Is This Man a Thief or a Do-Gooder?

Some interesting e-mails turn up in the Freakonomics in-box. Here’s a recent one:

I downloaded your book FREAKONOMICS on Limewire. Can I pay you something for this great book? Call it guilt or trying to use file sharing in an honest way, but I’d like to pay you something.

This is also an experiment in how accessible famous people are. I guess that makes you famous. I am not. I may not even get past your spam filter. I hope I do.

If you feel it is worth your while to respond, let me know if Paypal would work for you.

If you can reveal what you get per book from the publisher I want to better that amount.

Good luck. Keep writing and let’s hope that distribution gets better and authors get rewarded.

[NAME]
Victoria BC

Here’s how I replied:

Hi [NAME]. Thanks for asking. The combined share that Levitt and I receive from a hard copy of the book is a bit under $4; I think it’s less, however, for the electronic version. But if you were to pay *us*, why shouldn’t you pay the publisher? After all, their costs are just as legitimate as ours, right? That would bring the price to roughly $14. And then what about contributing to the distributor who got excluded — that’s got to be another $2 or $3. In other words, why should we be the only ones to get the offer of your generosity — are we simply more appealing b/c we’re the creator of the work? Adam Smith wouldn’t have liked that thinking. 🙂 Anyway … If you really want to give $4 to us, I’d suggest you make a charitable donation in the name of Freakonomics. That would make everyone really happy (except, maybe, our publisher). All best, SJD

Adam Smith probably wouldn’t have been very happy with my reply either — who am I to surrender $4 so willingly, to some charity I have no interest in? If 100 people wrote in the same week or month, I certainly wouldn’t have forfeited all of their offers. But it hardly seemed worth it to cash in just this one. Remember what happened to Jerry Seinfeld when he took the trouble to endorse all those tiny Japanese royalty checks?


Collopy

I disagree. S J D is benefitting from your work by reading the book. He's not benefitting from most aspects of the publisher's work, as he doesn't have a printed copy. He's not benefitting from the work of the distributer at all; the distributer hasn't actually done anything. He is benefitting from some aspects of the publisher's work, such as editing and marketing. I think that it's reasonable for the book industry to claim that one has to pay all of these people in order to pay any of them. I don't think there's any moral basis for this claim, though; it would actually be more fair to allow people to pay only those from whose work they benefit. Finally, having read Smith I'm not sure how he addresses this issue, but I may have forgotten.

Collopy

Ah. I misread the signatures. You're S J D. I hope everything else makes sense, though. My conclusion: it would be most fair if he paid you the $4 and the publisher a portion of editing and marketing costs.

Pieter

While reading the title, I was actually hoping for this to be about the thief turning in child-porn evidence. (http://www.mercurynews.com/mld/mercurynews/news/local/crime_courts/14523007.htm)

lborsato

I agree with Collopy. And arguably, since this person didn't even know who you were, he seemingly didn't benefit from the marketing costs.

But there have been no printing, inventory, or distribution costs involved here, so they don't need to be paid for.

It would be interesting to know just what the breakdown of costs was for the typical published book.

Aelstro

A similar argument can be made about comics distributed on the web.

The newpapers do not receive payment, but the syndicate does. The syndicate handles web development and "Publishing costs".

The newpapers have no part in it and thus, even if they are the traditional medium of distribution, recieve no payment.

In fact, the "charity" he should probably contribute to is the peer-to-peer network he downloaded it from, Limewire, as they handled distribution and marketing for you.

fuz

In contrast, I borrowed the book from a library, and paid neither you nor the library any money at all. Is my behavior less moral than his?

StCheryl

Fuz,

If you pay taxes, you paid the library, albeit indirectly. If you don't pay taxes, then I hope it is because you have a relatively low-income and not because you are a tax cheat. The library either paid for its copy of Freakonomics or the person who donated it to the library did.

I agree with lborsato in principle, except that without the publisher's, marketing, distribution, etc. costs, Freakonomics may not have been published in any meaningful way. We would have been stuck reading the article piecemeal somewhere else.

kkwan

I would tend towards thief. He possesses/owns a tangible, albiet electronic, copy of your work. At some point there's probably a disclaimer to the effect of 'this work cannot be duplicated, distributed, etc...without the written consent of the author/publisher etc." So a law was probably circumvented in one manner or another. He even expressed guilt, which is breaking his moral code.

If you really meant for readers to have it in the manner he obtained you or your publisher would have offered it. There are some trickle down effects of the publishers involvement. If the publisher never published your book it may not have gained the popularity, best selling lists, interviews, etc., and there would not have been online supply and demand for this book.

I am sad to say but marketing often has more to do with the perception than the content (though not in this case). Sometimes 'being there' is what counts the most.

I'd tell him to buy the book and offer it to someone who might benefit from it. Paying forward, as it were.

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Ken D.

Attention seeker though he may be, BC raises some interesting -- althogh hardly original -- issues. I read a library copy of Freakonomics, and the overhead to me was probably less than buying it on line (no shipping) or buying it in person (the library is closer than the book store). My amortized share of the library's purchase price is very likely less than what BC is offering to pay, probably well under a dollar. So why am I clean and he isn't? Actually, if there were not a rock-solid tradition of free public libraries in this country, I am conficent that the publishing industry would fight the idea with all the venom of the RIAA blasting music downloaders, with socialism thrown in for good measure. And I will leave the legal and ethical nature of copyright for another post. A fascinating subject indeed.

kramsauer

On that whole famous people issue, I've found the authors of Freakonomics to be incredibly accessible. I don't think I would be that accessible if I were that famous. :-)

Leviathan

I agree with both StCheryl and kkwan – Shouldn't the publisher be compensated for enabling this book to be published? While publishers provide readily observable services to readers, such as editing and marketing, isn't the larger service they provide the ushering of a ,previously non-published, work to market (A service which only a large publishing house can provide successfully – scale/agglomeration). It is obvious that the publisher being removed from the production cycle of any book would certainly doom its success.

