How the world works

*Comments are open for this post*

Nature matters more than nurture

Sex matters more than gender

Friends matter more than parents

Situation matters more than character

Norms matter more than laws

Institutions matter more than culture

Economics matters more than morality

Family matters more than state

Narrative matters more than truth

Identity matters more than rationality

Cohort matters more than generation

Class matters more than income

Status matters more than well-being

Race matters

The past is the future of paid content

With the news that pretty much every newspaper in Canada is going to some sort of pay wall/"metered model," debate is raging once again over whether consumers will ever pay for content. They have and they will. The trick, as someone from the recording business taught me long ago, was to make it seem free, without actually being free. The model is radio. Here's a column I wrote nearly five years ago on the subject. My belief in the soundness of the central argument hasn't changed. 

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Maclean's 

Mon Feb 25 2008 
Page: 14 
Byline: ANDREW POTTER 
Column: OPINION 

The lengths to which some people will go to avoid picking up the cheque. At the end of January, a 28-year-old Brit named Mark Boyle began what promises to be a 30-month trek from England to India, for which he is bringing some T-shirts, bandages, and an extra pair of sandals. Significantly, he is leaving his wallet behind, hoping to survive entirely off the kindness of strangers.

Mr. Boyle is walking to promote the values of the "freeconomy" movement, a group that claims 3,000 members in 54 countries. Advancing the bold and original thesis that money is the root of all alienation, freeconomicists believe we need to shift from a "money-based, community-less society" to a "community-based, moneyless society." And so Mark Boyle will strike a blow for community by spending the next 2 1/2 years cadging free meals from Bristol to Porbandar.

It comes as no great surprise then that Boyle is a former dot-com businessman. It is cyberculture, and its confluence with hippie values, that is helping drive the copyright wars, one of the most pointless economic conflicts in recent memory. Dedicated to the proposition that "information wants to be free," the Free Culture movement believes content such as news, books, film, games, but above all music, should be free in two senses: free as in speech (there should be no censorship or control over how culture is used); and free as in beer (the culture should be free for the taking).

This movement is opposed by music producers, film studios, and other content producers, who are lobbying for more stringent penalties for illegal downloading and for stricter controls on how content can be used and copied. Here in Canada, the Conservative government is preparing to introduce an updated copyright bill, but it is facing stiff resistance from "copyleft" activists who worry that the new legislation will give in to Big Copyright's most outrageous demands.

And so the two sides are locked in an increasingly polarized dance, with each advocating a perverse and unsustainable business model. It was left to Paul McGuinness, the long-time manager of U2, to try to knock some sense into them. At a conference in France last week, McGuinness gave a speech in which he blamed internet service providers (ISPs), fund managers, and the hippie culture of Silicon Valley for destroying the recording industry, and he went on to propose that a fee for legitimate downloading should be collected by ISPs and paid out to copyright holders.

For his efforts, McGuinness was flogged around the blogosphere, where he was variously accused of being greedy, hypocritical and -- worst -- "corporate." Except that he's right about the influence of hippie values on Internet culture, as well as his suggestion for how to bring the copyright wars to an end.

The profound influence of the counterculture on cyberculture is not remotely controversial. Scratch a file-sharing activist and, more often than not, you'll find someone who deep down just doesn't like the idea of paying for music.

But that is a bit of a cheap shot. After all, nobody likes paying for music, any more than they like paying for food or drink or shelter or anything else. People pay for things when there is stuff they want and shelling out is better than the alternatives of stealing it or going without. All the Internet has done is make theft the most palatable option of the three, while a halfway measure such as 99-cent downloads on iTunes only serves to foreground the main question, namely, why should you pay for something that other people are getting for free?

If you're trying to square the notion of free culture with how the economy works, a handy rule of thumb is this: in the end, the consumer pays for everything. So when it comes to seemingly free media like radio and television, they are funded for the most part by commercial advertising, which is in turn paid for at the cash register by consumers.

The trick to resolving the copyright wars once and for all is to come up with a scheme for making downloading a similar experience to listening to the radio or watching TV: it would seem free, while ensuring that copyright holders actually get paid.

So how can we make file sharing seem free without it actually being free? Canada currently has a levy on blank recording media (such as CDs) that is collected by the Copyright Board and passed on to copyright holders, but a plan to extend the levy to MP3 players was struck down in early January by the Federal Court of Appeal. The most promising idea is a version of McGuinness's tax-and-distribute model, in which the government charges a basic Internet access tax, collected by ISPs, that would give users an unlimited right to download songs, videos, books, games, and so on. The fee would then be paid out in royalties by the Copyright Board in much the same way it is currently done for radio.

Most importantly, it would allow artists to be paid, in a way that doesn't rely on draconian copyright controls on the one hand, or the kindness of strangers on the other. In the end, you get the culture you pay for, which is why the motto that everyone involved should be rallying around is "Free Lunch." As in, there's no such thing as a.

