The Economics of Starvation

Economic theory includes the "Baumol-Bowen effect," developed in the 1960s by Baumol and Bowen. It's an interesting effect; the theory asserts that although improvements in technology will improve productivity of labor in general, the arts are immune from this effect because improvements in technology will not improve productivity of artistic labor. The main difficulty here is improper extension of "arts" to differing aspects of the arts. Although it remains true that speaking the sad tales of Kings in Richard II takes as long now as it did in, say, 1640 (much to Charles I's chagrin), and that the labor productivity of the actors themselves has not changed, that analysis fails on four different grounds to provide an adequate explanation of the "productivity" problem.

• The actor, of course, is not the only "laborer" involved. Consider the stage crew, etc. If one looks at the actual labor-unit, there is clearly a qualitative improvement in the ability to present and a reduction in the total man-hours required for that presentation.
• More importantly, there's the fundamental question of whether the actor is, in fact, a labor-unit. In many respects, an artist's contribution to art — particularly at the "composition" end of things — is a contribution of intellectual capital, not a contribution of labor.
• The comparison also neglects duplicability and audience size. Consider, for example, a Mozart concert in 1790, and the number of people in the audience... and compare that to a Rolling Stones concert in 1990, and the number of people in that audience (not to mention the number listening later to all of those bootlegs!).
• Finally, and perhaps most damningly, the theory completely neglects the role of middlemen and the distribution system; it appears to apply only to nonrecorded, nonrecordable live performances of previously existing material. Conversely, consider partially or largely improvisational comedy concerts; even a series running several nights will not have identical performances.

However, it's hard to argue that there is no Baumol-Bowen effect at all, at least at the margins. Whether the conclusions one draws from Mick Jagger's compensation apply to local theater, though, is a question that seems to have (at least thus far) escaped this otherwise interesting series of articles that at least tries to understand what's going on.

One obvious place to look for the Baumol-Bowen effect is in commercial music distribution — specifically, in so-called "indie music." There's little argument that established commercial distribution systems have not adapted to the "indie" environment. Of course, this is hardly new; those of us who listened to fringish bands that (sometimes) made it big in the 1970s and 1980s recall IRS Records, and even Geffen, and their diverging fates. The real problem is that "popularity" and "value" have imperfect overlap, and that imperfection makes possible — nay, even encourages — selectivity that undermines any rational/scientific analysis.

Of course, this has nothing at all to do with publishing. Riiiiiiiiight. With the continuing consolidation in distribution epitomized by the AMS bankruptcy, and bookstore mergers (and rumors thereof) both Over There and Over Here, and potential technological changes in the way we read (which I will believe when I see a system designer show up at a news conference wearing bifocals), the status quo is doomed. But then, the status quo is always doomed, no matter how resistant to change the publishing industry has proven; the one thing constant since the end of the Second Thirty Years' War has been change.