disney's Aladdin (with 24 million copies sold since its late-1993 release). It eventually sold 50 million copies worldwide, the best-selling cassette of all time. It was the last of the early Disney animated films released for home video, following Pinocchio (1940), Sleeping Beauty (1959), and Cinderella (1950). [Snow White was later released for the first time on DVD, in late 2001.]'

And do note those other classic, at the time public domain, Disney stories - Pinocchio, Sleeping Beauty, and Cinderella.

And yet, strangely, by the American copyright law in force at the time that Snow White and the Seven Dwarfs was created, along with its soundtrack, should have entered the public domain in 1993 ('Previous copyright law set the duration of copyright protection at twenty-eight years with a possibility of a twenty-eight year extension, for a total maximum term of fifty-six years.') which was extended by the the Copyright Act of 1976.

An act that was most conveniently superseded by the Mickey Mouse Protection Act, which 'effectively "froze" the advancement date of the public domain in the United States for works covered by the older fixed term copyright rules.'

'I’m really not clear on how this excuses rampant file-sharing.'
Back in the 1980s, I enjoyed any number of 'illegal' musical creations - Big Audio Dynamite and Public Enemy to name two very concrete examples - and the fact that we have shut down the public domain (see above), stifles creativity, it does not increase it.

I referenced the public domain, the entire reason that copyright (in an American context) is a state governed monopoly, and you immediately jumped to file sharing. This is a typical tactic of those who have no concern about why copyright exists in itself. It isn't to allow corporations the eternal right to control their creative output - it is to increase the public domain, to allow creativity to flourish.

It must bother you that the Internet is based on another ethos, and yet, without the Internet, your message would be ignored by those participating in a shared cultural world that has finally been able to escape the continual rewriting of copyyright law for coporate benefit - after all, neither Walt Disney nor any of his employees are about to rise from the dead to create Snow White II.

To be more concrete - the Kleptones "A Night At The Hip-Hopera" represents more creativity than Freddy Mercury or Queen has mustered for more than a decade, and is a trenchant analysis of this debate. Give it a listen - it is available at http://www.kleptones.com/pages/downloads_hiphopera.html

Shouldn't these be titled, "what I've been skimming"?

No. TC is a very fast reader.

You mean a very fast skimmer?

Ironically, I'll never read Levine's book because the kindle version is priced at 14$, 2$ less than the hardback that I can get with free shipping.

If this pricing scheme is indicative of the ideas contained in the book, then it's just as well I saved myself the wasted time.

This looks like a pretty good review of the Levine book:


It'd be interesting to see a response to some of the points in there. I look forward to reading the book, of course. Maybe the actual book will leave a better aftertaste than the shorter Amazon blurb did.

How does -
>>>“drugs don’t have rights while creators do”
refute Mark’s argument that “both drugs and piracy are a difficult to stamp out as a practical matter“?

There are a few important differences.

First, since creators have rights, the government has an affirmative obligation to uphold them, at least to the extent that they don't interfere with the rights of others. (Free speech is a right; free stuff is not.) This is why we have a government in the first place.
Second, in the U.S., at least, copyright infringement is generally a civil tort and not an illegal act. In all but the most egregious cases, the government is not bringing the legal action in question.
Third, the government isn't trying to stamp out copyright infringement - or, at least, it hasn't expended much energy in that regard. So far, we've mostly seen civil litigation.
Fourth, even the laws that people think of as involving enforcement - like SOPA - really deal more with how to run that civil litigation and assign liability, These are interesting and difficult debates, but we're not talking about stamping anything out so much as whom to hold responsible. The government just sets the rules of the road (with various degrees of effectiveness).

The two issues really don't have much in common at all. Stamping out copyright infringement is also very difficult? But most of the cost isn't borne directly by the government (although a bit of it is) and it doesn't involve ruling something illegal so much as balancing the rights of various parties.

How Lessig, a Harvard law professor, compares the two, I will never understand . . .

PS As far as me being a troll, yes, you're right! I spent a year and a half interviewing 150 people and writing a 300-page book just to get on your nerves.