However, using this line of thought, shouldn't the purchaser of the online book also cut separate checks to every publisher, past and present, for providing the physical and intellectual infrastructure that has made and continues to make the publishing of all books possible. The entire publishing industry has certainly created a wealth of knowledge applicable to the successful production of books, knowledge which was most definitely used by the publishers of Freakonomics. Without the existence of other publishers, previous and contemporary, it is unlikely that the publishers of Freakonomics would have done a decent job. Furthermore, shouldn't he pay everyone who has bought the book or thought about buying the book? Without the expectation of their existence a publisher would not have “green light-ed” the book in the first place.

I suppose you could say the industry is compensated through the cultivation of all literature, which means more sales for their own offerings. You could also say that readers are compensated by the availability of a wide variety of books (being offered because of our “demand” bargaining chip).

In the end payment should only go to those who have established legal rights to payment through contracts connected with all sales of Freakonomics. These contracts, and the corresponding fractional shares divvied amongst the various players, depict compensation for both the physical services provided as well as the intangible contributions (such as the knowledge of publishing, knowing how to best deliver books to stores, etc.).

You are buying an entire product assembled from many pieces (intellectual content, paper, marketing, editing, delivery), none of which can be removed from the rest since they all begat each other. Any perversion of this arrangement circumvents the various necessities of brining a product to market.

He owes all of them cash.

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Leviathan

Additionally:
Ken D. is absolutely right about libraries. They are an accepted anomaly.

booknyc

lborsato,

A basic breakdown would look something like this (keep in mind that some of my numbers are pure guesstimates, and that we're talking about a book that has 'earned out' its royalty advance):

List price of book: $26
Amount retailer/wholesaler pays to publisher for book: roughly $11.50-$12.50 (depending on the retailer/wholesaler discount)
Authors' royalty: ~4.00 (this is almost always calculated as a percentage of the list price, so it's constant regardless of how much the publisher makes from the sale)
Cost to print and ship the book: 3.50-4.50 (this depends, obviously, on length of book, size of print run, doodads on jacket, etc.)
So that leaves the publisher with about $4.00-$5.00 per copy. From that, the publisher pays salaries, rents, marketing expenses, and all other costs of doing business, including offsetting the not inconsiderable number of titles that don't earn out their advances.

Hope that helps.

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oso

I think that [NAME] is making the assumption that Dubner understands the online model of distribution in which one author communicates directly to many readers without any intermediaries (other than hyperlinks and reviews).

You could make the argument like a few commenters did that "if the publisher never published your book it may not have gained the popularity, best selling lists, interviews, etc., and there would not have been online supply and demand for this book." But if we compensate publishers for popularity, then we should each be paying them every time we read this blog.

JimP

I authored a book under contract to a publisher and had to sign away electronic rights. My feeling is that the publisher would be entitled to the expected marginal profit of a book, minus a (25%? 50%?) discount to reflect that the user may not have bought the print edition and that the value of an e-copy is indeed less than the value of a book, which you can take anywhere and make notes and lend to friends and donate to the library and leave on your coffee table to impress guests.

Other relevant facts:
List price: $20
Street price: $13-15
Average price paid to publisher: ~$9
Royalties (split with co-author): ~$0.90 (10%)
Copies sold: 6 000

jjm4d

I disagree that Adam Smith would be displeased with Dubner's response. Smith championed the notion that self-interest guides us to undertake activities (like baking bread or writing bestsellers)which improve the commonweal despite such improvement being "no part of [our] intention." However, the author of "A Theory of Moral Sentiments" would not condemn altruism in any man, though he would likely see little significance in a $4 forfeiture of income.

Blandy

I've leant my copy of Freakonomics to a couple of friends, now you're making me feel guilty; or at least making me feel that my friends should feel guilty!

indifferentj

Thief. If the reader really wanted to pay you and your publisher fairly, she could have just gone out and purchased the book -- which has already been set at a price that should cover everyone's costs. Instead she emailed you, stole a little bit of your time, and got paid in the form of a blog post.

That's fame rent-seeking, the way I see it.

Franc28

I vote for not thief. as he did not steal anything. File-sharing is not stealing. It is the person who breaks the copyright by making the contents public who is breaking the law, not the person who downloads.

If I was Freakonomics I would have accepted the 4$ as a gesture of acknowledgement for his desire to reward me, but I don't mind that he refused it.

theberle

What about buying a used copy off of ebay/amazon/etc? No royalties go to the authors or the publisher. Although I paid for the book, I "screwed" some of the people involved. Is this unethical? Can't more than one person benefit from a single "new" purchase? I think this question is especially interesting when considering software (which, in this limewire example, Freakonomics actually is) like TurboTax. I borrowed a friend's copy of TurboTax, after he was done with his taxes and had uninstalled it from his computer. Is that stealing from Intuit?

Although I doubt this is the case in this example, what if I scanned Freakonomics after reading it and hiding it on a shelf somewhere, never to be read again? Then I emailed it to one friend, for her reading pleasure. Is this stealing?