The battle of the books:

L M McIntire writes : Mem Fox ( 16 July, comments) claimed that “Authors in the Western world own what is called ‘territorial’ copyright, meaning they earn a higher royalty in their own country: 10% for the average adult book, than on they do on overseas sales when they receive a reduced royalty of 6.6% or less. One of the current proposals of the Productivity Commission is that Australia alone, of all Western nations, should remove the local, territorial copyright of its writers, that is the right to earn a decent 10% royalty in the first instance, prior to overseas sales”

If this is what Mem Fox and other Australian writers believe it is little wonder that they can’t come to grips with what the productivity Commission is actually proposing.

Territorial copyright is not a term used in the Copyright Act. There is absolutely nothing in the Act that says that authors will get 10% (or any) royalty in Australia and a reduced royalty in another country. Authors own copyright in their works. That is they can make arrangements for the publication of their works on whatever conditions, including royalty levels, in Australia or overseas, as they see fit. If Australian authors receive a higher royalty from publication in Australia, that is a result of their bargaining power or their agents’ abilities at negotiating with overseas publishers, and nothing to do with the requirements of the Copyright Act .

Territorial copyright is a shorthand term used to describe the restriction on parallel importation of books published in Australia. It is totally distinct from copyright owned by authors in their work. That the removal of these restrictions might have the effect of reducing authors’ incomes can be debated but authors should not either deliberately or ignorantly try to confuse two separate issues.

Jackie French writes : Mem Fox is one of Australia best selling authors. If she is unable to negotiate a deal so that any remaindered copies of her books are pulped, not sold, what chance have other authors? “Remaindering” does make some money for publishers, if not authors. Note that publishing — in Australia and overseas — is usually has a very small margin of profit. Hells bells … could everyone stop commenting — including the productivity commission — until they have some facts to comment on?

David Hardie writes : Re. “Classical CDs went budget, why can’t Australian books?” (Friday, item 19). Greg Barns gets it half-right in that Naxos burst the balloon economy of classical music. However, suggesting that this could be translated to book publishing is questionable. Firstly, Naxos’ core business is recording music that is out of copyright by virtue that the composer is long dead. There is very little music in a Naxos catalogue that was composed in the last 50 years.

Contemporary Australian composers do not make any significant amounts of money out of these sorts of recording deals. Ironically, Peter Sculthorpe, perhaps the most prominent Australian composer alive today has one disc in the Naxos catalogue, and the performers are the New Zealand Symphony Orchestra. Secondly, the Naxos model already appeared in print via publishers like Penguin classics. Both aim to get the big classical works into mainstream shops with a minimum of fuss and with a minimum of cost.

There is nothing wrong with this but this has not created a market for contemporary composers and will not create a market for contemporary Australian authors.

Bruce Graham writes: One thing seems clear. Australian writers are getting a lousy deal from their publishers, and a lousy service from their copyright collection agencies. Perhaps writers (as a class) have uniquely poor business skills, or perhaps the artificially protected industry breeds complacency. There seem to be loopholes in a publishing contract that you could drive a truck through. This is a reason for better contracts, not for the perpetuation of increasingly non functional laws. Most books I buy are purchased online, because of where I live and the hours I work.

Current Australian law effectively guarantees that I will buy from overseas suppliers. Technical references are increasingly provided and read online. Lesser works of older fiction can be found most easily at project Gutenberg, which is why classic literature does not need the “Naxos” model — the current best price for an Orwell, F Scott Fitzgerald, or Jane Austin novel is: free. Old books do compete with new books (at least for my eyeballs).

Change happens, whether you like it or not. Either the Australian writing (and publishing) industry will be part of the change, or it will get done to them.

Humphrey Hollins writes: As a book lover I have been following the saga of the deregulation thing with interest. It seems to me that books are far too expensive in Australia due to regulation, do away with all regulation I say. Why do we regulate some sectors of the economy and not others? Here in Cambodia one can have any book copied overnight for about two dollars and we can buy these copies on the street from $3.25. If Mem Fox and Tim Winton don’t like it then they should try working in a real job where the market controls wages and conditions.

Sally Murphy writes : Coles and Woolies dominate the grocery market — high prices. Coles and Woolies dominate the fuel market — high prices. Coles and Woolies want to dominate the book market — and yet people believe book prices will be lower?

Climate change:

Judith Gamper writes : Re. Friday’s editorial. Thank you Crikey for another great editorial (many of them are “great” and perhaps there are a few I do not agree with — I cannot write to you every day!). I am desperate. I am “no spring chicken” and do not have heaps of money but I have put up 12 solar panels, have had a 9000litre water tank since 2003, catch a bus (I do have a car on standby — our public transport system is pretty bleak!!)

I am very concerned for my (and everyone else’s) children and grandchildren and everyone else who is hoping to live on this once beautiful planet for more than perhaps 40 years?

Crikey please keep up telling us what really is.

Georgina Smith writes : The intro to Friday’s Crikey was pure gold. As a sustainability warrior, KRudd’s “unutterable smugness” about his government’s piss-weak attempt at a climate change response is enough to send me mental. You quite deftly stuck your pin into our esteemed PM’s balloon head and I loved it.

Peter Garrett:

Michael Kieran Harvey writes : Re. “Leave Peter Garrett alone” (16 July, item 10). Although Bernard Keane’s defence of Garrett is gallant (if shocking for me), I think one has to take into account the magnitude of Garrett’s selling out on everything he previously stood up for.

The argument that “if you can’t beat ’em join ’em” does not excuse his craven acceptance of the party line, especially as he needs neither profile, cash nor kudos. Maybe as a performer he just wants to be universally loved, even by those too stupid or cynical to see the destruction their lifestyle is causing.

