Unless you want to shell out some rebate money, that
is. In a post over at Freakonomics
today, Ayres reveals that he paid out more than $150 in rebate money to his
contracts small section this year, because he assigned his own contracts
casebook and is trying to reduce the financial conflict of interest that
professors have in assigning their own books. Ayres wrote a 2005 New
York Times Op-Ed on the topic, arguing that:
This is a self-dealing transaction, which would be
presumptively illegal if professors owed a fiduciary duty to students. Some
professors realize this and donate to charity the royalties they earn when they
assign students their own books.
So this year, I am going to do something different. I will
give $11 to each of my contracts students who buys my book. That way, we will
all know that I assigned the book for the right reason.
In an article yesterday, The
Yale Daily News reported on the rising price of textbooks, and the large
number of Yale professors who assign their own books in class. Some of the professors interviewed for
the piece give the royalty money earned from their students back to the
students, or give it to charities in their respective fields of study. Others do not.
According to Ayres:
When I originally published the Op-Ed, I received dozens of
emails from professors around the country indicating that they disgorge their
royalty. So students, if your professor has asked you to buy his or her book,
ask for a rebate. A small way to make professors more sensitive about the price
of the books they are assigning is to think about the royalties they are
generating for themselves.
I see that, around the time of the NY Times Op Ed, there was
some blogosphere discussion of law professor practices, much of which seemed to
take the contrary view. Do the casebook authors among us know whether
views on this have changed since the 2005 discussion? How common today is rebate or donation among law school
professors who assign their own casebooks (my, quite uninformed, impression is
that it’s rare)? Is there a Conversations
About Ian Ayres and The People He Fights With series in my future? I’d be interested to hear as well from
those with knowledge about norms in other disciplines. Do different fields have different
views on this practice?
As only befits the Freakonomics crowd, the commenters have
already proposed a number of ways to game the rebate system, earning extra
income for themselves and depriving their professors of additional royalties. Others have offered solutions to the system-gaming
problem. All in all, an
interesting conversation.
Lounge reader Jeff Lipshaw notes in an e-mail that he writes "a check to the Student Bar Association for the after tax amount of the royalty I get from assigning my own casebook. It's hardly enough money to make much of a difference to anybody – about $250 per class in total."
I've heard from a few others similar stories — donations to the SBA or other student groups, pizza dinners for smaller classes, etc. So perhaps the times they are a changin' on the rebate/donation of royalties question.
Jeff also had some further observations about his decision to assign his own casebook — or, rather, to become a co-author on the book he was already using:
"I chose to use the book before I became a co-author. (It was Ribstein's 3d edition of Unincorporated Business Entities.) While I was using it, it occurred to me I could make it better, so I offered to join Larry on the next edition, and learned that you have to be careful what you wish for – next thing I knew I had devoted a year to the book and a complete rewrite of the teacher's manual. During the re-write, I assigned a course pack consisting of a bound version of the manuscript, which only cost the students $30, but also had lots of errors (including my forgetting to insert page numbers). Also, we include the relevant statutes in the casebook, so there's no need for a supplement."
Thanks for the info Jeff!
There was a professor — a very prominent Marxian social theorist — at my undergraduate college (*cough cough* years ago) who did the same as Ayers. He also personally inscribed each book.
The other thing to do is write a wildly successful supplement for Legalines, E&E or Emanuel's, in which (I think) the royalties are better, the sales are higher, and the purchase is entirely voluntary.
Thanks for the interesting post; a couple of thoughts.
1. In the 2005 snippet you reprint, Ayres says: "That way, we will all know that I assigned the book for the right reason." I think his more recent post acknowledges that we don't know anything of the kind, since there are lots of self-serving and public-serving reasons he could assign his book; we only know that he is reducing one potential cause for conflict of interest.
2. In the post, he also acknowledges the potential legitimacy of a market test, by which one looks to whether other faculty (without their own financial interests) have assigned the same book in some meaningful percentage — which might mean that it was assigned by its author for reasons that are above reproach, making realizing profits less problematic. I think that's a worthwhile approach, but probably too hard on faculty authors, since there's so many other non-merit-based reasons that go into how others assign (like prior use, etc.).
3. I'd use a presumption that faculty assign their own books because they worked hard on them, believe in them, and understand how to teach effectively from them. They keep the money because they would also like to earn a return that it is within spitting range of minimum hourly wage (and such returns encourage the production of good teaching materials). On this view, we should look askance at those who assign their own books when the books are worse than average. As to those more noble, someone donating profits for an end of semester party or to the SBA should be thanked, but unless they allow individual students to select the donee (including keeping it themselves), it's really not the same thing. For all we know, it simply displaces money the author would otherwise give to the same charity, or provides the author with a different kind of benefit, and we never know whether those who appear to keep the profits really do. The tax implications of the various strategies are beyond me.
P.S. I am not a textbook author, nor do I play one on TV.
Thanks for the comments all. Seems to be quite a bit of variation in the practices revealed so far.