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How I learned to stop worrying and love Amazon

The online retailer has reshaped bookselling since it entered the trade in 1995. But Amazon’s aggressive and “anti-competitive” tactics, especially for selling ebooks, are raising hackles in an industry under stress. What is the future of the book busines

Photo: Ralph D Fresco / Reuters

I have a confession. I like buying books online. From Amazon. Such an admission may seem unremarkable, indeed banal, to many book buyers, but offering it in the presence of book industry folk would be the equivalent of informing New Statesman readers that one admires Donald Rumsfeld or Rupert Murdoch. One cannot exaggerate the fear and loathing that Amazon inspires among publishers and rival booksellers. “I hate them,” one publisher who deals with Amazon regularly told me the other day, and many others have offered similar views – off the record, of course.

The story of contemporary publishing is largely that of what Amazon has done to it and of what it threatens – in publishers’ and booksellers’ nightmares – to do. It is the story of a huge contrast between the perceptions of readers, authors and Wall Street, and those of publishers and booksellers.

At first, in the 1990s, Amazon seemed cool – no doubt it still does to a good many people. There was romance in the company’s founder, Jeff Bezos, typing a business plan while his wife drove him in a Chevy from Texas to Seattle, and in his setting up a web retailer in a garage where the computers were powered by extension leads from the house. He was a geeky guy, with a weird, explosive, humourless laugh, but nevertheless came across as more personable than most executives.

In the book world, which Bezos had selected as the ideal entry point for his planned giant operation, Amazon’s cool image lasted only until the first of his company executives took the floor at an industry conference and spouted what was to become a familiar litany of unilluminating corporate jargon. Amazon, we realised, was remote and secretive. In a friendly industry, it had no interest in being collegiate. It played hardball. Fail to grant it the discounts it wanted, and it launched a battery of unpleasant correctives, chillingly outlined in Brad Stone’s recent book The Everything Store: Jeff Bezos and the Age of Amazon (Bantam Press). And, as we also learned, it was a tax avoider. (Amazon.co.uk accounts for its sales in Luxembourg.)

Worse, it appears to have ravaged the industry’s ecosystem. Because Bezos has so successfully trained investors to wait for returns, he has been able to offer loss-leading discounts beyond the scope of companies with the conventional imperatives of making profits. When Amazon arrived in the UK in October 1998, the leading specialist booksellers included the newly merged Waterstone’s (as it was then known) and Dillons (with 500 branches), Borders and Books Etc, Hammicks, James Thin and Ottakar’s. Now the only one left is Waterstones, with fewer than 300 branches – and recently it laid off 200 of its managers. There were 1,535 independent bookshops in the UK in 2008 and now there are 1,028. The rate of attrition in the United States has been similar.

The digital reading revolution, which Amazon kick-started by introducing the Kindle, has accelerated this process. Ebooks now account for a third of fiction sales in the UK, and by the end of 2014 the proportion will go up to half. These sales have mostly left terrestrial bookshops and gone to Amazon, whose Kindle has become the generic term for all e-reading devices. Furthermore, customers who have migrated to Amazon to buy ebooks there have bought more print books on the site, too. Amazon has at least 90 per cent of ebook sales in the UK. Overall, its UK book sales are worth roughly the same as the value of sales through all terrestrial bookshops put together.

Booksellers are crying foul. Tim Godfray, the chief executive of the Booksellers Association, has called for the Office of Fair Trading to re-examine Amazon’s dominance of the ebook market. Quoted in the Bookseller, he argued: “Booksellers are finding it impossible to compete against such a huge player that has such a stranglehold on the book market . . . Consumers are being left with a reduced choice of book suppliers and communities are losing their bookshops.”

To adapt the words of the sports commentator Chick Hearn, Godfray has two chances of getting what he wants: slim and none, and slim just left the building. It left when regulatory authorities on both sides of the Atlantic ruled against leading publishers in disputes over pricing policies that they had adopted, seemingly in an effort to curb Amazon’s discounting, following the opening of Apple’s iBookstore. All the evidence we have is that the authorities look benevolently on Amazon and its aggressive competitiveness over prices, and treat with hostility most attempts to blunt the retailer’s edge.

