Surreality Check

A Savage Writer's Journal

Last Month (January 2003)

06 February 2003
Montezuma Hated Lawyers

Based on the last three days, Montezuma must have really had it in for lawyers. His vengeance has lasted for three days, during which I've kept down no medication at all. To top it off, the dog got a really gross treat when she tripped me while I was rushing to the porcelain god for prayer services—and threw out my back.

Maybe more this weekend on the disturbing historical parallels surrounding not the Columbia disaster itself, but the government reaction to it.

08 February 2003
Staying the Appointed Carriers From Their Rounds

In many ways, the space shuttle is nothing more than an irregularly scheduled bus service. Its principal role is to launch groups of people and materials into space, then return people and materials to the ground. Its inherent scientific capabilities are virtually nil. It is delivering packages.

Just like the Army's pilots tried to do in the early days of flight. And, sad to say, the bureaucratic response to this disaster is starting to look very much the same, too.

The first airmail services in the US were performed by Army pilots flying cloth-sided aircraft, at night, in bad weather. There were the inevitible crashes; flying was and is dangerous business. This resulted in a temporary halt in air mail services, followed by Congressional hearings that very nearly shut down the budding Army air program and prevented the US Mail from ever developing an airmail service.

Although those hearings never reached this particular conclusion, the real cause of those mishaps was excessive outside pressure to get a task done in a specified timeframe without adequate logistical support. The pilots were not getting adequate rest, and the aircraft were not getting adequate maintenance. This will eventually snowball. That's not to say that the mechanics weren't good; it is to say that they didn't have the time and resources to do what really needed to be done.

Modern practice is quite different. Aircraft are more interchangeable and interoperable, and there are enough of them that if airframe 3-001 has maintenance problems, it can be pulled from the flight schedule and substituted with airframe 6-002 until the problems are fixed. The shuttle fleet is like the early airmail service. The aircraft that were used when service was resumed were really no more advanced than those they replaced. There were more of them, though, and broken aircraft were not under pressure to meet a schedule.

The biggest error in the shuttle program was in not replacing the Challenger airframe. The increased pressure on the remaining airframes probably contributed in some fashion to the loss of Columbia—and has certainly made that loss potentially more devastating. Penny wise, pound foolish. The "American advantage" in every conflict that we've ever "won" has been principally logistics: supply and maintenance. If one looks at the Civil War, the difference simply could not be more clear. The Civil War was won by the Union's REMFs, not its largely incompetent officer corps. The Confederacy's officer corps was much better than the Union's, particularly at the senior levels. As early as mid-1862, though, the logistical problems in the Confederacy were making themselves felt. Similarly, the US involvement in the Second Thirty Years' War was marked by bringing overwhelming amounts of materiel to bear on the enemy and essentially bleeding him to death. It's not elegant; it's not heroic; it works. We've never even tried to do this with the space program; and it shows.

But then, this is the federal government that, since the Surgeon General's report first labelled cigarettes as carcinogenic, could have bought four shuttle airframes just with the money that it spent subsidizing tobacco growing (converted to 1988 dollars). Yet another reason to despise Jesse Helms and Strom Thurmond. As if I need any more.

13 February 2003
Still Hanging

Remember the "cliffhanger" from last month? I'm going to leave you still hanging after this entry, but hopefully with a better toehold.

The HHI is merely a means to measure concentration in a given market. Although the Justice Department claims that certain HHIs are themselves signs of monopoly power, one needs to look back at the source of the law. The Clayton Act prohibits mergers that would "significantly lessen[]" competition. Thus, the "real" inquiry has to be whether the purchase of Warner by a larger publisher would do so. The HHI is not the law; it is only a measure. Thus, we have something like this, using the market available to speculative fiction authors as the proxy:

Buyer	Current HHI	Post-Sale HHI	Difference
von Holtzbrinck, DAW Independent	1385.26	1533.26	148 (+10.7%)
von Holtzbrinck, DAW Captive	1578.69	1726.69	148 (+ 9.4%)
Penguin, DAW Independent	1385.26	1522.16	139 (+10.0%)
Penguin, DAW Captive	1578.69	1717.59	139 (+ 8.8%)

…and so on. If any of the top four speculative fiction publishers, measured by number of works released, purchases Warner Aspect, the HHI will increase by at least 7%. That indicates "significantly less[]" competition.

