Charles R. Macedo is a partner at Amster, Rothstein & Ebenstein LLP, and the author of The Corporate Insider’s Guide to US Patent Practice, which provides a basic understanding of patent practice in the United States as it relates to both obtaining and enforcing patents. Macedo’s practice specializes in all facets of intellectual property law including patents, trademarks and copyrights.  In the article below he looks at “patent worthiness.”  Read his other OUPblog posts here.

Speed Dating is not the only issue that our nine Justices of the Supreme Court raised on November 9, 2009 to determine what types of processes should be entitled to “patent worthiness.” Justice Scalia wanted to know why, if the patent laws were intended to cover broad processes, weren’t there any patents filed in the 1800s relating to training horses.

At the time, as Justice Scalia rightly observed, the American economy was completely dependent on horses. In fact, during the late 19th Century commerce came to a standstill when approximately 99% of all horses in America contracted equine influenza. According to Greg Sabin’s February 13, 2009 article, “Nightmare on Wall Street: 4 Other Times Our Economy Tanked“, at the height of the pandemic “as many as 20,000 businesses failed, a third of all railroads went bankrupt, and unemployment spiked to almost 15 percent.”

Not surprisingly, as Justice Scalia suggested, there were many U.S. Patents issued in the late 1800s that taught different methods of training or breaking horses:

* U.S. Patent No. 247,296, to G.W. Blake, entitled “Harness” (patented September 20, 1881);
* U.S. Patent No. 381,745, to H. C. Woodnutt, entitled “Device for Assisting in Training Horses” (patented April 24, 1888);
* U.S. Patent No. 453,727, to H. Sample, entitled “Apparatus for Treating or Taming Horses” (patented June 9, 1891);
* U.S. Patent No. 478,513, to C.C. Kelly, entitled “Apparatus for Training Animals” (patented July 5, 1892); and
* U.S. Patent No. 545,228, to J.W. Green, entitled “Horse-Breaking Apparatus” (patented August 27, 1895).

While admittedly none of these patents claimed a method of training or breaking a horse, they all obtained patent protection for such methods by claiming the apparatus to do it.

There are various explanations of why these patents claimed apparatus instead of methods:

* In the 1800s, most patents were drafted in the form of apparatus or system claims, and not method claims, although the law allowed for method claims in the form of “arts.”
* It was much easier to detect infringement of an apparatus that was sold than to detect a method of performing acts. Thus, not surprisingly, one would be less likely to invest in method claims.
* Perhaps more importantly, the law was in flux as to what type of method claims were available. For example it was not until 1909, in Expanded Metal Co. v. Bradford, 214 U.S. 366 (1909), that the Supreme Court made clear that patent eligible method claims did not merely need to have chemical transformations, but could also include mechanical transformations.

Indeed, when the 1952 Patent Act was adopted, the law was drafted to define patent-eligible methods broadly. See 35 U.S.C. § 100(b). Thus, perhaps Justice Scalia would find it interesting to note that since the Act was enacted, many patents have issued which claim methods of training animals (including horses):

* U.S. Patent No. 3,099,248, to J.K. Giles et al., entitled “Methods of Training Horses” (patented July 30, 1963) (claiming “a method of breaking and training horses preparatory to racing”);
* U.S. Patent No. 5,566,645, to T.H. Cole, entitled “Animal Training Method and Apparatus” (patented October 22, 1996) (claiming “[a] method for training animals”);
* U.S. Patent No. 6,311,645, to J.S. Brown, entitled “Animal Training Method and Apparatus” (patented November 6, 2001) (claiming “[a] method of training an animal”);
* U.S. Patent No. 6,352,053, to D. Records et al., entitled “Apparatus and Method for Animal Testing and Training” (patented March 5, 2002) (claiming “[a] method permitting an observer to determine the bucking propensity of an animal such as a bull or horse”);
* U.S. Patent No. 6,568,940, to M. Mack, entitled “Equestrian Training Method” (patented May 27, 2003) (claiming “[a] method for equestrian training”);
* U.S. Patent No. 6,602,209, to D.H. Lambert et al., entitled “Method and Device for Analyzing Athletic Potential in Horses” (patented August 5, 2003) (claiming “[a] method for predicting potential performance in a selected racing or training animal”);
* U.S. Patent No. 7,107,939, to L.J. Lady, entitled “Animal Training Apparatus and Method” (patented September 19, 1996) (claiming “[a] method for training a four-legged animal”); and
* U.S. Patent No. 7,331,310, to K. Sersland et al., entitled “Domestic Animal Training Method” (patented Feb 19, 2008) (claiming “[a]n animal training method”).

Turning back the patent law to the uncertainty of the 1800s, when our economy was based on agrarian and early industrial technology, is not what our nation needs in this time of economic crisis.

The point is that any subject should be available for patent protection, whether it is Speed Dating, Horse Training, or Hedging Risk, so long it does not claim the subject in an abstract manner.

I recently chatted with Gillian Saunders, director of Grant Thornton Strategic Solutions, the consulting firm that has been working on the 2010 World Cup for over a decade now. In this podcast she explains why South Africa got the bid, how preparation for the tournament has changed the country, the controversy behind the giant stadiums, and the one thing you should see when you visit South Africa.  Be sure to check out more “Place of the Year” contributions here.

