mealypotatoes

The price of Kindle books

The Kindle version of “Create Your Own Economy” by Tyler Cowen is $14.27, $2.86 less than the hardcover version. This is after the price was reduced from above the hardcover price.

And from the “hot new releases” section:

• Glenn Beck’s Common Sense: K $6.59, PB $6.59
• Dick Morris’s Catastrophe: K $9.99 HC $14.84
• Janet Evanovich’s Finger Lickin’ Fifteen: K $15.37 HC $15.37
• David Kessler’s The End of Overeating: K $9.99 HC $15.57
• Brad Thor’s The Apostle: A Thriller: K $14.82 HC $14.82

So there are still the discounted $9.99 Kindle versions, but on the whole, are Kindle book prices going up — so much so that some Kindle versions are the same price or even more than their hardcover counterpart?

If so this seems like a bad situation for the Kindle. My explanation for the prices would be that a) people are willing to pay for the convenience of downloading a book and b) people already using the Kindle are OK with spending $15 on a book. The problem is that it makes buying a Kindle — already a significant investment — look that much less appealing.

The only option for Amazon would be to subsidize Kindle books and drive down prices, in the hope of selling more Kindles, which would in turn drive down Kindle book prices. I think the Kindle store, given enough momentum, could significantly drive down book prices in the same way the iPhone App Store has significantly driven down the price of software, particularly games.

In either case the price has little to do with the fixed costs. A Kindle book is not $5 less than a physical book because it costs $5 to print and handle the latter.

Aesthetic Identity

I had a conversation with my father yesterday about buying the paper New York Times. I used to but have stopped; he continues to buy the Sunday edition and a few day papers a week. Why, I wondered, when there are so many reasons not to buy the physical paper, did he continue to do so, even as the price increased? Consider:

My dad is no technophobe. He actually subscribes to the Times Reader, and can be found reliably reading the NYT on his laptop during lunch. He browses the headlines every morning. It’s clear that the majority of his day-to-day interaction with the paper is online.

He also lives in central Maine, a region that is lucky to get any national papers by 10:00 a.m. In fact, when he buys the paper, it is almost always in the afternoon, when he simply won’t have time to read any significant part of it. Not only does the physical paper cost more, he reads less of it!

And the price. We puzzled over exactly why he continues to spend — according to our quick calculation — around $500/year on NYT dead trees and ink. Not to mention the trip to town it requires. (Ostensibly he has other reasons to make the drive, but I think he makes up excuses so he can buy the paper.) Especially when every article is posted for free online (for now).

He is satisfied with the answer, “it’s just habit.” I’m less satisfied. We all have habits, and usually for some underlying reason. Besides, habits are meant for breaking.

I tried to argue it was due in part to his signaling a certain part of his identity, although I don’t think either he or I was convinced. The fact is that he reads his paper in relative solitude (generally only my mother sees him). So could he really be signaling? Perhaps, in a kind of “impartial spectator” way — the way he sees himself reading the newspaper gives him pleasure and affirms a part of his identity.

Does the image of one “reading the paper” appeal to us, and give us pleasure when we imagine ourselves approaching it? As I read a newspaper I also imagine myself reading the newspaper, and approve of it. It appears as a praiseworthy activity. It’s a powerful aesthetic. (It is my twitter avatar, from a painting by Cézanne. Undoubtably in the cultural consciousness.)

The opposing image I’d suggest is of a person behind a laptop screen. There are similarities, but there are significant differences. The man reading his newspaper is passive, taking in various facts from around the world, soaking up disparate narratives of the day’s events and hopefully coming to a greater understanding — he is a man of letters. The woman behind her laptop also takes in facts, narratives, events and arguments. But where the man stops she continues to work: she checks facts, asks questions, writes her opinion, comments on others’ work. She is an active participant in a global village of ideas — what was once a community to merely be considered, and now is a community one can be part of. She is a woman of conversation.

These two stereotypes are the “reader” and the “blogger” respectively. They are both equally important to a personal sense of propriety. We all yearn to be something significant in the greater world — the worlds of politics and art and culture. The way that we see ourselves in interaction with the larger world is, unsurprisingly, the principle of how we interact. To my father, seeing himself holding a newspaper is as fulfilling — as right — as it is when I see myself at my laptop.