But it gets better. Trust me.

18 February 2003
Illusions

So, then, what competition is involved here? Or, rather, can we narrow the definitions? Yes. Quite easily. Although it's going to piss off a lot of people.

To begin with, all media properties should be removed from the "market" here. There is no meaningful competition for the right to author media tie-in works that is in the purview of the publishers. The decisionmaking is with the rightsholders, whether directly or indirectly. (That the overlap in readership is also quite a bit less than complete reinforces the validity of this distinction.) Warner does not publish any major media tie-in series, in terms of an effect on the number of works it purchases/releases in a given year. However, to pick on just a couple of obvious examples, Del Rey (Star Wars) and Pocket (Star Trek) sure as hell do; Penguin (mostly gaming) and Hasbro/Wizards of the Coast (virtually all gaming) do, too. Removing media tie-in novels from the mix bumps the premerger HHI up over 1900, and postmerger well over 2100, if Warner were to be acquired by any of the top five publishers in this field. That meets even the overly generous per se overconcentration standard measured in Department of Justice guidelines.

Even absent this correction to the definition, though, one can see an HHI increase of 7% or more based on acquisition of Warner by another publisher already in the speculative fiction market. Applying the same analysis to the steel market in the mid-20th century, one finds that a slightly smaller increase in the HHI (6.5%) was found on remand in Columbia Steel to be unacceptable. HHIs were not calculated in the 1940s, but they're not hard to calculate using historical data. Further, the market structure was remarkably similar to that we've looked at for speculative fiction; its premerger HHI was 1428, quite comparable to that here if we're still pretending that the publishers are the actual market definition for media tie-in novels.

It gets better still.

◊        ◊        ◊

The other shoe has dropped for my mundane personality. I'll be in LA the first week of March arguing the appeal in Ellison v. Robertson. That, of course, means getting there and back. Thus, a trip to Chicago first, and a redeye back.

Ordinarily, one gets about six to eight weeks of notice prior to oral argument in the Ninth Circuit. This time, the Court's Pasadena schedule had already been issued for the first half of March. Then… we got an order placing the case on the argument calendar for 06 March. From the appearance of the order, this case is replacing something else that either was delayed or was entirely removed from the calendar (perhaps settled). No matter.

Although nonlawyers who follow courts at all tend to put undue emphasis on oral argument—with negligible exceptions, oral argument is an opportunity only for clarification, and the objective is to not lose, as in Tasini—it is still an opportunity to educate the judges on the issues and keep them from going astray through misunderstanding. The vast majority of the real "work" is long done by the time an appellate oral argument gets scheduled. Now I just have to find a way through this morass, and convince the judges that they can decide this matter by relying on only one thing: context. As Judge Posner noted recently, "To read language acontextually is an almost certain route to error. Especially when the context is supplied by the very document that is being interpreted." Foufas v. Dru (7th Cir. Feb. 5, 2003) (citations omitted).

20 February 2003
The End of the Beginning

The "better still" of Warner Books merging with another major player in the publishing industry is actually in other market segments. As disturbing as the overconcentration that would result in speculative fiction would be, it would be far worse in other market segments. This gets back to the question of market definition. As usual in any complex legal context, the argument is quite circular: the market definition is virtually result-determinative, but the reality of defining markets arises from the reality of the both very real abuses of monopoly power and often accrued advantages of economies of scale.

There is a Gordian knot to cut here. All of the preceding analysis is based upon an assumption that does not bear much scrutiny: the replaceable-commodity model of the markets. This model assumes that products from companies X and Y are, in fact, interchangeable commodities who differences are based on a combination of economic preferences (e.g., perceived "value for money," or even outright price competition) and irrational, insignificant consumer preferences (e.g., does "FORD" stand for "Fix or Repair Daily" or "First on Race Day"?). That this does not apply to the "market" in the arts should be obvious to even a Congressman. The whole point of literary and other artistic endeavor is that the works are not interchangeable, and that "irrational" consumer preferences are in fact significant. The so-called "marketplace of ideas" is perhaps the least-efficient marketplace on the planet. If anything, this argues for greater enforcement of antitrust laws, because one of the underlying economic principles of antitrust laws is that monopoly power leads to systemic marketplace inefficiency, and Inefficiency Is Bad.

