Economics

Resolved: The New York Times Should Be Staffed By Volunteers, Like Meals On Wheels

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Flaming Eggheads: In the current New Yorker, Malcolm Gladwell gives an energetic pan to Chris Anderson's Free: The Future of a Radical Price. As Anil Dash points out, there's a vehement tone to Gladwell's review that suggests some harder feelings at work than you'd expect in a standard piece of intra-Condé Nast logrolling. Anderson has replied somewhat snippily too. (Disclosure: I know Anderson medium well and like him; Gladwell I've never met but he looks cool in pictures.)

The central virtue of Wired, as a great man once told me, was to be right enough on the large trend that it could afford to be repeatedly, spectacularly wrong on almost all the specifics. As a result, you can nearly always refute a Wired-type manifesto by pointing out how facts on the ground keep falling short of the vision. (I used to do that a lot, sometimes in the pages of Wired itself.) So Gladwell is on semi-solid ground in referring to YouTube's high maintenance costs, The Wall Street Journal website's (sporadically applied) pay structure, premium cable, and iPhone downloads as areas where free isn't paying and paid-for is paying.

Gladwell gets lost in his other arguments, though. He pedantically objects to Stewart Brand's statement that "information wants to be free," by noting, correctly, that "information can't actually want anything." But then he uses that same formula, stating that in another case, "information does not want to be free. It wants to be really, really expensive."

That other case is the market for orphan pharmaceuticals, which are growing more expensive. But Gladwell was right the first time: The new drug recipes don't want to be free or expensive. Their manufacturers want them to be expensive; many other parties (buyers, industrial spies, some national governments, and after a period of protection, U.S. patent laws) want them to be free.

Some of those parties have more moral legitimacy than others, but the point is that there are two parties to every deal. Gladwell uses this point when it serves him. He starts off his review by citing a dispute between the Dallas Morning News (which wants to license its content at a high price) and Amazon.com (which wants to pay close-to-free prices to repackage the paper's content). In Gladwell's formulation, this undermines Brand's famous phrase. "Why," he writes, "are the self-interested motives of powerful companies being elevated to a philosophical principle?"

But most of us have no problem with the principle that you have to pay for quality, and that view certainly serves the interests of Morning News owner A. H. Belo Corporation. A. H. Belo doesn't enjoy Amazon's vast market cap, but it has been around for more than 150 years and lists on the New York Stock Exchange — unlike Amazon, which lists in the Nasdaq ghetto. Should Belo's concerns be privileged because its industry is in decline?

For all the quibbling, it seems pretty straightforward that over time, the natural progression of information is to become worth $0.00. I might feel differently if I were a paleontologist trying to get a dig funded, but to take an example close to hand: A brand new title from Gladwell or Anderson fetches a hefty price; after only a few weeks it becomes available for a few bucks on the remainder table, after a year or so for a dollar at the charity bin; and eventually it will be put out by the curb, to be picked up for free by trashpickers like me.

And that's just information in some physical delivery form. (That is, right now, a nice printed book has some intrinsic value.) The effect is even sharper for pure information. Right now it might be worth it to me to hire somebody to steal Gladwell's notebooks or memory stick, in the hope of using his ideas to write a bestseller of my own. But the value of those intellectual nuggets drops rapidly. Death accelerates the process: Anderson's personal papers may one day be of interest to some university archive, but eventually they will be picked over and thrown out by disinterested liquidators (who I like to imagine speaking in broad cockney accents). Maybe some portions will be digitized, but in time they'll be "accidentally" deleted to make space for something more current.

The other time factor is that right now we are in a period of plummeting prices for the kind of information both men are writing about. To take Gladwell's examples: Downloading an album's worth of music is cheaper than buying a CD used to be. Premium cable, in adjusted dollars, is cheaper than it was when Jerry Levin first cooked up that so-crazy-it-might-work idea. Pharmaceutical information tends downward so quickly that it requires a vast scaffolding of IP protection and regulation to keep it up. That trend may change with new models of content creation or the invention of smellivision or whatever. But right now it's Anderson's view that is ascendant.

You can, of course, read Gladwell's review for free.

NEXT: Volvo, Ikea, Abba, and the destruction of money...

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  1. One should think that Tim Cavanaugh, posting as he does on a site that relies on contributions to stay afloat and has barely a handful of faithful true-believing regulars, would be loath to raise the issue of information and value at all.

