anti-Star Trek

Robot Redux

August 18th, 2015  |  Published in anti-Star Trek, Political Economy, Politics, Time, Work

It never fails that when I get around to writing something, I’m immediately inundated by directly related news, making me think that I should have just waited a few days. The moment I commit bits to web servers about the robot future, I see the following things.

First, the blockbuster New York Times story about Amazon and its corporate culture. The brutality of life among the company’s low-wage warehouse employees was already well covered, but the experience of the white collar Amazonian was less well known. The office staff, it seems, experiences a more psychological form of brutality. I couldn’t have asked for a better demonstration of my point that “the truly dystopian prospect is that the worker herself is treated as if she were a machine, rather than being replaced by one”. To wit:

Company veterans often say the genius of Amazon is the way it drives them to drive themselves. “If you’re a good Amazonian, you become an Amabot,” said one employee, using a term that means you have become at one with the system.

On to number two! Lydia DePillis of the Washington Post reacts to efforts to raise the minimum wage in exactly the way I mentioned in my post: by raising the threat of automation. She notes various advances in technology, while also observing that in recent times “the industry as a whole has largely been resistant to cuts in labor . . . the average number of employees at fast-food restaurants declined by fewer than two people over the past decade”. But, she warns, that could all change if the minimum wage is raised to $15.

Liberal economist (and one-time adviser to the Vice President) Jared Bernstein responds here. He makes, in a slightly different way, the same point I did: “one implication of this argument is that we should make sure to keep wages low enough so employers won’t want to bother swapping out workers for machines . . . a great way to whack productivity growth.” (Not to mention, a great way to make life miserable for the workers in question.) He then goes on to argue that higher wages won’t really lead to decreased employment anyway, which sort of undercuts the point. But oh well.

Finally, we have the Economist weighing in. This little squib on “Automation angst” manages to combine all the bourgeois arguments into one, in a single paragraph:

[Economist David] Autor argues that many jobs still require a mixture of skills, flexibility and judgment; they draw upon “tacit” knowledge that is a very long way from being codified or performed by robots. Moreover, automation is likely to be circumscribed, he argues, as politicians fret about wider social consequences. Most important of all, even if they do destroy as many jobs as pessimists imagine, many other as yet unimagined ones that cannot be done by robots are likely to be created.

So, to summarize. The robots won’t take your job, because they can’t. Or, actually, the robots can take your job but they won’t, because we will make a political decision to disallow it. Or no, never mind, the robots will take your job, but it’s fine because we will create lots of other new jobs for you.

This summarizes the popular approach to this problem well, from a variety of vantage points that all miss the main point. Namely, that if it is possible to reduce the need for human labor, the question becomes: who benefits from that. The owners, of the robots, or the rest of the working masses?

Egyptian Lingerie and the Robot Future

August 6th, 2015  |  Published in anti-Star Trek, Feminism, Political Economy, Politics, Work

The current issue of the New Yorker has a story about the odd phenomenon of Chinese lingerie merchants in Egypt. These immigrant entrepreneurs are apparently ubiquitous throughout the poor, conservative districts of upper Egypt, where they dispense sexy garments to the region’s pious Muslim women. The cultural and geopolitical details of the story are interesting for a number of reasons, but I was struck in particular by a resonance with some debates that have recently flared up again about labor and automation, for reasons I’ll get back to below.

“Robots will take all our jobs” is a hardy perennial of popular political economy. Typical of the latest crop is Derek Thompson of the Atlantic, who wrote an article (in which he quotes me), speculating about a “World Without Work” in the wake of mass adoption of robotization and computerization. Paul Mason gives a more leftist and political rendition of similar themes.

As I note in my recent Jacobin editorial, this kind of thing is not new, and is in fact an anxiety that recurs throughout the history of capitalism. Two decades ago, we had the likes of Jeremy Rifkin and Stanley Aronowitz musing about the “end of work” and the “jobless future”.

And these repeating waves of robo-futurism call into existence the same repeated insistence that robots are not, in fact, taking all the jobs. Doug Henwood was on this beat twenty years ago and remains on it today. Matt Yglesias, likewise, calls fear of automation a “myth”.

One of the specific things that people like Henwood and Yglesias always cite is the productivity statistics. If we were seeing a wave of unprecedented automation, then we should be seeing rapid rises in measured labor productivity—that is, the amount of output that can be produced per hour of human labor. Instead, however, what we’ve seen is historically low productivity growth, compared to what happened in the middle and late 20th Century.