We already have companies that try to stop spam, just as we already have companies that seek out torrent seeders and try to prevent piracy. What will new regulations do?

Since you don't try to estimate costs / benefits, how are people supposed to compare your position to status quo? You must back your claims with relevant cost / benefit data.

All Controversy, No Data = Troll.

Market monetarists aren't worried about a shortfall in wealth, nor are we asking for a "boost" in nominal flow. No no no! We are asking that existing contracts be no *harder* to repay, in real terms, than when they were made. That obtains when NGDP maintains a trend. Some market monetarists call for returning to a past trend line, others simply for establishing one.

For godsakes, at least establish one. It doesn't seek to prevent the pain of supply shocks (natural phenomena), it simply prevents needlessly multiplying this pain through the arbitrary construction of nominal contracts and prices (which are made by humans to serve humans -- see Krugman's favorite parable of the babysitting co-op). It also ensures that monetary policy will have maximum effect with minimum action. The Fed announced the end date of QE2 before they made the first purchase in the program! And despite the recent Nobel, the FOMC still thinks such maneuvers make sense. All I can see in my mind's eye is Bernanke and co. around the table with an ox flayed open and blood everywhere.

@Carl_Lumma: We are asking that existing contracts be no *harder* to repay, in real terms, than when they were made.

And why, exactly, shouldn't this be the responsibility of the people agreeing to the contract? Borrowers wouldn't be begging the Fed to return to them to the original difficulty if the loan became *easier* to repay, would they?

Heads I win, tails you lose.

If you make a stupid contract that exposes you to a risk you're not ready to handle, then don't you worry: the Fed stands ready, willing, and able to sodomize prudent taxpayers to repair your ill-conceived get-rich-quick schemes.

You make me sick.

> Borrowers wouldn’t be begging the Fed to return to them to the original difficulty if the loan became *easier* to repay, would they?

Yes, absolutely! Otherwise you'll get hyperinflation.

> the Fed stands ready, willing, and able to sodomize prudent taxpayers to repair your ill-conceived get-rich-quick schemes.

I know it's perversely appealing to frame problems as zero-sum, prudent vs. irresponsible. But monetary policy isn't zero sum. Everyone benefits from correct monetary policy.

Yes, absolutely! Otherwise you’ll get hyperinflation.

No, they would pay off the loan for the price of a candy bar and laugh. Then, after all their debts go away, maybe they want the Fed to rein it in. The point is, you're still advocating an asymmetric "heads I win tails you lose" situation for borrowers, where if the loan becomes harder to repay, they get relief, but if it becomes easier, they get a free partial debt payoff.

I know it’s perversely appealing to frame problems as zero-sum, prudent vs. irresponsible. But monetary policy isn’t zero sum. Everyone benefits from correct monetary policy.

No, what everyone benefits from is *not* rewarding people for making stupid loans that depend on money getting cheaper.

I sure as hell do not benefit from the creation of a permanent class of people dependent on the Fed undoing the inconvenient parts of contracts they agreed to.

I'm trying to be polite, but it's amply clear you have no idea what money is or how it works. If you were somewhat less of an ignorant prick I'd be happy to explain it to you.

And if you understood why people shouldn't be tricked or forced into spending money when they don't want to, you would have an explanation to give in the first place.

How many of these did you get for free, Tyler_Cowen?

The last two.

Thanks for mentioning that in your post, I really appreciate your ethical approach to product shilling.

@Silas Barta

what about graphic novels don't you generally like? they seem perfect for you. higher information density per second invested in appraisal

Not sure if information density is a good metric to rate fiction with.

RE: Robert Levine

Youtube actually does have a system to enable content rights-holders to get money based off of the views of their content, even when it's being used without permission. Rolling Stone also had a good article about how much content rights-holders can make (approximately $1 for every 1,000 video plays). It's great for the content creators who can get it set-up.

The only real losers are the old distributors (such as the labels), but they're middlemen. They were very useful middlemen back when it cost a lot of money to make, distribute, and advertise any music, but there's no reason for them to stay solvent when the technology and economics no longer support them.

How many of the commenters here, apart from me, actually read Free Ride all the way through?

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