A sentence that should be tattooed on the forehead of every libertarian

"Increases in the price of what the federal government buys relative to what the private sector buys will inevitably raise the cost of state involvement in the economy"

Lawrence Summers in the WaPo

Growth and Lamborghinis

Of all the ways in which American political and cultural life has become stridently polarized, perhaps the most damaging is the language surrounding the economy. Since he got elected, Obama has been portrayed by Republicans as a socialist, a vulgar form of red-baiting that would be laughable if the president didn't allow himself the occasional foray, rhetorically anyway, into class warfare.

The most recent example of this was Obama's attack on Bain Capital. And so, right on cue, comes a new book entitled Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong, by Romney's former Bain Capital partner Edward Conard. 

I haven't read the book, but if a recent review in Business Week is to be believed, Conard's thesis is tricklenomics hitched to Archie comics: Imagine if Veronica Lodge's father was a market theorist, and you might get something like Conard's book. (According to the review, Conard dislikes charity because it isn't investment, and blames liberal arts majors for America's skills shortage). But the most telling passage from the review is this one:

Conard plainly cares about investment. He also cares about yachts. Where some conservatives suggest taxing consumption rather than income, Conard rejoins: “A heavy tax on consumption will discourage increased investment by making it harder to display status.” And since, as he elsewhere argues, “the thirst for … impressive homes, sleek boats, and exotic vacations” is what largely motivates people, such trinkets of affluence must be protected.

Set aside for now the obvious rejoinder that for many investors and capitalists, the accumulation of wealth, succeeding at building something that lasts and that people like, and basically being a river to your people is deeply satisfying; Conard's focus on status is usefully flawed.

He's certainly right, that the desire for status is a huge motivator (that's pretty much the driving thesis of both The Rebel Sell and The Authenticity Hoax). But what this ignores is that all status is relative. The argument behind the tax-consumption-not-income movement, especially the faction led by the economist Robert Frank, is that a steeply progressive consumption tax would serve as a sort of arms-limitation treaty on status consumption. So instead of the hyper-rich being able to buy 200 foot yachts, they'll only have 100-foot yachts. But because status is a positional good, (i.e., relative) it wouldn't matter because those would still be the biggest yachts around.

I actually saw evidence for this during my visit to Denmark. My friend Markus took me on a tour of Hellerup, the ritzy suburb just north of  Copenhagen. Some of the biggest celebrities in Denmark have homes there, including Lars von Trier,  Mads Mikkelsen, and some internet billionaire whose ex-wife took him to the cleaners and now lives next door.  And it was certainly a nice area, with wide streets, big homes, and a great view of the ocean. But the homes were not that nice -- not much nicer than you'd see on a decent stretch of upper Westmount or Forest Hill. 

At any rate, Hellerup represents nothing like the "out-of-sight" wealth that keeps the richest Americans on a separate plane of existence from the rest of the country -- Markus and I drove around, peered over fences and wandered the streets of Hellerup completely unmolested. If von Trier had walked by with his groceries I wouldn't have been remotely surprised. The thing is, taxes are so high in Denmark (the VAT alone is 25 percent), the richest people simply don't have the cash to compete in the manner that the 0.001 percenter Americans do. But in the pond that is Denmark, they're by far the biggest fish. 

How far you can push this argument depends in part on how much the ultra-rich in places like Copenhagen compare themselves to their counterparts in places like London or New York, feel envy at their inability to compete, and look for an exit strategy for their wealth. It also depends on whether the effect of all of this taxation, especially on consumption, leads to a shortage of investment capital. 

I don't have the figures handy, and I'm not a good enough economist anyway, to answer these sorts of questions. But if we start with the end goal, namely, a prosperous high-trust society governed by and through a healthy democratic system, then Denmark is already at the finish line. 

A summer of fish: The worst job I ever had

(This piece was originally published in Now Magazine, August 2000)

I was standing in a pizza place on my lunch break. "God, something reeks in here," said the girl behind the counter, talking through her nose. I raised my hand. "Uh, that would be me."

"No, it smells like rotting garbage or something."

"I know," I said. "It’s me. I work at the fish market around the corner."

"Christ," she muttered, and walked into the back. As I waited for my slice, the manager came out and asked me if I would please wait outside.

I walked out, sat on the step and decided that it was time to apply to graduate school.

It was July, and I had been working at the fish market in Montreal for three months, ever since graduating from McGill with a BA in philosophy and a sense that, if the world didn’t quite owe me a living, I deserved at least a substantial line of credit.

 Slick slime

But there I was, earning $6.15 an hour, working 10-hour days knee-deep in chipped ice and fish guts, my hands infected and burning from countless cuts and puncture wounds, and every pore of my body impregnated with the odour of rotting seafood.

It’s hard to say which part of the job was the worst. I really hated the first couple of hours in the morning, before the store opened. A half-dozen of us had to haul up from the basement a few thousand pounds of fresh fish -- salmon and snapper, mackerel and monkfish packed in insulated boxes.

The 70-pound boxes, slick with fish slime and melting ice, often wouldn’t stay on the conveyor belt, so we’d have to drag them up the stairs one at a time.

