Adam Penenberg’s funny and insightful column on why book reviews don’t sell books anymore. Personally, I do sometimes buy and read books because of the review in something like the New York Review of Books. But mostly I read the reviews so I don’t have to read the books. I’ll bet I’m not alone.
Archive for October, 2009
Banks charging people money for paying off their balances in full on their credit cards. Other banks jacking interest rates up to 30 percent on credit cards. I’d love to talk to the people who were in those meetings, and recreate the logic behind them. It does not jibe with the kind of benevolent capitalism I keep hearing about from people I’m interviewing. Though as one person said to me, “if there were an immoral business person in the paper every day, that would be 365 people. That’s not very many people compared to the millions of business people who want to do things right.”
He had his point. But in truth, we tend to cover the worst things, not all the things that happen. Here’s a piece in USA Today that I wish were ironic instead of depressingly true. That bit about how closing a credit card hurts your credit rating just reminds us that markets always have friction.
My friend Adam Penenberg drinks his own kool-aid, in what might represent a shift in how authors market their books. What he’s doing is notable enough for a piece on it in The New York Observer. Mazel tov!
Willy Shih fears that the U.S. is headed towards feudal capitalism. He doesn’t say that directly in The U.S. Can’t Manufacture the Kindle And That’s a Problem, but it’s what he means. By innovating without manufacturing, we cede the future of our economy, and with it the fate of most of our citizens.
Shih may be affected by his background: he was long a high-ranking executive at IBM, Digital and Kodak, all of which at some point failed as manufacturers, if not for the same reasons. His builds his case not around these firms but around the Kindle, the current darling of the innovation set. In the Kindle, Amazon.com has packaged a clever technology innovation from a company called E-Ink into the first device to make electronic reading feel like a natural human act.
Shih does some speculative arithmetic and argues that the bulk of the Kindle’s profits really go to its Asian component suppliers. While E-Ink looks like an American success story, he expects its presence in the U.S., especially its manufacturing, to go overseas. That’s because E-Ink has been acquired by a Taiwanese partner, PVI. So E-Ink’s loss of control means fewer U.S. jobs, and thus very little direct benefit for this innovation.
If Shih is correct, it would follow the trend set in VCRs, CDs, computers, many types of semiconductors, cell phones and other high-tech products: U.S. companies invent something, but either never make it or can’t make it profitably.
Thus these U.S. firms become subject to feudal capitalism. They create intellectual fiefs, based on an innovation and the people that are needed to help spread it. Such fiefs depend on manufacturing guilds to actually create the innovative new product. If, as in high tech, the manufacturing guilds sit in a different country than the intellectual fief, Shih argues that innovation will move there, too. In other words, the manufacturing guilds will naturally want to strengthen themselves by co-opting the most profitable part of the process, the innovation. Any country that only has intellectual fiefs will find itself growing weaker over time.
Shih could be wrong. David Yoffie thinks so. So does the respected venture capitalist Andy Rappaport. Both look at Apple, Nvidia, Qualcomm and other virtual high-tech firms as examples of how knowledge work is far more profitable for U.S. firms, and how the Japanese, Korean and Chinese firms that now make everything from televisions, memory chips and iPods get stuck in a low-margin cesspool. Look at Dell, they say, once lauded for its manufacturing prowess, now stuck with albatross factories.
That Dell argument misleads. Dell never made its own laptops, for instance, and its direct distribution model drew on its ability to control production. Even so, the arguments for Silicon Valley-style knowledge companies that avoid costly investments in manufacturing are beguiling, especially when you look at the kinds of problems affecting Shih’s former employers. Factories are like fortresses — they need guarding and constant investment, limiting your ability to invest in something new.
Still, Silicon Valley’s prowess as a source of innovative ideas masks the truth that it doesn’t create many new jobs. It’s better in some ways at destroying existing jobs. The same is true for Massachusetts, home to E-Ink and a perennial in the top three places for innovation in the U.S.
So what, you may ask. In the last 60 years, the U.S. has an incredible track record of creating new jobs. Yes, we’re in the process of dumping lots of highly-paid manufacturing jobs. Those are fortress jobs that create little of real economic value, hence it makes sense to cede them to foreign manufacturing guilds.Perhaps. But the miracle of modern capitalism is not the Kindle or any other individual innovation; it’s that entire societies moved past hand-to-mouth survival. Fortress jobs had a lot to do with that success. Sixty years is not enough time to tell much of anything about human history; it took hundreds of years for industrial capitalism to lift people out of Malthusian squalor, and it will take more than 60 for feudal capitalism to drive them back. I hope Shih is wrong, but that is the stakes of the debate.