And so, yes, it is a form of signaling. Our pleasure comes not from the substance of what we’re doing (the actual articles read or posts written) but from the aesthetic appreciation of our own propriety. We pray at the altar of our self-identity to appease it and convince ourselves it does exist and is proper. This could cost us $2 for the paper or a night staring at a screen.

Of course I do think the “blogger” image is more useful for society — hence the original argument with my father. But it’s clear we aren’t perfect utilitarians in respect to our identities; nor, perhaps, should we be. I don’t have much of a right to tell my dad he shouldn’t buy the newspaper (from opportunity cost, etc etc) because, well, it’s part of his identity. I wouldn’t want someone telling me not to sit at a screen all day (clearly a huge investment of my time compared to a $2 paper).

“straightforwardly useful”

This post is a response to Matthew Crawford’s essay in the NYT Magazine this Sunday.

Let me first say that I have nothing against “the trades” and I respect them quite a bit. My parents are furniture makers and craftspeople; I come from a rural Maine town where manual labor — “working with your hands” — is the norm.

I have an issue with Crawford’s essay, however. It concerns his use of the word “use.” Let me point out several instances:

• “work that is straightforwardly useful,”
• “the useful arts,”
• “work that is genuinely useful.”

These all refer to jobs involving working with your hands: motorcycle repairman, electrician, plumber, the jobs on shows like “Deadliest Catch” and “Dirty Jobs.” The implicit complementary point is that other work is not “straightforwardly useful.”

I think this idea of straightforward usefulness is ultimately a fabrication — a romanticism, which is ironic because Crawford explicitly disagrees with the ways society idealizes the trades. It’s a fabrication because the use of the work is — for the most part — determined by the buyer of the work; e.g., the person who brings in the motorcycle to be repaired is the recipient of the use of Crawford’s work. Crawford is the recipient of cash, which he then puts to his own use. The fixing of the motorcycle is useful to him in no straightforward way. (Although it is still useful to him, I will describe below. My problem is with the term “straightforward.”)

Let’s say I had a problem with my car, and brought it in for repair. It cost $200, and in return my car is fixed. But something happened such that I could not use the car again — perhaps it was stolen; then the use of the repair goes to the robber. If I swore off all driving for environmental concerns, and refused to sell the car for fear of it still contributing to global warming, that use simply disappears. I don’t think that’s straightforward use.

Of course, repairing someone else’s motorcycle is still useful to the repairer — he or she is utilizing skills and problem-solving, the practice of which improves them. Crawford makes an excellent case for this. But I don’t think you can distinguish at this point between the use of the trades and the use of other jobs which Crawford dismisses.

I would be the last to defend the merits of a useless, bureaucratic managerial position. I agree with Crawford that it leads to “provisional thinking and feeling, expressed in corporate doublespeak” and that work that adds no apparent value can be alienating and demoralizing. But I think Crawford is making a fallacy in distinguishing types of work. What would he say about working for the IMF? For the New York Times? For Harvard University? For Pixar? … and so on. I’m sure each of these institutions have positions which are less than ideal in terms of use. But to imply that they all aren’t “useful”? This is an indefensible position — in utilitarian terms it’s even morally objectionable.

But I don’t think Crawford is really making that argument. I think he wants to show the college-career oriented crowd that alternate lifestyles exist and there is nothing wrong or irrational about them. I wholeheartedly support this. He writes:

The good life comes in a variety of forms.

…and this is an eternal Truth if ever there were one.

Update: Ezra Klein has a post on this too.

Calculated Risk has a good post about Bernanke and a few of his thoughts on unpredictability — in both the economy and Bernanke’s own life. Here’s an excerpt from his 2009 commencement address at Boston College:

In some ways, predicting the economy is even more difficult than forecasting the weather, because an economy is not made up of molecules whose behavior is subject to the laws of physics, but rather of human beings who are themselves thinking about the future and whose behavior may be influenced by the forecasts that they or others make.

The unpredictability of the economy is, in some sense, the unpredictability of life. The macroeconomy is, after all, the sum of individual choices made in the context of various narratives.

Will we ever develop perfect models of risk? I don’t think so. We should acknowledge the unpredictable exists. The ethical dimension is that we should reflect upon the various economic peripeteia to better act in the future, just as we do for our lives.