Digital publishing threatens to undermine their power. The first sign of danger, or confirmation of it, came when Amazon promoted its new Kindle device by pricing New York Times bestsellers at $9.99 – less, in most cases, than it was paying the publishers for each sale. Sure, Amazon was taking the hit; but what if it gained the power in the future to get publishers to lower their wholesale prices? At the same time, Amazon introduced Kindle Direct Publishing, encouraging many thousands of aspiring authors, by no means all of them talentless, to self-publish their work. Many did so at very low prices and some, trying to build an audience, gave their ebooks away.

It was horribly apparent to publishers that readers expected ebooks to be cheap. When the US publisher of a novel by Ken Follett tried to give the ebook roughly the same price as the hardback, readers bombarded Amazon with one-star reviews. Ebooks cost nothing to print and distribute, readers reckoned. Publishers would reply that most of their other costs remained the same, and that they had many additional costs, too: digitisation in various formats, software and hardware updates, constant monitoring of the internet for copyright infringements. Plus, they were still bringing out print editions. But this argument has not found a sympathetic audience.

The arrival of Apple as a seller of ebooks, following the launch of the iPad, seemed to offer a chance of alleviating the problem. Under the “wholesale model” by which publishers sold to Amazon, the US publisher of a potential New York Times bestseller put a price on the ebook of $25, sold it to Amazon for $12.50, and allowed Amazon to sell it for whatever price it liked.

However, Apple had sold everything on iTunes through an “agency model”: the manufacturer set the price, from which Apple took a 30 per cent cut. So now the publisher could ensure that the book sold at, say, $14.99, from which Apple took 30 per cent. Yes, the publisher, and the author – whom we shall discuss later – earned less (the publisher got $10.50), but it was worth taking the hit in order to preserve the perceived value of ebooks. Otherwise, Amazon would keep slashing prices until there was no publishing industry left. Publishers negotiated agency deals with Apple, and then some of them went to Amazon and insisted that Amazon switch to the agency model, too.

These deals looked highly suspicious to the US department of justice, which in 2012 sued five of the six biggest publishers in the country for collusion. The European Commission, too, investigated agency pricing in the European Economic Area. Offices were raided and computers seized. Unfortunately, the late Apple boss Steve Jobs aided the regulators’ case, telling his biographer Walter Isaacson in an unguarded moment: “We told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 per cent, and yes, the customer pays a little more, but that’s what you want anyway . . .’ They went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books.’”

This did not look good. In both the UK and the US, the big publishers – while furiously denying that they had done anything wrong – nevertheless reached settlements with the authorities, agreeing to renegotiate contracts; in the US, publishers have paid more than $160m (£98m) to consumers to make up for the higher prices charged while agency deals were in place. But Apple fought on, and lost. Passing judgment in July, Judge Denise Cote of the federal district court in Manhattan was scathing: “With Apple’s active encouragement and assistance, the Publisher Defendants agreed to work together to eliminate retail price competition and raise ebook prices, and again with Apple’s knowing and active participation, they brought their scheme to fruition . . . Through their conspiracy they forced Amazon (and other resellers) to relinquish retail pricing authority and then they raised retail ebook prices. Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant.” Apple has lodged an appeal, bringing to mind again the phrase concerning slim and none.

Amazon, above the fray, was the victor in these cases, though in negotiating new contracts with publishers it does find itself landed with some restrictions on its ability to discount. While governments may amend the rules that allow Amazon to pay only minimal corporation tax, no authority is going to curb competitive aggression. The authorities are unconcerned about what share Amazon takes of the book market, provided book buyers continue to have choices. Those choices include bookstores at Apple and Google, which are unlikely to persuade anyone that they require protection from a predatory rival.

Of course, Tim Godfray was talking about protection not for the likes of Apple and Google, but for businesses that may achieve not even a six-figure turnover in a year. Independent bookshops were struggling before Amazon came along, however, in part because of their inability to compete with chains such as Waterstones, and in part because of trends – superstores, rates and rents, parking restrictions, and so on – which have been hostile to so many high-street businesses, and which prompted the government to call in the retail expert Mary Portas to see if she could conceive a plan to revitalise them. Chain booksellers were growing, but largely by opening branches and merging with each other. It was a bubble, and Amazon’s market share was still relatively modest when Waterstones and the book/stationery/enter­tainment retailer WHSmith became the only chains left standing.