All of which leads commentators like Yglesias and Tyler Cowen to fret that the robots aren’t coming fast enough. Typical of most writers on this subject, Yglesias just worries vaguely that increases in productivity won’t happen for some unspecified reason.

I’ve argued a number of times for an explanation that connects the question of automation and productivity growth directly to wages and the general condition of labor. The basic idea is very simple. From the perspective of the boss, replacing a worker with a machine will be more appealing to the degree that the machine is:

  • Cheaper than the human worker
  • More convenient and easier to control than the human worker

This implies that if workers win higher wages and more control over their working conditions, their jobs are more likely to be automated. Indeed, arguments like this frequently crop up among critics of things like the Fight for 15 campaign, which demands higher wages for fast food workers and other low wage employees. Prototypes for automatic burger-making machines are cited in order to warn workers that their jobs are at risk of being automated away.

I regard such warnings not as arguments against higher wages, but arguments for them. Workers, in the course of fighting for their interests, drive the dialectic that forces capitalists to find less labor-intensive ways of producing. The next political task, then, is to make sure that the benefits of such innovation accrue to the masses, and not to a small class of robot owners.

What I fear most is not that all of our labor will be replaced with machines. Rather, like Matt Yglesias, I worry that it won’t—but for a slightly different reason. Again, bosses prefer workers to machines when they are cheaper and easier to control. Hence the truly dystopian prospect is that the worker herself is treated as if she were a machine, rather than being replaced by one.

Which brings us back, finally, to the Chinese lingerie merchants. The article’s author, Peter Hessler, speaks to one such merchant, and asks him to comment on the biggest problem facing Egypt. To his surprise, his subject, Lin Xianfei, has a quick answer: gender inequality.

But the point turns out not to be that Lin is some sort of secret passionate feminist. Rather, his perspective turns on the exigencies of capital accumulation. For it turns out that while one kind of patriarchy is an impediment to business, another kind can be quite valuable to the shrewd businessman.

The problem, from Lin’s perspective, is that Egyptian women in his region don’t work in wage labor at all, or if they do they only do so for short periods of time, before marrying and retreating into the home. Even worse, local norms about proper female behavior preclude taking women out of their homes to live on site in massive dormitories, as might be done in China. Thus it becomes unfeasible to run factories on 24-hour production cycles.

Hiring men, meanwhile, is out of the question—another man, Xu Xin, tells Hessler that Egyptian men are too lazy and undisciplined for manufacturing work. Hessler goes on to note that “at the start of the economic boom in China, bosses hired young women because they could be paid less and controlled more easily than men”.

He proceeds to comment that female Chinese workers turned out to be “more motivated”, as though he is identifying something distinct from their weaker power position relative to men. But it is really the same thing. “More motivated”, here, refers to the motivation to work hard for the boss, for someone else’s profits and someone else’s riches. To behave, in other words, like obedient machines. The Chinese capitalist objects to the patriarchal structure of rural Egyptian society not because it is patriarchy, then, but because it is a form of patriarchy that is inconvenient to capital accumulation.

And sure enough, faced with recalcitrant humans, the textile magnates of Egypt turn to the same solution that the Chinese electronics firm Foxconn adopted in the wake of worker uprisings there. Wang Weiqiang echoes the other industrialists’ complaints about Egyptian labor: the men are lazy, the women “will work only during the daytime”. As a result, “he intends to introduce greater mechanization in hopes of maximizing the short workday”.

Greater mechanization and the maximization of a short work day might seem tragic to the capitalist, but it summarizes the short term goal of the post-work socialist left. Ornery, demanding workers work to drive technological developments that further this goal. And the socialist-feminist rendition of this project insists that we can prevent workers from being treated as machines not by shielding them with patriarchal and paternalistic morals, but rather by insisting that men and women alike can recognize their paid and unpaid labor in order to better refuse it.

Time Bubbles and Tech Bubbles

March 18th, 2015  |  Published in anti-Star Trek, Shameless self-promotion

The Time Bubble

The new issue of Jacobin is out. It’s about technology, a longstanding preoccupation of mine, and I have the lead editorial. Check it out, along with all the other great stuff in the issue.

I also wrote something for the newest issue of the New Inquiry, which is themed around “futures”. My essay is here. In some ways it functions as a companion piece to my editorial, although it’s generally loopier and weirder. It was retitled from my editor’s original suggestion, “The Time Bubble”, following the Fantastic Four storyline I reference in the text.

