Chris Anderson is not having a good week. It’s open season on the Wired editor-in-chief who earlier this week suffered an assault by Malcom Gladwell in the New Yorker. Today it is the turn of the FT and its message is clear: “Free does not live up to its billing”.
Gladwell kicked off an East Coast versus West Coast face-off with his New Yorker piece earlier this week, but you know without the hollow points, in a damning review of Chris Anderson’s new book ‘Free: The Future of a Radical Price’ his follow up to his best seller ‘The Long Tail: Why the Future of Business is Selling More of Less’.
First up, the New Yorker writer dismissed Anderson as a technological utopian who had got it wrong.
“It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for ‘non-monetary rewards’. Does he mean that the New York Times should be staffed by volunteers, like Meals on Wheels? Anderson’s reference to people who ‘prefer to buy their music online’ carries the faint suggestion that refraining from theft should be considered a mere preference. And then there is his insistence that the relentless downward pressure on prices represents an iron law of the digital economy.
“Why is it a law? Free is just another price, and prices are set by individual actors, in accordance with the aggregated particulars of marketplace power. ‘Information wants to be free,’ Anderson tells us, ‘in the same way that life wants to spread and water wants to run downhill.’ But information can’t actually want anything, can it? Amazon wants the information in the Dallas paper to be free, because that way Amazon makes more money. Why are the self-interested motives of powerful companies being elevated to a philosophical principle?”
Today John Gapper in the FT has a crack at Anderson and his argument that “there really is a free lunch. Sometimes you get more than you pay for” although he says early on it is unfair to dismiss Anderson as a “digital utopian who is in intellectual and financial hock to Silicon Valley companies”.
He argues ‘Free’ is more than propaganda for the West Coast software firms and venture capitalists, who have made their money and hope to make more out of being free although to be fair some have made it by charging you $2000 for a shiny laptop with a picture of a piece of fruit on it.
Gapper says the book is largely insightful. He describes it as “steady and scrupulous analysis of the past and present of free products and services” all at a time when newspapers, who are after all part of this “free revolution”, are going out of business faster than you can say “free lunch” as the reporters whose jobs are going (thousands this week alone in the US with Gannett and in the UK with Trinity Mirror) could sure use it.
To borrow from Shakespeare “the fault, dear Brutus, lies not in our stars but in ourselves”. The same appears to be true of Anderson. It is not in his writing, which is as engaging as ever, but in the very nature of his sweeping arguments.
Gapper says the problem is that Anderson veers between sweeping statements and balancing paragraphs in a manner that leaves the reader unsure of what he is actually saying.
“It is an intellectual version of a ride in a New York taxi whose driver alternately pumps the accelerator and stamps on the brakes.
“Early on, we learn: The new form of Free is not a gimmick, a trick to shift money from one pocket to another [like razors and blades]. Instead, it’s driven by an extraordinary new ability to lower the costs of goods and services close to zero. While the last century’s Free was a powerful marketing method, this century’s Free is an entirely new economic model’.
“That is a big claim and it never really gets substantiated, at least not at the scale of Mr Anderson’s rhetoric. Actually, quite a bit of what he claims to be new appears really to be the virtual equivalent of ‘buy one, get one free’ or the cheap subscriptions long offered by US magazines.”
Gapper goes onto argue that Anderson’s vision has two flaws: first, as Hal Varian, Google’s chief economist, has pointed out, network effects unleashed by digital technology tend not to spawn free competition among equals but a “winner takes all” effect in which a single company emerges with all the spoils. In the software era, that company was Microsoft; in the internet era, it is Google.
“The second flaw is that, even if the cost of digital distribution is lower than that of physical distribution, the marginal cost of production is not cut to zero. Companies have many costs, from marketing to employing people to make things. Offering things free on the internet is loss-leading just as surely as handing Jell-O recipe books to American housewives was in 1904.”
Whatever happens we are all going to be reading this and I for one am looking forward to hear Anderson answer some of these critics tonight “Free–The Future of a Radical Price” 2 July Royal College of Physicians”.