Paperback now available in Europe

The paperback version of Newton's Ark should be available via Amazon in Europe from tomorrow for £5.99 or €6.99.

US pricing for the paperback is $7.99.

If you're really worried about price though, the Kindle edition is a bargain at $2.99 (or the equivalent in pounds or euros). Interestingly, I make a bigger royalty on a $2.99 kindle edition than I do on a $7.99 paperback.

That makes it hard to see how traditional publishers can justify asking almost as much for the Kindle version (and sometimes more!) than for the hard copy. e-books should be considerably cheaper, not only because they are much cheaper to produce and distribute, but also because they are more restrictive (you can only lend them once ever, if at all, and you can't resell them) which ought to mean more sales. The disruption of the publishing market has really only just begun.

Book pricing in Australia

I'm in Australia at the moment visiting family and while I'm here I've been into a few book stores. Shocked is the only word I can use to describe my reaction to the price of books here. Take, for example, Caleb's Crossing, the latest book by Geraldine Brooks (I haven't read it but I loved People of the Book). It is available on Amazon.com for $10.88 in paperback and $16.17 in hardback; it's nearly $25 (in paperback!) in the book store here.

For all Australian readers, I would say if you don't have a Kindle buy one. Now. Forget about walking the dog. Forget about feeding the kids. Jump on Amazon.com now and buy a Kindle. Caleb's Crossing and lots of other great books are only $9.99 on Kindle (and even the 'expensive' books are $12.99). Not to mention there are lots of books like mine available at the ridiculously cheap price of $2.99.

Krugman and space aliens

In an attempt to justify more Keynesian stimulus spending, Paul Krugman has suggested a strategy which has now most cleverly been dubbed Wag the Dalek - yes, a fake invasion by space aliens to justify massive government spending.

Actually, given the consistent Keynesian failure to understand that every dollar the government spends is a dollar not being spent by taxpayers themselves, I'm a little disappointed that Krugman didn't advocate a real alien invasion. Imagine the jobs created rebuilding our civilization once those helpful aliens blast us back to the stone age with their death rays.

It's all too bizarre for words. I do see the work of aliens here, but what I really think has happened is that the Nobel prize winning economist we called Paul Krugman has been replaced by an alien pretending (not very well) to be Paul Krugman. Seriously. How else can you explain this guy seeming to have unlearnt everything he ever knew as an economist?

Update: You can buy a (slightly geeky) t-shirt that makes the point:

Sydney airport deja vu

I'm sitting in my home office in Steamboat listening to the the radio from Australia on the internet.

The Australian Minister for Transport is currently talking about the need for a second airport in Sydney.

I have two words for him: Badgery's Creek.

That was the name of the second Sydney airport announced by the Australian Government in mid-1989. It was a political sop back then. I know this because I was part of the small team that put the proposal together to provide political cover to get approval to build a third runway at the real Sydney airport (whenever I land on 16L/34R, I like to think of it as "my runway").

It's still a sop now. There are very few cities that successfully run more than one major airport. New York, London, Tokyo, Paris and Chicago come to mind. All much bigger cities than Sydney.

One of the things the Minister was just rabbiting on about was that demand for slots exceeds supply. The best way to match supply and demand and to ensure a resource is allocated to its highest value use is via a very secret mechanism economists call price. In the context of airport slots that means auctioning slots off to the highest bidder. Of course that's not how it works. So I have zero sympathy for bleating about excess demand.

Traditional publishers are idiots

Look closely at the pricing on Amazon for this book. The hardcover is $7.99 and the Kindle edition is $9.99!


Electronic books cost less to produce and distribute than physical books, there are no costs for inventory or returns, you can't lend them and you can't sell them when you are done. So they should always be priced lower than the physical book.

This is not Amazon's fault. The initial Kindle pricing model was that Amazon would set the prices. The publishers disliked that so much that they threatened to withdraw their books from Amazon with this very publisher, HarperCollins, leading the charge.

You might wonder what HarperCollins' agenda is. I can only surmise that they hope that they can sabotage the move to electronic books and maintain their current business model. Of course they would think that, because resisting digitalisation has worked so well for the entertainment industry!

