What is Money?

December 18th, 2013

Do you know what money is? Yes, the stuff in your bank account or wallet is, indeed, money, but there’s more to say.

We need money because barter is inherently inefficient. If you have some sort of “common store of value,” you figure out one price for your own offerings, and then everyone else does the same, instead of negotiating an exchange rate for every pair of goods or services that could be exchanged. You only have to carry money with you, instead of a wheelbarrow full of whatever you make.

The simplest definition of money is: a common store of value, the common element used to describe all prices.

Anything can be money, and a surprising number of things have been money. Cowrie shells are one example that most folks have read about. Wampum made of drilled shell beads is another. But there have been dozens of different things used as money.

So far, so obvious, and so very uncontroversial. But from here on, the going gets complex, and the controversy starts.

There is nothing that has any exchange value in and of itself. It only has an economic value if someone wants it, and if two (or more) people agree that “so much of thing X” is worth “so much of thing Y.”

This is far more true of money. Money is entirely a social construct. You can’t have money without having a governing body that stands behind it. Even if you use an object that has value on its own, someone has to standardize the weights and measures, and someone has to certify that the thing is genuine or pure. If you don’t have standardization, you’re back to barter, with separate negotiations every time.

Money, by definition, has to be controlled by a governing body.

Common sense says that an object that has a lot of value on its own is a better form of money than one that does not. The most popular example is precious metals. Gold and silver are real things you can hold in your hand, and they’ve been used as currency for centuries. They’re valuable in their own right for use in chemical and industrial processes, as well as for jewelry. Surely, then, they’re better, more stable, more effective as money than a piece of paper we’ve declared to be currency? No, they’re not.

Gold and silver do have value. But that value is not different in kind than the value of any other thing. It rises and falls as the uses for the metals gain or lose importance.The value also rises or falls with the discovery of new sources of gold or silver, as well.

Precious metals trading, like all other commodities trading, is a very risky form of gambling. Fortunes are regularly lost this way.

If you base your money on something that is riding its own roller coaster, your economy follows suit. On top of that gyration, you add the economic cycles that come from the rest of the activity that’s happening.

Remember the machines that medieval astronomers used to calculate the motion of the stars? The ones with wheels on wheels on top of wheels, all spinning madly around? That’s what an economy based on an item with a volatile value of its own does. It’s pretty to watch if you’re standing to the side and the motion is abstract. But roller coasters like that are only fun to ride if you’re in an amusement park. It’s absolutely no fun when the roller coaster is your economy, and the thing being turned upside down is your livelihood!

This is all theory, right? Nope. We’ve seen it in practice. In the times when gold and silver coins were the currency, economies regularly crashed or soared because of fluctuations in the intrinsic value of the metals (as vs. their value as currency).

For just one example: Spain went through one paroxysm after another when the treasure galleons were bringing bullion back home. The value of gold and silver, as metals, dropped precipitously, because the supply spiked. And this happened independently of all the rest of their economy. Its after-effects meant that Spain missed out on most of the Industrial Revolution.

Back then, gold and silver were most valuable as jewelry or coinage. But these days, we’re using them for so many things that there are many, many more reasons for the value of the metals to be volatile.

If traditional currencies aren’t ideal, what is? If you want to avoid “extra” bubbles and crashes, you need a currency that has almost no intrinsic worth — one that is valuable only because we have all agreed to use it as currency.

But it has to be rock solid.

Today, that’s a currency backed by the “full faith and credit” of a major economic powerhouse. Examples are the paper or electronic money regulated by the US or the EU. The paper itself has little intrinsic value, and what value it has is ignored by all who use it. When the paper changes, the value of the currency does not.

These forms of money do shift with the economic strength of the countries sponsoring them, but only with the economy and economic forecasts. (Yes the political strength of the countries involved has an impact, but only as it is expected to impact the economy.)

The problem with this type of money is that it gives those governments a great deal of power over their economies. And no one likes to be controlled.

So now, is that power is a bad thing? Governments are run by politicians. Elected politicians are predictably prone to doing the expedient thing, rather than taking an unpopular but necessary course. Elected politicians tend to be good at politics, but can’t possibly have a deep understanding of every thing that the government controls. So, they’re likely to choose an emotionally appealing, but ultimately stupid, course of action.

Fortunately, our politicians are aware of that, and many decades ago, they took themselves out of the day to day, or even year to year, control of the money supply. Instead, they select a board of highly qualified, experienced, and highly educated specialists who in turn do the controlling. These few people aren’t elected, so they’re not vulnerable to the type of short-term pressure that politicians are. And they don’t have to know anything except how their own actions in regulating our money will affect the economy.

