corporatism

In an interview on Geeks Guide to the Galaxy (Wired), econtard Paul Krugman discussed the relationship between science fiction and economics. He said that he was inspired to pursue economics by Asimov’s Foundation series. Quelle surprise! He also claimed economic laws change over time (I know, I know!), but he nevertheless embraces one unstoppable apriori economic law in the interview: greed.

Free online college course: Fantasy and Science Fiction: The Human Mind, Our Modern World: Taught by Professor Eric S. Rabkin of the University of Michigan. Hosted by Coursera. The course will run 10 weeks and will cover Grimm, Carroll, Stoker, Shelley, Hawthorne & Poe, Wells, Burroughs & Gilman, Bradbury, LeGuin, and Doctorow (Little Brother). Click on over for more details and the registration form.

ISS astronaut impressed by private firm SpaceX’s Dragon vehicle: “Inside of the Dragon module. Beautiful. Spacious, Modern. Blue LEDs. Feels a bit like a sci-fi filmset. Of course it is from Los Angeles.” And “You could say a new era of spaceflight has begun. Soon private companies will take people to and from space.”

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Michael Stackpole, a traditionally published author who was one of the early champions of self-publishing ebooks, has an interesting post analyzing the settlement agreed to by three of the Big Six publishers — Hachette, HarperCollins, and Simon & Schuster — involved in the alleged ebook price fixing flap. If he’s right, the Department of Justice is going to be imposing more injustice than just preventing a little self-destructive collusive fixing of high prices. This is yet another among so many many many examples of the state stepping in to prevent something only to impose that very thing itself. Yes, it looks like the DoJ is going to prevent price fixing of one sort only to impose its own brand of price fixing. But hey, it’s only a bad thing when non-state entities do it, right?

Here is Stackpole’s breakdown of the settlement  provisions:

1. For a period of two years,
2. Publishers will not be able to set a restricted retail price for their product.
3. Retailers will be able to set their own price for an ebook, but they cannot discount the bookbelow their own discount. (In short, the retailer cannot sell ebooks at a loss.)
4. Publishers cannot “retaliate” against retailers during this time.
5. The “favored nation” status that prevented a publisher from selling at a lower price to one retailer over another is gone.
6. The Agency Pricing discount of 30% off the top that retailers pay publishers can remain in place.
7. There are compliance procedures being set in place (that I don’t bother discussing) so the government can make sure that the publishers are complying with the agreement.

That’s right. Provision #3 fixes an arbitrary minimum price —a price floor. Retailers like Amazon will not be allowed to sell ebooks below the price they pay publishers for them; they will not be allowed to sell at a loss. For two years. And apparently there is yet more intrusive bureaucracy being set up to monitor compliance with these new regulations for the ebook market. It’s another shovel-ready Obama jobs program!

The federal government is also going to prevent publishers from requiring retailers sell their ebooks for a certain price. In other words, it bans the agency model. Now, I’m no fan of the agency model, and I think it’s self-destructive for publishers to adopt it in order to screw their customers with high prices so that they can prop up their dead-tree book business model for a while longer. But I don’t think they should be prevented by law from doing so.

Stabilization is Chaos: “Monetary policy all over the world has followed the advice of the stabilizers. It is high time that their influence, which has already done harm enough, should be overthrown.”
— F.A. Hayek, 1932

The federal government is also going to prevent publishers from retaliating against retailers for the prices they set. Also, no more contracts that stipulate publishers can’t sell to other retailers at a lower price. In other words, the state is going to short circuit the market process by preventing publishers from putting any kind of meaningful pressure on retailers and vice versa. No jockeying for position in the ebook market. Forget letting consumers decide and the best business model win. The United States federal government prefers stasis — the maintenance of a status quo of its own making.

But wait, there’s more. Stackpole does the math and argues that far from preventing publishers from fixing high prices for consumers, the settlement will actually disincentivize both publishers and retailers from setting lower prices:

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As you may have heard, the Department of Justice is looking into opening an antitrust case against the Big 6 publishers and Apple for allegedly colluding to set prices via an agency model which the publishers set the prices for their books in the iBooks store, not Apple. They were then able to put enough pressure on Amazon to coerce it into accepting the agency model as well, which it had previously resisted. This is why you see ebooks being sold on Amazon for $9.99 or more nowadays.

Now, there’s a contingent of publishers and authors who fear change and have grown complacent and dependent on their IP-based, physical distribution model; they tend to see Amazon as an evil corporation out to destroy publishing, bookselling, and writers.

Scott Turow, president of the Authors Guild — does anyone else find the idea of an authors guild disturbing, like modern-day feudalism? some would say the same about the Big 6 publishing houses — recently wrote an open letter speaking out against the antitrust investigation and in defense of the agency model. Quelle surprise! Though it’s ironic to see someone defending big corporations against antitrust investigations who, under normal circumstances (i.e., ones in which his bottom line isn’t directly affected), would probably be in favor of antitrust suits against monopolistic big corporations.

Anyway, Turow types some rather outrageous falsehoods about Amazon. Indie powerhouses Barry Eisler and Joe Konrath¹ do a pretty god job of showing how ridiculous Turow’s claims are. Richard Lea summed it up on Twitter with question that makes up the first half of this blogpost title: “Can a bookseller destroy bookselling by selling lots of books?”

