Jul/090
Chris Anderson’s “Free” isn’t Perfect, But I Think He’s Right (Part 2)
In my last post, I covered mostly the “Free isn’t perfect” part. So here’s why I think he’s right:
While I think that Anderson overstated the whole “Free as a business model” thing at the expense of what I think are the far more interesting and radical implications of Free, I think he’s dead right about Free. Free is a reality that businesses will need to contend with, and businesses that find ways to use it to their advantage will thrive; while those that refuse to do so will have to face the fact that you compete with zero cost without offering zero cost, you’ll lose every time. Allow me to illustrate with a quotation and a story from my own life:
Talking about a hypothetical glossy monthly magazine, Anderson explains…
It can typically be obtained in several different ways. You can read it online for free, in a somewhat stripped-down form… Or you can just buy one issue of the magazine on the newsstand for, say, $4.95. Or you can subscribe and get a year (twelve issues) for as little as $10, which is 83 cents per issue, delivered right to your door. Where do those three prices– $0, $4.95, and $0.83– come from?
Anderson then explains that the free web service is based on a combo of negligible hosting cost combined with ad revenue. The newsstand price is the cost of printing, plus a dollar or two profit for both the printer and the newsstand. And the subscription price is determined by an odd sort of set of calculations. The magazine is really ad-supported. But the ads are devalued if the publication is free. In addition, readers are less likely to actually get the subscription and read the magazine if the magazine is free. The ten dollars is as close to free as it can be (to get people to subscribe by making the low price an incentive) without making the magazine seem to be worth less to readers and advertisers.
Any company whose product can be delivered digitally will eventually be competing with someone giving it away for free. But if you add the Free model to your stable of strategies, it will work in synergy with the non-free elements of your business. To whit:
A week or two ago I was at Baltimore Penn Station waiting for a train. I went to the newsstand and picked up a copy of Wired. I hadn’t read the magazine in a while, and the cover stories looked interesting. I read it, and it was good. Really good. (Pick up this month’s copy of Wired if you haven’t– the cover article on the new netiquette is worth the cover price.)
Reading Wired reminded me, the next day, that Free should be out by now. I’d been wanting to read it since I’d read Anderson’s first blog post on the topic. So I looked on Amazon. It was thirty bucks, and only available in hardback. I’m a bit strapped for cash, given that summer means no assistantship, etc.
So, given the concept of the book, I wagered I could find the book– somewhere– for free. I found iTunes’s free audiobook deal, and downloaded it, listening to it over the next few days.
While listening to the book, and enjoying and being interested in it, I thought about it and realized that I’d really enjoyed the last issue of Wired, and felt I ought to give Chris Anderson some money for the free book, so I decided to check the subscription price for Wired. Looking on Amazon, I found it was only ten bucks
So that’s the story of how a free audiobook hooked me into multiple profit streams for Chris Anderson.
Free seems to be an effective business strategy, at least in his hands.
Jul/090
Chris Anderson’s “Free” isn’t Perfect, But I Think He’s Right. (Part 1)
I downloaded Chris Anderson’s Free: The Future of a Radical Price
I was a fan of The Long Tail. It wasn’t always spot on, it was a simplification, and it definitely didn’t fit with a lot of my more “scholarly” reading, but I think it was a good book, and it really pointed to a significant change in the current information age.
Free, on the other hand?
I’m a little less taken with Free.
It’s not that I find fault with his primary premise– that as marginal costs come closer and closer to zero with the digital delivery of content, the only way to stay ahead of the curve is to go to a Free model, and hope that the big numbers and market dominance you get from going to Free will allow you to monetize something else. That concept really seems fundamentally solid.
My problem, actually, lies with many of the negative Amazon reviews being right. (I don’t remember the last time that I’ve had that particular promise– usually, I read one-star Amazon reviews in order to fuel my reading, as an ignorant nutball reading that my reading of the text needs to avoid and, indeed, counter.)
When you look at most of the negative reviews
Which is not to say that I agree with these pooh-pooh-ers. I think there is a fundamental change here. I think that, as long as it’s something that can be produced and distributed digitally, we’re approaching the point where there is such a thing as a free (virtual) lunch. It’s just that Anderson is downplaying the places where “Free” is the most revolutionary– and the most free– namely, piracy and the gift economy.
Very little (virtual or otherwise) ink gets used in this book describing the amazing amount of work that volunteers put in for dev and testing communities for things like Linux distros and the Mozilla family–purely for for the good of the community and a better end product for them as users. Little to-do is made about the rather revolutionary nature of (so-called) digital piracy, the only form of “theft” ever invented that deprives the original maker only of an opportunity, not of any property.
Instead, Anderson’s book is all about how to monetize Free.
On the one hand, this is one of the biggest questions of the current digital age. Everybody insisted that there was no “there” there when Google offered its IPO, that a business model based primarily on Free was obviously and completely doomed. But five years later, the company’s 2004 price seems like a smarter investment than ever. I would expect nothing less from the editor-in-chief of Wired.