Rafferty: So Gillian, I was wondering if first you could first discuss, give us an overview, of the role Grant Thornton has played in the preparation for the World Cup.

Gillian Saunders: Well we were first approached in the late nineties by the South African football association, FIFA, to assist them with looking at a bid for the World Cup, and they felt that the way to promote this country going for the bid, was to look at the economic impact it would have on the country. So we did an economic impact analysis then; subsequent to that we did one for the 2006 bid and then we did another one for the 2010 bid which of course was a successful bid and we now actually have the event happening next year. Since then we’ve updated it a couple times. Most recently only last year, haven’t updated it again since, we will plan to update it after the draw in December when there’s a lot more finality about exactly who’s coming, where they’re traveling, etc…

Rafferty: In 2004, what role did you play in South Africa winning the bid to host the tournament?

Saunders: Well I think one of the reasons that Africa was seen as an attractive destination for the event was people did feel that it’s an event that can actually help the economy of a country like South Africa and other countries in Africa, and that was what we demonstrated and what went into the bid book and what helped I think position South Africa as a meritus winner of the event; and if we go back even further, the initial exercise we did, and it was based on work we’d done previously for Grand Prix that had been successful as well in terms of saying that major sporting events actually leave an economic legacy and are beneficial to the destination. And that you know there are some people that feel the benefit is minimal, that the benefit is often not only measured in the actual economic benefit of the event or the net additional economic benefit of the event, but the profiling of the destination that has a knock-on effect for trade, investment, and tourism in years after the event. So we looked at all of that, and basically our exercise was used by the football association to get South Africa to buy into bidding for the event. And the FIFA 2010 event is a huge undertaking from a government perspective; the country has to give a lot of guarantees and has to be involved in a lot of the infrastructure needs if there are such. So it brought our government on board to go for the event

Rafferty: So since winning the bid, what role has your firm played in the preparation for the tournament?

Saunders: We’ve been very involved with a number of the venue cities. We’ve worked on specific economic impact studies for those cities so that they can understand the benefits to the city itself. We’ve also worked on the stadia, for, in fact eight of the stadias out of the ten that are being used, we’ve done the business plan for. That was used by the National Treasury to make decisions on what funding to give to the stadia development projects in each city. Then we worked on destination marketing work for provinces and towns and neighboring countries, doing strategies of how they can best maximize their involvement in the event, as well as how they can protect what they may need to protect in terms of if the event has a negative impact on their country. So for instance neighboring countries like Namibia and Botswana, it’s very much their high tourism season, and they need to have the strategy to maintain their normal tourism markets so that the tourists don’t feel crowded out and don’t not come. For instance the Olympics in Greece, when they were in Athens, I think it was in 2006, 2004, they saw one of their worst seasons on the Greek Islands, simply because tourists start to feel, “I can’t go there, it’s too busy for me.” So we’ve been working on strategies like that with neighboring countries and with towns, in South African towns and cities.

Rafferty: So, how has the preparation for the World Cup affected the economy in general? Or how different does the country look from 2000 when you began doing this research? Does the landscape look any different? Do you think the economy has improved?

Saunders: I think the main change in South Africa is the government has put a huge amount of money into infrastructure. The normal amount that often gets quoted is more than 400 billion rand. Now what a lot of that is, is accelerated infrastructure projects that would have been needed and should have been done anyhow. But we were, if you like, very lucky that the World Cup became an impetus or a catalyst for all that happening. But within that is probably of the order of 30-40 billion rand worth of infrastructure that’s directly related to the event. Which is transport infrastructure around the stadia themselves and the stadiums. And I don’t know if anybody’s been lucky enough to see our stadiums, but we’ve got some stunning stadiums coming up. The one in Cape Town has had it’s lights lit up now, and you’ve seen it against the sort of backdrop of Table Mountain and the harbor and the port. It’s an amazing thing to see. We’ve got another beautiful stadium, in, new stadium, in, or more or less new, in Johannesburg called Soccer City and it’s designed after a calabash. And so these things are coming up around the country and people are seeing them either reported on the news, photgraphed in the newspaper, or they’re going past them themselves and they look stunning. And our transport infrastructure is still rather a lot of building signs and road works, but we can see that we are getting some massive improvements to our transport infrastructure. What’s happening now as well, I think the ball has really started rolling with the Confederations Cup earlier this year, is the sponsors and the host cities are really getting behind the programs and advertising that are sort of getting the population now to feel very positive and proud about the events coming. So there’s a lot of billboards that are using 2010, there’s a lot of advertising, a lot of merchandise in the shops that’s already out there. So it’s starting to build up the excitement in the country towards the event and that’s beginning to go quite nicely. We have something for instance, it was started by the tourism industry, instead of having casual Friday, we have Football Friday. And everybody wears a soccer shirt, any soccer shirt, Bafana Bafana, our national team is good, on Fridays. And that’s starting to roll out. We’ve had the Deputy President launch it on the lawns of the Union Buildings. So those are things that are changing, that we are seeing in the psyche in South Africa.

Rafferty: I have read there’s been controversy over these stadiums, basically saying that they’re a huge money suck because in the end they’re going to be rendered useless after the World Cup, and I was just wondering what your opinion is on that.