Is it bad that they have this kind of control? Shifting from the gold standard to paper currency did reduce economic volatility. With time and experience, the US Federal Reserve Board has made great strides in reducing the number and severity of our panics, depressions and recessions. It may not seem that way, since this has been happening over more than any one person’s life time. But it is true. The more control over the money supply that our government has had, the better off we have been, over the centuries.

Is it better to avoid economic consequences or to have less governmental interference in things that affect us? Each person has to answer that question for him or herself.

For me, the control is beneficial, and its control is not such that I feel any negative impact.

Comments? Countervailing evidence?

How to Sell Books

December 9th, 2013

You all know that I’m not a marketing maven. But I have developed some strong opinions about what works and what doesn’t over the last couple of decades. Here’s the distilled version:

– Is it a good manuscript? In what way?

– Who is already looking for a book like that? Why? What needs are driving them? Even novels are read to fill a need. Define it more narrowly than entertainment: different people find different things entertaining in large part because they fill different emotional needs. Know the needs that your book’s audience wants to fill.

– How many of these target readers can you find? What media, social or old-style, are they following? Who influences them? What messages or stories are they paying attention to in those groups?

– How does your manuscript fill the needs that are most discussed in those groups?

– How can you increase the benefits that your readers will take from your book? How can you demonstrate that you can deliver those benefits? Tip articles, second serial sales (aka excerpts), short stories or anecdotes (for a novelist, especially), offering advice in social media, comp copies to influential figures: the list is long.

– Worry if you hear yourself say the word “should,” as in “Everyone with ADHD should read this book.” It’s a danger signal. It means your about to try to get people to pay to be force fed the things you think will help them, instead of allowing them to pick out the things they think they need.

And last, but not least, don’t spam. Don’t post information about your book with every comment on new media. Don’t advertise. Don’t give books away indiscriminately.

Instead, demonstrate the benefits that your book will deliver, without mentioning it prominently (or at all, in many arenas). Leave a trail of breadcrumbs so that those who like what you have to say can figure out that you have a book, but don’t be in their face about it all day long. Those who are interested will find the book, and they’ll be so proud of themselves and their relationship to you that they’ll give it great word-of-mouth buzz. That’s effective marketing.

Reader-centered marketing. It works.

Marion’s Rules

May 17th, 2012

I’m procrastinating. Today, that means I’m blogging. I hope that the following helps you avoid whatever you don’t want to do right now, too!

The RULES of PUBLISHING, according to me:

It depends.
This one answers almost every question I get on-line and off, when it comes to making books and making a profit at the same time.

Publishing is high-stakes gambling. Don’t risk anything you can’t afford to lose.
There are no sure things in this business, and I have the stories to prove it.

Publishing is addictive.
Consult your accountant and psychiatrist before you begin.

New models that will revolutionize the industry arrive regularly.
And some of them actually do change things. But never as much as the pundits predict, especially if these pundits are from outside the industry.

There are no shortcuts to success.
And if you think you’ve found one, look harder. There’s something waiting out there in the woods to jump out and bite you.

Copyediting is not the same thing as editing.
And you need to do both!

There is no such thing as a book without competition.
In the US, at least. In a smaller market, it might be more possible.

Marketing to “all readers” is the same as marketing to none.
Know your reader(s), first, and everything else follows.

Marketing works best when you’re helping first, and selling second, or not at all.
Most people have an utterly different picture of marketing. In my experience, marketing works best if most of your audience doesn’t even realize that you’re engaged in marketing. They should be thrilled to get the help or the information or excerpt or whatever it is that you’re putting out there, and then they should think that it’s their own idea to go look for your book.

I’m sure that there are more. What are your favorite rules?

And which of the rules above do you disagree with?

Vampire Myths: The Ones We Simply Can’t Kill

January 15th, 2012

Do you have an authors’ or writers’ myth you’d love to kill? Ones that just keep going in defiance of all logic and reality? I have more than a few, and I’m collecting yours today, too!

Myth #1: The way to get published is to send your manuscript, in full, to a publisher or agent.
Why would they want your full manuscript before they ask for it? They have the instructions all over their sites, and all say to send queries or proposals. Many say that unsolicited manuscripts will be returned unopened. Believe them!

Myth #2: Editors will change your work until it sounds like them, not you.
Not if they’re any good, they won’t. The purpose of an editor is to help you figure out how your book can work better for the reader, while remaining true to your vision of it. That’s why one editor can have many very different, but excellent, authors on his or her list.

Myth #3: Editing is about fixing spelling and grammar.
That’s copyediting or maybe proofreading. Editing is about fixing the structure of the book, and the macro issues. Some of the small stuff may be caught along the way, but that’s not the point.