The above is an image from that storyline, showing the FF penetrating said bubble on their “time sled”. Which is named Rosebud II. I loved this series of comics when I first read it as a 10 year old, and I still have fond feelings about it. Walt Simonson was great on that run, which he both wrote and drew. He has a wonderfully angular and abstract art style, and he’s a witty writer with a good science fiction mind.

So I’m glad I got to build an essay about Marxist political economy around this story. Not that I’m the first person on the Internet to build an elaborate and vaguely ridiculous theory around these comics. For a far more ambitious and absurd attempt, you have to check out this site. The author argues that the 1961-1989 run of the Fantastic Four actually constitutes the “Great American Novel”, an unmatched examination and synthesis of all the big questions that confronted American society during the cold war.

The site’s coverage of the time bubble story can be found here. The author makes a bunch of metafictional arguments about the relationship between the stories and the upheavel in Marvel’s editorial direction at the time, which was of course totally invisible to me when I was 10. The time bubble, he argues, represents the end of continuity and permanent change in the Marvel universe. It is about “all powerful beings”—i.e., editors—“who prevent the world from moving into the future” by dictating that writers cannot make permanent changes to the characters and worlds that they are writing.

Later on, there’s another funny series of comics riffing on Marvel’s internal bureaucracy, with a dimension of infinite faceless desk jockeys standing in for a directionless editorial team. It’s all hilarious and wonderful. But really, just go read the comics.

The Tragedy of the Commons in the Rentier Mind

February 12th, 2015  |  Published in anti-Star Trek

Complementing my last post, here’s a story about the twisted ideology that now surrounds intellectual property, where IP is considered not just as utilitarian necessity, but as some kind of inherent natural right. In the most absurd form, it is seen as a moral responsibility for creators to zealously defend any IP they can get their hands on, and maximize whatever amount of money they can squeeze out of it.

This article is about our trendy hot sauce of the moment, Sriracha. Specifically, it is about the fact that while the hot sauce in question is strongly associated with a particular product made by Huy Fong foods, the Sriracha name itself is not trademarked. As a result, everyone from your local twee sauce artisan to Heinz and Tabasco is now jumping in with their own Sriracha.

None of this seems to much bother Huy Fong’s founder, David Tran. But boy does it bother all the people that look at this scenario and see a bunch of juicy lawsuits!

The author of the LA Times article calls it a “glaring omission” not to trademark the word.

“In my mind, it’s a major misstep,” says the president of a food marketing consultancy.

Even his competitors are baffled. “We spend enormous time protecting the word ‘Tabasco’ so that we don’t have exactly this problem,” says the CEO of a rival hot sauce company that’s now going into the Sriracha market. “Why Mr. Tran did not do that, I don’t know.”

An IP lawyer laments: “The ship has probably sailed on this, which is unfortunate because they’ve clearly added something to American cuisine that wasn’t there before.”

That David Tran has added something to American cuisine is hard to dispute. But Tran also has a successful, growing business that has most likely made him very rich. One which he has said, on numerous occasions, he deliberately does not scale up as much as he could, in order to maintain the quality of his product and control the sources of his peppers.

So for whom is it so “unfortunate” that he doesn’t spend his life in constant litigation against anyone who dares make a Thai-style hot sauce and name it after a city in Thailand? Tran himself gives the answer. “We have lawyers come and say ‘I can represent you and sue’ and I say ‘No. Let them do it.'”

Intellectual Property and Pseudo-Innovation

February 10th, 2015  |  Published in anti-Star Trek, Political Economy

The most common justification for intellectual property protection is that it provides an incentive for future creation or innovation. There are many cases where this rationale is highly implausible, as with copyrights that extend long after the death of the original author. But even where IP does spur innovation, the question arises: innovation of what kind?

I’ve written before about things like patent and copyright trolling, where the IP regime incentivizes innovations that have no value at all, because they amount to figuring out ways to leverage the law in order to make money without doing any work or producing anything. But there’s another category of what might be called “pseudo-innovation.” This involves genuine creativity and cleverness, and the end result is something with real social utility. But the creativity and cleverness involved pertains only to circumventing intellectual property restrictions, without which it would be possible to produce a better output in a simpler way. A couple of examples of this have recently come to mind.