When Amazon write "this price was set by the publisher" I don't know how they can resist adding "who are complete idiots and deserve to go the way of the dinosaurs."

Update: 6 October. I wrote this before I saw this article on the same subject in the New York Times.

The article discusses two specific examples and the publishers are quoted as saying "...those two books were the first they knew of that cost more as e-books than in hardcover on Amazon." Not only are they idiots, but they are either liars or completely and utterly clueless. I've seen dozens of examples on Amazon including some where the electronic book is more expensive than the paperback!

Hopefully enough pressure is building on publishers to stop this nonsense. By the way, I think the New York Times is much less imaginative with its headlines than I am!

What a difference one letter makes

I've obviously been spending too much time reading and thinking about the Global Financial Crisis.

I say that because I was driving from the Gold Coast to Brisbane when I saw the following on a variable road sign: "Unsecured loads cause crashes."

My reaction was to ask "why is the roads department commenting on economic policy?". Because I read it as: "Unsecured loans cause crashes"!

Pretentious BS

Apparently the world's best restaurant, El Bulli, is closing because it loses money.

If the amount people pay doesn't exceed your costs, your business is by definition a failure. You however may not be a failure; better to try an idea and fail than not to try at all. But if you've got a massive waiting list and you're too stupid to raise your prices, then you are a failure.

Yet we are supposed to get all excited about places like this, to lust after going there. Personally there's a thousand other things I'd rather do with the time and energy it would take to pursue this or many other over-subscribed events and locations. They may not provide the same bragging rights, but the choice between living your life for your own enjoyment vs. impressing other people seems a no brainer to me.

Best comment on the current economic crisis

I've been reading a lot about the economic crisis, including a lot from economists who are universally pessimistic about the Administration's response. I've avoided commenting for want of something original to say. But this blog post summarises the situation so well I have to repost it here:

Money flows out to the folks on Wall Street who bankrupted their firms, to schoolteachers who’ve failed to teach their students, to government workers who feel that simply showing up to work is a heroic achievement, to executives and union workers in America’s oldest and least competitive industries. If times are tough and money is tight, that means almost nothing is left over for productive investment. What would have been a short recession will turn into a long depression and decades of higher taxes and slow growth to pay for all of the cash ladled out.

Best argument yet against the bailout

Here's the best argument I've seen yet against the $700 billion bailout:

Once signed into law, Treasury would begin a process to determine the assets it will buy and the manner it will set a price. Like everything in government, this is a moment that is lobby-able. Expect swarms of financial services lobbyists, investor groups, housing advocates, and others to try to game the system for their individual clients or members.

If you don't believe we're on the path to the mother of all special interest feeding frenzies, think about this. In the midst of what our political leaders claim is the greatest economic crisis to face America since the Great Depression, a situation so dire as to require unprecedented urgent and bipartisan legislative action on massive scale, Senators could simply not restrain themselves, adding $150 billion of pork to the bailout bill.

On the financial crisis

As much as I have no great desire to live in Michigan, I wish I lived in this guy's district because it would be so nice to have a candidate I could vote for without having to hold my nose.

This pretty much sums up my position on the bailout; let the market do what it's doing, correcting for past excesses; let those who gambled on the bubble wear their justly deserved losses; and let the Government stop thinking that it can repeal the laws of economics with my money to buy the votes of those who were too stupid to think twice about what they were doing.

If you bought a house with no money down - you're a fool.

If you bought a house believing that you'd sell it in a year and make a killing - you're a (greedy) fool.

If you bought a house with an adjustable rate mortgage and didn't think about what you'd do when the rate reset (to a higher level) - you're a fool.

If you're a bank that issued a mortgage with no money down - you and your shareholders are fools.

If you're a financial institution that bought mortgage backed securities without caring to understand the true risk of the underlying loans - you and your shareholders are fools.

I'm sorry (well actually I'm not), but I don't tolerate fools terribly well. And I certainly don't want the Government taking my hard earned money to reward them for their folly.

Shrinking phones (and inflation?)