The best bookshops have found ways to remain attractive. They stage readings and festivals. They incorporate coffee shops. They recommend distinctive titles that you don’t see on the front tables at Waterstones or Smith’s, or on the Amazon home page. Mr B’s in Bath offers “reading spas”: one-on-one chats in its “bibliotherapy room”. It has also commissioned bespoke editions of books. Daunt Books has its own small publishing operation, which has brought back into print the kinds of literature that a chain of shops in well-heeled areas of London can sell. In September, the Booksellers Association launched an initiative called Books Are My Bag, which consists of only a slogan and a supply of canvas bags, but which the BA hopes will gain enough currency – as “Go to work on an egg” once did – to promote the joys of browsing and buying in real bookshops.

That Amazon has taken business away from these shops – well, that’s competition, and, as we’ve seen, we are going to have to live with it. The other day, I decided I wanted to read John Mullan’s What Matters in Jane Austen?. I looked on Amazon and I looked on the rival ebookseller Kobo; Amazon’s price was £4.63 and Kobo’s was £7.07. I bought the Amazon Kindle edition, with a single click; when I switched on my tablet, my book was there. My nearest bookshop, a Waterstones, is a 20-minute bus ride away, and it is not always guaranteed to have the book I want. If it does, it may be selling it at the recommended retail price – £8.99, in this case.

Price and convenience point me towards Amazon. I enjoy reading ebooks, and if the print equivalents are bulky and have small type, I prefer to read them on a lightweight device with adjustable fonts. I love browsing in bookshops, but I love browsing online, too, and get a small thrill every time I make an order that enables an instant download or a posted parcel. Furthermore, Amazon’s service is superb. Its website is the best, its Kindle Paperwhite is by reputation the best e-reading device of its kind, and its prices are usually the lowest.

My point is that this is what the overwhelming majority of Amazon’s customers feel about the company. Yes, we disapprove of its tax avoidance, but we have learned that every multinational will behave in this way, given the opportunity. It is for governments to sort out. But giving publishers a hard time? Why should we care about that? And if we felt that Amazon did not deserve to take business from the terrestrial bookshops, we would click on those Buy buttons less frequently.

The consolidation of power in retailing is in part responsible for a consolidation of power in publishing. Penguin and Random House confirmed their merger this summer, creating the largest publisher in the world; industry insiders expect there to be further mergers at the top – Simon & Schuster and HarperCollins are names that are often put together. Penguin Random House, which is home to a significant number of the most celebrated authors in the English language, has clawed back some of the negotiating power that Amazon had assumed. The company also believes that, thanks to “efficiencies” (cost-cutting) in its merged operations, it will have more resources to put into the acquisition and promotion of books and into “discoverability”, a buzzword that has become an obsession as book buyers have moved online. How do you ensure that people see your books? Publishers are desperate to be the facilitators of this process. They do not want Amazon to control it.

In addition to the power of Amazon, they have three significant fears. The first is piracy. Once, pirating a book involved printing it. Now, all you have to do is copy a computer file and you have an edition that is no different from the authorised version. The pirates have created jobs in the book industry: the leading publishers employ people whose sole responsibility is to trawl the internet searching for illegal editions. Fear of piracy is responsible for digital rights management, the annoying code that prevents you from reading an Amazon ebook, say, on anything other than a Kindle-enabled device. It also lies behind publishers’ wariness about allowing their ebooks to be lent through libraries.

The new wave of digital entrepreneurs is, on the whole, sceptical about copyright, in a bedrock of industries ranging from publishing to football (think of the importance to football of TV and image rights income). Google, which no government can ignore, scanned millions of in-copyright books without bothering to ask the rights-holders’ permission. The British government is planning to introduce copyright exceptions following a 2012 report into intellectual property by a panel under the leadership of Professor Ian Hargreaves; its draft proposals have alarmed bodies including the Society of Authors and the Publishers Association. “Fair dealing”, which Google cites in its defence, may be fair to the people who want to use the material, but is less fair to those who created it.

