The letter is long, but the message is simple:   textbook prices have been rising out of control only because we let them, and it is time to stop letting them.

Date:  18 August 2010

To:    Professor X, Instructor of ABC 1xx
Professor Y, Chair, Dept. of ______

CC:    Aaron Brower, Vice Provost for Teaching and Learning
Members and associates of the Committee on Textbook Affordability

Dear Professors X and Y,

I am writing both as a parent of a UW-Madison student and as a fellow faculty member.  My reason for writing is the discovery this morning that my daughter, an entering freshman, has been assigned a textbook for ABC 1xx that costs about $190 new, roughly $150 used.  This, to my mind, is an outrageous price for any freshman textbook.  To be fair, I realize that outrageous textbook prices are the norm, not the exception, in 2010.

But unlike most students, parents and instructors who bemoan high textbook prices but don’t know what to do about them, I am fairly familiar with the inside workings of the textbook industry, and I have come to understand that $190 for a freshman textbook in a non-niche field like ____ is blatant price gouging, pure and simple, and needs to be called out and dealt with as such.  It goes on only because publishers can set the price to whatever they want, and students have no choice but to buy the books that are assigned for their courses.  Shopping around doesn’t help much, because publishers still have a worldwide monopoly on any particular title, and they control the wholesale price which drives everything else, including used prices.

My purpose in writing is to respectfully suggest that it doesn’t have to be this way, and that price gouging on textbooks is possible only if students, faculty, and university officials continue to assume, incorrectly, that high textbook costs reflect economic forces beyond our control.  They don’t.  I know this because I have a small side business as a publisher, and I know the wide latitude I have to set the retail price for my textbooks.  I choose to charge far less than the market would bear simply because I don’t wish to gouge students.  Large commercial publishing houses don’t have the same scruples.

Introductory textbooks in required large-lecture subjects like ___ and ___  are an especially lucrative industry with huge potential profit margins precisely because demand is large and rigid and normal market controls on prices are broken.  That’s why there is such a glut of glossy new textbooks (and never-ending revisions) for large courses — every publisher is fighting to get even a small but still lucrative slice of a very, very large pie by persuading professors to assign their books.

I don’t know how many students take ABC 1xx and other freshman ABC courses each semester, but I would guess that it’s a number in the many hundreds, if not more.  Multiply that number, whatever it is, by an estimated publisher profit margin of maybe $80-$100 on a $140 wholesale price, and you’ll see how publishers are fattening their bottom lines on the backs of our students (and their parents).

The only way to restore sanity to textbook prices is to push back.  I’m doing it with this message, and I have urged my daughter to push back when she is assigned expensive textbooks and to encourage her friends to do so as well.  I respectfully invite the _____ department and, for that matter, the entire University to join us all in pushing back against publisher gouging.

Here’s the most important point: it IS possible to negotiate prices significantly downward.  I had a publisher sales rep in my office a couple years ago trying to get me to adopt their textbook for my single 300-student freshman course.  I asked her whether she could arrange a 20% discount off the retail price for books sold through our bookstore.  She said yes without even hesitating, because she knew that my decision to adopt would still be worth somewhere approaching $10,000 in net profit for her company for just that semester, even at the discounted price.  Next time I will ask for 50%.

If I can do that as a single professor with just one 300-student lecture, think how much more negotiating power we would have if entire departments or, better, the University, took the same hardnosed position.

Thank you for your attention.

Sincerely,

Z

PS:  Because the issues I have raised go beyond just one department’s textbook policies, I am cc’ing Vice Provost Aaron Brower and several individuals associated with a new campus committee on textbook affordability.

A Year-End Letter: Opportunities, Challenges, Impressions
By Chancellor Biddy Martin

1. Preamble
2. The Madison Initiative for Undergraduates
3. Great People Scholarship Campaign
4. Research Administration and Funding
5. Graduate Student Funding
6. UW Foundation Presidential Search
7. Global Health and Sustainability
8. Diversity
9. Faculty and Academic Staff Salaries
10. Collaboration with WAA and UWF
11. University Relations/Communications
12. Looking Forward

- Eds.

A Year-End Letter: Opportunities, Challenges, Impressions

By Chancellor Biddy Martin

Dear Members of the UW-Madison Community,

Before the semester ends and many of you leave for summer jobs and research activities, I want to summarize some of the important issues that have engaged us this year, share some of the impressions I have formed over two academic years, and look to the opportunities and the challenges ahead.