The first is the movie Selma, Ava DuVernay’s dramatization of the 1965 Selma to Montgomery voting rights marches led by Martin Luther King, Jr. Like most dramatizations of historical events, the movie takes liberties with the historical record in order to compress events into a coherent and compelling narrative. But one of these liberties is particularly unusual: in scenes recreating actual King speeches, none of the words we hear from actor David Oyelowo’s mouth are King’s; rather they are broad paraphrases of the original words.

As it turns out, this was not a decision made for any artistic reason, but for a legal one: King’s speeches are still the property of his descendants, who make large amounts of money by zealously guarding their copyrights. DuVernay was apparently barred from using the speeches because the film rights to King had already been licensed to Stephen Spielberg; meanwhile, the King family has had no problem lending his memory out to commercials for luxury cars and phone companies. DuVernay does an elegant job of giving the content and the feel of King’s oratory without using his actual words, and one could perhaps even argue that some unique value arises from this technique. But for the most part it’s pseudo-innovation, a second best solution mandated by copyright.

Another example comes from a very different field, computer hardware manufacturing. Here we turn to the early 1980’s and the development of the “PC clone.” Today, the personal computer is a generic technology—the machines that run Windows or Linux or other operating systems can be bought from many manufacturers or even, like the machine I’m using to write this post, assembled by the end user from individually sourced components. But in 1981, the PC was the IBM PC, and if you wanted to run PC software you needed to buy a machine from IBM..

Soon after the PC was introduced, rival companies began trying to produce cheaper knockoffs of the IBM product–the efforts of one leader, Compaq, are dramatized in the AMC series “Halt and Catch Fire”. Building the machines themselves was trivial, because the necessary hardware was all publicly available and didn’t require any propriety IBM technology. But problems arose in the attempt to make them truly “IBM-compatible”—that is, able to run all the same software that you could run on an IBM. This required copying the BIOS (Basic Input/Output System), a bit of software built into the PC that programs use to interface with the hardware.

That BIOS was proprietary to IBM. So in order to copy it, Compaq was forced into a bizarre development system described by Compaq founder Rod Canlon as follows:

What our lawyers told us was that, not only can you not use it [the copyrighted code] anybody that’s even looked at it—glanced at it—could taint the whole project. (…) We had two software people. One guy read the code and generated the functional specifications. So, it was like, reading hieroglyphics. Figuring out what it does, then writing the specification for what it does. Then, once he’s got that specification completed, he sort of hands it through a doorway or a window to another person who’s never seen IBM’s code, and he takes that spec and starts from scratch and writes our own code to be able to do the exact same function.

Through this convoluted process, Compaq managed to make a knockoff BIOS within 9 months. Just as Ava DuVernay came up with paraphrases of King, they had essentially paraphrased the IBM BIOS. And the result was something genuinely useful: a cheaper version of the IBM PC, which expanded access to computing. But the truly inventive and interesting things Compaq came up with—the things that make the story worth fictionalizing on TV—are pure pseudo-innovation.

Looked at this way, the world of IP pseudo-innovation looks kind of like high finance. In both cases, you have people making money and even having fun figuring out the best ways to game and counter-game the system, but in none of the complicated trading algorithms or software development strategies add anything to social wealth.

The Comforts of Dystopia

March 21st, 2014  |  Published in anti-Star Trek, Political Economy, Shameless self-promotion, Socialism

I’m currently working on a longer treatment of Four Futures, my social science fictional speculation about the possible successor systems to capitalism, in a world characterized by pervasive automation and ecological crisis. That book is slotted for Jacobin‘s series; more about that at a later date.

Four Futures was, itself, an extension of “Anti-Star Trek”, a post that still gets some love around the Internet from time to time. The core intuition of both pieces of writing was that while we live in a world that abounds in utopian potential, the realization of that potential depends on the outcome of political struggle. A rich elite that wants to preserve its privileges will do everything possible to ensure that we don’t reach a world of leisure and abundance, even if such a world is materially possible.

But one of the things I’ve struggled with, as a writer, is the tendency of my more speculative writing to mine a streak of apocalyptic quiescence on the radical left. To me, the story I’m telling is all about hope and agency: the future is here, it’s unevenly distributed, and only through struggle will we get it distributed properly. I suppose it’s no surprise, though, after decades in retreat, that some people would rather tell themselves fables of inevitable doom rather than tackling the harder problem of figuring out how we can collectively walk down the path to paradise.