We take a lot of technological progress for granted these days, partly because we've become so used to it and partly because it sneaks up on you gradually. But every now and again you get a sudden jolt that reminds you just how amazing the improvements in technology are.

That's what happened when my wife recently got a new phone.

Here's Marie's old phone obtained in 2002 at a net cost of $50 ($90 with a $40 call credit).

Here's her new phone obtained last week at net cost of, well nothing ($20 with a $20 call credit).

What's my point? Well look at them side by side; the new phone is tiny in comparison.


And yet in this package that's about 15% of the volume you get a full colour screen vs. a green LCD, you get a built in web browser, you get polyphonic sound vs. a tinny mono speaker and the list goes on and on.

There's an important point here, not just about taking technology for granted but also about economics. Most economists will tell you that in our period of rapid technology improvement traditional measures of the Consumer Price Index overstate inflation because the items they are measuring now are not the same as the items that were measured in the past but are in fact much better. This case demonstrates that issue beautifully. How do you factor into the CPI something that has gone from $50 to $0 but is ten times as good? That's a problem that's more than hard to solve, it's damn near impossible.

Historic preservation

One issue that's been on the agenda in Steamboat in recent times with all the development going on is historic preservation.

To the credit of the current City Council they are moving in the direction of a completely voluntary code. That is the only approach that is consistent with a meaningful concept of private property. It's one thing to restrict what I can do with my property if it harms others, it another to restrict my property rights in order to benefit others.

Unfortunately there are still plenty of players in this town who are ready to impose costs on the private owners of historical structures for the "benefit of the community." Here's an idea. If historic preservation is so valuable to "the community" how about they put their money where their mouth is and pay private owners to preserve properties. It always focuses the mind to have to pay for one's high minded ideals doesn't it?

Not so Great Britain

For a country that used to rule an empire on which the sun never sets, it's a long way to fall, but I think the final votes are in: Great Britain has the world's worst major airport in London Heathrow.

If it wasn't enough that (alone of all the world's airport operators) BAA has imposed it's own more restrictive hand luggage policies because it's too damn cheap to hire enough security staff, now we have British Airways telling customers they can't check any bags!

Imagine turning up at Heathrow to fly home (say to Denver, as I've done three times in the past six months) to be told "sorry guv, you'll need leave the suitcases behind"!

The crazy thing is that unlike most cities where there's an element of natural monopoly to the airport business, London actually has huge amounts of traffic along with two major airports (Heathrow and Gatwick) and two not so insignificant ones (Standsted and Luton).

The obvious solution is to have them compete with each other. Of course that's not so obvious to the bright sparks pretending to govern Britain who in their infinite wisdom continue to let BAA operate all four airports at a standard which can only be categorised as a global embarrassment.

Open skies?

Australian newspapers are reporting on plans by Virgin Blue subsidiary V Australia to start trans-pacific flights in competition with Qantas as a result of Australia and the US signing an "Open Skies" agreement.

Unfortunately all this agreement does is allow US and Australian carriers to compete on this route without capacity controls. It doesn't allow for open anything.

What's the effect? Continued daylight robbery on the part of Qantas who compete only with United* for direct flights.

Let me demonstrate. Let's say I wanted to fly business class from Los Angeles to Sydney on May 20 returning June 17 (which I actually do, to attend my cousin's wedding and take care of some other stuff, not to mention catch a couple of Brisbane Lions games). It's going to cost me $US17,778!

Now let's imagine I want to make this trip from London to Sydney on the same dates, also in business class. Now before you see the price remember that this trip is about 75% longer. What's it going to cost me? £3,376 or $US6,621. That's about a fifth of the cost per mile.

The only difference is that excellent airlines like Singapore Airlines and Emirates compete with Qantas between Australia and Europe. Over recent year's they've lobbied the Australian government unsuccessfully to enter the trans-pacific route. The government's justification for keeping them out is that it's somehow good for Australian tourism and jobs. As far as I'm concerned the only jobs this policy is creating are for Air New Zealand.

So when the Qantas CEO Geoff Dixon says he welcomes the competition, what he really means is he's glad he can go on screwing trans-pacific business travellers and extracting excess profits thanks to this artificial market shortage created by the "wisdom" of government regulation. All I can say to Mr Dixon is "you're absolutely full of it mate".