Among the major issues we addressed this year, I include: 1) the implementation of the Madison Initiative for Undergraduates, 2) efforts to build support for the Great People Scholarship campaign, 3) studies of the organization and effectiveness of our research administration, 4) the need to increase graduate student funding, 5) the search for a new president of the UW Foundation, 6) Global Health and Sustainability, two university-wide interdisciplinary initiatives, 7) re-dedication to our diversity efforts and to extending our reach internationally, 8 ) the activation of new tools to address salary issues, 9) collaborative efforts with our partners –  the Wisconsin Alumni Association and the UW Foundation — to achieve greater coordination and enhance our alumni and donor base, and 10) changes in university relations/communications to similar ends.

As is always the case with my letters, this one is too long. For that reason, I have divided it into sections. At the end, I will re-emphasize the balance we need to achieve between quality and affordability, and I will share my view of where we need to head. This letter covers some of the important issues that have engaged me as chancellor this academic year, but they are a tiny fraction of the critically important activities, achievements and opportunities in which you are involved. I want to thank all of you for the extraordinary work you do on so many fronts to make this one of the most vibrant universities in the world.

The Madison Initiative for Undergraduates

Let me start by thanking all members of the community who developed proposals for the first two rounds of the Madison Initiative for Undergraduates. We saw a range of impressive ideas aimed not only at enhancing, but also transforming, aspects of undergraduate education and the student experience on campus. We set out not simply to fill gaps or address bottlenecks in courses and majors, as important as those goals are, but also to have an impact on the way students are taught and how they learn, both in and outside the classroom. We also made the diversity of the faculty who teach them a high priority for the initiative.

The student board and the general oversight committee have worked long and hard, reading, assessing, ranking and trying to add value to your proposals. At the end of the first two rounds, we have approved initiatives that take us over the $10 million mark. In the fall, we will call for a third round of proposals and will be able to spend another $4 million. We are on track to add as many as 75 faculty positions. We have funded a range of important student and academic service initiatives, including additional Freshman Interest Groups, new residential learning communities and internship programs. We have set aside well over $1 million in ongoing funding in anticipation of a proposal that takes a holistic and innovative approach to student advising. Money has also been held aside for a promising proposal to establish spaces for technology-assisted teaching and learning.

I regret the fact that we are unable to approve even more proposals. I know it is disappointing to those of you whose proposals were not supported, not only because of the time and energy you gave to the process, but also because you have serious needs for additional funding. There are great needs all over campus. I thank you for caring enough about undergraduate education and the overall quality of the university to do the work you did. I hope we can find other funds over time, private as well as public, to enable the improvements you seek to make. For information on the proposals and our decisions, please visit http://www.madisoninitiative.wisc.edu.

Great People Scholarship Campaign

As you know, $20 million of ongoing funding from the Madison Initiative for Undergraduates is being allocated to need-based financial aid. This year we were able to add $5 million, and next year we will add another $5 million in ongoing funds.

Need-based aid has become our highest university-wide fundraising priority for several reasons. It is absolutely essential that we keep UW-Madison affordable to students from low- and low-to-middle-income backgrounds, for the good of every one of our students and for the sake of the communities we serve. Each student needs to interact and build networks with peers from every conceivable background and the families of this great state need to be able to afford an education for their children at one of the worlds great research universities.

As I have argued since I arrived at UW-Madison, keeping tuition near the bottom of our peer group is not the answer to those needs. Over the long term, balancing quality with affordability will mean marking out a path that puts tuition at the median of our peer group and provides much higher amounts of need-based aid. The desire to keep tuition at the low end is understandable, but it has a number of problematic and often unintended consequences: It ends up subsidizing those who can more easily afford an education at UW-Madison, and it threatens the university with a potential deterioration in quality, putting the value of our students degrees at risk over time.

I do not believe there is anything more important to our long-term success than the appropriate balance between affordability and quality. We will need to establish a new compact with the state of Wisconsin, one that recognizes our reliance on revenues from the private sector, from the federal government and from tuition, and one that, therefore, allows us the flexibility to use our funds in ways that will keep the university strong, for the good of the state, the nation and the world. The new compact with the state would provide us greater freedom to manage our resources and clearer forms of accountability to the state. I expect to spend a significant amount of time working with you, with business leaders, with political and government leaders, and with the general public to develop and promote change of this kind.

