The Marginal Side of the Moon

June 6, 2009

by Gene Callahan

Nick Mason of Pink Floyd, on the band’s best-selling album, Dark Side of the Moon: “Everyone thought it was the best thing we’d done to date, and everyone was very pleased with it. But there’s no way that anyone felt it was five times as good as Meddle or eight times as good as Atom Heart Mother. The sort of figures it, in fact, sold.”

What Mason has missed is the importance of marginalism. One cannot move from “This album sold five times as many copies as Meddle” to “People think this album is five times as good as Meddle.” If, say, four times as many people as the number who bought Meddle found it fell just 1% shy of being worth buying, then Dark Side of the Moon would only have to be 1% better to sell five times as many records. (I’m assuming, for the sake of discussion, that there is some meaning to calling one piece of music “1% better than” some other piece.)

11 Responses to “The Marginal Side of the Moon”

  1. James Robinson Says:

    Wonderful but I wish you’d work a little more on the wording. Wouldn’t it be correct to say “five times as many people as the number who bought Meddle”?


  2. No, it wouldn’t — that would give you six times the sales (the one times the people who already bought it em>plus the five times as many who would now buy it).


  3. Sorry about the crazy italics in the comment above — it’s 7:30 Sunday morning!


  4. How would people who didn’t buy Meddle know how good it was?


  5. Hmmm… they had a radio? A friend with a stereo? Got a second-hand cassette copy? Read a review in Rolling Stone?

    But in any case, all that matters for the marginal decision is whether or not they suspected it was good enough to be worth buying… just like with any other product.


  6. I don’t imagine most record buyers back then heard more than one or two songs off an album before they bought it.

    I read Mason as trying to say that sales aren’t all that closely related to quality. And if you’re trying to make that claim, you probably need to make some sort of effort toward relating the two magnitudes. The hypothetical case in which music buyers are so discerning that a 1% quality difference leads to a 400% sales difference is technically possible, of course, but it’s very implausible when you consider that albums aren’t generally evaluated for quality before they are bought (at least, certainly not back in the 1970s!).

    It would be different to argue that a 1% difference in the status signal yielded by an album purchase can lead to a 400% sales increase — but Mason was speaking specifically about how good the band members felt the music was.

  7. Gene Callahan Says:

    “I don’t imagine most record buyers back then heard more than one or two songs off an album before they bought it.”

    Well, besides “imagining” history, one can also try to find out about it. I had often heard an entire album several times before I bought it. (Friends, you know.)

    “The hypothetical case in which music buyers are so discerning that a 1% quality difference leads to a 400% sales difference is technically possible, of course, but it’s very implausible…”

    Yes, I was merely giving a theoretical possibility — did I say anything that made you think otherwise? Did I imply that I thought Dark Side of the Moon was really only 1% better?

    “but Mason was speaking specifically about how good the band members felt the music was.”

    Yes, and he was citing a ridiculous relation between sales and quality — as if “five times better” ought to equal “five times the sales.” Using marginalism, we can easily see why that isn’t so. I offered an extreme (admittedly unrealistic) case to show why there is no reason any such relationship should hold.

    You seem to be objecting to something about my post, but I just ain’t clear what as of yet.

  8. Gene Callahan Says:

    By the way Jason, I don’t know if you imagined this or not, but in the 1970s, when a significant new album was released, FM deejays would sometimes play the entire album, start to finish, in one pop. So you could easily hear the entire album the day it was released! And if you didn’t, your friend might have, and would say, “Man, the new Pink Floyd is incredible! You have to get it.”

  9. Blake Says:

    Correct me if I’m wrong, but the inverse is true as well:
    If the Dark Side of the Moon was 1% worse, this could make all the difference in total sales between the two albums.
    The lesson, just to reiterate, is that when we’re comparing the value of the two albums, the economical way to do so is by equating the marginal values rather than the total value (measured in sales). This goes back to Marshall’s marginal utility theory.

  10. Gene Callahan Says:

    Yes, Blake, exactly so. Consider two cars, the Ronda and the Bubaru, in the same class, offered at exactly the same price. It turns out that, by neutral measurements, the Rondda is 1% more fuel efficient, 1% more powerful, 1% roomier, 1% more maneuverable, and so on. Clearly, the Ronda is “1% better.”

    Now let’s say the market for this type of car is 1,000,001 people. Out of those people, one million of them read the auto magazine reviews and realize that the Ronda is a better buy at the same price. One of the potential buyers just takes his brother’s word (his brother is a Bubaru dealer) and buys the Bubaru.

    What are we to make of a complaint, on the part of the Bubaru Corporation, that the market is unjust because “sales don’t reflect quality”? After all, as the Bubaru spokespeople say, “our car was only 1% worse, so it should have had only 1% fewer sales than the Ronda — not one million times fewer sales!”

    We should say, “You are mumbling nonsense. Buyers, in choosing to purchase a Ronda or a Bubaru, are not allocating their dollars as an aggregate according to the relative quality differences between the two vehicles. No, they are deciding, on the margin, which of the two they would rather purchase. And, on the margin. all rational buyers should prefer the Ronda.”

  11. Bob Murphy Says:

    I’m sending this post to Tom Woods. (We both had Regnery books come out recently.)


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