One thing that the Macmillan-Amazon debacle highlighted is, to me, a very disturbing aspect of American society — the idea that everyone has a right to everything cheaply, and that if a copy of something can be made inexpensively — or for almost nothing — then that’s everyone’s right. Thankfully, not everyone, and perhaps not even a majority of Americans believes that, but millions clearly do. The reaction of the ten-dollar-or-cheaper e-book demanders is merely the latest manifestation of the idea.

People who copy music, either recorded or sheet music, without paying for it, people who download illegal torrent copies of books, people who plagiarize others’ ideas — all of them are part of this movement, and they justify it with slogans such as, “Information should be free” or “The marginal costs of producing e-books are nothing” or “the music industry is gouging the listeners.” In the area of books, the e-book buyers tend to ignore the fact that authors get less than half as much from an e-book as from a hardcover, or the fact that the vast majority of authors hold down daytime jobs because writing doesn’t cover the bills. Everyone concentrates on the five percent or so of authors who actually make a living at writing. The same pattern holds true in music as well, and I have to ask if the lack of technical perfection and musical quality in so much of what is popular is the result of the “cheap at any cost” philosophy? Might that just have something to do with the fact that a smaller and smaller fraction of musicians and singers can support themselves by their music?

And then there are the banks, who are working diligently to reduce their costs, by making you print your statements out, or having you use your computer to monitor your account, and by trying to run banks with fewer and fewer employees while paying less and less interest on deposits. Or the various state legislatures who insist on not raising taxes while more and more children pour into the schools and colleges, and while teachers’ salaries are frozen and classroom sizes increase, while state universities have to hike tuition because the state legislators want to keep taxes “cheap.”

Of course, these examples are just the tip of the iceberg. As a nation, we want everything as cheaply as possible, but we also believe that our incomes or wages or salaries should increase every year. Exactly why did so many manufacturers shut down U.S. facilities and outsource to Asia, Central America, or other third world countries? Or automate and reduce the number of employees? Because very few of them could compete on price while paying the wages, salaries, and working conditions demanded by U.S. workers and required under state and federal regulations. In addition, investors and lenders demand higher and higher profit levels. That combination translates into higher prices, unless costs can be reduced, and Americans generally won’t pay higher prices — except for certain luxury goods… and those often only in “good times.” The result? Fewer high paying manufacturing jobs and more lower-paying service McJobs… with even more pressure for “cheap” goods, because more people have lower incomes… or none at all.

So, “price-sensitive” manufacturing industries have automated or fled the USA, if not both, of necessity, while everyone complains — even while shopping for the lowest possible price for those goods. Along the way, we tend to turn a blind eye at the working conditions in those countries, yet rail against Chinese manufacturers of defective drywall, or toys with lead paint, or other unsafe products.

What almost everyone tends to ignore is that not only does price reflects the sum total of inputs, plus profit, but that not complying with safe working conditions and not enforcing good environmental practices also reduces costs, and much of the lower prices of many, many imported goods, including cheap CDS and other bottom-line electronics, is effectively subsidized by such practices as child labor, slave labor, terrible working conditions, and environmental degradation in third world countries. Of course, what makes it work is that, bad as those conditions may be, they’re often far better than what existed before.

But what happens when there are no more third world countries willing to accept such conditions? When we run out of places to which we can export costs, so to speak? Or will we end up destroying our own economic system in pursuit of the “cheap at any cost” and become someone else’s third world country?

As of this Friday morning, Amazon still isn’t selling any Macmillan [or Tor] books, despite a statement six days ago that they would capitulate. Now… to be fair, Amazon didn’t say when it would resume selling Macmillan products; it might be in the next hour, or it might be a year from now. [NOTE: As of Friday evening, sales of hardcovers and paperbacks resumed, but not the majority of e-books, and the issues raised below still are open questions.]

Some who know the book industry and Amazon have speculated that the promise was designed to mute the reaction from readers and authors, while the reality was to punish Macmillan for not falling into line with Amazon’s future view of how e-books and books in general should be sold. Certainly, there’s a case that can be made for this. Amazon was willing to lose tens of millions of dollars in establishing itself, and if Amazon believes that, by losing more tens of millions of dollars to “punish” Macmillan in order to shape the future of bookselling, then that’s a small price to pay for eventual success and market domination.