I do disagree with Eisler and Konrath on one thing, however, and that is their opposition to the collusion between Apple and the Big 6 publishers. As a libertarian, I don’t have a problem legally speaking with collusion, or price fixing. Without government support, cartels are unsustainable. Of course, believing some practice shouldn’t be illegal doesn’t mean I approve of said practice.

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1. Full disclosure: Both men recently made publishing deals with one of Amazon’s new fiction imprints but were extremely successful self-publishers beforehand and are still self-publishing other work. ↩

The Ayn Rand’s Atlas Shrugged book app for iPad has been awarded the App Fiction prize in the 2012 Publishing Innovation Awards. The award was handed out at the recent Digital Book World Conference.

In addition to the novel itself, the app “includes some of Rand’s lectures, additional articles for further reading on Rand and her philosophies, a timeline of events in Rand’s life as well as the works she published, and other materials.” If you own an iOS device, you might want to check it out, but it will cost you $14.99.

In related news, filming for Atlas Shrugged: Part Two is scheduled to begin in April. The first film was not great (see Matthew Alexander’s review) and didn’t do so well financially. It doesn’t bode well that the second film will have a smaller budget and a new director and may have some central characters recasted.

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But back to Apple-related news, one P.J. Rey over at The Society Pages: Cyborgology has an interesting article about “How Cyberpunk Warned against Apple’s Consumer Revolution.” There are at times anti-corporate progressive and Marxist overtones in the article — Rey even references Marx’s notion of “false consciousness” — but nevertheless Rey’s criticism of Apple in light of cyberpunk’s tendency toward individualist anarchism should be of interest to radical libertarians of all stripes.

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Cory Doctorow’s latest YA novel, For The Win, just might be the Jungle of the digital age — a depiction of the plight of professional gamers and their struggle to unionize and extract concessions such as better pay, shorter hours, and safer working conditions (?!) from their employers through collective bargaining. Not being an avid gamer myself, much less a professional gold farmer, I’m left to wonder if it is as poorly researched and inaccurate as Upton Sinclair’s piece of socialist propaganda fiction. I expect left-libertarians will tend to like this novel but other libertarians will not. As for myself, I struggled to finish it and do not recommend it — as much because of the writing style and quality of writing as the subject matter.

For The Win opens with a gifted Chinese gold farmer — a working gamer who plays to collect game money and items to sell for “real” money to “rich,” lazy, mostly American gamers — in China who just happens to have the Western name of Matthew. He’s attempting to strike out on his own but is visited by Boss Wing’s goons and taught a lesson. Then we meet an American Jew in Los Angeles who goes by the Chinese name of Wei-Dong and moonlights, against his parents’ orders, as a gold farmer with some online buddies in China. Next, we’re introduced to Mala, aka General Robotwallah, a poor Indian girl with a talent for strategy and leadership, who is hired by a mysterious man to use her “army” to harass gold farmers in-game because they allegedly disrupt the game for honest, paying customers.

Before long we’re introduced to Big Sister Nor, a mysterious new figure on the scene who is out to organize working gamers into a union to fight corruption and improve their circumstances. As the novel progresses, we’re introduced to more characters, mostly in China and India, where the bulk of the action takes place. Perhaps the most notable is a female Chinese underground radio host who caters to the factory girls, giving them advice and urging them to stand up for themselves, while she dodges police raids, moving from safe house to safe house under a series of false identities.

One of the themes of the novel is how difficult it has been historically for workers to organize and how the internet (including social media and online games) provide game-changing tools for organizing labor. There is much truth to this, though I am skeptical that even the myriad tools of the internet can allow a voluntary global union to pull off anything like the ambitious scheme Cory’s protagonists endeavor to carry out in the novel. Although Cory has characters voice the usual skeptical objections to the efficacy of a voluntary global union, I don’t think he adequately addresses the difficulties such a union would face even in the digital age. Without state-backed coercion (directed at businesses, scabs, and their own members), how much power would a union really have, particularly spread out over the globe? Sure, gamers have an advantage in that they all work virtually in the same place — but still…

To Cory’s credit, however, he does depict a truly voluntary union whose leaders welcome freely competing unions in the market. The International Workers of the World Wide Web (IWWWW) or Webblies, as they call themselves,¹ even eschew a formal hierarchy. The de facto head of the union at one point exclaims to her followers, “I’m not magic. … You all lead yourselves.” They also, admirably, do not seek compliance with their demands through legislation or regulation. Instead, they engage in self-help. Libertarians may find some of their methods questionable, however.

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1. These terms were coined by Ken MacLeod, based on the real Industrial Workers of the World (or Wobblies), and borrowed by Cory Doctorow. ↩

Justin Cord, protagonist of The Unincorporated Man (2010 Prometheus Award winner for Best Libertarian Novel) once quips that, “You often learn more about a situation from the questions than the answers.”

My highest praise for the book is for the questions it raises in the best tradition of social science fiction, questions that get us thinking about economic, legal, and even financial institutions in new ways. The book portrays a future society with a minimalist limited government, strong corporations, and a universal system of “personal incorporation.”

Each person is owned by a shifting combination of self and others through a joint stock arrangement set up at birth. Making corporations personal serves to amplify and universalize the conventional image of corporate titans maneuvering against each other for power and position. Everyone plays the “corporate game” and plays it with their whole lives, not just their jobs. Into this mix awakens one man from 300 years of suspended animation. Can he remain wholly self-owned? Will his ancient ideas of autonomy infect others and upset the new social order?

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