Given the importance of financial aid, I want to thank UW-Madison faculty and staff again for your generous contributions to the Great People campaign. You have raised almost $619,000. The match from the UW Foundation brings your contributions to more than $1 million. While the magnitude is impressive, the amount is less important than the number of contributors among our faculty and staff. In my fundraising activities this past year, I have observed the strong impression it makes on our alumni and donors that so many of you would contribute at a time when your own salaries not only are not growing, but also have temporarily shrunk as a result of furloughs.

Research Administration and Funding

UW-Madison, as a research powerhouse, has a significant economic impact on the region and the state as a whole. We are one of only two universities in the United States, including both public and private institutions, to be ranked in the top five in total research expenditures for 20 consecutive years. Over the course of the past two decades, the administration of research has become a much larger and more complicated responsibility, in part because the nature of research has changed, and in part because of unfunded regulatory mandates from the federal government.

During my first year as chancellor, I heard from a large number of faculty members that our infrastructure has failed to keep pace. As you know, the provost presented a plan for the reorganization of research administration early in the fall semester. That plan grew out of a sense of urgency about changes that need to be made in the management of what is both a traditional strength and a major priority for this campus.

The University Committee (UC) was charged by the Faculty Senate with establishing a faculty task force to consider the proposal and make recommendations of its own about the administration of research. At the same time, the Academic Staff Executive Committee (ASEC) charged a committee with a similar task. Both groups have now reported –  one to the UC and the other to ASEC. Both favor the continuing integration of research with graduate education, and reject the proposal that research and graduate training be separate management activities. The ASEC-sponsored report called for more study and offered excellent recommendations for improvements in our processes. The faculty task force made a series of recommendations that became the foundation for the motion offered by the UC for the Faculty Senate.

The university administration has accepted the wisdom of the faculty and staff on the integration of research and graduate education. They will remain under one roof. Provost Paul DeLuca and I worked with the UC on the motion that was approved, overwhelmingly, with minor revision by the Faculty Senate on May 3. I am confident we have emerged from this year’s deliberations with a structure, a set of process improvements and an industry-relations program that, together, will ensure the university’s continued leadership in research, discovery and technology transfer.

The Wisconsin Alumni Research Foundation (WARF) has provided the margin of excellence in research for many years. Despite the hit on its endowment in 2008-09, WARF provided a $53.4 million grant to the Graduate School for 2009-2010 to support research and graduate education. In addition, WARF has made a long-term commitment to the Morgridge Institute for Research, the private partner to the state-funded Wisconsin Institute for Discovery; together, they form the Wisconsin Institutes for Discovery. WARF has spent the year developing plans for the institutes and for the town center, to which the entire first floor of the building is dedicated. I hope the town center will become a destination not only for faculty, staff and students, but also for a larger public. It has the potential to build community, enliven intellectual exchange and increase interest in science and scientific literacy far beyond the campus.

I have just returned from the spring meeting of the American Association of Universities where we heard from Francis Collins, director of the National Institutes of Health (NIH), and John Holdren, chief science adviser to President Obama. It was clear from both presentations and from subsequent discussions that the current administration understands the importance of scientific research, both basic and applied, and is doing, what it can to find funding in a budget that the president has promised to freeze for the next three years. The president’s budget proposes increases for NIH (3.2 percent), the National Science Foundation (8 percent), the Department of Energy (4.4 percent), the Department of Defense (7 percent), and the National Aeronautics and Space Administration (11.4 percent), and a decrease of 3.7 percent for the National Endowment for the Humanities. Base funding for the various federal agencies is up, but, as you know, we also face a cliff when American Recovery and Reinvestment Act funding ends.

In response to questions about the administration’s top science priorities, John Holdren commented that the U.S. cannot attempt to lead in every domain. He then listed four areas in which it will be important that we do lead: low-carbon economy, life sciences, information and communication technologies, and new materials. It seemed evident that a low-carbon economy is this administration’s highest priority. Our strengths at UW-Madison put us in an excellent position to take advantage of the administration’s focus on energy, environment, and climate change; the life sciences and health; information technologies; and materials.

Graduate Student Funding

Our ability to compete for the best graduate students is critical to our research enterprise, as well as to faculty recruitment and retention. Our offers of support fall short of those of our peers in some fields. In those fields where grant funding is not available and there is no discretionary funding for graduate education, the problem is particularly grave. This year, we found the funds to address the shortfall in NIH training grants. Darrell Bazzell, vice chancellor for administration, is working with the University Committee to develop a biennial budget proposal that would allow us to address the problem.