However, publishers could relax a little. People want to get things for free or cheaply, but they are also happy to pay what they see as fair prices. Getting most of my books free when I was young did not dissuade me from becoming a book buyer, and listening to pirated music did not prevent my purchasing records. My daughters, who no doubt consume illegally shared material, spend fortunes through iTunes. When I began reporting on the book industry, Delia Smith featured in ubiquitous ads for book clubs that were offering her Complete Cookery Course for a nugatory sum. Yet the same book, at full price, appeared in the bestseller list week after week. Free or cheap does not necessarily undermine paid-for. Imagining an ideal world in which every consumer would pay a recommended price for every cultural item is futile.

The second significant fear, though, is the lowering of the recommended prices that consumers are prepared to pay. The average price paid for an ebook in the UK is about £3. The average price paid for a bestselling paperback novel is about £4.20, and the average price paid for a bestselling hardback novel is about £11. As ebooks take a larger share of the market, will publishers suffer a decline in revenues, and will they find, as booksellers did in the 1990s, that the only way they can grow is through mergers? Penguin Random may be an early symptom of such a trend.

The third fear is of becoming irrelevant. The rise of the publishing conglomerates has not been as hostile to independent houses as many had feared, partly because distribution has become more egalitarian (smaller houses have more chance of getting their authors discovered now, through Amazon and other sites, than when their only way of selling was by begging booksellers’ support) and partly because there are so many successful titles that the conglomerates miss or never see. But all publishers must be aware that authors have what appears to be the increasingly viable choice of self-publishing. Since internet distribution has vastly reduced the cost and difficulty of getting a manuscript into book form, self-publishing has lost its reputation as exclusively the last resort of the hopeless and deluded. Every week, it seems, one reads a story of an unknown author who has sold tens of thousands of copies of his or her self-published books, particularly through Amazon. Amanda Hocking, an author of paranormal romances, earned $2.5m from Amazon sales in under two years; even more famously, E L James first published online the story that became the Fifty Shades of Grey trilogy.

Publishers hope that the self-publishing world can become a training ground for writers, and last year Penguin’s parent company bought Author Solutions, the world’s largest self-publishing service (which at that point had a mixed reputation). Hocking and James went on to sign conventional publishing deals. Yet some self-publishers have not, while others have signed print book deals but retained their ebook rights. Few authors can have failed to notice that self-publishing offers higher royalties. Kindle Direct Publishing can pay up to 70 per cent of the returns from sales, and offers at least 35 per cent. Until recently, publishers were distributing to authors just 15 per cent of the returns; only under pressure, and not universally, have they raised these royalty rates to 25 per cent.

While publishers may have good arguments to explain why their royalties should remain at this level, they have not succeeded in making their case to authors and agents. At present, most authors crave the imprimatur, the editorial expertise, the marketing and the distribution that established imprints can provide. But publishers’ claims that they “add value” to the publishing process – value that self-publishing services cannot replicate – are not as incontrovertible as they once seemed.

In the ways described, the disruption that Amazon has caused the book industry has been welcome for readers and authors. Culturally, the picture is more confused. Some authors who might never have seen their books in print a few years ago have thrived through self-publishing, but others – who enjoyed a brief period when advances rose, as the big publishers grew bigger and the book chains expanded – are in trouble. They can no longer afford to spend a year or longer writing books, because no one will pay them to do so. Fashions are changing quickly, and many authors who were under contract a few years ago can no longer get their manuscripts accepted.

It is a harsh world, but whether it is barbaric, as some disillusioned authors believe, is debatable. Pitifully low sales of literary fiction are not a new phenomenon: George Orwell’s early novels sold only a few hundred copies each. When one reads of the long exile from print of Barbara Pym in the 1960s and 1970s after Tom Maschler at Jonathan Cape had decided that her novels were hopelessly old-fashioned, one recognises a story with contemporary resonances. It is very hard to determine whether an industry that produces more than 100,000 titles a year is lowering its standards. Regular reading of the literary pages, and scanning of book-prize shortlists, suggests that there remains plenty of quality about. I once heard someone say that Paul McCartney, an acquaintance of his, was “as nice as you’d expect him to be”. Amazon is certainly no nicer than you would expect a Wall Street-quoted giant with a market capitalisation of $135bn to be. But I don’t feel guilty about being its customer.

