125-127 The Vanishing Middle:
The discussion of the impact of education on income growth draws from Claudia Goldin and Lawrence Katz,
The Race Between Education and Technology
(Cambridge, Mass.: Belknap Press of Harvard University Press, 2008); David Autor and David Dorn, “Inequality and Specialization: The Growth of Low-Skill Service Jobs in the United States,” NBER working paper, November 2008; Congressional Budget Office, “Changes in the Distribution of Workers’ Annual Earnings Between 1979 and 2007,” October 2009; Francine Blau, Marianne Ferber, and Anne Winkler,
The Economics of Women, Men and Work
, 5th edition (Upper Saddle River, N.J.: Pearson Prentice Hall, 2006); Bureau of Labor Statistics (
www.bls.gov/news.release/wkyeng.t05.htm
, accessed 08/08/2010); Census Bureau, “Income, Poverty, and Health Insurance Coverage in the United States,” 2008 (
www.census.gov/prod/2009pubs/p60-236.pdf
, accessed 08/09/2010); Bureau of Labor Statistics, “100 Years of U.S. Consumer Spending: Data for the Nation, New York City, and Boston,” May 2006 (
www.bls.gov/opub/uscs/home.htm
, accessed 08/09/2010); and Bureau of Labor Statistics (
www.bls.gov/bls/wages.htm
, accessed 08/08/2010).
127-129 A Banker’s Paradise:
The narrative about financial deregulation and the rise of bankers’ pay draws from Thomas Philippon and Ariell Reshef, “Wages and Human Capital in the U.S. Financial Industry: 1909-2006,” NBER working paper, January 2009. The data on banks’ share of corporate profits comes from the Bureau of Economic Analysis, NIPA Tabes No. 6.16A-D (
www.bea.gov/national/nipaweb/Index.asp
, accessed 08/09/2010). The data on university graduates taking jobs in finance comes from Claudia Goldin and Lawrence F. Katz, “Transitions: Career and Family Lifecycles of the Educational Elite,”
American Economic Association Papers and Proceedings
, May 2008, pp. 363- 366; and Princeton University, Office of Career Services, Class of 2008 Career Survey Report.
130-133 The Price of Free:
The discussion about the success of Radiohead’s
In Rainbows
draws from
Billboard
(
www.billboard.com/#/
); and Daniel Kreps, “Radiohead Publishers Reveal ‘In Rainbows’ Numbers,”
Rolling Stone
, October 15, 2008. Analysis about the value of viewers’ attention to broadcast television is drawn from Eduardo Porter, “Television Is Not Free and Does Not Want to Be,”
New York Times
, March 8, 2010; and Ernest Miller, “Top Ten New Copyright Crimes,”
Lawmeme
, May 2, 2002 (
lawmeme.research.yale.edu/modules.php?na me=News&file=article&sid=198
, accessed 07/18/2010).
133-137 The Allure of the Free:
The origin of the “no free lunch” saying is taken from William Safire, “On Language: Words Out in the Cold,”
New York Times
, February 14, 1993. The psychological impact of receiving something for free comes from David Adam Friedman, “Free Offers: A New Look,”
New Mexico Law Review
, Vol. 38, Winter 2008, pp. 49-94; Kristina Shampanier, Nina Mazar, and Dan Ariely, “Zero as a Special Price: The True Value of Free Products,”
Marketing Science
, Vol. 26, No. 6, November/December 2007, pp. 742- 757. Adrian Johns makes his point on the importance of information to the economy of the twenty-first century in
Piracy: The Intellectual Property Wars from Gutenberg to Gates
(Chicago: University of Chicago Press, 2009). Comments on gift-giving rituals among marginal cultures draws from Marcel Mauss,
The Gift: The Form and Reason for Exchange in Archaic Societies
(New York: W. W. Norton, 1990), p. 30. Data on spam volumes and costs drawn from Messagelabs ( .
wwwmessagelabs.com/resources/press/45666
, accessed 7/18/2010); Chris Kanich, Christian Kreibich, Kirill Levchenko, Brandon Enright, Geoffrey Voelker, Vern Paxson, and Stefan Savage, “Spamalytics: An Empirical Analysis of Spam Marketing Conversion,”
Communications of the Association for Computing Machinery
, Vol. 52, No. 9, September 2009, pp. 99-107; Marco Caliendo, Michel Clement, Dominik Papies, and Sabine Scheel-Kopeinig, “The Cost Impact of Spam Filters: Measuring the Effect of Information System Technologies in Organizations,” IZA Working Paper, October 2008. German wages are from Eurostat (epp.eurostat .
ec.europa.eu/portal/page/portal/eurostat/home/
, accessed 7/18/2010). The Korean reaction to spam is in Robert Kraut, Shyam Sunder, Rahul Telang, and James Morris, “Pricing Electronic Mail to Solve the Problem of Spam,” Yale ICF Working Paper, July 2005.