Saunders: Some of them are going to be well used. For instance, the one in Cape Town is a prime location and an iconic city where we know when we worked on the business plan that conference organizers, race organizers, people who organize functions and events, main ones, looked forward to getting that facility and being able to use it. The trick to any of these is multiple sports that you can get in them and the alternative uses which you can get in them. So we feel Cape Town can go very well and one of the big pluses for Cape Town would be if the Western Cape rugby moved to the new stadium, which has been talked about, it’s been discussed in the press, but nobody knows whether or not it would happen. Because they have a stadium that’s too small, that could easily be sold for good property development rights and then make a move into the new one. So the things that could still happen to make these stadia even more long term viable. A stadia generally is a cost to a municipality, you know there’s only a couple of places like the soccer leagues in Germany and England that can have stadias that actually sustain themselves. So they often make a small operating profit or a small operating loss, they are sustained by subsides from the government side—it’s the extent of those subsidies and how much they would cost. And some of our stadia in the less prominent towns, such as Nelspruit and Polokwane, they may be the ones that struggle the most in terms of having on going reasonable levels of usage and reasonable levels of income. But they will be used on an ongoing basis.

Rafferty: Grant Thorton, at the beginning of your research, you estimated that the World Cup would contribute 55.7 billion rand to the South African economy and generate 415,400 jobs, and 19.3 billion rand in tax income to the government, and I was just wondering if you could tell me: Do those numbers still stand? Do you still estimate that’s what we’re going to see happen?

Saunders: Yes they do, the only area, because some of that expenditure has happened, it’s been a lot of the infrastructure spending. The only area that people could challenge if they wanted is the tourism spending which I mentioned at the beginning and since how we’ve build that up. But all the research we’ve looked at related to soccer and people following an event like this, is that recessions and things like don’t usually have much of an impact. They might trade down slightly, but they’ll not, not travel, so we fully expect the same levels of tourism and tourism expenditure as we had originally estimated. And to be quite honest, our estimates are probably on the conservative side because we know there’s certain information we just couldn’t get the information on, that’s being spent by some of the provinces, and some of the cities, and some of the sponsors. So being consultants we are slightly on the conservative side. So we wouldn’t change those numbers at all, and the employment generated as well, we wouldn’t change any of those numbers. We would stand by them and say, “Look they were on the conservative side, they are still a little bit on the conservative side.”

Rafferty: There’s going to be a bunch of people traveling to South Africa for the World Cup. What is one thing that you would recommend they do? And it doesn’t even have to be soccer related. What’s one thing you suggest they do when they come?

Saunders: It’s a difficult one, but I think the thing that has the most impact is if they can make it to a good game park and do some game viewing. You know African wildlife is stunning, the African Bush is stunning, it’s a very very different experience. And even if they can’t make it to one of the top game reserves, which would mean traveling in some instances quite a way, it depends where they’re based and where they watch their matches, we have lots of smaller wildlife farms nearer to the big cities, so take time to go and see some of our wildlife, it’s stunning.

Rafferty: Great. Well Gillian, thanks so much for taking the time to chat with me today, I really appreciate it.

Saunders: It’s a pleasure Michelle, thank you very much.

By Edward Zelinsky

Because the rate of inflation for 2009 has effectively been zero, the Social Security Administration has announced that Social Security payments will stay flat for 2010. In response, the Obama Administration has asked Congress to send every Social Security recipient an additional $250 in 2010.

This is a bad idea. The Administration’s proposal is both unfair and misfocused.

Many Americans would be delighted to have the same deal as Social Security recipients, namely, the identical cash income in 2010 that they received in 2009. To millions of newly unemployed Americans, that looks like a good deal. Not as good as being president of a bailed-out bank, but still a good deal.

For 2010, the salaries of many Americans working in the private sector are frozen or reduced. In countless cases, compensation decreases are taking the form of fringe benefits eliminated or reduced, for example, the termination of employers’ 401(k) contributions.

As the latest saying goes, for these working Americans, flat is the new up. It is inequitable for federal taxpayers to finance $250 checks in 2010 for Social Security recipients with stable incomes, but not for the working and unemployed Americans whose incomes have declined, often precipitously.

And this is before we consider the tax-free nature of most Social Security benefits.

To illustrate, compare a young married couple with a retired couple receiving Social Security benefits. Let us suppose that both of these families have annual incomes of $20,000. The members of the hypothetical young family have minimum wage jobs while the retired family receives yearly Social Security benefits of $20,000.

While the nominal, pre-tax incomes of these two families are identical, the younger couple pays FICA taxes of $1,530. In contrast, the retired couple receives all of its Social Security payments tax-free. Thus, on an after-tax basis, the younger family has substantially less income per person than the older couple.

If federal checks are to be sent to either of these couples, the younger family is the more deserving recipient. Neither of these families is rolling in dough. However, there is no reason to target federal largesse to the retired couple rather than the young working family, with the same nominal income but which pays FICA taxes on all of its income.

In effect, the younger family would, by its FICA tax payments, finance the $250 checks the President wants to send to seniors.

The Administration has suggested other programs for 2010 which make more sense than the proposed $250 check to Social Security recipients. The Administration has advocated that, in light of the poor job market, unemployment benefits be extended and that so-called COBRA subsidies also be prolonged to help the unemployed purchase continuing medical insurance from their former employers. Both of these suggestions are compelling. Indeed, the COBRA subsidy should be made permanent.