So of the four futures I described, the one that I think is both the most hopeful and most interesting—the one I call “communism”—is the least discussed. Instead it’s exterminism, the mixture of ecological constraints, automation, and murderous elites, that seems to stick in peoples’ brains, with the anti-Star Trek dystopia of intellectual property rentiers running a close second.

But strip away the utopian and Marxist framework, and all you have is a grim dismissal of the possibility of egalitarian politics. You get something like this, from Noah Smith, which echoes my account of exterminism but updates it to our present drone-obsessed times. For a lot of isolated intellectual writer types, it can be perversely reassuring to think that achieving a better world is not just difficult, but actually impossible. How else to explain the appeal of Chris Hedges?

Another piece of news that recently aroused this sensibility was this Guardian post about an alleged “NASA study” predicting the “irreversible collapse” of industrial civilization. Here, via Doug Henwood, is a critique of the study itself and the lazy media that propagated it. And another Twitterer links to this, which is even more damning. In short, the study—which the original author didn’t even bother to link to—had little to do with NASA, and was a crude theoretical model based on a handful of equations. Frankly, as far as futurology goes, I think “Four Futures” was built on a far sounder scientific foundation.

What depresses me is not so much the perambulations of a crank with a Guardian blog, such people will probably be with us forever. But many people I know and like were eager to share this thinly sourced bit of nonsense around Facebook and Twitter, suggesting that it spoke to a desire for apocalyptic scenarios among ostensibly pragmatic leftists.

This fatalism is the perfect complement to the equally inane positivity that pervades bourgeois discourse, whether it’s coming in the form of self-help as dissected by Barbara Ehrenreich, or as the phony utopianism of silicon valley plutocrats. The ruling class tells us that the future is inevitably bright, while left curmudgeons reassure themselves with the conviction that it’s inevitably gloomy. We don’t win from playing this game, taking our meager emotional returns while our opponents take their payment in a much more tangible form.

The Problem of “Capital in the Twenty First Century”

March 10th, 2014  |  Published in anti-Star Trek, Political Economy

Today marks the English-language publication of Thomas Piketty’s eagerly awaited Capital in the Twenty-First Century. I haven’t read the book yet, so I can’t comment on the adequacy of its approach to the problem of capital in the twenty-first century. But I can comment on a specific problem of “Capital in the Twenty-First Century” that turns out to be illuminating.

In his review of the book, Dean Baker complains that Piketty’s account is overly deterministic, largely due to an inattention to the details of institutional structures which shape the distribution of wealth and income, and which are potentially subject to change by political means. In particular, he draws attention to one of his, and my, recurring themes: intellectual property. Using drug companies as a case in point, Baker notes that this industry makes up 2 percent of GDP and 15 percent of corporate profits, based entirely on “government granted patent monopolies”.

Drug patents may be the most egregious example, but there’s plenty more where that came from. After reading Baker’s review, I headed over to Amazon, with the thought of picking up an ebook edition of Piketty’s book. There I found that the Kindle edition retails for a whopping $27.48, for a grand total of $1.45 in savings over the physical, hardcover edition.

Only copyright law and digital copy protections make this possible, of course—copying an ebook is trivial and nearly costless. And who benefits from that? Presumably some royalties accrue to Piketty and his translator, Arthur Goldhammer. Which I can’t really begrudge, although Piketty already enjoys a comfortable faculty position at the Paris School of Economics.

But the other beneficiary is the publisher, Harvard University Press, and it’s a bit harder to see how they need the money. HUP is a division of Harvard University, which, some incidental educational operations aside, is primarily an enormous investment fund presiding over $32 billion dollars in assets. Which brings us around to another of Dean Baker’s objections, which is that the unusual success of Harvard’s investments may not simply be due to the expertise of its financial managers. He proposes insider trading as another plausible (albeit unsubstantiated) explanation: “graduates of these institutions undoubtedly could [provide] their alma maters with plenty of useful investment tips.”

All of which is to say that while I laud Piketty’s support for increased taxation of income and wealth, the peculiar case of his own book illustrates Baker’s important counterpoint. It’s a point that could equally be directed at certain Marxists and other leftists, for whom all efforts at reformist politics are doomed to fail a priori: “capitalism is far more dynamic and flexible than the way Piketty presents it”, and thus we should pay close attention to “the specifics of the institutional structure that is crucial for constructing a more egalitarian path going forward.”

