May 292008
 

Alan Jacobs at The American Scene argues with the “freetards.”

That’s a new term for me. I think I’ll steal it and use it myself without paying any license fees for it.

His first article on the subject was titled, “My writing doesn’t want to be free.” He credits the Fake Steve Jobs for the term.

Jacobs questions the applicability of the method whereby bands give away free music as a kind of loss leader. That idea is one that comes up a lot in these discussions — the freetards tell us to give away our writing/music/software for free and make money on X.

So here’s my question: If giving away your stuff on the internet as free loss-leading MP3 files or PDF’s is a virtuous way to sell something else, how come in international trade it’s considered evil? There they call it dumping or predatory pricing, and there are treaties and laws against it. It can be argued that authors who give away stuff for free are hurting others who’d like to sell their goods just as much as those countries who sell lead ingots below price in order to drive competitors from the market.

  • Well, I would argue that a crucial difference comes with the nature of the product.

    Ingots are a commodity. The ingot you sell (or sell aggressively cheaply) is essentially the same as that I sell.

    My writing and your writing (as cultural products) are not so identical – assuming they are actually mine and yours respectively – and so therefore your analogy is a touch bunk.

    Commodities have a 1-to-1 relationship of value. This is where a fairness issue arises in pricing. In any place, such as writing, where this 1-to-1 value relationship is not in place, such fairness issues do not arise as cleanly as you suggest.

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  • Oliver

    ” It can be argued that authors who give away stuff for free are hurting others who’d like to sell their goods just as much as those countries who sell lead ingots below price in order to drive competitors from the market.”

    It can’t: you’re not comparing like with like.

    If I want a novel by a particular author it’s pointless telling me that there’s an author who writes in a similar vein offering his material for free.

    If it’s lead ingots I need then I’ll take the lowest-priced because there’s nothing to distinguish between the offerings… but it’s a strange comparison to draw with the written word (unless you consider your style particularly leaden).

  • Mongo

    Dumping is when products are sold below marginal cost to produce a unit, not “below price” which is a very different thing indeed. And it is relatively easy to determine the cost of production for most tangible goods, so it’s easy to prove.

    The marginal cost to produce the next copy of your writing is exactly zero on the Internet, for the first time in history.

    Some types of writing, particularly valuable commercial data, will likely always be charged for, especially in cases where there is an enormous fixed cost to generate the data (a pilot’s series of navigation charts, for instance) that must be amortized.

    Part of the reason that price is going down for music is not only that the variable cost of each copy has gone from a couple of bucks to press a CD to zero, but that the fixed cost of producing the music has also plummeted, with the advent of ProTools, drum machines, etc. This lessens the value of the record companies in terms of their ability to access a competitive distribution channel, and to provide financing for the high production expenses formerly needed to build the album. This in turn reduces the barrier to entry for a band.

    I’m not saying that people don’t deserve to be paid for writing — I write and get paid quite well for it. It’s just that one has to adapt one’s strategy. I’ve done that despite staggering price ccompression over the last decade in the type of writing I do professionally.

  • Kevin

    “If giving away your stuff on the internet as free loss-leading MP3 files or PDF’s is a virtuous way to sell something else, how come in international trade it’s considered evil?”

    It’s only considered “evil” by competing domestic producers, whose interests politicians are paid to represent. It would be freakin’ fantastic for consumers to get free imports. Of course, the business model is different when it comes to exporting washing machines and cars than with music — where you might get some groupie to go to your next concert and buy a T-shirt. Free isn’t sustainable for Honda Accords. Music, I’m not sure.

  • Reticulator

    It looks like there are lots of good comments to respond to, but right now I’ve got to do the work I’m getting paid for at my day job.

  • Wick

    I haven’t seen this sort of glomming since the iPhone came out. What’s interesting to me about this one is the chain-letter element. Let’s see if we can follow the chain:

    – Steve Jobs is the Real Steve Jobs. The majority of people that know his name know it because of what he has done.