  2. One would not think that Lester could ever top his personal record of fitting sixteen baked potatoes in his rectum. One would then be doubting his perserverance, of course. THE TITLE IS AS GOOD AS HIS.

  3. Gladwell hasn’t done his research if he thinks he’s contradicting Brand. Brand’s full statement was: “On the one hand information wants to be expensive, because it’s so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.”

  4. “Information wants to be free” in the hacker sense means you don’t keep vital information about use of equipment away from the public as a means of security.

    These idiots took it to a new level of stupid. Gladwell looks like a genetic mistake.

  5. Intelligence commentary from Gene Expression blog:

    Thus, in a world where there is more FREE stuff, the quality of stuff will decline. It’s hard to believe that this needs to be pointed out. And again, this is not the same as prices declining because technology has become more efficient — prices are still above 0 in that case. FREE lives in a world of its own.

    If you’re only trying to get people to buy your target product by packaging it with a FREE trinket, then that’s fine. You’re still selling something, but just drawing the customer in with FREE stuff. This jibes with another behavioral economics finding — that when two items A and B are similar to each other but very different from item C, all lying on the same utility curve, people ignore C because it’s hard to compare it to the altneratives. They end up hyper-comparing A and B since their features are so similar, and whichever one is marginally better wins.

    http://www.gnxp.com/blog/2009/07/gladwell-at-it-again.php

  6. I just picked up a subscription to Wired. I love reading about consumer electronics because its one of the few fields the government can’t claim they have to interfere in the “public interest”.

    They fucked up health care, education, and letter delivery. Now they’re busily fucking up finance and auto manufacture as well.

    But consumer electronics lives on! And its about the only field where we see continuous, rapid, predictable improvement.

  7. Interesting. I normally steer away from anything approaching ad hominem, but the entire gist of this thing is Gladwell vs. Anderson.

    I have books from both of them on my shelf, and don’t think too highly of either of them from an intellectual standpoint, but Anderson gets the nod on at least being sincere in his outlook.

    Gladwell is like someone creepy character out of a Rand novel.

    They both deal with abstract ideas spun off of anecdotal evidence, and never seem to be harmed by the emptiness of their ideas.

    They just keep on writing, and living in the public realm, being treated as if they’ve actually contributed something valuable when in fact they have not.

  8. “I just picked up a subscription to Wired. I love reading about consumer electronics because its one of the few fields the government can’t claim they have to interfere in the “public interest”.

    FCC?

  9. So with health care we say there can be no free health care since people will just be made to wait and therefore pay with time. This is exactly true with information. The “free” review is not free, it would eat up a decent chunk of my finite life to read it. That is why compilation, editing and review is even more valuable than ever. When movable type replaced woodcuts I supposed everyone had the same worry, that information was becoming free. The intertube has reduced the cost of printing, sure, but many people prefer to read a print publication. It is not like the invention of TV eliminated books. The Internet will not do that either. It changes things sure, moves the equilibrium and dynamics a bit, but there will always be people willing to pay for the best information. We might pay with ads or with a subscription or with providing bandwidth or with time. But there is still a great market for providing information for pay, just ask Google.

  10. “most of us have no problem with the principle that you have to pay for quality…it seems pretty straightforward that over time, the natural progression of information is to become worth $0.00

    Most of “us” (the stable of “libertarian” commenters here) have no problem with the principle of stealing quality, be it MP3s, movies, games. The “natural progression” of most “information” is to become nearly worthless over time, certainly, but nobody wants the worthless stuff. They use this “natural progression” argument as an excuse to “pirate” (a fuzzy libertarian euphemism for theft). The very best “information” retains its value over decades and centuries.

    Regardless, wouldn’t a true “libertarian” argue that only the property owner has a right to determine the price and value and means of distribution of his work? If he charges too much or limits the distribution channels or decides to withhold it altogether, it’s his right to do so, because it’s his.

  11. “They just keep on writing, and living in the public realm, being treated as if they’ve actually contributed something valuable when in fact they have not”

    Ray Gardner unintentionally nails the blogger/commenter symbiosis.

  12. The very best “information” retains its value over decades and centuries.

    Look at Shakespeare, though. You can read anything written by him online for free. This is not “pirating” or theft. Unless I’m misunderstanding your argument.

  13. That Credit Suisse report on Google’s YouTube costs was pretty horribly wrong, by the way:

    http://digitaldaily.allthingsd.com/20090617/credit-suisse-far-better-at-analyzing-derivatives-than-youtube-infrastructure-costs/

    He may be on semi-solid ground elsewhere, but he’s not there.