Guards, Workers, Machines

February 17th, 2014  |  Published in anti-Star Trek, Political Economy, Politics, Shameless self-promotion, Socialism, Work

I see that a couple of my longtime interests—guard labor and the relationship between wages and productivity—have surfaced in the New York Times and the Economist, respectively.

The Times published an article by the economists Samuel Bowles and Arjun Jayadev, advancing their research on what they call “guard labor”: the work of security guards, police, the armed forces, prison staff, and others whose function is chiefly “guarding stuff rather than making stuff”, in the words of another economist they quote.

Bowles and Jayadev first proposed the concept of guard labor, as far as I know, in this paper from about ten years ago. Their basic insight is that maintaining a system of unequally distributed private wealth requires a large amount of repressive labor that is not directly productive. I first drew on their idea a few years ago in my sketch of the economy of anti-Star Trek (and I should note that the economics of Star Trek has also gotten another recent treatment.) I returned to it in “Four Futures”, which also considers the increasing significance of guard labor in a society characterized by abundant and unequal wealth alongside ecological scarcity.

In their latest update, Bowles and Jayadev advance their analysis by empirically analyzing guard labor in a cross-national perspective, and relating it directly to income inequality. They find, unsurprisingly, that higher levels of inequality are strongly correlated with a stronger share of guard labor in the economy. To over-simplify only a bit, societies with a greater social distance between the rich and poor require more people to protect the haves from the have-nots. Thus Bowles and Jayadev suggest that reducing economic inequality is an important part of rolling back our increasingly militarized, carceral society.

Meanwhile, at the Economist, we have Ryan Avent (technically unattributed, according to the magazine’s annoying convention), writing about an apparently unrelated topic: the relationship among productivity, economic growth, and wage stagnation. The post is long and contains a number of interesting detours, but the basic point is simple: “productivity is often endogenous to the real wage.” What this means is that technological change in the production process isn’t something that happens independently of what’s happening to the wages of workers. Rather, high wages spur productivity growth because they encourage businesses to economize on labor. Conversely, lots of workers competing for jobs at low wages is a recipe for slow growth, because there is little incentive to use labor-saving technology when labor is so cheap.

As it happens, this is exactly what I suggested a few years ago, in response to Tyler Cowen’s theories of technological stagnation. I’ve elaborated the point, and even drawn on the mainstream economist Daron Acemoglu, who also crops up in Avent’s post. But economics writers have been remarkably resistant to the idea that wages and technology can dynamically interact like this, and the Economist post still treats it as a scandalous proposition rather than something that seems compelling and obvious on its face. Thus we find ourselves trapped in an endless, unhelpful debate about whether or not technology is some kind of independent, inevitable cause of unemployment and wage polarization.

Having examined various aspects of the problems that arise from a glut of too-cheap labor, Avent ends up very close to where I do on these issues, in particular on the value of reducing labor supply. A higher minimum wage is important, since it provides the necessary incentive to economize on labor. But it’s not sufficient, because we also need to reduce the amount of hours of work, both through shorter hours and lower labor force participation. That means something like a Universal Basic Income not tied directly to employment. Which brings us back to the same place Bowles and Jayadev end up as well: massive redistribution to tackle income inequality and share out the benefits of a highly productive economy.

Avent notes with amusing understatement that “redistribution at the scale described above would be very difficult to engineer.” It will require, in fact, pitched class struggle of no less intensity than was necessary to build the socialisms and social democracies of the 20th century. But taking that path is the only way to get to something resembling the two egalitarian endings I sketched, as part of my speculative political economy choose-your-own-adventure in “Four Futures”, which I called communism and socialism. The alternative is to continue along the path Bowles and Jayadev describe, to a society locked down by guard labor—whether that’s the rentier dystopia of pervasive intellectual property I called rentism, or the inverted global gulag of rich enclaves scattered across a world of ecological ruin, which I called exterminism.

Porno for Pirates

May 7th, 2013  |  Published in anti-Star Trek

As someone who made a certain amount of my reputation by using the Star Trek universe to illustrate the dangers of strong intellectual property law, I feel obligated to comment on the recent court decision against the entity commonly referred to as Prenda Law. The case combines copyright battles, Star Trek, and pornography—if I can slip in a picture of a cute animal, I may be able to construct the Platonic ideal of a popular Internet post.