Myth #4: Big publishing is terrified of the self-publishing’s new modes, especially the e-book revolution.
Wish fulfillment, anyone? 99% of all manuscripts that float around are not worth publishing. They’re either so bad that it’s not worth trying to fix them, or they are good, but have a very limited market. So now, those manuscripts are going straight to ebook or being “POD published” (which is NOT the same as self-publishing with a POD printer). This is simply dumping the slush pile on an unsuspecting public, most of whom are showing the sterling good sense to buy elsewhere, or to do a pan review if they do accidentally purchase one.

Good stuff will sell, and be on the front pages of the on-line searches, and on bookstore shelves. And publishers still offer all the advantages that they always have. (Should this be another blog topic for later? Are you interested in this?)

I could keep going for a good long time, but I’ll give the rest of you a chance. What are your favorite myths? Skewer away!

Reversion Clauses in an Age of Change

October 17th, 2011

As the book business changes more and more quickly, we need to write flexibility and clarity into our contracts, in ways that are fair to all parties, and yet allow for futures we cannot yet see.

I see reversion clauses that have problems in this respect, but I think I have one that works. What do you think?

My reversion version:
Rights to this work shall revert to the author(s) when royalty earnings, exclusive of any reserves taken or released, have fallen below $XY for one full year. At that point, rights shall revert within 1 month of receipt of the author’s written request.

Possible variations:
–The publisher shall have the right to dispose of or sell any printed copies on hand at the time that reversion is requested, if the author(s) does(do) not choose to purchase that stock for amount it cost the publisher to print those copies.

–The publisher shall have 6 months from the date of request to issue a new edition or otherwise improve sales and royalty earnings.

So, what problems and misunderstandings might occur under this sort of contract? How would we fix those issues fairly?

Writer Beware vs. Another Troll-Blog

October 12th, 2011

Writer Beware is doing battle again on behalf of all of us who work in small press publishing and all of the writers who are entering the industry.

Go, read, comment and support them, and all the other writers and editors who have been attacked by the trolls.

POD: Some Very Good Questions

June 26th, 2011

Most of my readers know that POD publishing and POD printing are not synonymous. It’s entirely possible for anyone to set up a publishing company (which is totally trivial to do), and send a file into a POD printer. And you’ve probably heard that it’s a much better idea. The questions that many of you may still have include:
–Why is it a good idea?
–Would price per copy be the only reason for not printing with a POD?
–Is there a marketing or PR reason to use one POD over the other?

Why is it better to use a POD printer than a POD publisher?
Sometimes it’s not. Those times are when you expect to sell fewer than a 100 copies in the life of your book. This might apply to a gift edition of Aunt Peggy’s early poetry, or a family history.

When you have valid reasons to expect sales of a few thousand copies over a couple of years, then you should be using offset printing, and an inexpensive warehousing option. Or perhaps an inexpensive fulfillment house.

In between those areas, and in a few other special circumstances, you will probably do best with a POD printer. POD publishers charge much more per copy (although those charges are often unclear to the new author — they’re certainly not broken out for you). No one in this business can afford to give away part of their profit. It’s a very low margin industry!

Would price per copy be the only reason you would avoid a POD publisher?
No. POD publishers tend to charge very, very low rates for their design and layout services, but you’re not getting more than you pay for. The quality, although good enough to a besotted author’s eye, tends to seem “a little off” to regular readers who don’t know you, and to show glaring problems to the educated eyes of the people (reviewers, buyers for bookstores, etc) who stand between you and large numbers of readers.

Is there a marketing or PR reason not to use a POD publisher?
There’s the company you’re keeping. Most books produced by POD publishers are, I’m sorry to say, dreadful, in design and in writing. They’re often labors of love, but that can’t save them from an audience of people who don’t know the author. If your book is classed among these “book-shaped objects,” it’s easy for gatekeepers to dismiss it, without a single second’s examination.

And gatekeepers must weed out most of the books submitted to them immediately. There were 3,000,000 books published in the US last year. That’s one every other second, for the every working hour. Reviewers and buyers don’t get to look at books all day, every day. At some point, they have to read some and write reviews, or look at some longer, and decide how many to order, for which store or library branch, or do whatever else justifies their paychecks.

Oh, and one last reason why you may want to go to POD printer: your book might actually do well!
If your book “breaks out,” you’ll probably need print runs of several thousand copies each month. You can’t afford to give away half of the possible profit, or more, by not switching to offset. But if you publish through a POD publisher, when you want to change printing, you have to change the publisher. That means changing the ISBN (because the original one came from your publisher’s block), and that means starting over with all the marketing, reviews, and other momentum builders.

Most POD publishers also don’t sell you the rights to the cover or the layout. You pay for these things, but you don’t own them. So, when you need to start printing more inexpensively, you also have to get a new cover and a new text design, and that, too, will damage your sales momentum.

There are other reasons, of course, for any decision. And there are exceptions to every generalization.