137-141 Napstering the World:
The falling prices of computers are found in Bureau of Economic Analysis, NIPA table 1.5.4, Price Indices for GDP, expanded detail (
www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=34&ViewSeries=NO&Java=no&Request3Place=N&3Place=N&FromView=YES&Freq=Year&FirstYear=
1980&LastYear=2009&3Place=N&Update= U pdate& Java Box=no#Mid, accessed on 08/16/2010). The explosion of free music downloads is detailed in Amanda Lenhart and Susannah Fox, “Downloading Free Music,” Pew Internet and American Life Project, September 28, 2000. Stewart Brand’s quote is in Jack Fuller,
What Is Happening to News: The Information Explosion and the Crisis in Journalism
(Chicago: University of Chicago Press, 2010), p. 104. Chris Anderson’s thoughts can be found in
Free: The Future of a Radical Price
(New York: Hyperion, 2009). Data on the declining sales of music recordings come from the Recording Industry Association of America (awww.riaa. org) and the International Federation of the Phonographic Industry (
www.ifpi.org
). The stories about the music industry’s losing battle against free music are drawn from Eric Pfanner, “Court Says File-Sharing Site Violated Copyright,”
New York Times
, April 18, 2009; John Schwartz, “Tilting at Internet Barrier, a Stalwart Is Upended,”
New York Times
, August 11, 2009; Joseph Plambeck, “Idea Man of LimeWire at a Crossroads,”
New York Times
, May 23, 2010; “The State of Online Music: Ten Years After Napster,” Pew Internet and American Life Project, June 15, 2009; Hilmar Schmundt, “Darth Vader and the Vikings: The Rise of Sweden’s Pirate Party,”
Der Spiegel
Online, June 19, 2009; IFPI Digital Music report 2009 (
www.ifpi.org/content/section_resources/dmr2009.html
, accessed 07/18/2010); Tim Arango, “Despite iTunes Accord, Music Labels Still Fret,”
New York Times
, February 1, 2009. Data on how free downloads are making inroads in Hollywood are drawn from “The Cost of Movie Piracy,” Motion Picture Association of America, 2005; IFPI Digital Music Report 2009; and Brian Stelter and Brad Stone, “Digital Pirates Winning Battle with Studios,”
New York Times
, February 4, 2009. The discussion of the top sources of news about Michael Jackson’s death is found in “Protect, Point, Pay: An Associated Press Plan for Reclaiming News Content Online,” Associated Press internal memorandum, unpublished, July 2009. Data on newspapers’ declining advertising revenue come from the Newspaper Association of America (at
www.naa.org
). Google’s financial data come from the company.
141-144 Profiting from Ideas:
The story of Brunelleschi’s patent on
Il Badalone
is in Paul Robert Walker,
The Feud That Sparked the Renaissance: How Brunelleschi and Ghiberti Changed the Art World
(New York: William Morrow, 2002), pp. 117- 118. Data on the pharmaceutical industry’s investments are in Joseph DiMasi, Ronald Hansen, and Henry Grabowski, “The Price of Innovation: New Estimates of Drug Development Costs,”
Journal of Health Economics
, Vol. 22, 2003, pp. 151-185. Details of Brazil’s compulsory licensing of antiretroviral drugs are found in “Timeline on Brazil’s Compulsory Licensing,” Program on Information Justice and Intellectual Property, American University, Washington College of Law, April 2008 (
www.ggp.up.ac.za/human_rights_access_to_medicines/syllabus/2009/day2/2PIJIPBrazilTimeline.pdf
, accessed 08/08/2010). Changes in Indian patent law are described in Donald McNeil Jr., “India Alters Law on Drug Patents,”
New York Times,
March 24, 2005. The impact of patent expiry on the prices and market share of branded drugs is discussed in Laura Magazzini, Fabio Pammolli, and Massimo Riccaboni, “Dynamic Competition in Pharmaceuticals: Patent Expiry, Generic Penetration, and Industry Structure,”
European Journal of Health Economics
, Vol. 5, June 2004, pp. 175-182; Frank R. Lichtenberg and Gautier Duflos, “Time Release: The Effect of Patent Expiration on U.S. Drug Prices, Marketing, and Utilization by the Public,” Manhattan Institute Center for Policy Research, Medical Progress Report No. 11, October 2009 (
www.manhattan-institute.org/pdf/mpr_11.pdf
, accessed 08/08/2010). The impact of patents on the creation and diffusion of innovations is discussed in William Baumol, “Intellectual Property: How the Right to Keep It to Yourself Promotes Dissemination,”
Review of Economic Research on Copyright Issues
, Vol. 2, No. 2, pp. 17-23; Steve Lohr, “Now, an Invention Inventors Will Like,”
New York Times
, September 21, 2009.