    – Daniel Lyons is the Fake Steve Jobs. MOST people know who he is because of his “connection” to Steve Jobs.

    – Alan Jacobs is some guy that posts on some blog site. He got some extra hits recently ’cause he poached the term “freetards” from Daniel Lyons.

    – John Gorentz is “The Reticulator”. Though I had to go through an extra mouse click just to find his name. Probably get’s more add hits way. Gotta get paid, y’know.

    So, John has now glommed onto Alan who glommed onto Dan who glommed onto Steve. I’m thinking we’re only one degree away from Kevin Bacon. Cool.

  • Kevin Bacon

    Well I’m reading it so there you go.

  • Luis

    Nice work Mongo. Because of the conditions you cite the market is flooded with “talent” at this point as well.

  • deathbychichi

    Hey crybaby, what are you gonna do? Try to get a law passed to prevent people from making stuff and giving it away? It’s a pretty basic freedom.

    Dumping is a predatory tactic to blow competitors out of business and then, after they’re gone, the dumper raises prices. This is fundamentally *fundamentally* different from people giving away their content.

    If the public prefers free stuff to your pay stuff, screw you, go get a job. Since people first tried to sell words, their words are competing for peoples’ interest and attention, and unless your stuff is sufficiently interest-worthy to me, I’d prefer to jerk off or watch baseball.

  • Nick

    Hey Ethan if commodities have a 1-to-1 value, then American cotton and Egyptian cotton should be sold at the same value right? Your logic is flawed.

  • Jan Dockx

    “how come in international trade it’s considered evil?”

    That is actually a very good point.

    As a proponent of F/OSS, I can acknowledge that F/OSS actually killed of entire industries, such as the commercial Java IDE industry. Yet still, as developers (the users of the Java IDEs) we are happy with that.

    Makes you think …

  • Buzz Lightyear

    Mongo…the cost of producing a second copy is NEAR zero, it is not zero. There are costs involved in server storage and transport of bits.

    And there is a cost in production for words, software or anything else. At the bare minimum there is the author/programmer’s time. Giving software or books away doesn’t pay my rent. And…with very few exceptions most of the free (as in beer) software that is out there is worth exactly the price charged. The greatest exception to this is Mozilla Foundation who squeeze no small amount of money from search engine referrals from their browsers.

    “Free” software is a great place to learn your chops but the only place that pays worth anything to be a developer is still in the pay-to-play world of software.

  • Reticulator

    Ethan,

    I’d say that there is a 1-to-1 relationship of value for writing, too, sort of. An hour I spend reading the free stuff that’s being dumped on the market is an hour I don’t spend reading the stuff I have to pay to read.

    But maybe I’m showing my age. I am told that the younger generation can carry on a couple dozen IM conversations while reading their homework and listening to music. So maybe it doesn’t apply to them.

    And Mongo is ride when he says selling below cost is different from selling below price. I should have said selling below cost. I have no idea what selling below price really means. But whether the marginal cost of producing another copy is zero or not, it has the same effect on the marketplace as dumping lead ingots.

  • That is possibly the dumbest arguement I’ve ever read.

    Music is a social interaction; in the olden days everyone made music together. No one charged each other for the privilege. If you really love music, learn to make it yourself, you know, with an instrument or, your voice, and with your friends. It’s quite a nice experience. No money is required either.

    ‘Predatory pricing’, ‘dumping’: my lord, what rot! This is music and culture we’re discussing, not your corporate world of lead ingots.

    Yes, I am giving away free music as a way to introduce people to my stuff…sorry if that offends you!

  • Reticulator,

    Sorry to be a bit late to come back. Good post, even if I disagree. But as I understand it the definition of commodity is such that each unit is of equivalent worth to another, right?

    I’m a PoliSco grad, so I pretty much have learned how to fake economics but not much else in that field. All the same, a barrel of oil is a barrel of oil, no? Like wise for copper, RAM, et al. But your writing and a random guys writing at a per word rate? Odds are that there will a substantial difference in quality. As I see it , that’s the difference (?)