Michael Parenti Internet Archive


Dividends Are Not Royalties: The SAT and Surplus Value


Source: Monthly Review Volume 45, Number 5
Published: October 1993
Online Version: Michael Parenti Internet Archive, 2026
Proofread/HTML: Gal Y.
License: CC-BY-NC-ND-4.0


It has been frequently noted that IQ examinations, while professing to measure innate intelligence, are riddled with racial, gender, and class biases. Thus a low-income, inner-city youth, confronting a seemingly innocuous phrase like “behind the sofa” on an IQ test, may find it unfathomable, not realizing that it is just a middle-class way of saying “in back of the couch.”

Along with IQ exams, the Scholastic Aptitude Test (SAT) has come under fire. Going through my file, I came across a story, clipped several years ago from the Washington Post (April 28, 1989), noting that the Center for Women Policy Studies found that the SAT was biased against women. The center reported that about one out of every seven questions favored males over females, specifically questions about sports, science, war, and business. A more recent story in the New York Times (May 26, 1993) reiterates the charge of gender bias.

One claim made for the SAT is that it is designed to predict a student's college performance. Not true. Men consistently and substantially outscore women on the SAT, yet women earn higher grades both in high school and college. But, because of the gap in SAT scores, women are less likely to win scholarships or gain entry to certain schools and programs.

While agreeing that there is gender bias in the SAT, we might also wonder about the test's unexamined politico-economic bias. What caught my eye was an example offered in the Post article of the questions that favored males. Males are more likely to answer correctly the comparison: “Dividends is to stock as royalties is to writer.” According to the SAT, the correct answer is “true.” Presumably, both dividends and royalties are seen as income, while stock and writer are the respective income producers.

Wait a minute, I thought. What is so correct about that parallel? It is just such thinking that leads some people to accuse me of being a “capitalist” because I earn royalties on my books. But income accrued from stock ownership is something apart from salary or wages or royalties earned from hard work.[1] Dividends from stock represent profits from capital investment, money you make without having to work. The author of a book does not make profits on his or her book. He or she earns an income from the labor of writing it, proportionately much less than the sum going to those who own the publishing house and who do none of the writing, editing, production, printing, and marketing.

The sum going to the owners is profits, the dividends of the stock they own in the publishing house. It is a portion of the value added to the commodity by the labor power of others. It is what federal tax forms used to call “unearned income” and with good reason. Again—it cannot be said too often—profits are what you make when not working. This explains why, in most instances, the secret to getting rich is not to work hard but to get others to work hard for you.

That is why big commercial publishers of books and magazines bring in wealth for their owners while most of their writers live at the subsistence level. In 1975, when I published an op-ed in the New York Times, I was paid $150. Eight years later I published another in the Times and despite all the intervening inflation, I again was paid only $150. Today, almost two decades since I first appeared in that illustrious publication, the fee is still $150. I got the same munificent sum for an op-ed I published in the Los Angeles Times. Furthermore, neither of these newspapers—nor most other major publications—pay permission or reprint fees to authors. That means the piece might get picked up by various other newspapers who then pay a fee to the Times—but the author sees not a penny of it. Some of the major magazines, known as the “big slicks,” not only have frozen their fees but have reduced them over the years. Forget about trying to keep up with inflation; freelance writers are not even keeping up with the 1970s—even without accounting for inflation.

Some time ago, at a meeting of the Washington DC chapter of the National Writers Union, the chair asked for a show of hands of those who had earned over $5,000 from their writing in the previous year. Of about thirty persons, I was the only one who raised his hand—and that's only because I had a textbook that had enjoyed some adoptions.

Writers will tell you about their many grievances, about publishers who lie about sales figures and withhold royalties, about manuscripts accepted then never published, about book publication dates that are postponed for as much as three or four years, about books that are published only to have their distribution deliberately and completely aborted—”privished” it is called. Writers will tell you about payments and kill fees never collected, about articles that are completely rewritten by clunky-styled editors, about having no say regarding framing, titling, headlining, and rewrite. And they will tell you about major magazines and big publishing houses that have grown rich off their labor.

So a correct analogy would be: “Dividends is to stock as profits is to publisher.” Leave the writer out of it, unless you want to say: “Wages is to workers as royalties is to writer.” Authors make money off their own hard work, and usually not all that much. Unlike the publisher, they make nothing from the capital investment on their books because they don't have any capital invested. Like the proofreaders, editors, printers, and sales representatives, writers create value through the direct application of their mental and physical labor. A portion of the value they create goes to them. The rest goes to the investors.

What the Washington Post article, and the study it reported on, both missed was the political and class bias in that particular SAT question. What was taken as the correct answer happens to be incorrect or at least loaded with capitalist ideological presumptions that treat the pocketing of value by investors as identical to the creation of value by writers. Both investor and writer (like other workers) supposedly are “working” in partnership to create” earnings.” Tell it to Forbes not to us underpaid scribes.

The Post quotes a New York state judge:

After a careful review of the evidence, this court concludes that SAT scores capture a student's academic achievement no more than a student's yearbook photograph captures the full range of her experience in high school.

Well said. All I would like to add is that at least one of the SAT questions captures the biases and disinformation of a capitalist system all too well, biases that are so thoroughly ingrained as to go undetected and unchallenged in the very investigations that purport to expose bias.

 


[1] ”Royalties” are analogous to dividends when they refer to profits on land, oil, and mineral rights that go to owners, something quite different from the “royalties” that go to writers.