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"We were so keen to believe that Web 2.0 would make the world fairer that we rejected all evidence to the contrary"

Exciting as they sound, the Wired editor’s theories have no sticking power

Few attempts at rewriting the rules of business have been met with as much hostility as the latest theory touted by Chris Anderson, editor of the technology magazine Wired. His latest book, Free: the Future of a Radical Price, expounds a philosophy of “freeconomics” – businesses in a vast range of industries, he argues, should emulate the giant giveaway of the internet. Bold, perhaps, but also spectacularly badly timed. And the response has reflected that. The Economist, for one, has roundly criticised Free. “The lesson of the two internet bubbles,” it intoned, “is that somebody, somewhere, is going to have to pick up the tab for lunch.”

What is really puzzling is that the backlash against Anderson’s ideas has taken this long to happen. The response to his first book, The Long Tail, an analysis of online businesses which sell a wide variety of items in very small quantities, compared Anderson to Copernicus, no less, and its title became a buzz-phrase for the new media and marketing classes. But eventually his theory wilted in the face of empirical evidence.

Both books contain a grain of truth; however, in each case it is buried beneath a pile of dramatic, improbable extrapolations. Anderson correctly notes that digital technology has lowered the cost of production (and reproduction) of digital goods, the cost of transactions, and the cost of ­acquiring customers. However, the giveaways his freeconomy depends on require someone else to pick up the tab, and in the current economic climate, with profits evaporating and jobs being shed, there is little enthusiasm for altruism or wild punts. In addition, media owners and executives have turned viscerally on the notion of giving away their key products. Rupert Murdoch, who could be heard lauding Web 2.0 a couple of years ago, now echoes the fairly common view that aggregators such as Google are parasitic. Understanding how such flimsy ideas became so popular in the first place involves looking back to the infancy of the magazine that incubated them.

In 1992, Louis Rossetto, an expatriate American living in Amsterdam, was getting exhausted. For a fruitless two years, he had been pulling a blueprint from his backpack. It was for a new magazine that would foretell dramatic changes in business and society as computers became networked – but nobody wanted to know. However, his fortunes took a turn for the better when he met Nicholas Negroponte, the well-connected Boston socialite and academic.

Negroponte was seeking a publicity vehicle for his “concept factory”, a novel business proposition spun out from the venerable Massachusetts Institute of Technology. Negroponte’s Media Lab didn’t trouble itself with boring engineering and scientific research – the empirical bedrock of technological innovation, which takes years to bear fruit. The Lab was designed to coax corporate sponsorship with attention-grabbing ideas. This was Hollywood with P T Barnum thrown in.

Few of the whimsical concepts from the Lab – furry alarm clocks that run away, “ambient furniture” – would ever be viable products, but they generated acres of newsprint. And the press coverage drew in the sponsorship. Negroponte sold the proposition that his whizz-kids knew the future, and if you, too, suspended disbelief, so could you. A new business had been created. Negroponte became Rossetto’s first investor, and his flagship guru. Wired magazine was born.

Wired married an admirable American can-do spirit to the techno-utopianism of earlier media prophets such as Alvin Toffler, a former associate editor of Forbes magazine who has been writing since the 1960s about technology’s future and its impact. But Wired also inherited Toffler’s bossy, declamatory tone. The future wouldn’t just be different, it would be unrecognisable; history would be erased, and existing businesses must leap out of the way. The necessity to preach “rewriting the rules of business” in every issue set Wired on the path to hubris.

The answer to the puzzle of Anderson’s popularity lies in the roots of Wired itself – a mix of manifest destiny and opportunistic hucksterism. Anderson is primarily an evangelist for a vision that dictates a specific shape and structure for the internet. This may be premature. And, coincidentally, it is a vision that directly benefits one company, Google, at the expense of the telecommunications and media industries. Both of Anderson’s theses were inspired by critiques of the internet that fatally undermine this vision. Arguably, both amount to exercises in public relations rather than economics.

The Long Tail was a response to an essay by Clay Shirky, a prominent technology writer who also teaches at New York University. Shirky’s argument dampened much of the nascent utopianism about blogs, pointing out that the readership of early blogs followed what economists call a Pareto curve, or “power curve”: a small number of sites (the “head”) attracted a huge number of readers, but most (the “tail”) had few or none. This jarred with the utopian notion of the internet as a new kind of democracy. Why bother to participate if our fates were decided for us by a few block votes?