Nicholas Clee, a former editor of the Bookseller magazine, is the joint editor of BookBrunch, a book industry news service

Nicholas Clee, the NS food columnist, is the author of Don’t Sweat the Aubergine: What Works in the Kitchen and Why (Short Books). He is a former editor of The Bookseller, and writes about books for papers including the Times, Guardian, and Times Literary Supplement.
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The French millennials marching behind Marine Le Pen

A Front National rally attracts former socialists with manicured beards, and a lesbian couple. 

“In 85 days, Marine will be President of the French Republic!” The 150-strong crowd cheered at the sound of the words. On stage, the speaker, the vice-president of the far-right Front National (FN), Florian Philippot, continued: “We will be told that it’s the apocalypse, by the same banks, media, politicians, who were telling the British that Brexit would be an immediate catastrophe.

"Well, they voted, and it’s not! The British are much better off than we are!” The applause grew louder and louder. 

I was in the medieval city of Metz, in a municipal hall near the banks of the Moselle River, a tributary of the Rhine from which the region takes its name. The German border lies 49km east; Luxembourg City is less than an hour’s drive away. This is the "Country of the Three Borders", equidistant from Strasbourg and Frankfurt, and French, German and French again after various wars. Yet for all that local history is deeply rooted in the wider European history, votes for the Front National rank among the highest nationally, and continue to rise at every poll. 

In rural Moselle, “Marine”, as the Front National leader Marine Le Pen is known, has an envoy. In 2014, the well-spoken, elite-educated Philippot, 35, ran for mayor in Forbach, a former miner’s town near the border. He lost to the Socialist candidate but has visited regularly since. Enough for the locals to call him “Florian".

I grew up in a small town, Saint-Avold, halfway between Metz and Forbach. When my grandfather was working in the then-prosperous coal mines, the Moselle region attracted many foreign workers. Many of my fellow schoolmates bore Italian and Polish surnames. But the last mine closed in 2004, and now, some of the immigrants’ grandchildren are voting for the National Front.

Returning, I can't help but wonder: How did my generation, born with the Maastricht treaty, end up turning to the Eurosceptic, hard right FN?

“We’ve seen what the other political parties do – it’s always the same. We must try something else," said Candice Bertrand, 23, She might not be part of the group asking Philippot for selfies, but she had voted FN at every election, and her family agreed. “My mum was a Communist, then voted for [Nicolas] Sarkozy, and now she votes FN. She’s come a long way.”  The way, it seemed, was political distrust.

Minutes earlier, Philippot had pleaded with the audience to talk to their relatives and neighbours. Bertrand had brought her girlfriend, Lola, whom she was trying to convince to vote FN.  Lola wouldn’t give her surname – her strongly left-wing family would “certainly not” like to know she was there. She herself had never voted.

This infuriated Bertrand. “Women have fought for the right to vote!” she declared. Daily chats with Bertrand and her family had warmed up Lola to voting Le Pen in the first round, although not yet in the second. “I’m scared of a major change,” she confided, looking lost. “It’s a bit too extreme.” Both were too young to remember 2002, when a presidential victory for the then-Front National leader Jean-Marie Le Pen, was only a few percentage points away.

Since then, under the leadership of his daughter, Marine, the FN has broken every record. But in this region, the FN’s success isn’t new. In 2002, when liberal France was shocked to see Le Pen reach the second round of the presidential election, the FN was already sailing in Moselle. Le Pen grabbed 23.7 per cent of the Moselle vote in the first round and 21.9 per cent in the second, compared to 16.9 per cent and 17.8 per cent nationally. 

The far-right vote in Moselle remained higher than the national average before skyrocketing in 2012. By then, the younger, softer-looking Marine had taken over the party. In that year, the FN won an astonishing 24.7 per cent of the Moselle vote, and 17.8 per cent nationwide.

For some people of my generation, the FN has already provided opportunities. With his manicured beard and chic suit, Emilien Noé still looks like the Young Socialist he was between 16 and 18 years old. But looks can be deceiving. “I have been disgusted by the internal politics at the Socialist Party, the lack of respect for the low-ranked campaigners," he told me. So instead, he stood as the FN’s youngest national candidate to become mayor in his village, Gosselming, in 2014. “I entered directly into action," he said. (He lost). Now, at just 21, Noé is the FN’s youth coordinator for Eastern France.