The case, decided in the District Court for the Central District of California, concerns a group of lawyers engaged in a particularly egregious form of copyright trolling. Their strategy was to file a large number of lawsuits accusing individuals of illegally downloading a single porn video, the copyright for which was apparently assigned to one of the lawyers’ groundskeeper on the basis of a forged signature. The basis for these lawsuits was quite flimsy, but the firm had no real intention of winning the lawsuits in court. Instead, they would offer to settle—and as the court decision notes, the offer was “for a sum calculated to be just below the cost of a bare-bones defense.” This, combined with the embarrassment of being publicly linked with downloading porn, was apparently enough to extort money from a significant number of people.

The tangled organizational web woven by the trolls is shown in the image below, taken from the court decision. It won’t shock anyone who followed This American Life’s story about patent-trolling front companies. In this case, though, the strategy of obfuscation ultimately contributed to Prenda’s undoing, as the judge concluded that its only purpose was to “shield the Principals from potential liability and to give an appearance of legitimacy.”

Org chart of Prenda Law

It’s also worth noting, amid concerns over ISP monitoring of user traffic, that actually being able to correctly identify downloaders was superfluous to Prenda’s strategy. They claimed to show that their targets had used Bittorrent to download the video. Yet the judge points out that they never bothered to “conduct a sufficient investigation to determine whether that person actually downloaded enough data (or even anything at all) to produce a viewable video.” Nor did they make any effort to “conclude whether that person spoofed the IP address, is the subscriber of that IP address, or is someone else using that subscriber’s Internet access.” Why bother, when they never intended to defend their claims in court? “When faced with a determined defendant . . . they dismiss the case.”

All of this would be signficant enough just for providing an extreme example of the way copyright law can be exploited within the American legal system—what the court decision calls “the nexus of antiquated copyright laws, paralyzing social stigma, and unaffordable defense costs.” But the author of the decision, judge Otis Wright, took things to another level entirely when he chose to write a decision littered with Star Trek references, beginning with an opening quotation from Spock in Star Trek II: “the needs of the many outweigh the needs of the few”.

It only gets better from there, as Wright unloads his scorn on what he refers to as “the porno-trolling collective”. An analogy to the Borg begins by explaining why “resistance is futile” to the porn-trolling scheme, and several pages later notes that some other attorneys who colluded with the main culprits “were not merely assimilated; they knowingly participated in this scheme.” In his concluding remarks, Wright observes that

Though Plaintiffs boldly probe the outskirts of law, the only enterprise they resemble is RICO. The federal agency eleven decks up is familiar with their prime directive and will gladly refit them for their next voyage. The Court will refer this matter to the United States Attorney for the Central District of California.

Watching these scumbags get their comeuppance gives this story a happy ending. But as usual, the real scandal is what’s legal. There’s no happy ending for Jammie Thomas, the working class mother of four who’s still on the hook for $222,000 for the crime of sharing 24 songs on the Internet. And while bottom-feeders like Prenda get upbraided in court, high class patent trolls like Nathan Myhrvold get puffed up as brilliant innovators by Malcolm Gladwell in the pages of the New Yorker. Unfortunately, we may yet look back on Prenda Law as the real innovators, who were just a bit too audacious and a bit too far ahead of their time.

We Have Always Been Rentiers

April 22nd, 2013  |  Published in anti-Star Trek, Political Economy, Statistics

In my periodic discussions of contemporary capitalism and its potential transition into a rentier-dominated economy, I have emphasized the point that an economy based on private property depends upon the state to define and enforce just what counts as property, and what rights come with owning that property. (The point is perhaps made most directly in this essay for The New Inquiry.) Just as capitalism required that the commons in land be enclosed and transformed into the property of individuals, so what I’ve called “rentism” requires the extension of intellectual property: the right to control the copying and modification of patterns, and not just of physical objects.

But the development of rentism entails not just a change in the laws, but in the way the economy itself is measured and defined. Since capitalism is rooted in the quantitative reduction of human action to the accumulation of money, the way in which it quantifies itself has great economic and political significance. To relate this back to my last post: much was made of the empirical and conceptual worthiness of Reinhart and Rogoff’s link between government debt and economic growth, but all such disputations presume agreement about the measurement of economic growth itself.

Which brings us to the United States Bureau of Economic Analysis, and its surprisingly fascinating “Preview of the 2013 Comprehensive Revision of the National Income and Product Accounts”. The paper describes a change in the way the government represents the size of various parts of the economy, and therefore economic growth. The most significant changes are these:

Recognize expenditures by business, government, and nonprofit institutions serving households (NPISH) on research and development as fixed investment.

