Author Archives: Diane Coyle

Supply and demand for authors

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Most writers know that their chosen path is not going to make them a fortune. The exceptions are few – only a few are as successful as J.K.Rowling (a.k.a. Robert Galbraith, apparently after J.K.Galbraith, in her recent PR stunt with [amazon_link id=”1408703998″ target=”_blank” ]The Cuckoo’s Calling[/amazon_link]) or [amazon_link id=”0593072499″ target=”_blank” ]Dan Brown[/amazon_link] or, in our world, [amazon_link id=”1844801330″ target=”_blank” ]Greg Mankiw[/amazon_link] or [amazon_link id=”0141019018″ target=”_blank” ]Steven Levitt[/amazon_link].

[amazon_image id=”0141019018″ link=”true” target=”_blank” size=”medium” ]Freakonomics: A Rogue Economist Explores the Hidden Side of Everything[/amazon_image]

So it was with great sympathy that I read a lament by Guy Walters in the Literary Review about the expectation that writers will travel the country giving talks for free, on the basis that it might just increase sales. He contrasts writers with comedians – apparently Al Murray asks for and gets 70% of takings at the door. Mr Walters calculates that the Hay Festival took £5600 from ticket sales at a talk he gave, for which they ‘paid’ him half a dozen bottles of wine.

I know nothing about the Hay Festival’s finances. But there are two problems with wanting to get paid for book talks.

One is that event costs are high. I’m currently organising the 2nd Festival of Economics with the Bristol Festival of Ideas. Participants are paid expenses and a small fee, because on principle we believe they should get paid something whenever tickets are charged for. But ticket sales alone do not cover the costs of the expenses and venue hire; we need to raise a few thousand pounds in sponsorship to break even. (Almost there, but please get in touch if you’re interested in sponsoring us!)

The second is that there are lots of authors. Lots and lots of them. The well-known ones can presumably charge a high fee, like the well-known comedians, but the lesser known ones have virtually no market power. It’s supply versus demand and then some: like so many other creative sectors, superstar economics apply here. This is a common phenomenon with experience goods, whose quality is unknown before they have been consumed. This means consumers flock to the writers/performers whose reputation is already strong enough to guarantee enjoyment, rather than taking a risk on the unknown. To them that hath, shall more be given.

I do think writers should have expenses paid by event organisers, and a fee even if token when the audience is paying. There’s never any harm in asking. But most writers have to take part in the events for enjoyment, and a scintilla of extra public recognition that might help sales, and not for cash.

Non-satiation or the paradox of choice?

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This week I’ve been travelling – two days in Newcastle and lots of meetings. It included a visit to the set of The Paradise, the BBC drama based on Zola’s [amazon_link id=”2218745208″ target=”_blank” ]Au Bonheur des Dames[/amazon_link]. It’s one of the novels I haven’t read, despite being a huge Zola fan. (Does any other British reader of this blog remember the superb, terrifying BBC dramatisation of Therese Raquin with Alan Rickman in the 1980?) So of course I’ll have to get the book now.

[amazon_image id=”0199675961″ link=”true” target=”_blank” size=”medium” ]The Ladies’ Paradise (BBC tie-in) (Oxford World’s Classics)[/amazon_image]

Meanwhile I bought Jeremy Bowen’s [amazon_link id=”0857208861″ target=”_blank” ]The Arab Uprisings[/amazon_link] at the station bookstore, just in case I ended up with some unexpected free time and no book (hah!).

Then got home to my recent orders and a couple of incoming review copies. Here are the recent acquisitions. Good thing summer is coming up.

Recent acquisitions

Of course, this kind of appetite for more books (and I’m with Umberto Eco that it isn’t necessary to read all the books in one’s library/anti-library) lends support to the assumption of non-satiation in consumer choice theory. More is always better. The theory refers to more of the same and one could argue that each book title should count as a separate good, in which case non-satiation would not be a valid assumption (although a couple of my colleagues like to have the same book in physical copy and on an e-reader).

But that doesn’t mean Barry Schwarz’s [amazon_link id=”0060005696″ target=”_blank” ]Paradox of Choice[/amazon_link] is valid either. His examples include types of jeans or brands of cereal and toothpaste. But not only do I not want Prof Schwarz determining what kinds of jeans I’m allowed to wear, I never hear proponents of the paradox of choice arguing that there are ‘too many’ book titles, or charities to which to donate, or types of wine. Are we to suppose that the professional classes are less likely than the lower orders to be daunted psychologically by too much variety?

Political bubbles

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The Adelman biography of Albert Hirschman, [amazon_link id=”0691155674″ target=”_blank” ]Worldly Philosopher[/amazon_link], is great but too big to carry around so I’m reading it at home, and on the tube I’m reading [amazon_link id=”0691145016″ target=”_blank” ]Political Bubbles[/amazon_link] by Nolan McCarty, Keith Poole and Howard Rosenthal, & have almost finished.

[amazon_image id=”0691145016″ link=”true” target=”_blank” size=”medium” ]Political Bubbles: Financial Crises and the Failure of American Democracy[/amazon_image]

It’s long been my view that history is over-determined, looked at from today (under-determined of course, if you’re trying to predict events.) These three political scientists have another causal explanation to add to the list of explanatory factors for the Great Crash of 2008. As well as greed and fraud, toxic financial innovation, global imbalances, fiscal irresponsibility, gigantism in banking and all the other contributors, there is the political dimension.