In Security versus the Mob, I examine how organized criminals find easy pickings in corporations. Organized crime rings attack companies both in the physical world, where retail theft offers lucrative rewards and lax punishment, and in the cyber world, where enforcing the law often becomes next to impossible. Derek Slater, my editor, added this fun Mafia quiz.
The bust of superhacker Albert Gonzalez took place after this story was on its way to readers. He’s a fascinating case all on his own, and somebody, may it be me, will center a great story on him.
A white-collar worker who spent time in jail wrote about his experience on Twitter. I followed it there and wondered what happened to it when it stopped abruptly. He deleted it, but the Ann Arbor Chronicle has published two excerpts of it so far. It reads better than it did on Twitter. I like the use of narrative by an online site, as well.
The trouble with Brad Whittington’s Fred trilogy is that musicals differ from novels. The structure of a musical requires starker characters, exclamation points instead of periods, slapstick, not nuance. Whittington packaged his chronicle of the coming of age of Mark Cloud as a novel in three parts, but he really wrote a musical.
The result is a sometimes disconcerting collection of effervescent scenes connected only by an introspective and self-absorbed young Christian. The musical-as-novel structure works well enough in book two, “Living with Fred.” But in the third book, “Escape from Fred,” it falls apart.
Fred’s main character, Mark Cloud, reminds me of a chaste, male Ado Annie, a supporting character with a penchant for goofily complicated situations, improbably resolved. But beneath that Puritan Ado Annie lies someone more complex. Belief in the rational and the supernatural meet in Mark Cloud, which creates the discomfort you would expect. He is both a budding entrepreneur who believes in modern science and a preacher’s kid who appreciates his father’s faith. Having observed the transforming effect of religious experience in the people around him, he cannot discount it. His debates with his Dad and others about science and the Bible do not end in clearcut victory for either side. They do present the sort of nuance often missing from depictions of the religious right, particularly Southern Baptists.
There is no religious uniformity in Cloud’s circle of familiars (he doesn’t really seem to have friends), although there are few open atheists. Several people, like Cloud himself, don’t really seem to have any experience of God. Cloud wants that experience; it would clearly make his beliefs more tenable if he personally felt God speaking to him.
Religion in the Fred trilogy hinges on experience. Religious experience tends to get pooh-poohed as a proof of God – such experiences make up what scientists would dismiss as ‘just-so’ stories, not testable or even universally experienced. Yet those who have these experiences clearly see them as real, and often change their lives because of them. William James said, “we build out our religion in the way most congruous with our personal susceptibilities.” But James also said that even if such experiences is caused by ‘the higher faculties of our own hidden mind,” they were ‘not merely apparently, but literally true.” Neuroscientists like Andrew Neuberg and Nina Azari have produced imaging studies that show the brain does reflect religious experience (though in truth it would be a more interesting sign of God if the brain did not show something going on).
Cloud doesn’t get so philosophical. His occasional wrestling with questions of religion without the experience of God mostly serves as a foil for his follies in the first two books of the trilogy. In the much darker book three, the foil becomes the focus, and the novel-as-musical structure stops working. Comic musicals depend on miscommunication. But in this third book, those mishaps become Pinteresque, unpleasant. Cloud struggles with himself, God and everyone. He finds not Jesus, but Kerouac. Like Kerouac (and Jesus), he hits the road.
On his road to rebirth, Mark Cloud faces ultimate questions: is there really a God? How do we experience that God? Can we do what that God requires of us? It’s jarring to run into these questions after two novels dominated by slapstick. Perhaps if the trilogy were just one book, I would not have minded as much. For some reason, Whittington also dodges many moments of passage in a boy’s life – Mark Cloud never seems even tempted to masturbate. His first real kiss precipitates major crisis. Contrast this with Steven Pressfield’s “Tides of War,” another novel that stars a supporting character buffeted by ultimate questions. That character, Pommo, meets us from his jail cell, where he awaits trial for assassinating the most famous man of his ear. Pommo, like all of Pressfield’s characters, is richly painted. Many of Whittington’s feel like ghosts. True, Pressfield’s painting takes time, but when Pressfield warms up and strikes the bell of truth, it rings more clearly than anything in the Fred trilogy. For example, at one point a character in that novel admonishes his fellows by saying “You dream of what will be, and disdain what is. You define yourselves not as who you are, but as who you may become, and hasten over oceans to this shore you can never reach.”
