Sunday, November 18, 2007

Conservatives Seek Government Intervention to Correct Market Failure

OR - Sweet Delicious Irony

Five authors have sued the parent company of Regnery Publishing, a Washington imprint of conservative books, charging that the company deprives its writers of royalties by selling their books at a steep discount to book clubs and other organizations owned by the same parent company.

In a suit filed in United States District Court in Washington yesterday, the authors ... state that Eagle Publishing, which owns Regnery, “orchestrates and participates in a fraudulent, deceptively concealed and self-dealing scheme to divert book sales away from retail outlets and to wholly owned subsidiary organizations within the Eagle conglomerate.”


The authors argue that in reducing royalty payments, the publisher is maximizing its profits and the profits of its parent company at their expense.

“They’ve structured their business essentially as a scam and are defrauding their writers,” Mr. Miniter said in an interview, “causing a tremendous rift inside the conservative community.”


In Regnery’s case, according to the lawsuit, the publisher sells books to sister companies, including the Conservative Book Club, which then sells the books to members at discounted prices, “at, below or only marginally above its own cost of publication.” In the lawsuit the authors say they receive “little or no royalty” on these sales because their contracts specify that the publisher pays only 10 percent of the amount received by the publisher, minus costs — as opposed to 15 percent of the cover price — for the book.

So, to review, these arch-conservatives entered into a voluntary contract with a publisher and then when the publisher acted as they were entitled to within the contract, the conservative authors turned to Big Government, in the form of the court system, to help them out.

Hey. I thought that The Market could fix everything. If a publisher like Regnery underpays its authors, then the authors will prefer to publish elsewhere and Regnery will be forced to pay more due to Market Forces. Right?

But apparently these workers aren't content to allow The Market works it magic. Apparently, the author of “Shadow War: The Untold Story of How Bush Is Winning the War on Terror.” discovered, at least in his own case, that the process is imperfect and people get hurt along the way and doesn't always work anyway - and sometimes Government needs to intervene to make corporations behave.


Who knew?

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