The charge is that a combination of three political factors created the conditions for all those other contributors to financial meltdown to develop. The first is ideology, the pure belief that markets are good and government regulation bad; the second is the array of special interests hoping for an endless boom, especially in housing – the lenders, the realtors, the people getting cheap loans; the third is the American institutional framework, expressly designed to stop things happening rapidly, in the context of ultra-rapid developments in financial markets. The three interact in a pro-cyclical way, the book argues, hence the terminology of the ‘political bubble’.

Nobody in the political elite, on the executive or the legislative side, comes out of this book well. The authors even trace some of the rot as far back as the now-saintly-seeming Jimmy Carter – after all, the savings and loan debacle of the early 1980s had its root in his presidency. The book is equally scathing about the ideologically free market Republicans, Reagan and the two Bushes, and the differently ideologically free market economics team of the Bill Clinton years.

The focus is solely on the United States. This means there is more political detail than many non-American readers will either want or be fully able to interpret.

With that caveat, I found the argument persuasive. After all, there are plenty of other mature democracies that have experienced that combination of housing bubbles, Franken-finance, and political incapacity. The US financial markets have also hugely influenced global markets. It would be interesting to work through the same kind of argument in other countries. One might even add another layer of political sclerosis in the international context, adding a fourth ‘i’ for ‘international incompetence’ to the three ‘i’s making up the book’s hypothesis.

Summer reading

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The papers all magically decided that this was the weekend to publish recommendations for summer reading. My holiday is still a few weeks away but it’s never too soon to start planning which books to take.

In my in-pile I’ve got some suitable paperbacks.

[amazon_link id=”0141030585″ target=”_blank” ]The Old Ways: A Journey On Foot[/amazon_link] by Robert Macfarlane

[amazon_image id=”0141030585″ link=”true” target=”_blank” size=”medium” ]The Old Ways: A Journey on Foot[/amazon_image]

[amazon_link id=”0713998687″ target=”_blank” ]Iron Curtain[/amazon_link] by Anne Applebaum

[amazon_link id=”1849904936″ target=”_blank” ]Parade’s End[/amazon_link] by Ford Madox Ford (bought after the brilliant TV drama, and not yet read)

[amazon_image id=”1849904936″ link=”true” target=”_blank” size=”medium” ]Parade’s End[/amazon_image]

[amazon_link id=”0140449086″ target=”_blank” ]The Histories[/amazon_link] by Herodotus (a 2nd hand book also in the pile for some time)

That’s nowhere near enough so I’m planning to by some of:

[amazon_link id=”075381983X” target=”_blank” ]Building Jerusalem: Rise and Fall of the Victorian City[/amazon_link] by Tristram Hunt

[amazon_image id=”075381983X” link=”true” target=”_blank” size=”medium” ]Building Jerusalem: The Rise and Fall of the Victorian City[/amazon_image]

[amazon_link id=”0670918989″ target=”_blank” ]Tubes: Behind the Scenes at the Internet[/amazon_link] by Andrew Blum

[amazon_link id=”1908526173″ target=”_blank” ]Calcutta: Two Years in the Cit[/amazon_link]y by Amit Chauduri

[amazon_image id=”1908526173″ link=”true” target=”_blank” size=”medium” ]Calcutta: Two Years in the City[/amazon_image]

[amazon_link id=”0241145368″ target=”_blank” ]The Infatuations [/amazon_link]by Javier Marias (I loved his earlier trilogy, [amazon_link id=”0099461994″ target=”_blank” ]Your Face Tomorrow[/amazon_link])

[amazon_image id=”0241145376″ link=”true” target=”_blank” size=”medium” ]The Infatuations[/amazon_image]

Any other recommendations, folks? A strong preference for paperbacks, and some detective fiction ideas needed.

Words and the worldly philosopher

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On the strength of the introductory chapter, I’m really going to enjoy Jeremy Adelman’s biography of Albert Hirschman, [amazon_link id=”0691155674″ target=”_blank” ]Worldly Philosopher.[/amazon_link] Adelman talks about his subject’s love of words:

“Hirschman’s work represents an effort to practice social science as literature. It is what makes him appear so original in style and content now the bonds between literature and social science have increasingly been severed. ….. [H]e made of his style a kind of rampart from which to warn us, without giving up on humor, of the perils of over-specialization, of a narrowing of vision, and of the temptation to fall in love with one’s own technical prowess and vocabulary, and lose sight of the vitality of moving back and forth between proving and preaching.”

[amazon_image id=”0691155674″ link=”true” target=”_blank” size=”medium” ]Worldly Philosopher: The Odyssey of Albert O. Hirschman[/amazon_image]

I also like Hirschman’s insistence on being wary about strong claims and grand theories, intended to free social science from the shackles of historical specificity – the kind of humility economists have been urging on themselves since the onset of the crisis, without quite managing to achieve it.

Like many economists of my generation – in graduate school at the height of the rational expectations/real business cycle madness – I was never taught anything of Hirschman’s work. The only book of his I’ve read is [amazon_link id=”0674276604″ target=”_blank” ]Exit, Voice and Loyalty.[/amazon_link] I’ll obviously have to set that right after finishing this biography.

[amazon_image id=”0674276604″ link=”true” target=”_blank” size=”medium” ]Exit, Voice and Loyalty: Responses to Decline in Firms, Organizations and States[/amazon_image]