If the federal fisc provides additional relief beyond this, Congress should expand the earned income tax credit for 2010 to relieve low-income working families, like our hypothetical younger couple, of some of their tax burden.

In contrast, the proposal to send all Social Security recipients $250 is ill-conceived. This proposal is not fair to working and unemployed Americans struggling with reduced incomes and tax obligations. This proposal misdirects the focus of federal assistance. When it comes to the $250 checks for seniors, Congress should just say no.

Chris Mallin is Professor of Corporate Governance and Finance & Director of the Centre for Corporate Governance Research at the University of Birmingham. She is the author of Corporate Governance and she blogs with fellow OUP author Bob Tricker at Corporate Governance. The below post is an adapted version of one found on that blog, and is about whether companies should split the roles of Chair and CEO. Her previous OUP posts can be found here, here and here.

It is widely recognised that corporate scandals and collapses often occur when there is a single powerful individual in control of a company. This is exacerbated when there is a lack of independent non-executive directors on the board. Therefore it seems axiomatic that powerful individuals can be constrained, and the temptations they may face conquered, by having in place a sound corporate governance structure achieved through dividing the roles of Chair and CEO.

UK Context

Back in 1992, the much lauded Report of the Committee on the Financial Aspects of Corporate Governance, often referred to as the Cadbury Report after the Chair of the Committee, Sir Adrian Cadbury, identified the potential danger of combining the roles of Chair and CEO in one person. The Cadbury report recommended ‘there should be a clearly accepted division of responsibilities at the head of a company, which will ensure a balance of power and authority, such that no one individual has unfettered powers of decision’. This principle was embodied in corporate governance best practice in the UK, with the Combined Code on Corporate Governance (2008) stating ‘there should be a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company’s business. No one individual should have unfettered powers of decision’, and furthermore the Combined Code explicitly states ‘the roles of chairman and chief executive should not be exercised by the same individual.’

Whilst combining the roles of Chair and CEO is rare in the UK’s largest companies, Marks and Spencer PLC is a notable exception. In May 2004 Sir Stuart Rose was appointed to the position of Chief Executive and subsequently in 2008 he became both chairman and CEO until July 2011. This combination of roles goes against the Combined Code’s recommendations of best practice. As a result in 2008 some 22 per cent of the shareholders did not support the appointment of Sir Stuart Rose as chairman. Nonetheless he remains in the combined role although there is still considerable shareholder unrest and 2009 has seen more dissent by shareholders on this issue.

US Context

In the US, the roles of Chair and CEO have often been combined but now more and more companies are appointing separate individuals to the two roles. A recent example of a US company which has decided to appoint an independent chairman is Sara Lee, the famous producer of gateaux, beverages and body care products. Sara Lee has decided to make this change as a response to investor pressure and also the growing trend in the US to split the two roles. Kate Burgess in her article ‘Sara Lee to separate executive roles’ explores this case in more detail.

Institutional Investor Pressure

In the UK there has long been pressure brought to bear by institutional investors on companies which have tried to combine these roles. This pressure, together with the long history in UK corporate governance codes against the combination of roles, means that few large companies seek to combine the roles (although as noted above, Marks and Spencer plc is an exception).

Recently Norges Bank Investment Management (NBIM), a separate part of the Norwegian central bank (Norges Bank) and responsible for investing the international assets of the Norwegian Government Pension Fund, has started a campaign to convince US companies to split the roles of Chair and CEO and appoint independent chairmen. Kate Burgess  in her article ‘Norwegian fund steps up campaign’ highlights how NBIM has submitted resolutions to four US companies calling on them to appoint independent chairmen. The four companies are Harris Corporation, Parker Hannifin, Cardinal Health Inc, and Clorox. In addition NBIM has also voted against combined Chair/CEOs at some 700 US companies. Interestingly Sara Lee had also been the focus of action by NBIM before agreeing to appoint separate individuals to the roles in future. Also in Kate Burgess’ article, Nell Minow of The Corporate Library states ‘NBIM can leverage a lot of shareholder frustration and a widespread sense that this is a sensible, meaningful but not disruptive initiative’.

It seems to be only a matter of time before the vast majority of companies will split the roles of Chair and CEO. Of course the individuals appointed to those roles must be both capable of fulfilling the tasks expected of them, and of ensuring that ultimately the two roles, carried out by separate individuals, unite the company under a common leadership approach. That may prove more difficult than many imagine and so the appointments process must consider fully the many traits needed to ensure success.

Jennifer Burns is Assistant Professor of History at the University of Virginia.  Her new biography, Goddess of the Market: Ayn Rand and the American Right, follows Rand through her meteoric rise from struggling Hollywood screenwriter to best-selling novelist.   Burns highlights two facets of Rand’s work that make her a perennial draw for those on the right: her promotion of capitalism, and her defense of limited government.  In honor of Jennifer Burns’s The Daily Show appearance (be sure to tune in 11 tonight!) we have posted an excerpt below.