Once the fish was up, we would fill huge tubs with ice chips that we shovelled out of the walk-in ice-maker, and then start rotating the fresh fish onto the long steel display counters. Overnight, blood and guts would leach out of the displayed fish into the bed of melting ice underneath. We would drain off a few gallons of this seafood slurpee, shovel fresh ice into the counters and replace the fish.

This part wasn’t too bad -- making the fish look presentable was mildly creative -- but it wreaked havoc on my hands. Red snapper were the worst: needle-sharp dorsal-fin rays poked through my gloves and gave me so many puncture wounds, I looked like a junkie who’d lost any hope of finding a decent vein.

 Daily restocking

Working in the frozen fish section wasn’t any fun either. The store had an immense industrial deep-freeze with wooden pallets piled with frozen fish reaching precariously toward the 30-foot ceiling.

In the summer, Montrealers apparently consume more frozen fish than they do jazz, and every day someone had to restock the display freezers with hundreds of packages of frozen calamari, sardines and prawns.

The deep-freeze was kept at a steady -35°C., and walking into it from the store’s humid summer air was an experiment in sudden, involuntary cryogenics. To borrow a line from Thomas Pynchon, it was like being hit over the head with a Swiss Alp. Freezing to death is supposed to be a fairly pleasant way to die. Not so pleasant, I would expect, would be freezing to death while pinned under a 500-pound solid block of frozen sardines that has toppled over onto you because your brain was too busy trying to avoid being flash-frozen to devote adequate resources to basic motor control.

But for sheer unpleasantness, nothing approached working at the customer service counter, where the corpses of just-purchased fish were subject to all manner of indignities.

"Cleaning fish" is a ridiculously Orwellian term for the most consistently disgusting activity I have ever been paid to perform.

The head fishmonger was a middle-aged Portuguese man named Manuel who clearly had it in for fish. Tiny Vietnamese women would approach the counter waving plastic bags filled with flailing, gasping carp recently plucked from the live fish tank. Manuel would take a carp, pin it down with one hand and bash its brains in with a heavy wooden mallet.

Then he’d toss it into the automatic scaling machine, basically a cross between a band saw and a car wash. The carp would slide down a groove into one end of the machine, there would be a loud metallic shriek, and it would shoot out the other end, sans scales. Occasionally, the carp weren’t entirely dead when they went through the scaler, and they would emerge in what appeared to be a considerable amount of pain.

My job at the counter was pretty straightforward. I would scale the fish, then take a heavy pair of scissored pliers and snip off all their fins. I would cut open their bellies from throat to anus, grip their gill rakers with the pliers and rip out their insides. Then I’d wash the fish out with a hose and pass them on to Manuel to be turned into filets.

All the fish parts that weren’t returned to customers as food went into a long trough that led to a hole in the floor. We would hose the blood and entrails down the hole to the basement, where it would sluice into more big plastic tubs. At the end of the day we had to stack these tubs in a walk-in fridge, where they would sit in primary fermentation.

 Allied soldiers

Once a week, the tubs were emptied into the hindquarters of a modified garbage truck with "Non-edible meats/viandes non-comestibles" stencilled on the side.

The truck also made regular stops at local butcher shops and the humane society, and it generated an olfactory Doppler effect: you smelled it before you saw it. When it came crawling up St. Laurent, the cafe patios would clear, the streets would empty, windows would slam shut. The non-edible meats/viandes non-comestibles guys would hang off the back of the truck, grinning and waving in their dark jumpsuits like Allied soldiers liberating Berlin.

Normally, the truck would pull up behind the store, we’d throw the tubs onto a conveyor belt, and the n-em/vn-c guys would empty them into the truck and toss them back down. But on this particular day, the conveyor had broken, and an employee named Marc and I had to carry the tubs, one at a time, to the truck.

Imagine the conveyor belt as the hypotenuse of a right-angle triangle, with a base (the floor of the basement) of 30 feet, and a height (the outer wall) of 8. We had to duck-walk the heavy tubs along the floor to the wall, from where it was 8 feet straight up to the street and the waiting arms of the n-em/vn-c guys.

Marc climbed halfway up the ladder built into the wall, leaving me to pick up a tub and lift it up so that he could grab one end. We then tried to muscle it up to the landing, but the geometry was all wrong. It was impossible to keep the tub level -- to get it to the lip of the landing, it would have to tip at about a 30-degree angle.

As we lifted, a steaming stew of rotting fish guts sloshed out of the lower end and onto my hand and face and oozed down my arms and neck.

Twelve or so tubs of that later, it was time for lunch.

Seven years later, I have just graduated with a PhD from the University of Toronto, and I’m not sure if I’m any better off. I took that line of credit I thought the world owed me in the form of student loans, and I’m about to enter a flooded job market that sometimes seems to have it in for young scholars the way Manuel had it in for carp.

I wonder if it’s too late to apply to law school....

NOW | August 10-17, 2000 | VOL 19 NO 50