Metz, Creative Commons licence credit Morgaine

Next to him stood Kevin Pfeiffer, 27. He told me he used to believe in the Socialist ideal, too - in 2007, as a 17-year-old, he backed Ségolène Royal against Sarkozy. But he is now a FN local councillor and acts as the party's general co-ordinator in the region. Both Noé and Pfeiffer radiated a quiet self-confidence, the sort that such swift rises induces. They shared a deep respect for the young-achiever-in-chief: Philippot. “We’re young and we know we can have perspectives in this party without being a graduate of l’ENA,” said another activist, Olivier Musci, 24. (The elite school Ecole Nationale d’Administration, or ENA, is considered something of a mandatory finishing school for politicians. It counts Francois Hollande and Jacques Chirac among its alumni. Ironically, Philippot is one, too.)

“Florian” likes to say that the FN scores the highest among the young. “Today’s youth have not grown up in a left-right divide”, he told me when I asked why. “The big topics, for them, were Maastricht, 9/11, the Chinese competition, and now Brexit. They have grown up in a political world structured around two poles: globalism versus patriotism.” Notably, half his speech was dedicated to ridiculing the FN's most probably rival, the maverick centrist Emmanuel Macron. “It is a time of the nations. Macron is the opposite of that," Philippot declared. 

At the rally, the blue, red and white flame, the FN’s historic logo, was nowhere to be seen. Even the words “Front National” had deserted the posters, which were instead plastered with “in the name of the people” slogans beneath Marine’s name and large smile. But everyone wears a blue rose at the buttonhole. “It’s the synthesis between the left’s rose and the right’s blue colour”, Pfeiffer said. “The symbol of the impossible becoming possible.” So, neither left nor right? I ask, echoing Macron’s campaign appeal. “Or both left and right”, Pfeiffer answered with a grin.

This nationwide rebranding follows years of efforts to polish the party’s jackass image, forged by decades of xenophobic, racist and anti-Semitic declarations by Le Pen Sr. His daughter evicted him from the party in 2015.

Still, Le Pen’s main pledges revolve around the same issue her father obsessed over - immigration. The resources spent on "dealing with migrants" will, Le Pen promises, be redirected to address the concerns of "the French people". Unemployment, which has been hovering at 10 per cent for years, is very much one of them. Moselle's damaged job market is a booster for the FN - between 10 and 12 per cent of young people are unemployed.

Yet the two phenomena cannot always rationally be linked. The female FN supporters I met candidly admitted they drove from France to Luxembourg every day for work and, like many locals, often went shopping in Germany. Yet they hoped to see the candidate of “Frexit” enter the Elysee palace in May. “We've never had problems to work in Luxembourg. Why would that change?” asked Bertrand. (Le Pen's “144 campaign pledges” promise frontier workers “special measures” to cross the border once out of the Schengen area, which sounds very much like the concept of the Schengen area itself.)

Grégoire Laloux, 21, studied history at the University of Metz. He didn't believe in the European Union. “Countries have their own interests. There are people, but no European people,” he said. “Marine is different because she defends patriotism, sovereignty, French greatness and French history.” He compared Le Pen to Richelieu, the cardinal who made Louis XIV's absolute monarchy possible:  “She, too, wants to build a modern state.”

French populists are quick to link the country's current problems to immigration, and these FN supporters were no exception. “With 7m poor and unemployed, we can't accept all the world's misery,” Olivier Musci, 24, a grandchild of Polish and Italian immigrants, told me. “Those we welcome must serve the country and be proud to be here.”

Lola echoed this call for more assimilation. “At our shopping centre, everyone speaks Arabic now," she said. "People have spat on us, thrown pebbles at us because we're lesbians. But I'm in my country and I have the right to do what I want.” When I asked if the people who attacked them were migrants, she was not so sure. “Let's say, they weren't white.”

Trump promised to “Make America Great Again”. To where would Le Pen's France return? Would it be sovereign again? White again? French again? Ruled by absolutism again? She has blurred enough lines to seduce voters her father never could – the young, the gay, the left-wingers. At the end of his speech, under the rebranded banners, Philippot invited the audience to sing La Marseillaise with him. And in one voice they did: “To arms citizens! Form your battalions! March, march, let impure blood, water our furrows...” The song is the same as the one I knew growing up. But it seemed to me, this time, a more sinister tune.