Jim Baen died two days ago. There is a moving obituary by David Drake. In case you are wondering what this might have to do with copyright and DRM, here is the relevant part

For example, the traditional model of electronic publishing required that the works be encrypted. Jim thought that just made it hard for people to read books, the worst mistake a publisher could make. His e-texts were clear and in a variety of common formats.

While e-publishing has been a costly waste of effort for others, Baen Books quickly began earning more from electronic sales than it did from Canada. By the time of Jim's death, the figure had risen to ten times that.

This is real entrepreneurship - making available a superior product at a good price. I expect it put more money in the pockets of authors than the other kind.

I owe my own personal gratitude to Jim Baen. He published the kind of science fiction I love to read - I was reading books he published long before electronic publishing was a gleam in his eye. I read fast, and I like to read on airplanes: while reading off of a palm pilot or tablet pc isn't quite as satisfying as a real book, the fact that I can bring a 1000 volume library with me wherever I am is worth a lot. For me Baen's electronic publication was a godsend. I went to his website to see how many Baen electronic books I own: 171 is the count. That means I've (happily) paid him over $600 for electronic books over the years - probably more than I've spent on traditional dead-tree fiction from all publishers during that time. I imagine quite a bit of that was well-earned money for the authors, as well as well-earned money for Baen himself. My only regret is that I will never have the opportunity to meet the man.

Over on Ed Felten's blog there is an argument that the transactions costs imposed by IP law are devastatingly bad because of the high cumulative value of many small transactions. The specific fact quoted was

For those not in the know, “long tail” is one of the current buzzphrases of tech punditry. The term was coined by Chris Anderson in a famous Wired article. The idea is that in markets for creative works, niche works account for a surprisingly large fraction of consumer demand. For example, Anderson writes that about one-fourth of Amazon's book sales come from titles not among the 135,000 most popular. These books may sell in ones and twos, but there are so many of them that collectively they make up a big part of the market.

I was pretty surprised by this "fact." Michele and I have gathered some data on book revenues and the striking thing is the concentration of sales by a few very successful authors. While we argue that this isn't a very good fact for those who support IP it also doesn't seem consistent with the Chris Anderson fact cited above. (Anyone know what data he used?)

Anyway, I went back and looked at our data, and I found that 75% of book revenues are earned by roughly the top 200 books out of our sample of 1712 book titles. That is, the bottom 88% of books earns only a quarter of the revenue. This doesn't seem like that long a tail. In our sample, the top 700 books generally sold more than 100 copies during the two week period of the sample; while the bottom 900 books generally sold less than 20 copies. However, this bottom 900 accounted for only about 1/3rd of 1 percent of book revenue. So the idea that books that "sell in ones and twos" make up a big part of the market isn't in our data. In short, I am skeptical of Chris Anderson's fact.

The U.S. Supreme Court is about to take up the critical issue of the "obviousness" of a patent. CNET has an informative article about the upcoming case - although the Supreme Court has a long sad history of allowing the Federal Circuit Court to make up the law as it goes along. Needless to say

Last January, the U.S. Court of Appeals for the Federal Circuit reversed an earlier court decision last that found patents held by Teleflex were "obvious" and therefore invalid.

Also of interest is

Microsoft and Cisco charged that the current test applied by the Federal Circuit "hurts innovation" because it establishes "far too lenient a standard for patentability." Cisco has even built up a portfolio of patents for "defensive purposes" in order to "neutralize" a proliferation of trivial patents, the brief said.

highlighting the fact that large companies probably have more to lose from patent law than gain.

Creative Commons is partying in Brazil. William Patry has a nice post linking to some video, and a discussion of the creative commons with comments. However he says

It is also important to devise ways so that creators don't give away their rights in the first place. That will require market conditions so that individuals will themselves distribute their works in way that will result in sufficient remuneration without the need to involve a middleman.