* The world's second worst airline. Exceeded in their hopelessness only by Northwest.

Queuing theory

A short but interesting post over at Jane Galt on one of my pet hates - separate queues for multiple service points.

There ought to be a name for this kind of phenomenon - where anyone who has studied the issue knows the answer is A, but 95% of the world persists with B. Free trade is another example. Every economist in the world knows that free trade is good, but the great majority of people persist in thinking it's a bad thing.

I remember being stuck once in an immigration queue at Ben Gurion airport in Tel Aviv for 30 minutes behind a lady from Mongolia. I suspect the Israeli immigration agent didn't even know where Mongolia was, let alone get his head around a Mongolian wanting to visit Israel (perhaps she was a member of one of those long lost Jewish tribes?) And there was absolutely no way they'd let me move to another line!

Close the borders?

Colorado Congressman Tom Tancredo is leading the push to close the nation's borders. I don't question his loyalty as an American but I do question his loyalty as a Coloradan, because if it makes sense to close the national borders it must make sense to close state borders.

So it's time Tom for you to start agitating to build a great big fence around Colorado and to recruit a few thousand armed men and women to stand guard. Time to stop all the boring people from Kansas, gay-lovers from Massachusetts, pot smokers from California and people who talk funny from Texas from moving here, forcing up property prices, taking 'our' jobs and generally ruining our state. While we're at it, let's slap some massive tariffs on sugar and oranges from Florida and cars from Detroit. Finally, don't forget that the rest of the US is full of terrorists like Timothy McVeigh, the Unabomber and whoever sent the anthrax. Got to protect Colorado from these evildoers.

Sounds crazy doesn't it? But if it doesn't make sense for Colorado to close it borders to the rest of the country, why does it make sense for the US to close its borders to the rest of the world? If it makes sense to allow poor people from rural Alabama to move to Colorado in search of a better future by working hard, why doesn't it make sense to allow poor people from Mexico to come to the US to do the same? If it makes sense to buy sugar from Florida because they can grow it much cheaper than we can in Colorado, why doesn't it make sense to buy it from Australia who can produce it even cheaper still? And are you any less dead if you're killed by a domestic terrorist rather than a foreign one?

The idea of closed borders taken to it's logical conclusion gets you North Korea. All Americans would agree that's a bad thing. But if we all agree that a big dose of economic and social isolation from the world has horrible consequences, what logic tells us that a moderate dose of the same poison is good for us?

Hail our self-appointed Commissar

Here's a letter to our local newspaper from a resident who'd like to turn Steamboat Springs into a People's Republic.

Walgreens is proposing to build a new store here. It's bad enough that they have to jump through numerous hoops to satisfy additional planning requirements imposed by our left-leaning community on "big box" retailers. Apart from satisfying the City Council's self-appointed and self-important arbiters of architectural taste by modifying the external look of the proposed building and landscaping, the developer has gone so far as to offer to provide affordable housing as well. In fact, The City has been jerking the developer's chain for over a year now and has moved the goalposts several times, but the developer has been nothing but the picture of co-operation.

But that's not enough for this budding Commissar:

The Today [our local paper] asserts that Walgreens should be approved for the simple fact that the developers have successfully negotiated the "big-box" ordinance review and done as the Steamboat Springs City Council asked. In short, the Today is arguing that because the developer correctly checked off the boxes of the planning process, thus empowering the City Council to have it built "our way," then it should get the thumbs up.

...My question is this: Why Walgreens? What can a person get at Walgreens that you cannot already get in town? ...I am not against development, but big business can be managed only at a local level, and it is up to us and our council members to do this. Just because it is getting "built on our terms" does not mean that it is a good idea. I'm simply not convinced that Walgreens is the best idea.

This guy wants the government to decide which stores can come to town and which can't and to pass judgement on what ought to be sold and what should not. He goes on to try to justify it in terms of what the market is looking for:

We are a community built on tourism. People come here for a unique experience and glimpse of a unique lifestyle, Western and terrain park. In my opinion, these businesses such as Walgreens fall into one category: Generica. Nobody travels across the country to visit a place that is down the street in their hometown. How does this enhance the guest experience? How does this perpetuate this "local flavor" that has come to attract so many people?