Another possibility is that, because Amazon has not updated its software, except on a piecemeal basis, since its founding, the abrupt “re-structuring” of the “Buy” buttons produced a cascade effect that has overwhelmed the programming capabilities of its staff and technicians.

And a third possibility is simply that Amazon was lying when it said it had to capitulate. One small fact that supports this view was the phrase in the Amazon statement of “capitulation” that declared that Macmillan had a “monopoly” over its products. Duhh… Every producer has a monopoly over its specific products. Ford can’t sell brand-new from the factory GM products. Kroger doesn’t get to sell Wal-Mart’s “Great Value” store products. Tor doesn’t get to sell Berkeley or ROC books. What the Amazon statement reveals is Jeff Bezos’ view that Amazon has the “divine right” to sell all books from all publishers on his terms. Not that this is really anything new; it’s been obvious from the beginning that such was his goal.

In addition to the fairly obvious use of strong-arm techniques and misleading and/or misinformative statements, what also disturbs me about this “vision” is the hypocrisy behind it. Amazon has positioned itself as a champion of readers, claiming that it wants to make low-cost books and e-books available to everyone at the lowest possible prices, as well as trumpeting the widest possible selection. Yet the tactics used by Amazon are designed, or will have the effect, as I suggested earlier, of reducing the diversity of books available to readers, because books which sell in smaller volumes will either have to be priced higher or subsidized by better-selling books. Yet, if Amazon is successful in forcing price levels down so that the better-selling books have far lower profits, publishers will reduce the numbers of “different” books that do not fit in whatever the “flavor de jour” of the marketplace may be at any given point, because either their prices will be comparatively too high and readers won’t buy them, or because the profits from better selling books won’t support subsidizing them. There is already tremendous pressure in the publishing marketplace to “homogenize” and “popularize” publishers’ offerings, and Amazon’s tactics, if successful, will increase that pressure, because, in order to compete, other booksellers will have to follow suit.

Readers are already a minority in the United States, and intelligent readers more so, and whether “accidental” or deliberate, Amazon’s failure to resume sales of Macmillan books does tend to suggest to me that its agendas are anything but good for the future of different, thought-provoking, and diverse books — no matter what Jeff Bezos may claim. And, if the problem is “merely” technical, then should we really be quite so trusting of Amazonian pronouncements? Should we really trust a multibillion dollar entity that can’t fix its “Buy” buttons?

I suspect by now a good many readers know that, as a result of a disagreement over the pricing of e-books, Amazon has “temporarily” removed all Macmillan titles [which includes Tor titles… and all of my books] from its online sales operation. For some time, Amazon has been listing the majority of its Kindle titles at $9.99. In addition, more recently, it has been making the Kindle titles available, at least in the case of my books, almost simultaneously with the initial hardcovers.

Amazon wanted the price to start at $9.99 and decrease from there. It’s hardly surprising that Amazon wanted a ten dollar list price because Amazon had been losing $4-$5 on all those ten dollar e-books, at least in the case of new releases, in the hopes of establishing what amounted to a market monopoly on e-books, at least until Apple’s latest news. Jeff Bezos, the CEO of Amazon, justified this stand by saying that e-books should be cheaper than hardcovers because they don’t have to be physically printed. But… e-books already are cheaper.At $15.00, an e-book of one of my titles is 46% less than the list price, and more than 10% below the super-discounted hardcover price.

The reader advocates and Bezos have made the point that the incremental or marginal cost of “producing an e-book” is almost nothing. Unhappily, this argument not only misses the point, but is fallacious. Here’s why.

First, the production costs of a book go well beyond the paper and binding. The president of HarperStudio, a division of HarperCollins, noted in the Los Angeles Times that his costs for an e-book were three dollars less than for a hardcover, not the $18 less claimed by Amazon. The reason for this is that the author has to be paid, or he or she isn’t likely to keep writing books. Then there are editors, assistant editors, proofreaders, and copy-editors to be paid. They happen to be there as part of the review and quality control process, and, until you’ve read the first drafts of some authors, you have no idea how critical they are. Then there are artists and illustrators, and even e-books have covers, even if only electronically reproduced. In addition, there are the sales representatives, who have to persuade booksellers to buy books. Why are they necessary? Because the booksellers don’t have enough people and enough time to sort through every single book published each year, among other things. There are also contracts attorneys, publicists, and accountants. Like it or not, publishing is already one of the lowest profit margin industries in the U.S. Last year was so bad that virtually every single fiction publisher either laid off employees or didn’t hire as many as left through normal attrition.