So Anderson turned the notion upside down. The blockbuster was over, he proclaimed, and, like a man possessed, he began to see long tails everywhere. It was the Guardian that lauded this logic by comparing Anderson to Copernicus. The implicit message was that the little people would win. Many people were so keen to believe that Web 2.0 would make the world fairer that they rejected any evidence to the contrary. It was only last year, with an exhaustive study of online music sales by the economist Will Page and an experienced digital retailer, Andrew Bud, that a more useful picture of digital markets begin to emerge.

Page and Bud found that most of the songs available for purchase had never been downloaded, and that the concentration of hits was more pronounced than ever before. On the file-sharing networks, the same pattern emerged. So, carrying a huge retail inventory, though cheaper than before, was of little or no value.

Now, with Free, Anderson has turned to the criticism that the internet destroyed the value of movies, newspapers and music. Firms could, and now should, cross-subsidise this unprofitable activity, he argues. But cross-subsidies aren’t new: they have been the subject of decades of observation by economists. Nor are they a panacea. Alan Patrick, co-founder of the Broadsight media and technology consultancy, points out that despite falling marginal costs, the idea of anything being “free to produce” is a myth; the costs are hidden elsewhere in the system. While at McKinsey, Patrick ran simulations of the “free to produce” business model and found that “it results in wholesale value destruction with no accruing market benefit, unless you can build an extremely commanding lead and get the whole positive dynamic of increasing returns working for you. But that’s hard and rare.”

Explaining the popularity of Wired-style theses should keep sociologists busy for years to come. They will doubtless note the business culture’s appetite for upbeat nostrums, and the media’s desire for myth-making. Business pays lip-service to genuine innovation these days, but, like the modern politician, it is keen to hear about the virtues of constant structural reorganisation, or how to adopt the ephemera of radical change. A speaker who can supply this market with new buzzwords can command 20 times the income of an American magazine editor. So one can hardly blame Anderson for trying his luck. And the buzz-phrases wouldn’t have spread without frequent repetition by an uncritical media. This could be evidence of a lack of confidence or expertise in explaining technical subjects – but it’s the same cynical resort to novelty that Negroponte banked on when he backed Wired magazine.

Anderson’s vision today looks curiously conservative and static, and is both deeply reductive and pessimistic about human nature. We are happy to pay when we perceive value, even for the most unlikely products, such as bottled water. The ideas at the heart of Free do little to explain that. For the “little people to win”, we need to draw on our human capacity for organisation and inventiveness, and engage in real, not virtual, politics. Fittingly, and not surprisingly, Free has had a critical mauling. So, perhaps the Wired era is over, departing like a snake-oil salesman at a medicine show who – having poisoned the town – can’t leave quickly enough.

Andrew Orlowski is Executive Editor of the Register

Chris Anderson: for and against

The Long Tail’s fans . . .

"Each year produces a book that captures the zeitgeist . . . This year
Chris Anderson’s The Long Tail has helped to reinterpret our world."
Times

"It is a powerful idea that provides us with a new(ish) way of looking at the world. Copernicus did the same thing for many people when he pointed out that the earth went round the sun."
Guardian

"I strongly recommend this one to anyone who wants to understand how economics is changing."
Telegraph

"Mr Anderson’s book does an excellent job of spotting trends and fitting them into an easily accessible theoretical framework."
New York Times

"The Long Tail does something that only the best books do – uncovers a phenomenon that’s undeniably going on and makes clear sense of it."
Slate online magazine

"By applying the long tail to the online world, Anderson brings intellectual order to what often looks like pointless activity."
New Yorker

"[Most technologists and bloggers] are envious of Mr Anderson, whose brainwave quickly became the most fashionable business idea around."
Economist

. . . and its critics . . .

"Is most of the business in the long tail being generated by a bunch of iconoclasts determined to march to different drummers? The answer is a definite no . . . our research also showed that success is concentrated in ever fewer bestselling titles at the head of the distribution curve."
Harvard Business Review

. . . and the response to the yet-to-be-released Free . . .