To be fair, Pressfield’s subject is the beguiling Alcibiades, his background nations in conflict over their essence. War provides a natural setting for drama and the testing of human character. Whittington writes about an evangelical everyman wrestling only with himself. And the Fred trilogy is enjoyable. I warmed to the first book, and quickly read the second. Even that troublesome third book resolves reasonably well (here’s a far more favorable review). Fred might be set in Texas, but it makes good beach reading anywhere.
A two-part debate on whether newspapers can avoid the fate of horseshoe makers in the early 20th century. In part one, a discussion of why anyone might pay for news, a commodity in great oversupply. The potential for multiple big newspapers to more or less simultaneously charge for their news, the collusion argument, comes up. Says Mike Masnick of the aggregator TechDirt:
If I’m running a major newspaper the night that everyone starts to charge, I’m dancing for joy because my competitors just stepped out of a huge market and left it to me. And don’t think there aren’t news execs who get this.
The trouble here comes from the idea that there’s a huge market left to “me.” David Carr of the New York Times comes up with the obvious rejoinder:
A broad swath of newspapers are not looking into pay content as a matter of collusion, but survival. You talk about being the lucky newspaper that bystands a move to paid and then jumps in on all the free ad dollars. Who might that be? [bolding mine]
The potential candidates, to me, would be the Associated Press and Reuters.
In part two, Masnick outlines TechDirt’s spin on a virtual goods strategy, where it gets money from readers in return for things like a TechDirt badge for their Web sites, and TechDirt t-shirts. Creative and clever — I think virtual goods hold a lot of potential for online content sites. Though it depresses me to think that a t-shirt inspires readers to pay money, but content cannot. Also, a Web badge that says, in effect, “I paid for TechDirt content” brands you as a loser who pays for online content. Why not just charge your readers for the content, and not ask them to identify themselves as losers?
Online content faces a nasty ‘free rider’ problem. But virtual goods do give those who are not free riders a way to pay for things. Better to go to a platform like the Kindle and start a publication. People expect to pay for things, there.
Clay Shirky weighed in with some good comments on why the demise of newspapers will mean a rise in corruption in politics and other bad behaviors.
n the nightmare scenario that I’ve kind of been spinning at for the last couple years has been: Every town in this country of 500,000 or less just sinks into casual, endemic, civic corruption — that without somebody going down to the city council again today, just in case, that those places will simply revert to self-dealing. Not of epic, catastrophic sorts, but the sort that just takes five percent off the top. Newspapers have been our principal bulwark for that, and as they’re shrinking, that I think is where the threat is.
I think he’s probably wrong, that something else will emerge. There will always be lawyers with principles or ambitions to power who will attack low-grade corruption; newspapers expose things and embarrass people, but the lawyers tend to be the ones to do something about it.
Much of the rest of his talk will matter mostly to people like me, who work in the media and wonder how much longer we can say that.
In that vein, he cites three publications that have successfully charged for their content, or kept it from free riders: the Wall Street Journal, the Financial Times and the Economist. Shirky explains their success away by calling them stock pickers books. That’s not quite true of the Economist, and as the Wall Street Journal becomes more of a traditional Murdoch paper, it’s less true of it. There must be something else to it. Fortune, Forbes and Business Week also move markets, but they each seem to have seats in Charon’s boat. Of course, none of the latter three did much to wall off their online content, which may be why they’re lagging so badly. But would anyone now pay for Business Week or Forbes online?
His discussion of why the Boston Globe reports on Catholic Church abuses sparked an international incident in 2002 when similar stories a decade earlier did not was also interesting. I remember being shocked at the shock; I had lived in Boston area in 1992 and thought it was an odd reaction. Shirky credits the internet, but as one of his questioners points out, nobody picked up on the Boston Phoenix coverage of the issue in 2002. Perhaps there was something else going on, the same thing that would explain why the Da Vinci Code sold so well though Angels and Demons had not.
Here’s the link to his talk and some notes about it. I read the transcript, which had some odd hiccups in it, but was faster than listening to the speech.