  14. me: Regardless, wouldn’t a true “libertarian” argue that only the property owner has a right to determine the price and value and means of distribution of his work? If he charges too much or limits the distribution channels or decides to withhold it altogether, it’s his right to do so, because it’s his.

    I would think a true libertarian would argue that a government-enforced monopoly is antithetical to both libertarian and free-market principles.

  15. I would think a true libertarian would argue that a government-enforced monopoly is antithetical to both libertarian and free-market principles.

    Uh, your monopoly on the use of your tangible property (house, car, lawnmower) is also government-enforced, so you might want to rethink that.

  16. Not sure where “me again” is going with the symbiosis comment, but I’ll expound on the excerpt that he pulled out:

    Both Gladwell and Anderson are professional journalists who specialize in taking a known, factual anecdote of sorts, and then spinning their own ideas off of that factoid.

    Gladwell takes valid research, and without presenting the equally valid counter-evidence on the same subject, posits his own deeply tainted ideological views along side of the research.

    That’s why Richard Posner’s now semi-famous quote was repeated as much as it was, because it was so true (that “Blink” was written for people who don’t read). Gladwell’s approach is genuinely dishonest, and can only be digested in the complete absence of any critical thinking skills.

    Anderson on the other hand has some ideas that are just pie in the sky kind of stuff. His worst sin is a lack of intellectual discretion. He is a sharp guy, and somewhere along the way his moderate success has dulled his ability to be critical of his own ideas.

    More to the point of Chris’s free idea, see Russ Roberts’ podcast interview with him.
    http://www.econtalk.org/archives/2008/05/chris_anderson_1.html

    I’ll listen to the podcast again, but the way I recall it, they were focusing more on how “cheap” information was becoming.

  17. Tulpa: Uh, your monopoly on the use of your tangible property (house, car, lawnmower) is also government-enforced, so you might want to rethink that.

    It’s not really the same. We have agreed it’s better to authorize the government to protect our tangible property than to defend our use of it ourselves, but that’s about as far as it goes. The government doesn’t tell me I can’t go halvsies on a car with my neighbor, it doesn’t tell me I can’t have houseguests, it doesn’t tell me I can’t combine parts from different lawnmowers to make my own that suits me better (and mixes drinks while I mow the lawn!). The problem with the copyright monopoly is that it restricts my use of my property unduly.

    I can buy seeds, grow tomatoes, and give half of them to my neighbor, but I can’t buy a CD, make a copy, and give that copy to my neighbor (or give the original to my neighbor and keep the copy). From a libertarian perspective, why the difference?

  18. An addendum or clarification:

    In my view, the difference between Gladwell and Anderson is that Mr. Anderson is speculating based upon, valid, observable trends whereas Gladwell is overtly manipulative of his data.

    And on monopolies, someone in that chain of posts doesn’t understand the basics of property rights.

    In context to a free society, the government provides a basic legal infrastructure for the protection of private property. Within that framework, a person has the monopoly power or sole ownership of their property.

    This includes one’s labor as well personal property. Equivocating my lawn mower with a monopoly of market power is to totally misunderstand the entire subject.

    To whomever was missing the boat on that one, do a search on Richard Epstein and the rule of law. I think he expounds on it best.

    Also look up the right to exclude as well as the right to develop, etc.

  19. They use this “natural progression” argument as an excuse to “pirate” (a fuzzy libertarian euphemism for theft). The very best “information” retains its value over decades and centuries.

    If you go to almost any public library you’ll find a set of BBC productions of the complete works of Shakespeare on DVD. If you’re a person of refinement you’ll be astounded at your good fortune. You’ll note that there’s a Midsummer Night’s Dream with Helen Mirren; Derek Jacoby as Richard II. You’ll imagine the pride of being the only person in the tristate area who has seen King John. You’ll relish living in a country where such treasures are available to you at no cost. Then you won’t check out any of them.

  20. No cost to him provided he pays no taxes.

  21. I can buy seeds, grow tomatoes, and give half of them to my neighbor, but I can’t buy a CD, make a copy, and give that copy to my neighbor (or give the original to my neighbor and keep the copy). From a libertarian perspective, why the difference?

    Making a copy and giving it to someone else is not “going halvsies”. This causes you and your neighbor to each have full use of all the property at all times.