“I am coming back to life,” Rand announced as the Nathaniel Branden Institute entered its second year of existence.  Watching Nathan’s lectures fill, Rand began to believe she might yet make an impact on the culture.  Roused from her despair, she began once more to write.  In 1961 she published her first work of nonfiction, For the New Intellectual, and in 1962 launched her own monthly periodical, The Objectivist Newsletter. Over the course of the decade she reprinted articles from the newsletter and speeches she had given in two more books, The Virtue of Selfishness and Capitalism: The Unknown Ideal.  Although she occasionally talked of a fourth novel, Rand had abandoned fiction for good.  Instead she reinvented herself as a public intellectual. Gone were the allegorical stores, the dramatic heroes and heroines, the thinly coded references to real politicians, intellectuals, and events.  In The Objectivist Newsletter Rand named names and pointed fingers, injecting herself directly into the hottest political issues of the day.  Through her speeches and articles she elaborated on the ethical, political, and artistic sides of Objectivism.

Rand’s ideas were particularly attractive to a new generation of campus conservatives, who saw rebellion against a stifling liberal consensus as a basic part of their identity.  Unlike older conservatives, many right-leaning college students were untroubled by her atheism, or even attracted to it.  As Rand’s followers drew together in campus conservative groups, Ayn Rand clubs, and NBI classes, her ideas became a distinct stream of conservative youth culture.  Through her essays on government, politics, and capitalism Rand herself encouraged the politicization of her work.  In 1963 she even endorsed a new Republican on the scene, Barry Goldwater, a move that situated her as the leader of a growing political and intellectual movement.

At first look Objectivism may appear a freakish outgrowth of the turbulent 1960s, but it had significant parallels in American history.  Nearly a century before, similar reading clubs and political activism had sprung up around Edward Bellamy’s Looking Backward, a book uncannily similar to Atlas Shrugged, if diametrically opposite politically…

Rand made her network television debut in 1960, appearing on Mike Wallace’s celebrated interview show.  Her dark eyes flashing, she refused to be intimidated by the liberal Wallace and expertly parried his every question and critique.  Her performance caught the eye of Senator Barry Goldwater, who wrote Rand a letter thanking her for defending his “conservative position.”  Rand had not mentioned the senator by name, but he immediately recognized the similarity between their views.  Goldwater told Rand, “I have enjoyed very few books in my life as much as I have yours, Atlas Shrugged.”  He enclosed an autographed copy of his new book, the best-selling Conscience of a Conservative.  Shortly thereafter the two met briefly in New York.  Rand followed up this encounter with a lengthy letter urging Goldwater to support capitalism through reason alone.  Although she considered him the most promising politician in the country, Rand was distressed by Goldwater’s frequent allusions to religions.  The Conscience of a Conservative had been written primarily by L. Brent Bozell, William F. Buckley’s brother-in-law, and accordingly reflected the fusionist consensus of National Review.

In her letter to Goldwater Rand hammered on the need to separate religion and politics, a theme that would animate her for decades.  She singled out National Review for special criticism because it was a supposedly secular magazine that surreptitiously tried “to tie Conservatism to religion, and thus to take over the American Conservatives.”  If such an effort succeeded, Rand asked, what would become of religious minorities or people like herself who held no religion?  Goldwater’s response, which reiterated his Christian religious beliefs, was brief yet polite.  Rand had a powerful admirer, but not a convert.

As her depression lifted, Rand began to explore different ways she might exercise cultural influence.  She was newly interested in politics because of her esteem for Goldwater and her dislike of the dashing presidential contender, Jack Kennedy, to her a glamour candidate who offered no serious ideas.  She made her first venture back into political commentary with a scathing attack on Kennedy, “JFK: High Class Beatnik,” a short article published in the libertarian journal Human Events.  In the summer of 1960 she even dispatched Nathan to investigate the possibility of her founding her own political party. It was unclear if Rand saw herself as a potential candidate or simply a gatekeeper for others.  Nathan sounded out a few of Goldwater’s political advisors, who told him that Rand’s atheism severely limited her prospects.  Abandoning that idea, Rand returned once again to intellectual pursuits.  She sent her attack on JFK to the head of the Republican National Committee to be used as needed in Republican publications.

Shaking off her lethargy, Rand now began paying attention to the new following she had gained through Atlas Shrugged.  The book was an instant best-seller despite the largely negative reviews it received.  As with The Fountainhead enormous quantities of enthusiastic fan mail poured in.  Although Rand could not respond personally to ever letter, she was interested in her readers, particularly those who wrote especially perceptive or ignorant letters.  Nathan often interposed himself between Rand and the most objectionable writers, but in the early 1960s it was entirely possible to send her a letter and receive a personal response.  Sometimes she even engaged in a lengthy correspondence with fans she had not met, although her more usual response was to refer the writer to work she had already published.

The Nathaniel Branden Institute both capitalized on and fostered Rand’s appeal.  Nathan used the addresses from her fan mail to build NBI’s mailing list and advertise new courses.  As the lectures expanded into new cities, he took out newspaper advertisements describing Objectivism as the philosophy of Ayn Rand.  In 1962 he and Barbara published a hagiographic biography, Who is Ayn Rand?, which included an essay by Nathan on the fundamentals of her philosophy.  Slowly public perception of Rand began to shift, establishing her as a philosopher, not just a novelist.  The NBI ads and lectures made Objectivism into a movement, a larger trend with Rand at the forefront.