The argument used by some readers and Amazon is that e-books are an “afterthought,” something that can be created electronically after all the other costs are attributed to the hardcover and mass market paperback. Yet… if the devotees of e-books are right, and they are the wave of the future and end up becoming a major fraction of the copies of most fiction titles, how can a publisher not spread the costs across all formats being sold?

Second, what’s been overlooked is the fact that a tremendous number of book titles actually lose money. Depending on the publisher and the year, that can range from as little as 30% of all titles published to more than 60%. That means that successful books not only have to cover their own production costs but the losses from unsuccessful books if the publisher is to remain in business.

Third, hardcover sales of successful books effectively subsidize paperbacks or less successful books. Ten-dollar Kindle books would have created price pressures that would either reduce the sales of hardcovers or replace them with e-books, and as more adaptable e-book reading devices become available, that would reduce overall revenues even more than would $15 e-books. This, in turn, would reduce the ability of publishers to try “new” authors and approaches, and would likely result in more “mass” entertainment and less diversity in a field that is already having trouble publishing books for limited audiences.

What about the small presses? Aren’t they supposed to fill that gap? Some are, and in the F&SF field, they’ve done well… BUT… what most small presses cannot do is offer a national exposure to a range of new authors. Doing that takes the resources of a large publisher, and they’ll do less of that in a marketplace based on the lowest possible price.

Now… is all this just a ploy to “justify” the status quo for my own benefit? No. I already have a defined “brand.” Even over the short time Amazon is boycotting Macmillan I will possibly lose some revenue, and had Amazon prevailed in its demands for ten dollar e-books, I probably would have lost more over time, wherever the e-book pricing point settled, but not enough for the publisher to stop publishing me. But that’s because I’m an established author, even if I’m not rolling in the millions as some are. Had Amazon been successful, it would have hurt beginning and mid-list authors, and it could have destroyed some careers, because what Amazon wants is to sell lots of cheap books, regardless of the effect on authors or discriminating readers.

I don’t have a problem with “cheap books.” I do have a problem with Amazon claiming lofty arguments for those “cheap books” and rationalizing their predatory scheme with fallacious arguments, supported by what amounted to blackmail, and their low cost to Amazon being subsidized by everyone else.

And from Amazon’s grudging concession to Macmillan, so did a lot of other readers.

I love my computers… mostly. But computers aren’t exactly what they seem to be for most people, and the wide-spread proliferation of computers and their omnipresence has had good effects and bad. One of the worst is that the “computer age” has generated a host of illusions that have, in general, had pervasively negative effects.

The first illusion is one I’ve mentioned before — the illusion of choice. The internet and the world-wide web — as well as satellite TV — offer an infinite array of choices, don’t they? No… not exactly. If… and it’s a big IF, often requiring considerable expense to someone, you have access to all the university libraries and research facilities through the web, there’s quite a bit to be found. The problem is that, first, most people don’t have universal access or anything close to it, and, second, even for those that do, the search systems are rudimentary, if not misleading, and often simply cannot find information that’s there. More to the point, for general users, the information resembles the “Top 40” in hundreds of different formats — the same two paragraphs of information in infinite variety of presentation. The same is equally true of the software tools available. And it’s definitely true of all the varieties of TV entertainment. Yes, there’s great choice, and most of it’s in the packaging.

The second illusion is what I’d call the illusion of completeness. Students, in particular, but a huge percentage of those under thirty have the illusion that all the knowledge and information can be had through the internet. Just as an illustration I did a search on Paul Bowles, the composer and writer, and came up with a theoretical 285,000 references, which boiled down to 480 discrete references, which further decreased to 450 after deleting the other “Paul Bowles.” Almost 20% of the references dealt with aspects of his most famous book — The Sheltering Sky. Something like 15% were different versions of the same standard biography. Three other books of his received about 10% each of the references. From what I could determine, more than ten percent of all entries were totally useless, and over 70 percent of the detailed references, which might provide unique information, were either about works for purchase or articles or studies not available online. That’s not to say that such an internet search doesn’t provide a good starting point. It can, but, unfortunately, the internet is exactly where most students and others looking for information stop.