    Going halvsies would be some sort of arrangement where you and your neighbor each get possession of the CD for half of each week or something. (This is exactly how you would “go halvsies” on a car, to cite one of your examples.) Note that this is NOT a violation of copyright law, it’s perfectly legal even under the current copyright regime. As long as there is only one instance of the copyrighted material usable at any given time, you’re within the confines of the law.

    Now I don’t like the provisions about converting to different formats, combining pieces of works you own, and otherwise altering works that you have legally obtained for your own use. Most of all I don’t like the ridiculously long term of copyright. But the basic idea of copyright is a good one.

  22. Ray Gardner,

    Whom are you referring to? You know, the names above these posts are there for a reason.

  23. Ray, I really need to write some boilerplate metas. I was going to preamble that with a note that tax-funded libraries are a million times worse than murder, but that you should feel free to use them anyway because the government won’t let you sublet the late Murray Rothbard’s rent-controlled apartment. But I’m trying to write shorter.

    You also could have noted that what is nearly costless to me has been largely underwritten by British television users. But my point isn’t the labor theory of value; it’s what a buyer will actually pay for the product, no matter how much cost went into producing it.

    In any event the portion of my city taxes that go into funding the library is a sunk cost. As a discrete transaction, picking up Othello is free to me.

  24. Cool. Fuck the new york times. Fuck all reporters for that matter. Everything you need to know can be made up at the dining room table and uploaded to your website.

  25. I happen to work in public radio – that’s right, funded by the government. Ooo, scary. However, the freedom to choose which stories are important, which ones we want to fund and how we want to report them are all still secure – we just receive funding from the government. We also rely on donations and charity, sometimes I think too heavily. If newspapers, magazines or other news sources move into the “public interest” realm, as they somewhat has with examples of public tv and radio, then information will largely step into the “free” zone, paid for via the electricity bill, and maybe that’s it.
    I have yet to find a problem with public sources of information, but I’m bracing myself for a Mel-Gibson-like cry of freedom from the libertarians.

  26. Tim:

    I understand in needing to keep posts succinct.

    A comment on taxes seemed appropriate because it occurred to me that I’ve never given libraries much thought on that level.

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  28. I really need to write some boilerplate metas. I was going to preamble that with a note that tax-funded libraries are a million times worse than murder, but that you should feel free to use them anyway because the government won’t let you sublet the late Murray Rothbard’s rent-controlled apartment. But I’m trying to write shorter.

    Lol!

    I like the use of the word “metas”. “Itellectual property” is almost always a bullshit phrase, mostly because it confuses rather than defines (note the constant arguments over what it means). Calling it “metaphysical property” is much more accurate. Would anyone in their right mind want government dealing with anything metaphysical?

  29. Hey, we’ve been reading about the Honduras “military coup” (it ain’t one) for a week or so in the professional media. Can someone link me to a WaPo, NYT, CNN etc. article that explains WTF is going on as well as this piece of “free” information?

  30. Gladwell’s so fucking rich it’s amazing that he gets so pissed when someone else tries to peddle his own patented “so obvious right in front of your nose but you didn’t see it until I pointed it out for you” brand of bullshit. But I guess that’s how you get so fucking rich.

  31. I have yet to find a problem with public sources of information,

    Why doesn’t this surprise me? Perhaps it has to do with your shared world-view? Not that there’s anything wrong with that, but it’s a bit myopic, if not completely self-absorbed, to report your own satisfaction with public sources of information as if it’s useful to the debate.

    Besides, even if it were the case the NPR represented some platonic ideal of truth, wisdom and fairness there is still the philosophical issue of taking money from others to indulge your particular tastes in media coverage. NPR listeners are on average fairly affluent. Certainly they much more affluent than the average person being forced to pay for NPR. The question arises then, why should we expect people of limited means to contribute to the listening enjoyment of those much better situated? Shouldn’t these affluent listeners care enough about the less fortunate non-listeners to foot the bill themselves?

    but I’m bracing myself for a Mel-Gibson-like cry of freedom from the libertarians.

    Just a bit of gratuitous advice: When you attempt to preemptively dismiss those who disagree with you with cheap, meaningless nonsense like that, it makes it much harder to take you seriously.

  32. Why do you take the author of “Free” seriously when the book costs $20?

  33. “Itellectual property” is almost always a bullshit phrase, mostly because it confuses rather than defines (note the constant arguments over what it means). Calling it “metaphysical property” is much more accurate.

    “Intangible property” is more accurate still; “intellectual property” is a subset of intangible property.

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