In addition, we have submitted a request for graduate funding and for tuition remissions as part of our contribution to the UW System’s Educational Attainment Initiative. We also will submit a proposal for new graduate student funding as part of our participation in the system’s Research to Jobs Initiative. We are working with the UW System on other possible approaches to the challenge we face. Meanwhile, we continue to educate our donors about the importance of graduate student funding, and we are encouraging them to consider linking graduate fellowships to professorships. The Madison Initiative for Undergraduates also will provide a number of departments with additional teaching assistantships, and the Great People campaign is a good platform for educating our donors about the need for graduate student aid.

I will suggest that the new vice chancellor for research and graduate education undertake a study of the sizes of our graduate programs in relation to faculty research needs, departmental and program teaching needs, the job market in various disciplines and sources of funding.

UW Foundation Presidential Search

As you know, the University of Wisconsin Foundation (UWF) is currently searching for a successor to Sandy Wilcox, UWF’s very successful current president. I consider this to be one of the most important appointments that will be made during my tenure as chancellor. I have been consulting with the search committee and will be fully involved in the process once the search firm (Spencer Stuart) has developed a list of prospects for review by the committee. The committee hopes to present a candidate for the UWF Board’s consideration by the end of the summer. I encourage you to nominate promising candidates. For the position description, visit http://www.uwfoundation.wisc.edu/home/employment/currentpositions/president /president.aspx.

Global Health and Sustainability

We have chosen as two interdisciplinary, university-wide initiatives areas of campus strength and societal need that also integrate research, education, policy and action — Global Health and Sustainability. In each case, we seek to help identify the full breadth of campus capabilities and bring them to bear on pivotal issues. The provost’s office is providing leadership, staff support and funding for these areas.

Jeannette Roberts, dean of the School of Pharmacy, and Jeremi Suri, professor of history, are co-chairing the Global Health Initiative. For Global Health, we anticipate an inclusive initiative that brings together the sciences, social sciences and the humanities to address what is one of the most challenging problems of the new century.

The Sustainability Initiative is co-sponsored by the provost and vice chancellor for administration and will ensure a fusion of academic and functional/administrative initiatives campuswide. Led by Gregg Mitman, interim director of the Nelson Institute for Environmental Studies, and spearheaded by the institute, this initiative includes faculty, staff and students, and is focused not only on research and education, but also on having our campus serve as a laboratory for best practices. Initial subject-matter retreats for each initiative attracted hundreds of faculty and staff, and generated strong interest and enthusiasm. Both initiatives are open to participation, and we encourage you to get involved.

Diversity

Our efforts to diversify the faculty, staff and student bodies will be aided by the expectations we have set for the use of funds from the Madison Initiative for Undergraduates (MIU). Departments and programs will be held accountable for the proactive recruitment of underrepresented scholars and scientists, as well as for innovations in undergraduate curricula. Funding from the MIU will open up opportunities for students to study and find internships abroad. It will also help us establish exchanges that bring students from other countries to UW-Madison. Each student deserves the opportunity to study with peers from all over the world; we intend to create more of those opportunities.

In an effort to ensure that we are more actively recruiting a diverse student body, we have invested additional funding (from reallocations) to initiatives coordinated by the offices of the Vice Provost for Diversity and Climate, the Vice Provost for Enrollment Management, and the Vice Provost for Faculty and Staff.

The best students for UW-Madison represent the global marketplace. The Vice Provost for Enrollment Management is working with University Relations to create a new marketing plan for the university that specifically focuses on increasing numbers in each of the following populations: first-generation students, geographically diverse students (urban, rural, in- and out-of-state), economically disadvantaged (in particular, more Pell-eligible students), targeted ethnic minorities, international students, transfer students, Women in STEM (science, technology, engineering and math) fields and Wisconsin high-achievers.

Building the new marketing and recruitment strategy will involve rethinking how the admissions office handles inquiries, how and when admission decisions are made and communicated, how financial aid plays into our success and how we maintain a close relationship with every applicant at every step of the process.

Our goal is not only to enroll a more diverse student body, but also to ensure that students from every background succeed once they are here. Working together, we can eliminate the achievement gap between majority and minority students –  a commitment we made to one another in our strategic plan and reaccreditation self-study.