The third is the illusion of accomplishment. Americans, in particular, feel that they’re working harder than ever, and the statistics tend to support it. But what did all that work accomplish? With all the emphasis on reports and accountability, businesses and institutions are generating more reports and data than ever before in history. With email and cellphones, the majority of North Americans and those in the industrialized world are “instantly” available. With this instant access, supervisors, customers, and governments all want answers “now,” and more and more time is spent responding rather than “doing,” and all the need to respond to all the inquiries limits the time available to “do.”

The fourth is the illusion of the “quick and perfect solution.” In the world of the mass media, entertainment, and computers, problems are resolved in an hour or by the judicious application of software [and if you can’t make the software work, that’s your problem, not the software’s]. Combine this with the niche-fragmentation of society, and each group has its own “perfect solution,” if only those “other idiots” would understand why what we’ve laid out is THE answer.

The fifth illusion is that of “reality.” Both the entertainment industry and the computer wizards are working hard to make the unreal look as real as possible and to convince everyone that everything can be handled electronically, and that there’s little difference between “electronic reality” and dirt-under-your-fingernails reality. That bothers me, more than a little, because electronics don’t convey the blood, sweat, striving, and agony that fill all too many people’s lives, and that lack of visceral appeal leads to more and more decisions based on image and profit — exactly exemplified in bankers who make million dollar bonuses while police, firefighters, and teachers have their wages cut and/or frozen whenever the economy dips.

But then, of what use is reality when illusion is so satisfying?

With a military escalation in Afghanistan estimated to cost one million dollars per soldier per year, a health care legislative package that could cost trillions, not to mention escalating costs in dozens of federal programs, both the Administration and the Congress are looking for ways to come up with more funding and/or reduce the cost of existing programs.

The easy target, of course, is to aim at the “undeserving rich,” such as Wall Street hedge fund managers and investment bankers and tax them more heavily. And between the expiration of the Bush tax cuts and various administration and Congressional initiatives, it seems unlikely that the “rich” will escape greater taxation. The problem there, of course, as I’ve noted before, is that most of the “undeserving rich” will escape the majority of the proposed taxes, while the upper middle class will pay for most of it, because, for some strange reason, the political mindset is that anyone who makes over $250,000 is rich. Yet, in practice, most tax avoidance strategies don’t work for couples who make between $250,000 and $400,000. In fact, the more money you make, the better they work. So these tax increases will hit the hardest on those couples in high cost-of-living cities, such as New York and San Francisco, particularly those where both spouses work long hours and who, facing high mortgage and schooling costs for offspring, would laugh bitterly at the idea that they’re rich. Do they really “deserve” to be the most heavily taxed segment of the population? Certainly, they’re anything but poor, but for the most part, the vast majority of their income is earned through long and hard work, and they’re not the ones with the mansions and the yachts and the fabulous vacations.

At the other end of the income spectrum are the “poor.” Like the “rich,” this catch-all definition includes all manner of people, except the poor range from third-generation welfare recipients to hard-working minimum-wage level families, from drug-addicts to disabled individuals who need support services, either to work or just to live, from the able-bodied employable unemployed to the mentally-disabled unemployable. And society has effectively said that all of them are deserving of governmental aid, in some form or another, if not in several forms.

But… exactly who is “deserving,” and of what are they deserving?

Both the Iraqi and Afghan people deserve better governments and lives, and we “deserve” not to be at the mercy of terrorists — but “deserving” or not, does spending all those resources and lives in the Middle East really make sense? On the domestic front, why should middle-class taxpayers subsidize families and single mothers who knowingly have child after child that they cannot support through their own efforts? Why should hedge fund managers who get multimillion dollar bonuses for gaming securities in such a way that it continually threatens our prosperity pay lower effective tax rates than say, primary care doctors or college professors? Why should taxpayers have to fund rehabilitation efforts for teenagers and adults who make bad choices and become addicts?

One answer, of course, that applies to the “poor” is the children. If society doesn’t maintain some living standards for the poor with children, the argument goes, then the cycle of poverty and violence is merely repeated generation after generation, and besides, the children “deserve better.” But with forty percent or more of the American population paying no income taxes at all, virtually all of them, despite the rhetoric, either working-class or poor, and something like 20% of the remainder paying 80% of the taxes, how long before the “needs” of the “deserving” — both internationally and domestically — overwhelm the American mid-middle class and upper-middle class?

Don’t they “deserve” some consideration as well?