Bob Geldof said it best back in 1979 with the hit “I Don’t Like Mondays.” My staff know better than to approach me too early on Mondays. My crankiness can sometimes last well into the afternoon. Yesterday, however, was an exception to the rule. I love it each year when the Nobel Prizes are announced. And yesterday two Oxford authors were recognized by the Nobel committee for their work in Economics. Congratulations go out to Elinor Ostrom, co-author of The Samaritan’s Dilemma: The Political Economy of Development Aid (OUP, 2005) and Oliver Williamson, author of The Mechanisms of Governance (OUP, 1999), Organization Theory: From Chester Barnard to the Present and Beyond, 2nd Edition (OUP, 1995), and The Nature of the Firm: Origins, Evolution, and Development (OUP, 1993).

While I have not had the great good pleasure to work with Ostrum and Williamson, there is still a sense of pride in working for the publisher that recognized their genius and contributions to Economics long ago. We might not see too many celebrity authors (thankfully), or New York Times bestsellers (unfortunately) here at OUP, but we do have a long list of authors who are Nobel laureates, Pulitzer recipients, and National Book Award winners (fortunately). And to the sage Nobel Economics committee in Oslo I say, “Thanks for making my Monday a little sweeter. Keep up the good work. I look forward to next year’s recipients.”

By Edward Zelinsky

Few governmental agencies are as widely criticized as the IRS. Some of this criticism is inevitable resentment towards the tax collector. It is, Edmund Burke famously observed, as impossible “to tax and to please” as it is “to love and be wise.” The IRS rarely pleases and is never loved.

Moreover, the IRS has become a particularly tempting target for opportunistic politicians. Rather than engage in the difficult work of controlling public expenditures and rationalizing the tax law, it is easier for elected officials to engage in faux populist bashing of the IRS for its enforcement of tax laws for which Congress and the President are responsible.

However, a substantial portion of contemporary criticism of the IRS is justified. It is, for example, troubling that the IRS consistently attacks as unreasonable the compensation paid to owners of closely-held corporations while acquiescing to the tax deductibility of far larger salary payments to the executives of publicly-traded firms.

It is, in the final analysis, critical to the operation of a modern society that taxes be collected fairly and efficiently. It is accordingly important for those of us who have criticized the IRS (and expect to do so in the future) to speak up when the IRS gets something right.

And recently the IRS has done something important right: cracking the secrecy of the Swiss banks which help affluent Americans to cheat on their U.S. taxes.

This is a simple matter of fairness. Middle and working class Americans, when they save outside their IRAs and 401(k) accounts, typically put cash into local banks and credit unions. From such institutions, these taxpayers receive Form 1099 annually and generally comply with the legal obligation to pay federal income tax on the interest credited to their bank and credit union accounts. Such middle and working class taxpayers may also be subject to back-up withholding under which the institutions paying them interest retain some of that interest and send it to the IRS.

In contrast, for years, a disturbingly large number of affluent Americans have knowingly cheated on their U.S. tax obligations by placing savings in foreign bank accounts which they do not report to the IRS, even though these citizens are legally obligated to disclose foreign accounts to the IRS and to pay U.S. income tax on the interest earned by such foreign accounts. The result has been something of a two-tier system under which, to paraphrase Leona Helmsley, only the little people pay taxes on bank account interest.

Central to the creation and promotion of this two-tier scheme have been the efforts of Swiss bankers with the active connivance of the Swiss government. Tax evasion and money laundering are major Swiss industries which Swiss bankers have conducted with the support of Switzerland’s bank secrecy laws. Those laws have assured high income U.S. taxpayers that they will not be caught if they violate U.S. law by putting savings into undisclosed Swiss bank accounts and failing to pay the federal income taxes owed on the interest paid on such accounts.

Recently, the IRS has begun to crack the wall of secrecy surrounding Swiss bank accounts by obtaining the names of U.S. citizens holding such accounts and enforcing the tax law against these individuals. Every American who has been paying his federal income taxes on his interest-bearing accounts should applaud this development.

This being the IRS, there are those who have criticized the IRS’s efforts as overdue and as obtaining the names of only a fraction of the U.S. citizens who have cheated on U.S. taxes via Swiss bank accounts. Others have faulted the IRS for giving American citizens an amnesty period during which such citizens will generally be spared the worst penalties if they now come forward and pay the back taxes owed on previously undisclosed Swiss bank accounts.

It would indeed be unfortunate if, having achieved impressive initial success, the IRS were to rest on its laurels, rather than continue its efforts to obtain more names of U.S. citizens with undisclosed Swiss bank deposits. Whatever the merits of the amnesty deployed by the IRS (it probably is a necessary evil), this should be a one-time offer to those who have cheated on U.S. taxes, an offer not to be repeated.

When I was in government, I invariably heard from persons who were unhappy with my performance but rarely received a word of commendation from those who favored my decisions. This always troubled me. So, as one who has not hesitated over the years to criticize the IRS, let me commend the IRS for its crackdown on Americans who have been cheating on U.S. taxes through Swiss bank accounts. On this one, the IRS is getting it right and deserves the support of all U.S. taxpayers.

Dennis Baron is Professor of English and Linguistics at the University of Illinois. His book, A BETTER PENCIL: Readers, Writers, and the Digital Revolution, looks at the evolution of communication technology, from pencils to pixels. In this post, originally from Baron’s personal blog The Web of Language, he looks at the Amazon sales rank numbers to see if he can figure out where he stacks up–and what those numbers mean, anyway.