144-148 The Case for Bookaneering:
Paul McCartney’s quote is found in David Bennahum,
The Beatles: After the Break-up: In Their Own Words
(London: Omnibus Press, 1991), p. 19. The tale about the origins of copyright in Britain and its controversial application in the United States is drawn from Hal Varian, “Copying and Copyright,”
Journal of Economic Perspectives
, Vol. 19, No. 2, Spring 2005, pp. 121-138; Robert Spoo, “Ezra Pound’s Copyright Statute: Perpetual Rights and the Problem of Heirs,”
UCLA Law Review
, Vol. 56, 2009; Charles C. Mann, “The Heavenly Jukebox,”
Atlantic Monthly
, September 2000; Ezra Pound, “Copyright and Tariff,”
New Age
, Vol. 23, October 13, 1918, p. 363. Paulo Coelho’s fondness for sharing his books online is discussed in Torrent Freak, “Best-Selling Author Turns Piracy into Profit,” May 12, 2008 (
torrentfreak.com/best-selling-author-turns-piracy-into-profit-080512/
, accessed 07/18/2010). Analysis of the impact of file sharing on the market for music draws from Rafael Rob and Joel Waldfogel, “Piracy on the High C’s: Music Downloading, Sales Displacement, and Social Welfare in a Sample of College Students,”
Journal of Law and Economics
, Vol. 49, No. 1, April 2006, pp. 29-62; Alejandro Zentner, “Measuring the Effect of File Sharing on Music Purchases,”
Journal of Law and Economics
, Vol. 49, No. 1, April 2006; Martin Peitz and Patrick Waelbroeck, “The Effect of Internet Piracy on Music Sales: Cross-Section Evidence,”
Review of Economic Research on Copyright Issues
, 2004, Vol. 1, No. 2, 2004, pp. 71-79; Sudip Bhattacharjee, Ram Gopal, Kaveepan Lertwachara, James Marsden, and Rahul Telang, “The Effect of Digital Sharing Technologies on Music Markets,”
Management Science
, Vol. 53, No. 9, September 2007, pp. 1359-1374. The analysis of the impact of music downloads on bands that haven’t yet made the A-list is drawn from Alan Krueger, “The Economics of Real Superstars: The Market for Rock Concerts in the Material World,”
Journal of Labor Economics
, Vol. 23, January 2005, pp. 1-30; Marie Connolly and Alan Krueger, “Rockonomics: The Economics of Popular Music,” NBER Working Paper, April 2005; “The State of Online Music: Ten Years After Napster,” Pew Internet and American Life Project, June 15, 2009, pp. 13-14; Greg Sandoval, “Trent Reznor: Why Won’t People Pay $5?,” CNET News, January 10, 2008 (at
news.cnet.com/8301-10784_3-9847788-7.html
. , accessed 07/18/2010).
149-152 Stealing Sneakers:
Stan Liebowitz’s analysis of the economics of copyright is found on his Web site at the University of Texas at Dallas (at
www.utdallas.edu/~liebowit/
, accessed 07/18/2010); Stan Liebowitz, “Testing File-Sharing’s Impact by Examining Record Sales in Cities,” University of Texas at Dallas School of Management, Department of Finance and Managerial Economics Working Paper, April 2006; Stan Liebowitz, “Economists’ Topsy-Turvy View of Piracy,”
Review of Economic Research on Copyright Issues
, Vol. 2, No. 1, 2005, pp. 5-17. Artists’ reactions to Google’s request for free art is found in Andrew Adam Newman, “Use Their Work Free? Some Artists Say No to Google,”
New York Times
, June 15, 2009. The story about free lawyers is in Elie Mystal, “It’s Come to This: Unpaid Internships for Lawyers with One-Three Years Experience,”
Above the Law
, September 30, 2009 (
abovethelaw.com/2009/09/its-come-to-this-unpaid-internships-for-lawyers-with-one-three-years-experience/
, accessed 07/18/2010). Hal Varian’s suggestion on how newspapers can make money is in Hal R. Varian, “Versioning Information Goods,” University of California Berkeley Working Paper, March 13, 1997. The online pricing strategy of the
Newport Daily News
in Rhode Island is described in Joseph Tartakoff, “Taking the Plunge: How Newspaper Sites That Charge Are Faring,” Paid Content. org, September 2, 2009 (
paidcontent.org/article/419-taking-the-plunge-how-newspaper-sites-that-charge-are-faring/
, accessed on 08/16/2010).