Localism and the reductio ad absurdum counter-argument

There’s a great logical counter to the localism argument: the reductio ad absurdum: Where does one stop? Within a state? Within a town? The family? Obviously we benefit from the interaction and cooperation within a community; extrapolating ad infinitum, isn’t it true that we benefit greatest from the global community?

This counter-argument is sound assuming that the moral physics of our interaction with others holds constant. That is: do we act similarly across the spectrum of local to global? Take this quote from Hayek’s The Fatal Conceit:

If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilization), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of worlds at once.

The point Hayek makes — I think it’s true — is that the micro-cosmos and the macro-cosmos are not interchangeable. We shouldn’t extrapolate values from the micro to the macro, or vice versa, because they are essentially different, and one does not belong in the other. In this sense there isn’t really a reductio ad absurdum to be made: there actually is an observable difference, a line to be drawn, between local and global.

The issue is that different kinds of morality apply to different spheres. I think — as Adam Smith argues — our local interactions tend to favor sympathy, whereas our global interactions tend to favor prudence. Sympathy just doesn’t travel well over long distances. Smith puts it best — and it’s worth quoting in full (emphasis added):

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorry for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquility, as if no such accident had happened. The most frivolous disaster which could befal himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own.

The “little finger” description may upset you, but it is true. How many of us lost any sleep over the latest atrocities — Sri Lanka, for one?

What sorts of interactions do we have that benefit from sympathy? Within the local sphere, there’s a wide range. Listening to others tell a story and truly understanding it. Providing a kind of social insurance for the community by helping others in need (and in return receiving help). Treating others with respect to develop a guarantee of civil rights. Tipping. And buying our food, which recently has become an important topic.

Does sympathy hold well over a distance? Definitely not. There’s the problem of foreign aid. We want to help those in need but very often our efforts backfire. It’s clearly better to think in economic terms and hard statistics for solving global poverty rather than in emotional or narrative terms. Our moral barometer just doesn’t have access to enough information from that distance. For example: we read a story in a newspaper about a suffering people; we want to help them, and so we donate a sum of money to a charity. Did we assess all of the relevant facts and is our money doing the most good? Did the newspaper publish that story because it was the most important one or because it sold more newspapers? To say the least, if we really want to help, more investigation is needed.

When we peruse a list of Amazon sellers, we don’t check up on which one most deserves our sympathy — we prudently look for the best deal. Businesses that do appeal to our sympathy should be further examined and critiqued: are we dealing with them for the right reasons, or so that we ourselves feel better?

And vice versa: we don’t bring a $20 bill as a gift to a dinner party.

The other issue for localism is the regulatory one: how much do we benefit from protectionist/localist laws and regulations? I’m not sure there is an argument for local interactions being a more valuable public good than global interactions. We clearly need them both. There are exceptions, perhaps: but that’s the subject for another post.

Ears of grain

I’m reading the excellent Wars, Guns, and Votes by Paul Collier. Several times he refers to this passage from Herodotus:

[Cypselus] was succeeded in the tyranny by his son Periander. At first, Periander was less cruel than his father, but after he had corresponded with Thrasybulus, the tyrant of Miletus, he became far more blood-thirsty than Cypselus. He sent an agent to Thrasybulus to ask what was the safest kind of government for him to establish, which would allow him to manage the state best. Thrasybulus took the man sent by Periander out of the city and into a field where there were crops growing. As he walked through the grain, he kept questining the messenger and getting him to repeat over and over again what he come from Corinth to ask. Meanwhile, every time he saw an ear of grain standing high than the rest, he broke it off and threw it away, and he went on doing this until he had destroyed the choicest, tallest stems in the crop. After this walk across the field, Thrasybulus sent Periander’s man back home, without having offered him any advice.

The advice, Periander realized, was to kill off any potential threats to his throne.

Collier shows that bad presidents in poor countries usually have incentives to be bad. They get along better rigging elections, bribing voters, threatening or killing the opposition, and rewarding their ethnic group to the exclusion of others.

The book is fascinating, and on nearly every page I stop to think about the ramifications of his research and findings. Here’s a review of his previous Bottom Billion, which is next on my list.