Two weeks ago, I had the chance to go see Cory Doctorow at my local independent bookstore, in Montréal. He was there to present his latest essay, co-written with Rebecca Giblin1. Titled Chokepoint Capitalism: How Big Tech and Big Content Captured Creative Labor Markets and How We'll Win Them Back, it focuses on the impact of monopolies and monopsonies (more on this later) on creative workers.
The book is divided in two main parts:
- Part one, Culture has been captured (chapters 1 to 11), is a series of case studies that focus on different examples of market failure. The specific sectors analysed are the book market, the news media, the music industry, Hollywood, the mobile apps industry and the online video platforms.
- Part two, Braking anticompetitive flywheels (chapters 12 to 19), looks at different solutions to try to fix these failures.
Although Doctorow is known for his strong political stances, I have to say I'm quite surprised by the quality of the research Giblin and he did for this book. They both show a pretty advanced understanding of the market dynamics they look at, and even though most of the solutions they propose aren't new or groundbreaking, they manage to be convincing and clear.
That is to say, you certainly don't need to be an economist to understand or enjoy this book :)
As I have mentioned before, the book heavily criticises monopolies, but also monopsonies — a market structure that has only one buyer (instead of one seller). I find this quite interesting, as whereas people are often familiar with the concept of monopolies, monopsonies are frequently overlooked.
The classic example of a monopsony is a labor market with a single employer: there is a multitude of workers trying to sell their labor power, but in the end, working conditions are dictated by the sole employer, who gets to decide who has a job and who hasn't. Mining towns are good real-world examples of monopsonies.
In the book, the authors argue most of the contemporary work produced by creative workers (especially musicians and writers) is sold to monopsonies and oligopsonies, like Amazon2 or major music labels. This creates a situation where the consumers are less directly affected by the lack of competition in the market (they often get better prices), but where creators have an increasingly hard time making ends meet. Not only this, but natural monopsonies3 are relatively rare, making the case for breaking the existing ones even stronger.
Apart from the evident need to actually start applying (the quite good) antitrust laws in the USA, some of the other solutions put forward are:
- Transparency Rights — giving creative workers a way to audit the companies that sell their work and make sure they are paid what they are due.
- Collective Action
- Time Limits on Copyright Contracts — making sure creators that sell their copyrights to publishers or labels can get them back after a reasonable period of time.
- Radical Interoperability — forcing tech giants to make their walled-gardens interoperable.
- Minimum Wages for Creative Work — enforcing minimum legal rates for workers in certain domains, like what is already done for screenplays in the US by members of the Writers Guild of America.
- Collective Ownership
Overall, I found this book quite enjoying and well written. Since I am not a creative worker myself and don't experience first-hand the hardships presented in the book, it was the occasion for me to delve more deeply in this topic. Chances are I'll reuse some of the exposés in my classes too.
Amazon owns more than 50% of the US physical book retail market and has an even higher market share for ebooks and audiobooks (via Audible). Not only this, but with the decline of the physical book market, audiobooks are an increasingly important source of revenue for authors. ↩
Natural monopolies happen when it does not make economic sense for multiple enterprises to compete in a market. Critical infrastructures, like water supply or electricity, make for good examples of natural monopolies. It simply wouldn't be efficient to have 10 separate electrical cables connecting your house to 10 separate electric grids. In my opinion, such monopolies are acceptable (and even desirable), as long as they are collectively owned, either by the State or by local entities (municipalities, non-profits, etc.). ↩