In this context, and having cut that knot, I see no choice. If any existing player in the publishing industry were to attempt to purchase Warner Books, I believe that antitrust law and policy would prohibit the purchase without a corresponding divestiture—even before considering the vertical monopoly and tying arrangements at issue that I have not discussed in this little extended rant.

25 February 2003
Short Takes

Today's entry will be just randomized short takes. Sort of like my brain, which has been thoroughly randomized by untoward and bizarre events of late.

• Household canine mass decreased by about 60kg today. The Heffalump had a series of small strokes over the last few days, was not moving freely, and had become a danger to the other animals—and the kids. Poor guy—it wasn't really his fault, but he never got the training he needed as a younger dog. Of course, the kids are quite upset. (For that matter, so am I… but at least I didn't have to watch him suffer through a massive stroke.)
• I will be keeping notes for this journal while away for the argument in Ellison from Sunday through Friday, and hopefully uploading stuff within a couple of days thereafter. I promise that not everything will be connected to the case. Of course, since I'm a lawyer, you can guess just how committed to that promise I really am.
• I also promise to do a few more book reviews in the near future. Presuming that other circumstances don't get in the way (which, I'm afraid, is an awfully big assumption).
• If you give a rat's ass about civil liberties, contact your Congresscritter and Senators and object strongly (but politely) to any attempt to strengthen the "Patriot Act," even if it is less objectionable than the "draft" of "Patriot Act II" that has floated around over the last few days. While you're at it, remind them that they work for you. Or at least are supposed to work for you.

28 February 2003
3e6 km/s: It's Not Just a Good Idea—It's the Law

Today is the beginning of some speculations about certain laws of nature and the law. The catalyst here is the Ninth Circuit's decision not to rehear the Pledge of Allegiance case en banc (with a panel of eleven judges instead of just three). This was the correct resolution for two reasons:

1. It reinforces an existing circuit split with a (badly reasoned and outcome-oriented) decision of the Seventh Circuit, making Supreme Court review more likely.
2. The panel was right.

I've already remarked before that, in substance, the panel was bound by precedent. More-recent Supreme Court precedent reinforces that conclusion, particularly when we speculate using the following null hypothesis:

Children's participation in the Pledge is truly voluntary and not influenced by the attitude or participation of peers or authority figures such as teachers and school administrators.

Yeah, right. I did my very best to state that hypothesis neutrally. The Supreme Court has already expressed extreme skepticism on this hypothesis:

Even if we regard every high school student’s decision to attend a home football game as purely voluntary, we are nevertheless persuaded that the delivery of a pregame prayer has the improper effect of coercing those present to participate in an act of religious worship. For "the government may no more use social pressure to enforce orthodoxy than it may use more direct means."

Santa Fe Ind. School Dist. v. Doe, 530 U.S. 290, 312 (2000) (citation omitted)

(Of course, I already remarked on Santa Fe School District.)

The Pledge of Allegiance is admittedly in many respects different from the prayer before a football game at issue in Santa Fe School District. Unwrapping those differences, however, actually makes the "peer pressure" concerns raised by Justice Stevens more relevant to the Pledge. Unlike the football game prayer, the Pledge has an explicitly governmental purpose: to foster respect for the US government and flag. There is no rational secular purpose to add "under God" to that governmental purpose; it is completely superfluous—unless one assumes that the Pledge is supposed to equate respect for the flag and US government with belief in God. I've managed the former without the latter for thirty years, including my entire time as a commissioned officer. They are not equivalent, or necessary consequences one of the other (whichever order you prefer).

The law of nature at issue here is the impact of crowd and authority-figure pressure upon individual behavior. We may pretend that each of us, individually, would resist (although psychological research tends to show otherwise). That is just as plausible as "Doc" Smith's "inertialess drive" method of allowing a starship to take on any velocity it wants, including acceleration through lightspeed.

◊        ◊        ◊

We're going to have a very interesting panel for the Ellison argument: Judges Pregerson and Thomas of the Ninth Circuit, and Judge Oberdorfer of the District of Columbia (sitting by designation). How many other appellate panels across the country have all three judges appointed by Democratic administrations?

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