Monthly Archives: October 2011

Ceci Tuera Cela, Take Two

Hal Varian is the chief economist for Google and retired professor emeritus at UC Berkeley, where he founded the School of Information and held positions with the Haas School of Business and the Department of Economics. In The Economics of Information Technology, he and Joseph Farrell and Carl Shapiro outline a market-based philosophy of the relationships between economic factors and for-profit information technology companies. They note that in technological industries, constant and substantial fixed costs are coupled with low or nonexistent marginal costs for each additional incremental unit (3). This is of particular interest when coupled to the careful distinctions they draw between “Information technology,” which “is used to manipulate information,” of which a portion “may be intellectual property” (4). We know these are not separate categories. Often, in the economic cycle of production, distribution, use, and re-production, one becomes the other. When that happens, we should understand it as an instance of the transformation problem and the aggregation problem. Varian is a lot smarter and a lot more well-educated about economic phenomena than am I, but I’ll point out that this illustrates a difference in emphasis and perspective: mainstream neoclassical economics is synchronic in its analysis, while I’m concerned via that economic cycle I’ve outlined with what takes place over time. Varian wants to categorize economic inputs and transactions and look at their intersections in the moment. I’m looking at processes over time and how time is always and inevitably the factor in the three problems (transformation, aggregation, substitution) that I see as being characteristic of the way we teach composition. We aggregate the labor of production into the commodification of both the grade and the skill, but the process itself attends to the phenomenology of writing in ways that blur value together rather than separate value into distinct domains.

What would happen, then, if we worked to closely examine the ways in which value is appropriated into different domains and by different parties at different stages in the economic process? Varian discusses the phenomenon of “price discrimination” enabled by “high-tech industries” in the ways that “price will often exceed marginal cost” and “a seller can offer prices and goods that are differentiated by individual behavior and/or characteristics” (12). This phenomenon, exemplified in wishlists and egocasting and the splintering of the supply of goods — Zuboff and Maxmin’s so-called “support economy” — would seem to be a strong counter to the rhetorically idealized massed economic forces of depersonalized corporations and ideologies of mass consumption. Chomsky’s critique of “Weapons of Mass Distraction” refers to advertising, and homogenizes capitalist entities in order to criticize them homogenously, as an undifferentiated group, while simultaneously surrendering to them as the overpowering metonymic avatars of an irresistible global capitalism. For critiques such as Chomsky’s, which are all too common to the discourse of composition, the game is already lost and it is always already the end of the world and the only things we can do is shake our heads and say, “If only they had listened to us, but they didn’t, so there’s nothing to be done except decry the fact that they didn’t listen to us and so reinforce our nobly subaltern position”: we have met the enemy, and he is us. On the other hand, if we were to attend to the diverse economic landscape and extend the metaphor of price discrimination to non-market activities, we would recognize ourselves and the work we do with information as an experience good.

Consider the concept of versioning as it takes place in the non-market context of revision in the composition classroom or in scholarly discourse. Varian describes “versioning” as “a way to price discriminate between collectors and casual viewers, and between buyers and renters,” and notes that “the price differences between the two version is much greater than the difference in marginal cost” (17). We know as scholars, and we teach our students, that once you educate yourself enough about a particular subject, you can shift your arguments about that subject to pitch some to experts and some to non-experts, who will take away slightly different messages and be inclined to react in different ways to your rhetorical pitch, despite how little you needed to adjust your fundamental message. We do versioning, too, in the ways we compose and ask students to compose for different audiences, and in the ways we return to habitual concerns. We embody versioning, in fact, in our variations on particular topics and our returns to the same concerns in conference presentations and scholarly articles. But it’s not price we’re interested in; it’s value, and how it circulates, and we hope that others take up our concerns and differentiate theirs from ours in new and unique ways.

That act of versioning, however, can only offer value in a context where enough people possess the motivation and the ability — the will and the skill — to make that discrimination. Varian talks about “network effects” and how those effects “are endemic in high-tech products,” pointing out that “the demand for the [technological] infrastructure depends on the availability of applications, and vice versa” (33). The condition of literacy is infrastructure. These are “demand-side economies of scale” (33): how valuable a skill is depends on how many people have it. As Varian notes, “average revenue (demand) increases with scale” (34). Increasing the number of people who know how to use computers increases the value of knowing how to use computers. The same phenomenon occurs with literacy. There is a hump, a tipping point, that one has to get over, and to a large degree we’ve done so in the U.S., and so we’ve hidden from ourselves that obstacle. That obstacle is wholly present in Afghanistan, even if we don’t know quite where it is: we only know that we have to get over it. That’s what the counterinsurgency battle is about, and that’s why we should be thinking about Plato and the Phaedrus when we’re engaging the Afghans. There are plenty of things that are going to influence them, and enjoyment of literature might be one, and familiarity with Western culture might be another (even as I cringe at the ugly inherent colonialism of such a statement). The coupled abilities of post-print literacy and computer literacy will be of enormous benefit to the Afghans if they can get enough people practiced in those abilities. Right now, they don’t have it, but we know that network effects are hugely influential, and we know that once that positive-value tipping point is passed, improvement in multiliteracies and economic gain (both market and nonmarket) can become mutually self-sustaining. In observing such a self-sustaining relationship, however, we should not confuse ourselves that marked effects are in some way equivalent to network effects, as we so often do.

In fact, as smart as Varian and Farrell and Shapiro are, they are in their attention to markets missing the broader and much more important picture: it’s not about money; it’s about value. Varian problematically asserts that “copyrighted computer software, such as Microsoft Windows, can have far greater economic significance than any single book, musical composition, or movie” (34), apparently ignoring the Bible, The Communist Manifesto, Chairman Mao’s Little Red Book, The Internationale, Triumph of the Will, and The Battle Hymn of the Republic. As market economists, they see only market effects. They are once more engaging in the reductive “ceci tuera cela” argument familiar from Victor Hugo’s Hunchback of Notre Dame: this will kill that. The book will kill the cathedral. Postmodernism will kill the author. The screen will kill the page. In fact, I would argue that the market-based economic arguments of Varian, Farrell, and Shapiro all carry within them their own unseaming and show how success with market-based interpretations of the functioning of information technology actually show and illustrate how the market is circumscribed, bound, and supplemented by a broader nonmarket economy. Not that this will kill that, but that this will coexist with that, and many more things besides, and necessarily so.