My book “A Better Pencil” came out this month from Oxford University Press. It’s not my first book, but it’s the first one I’ve published since the internet went viral. Because my book is about the impact of computers and the ‘Net on how we read and write, I checked the World Wide Web to see how the book was doing.

Last week I was interviewed about “A Better Pencil” on Salon, and that interview, provocatively titled “Is the internet melting our brains?”, triggered 95 comments on the Salon.com site. The comments were both positive and negative, though many had nothing to do with the book or the interview but instead consisted of commenters attacking one another. This seems to be fairly normal for online comments, but while I really wanted to feel good about stimulating so much passionate discussion, those sidebar conversations only managed to make me feel irrelevant.

Googling told me that the Salon interview had also been reposted and retweeted on 100 or more websites. Some of them, like boingboing and techdirt, are fairly influential. Hoping that the interview would stimulate sales, I decided to track my Amazon Sales Rank, the number that the world’s largest bookseller assigns to every book to indicate how much it’s selling relative to all the other books on Amazon.

On Wednesday night my Amazon Sales Rank was 4,913 (that’s supposed to be pretty good — low ASR numbers mean higher sales, and only 4,912 books were outselling mine). In one subcategory, culture, my book was even a “bestseller” in 9th place. I faced stiff competition: number 6 in the “culture” list was The Cannabis Grow Bible, but in another subcategory I was outselling Storey’s Guide to Raising Chickens.

By the next morning, my overall Amazon Sales Rank had jumped to 2,981 (remember, low numbers are good), and “A Better Pencil” had climbed from 9 to 4 in “culture,” just below Stuff White People Like, a book I’d actually heard of. Figuring this meant that my book was going off the charts, I googled “Amazon sales rank” only to find that a rank of 3,000 means Amazon is selling about 20 copies a week. At that rate, it will take more than three years to exhaust the publisher’s inventory.

Two hours later, my ASR had dipped to 3,356, and I began to feel like I was watching the Dow. Readers had clearly lost confidence in me, and all of a sudden my book was being eclipsed in “culture” by The Mammoth Book of Tattoos. Really, if tattoos are more important than computers to readers — I’m talking about readers, not bikers — then maybe I got the whole internet thing wrong anyway.

Checking with my publisher lifted my spirits: the numbers on Amazon do suggest that people are buying my book, and that there may have been a Salon bump in sales. But it also confirmed my feeling that the Amazon Sales Rank, which is computed hourly using a top-secret proprietary algorithm, doesn’t reveal anything useful about the actual numbers of books sold.

Even so, I’m happy that in the past hour I’ve sold more than Marshall McLuhan’s The Medium is the Massage (subcategory: communication), which I read when it was first published in 1967, though in “history of technology” I’m being soundly trounced by Sun Tzu’s Art of War. To be fair, that book had a significant head start — it was written in the 6th century BCE. Also, I’m not quite sure what Sun Tzu has to do with the history of technology, though I see that in addition to hard copy, a digital version of The Art of War is available for the Kindle, Amazon’s e-book reader.

Fifteen years ago, in the fairy-tale age before Amazon and its author-mesmerizing Sales Rank, I was attending a conference where another book I had just published was on display in the book exhibits. I watched from a few tables away while browsers approached the display, fingered a copy of the book, looked inside, then put it down and moved on. I think a few copies of the book did sell at the conference, and I still get a royalty check in the low single figures for it. But I’m not sure whether that “analog” experience of watching my book being studiously ignored by readers who were clearly not bikers was better or worse than digitally tracking my Amazon Sales Rank. Maybe authors should avoid both ways of monitoring sales and wait patiently for their annual publisher’s statements. But my experience with Amazon is that, like watching a traffic accident, it’s just impossible for any writer to turn away.

Arthur B. Markman is the Annabel Irion Worsham Centennial Professor of Psychology and Marketing at the University of Texas at Austin. His new book, with Kristin L. Wood, is Tools For Innovation which looks at the practical methods that support innovation and creative design, from different ways of thinking and conceptualizing to computer-based tools. In the post below, which originally appeared on Markman’s Psychology Today blog, we learn about how goals drive behavior.

Business magazines like Forbes, newspapers like the Wall Street Journal, and economic forecasters are united in their belief that economic growth in the US will be driven by innovation. That is, the US and other major economic players will not grow by developing new products and key refinements of existing products that will drive new consumption. This is not news, really. Bringing new ideas to market has long been a centerpiece of economic growth. And that means that Psychology is crucial to the economy.

That’s right. Psychology.

Innovation is driven by new ideas. That means that creativity is at the heart of innovation, and so creativity will drive the economy.

Creativity seems mysterious. We love stories about mad geniuses striving alone in dark labs. We create myths about flashes of superhuman insight that lead to the solutions to difficult problems. We give credit for inventions to single individuals like Edison, Bell, and Marconi.

If creativity is mysterious, then we should be worried about the state of the economy. How can we count on creativity to create growth if it is mysterious and requires heroic figures to occur?

Happily, creativity is not a mystery. The creation of new ideas results from basic psychological mechanisms. Because those mechanisms are well-studied by psychologists, there is much that we can do to teach others how to become more creative. In addition, this knowledge provides us with ways to create tools to support that creativity.