Finally, after more than a year of consultation about how best to coordinate and enhance existing diversity programs, we are moving toward a new structure whereby the Vice Provost for Diversity and Climate will assume responsibility for the oversight of several key programs that currently report elsewhere.

Faculty and Academic Staff Salaries

Faculty/staff compensation has been a high priority for the provost’s office this year. Under the leadership of Vice Provost Steve Stern, we have made a serious effort to identify, review, revise and use the tools at our disposal to adjust salaries in the absence of a faculty/staff pay plan. The purpose of the initiative was to develop a set of tools that allow frequent review and appropriate adjustments in compensation in response to retention and market pressures. At the same time, we have increased the amount added to faculty salaries at the time of promotion to associate professor and to full professor. We also added a periodic post-full professor review that can lead to salary increases. We would like to be able to do more, but, as you know, we are prohibited by the state from implementing salary increases that would appear “pay-plan-like” when no pay plan exists. I hope that a new understanding with the state will eventually allow us considerably more freedom when it comes to compensation practices.

Vice Provost Stern has also been working with Stephen Lund, director of the Academic Personnel Office, and academic staff on a set of initiatives that could give us tools to reward and enhance excellence, and to introduce clarity about job security among our academic staff. That work is ongoing; we will ensure that any developments are communicated to the community as a whole.

Collaboration with WAA and UWF

The university will be increasingly dependent on private funding. With that in mind, I charged a task force with considering how the university; its schools, colleges and departments; the Wisconsin Alumni Association (WAA) and the University of Wisconsin Foundation (UWF) could be more closely coordinate and enhance our joint efforts to build our alumni and donor base. The task force met for several months and presented a set of recommendations at the end of the fall semester. They included the formation of a steering committee with representation from all three organizations charged with developing “an enterprise-wide approach to development and engagement”; charging a group with the task of recommending new technology platforms that would enable us to reach and communicate with our alumni, friends and donors; and developing a culture of giving among our current students. I expect to get recommendations from the members of three different committees by the end of the summer.

University Relations/Communications

Last year I established a new position, vice chancellor for university relations, and named Vince Sweeney to the position. This position is intended to coordinate the university’s messaging and relationship-building strategies across a broad range of audiences. That’s a tall task, but we are making progress. From a state-relations level, for example, I’m pleased to report that we’ve been in direct dialogue with the three major candidates for governor, and we have had ongoing conversations with Gov. Jim Doyle, legislative leadership and industry lobbyists — all in an effort to share our priorities and nurture those relationships. On the internal and external communications level, you’ll soon see a redesigned front page on our university’s website, with improved functionality and a new and exciting look that will better reflect the excitement and energy of this great university. On a daily basis, I continue to see the benefits of our efforts to articulate and communicate our priorities and goals more effectively and more consistently across a range of different audiences. We are approaching our relationships with a greater degree of intentionality and with more coherent messages.

Looking Forward

As you know, this summer the UW System Board of Regents will discuss our next biennial budget request. At the moment, the UW System is working to develop two initiatives — Educational Attainment and Research to Jobs — for which the regents are expected to ask for new funding. UW-Madison has submitted a report to UW System showing the means by which we could increase the number of graduates. We included an increase in transfer students, elimination of the achievement gap and overall decreases in time to graduation. We also estimated the number of new freshmen we could serve if, and only if, new funding existed to support the increased instructional costs as well as infrastructure. We made graduate student funding a central part of our report and proposal to UW System.

UW System also established a Competitive Workforce Commission to study compensation and make recommendations about the changes that they deem necessary. I was asked to speak to the commission and I gave a presentation several weeks ago, providing comparative data on UW-Madison faculty salaries and establishing the context in which I think that data should be viewed. I believe the commission, which is made up of business leaders and representatives from various campuses, will recommend strong measures to improve faculty and staff salaries in the UW System.

Given the budget deficit in the state of Wisconsin and the slow rate of recovery from the recession, I am not optimistic about increased funding for the UW System for this next biennium. In addition to the cost to continue, I believe a pay plan and graduate student funding should be at the top of our priority list. We will, of course, have time in the fall to discuss priorities and tactics. At the moment, we are considering inviting an outside consultant to study how we might effectively organize some of our administrative functions and services, and realize savings in the process. Should we pursue such a course of action, faculty, staff and students will be involved in the work and in any consideration of recommended changes. All of us should be thinking about how we can manage effectively in the face of ongoing budget challenges and possible cuts. What we have achieved over the past two years under significant budget pressures is remarkable. Though the outlook is beginning to brighten, I anticipate that we will face another two years of pressure.

