The deadly economics of the long run

The 20th century Cambridge economist John Maynard Keynes once said that it in the long run, we are all dead. Princeton economist Paul Krugman, writing in today's New York Times argued that "in the long run, we are all the Grateful Dead."

In either event, we -- we writers, that is -- are probably (brain) dead.

In a characteristically provocative column entitled "Bits, Bands and Books", Krugman half welcomes and half dreads the arrival of the e-book. Whether it is Amazon's Kindle or devices from Philips or Sony, Krugman believes that the digitalization of the book business is about to reach its tipping point. He's right. We are at an epochal iPod moment in the history of the book. So, he wonders, how will this affect the publishing industry? Krugman finds the comparison between the book and the music business sobering. Just as he recognizes that the old recorded music business is dying, so, he fears, the publishing trade may "wither away":

"Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission."

In other words, writers will be forced to embrace the Grateful Dead business model of giving their content away for free (ie: allowing anyone to tape their concerts) and making money through the sale of hats, t-shirts and, above all, concert tickets. Krugman is, of course, right. In the age of mass media, the copy of the creative work represented the economic value; in the digital age, that copy is ubiquitous (ie: valueless) and it's the physical appearance of the artist -- the musician or writer -- which now represents the key scarcity in the creative economy.

Enough about the abstraction of economic value. What about the real value -- the value of the creative work. Is the Grateful Dead model good for the talented writer and for high quality writing? Krugman is ambivalent. "If it is good enough for Charles Dickens, I guess it's good enough for me," he says, reminding us that Dickens' business model was similar to that of the Grateful Dead.

But the problem is that most writers aren't marketing and sales machines like the Grateful Dead or Charles Dickens. My fear is that by transforming the publishing trade into an adjunct of the PR, advertising and marketing industries, the most successful writers are going to be those best skilled in the dark arts of self-promoting their own brands. Like the quiet bookstore, the shy, retiring writer is history. Writing a book will become increasingly indistinguishable from writing advertising copy or running for public office.

So what happens to the book reader, the lover of fine writing? This grateful reader, I'm afraid, will be transformed into an interactive consumer of hats, t-shirts and live performances. In the long run, therefore, the reader is dead.