Rather than caving in to the pro-nuclear lobby in the ALP he could have resigned and aligned himself with a politician of integrity such as Bob Brown. My disgust over Garrett’s betrayals on things such as the Gunn’s pulp mill, the ANAM, the Port Philip dredging, uranium mining and now most probably the Ralph’s Bay development is the same as I felt for Jimmy Swaggart, paedo priests or any sanctimonious Republican politician when blubbering about adultery — the hypocrisy in asking for understanding and TLC after betraying everything they stood for (and more often than not piously condemned and ruined others for) is pathetic.

Some people like Bernard with stars in their eyes might make excuses for these idiots and accept that hypocrisy is just part of politics, but call us extremists; some of us still expect our politicians to lead, especially on issues concerning the environment.

The bushfire blame game:

Keith Thomas writes : Re. “The bushfire blame game: greenies, loggers or arsonists?” (Friday, item 10). Eleri Harris has allowed herself to be sidetracked by the cut and thrust of politics and blame, when it’s the processes of the natural world which deserve our attention. I have walked and clambered through many forests in Victoria and southern New South Wales which bear absolutely no sign of fires.

We appear to be obsessed with wanting to “manage” our forests by burning them to reduce what we call — rather fashionably — “fuel load”. But until we humans stuck our oar in, the vast majority of what we are led to regard as bushfire fuel was actually feed stock for natural processes: mammals ate grasses and shoots, insects ate leaves, termites and borers ate wood and fungi and bacteria eventually consumed the lot of them, till the cycle was complete and new plants jostled each other for the moist fertile remains left from microbiotic life processes.

Fundamentally, we need to look at the natural forest fuel reduction cycle — in which fire played a relatively small part — and what we have done to fracture it so seriously.

Government debt:

Adam Schwab writes: Re. “Park the Debt Truck! Household debt reaches 100% of GDP!” (Friday, item 3). It is sometimes said that economics is a science, albeit a highly imprecise one. The beauty of being an economist (or economics commentator) is that you can say anything with authority and by the time you are eventually proven wrong, most people would have forgotten what was said in the first place. A good example of this is Alan Greenspan, whose views still command media and public attention, despite the former head of the United States Federal Reserve being more responsible than anyone for the debt and real estate bubble.

In that regard it was amusing to read the views of Sean Carmody in Crikey last Friday. Carmody, who has a blog and apparently works in “financial markets” produced an interesting analysis of Australia’s debt situation, and the implications of governments running large deficit programs.

Carmody initially regurgitated basic Keynesian theory regarding stimulus during economic downturns, noting:

What the debt demonisers fail to realise is that this counter-cyclical pattern of government spending is a good thing. The increase in welfare spending in troubled economic times helps boost economic activity, softening the impact of a slowdown, which is why welfare spending is often referred to as an “automatic stabiliser”. In more extreme downturns, such as the one we currently face, the government can supplement the automatic stabilisers with additional stimulus spending.

All great analysis, especially from a student preparing to study for a year 11 economics exam. However, it is Carmody’s subsequent defense of government debt which is more mystifying:

More importantly, government debt is very different from personal or business debt and is not something to be afraid of. In Australia, we have a currency that is not tied to other currencies, nor to gold or any other commodities. It is “fiat money”, effectively under the control of the government. Furthermore, all of the government’s debt is denominated in Australian dollars. This means that the government can, in fact, never run out of money, unlike individuals or businesses…

So, there is no substance to the fear that the opposition is trying to excite with their debt truck. Government debt is not what we should be worrying about. What is more concerning is private debt. Since individuals cannot issue new currency to repay their loans, excessive household debt can be a real concern.

Saying that a government can never run out of money is true in a sense that a government can always print money (or undertake ‘quantitative easing’). However, taking a step backwards, government (or sovereign states) are no different to a household in that they have income (in the form of tax revenues) and expenses (public spending on items like schools, hospitals, welfare etc). In the long run, a government can only spend money it earns through taxes. In the short run, if can finance spending through borrowing (most commonly, through the issuing of government bonds).

Investors buy bonds on the understanding that the government will repay the face value (with interest). Governments are able to fund their promise to repay the bonds and the interest from future tax revenues.

Most governments, especially in economic downturns, run budget deficits. Therefore, the value of tax revenues is less than the government’s expenses. However, so long as the government is able to issue bonds everything is OK as the short-fall is made up for by borrowings, which will presumably be repaid in future years. This is a bit like a household paying for a holiday on a credit card.

The problem however (and this point was ignored by Carmody) is that not all governments are always able to borrow by issuing bonds. If lenders (in this cased, bond investors) believe that the borrower won’t be able to repay the monies lent, they will demand a higher level of return to compensate for the additional risk of not being repaid. This will lead to the price of bonds falling and the yield on those bonds rising.

As a state becomes a riskier proposition, investors will demand higher returns to the point where the government is simply unable to pay the levels of interest charged. When this happens, governments have little choice but to start buying their own bonds (known as quantitative easing). This is, in effect, printing money or monetizing debt.

If Carmody thinks this isn’t a problem, perhaps the examples of Weimar Germany in the 1920s, Argentina in 1989 or Zimbabwe in recent years prove a real life example of why Government debt can be a serious problem. High inflation (often referred to as ‘hyper-inflation’) is disastrous for the living standards of a population. It is disastrous for those on fixed incomes or businesses unable to easily adjust prices. Germany’s hyperinflation of the 1920s is believed to be a key precipitating factor in the ascension of Hitler, while few would look positively jupon the tragedy unfolding in Zimbabwe. In both instances, it excessive government debt and the state effectively ‘printing money’ which sporned the crises.

There is no doubt that excessive household debt is a problem (and has been a key cause of the global financial crisis which emanated in the United States), but to dismiss government debt as an irrelevance is to naively ignore past history and current events.

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