Let me end with a few observations and a perspective on the longer term. Our trip to China this semester was gratifying for a number of reasons, among them the high regard in which UW-Madison is held there. In addition to historical reasons for the university’s reputation, the Shanghai Jiao Tong rankings of world universities, which place UW-Madison 17th in the world, also contribute to our high standing. The unique attributes of this university attracted attention in China, including not only the talent of our faculty, staff and students, but also our commitment to the Wisconsin Idea. As China considers its goals for higher education, its students, faculty and academic leaders displayed a great deal of interest in the notion that the university could be, at once, preeminent in the quality of its research and education, and also committed to partnerships with people and institutions outside the university dedicated to addressing the state’s, the nation’s and the world’s most vexing problems.

After two academic years as chancellor of this university, I have come to see UW-Madison as a uniquely open and engaged intellectual community. Our faculty, staff and students are deeply engaged with the larger public, fiercely devoted to “sifting and winnowing” and willing to work not only at the cutting edge, but at the heart of things. The larger community, which includes the city of Madison, the surrounding region, the state of Wisconsin and all of our alumni, is involved in the university to a remarkable degree. It is our responsibility to preserve the quality and uniqueness of this great institution and to enhance its impact.

That requires that we find the right economic model for the university — the right balance of quality and affordability. Over time, we will need to establish a new relationship with the state of Wisconsin, one that recognizes how reliant we are on revenues from the private sector, from the federal government and from tuition; one that would, therefore, allow us the flexibility to use our funds in more effective ways that make sense for us, for the larger UW System and for the state. A new compact with the state would provide greater freedom to manage our resources and clearer forms of accountability to the state.

I expect to spend a significant amount of time working with you, with business leaders, with political and government leaders, and with the general public to develop and promote such a compact. I believe the issue of increased flexibilities for the university will become a topic of discussion in the context of the gubernatorial election. It will be important that we be active, informed and thoughtful participants in that discussion. I look forward to working with you toward that end.

The spirit, energy and dedication of our faculty, staff and students make this university worthy of celebration. I celebrate all of you, and I hope you have a wonderful summer.

For the benefit of those who could not attend, we are now belatedly posting (courtesy of CAPE) a link to the complete video record (157 MB) of the presentations by the three distinguished speakers: Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE); Andrew Reschovsky, professor at the La Follette School of Public Affairs;  and Kevin Reilly, President of the University of Wisconsin System.

All three presentations made clear that the budget problems facing the state of Wisconsin, and therefore the University, will be with us for some time to come and will require difficult choices.

Planning for the second forum in the series, which will likely take place in early Fall 2010, is now underway.

[T]his is the overarching policy issue of the decade (century?) and we need all members of the university community, as well as those in the wider public, to understand the inexorable trends that are driving the university’s future and what it can expect to do for the state in the future.

Three separate campus organizations — PROFS, UFAS, and CAPE — have come together to jointly sponsor the first of a planned series of public forums on the subject, to be held Tuesday, February 23, 4:00-5:30 pm at the Memorial Union (check Today in the Union to confirm the room location; tentatively the Wisconsin Inn).

The press release from PROFS can be viewed here.

Distinguished panelists include Kevin Reilly, President of the University of Wisconsin System; Andrew Reschovsky, professor at the La Follette School of Public Affairs; and Noel Radomski, director of the Wisconsin Center for the Advancement of Postsecondary Education (WISCAPE).

From the press release:

Financing of higher education has changed significantly over the past several decades. Shrinking state support and sharply increased costs have forced campuses to chart new courses for survival. Are our only alternatives hyper-inflationary tuition increases and bigger classes?

“The financing of public higher education has changed dramatically and continues to change. How great universities – UW-Madison, in particular – continue to respond to those changes is among the most important issues we face on campus and nationally,” says Joe Salmons, president of PROFS. “This forum will launch an important conversation for faculty, the university community and our state.”

According to Prof. Salmons, this first forum, which will concentrate on  identifying and explaining the current fiscal challenges, will consist of approximately 15 minute presentations by each of the three panelists, with additional time for questions by the audience.  Future planned forums in the series will dissect proposed solutions.

The campus community and Wisconsin citizens alike have an enormous stake in sustaining the educational, outreach, and research missions of the University, all of which are major drivers of long-term economic stability and prosperity in the state.

We urge everyone to attend this forum.