But when you talk about how to monetize Free, it inevitably comes about that what you’re really talking about isn’t “free” Free, but “kinda” Free.
But Chris Anderson knows what side his bread is buttered on: he’s going to stick to the part of Free that’s going to appeal to and sell to people in business. Not because it’s the more interesting question, but because, well, they’re the ones with the money.
On page 98 of the book, Anderson writes:
Information that can be replicated and distributed at a low marginal cost wants to be free; information with high marginal costs wants to be expensive. So you can read a copy of this book online (abundant, commodity information) for free, but if you want me to fly to your city and prepare a custom talk on Free as it applies to your business, I’ll be happy to, but you’re going to have to pay me for my (scarce) time.
So if you own a Fortune 500 company, and you’re interested in finding out how Free can benefit your company, please– pay Mr. Anderson’s exorbitant-seeming speaker fees. You’ll be absorbing a hidden cost by doing so:
He wrote this book, rather than a far more interesting one, for the sake of you and your colleagues. So go support him, before he starts rethinking this whole free thing and I have to pay for access to old Wired articles.
Dec/070
The Cold War and the Militarization of the Academy
It is a widely-discussed problem within higher education that the current job market is, to say the least, a difficult one. Universities are creating fewer and fewer tenure-track positions, relying on adjuncts, graduate students, and limited-term visiting professors for a growing share of the teaching load. Many if not most disciplines produce more PhDs than there are academic jobs to be filled. Public Universities in most states face the constant threat of reduced funding. One of the primary reasons for this state of affairs can be traced directly to the first fifteen years or so of the Cold War. In the years between World War II and 1960, the United States government began a massive and unparalleled investment in higher education, through grants, endowments, and the GI Bill, in order to promote its anti-Soviet agenda. The beginning of Perestroika and the eventual collapse of the Soviet Union, then, created a problem for American academics—the US university system had grown, over fifty years of federal investment for Cold War aims, to a point that was unsustainable without continued levels of funding. But when the specter of Communism was no enough to justify previous levels of spending, disinvestment began, and as is the case with most large, bureaucratic systems, the American university system was slow to react and adapt.
Three books that look at different disciplines in the years between 1945 and 1960, Jessica Wang’s American Science in an Age of Anxiety, Paul Edwards’s The Closed World, and Peter Novick’s That Noble Dream, all point to the unprecedented tremendous investment made by the federal government at that time. Looking at the level to which the academy was, in effect, militarized in order to advance the Cold War cause, it becomes quickly apparent why this level of subsidizing academe would become unsustainable after the end of the Cold War.
Jessica Wang’s excellent American Science in an Age of Anxiety is a history of atomic scientists in the latter half of the 1940s. Wang’s account shows that there was a considerable level of initial trepidation among at least certain circles of atomic scientists about the increasing role of the federal government funding atomic research, fearing “that military patronage would adversely affect the content and character of physics research.” (38) A particularly clear expression of this fear can be found in Eugene Rabinowitz’s editorial “Science, a Branch of the Military?” in the 1946 Bulletin of the Atomic Scientists, which worried about the subordination of scientific research to military goals, the suppression of traditional scientific exchange in the interest of national security, and the impression that such a relationship could give to the rest of the world that the US was determined to continue military buildup and pursue aggressive foreign policies. (39-40) Even further, some scientists initially argued that control and regulation of atomic technologies was too dangerous to be left in the hands of military-governmental bodies at all, and should rather be handled by an international body of dispassionate scientists committed to civilian applications of nuclear technologies.
Such dissenting voices to the direction of US atomic policy were functionally silenced within the scientific community within five years, however, due in large part to scrutiny and sometimes persecution in the name of domestic anti-communism by federal organizations, most notably the FBI and the House Committee on Un-American Activities. The post-World War II Red Scare had a profound chilling effect on dissident atomic scientists, Wang argues, by splitting the left into two camps—left anticommunists, who put practicality and spectacles of patriotism ahead of ideals in order to maintain their position in the middle of anticommunist paranoia, and the progressive left, who were most often silenced by anticommunist persecution, and often faced tragic consequences when they refused to be silenced.
Beyond the “stick” of blacklisting and persecution, Wang also notes the powerful role of the “carrot” of scientific research funding. While many of the top atomic research facilities were governmentally-founded organizations or semiautonomous institutes dependant on military and federal funding, many other institutes were associated in some way with America’s top universities. Looking at a 1947 FBI memo on the loyalties of various chapters of the Federation of American Scientists, one quickly notices that along with military/industrial centers like Los Alamos and Northern California, many other chapters were located in the cities that were home to some of the US’s top research universities, including Cambridge, Ithaca, and Rochester. (65) Beyond simply funding research institutions, the government also invested in individual students of promise: the Atomic Energy Commission’s fellowship program, for example, “awarded grants to almost five hundred young physicists, biologists, and medical researchers in 1948 and 1949. At the time, it was the largest program for advanced science education in the nation’s history…” (220) By 1950, the prerequisites for the fellowship included a loyalty oath and an affidavit denying ties to the Communist Party. The federal government in this way attempted to assure that the top researchers of the next generation would be properly ideologically vetted and screened while still in training.