In July of 2009, the book Tools for Innovation came out. I edited this book with my colleague Kris Wood, who is a mechanical engineer. We brought together psychologists, engineers, computer scientists, and people in business to write chapters about basic research that helps us to understand creativity and the tools that can be developed based on that research. In the next few posts, I’ll describe a few of the lessons from this book.

The first lesson comes from a chapter by Robert Weisberg from Temple University. He analyzes a number of examples of creativity, such as Edison’s creation of the kinetoscope (a precursor to the movie projector), Picasso’s creation of the painting Guernica, and the Wright brother’s development of the airplane. He uses these examples to break down a number of myths about innovation.
For example, we tend to give credit to a single individual for an invention. We all know, for example, that the Wright brothers invented the airplane. However, they were working within a larger world community of people who were all working on flying machines. They took note of other people’s failures, such as the death of inventor Otto Lilienthal, who was killed when his flying machine was caught in a gust of wind. This failure led the Wrights to assume that the pilot needed to be able to control the flight of the airplane.

The Wrights were bicycle makers before they started to make airplanes. So they had extensive experience with complicated mechanical devices. This expertise was important as they began to put together an actual device for flying.

Finally, the Wrights looked to the world around them for help in developing the control system for the airplane. Many groups focused on using what was known about steering boats to help steer a plane (that is why the fin on the back of a plane is called a ‘rudder’), but the Wrights read extensively about what was known about bird flight. They decided to have the control system of the plane warp the wings by analogy to what was known about the way that birds fly.

So, the Wright brothers were smart, and persistent, and diligent. They tested their designs carefully. Their invention helped pave the way toward a multibillion dollar industry. But this innovation did not come about because they did things that were beyond the grasp of mere mortals…

Douglas E. Phillips is author of The Software License Unveiled: How Legislation by License Controls Software Access, which reframes the debate between proprietary and free software to ask whether “legislation by license” should control either kind of software access.  In the article below he looks at Google’s new Chrome operating system.

Google recently announced plans for a new PC operating system, the Chrome OS. Within minutes, the media reported an OS war and began telling us who loses and who wins. The Chrome OS will smash Windows! Or else Chrome is actually good for Microsoft and (despite running on a Linux kernel) threatens Linux! Who knows? We might actually have to wait until the new OS comes out, which Google says won’t happen for another year.

Whatever becomes of the Chrome OS, though, Google’s decision about how to license it tells us something about where the software license itself is going. And that’s worth looking at now, given that how software is licensed shapes how it’s created and used.

Google promises open source licensing, which points to an approach the company already uses for the Chrome browser. This approach combines a royalty-free source code license to developers with proprietary end user terms. Expect to see more of this hybrid model across the software industry in the years to come.

Source code for the browser is available under the BSD license, which is short, sweet, and (in licensing jargon) permissive. You can use BSD-licensed code in a new work and distribute the new work any way you choose.

The separate terms of service for the browser’s executable version don’t impose a fee, but they do authorize Google to deliver targeted advertising when you use it. So the browser – and most of Google’s other services – are free, but only in the sense that broadcast television is free (or was free, before cable and satellite found a way to charge for it). You pay (some would say dearly) for broadcast TV, not by sending money to ABC, CBS, NBC, or Fox, but by tolerating a high-fat diet of ads we hate.

You pay Google in more or less the same way, except that the advertisements usually tend to be more relevant. In return, you get access to content that compares to network TV, in scope and depth, as the Pacific Ocean compares to a puddle (taking into account that the Pacific Ocean also has its shallow parts and sharks). Most people seem to like this bargain. It works, however, only if you agree to let Google keep track of what you’re looking for online and serve ads in response. Without this proprietary element, there would be no Google as we know it and, among other things, no Chrome browser or Chrome OS. The hybrid license lets all this happen.

The main objection to permissive and hybrid licensing comes not from the Microsofts of the world, but from advocates of the GNU General Public License. You can borrow source code from a GPL-licensed work and include the code, royalty-free, in a new work. But if you want to share the new work with others, then the GPL requires that you also license the new work – including the parts that weren’t borrowed – under the GPL. In the GPL philosophy, protecting software freedom means denying the freedom to mix free code with any code that is subject to proprietary licensing terms.

According to Google, the Chrome OS will consist of the Chrome browser “running within a new windowing system on top of a Linux kernel.” Because the Linux kernel is GPL-licensed, Google will have to provide that part under the GPL. The GPL’s “copyleft” condition applies, however, only if the new work is a “derivative work” as a matter of copyright law. The Chrome browser clearly is a separate work, and the new windowing system apparently will be as well (as is the existing X11 windowing system, which is often used with Linux but not licensed under the GPL).

Google’s not likely to license the non-Linux parts of the Chrome OS under the GPL, and for good reason. Consider the Web itself. Tim Berners-Lee, who invented the Web, at first wanted the Web software to be licensed under the GPL. He changed his mind after people told him that the strings attached by the GPL could severely limit the Web’s reach. So he arranged instead to have the Web software dedicated to the public domain. The Mosaic graphical browser included parts of the original Web software, which meant that avoiding the GPL was key to making Mosaic something on which for-profit companies could build. Without the freedom to monetize Web technologies, the private investment that helped the World Wide Web live up to its name almost certainly never would have occurred. That’s why a combined open source and proprietary licensing model probably makes sense for the Chrome OS. It’s also why your next software license, like your next car, may well be a hybrid.