I don't see that eliminating copyright would do away with the middleman - although it would probably do away with the current middleman. Wheat is produced competitively - but most of us don't deal directly with wheat farmers for our wheat. (ht: Crosbie Fitch)

Eliminating copyright doesn't mean eliminating profits for artists. Historically artists such as Mozart who wrote without copyright did as well financially as those like Beethoven that wrote with copyright. (Mozart was always strapped for cash because he was a free spender, not because he didn't earn a lot.) But the competitive market is a great creative force - a great example of this is Crosbie Fitch's Digital Productions which is pioneering a way for artists to make money through contingency auctions. The idea is that fans make pledges and the money is escrowed. When sufficient pledges are received, the work (music or digital art in this case) is released to the fans.

(via Slashdot) An article on CNET covers congressional hearing on patent trolls. Leading the charge against patent trolls: Amazon. My favorite part of the article

"Could not Amazon.com be accused of being a troll for patenting the one-click?" Smith asked, a wry smile on his face.

Misener defended the patent as "a radical departure from the shopping cart model" when it was granted in 1998. "We only exercised the patent against someone who at the time...had publicly announced intention to crush our business," he said. "This wasn't some scheme to hit up small users."

Yeesh. Apparently a patent troll is everyone else who wants a patent except for you. While I'm generally in favor of patent reform that would make patent trolling more difficult, it is pretty clear that the legislation is being pushed by large companies that want to preserve their own ability to garner monopoly through patent, while making it harder for the little guy to do so. This isn't surprising, and it is the main reason why patents should be eliminated. As long as they exist they create an enormous incentive for rent-seeking, and the big guys are always going to win that game.

(Hat Tip: Gizmodo) USA Today has an article explaining how "unauthorized song swapping" (give them credit for not calling it theft) has been "contained." My favorite part: The RIAA has

also embarked on a very successful education campaign. Kids now know about copyright, and the consequences.

I also like the picture from Gizmodo that pretty much explains it all

I've heard the war on drugs is a great success too.

AllofMP3.com is one of those places we never would have heard of if the RIAA wasn't so loudly trying to get it closed down. This follows a long practice by the RIAA of advertising that great stuff is available for free: we learned that you could rip CDs and put them on portable players from their suit against Diamond Rio. We learned about Napster from ... the RIAA. From Slyck News we learn what the RIAA (or its parrot body the IFPI) has to say:

AllofMp3.com is not a legal service either in Russia or anywhere else. It is distributing music without any permission from the artists or copyright holders. Unlike all the legitimate sites, it does not pay artists or copyright holders so it is effectively stealing from those who create music. Like most things that appear to be too good to be true, allofmp3.com is not what it seems.

There is not much question that the service isn't legal outside of Russia. But AllofMp3.com is correct in asserting that

The site AllOfMP3.com belongs to a Russian company and for 6 years it has operated within the country, in full compliance with all Russian laws. Throughout this period the various government offices have scrutinized site's legality and have not found any breach of the law. So far there has been no decision by any Russian court contesting the site's legality.

Sadly there is little doubt that they will soon be shut down as part of the price for Russia joining the WTO.

From the NY Times Magazine [because registration is required I will only quote them when they do something dumb] it seems that cheap organic food is a bad thing

To index the price of organic to the price of conventional is to give up, right from the start, on the idea, once enshrined in the organic movement, that food should be priced not high or low but responsibly. As the organic movement has long maintained, cheap industrial food is cheap only because the real costs of producing it are not reflected in the price at the checkout. Rather, those costs are charged to the environment, in the form of soil depletion and pollution (industrial agriculture is now our biggest polluter); to the public purse, in the form of subsidies to conventional commodity farmers; to the public health, in the form of an epidemic of diabetes and obesity that is expected to cost the economy more than $100 billion per year; and to the welfare of the farm- and food-factory workers, not to mention the well-being of the animals we eat. As Wendell Berry once wrote, the motto of our conventional food system at the center of which stands Wal-Mart, the biggest purveyor of cheap food in America should be: Cheap at any price!

To say you can sell organic food for 10 percent more than you sell irresponsibly priced food suggests that you don't really get it that you plan to bring business-as-usual principles of industrial "efficiency" and "economies of scale" to a system of food production that was supposed to mimic the logic of natural systems rather than that of the factory.