"Anderson’s idea of freeconomics offers a beautiful, if infantile, dream of a return to the Garden of Eden."
Guardian

"Free to produce is a myth – the costs are hidden elsewhere in the system."
Alan Patrick of the Broadsight consultancy

"Reality is reasserting itself . . . the lesson of the two internet bubbles is that somebody, somewhere, is going to have to pick up the tab for lunch."
Economist

This article first appeared in the 04 May 2009 issue of the New Statesman, Flu: Everything you need to know

Ralph Steadman for the New Statesman.
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Tim Farron: Theresa May is "the prisoner of the Ukip wing of her party"

The Liberal Democrat leader on his faith, Blairism and his plan to replace Labour as the opposition. 

This is Tim Farron’s seventh general election. His first was in 1992, when his Tory opponent was a 36-year-old called Ther­esa May. He was just 21 and they were both unsuccessful candidates in the Labour fortress of North-West Durham. He recalls talking “to a bunch of ex-miners who weren’t best pleased to see either of us, some kid Liberal and some Tory”. Now he sees his former and current opponent as “the prisoner of the Ukip wing of her party . . . I think it has rendered Ukip almost pointless – she is Ukip now.”

May was elected to parliament in 1997, but it took Farron until 2005 to join her. She leads the dominant Conservatives while he heads a party of only nine Liberal Democrat MPs. Still, their reversal of fortunes gives him hope. “After the 1992 election, every­one said there’s no way for a non-Tory government, and it turned out there was. So let’s not assume it’s a given there’s a Tory government [for ever].”

In April, I accompanied Farron to Manchester Gorton, in the lead-up to a by-election that was cancelled by May’s decision to call a snap election on 8 June. Still, the 46-year-old’s party has been in campaign mode for months; Lib Dems spoke of using last December’s Richmond Park by-election to test their messaging. It clearly had an effect: the incumbent Conservative, Zac Goldsmith, lost to their candidate, Sarah Olney.

Brexit, to which the Liberal Democrats are vehemently opposed, will be a dominant theme of the election. Their party membership has just exceeded 100,000, close to an all-time high, and they have enjoyed much success in council by-elections, with more to come in the local elections of 4 May.

However, any feel-good factor swiftly evaporated when Farron appeared on Channel 4 News on 18 April. He was asked by the co-presenter Cathy Newman whether or not he believes that homosexuality is a sin, a question that he answered obliquely in 2015 by saying that Christianity started with acknowledging that “we’re all sinners”.

This time, he told Newman, he was “not in the position to make theological announcements over the next six weeks . . . as a Liberal, I’m passionate about equality”.

The Channel 4 interview divided opinion. One Liberal politician told me that Farron’s stance was “completely intolerable”. Stephen Pollard, the influential editor of the Jewish Chronicle, described it as
“a very liberal position: he holds certain personal views but does not wish to legislate around them”. Jennie Rigg, the acting chair of LGBT+ Liberal Democrats, said it was “as plain as the nose on my face that Tim Farron is no homophobe”.

Farron declined the chance to clarify his views with us in a follow-up phone call, but told the BBC on 25 April: “I don’t believe that gay sex is a sin,” adding, “On reflection, it makes sense to actually answer this direct question since it’s become an issue.”

For his critics, Farron’s faith and politics are intertwined. He sees it differently, as he told Christian Today in 2015: “. . . the danger is sometimes that as a Christian in politics you think your job is to impose your morality on other people. It absolutely isn’t.”

Tim Farron joined the then Liberal Party at the age of 16 but didn’t become a Christian until he was 18. Between completing his A-levels in Lancashire and going to Newcastle University to read politics, he read the apologetics, a body of Christian writing that provides reasoned arguments for the gospel story. “I came to the conclusion that it was true,” he told me. “It wasn’t just a feel-good story.”

In speeches, Farron now takes on the mannerisms of a preacher, but he had a largely non-religious upbringing in Preston, Lancashire. “I don’t think I’d been to church once other than Christmas or the odd wedding,” he says. “I went once with my dad when I was 11, for all the good that did me.”

When we meet, it is Theresa May’s religion that is in the spotlight. She has condemned the National Trust for scrubbing the word “Easter” from its Easter egg hunt, a row it later emerged had been largely invented by the right-wing press in response to a press release from a religious-themed chocolate company.