152-154 Where Information Goes to Die:
Data on music sales in France is in IFPI, “Digital Music Report,” 2009. Experts’ trust in the inevitable demise of copyright is drawn from “The Future of the Internet III,” Pew Internet and American Life Project, December 14, 2008. Tales about the battle against the piracy of sheet music in the nineteenth century are found in Adrian Johns,
Piracy: The Intellectual Property Wars from Gutenberg to Gates
(Chicago: University of Chicago Press, 2009), p. 329.
155-162 The Price of Culture:
The data on the spread of democracy is drawn from Freedom House, “Democracy’s Century: A Survey of Global Political Change in the 20th Century,” 1999 (
http://www.freedomhouse.org/template.cfm?page=70&release=75
, accessed 08/09/2010). The data on vote buying in Thailand and São Tomé and Príncipe comes from Frederic Charles Schaffer, “Vote Buying in East Asia,” Transparency International Corruption Report, 2004; Pedro Vicente, “Is Vote Buying Effective? Evidence from a Field Experiment in West Africa,” Oxford University Working Paper, 2007; and Pedro Vicente, “Does Oil Corrupt? Evidence from a Natural Experiment in West Africa,” Oxford University Working Paper, 2006. Tales about vote buying in Britain and the United States in the nineteenth century come from E. Anthony Smith, “Bribery and Disfranchisement: Wallingford Elections, 1820- 1832,”
English Historical Review
, Vol. 75, No. 297, October 1960, pp. 618-630; Gary Cox and J. Morgan Kousser, “Turnout and Rural Corruption: New York as a Test Case,”
American Journal of Political Science
, Vol. 25, No. 4, 1981; and David Kirkpatrick, “Does Corporate Money Lead to Political Corruption?,”
New York Times
, January 23, 2010. The data on campaign spending in the 2008 presidential election in the United States comes from the Center for Responsive Politics (
www.opensecrets.org/pres08/index.php
, accessed 07/18/2010); and Federal Election Commission, 2008 Official Presidential General Election Results (
www.fec.gov/pubrec/fe2008/2008presgeresults.pdf
, accessed 07/18/2010). The discussion of the limited returns to contemporary campaign spending is in Steven Levitt, “Using Repeat Challengers to Estimate the Effects of Campaign Spending on Electoral Outcomes in the U.S. House,”
Journal of Political Economy
, Vol. 102, 1994, pp. 777-798. The comparison between corruption and lobbying draws from Bard Harstad and Jakob Svensson, “Bribes, Lobbying and Development,” CEPR Discussion Paper, 2006; the Center for Responsive Politics (
www.opensecrets.org/lobby/index.php
, accessed 07/18/2010); the Center for Responsive Politics, “Banking on Connections,” June 3, 2010; Erich Lichtblau and Edward Wyatt, “Financial Overhaul Bill Poses Big Test for Lobbyists,”
New York Times
, May 22, 2010; Henrik Kleven, Martin Knudsen, Claus Kreiner, Søren Pedersen, and Emmanuel Saez, “Unwilling or Unable to Cheat? Evidence from a Randomized Tax Audit Experiment in Denmark,” NBER Working Paper, February 2010; Nauro Campos and Francesco Giovannoni, “Lobbying, Corruption and Other Banes,” CEPR Discussion Paper, 2008; “Daimler Agrees to Pay $185m After Admitting Bribery,” BBC News, April 1, 2010 (
news.bbc.co.uk/go/pr/fr/-/2/hi/business/8600241.stm
, accessed 07/18/2010); and Politische Datensbank (
www.parteispenden.unklarheiten.de/
?seite=datenbank_show_k&db_id=25&kat=3&sortierung=start, accessed 07/ 15/2010); and Vanessa Fuhrman and Thomas Catan, “Daimler to Settle with U.S. on Bribes,”
Wall Street Journal
, March 24, 2010. Tim Groseclose and Jeff Milyo discuss how members of Congress value their seats in “Buying the Bums Out: What’s the Dollar Value of a Seat in Congress?” Stanford University Graduate School of Business Research Paper, 1999.