06 July 2014

Breaching the Boundary Conditions

Once again, too busy to make sausages, so these may be of even-dodgier-than-usual ingredients...

  • Just as there's something wrong with publishing cookbooks deep-fried in testosterone and endorsed by poor losers (hello, Food Network!), tech isn't going to become more gender-inclusive with sparkly pink brochures "aimed" at geeks who don't have a Y chromosome. This is what happens when you let marketing dorks apply their general principles that (supposedly) work on everyone to specialized markets — and even not-so-specialized markets. The less said about how successful the dorks actually are, the better...
  • Power — economic, political, cultural — is merely another form of gravitational force, with perhaps some different constants ("perhaps" because nobody has really figured out how to measure it yet). This leads one to wonder whether the EU's latest response to Google and Amazon has as much chance of success as King Canute ranting against the tides. All the monopolist ventures are trying to do is emulate government monopolies... right? (<SARCASM> tag omitted as redundant.)
  • And that leads to the current kerfluffle between Amazon and Hachette over e-book pricing availability, etc. In many ways, it's a struggle I really want to see both of them lose. Unfortunately, there's a lot of rhetoric out there that takes one side (PDF) or the other, often to the long-term disadvantage of those taking sides (who usually don't think things through well enough).

    • Amazon is in the wrong by punishing both the captive, ultimate vendors (the authors) and its own customers, by focusing its conduct on a fellow oligopolist and that fellow oligopolist's visible pricing practices without regard to ripple effects. Whether it has a conscious intention of doing so or not, it is engaging in practices perilously similar to predatory pricing. The legal definition of predatory pricing has ossified into requiring an actual loss to make a transaction potentially predatory. That's insupportable as theory, and assumes equilibrium (the math is there, economists: it's called "quantum thermodynamics" and "reaction profile analysis"). It's easier to go after the whole herd at once if you weaken it by drastically limiting its moneyfood supply... and that's why predators in the wild never do so, because they know that they're actually dependent upon the herd. Only mindless, malfunctioning parasitic microorganisms that can't recognize codependence act like that. The rejoinder that "But Amazon is developing its own internal replacement food supply content providers through its self-publishing programs" isn't going to cut it in the long run, because the measures of success remain tied to those of commercial publishers.
    • Hachette is in the wrong because it is false-flagging the controversy over its visible pricing practices as making it the "victim" here, while ignoring its own perfidy farther up the chain as a monopsonist engaging in exactly the same price-fixing behavior against its authors. As I've remarked before, it seems astounding that with the diversity of product lines, financial and managerial structures, and age cohorts in commercial publishing, everyone converged within two years on a nonnegotiable 25%-of-net share to authors for e-books... astounding, that is, if one assumes competent and noncorrupt management in the publishing industry. The less said about the typical compensation paid on print titles, the better — the problem is not the lack of evidence of unlawful collusion, but the statute of limitations and the egregious cooperation of the agent community. And that's just one aspect of Hachette's (and its "competitors'") hypocrisy in this particular controversy.

    This is, ultimately, an inevitable result of an investment system that (a) substitutes the Β statistic (a measure of variability of return that works only when all returns are positive) for actual considerations of "risk" (that is, the possibility that returns might be negative — a loss, and possibly total — for specific transactions), (b) promotes both inside and outside of corporations based upon how well middle managers adapt to and massage the appearance of their responsibility for favorable Β (whether or not they're consciously doing so), and (c) accepts — even celebrates — the unproven lemma of linear scalability, aka universal economies of scale. Remember the American automobile industry in the 1960s and 1970s? Like that.

    Sometimes high-falutin' theory does have clear application to current matters. This is one of them: I reject "efficiency" as a normative, as opposed to merely descriptive, value in financial and economic systems, based on a theoretical examination of nonequilibrium systems. And I dare anyone who actually looks at data to characterize any part of publishing — let alone retail distribution of trade works — as even resembling equilibrium; indeed, the whole point of publishing is to exploit, and even celebrate, informational and expressional disequilibrium! Commercial publishing is the ultimate expression of Maxwell's Daemon as not just theory, but a method of doing business.

    Taking sides in this particular controversy resembles cracking down on the Bloods while leaving the Crips, the Latin Kings, the Outlaws, and so on to go on with their own thuggery, merely because one recent member of the public caught in the crossfire was "obviously" the victim of a Blood-fired bullet. These gangs aren't the "friendly" Sharks and Jets of West Side Story.

If there's a unifying theme here, it's the mistaken — and frequently self-defeating — application of purported "laws" beyond their boundary conditions. Virtually everything has a boundary condition beyond which the basic statement of the "law" does not apply, even by its own terms: Division by zero, "thou shalt not kill," "treat others as you would wish to be treated," and negative externalities are only excrutiatingly obvious examples. We need to pay better attention to this problem.