“It’s worth observing there’s no mention of chocolate or bunny rabbits in the Bible,” Farron reminds me. “When people get cross about, in inverted commas, ‘us losing our Christian heritage’ they mean things which are safe and comfortable and nostalgic.” He pauses. “But the Christian message at Easter is shocking, actually, and very radical.”

British politics is tolerant of atheists (such as Ed Miliband and Nick Clegg) alongside those who, like David Cameron, are culturally Christian but whose faith is “a bit like the reception for Magic FM in the Chilterns: it sort of comes and goes”. But the reaction to Farron’s equivocation on homosexuality prompted many to wonder if a politician who talks openly about his faith is now seen as alarming. Nebulous wishes of peace and love at Christmas, yes; sincere discussions of the literal truth of the Resurrection? Hmm.

Tim Farron’s beliefs matter because he has a mission: to replace not only Jeremy Corbyn as leader of the opposition but Theresa May in Downing Street. Over lassis at the MyLahore curry house in Manchester, he tells me that Britain is facing two calamities. “One is Brexit, indeed hard Brexit . . . and the other is a Tory government for 25 years. We have to present a genuine, progressive alternative that can not only replace Labour as an opposition, it can replace the Tories as a government.” This is ambitious talk for a party with nine MPs. “I understand the ridicule that will be thrown at me for saying those things: but if you don’t want to run the country, why are you in politics?” He pauses. “That’s a question I would ask most people leading the Labour Party at present.”

What does he think of May, his one-time opponent in North-West Durham? “She strikes me as being very professional, very straightforward, somebody who is very conservative in every sense of the word, in her thought processes, her politics, in her style.” He recalls her 2002 conference speech in which she warned Tory activists: “Our base is too narrow and so, occasionally, are our sympathies. You know what some people call us: the nasty party.”

“In many ways, she was the trailblazer for Cameron in being a softer-focused Tory,” he says. “It now looks like she’s been trapped by the very people she was berating as the nasty party all those years ago. I like to think that isn’t really her. But that means she isn’t really in control of the Conservative Party.”

Voters, however, seem to disagree. In recent polls, support for the Conservatives has hovered between 40 and 50 per cent. Isn’t a progressive alliance the only way to stop her: Labour, the Liberal Democrats, the Greens, the SNP and Plaid Cymru all working together to beat the Tories?

“Let’s be really blunt,” he says. “Had Jeremy Corbyn stood down for us in Richmond Park [where Labour stood Christian Wolmar], we would not have won. I could have written Zac Goldsmith’s leaflets for you: Corbyn-backed Liberal Democrats.

“I’m a pluralist,” he adds. “But any progressive alliance has got to be at least equal to the sum of its parts. At the moment, it would be less than the sum of its parts. The only way the Tories are losing their majority is us gaining seats in Hazel Grove –” he ticks them off with his fingers, “– in Cheadle, in the West Country and west London. There’s no chance of us gaining those seats if we have a kind of arrangement with the current Labour Party in its current form.”

What about the SNP? “Most sensible people would look at that SNP manifesto and agree with 99 per cent of it,” Farron says. “But it’s that one thing: they want to wreck the country! How can you do a deal with people who want to wreck the country?”

There’s no other alternative, he says. Someone needs to step up and offer “something that can appeal to progressive younger voters, pro-Europeans and, you know, moderate-thinking Middle England”. He wants to champion a market economy, strong public services, action on climate change, internationalism and free trade.

That sounds like Blairism. “I’m a liberal, and I don’t think Blair was a liberal,” he replies. “But I admire Blair because he was somebody who was able to win elections . . . Iraq aside, my criticisms of Blair are what he didn’t do, rather than what he did do.”

Turning around the Tory tide – let alone with just nine MPs, and from third place – is one hell of a job. But Farron takes heart from the Liberal Party in Canada, where Justin Trudeau did just that. “I’m not Trudeau,” he concedes, “He was better-looking, and his dad was prime minister.”

There is a reason for his optimism. “I use the analogy of being in a maze,” he says, “You can’t see a way out of it, for a progressive party to form a majority against the Tories. But in every maze, there is a way out. We just haven’t found it yet.” 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

This article first appeared in the 27 April 2017 issue of the New Statesman, Cool Britannia 20 Years On

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