Free Markets, Free People
I love stories like this because the demonstrate the momentous changes that have been introduced by technology which has democratized publishing and not just opened the gates to everyone, but flat torn the gates down:
John Locke, 60, who publishes and promotes his own work, enjoys sales figures close to such literary luminaries as Stieg Larsson, James Patterson and Michael Connelly.
But unlike these heavyweights of the writing world, he has achieved it without the help of an agent or publicist – and with virtually no marketing budget.
Instead the DIY novelist has relied on word of mouth and a growing army of fans of his crime and western novellas that he has built up online thanks to a website and twitter account.
His remarkable achievement is being hailed as a milestone of the internet age and the beginning of a revolution in the way that books are sold.
His achievement is doubly impressive because of the way he accomplished this:
He saw that many successful authors were charging almost $10 (£6) for a book and decided that he would undercut them – selling his own efforts for 99 cents (60 pence).
"I’ve been in commission sales all my life, and when I learned Kindle and the other e-book platforms offered a royalty of 35 per cent on books priced at 99 cents, I couldn’t believe it," he said.
"To most people, 35 cents doesn’t sound like much. To me, it seemed like a license to print money.
"With the most famous authors in the world charging $9.95 for e-books, I saw an opportunity to compete, and so I put them in the position of having to prove their books were 10 times better than mine.
"Figuring that was a battle I could win, I decided right then and there to become the bestselling author in the world, a buck at a time."
Or, he figured that the opportunity of self-publishing allowed him the freedom to decide how much to charge and take advantage of the royalty being paid a lower price. Obviously you have to have something worth selling, but he’s figured out that formula as well – what most of us would consider “pulp fiction” with mass appeal:
His books – which centre around characters such as Donovan Creed, a former CIA assassin "with a weakness for easy women" and Emmett Love, a former gunslinger – are unlikely to trouble the Booker Prize judges.
But nevertheless they are immensely popular among the new e-Book fraternity, selling a copy every seven seconds and making him only the eighth author in history to sell a million copies on Amazon’s Kindle – a milestone he passed this week.
Phenomenal. Kudos to Locke … John Locke, that is. Great name.
The gate no longer exists and that has to make publishers as nervous as the news media is anymore. Anyone can publish just about anything and, unlike before, the market gets to decide what is or isn’t worth the money and reward – directly – those who manage to give it what it wants.
What’s not to like (our own Martin McPhillips may be able to give us a little insight into this phenomenon – and it will give him a chance to plug his book)?
I’m happy to announce that sometime tomorrow my book, Slackernomics, will be available on Kindle at the Amazon store for the low, low price of $3. For those who don’t know, Slackernomics is a book on basic economics for people who think economics is boring. Instead of a bunch of charts and math, I present economics in a more enjoyable way. For instance, here is a portion of my discussion on the role of prices:
Another feature of the price system is that it forces producers to put resources to their most valued uses. This is important because, quite often, consumers demand different goods that use many of the same components.
Let’s take petroleum, for example. People don’t just need gasoline; they need plastics to make computer keyboards and ugly furniture for college students. Businesses need chemicals for industrial production and dyes. Textile companies need artificial fabrics that don’t fade or discolor. Perverts need Vaseline.
So, in bidding for each of those items, their producers are also bidding for the petroleum required to make them. When more people buy Vaseline, Johnson & Johnson has to bid away some of that petroleum from refineries or textile mills. In turn, this increased demand in petroleum causes the price of oil to rise for everyone who uses it.
In order to keep buying oil, everyone now has to pay the price that Johnson & Johnson is willing to pay. As this raises consumer prices for these items, consumers are likely to buy less of them. For example, a consumer, noticing the increase in the cost of Vaseline, decides to spend Saturday night alone.
So, the price that Johnson & Johnson is willing to pay for oil becomes an added cost for all of the other businesses that use oil. If they want to bid away some of that oil, they have to be willing to pay the higher price. But since higher prices tend to mean lower sales, other producers will only bid away as much oil as they think they can use, now that sales are dropping.
The end result is that Johnson & Johnson ends up with a relatively larger portion of oil. In other words, the resource of oil has flowed to the highest valued product, an important…uh…medical lubricant.
Eventually, because there is an increasing supply of Vaseline, demand is affected. At some point, consumers are unwilling to buy it, because there’s enough of it on the shelves. And, of course, with all this petroleum bidding going on, the price has been increasing. So, some consumers may notice that the price of Vaseline has now increased relative to, say KY Jelly, and they may decide to purchase that instead.
Of course, either way, Johnson & Johnson wins.
So, if you’d like to get a better understanding of how economics work, and maybe get a few good laughs on the way, you can get it tomorrow for about 1/6 the price of the physical book.
I’ll provide the direct link to Amazon to purchase it when it becomes available tomorrow.
I regularly receive review copies of new books from Regnery Publishing. Occasionally, one stands out above the rest, such as Kevin D. Williamson’s The Politically Incorrect Guide to Socialism.
I am not a huge fan of many of the Politically Incorrect Guides. While they are all relatively enjoyable reading, all to often they suffer from a shotgun approach to their subject, in that they try to bring too many threads together in a relatively brief book, rather than telling a single, compelling story. Williamson’s Guide does not suffer from this problem, but rather sticks to a simple, powerful theme. From the democratic socialism of Sweden and India, to the authoritarian socialism of Hugo Chavez’s Venezuela, to the hard communism of the Soviet Union, Williamson exposes and explains the central problem of socialism: The futility of central planning.
The trouble with socialism is not that it redistributes income to create perverse incentives–although it does do that–but rather that it attempts to do something that is literally impossible, which is to centrally plan the economy. Indeed, even planning relatively small parts of the economy are impossible. To illustrate this problem, Williamson uses the relatively simple problem of trying to plan for milk production:
There are 115 million households in the United States. If we imagine a weekly milk consumption budget for each of them, that’s 5.9 billion household weeks to plan for. Adding in a fairly restrictive list of variables–call it zero to twenty quarts a week, four levels of fat content, organic/non-organic, soy/dairy, and three flavor options, you end up with around 6 trillion options to choose from…
If they took just one second to consider each of these options, it would take them 190,128 years just to tun through the possibilities of one year’s milk consumption in the United States.
Ah, but if it were only that simple. Milk consumption is, alas, variable over time. Some families may use more milk making ice cream in the summer months. Some families may decide to reduce consumption for health reasons. The actual demand for milk–or any other good, for that matter–is essentially unknowable in any rational sense.
In country after country, covering a variety of issues, Williamson points out how, time after time, the record of socialism is one of utter failure. Whether it’s the provision of food, housing, education or medical care, Williamson demonstrates how central planning invariably produces worse outcomes than free markets.
Except, of course, for those who are planners or their associates. Things always work well for them.
In addition to his central thesis, Williamson demonstrates, along the way, how the inability to use price signals further hampers the ability of socialism to rationally match supply with demand, because economic calculation is impossible in the absence of real price data. And, perhaps even more importantly, he inquires into why the central planning impusle is ultimately antithetical to liberty and democratic governance.
This is definitely a book for the layman. Williamson explains in clear, simple language, the fundamental economic and political principles that make socialism so damaging. He doesn’t delve deeply into abstruse theoretical arguments, but rather looks at the controversial policies of the last few years to detail their shortcomings with with clarity and simplicity that should strike a chord with even those who have a minimal understanding of economics or politics.
I highly recommend this book.