This type of hatred of Wal-Mart must surely stem from jealousy of their success, not any sort of rational consideration of the great good they have done.

Addendum: In the comments Melinda objects that I am too quick to pass over the enviromental issues. She makes some good points. See the comments.

Tim Sullivan brings to my attention an an article in the NY Times on digital publishing. I was particularly struck by "the novelist John Updike [who] forcefully decried a digital future composed of free downloads of books and the mixing and matching of 'snippets' of text, calling it a 'grisly scenario.'" Taking this at face value (a bad idea - see below) one might wonder what John Updike was thinking: of course every book is made up of snippets. John Updike, after all, simply rearranges the words in the English language to form his books, and I would be surprised if he does not use entire phrases "stolen" from others. For example, a Google Book search for the exact phrase "he turned and ran" turns up 3150 hits - plagiarism, I suppose, and we can only be thankful that such a short phrase cannot be copyrighted.

At this point a disclaimer: the entire Updike talk is available as a (free) podcast, and the NY Times quotation above has little to do with John Updike's actual comments. About half of his talk is a paean to bookstores. He evidentally led a more privileged youth than I, because while I can recall little time spent in bookstores, I recall thousands of happy hours spent in libraries. The last half of his talk is a commentary on a Wired article on the digital revolution in books. His comments read less like a the forceful decrying of a grisly scenario than the sad reflection of a buggy whip manufacturer on the death of his industry. If you want to know what this brave new world is likely to be like, instead of John Updike's poorly informed speculation, you might want to read David Friedman's thoughtful analysis.

To be clear - I am doubtful that the "digital revolution" will lead to the end of the sharp "edges" of books as independent entities that we enjoy today. No doubt words, phrases, or even entire paragraphs, will be combined in new ways as new books that have edges of their own. And that is no different than it is today - each book is independent, yet no book is an island independent of the world and literature surrounding it. Indeed, it is the erudition of a man such as Updike that is a great part of his appeal.

The NY Times article (although not the actual Updike talk) brought to my mind the issue of the "moral rights" of authors. To what extent is a creator morally entitled to the value created by his creation? There seem to be two camps of "moral rights" those who worship as heroes the great creators (sometimes this is self-worship) and those who worship the free market. As to why great creators of books should be more entitled to fast cars and the other things that money can buy than great cabinet makers I will leave for others to figure out. I simply want to point out that economists celebrate the market because it works and not because it leads to outcomes that are just.

I can illustrate this through a simple example having nothing to do with intellectual "property." Let's focus on cabinets. We may imagine that there are six cabinet makers each of whom can produce only one cabinet. The first two can produce a cabinet in an hour, the second two each take two hours, and the other two each take three hours. Each cabinet maker can also spend his hours selling books at the bookstore for $10 per hour. There are six people who want to buy cabinets, one would pay $50 for a cabinet and two would pay $40 and three would pay $10. It is easy enough to see that the actual price of cabinets will be $20 as the two "marginal two-hour" cabinet makers compete with each other to produce the third cabinet. This produces a benefit of $10 to the first two cabinet makers, $30 to the first consumer and $20 to the next two consumers. As it happens the total benefit of $90 is the greatest possible - which is what economists refer to as the "efficiency" of the free market. But is this outcome "just"? Certainly each cabinet maker is recompensed for their time - otherwise they wouldn't produce cabinets. But is the first cabinet maker morally entitled to the extra $10 he gets for his efforts? If the $10 consumers were willing to pay $30, price would rise to $30, and even if the first cabinet maker was selling to the original $50 consumer, he would now net $20 instead of $10. If the "two-hour" cabinet makers could produce cabinets in one hour instead, price would fall to $10 and the first cabinet maker wouldn't get the extra $10 at all.

In other words, in the competitive market, the amount you get isn't some measure of your effort or intrinsic worth, but depends on all sorts of idiosyncratic conditions of demand and supply. Economists favor free markets not because they are "fair" or "just" nor are we against them because they are "idiosyncratic and random" but we favor them because they work to produce the greatest good for the greatest many.