Well here's an idea. If he's so sure nobody wants to shop there, why doesn't he just wait for them to fold, or better yet, put up his own money to create the type of retailing establishment he's so self-righteously convinced that everyone would prefer. Or better yet, he could move to an actual People's Republic like North Korea. They don't have any Walgreens there.

The evils of minimum wage legislation

An excellent post at The Liberal Order on the evils of minimum wage legislation.

It's always tough arguing against something like raising the minimum wage since it seems like a decent thing to do if you don't think about it too hard. You risk looking like a heartless bastard. But the difference is I have nothing personal to lose or gain from changes in the minimum wage. The true heartless bastards are those like labour unions who do stand to benefit at the expense of others.

Wages are nothing more that the price of labour. For those who missed Economics 101 if you raise the price of something you reduce the demand. It's as simple as that. And it's the poor struggling sorry bastards who are only just productive enough to justify being employed under current minimum wages that end up out of work (often replaced by a machine).

So at the end of the day raising the minimum wage amounts to taking the very lowest paid people in the workforce and giving them the pink slip. Does it still seem compassionate?

Private property?

I was in the Australian capital of Canberra last week and got to thinking about the implications of their approach to land ownership for compulsory acquisition ('eminent domain' as it is called in the US, an issue which has been in the news there lately).

All land in the Australian Capital Territory is owned by the Federal Government and is only available for private uses (including housing) on 99 year leases. This decision was made when Canberra was first established in the early 1900's, partly reflecting the prevailing socialist Utopian philosophies of the time and partly for the practical reason that you don't want to sell land freehold thereby making it harder to acquire it back over the next seventy five years as you build your capital city from scratch (the place was literally nothing but a sheep farm).

Actually this is an object lesson for those who believe in the prescience of government planners. Canberra is the most planned city in the world. If government planners always get it right, then they could have just come up with a plan to begin with, stuck to it and this would never have been a problem, would it?

As you can see from this Bill, in 1997 the Government found it necessary to extend leases from 99 years to 999 years. Why? Well, by that time some of the older suburbs in Canberra had been settled for nearly 75 years and these home owners were finding it difficult to sell their houses because prospective buyers couldn't get 30 year mortgages on properties with less than that period remaining on their leases.

Now lawyers may be able to argue until the cows come home about the differences between freehold and a 999 year lease, but I can guarantee you that in the mind of any average person, and especially someone who owns a home sitting on that land, they are indistinguishable. And that means politically they are indistinguishable. The political reaction to any compulsory acquisition will be absolutely the same regardless of whether the land is held freehold or leasehold. If there is enough political backlash the government will back off and if there isn't they will go ahead, whatever the legal, economic and social merits of their plans.

Nevertheless, I find that there's something disturbingly socialist and totalitarian about a place where you can't own land.

Can't find a cheap room in Aspen?

Then come to Steamboat. There's an article in USA Today on families being priced out of holidays in Aspen due to the redevelopment of older, less expensive accommodation.

The tone of the article - that this development is somehow surprising and some sort of tragedy - irks me a little. C'mon. Everybody knows Aspen is expensive and becoming more so. And it isn't like there aren't plenty of alternatives. The skiing in Steamboat is just as good (if not better) and a fraction of the price. If that isn't good enough for you, if you must have the cachet of Aspen, then fine, but just shut up and pay the price.

Sure I would liked to have lived in Aspen, but equivalent properties are five times the cost of Steamboat. My condo - 1,200 sq ft and walking distance to the gondola - cost me less than $200,000 in 2003. An equivalent property in Aspen would cost you $1.5-2 million. Do you hear me complaining that Aspen is too expensive for me? Not at all. In fact, I like to brag about how good a deal I've got here in Steamboat.

Rental prices are similarly much cheaper in Steamboat. So if you can't afford Aspen, don't worry, we've got plenty of champagne powder and world class skiing for you here in Steamboat.