When you’re making decisions about publishing:
–DO YOUR HOMEWORK FIRST! There’s usually a simple, obvious solution that’s quite wrong for your book and your bank account.
–Read books before you make books, because even blogs like this are much too short to cover all the important things you need to think about.
–Crunch your numbers. Your P&L spreadsheets should be at least 2 pages, if they’re to include all of the important variables.
–Be aware that the popular press is an unreliable guide to the complexities of something like this industry.
–Don’t blindly follow the herd. It may be thundering over a cliff.

BEA 2011

June 3rd, 2011

Overall Impressions:

–Reed and the Javits staff have found a way to obscure the fact that it no longer fills an entire floor with exhibitors, but there was plenty of space around the edges for curtained enclosures and meeting rooms of various types.
–Despite the small number of exhibitors (or perhaps because of it), the aisles were full, and the mood seemed upbeat, enthusiastic and intent. I heard far less of the “this will be the last show” chatter.
–The “concurrent events” brought new blood into the mix. This bodes well for the future. Unfortunately, the total attendance didn’t go up with the inclusion of this new blood. That doesn’t bode as well.
–Oddly enough, I saw far fewer of the independent publishers’ booths and the denizens of Writers’ Row. It could be that the word has finally gotten out that those locations aren’t really offering the full benefit of being at the show, and that this isn’t a place where you go to sell a bunch of books on the spot.
–This was the “All Ebook, All the Time” BEA. I know that e- is the coming trend, and I certainly advocate being aware of how it can be used in your own publishing, and what the pros and cons are for your operation, but surely we could have found more topics to discuss? Maybe next year?

I attended one very interesting lecture, and yes, it was ebook-related. The presenter was from Attributor. If you publish in niches that suffer from large amounts of organized piracy, I would invest in their services. They search all of the darknet and legitimate file sharing sites (after all, there are legitimate reasons why you might need to upload things, for example team projects where people are telecommuting). When they locate files that might be caches of pirated material, use AI and expert systems to rank the most probably-pirated of the millions of files found, and then have humans examine them to prevent false positives.

Then they do a tiered enforcement action, resulting in a 99% success rate in getting the illegitimate material yanked, or converted to a revenue producing legitimate sales site.

But Self-Publishing Makes So Much More $

March 22nd, 2011

A number of bloggers, including, most prominently, Joe Konrath and Barry Eisler, have talked about how self-publishers make more money than traditionally published authors. This can be true. More often, it’s not.

It is obvious that you can get a higher share of the total revenue if you cut out a middleman, or even several of them. BUT a larger share of a smaller total may not equal more money in your bank account.

Before you jump on the bandwagon, wise authors will consider a few things, such as:

How much will your sales of print books shrink when you no longer have a large press’ distribution muscle behind you?

How much will your subsidiary rights income shrink? Are you clued-in enough to sell your own? Which ones? First and second serial aren’t too hard, but translation? Audio? Or hardest of all, movies?

How much extra time or money will you be spending upon doing, or getting done, all of the editing, cover design, marketing copy, file conversion and proofing, and so on that publishers do?

Will you earn enough more to re-pay that extra investment of time or money?

When you are contemplating the best use of that manuscript you just spent hundreds or thousands of hours writing, it should be worth a few dozen hours of your time to learn about and evaluate the options available.

Go buy some books on the publishing process, and on running a publishing company. (That’s what a self-publisher is, like it or not.) Pull up your copy of Excel and do some spreadsheets on various possible courses of action, using real numbers from books that would be comparable to yours. (And if you don’t know how to get those real numbers — read some of my other posts!)

As always, you are invited to tell me where I have it wrong, or to ask me to explain myself!

A Chance to Do Well While Doing Good

February 7th, 2011

I have donated a 2 hour consult, plus assorted extras, to a charitable auction. I would normally charge $200 per hour for the consults, and $55 for the book and software package, so this is a $455 value. The crowd is not focused on publishing or writing, so the chances are that the item will go for a very low price. It’s here.

The auction supports The Lang School, which is a very special place indeed. They work with children who are simultaneously brilliant and learning disabled. You can probably imagine how frustrating and difficult it would be to walk in their shoes, especially in either normal or special education environments.

One of these kids could be the next Einstein, but without the support of an environment tailored to them, most will spiral into a cycle of failure, let alone realizing their potential and becoming the forces for good that they could be.

If you want to support the school, you can bid on the item above, or one of the others in the auction, at Bidding for Good. If you visit the school’s site, you can find out more, including this link for donations.

And finally, if you live in NYC, you can always come to the party, this Thursday, February 10. It’s called Cocktails at the Cabanas, and you can get a ticket here. I’ll be there, and it looks like it will be a lot of fun, as well as supporting a wonderful cause.