- the Editors

When it comes to both the availability and the pricing of a product, the Law of Supply and Demand works best (from the customer’s perspective) when (a) those creating the demand are also the ones paying the price, (b) when the demand is elastic — that is, when an unreasonable increase in price leads to a sharp drop in demand and thus in the supplier’s profits, and (c) the profit potential is sufficient to motivate a supplier to provide, or continue providing, an essential product or service even when the market is small.

With textbooks, the demand is created by instructors who assign the reading for a class of anywhere between 10 and 400 students. But it is the students who pay. The demand is rigid – most instructors don’t assign the textbook based on price but rather based on pedagogical suitability for their course, and students have to buy it. And for many advanced courses, there may be only one suitable textbook on the market. So that textbook, within its particular narrow niche, enjoys no less of a de facto monopoly than Microsoft enjoys in the computer world.

To illustrate my point, let’s take J.D. Jackson’s Classical Electrodynamics. It has been around for 45 years (it is now in its third edition). It is one of the most widely used advanced physics textbooks ever and has undoubtedly sold many tens of thousands of copies, if not more.

The list price for Jackson is $96, and the current discounted price from Amazon is $76. Even used copies are selling for upwards of $56, and this despite an ample supply, as there are currently 75 used copies available via Amazon!

Now compare Classical Electrodynamics, with its 808 pages and current rank of around #13,000 in Amazon sales, with W.L. Shirer’s Rise and Fall of the Third Reich, with its 1,264 pages and sales rank of around #15,000. Jackson was first published in 1962; Shirer in 1960. In short, comparable age, comparable sales in recent years, and Shirer has 50% more pages to boot.

The list price of Rise and Fall is $25.00; the Amazon discount price is $16.50.

How do we explain the fact that Jackson is four times as expensive as Shirer?

It’s not marketing cost. Every physics professor in the world already knows Jackson. I’m not a physics professor and even I know about it! Presumably, just about every physics professor has already made up their mind whether Jackson is the textbook of choice for their course.

Even if Jackson were still being actively marketed today (which I doubt), instructors are vastly less expensive to identify and reach than the general public. All you have to do is send them a free examination copy. If an instructor likes it and adopts it for their course, voila! You’ve got dozens, if not hundreds or thousands, of guaranteed sales over the next few years.

It’s not distribution cost, which should be about the same regardless of the subject matter. And it’s not author royalties — in neither case, in fact, is it likely that the author royalties account for more than 10-20% of gross receipts. It’s not layout, design, and typesetting costs — these are one-time expenses that were probably recouped within the first year of printing.

What about paper, printing, and binding cost? Contrary to common perception, retail prices for books have almost nothing to do with their manufacturing cost. When many thousands of copies per year are being sold, the printing/binding cost of even the fanciest color textbook with accompanying CD is almost certainly well under $10 per copy. For a simpler, text-only paperback of the type frequently used in language and literature courses, the manufacturing cost is probably closer to $2 per copy. Hardcover binding is perhaps a dollar more — that’s right, a dollar!

Most likely, there are two factors at work here: (a) perceived value — a hardcover book with lots of complicated equations looks more expensive than a softcover with just text and a few photos; and (b) the fact that Jackson is usually purchased by students who have no choice.

My point is this: the prices for many, if not most, textbooks are artificially inflated relative to other books, sometimes by ridiculous amounts. Publishers charge a lot simply because they can. Most instructors either don’t consider price when assigning a textbook or else don’t feel they have acceptable lower-cost alternatives to choose from.

In order to control textbook costs, which are now a major factor in the rising cost of a college education, the academic community needs to figure out the following:

1) How to give instructors a reasonable incentive to factor cost into their textbook decisions without penalizing them for sound pedagogical choices; and

2) How to effectively exert pressure on publishers to hold down prices despite the shortcircuiting of traditional market forces.

I don’t claim to have the solution. But awareness of the problem may be an important first step.

It is worth mentioning in passing, however, that instructors may have more leverage with publishers than they realize. One publisher sales rep once worked hard to persuade me to adopt a popular $60 textbook for a freshman course with a projected enrollment of 350. I said I would consider it if she would make it available through the University Bookstore at 20% off the retail price. To my surprise, she agreed! (To her surprise, I still didn’t adopt the book.)

Incidentally, an analogous distortion of market forces is at work with library journal subscriptions, whose cost has far outstripped inflation in recent decades. But that is a topic is for another day.

-G