Recognize expenditures by business and NPISH on entertainment, literary, and other artistic originals as fixed investment.

The essential issue is whether spending on Research and Development, and on the production of creative works, should be regarded merely as an input to other production processes, or instead as an investment in the creation of a distinct value-bearing asset. The BEA report observes that “expenditures for R&D have long been recognized as having the characteristics of fixed assets—defined ownership rights, long-lasting, and repeated use and benefit in the production process”, and that therefore the BEA “recogniz[es] that the asset boundary should be expanded to include innovative activities.” Likewise, “some entertainment, literary, and other artistic originals are designed to generate mass reproductions for sale to the general public and to have a useful lifespan of more than one year.” Thus the need for “a new asset category entitled ‘intellectual property products’,” which will encompass both types of property.

What the BEA calls “expanding the asset boundary” is precisely the redefinition of the property form that I’ve written about—only now it is a statistical rather than a legal redefinition. And that change in measurement will be written backwards into the past as well as forwards into the future: national accounts going back to 1929 will be revised to account for the newly expansive view of assets.

Here the statisticians are only following a long legal trend, in which the state treats immaterial patterns as a sort of physical asset. It may be a coincidence, but the BEA’s decision to start its revisionist statistical account in the 1920’s matches the point at which U.S. copyright law became fully disconnected from its original emphasis on limited and temporary protections subordinated to social benefits. Under the Copyright Term Extension Act, creative works made in 1923 and afterwards have remained out of the public domain, perpetually maintaining them as private assets rather than public goods.

A careful reading of the BEA report shows the way in which the very statistical definitions employed in the new accounts rely upon the prior efforts of the state to promote the profitability of the intellectual property form. In its discussion of creative works, the report notes that “entertainment originals are rarely sold in an open market, so it is difficult to observe market prices . . . a common problem with measuring the value of intangible assets.” As libertarian critics like to point out, an economy based on intellectual property must be organized around monopoly rather than direct competition.

In order to measure the value of intangible assets, therefore, the BEA takes a different approach. For R&D, “BEA analyzed the relationship between investment in R&D and future profits . . . in which each period’s R&D investment contributes to the profits in later periods.” Likewise for creative works, BEA will “estimate the value of these as­sets based on the NPV [Net Present Value] of expected future royalties or other revenue obtained from these assets”.

Here we see the reciprocal operation of state power and statistical measurement. Insofar as the state collaborates with copyright holders to stamp out unauthorized copying (“piracy”), and insofar as the courts uphold stringent patent rights, the potential revenue stream that can be derived from owning IP will grow. And now that the system of national accounts has validated such revenues as a part of the value of intangible assets, the copyright and patent cartels can justly claim to be important contributors to the growth of the Gross Domestic Product.

The BEA also has interesting things to say about how their new definitions will impact different components of the overall national accounts aggregate. They note that the categories of “corporate profits” and “proprietors’ income” will increase—an accounting convention perhaps, but one that accurately reflects the constituencies that stand to benefit from the control of intellectual property. Thus the new economic order being mapped by the BEA fits in neatly with Steve Waldman’s excellent recent post about late capitalism’s “technologically-driven resource curse, coalescing into groups of insiders and outsiders and people fighting at the margins not to be left behind.”

The changes related to R&D and artistic works may be the most significant, but the other three revisions in the report are worth noting as well. One has to do with the costs associated with transferring residential fixed assets (e.g., the closing costs related to buying a house), while another has to do with the accounting applied to pension plans. Only the final one, a technical harmonization, has to do directly with wages and salaries. This is perhaps an accurate reflection of an economic elite more preoccupied with asset values than with the direct returns to wage labor.

Finally, the reception of the BEA report provides another “peril of wonkery”, related to the one I described in my last post. The Wonkblog post about the report makes some effort to acknowledge the socially constructed nature of economic statistics: “the assumptions you make in creating your benchmark economic statistics can create big swings in the reality you see.” And yet the post then moves directly on to claim that in light of the statistical revisions, “the U.S. economy is even more heavily driven by the iPad designers and George Lucases of the world—and proportionally less by the guys who assemble washing machines—than we thought.” This is no doubt how the matter will be described going forward. But the new measurement strategies are only manifestations of a choice to attribute a greater share of our material wealth to designers and directors, and that choice has more to do with class struggle than with statistics.