While focusing more on the “carrot” of funding than the “sticks” of anticommunism, Paul Edwards’s The Closed World illustrates the profound impact of the militarization of the academy on scientific research far more varied than Wang’s atomic scientists. Edwards argues that Eisenhower’s notion of a “military-industrial complex” overlooks the important role of the academy in the military, technological, and scientific buildup of the Cold War, preferring an “’iron triangle’ of self-perpetuating academic, industrial, and military collaboration.” (47)
Two aspects of this collaboration he pays particular attention to are research in computers and psychology. While early research into computers was certainly driven by military funding and researchers, as well as corporate players like IBM and Bell Labs, universities like MIT and Harvard were integral in early developments in computer science. Many researchers moved back and forth between private, governmental, and academic research positions. Like atomic energy, the military uses of computers are immediately obvious and it is perhaps not surprising that the federal government would invest large amounts of money into such projects. However, Edward’s discussion of the funding of psychological research yields somewhat surprising numbers. In the years between 1941 and 1960, the American Psychological Association’s membership grew from 2,600 to 12,000. During World War II, the majority of its membership worked on war-related research, and half of all professional psychologists were employees of the federal government. (177) The government was interested in the uses of psychology for everything from propaganda and public opinion to finding better ways to regulate and control military personnel. Moreover, as Edwards makes quite clear, there was a lot of overlap between some of the earliest developers of computers and information theory and some of the most influential psychologists of the time.
The militarization of the military was not limited to the sciences, however. While his classic That Noble Dream chronicles around a hundred years of the historical profession, Peter Novick’s discussion of historians in the wake of the Cold War bears mention here. Novick notes that there was a sharp rise in diplomatic history in the years immediately following World War II. (305) Moreover, while “private philanthropic organizations… provided initial funding for most of these ventures… as the academic cold war became institutionalized, a program of official government grants became established, mostly under one or another ‘national defense’ rubric.” (310) This new influx of money and interest led to the creation of integrated area studies programs throughout America—twenty-nine had been created by 1950, and by 1965, that number had grown to 153. (310) While the research that came out of these diplomatic histories and area studies programs tended to reflect a strong interest in the narrative of the US as the Free World, diametrically opposed by the Totalitarianism of the Soviet Union, the perception of the field from within was one of absolute objectivity, of history as an account of Truths about the past.
Moreover, another element beyond the investment in the institutions and members of the academy that the federal government was the massive investment in tuitions for many who came back from World War II and later Korea under the GI Bill—according to the Department of Veteran Affairs, GI Bill veterans made up almost half of all college students in 1947, and ultimately, 7.8 out of 16 million veterans of the World War had taken part in education or training programs under the bill. Such a large infusion of students helped to create demand for a large number of positions throughout higher education, meaning that even academics working outside areas of direct military interest.
Jessica Wang has noted that many scientists, in reaction to the post-Cold War drawback in research funding, are more likely to rail against postmodernist critics of science and general public ignorance than to look back to the historical trends that have created this situation. (290) But what she doesn’t comment on is whether or not this federal and military disinvestment in higher education after the end of the Cold War has put the American academy in an untenable situation. Did the infusion of so much money over half a century artificially inflate the size and number of postsecondary institutions to the point where they cannot structurally adjust to this lessening of funding? How can we maintain—or even responsibly reduce, while maintaining the primary benefits of—the previous levels of research in this new age? America has become a leading exporter of the educated—the number of foreign students coming to the States for an education is higher than ever—but if the primacy in academics that this is built on was the result of Cold War funding, will this disinvestment engender a decrease in the prestige of American higher education—or even of America itself? Even with a war going on the GI Bill—now the Montgomery GI Bill—is nowhere near what it was in the middle of the twentieth century. Veterans coming back from the Middle East won’t be flooding into our institutions of higher learning on the government’s tab, meaning not only that the money the GI Bill represented won’t be there, but neither will the talent that it provided.
It is perhaps possible that, in framing the “War on Terror” as a generational conflict, the current administration has created a discourse that could serve to frame military and federal funding into higher education once again, but that is uncertain at best, and one cannot in good conscience hope for an outcome that relies on so much potential for human suffering. All one can say for sure is that this is a discussion that needs to be continued and expanded, and that the history of this phenomenon and its ties to Cold War military spending should be a larger part of the broader public discourse on the topic, as it is so intrinsic to what is at stake.
Nov/070
“Bugs” and Blowback: Science and American High Modernism
American policy with regard to science and technology in the twentieth century had often been canceled with what James C. Scott described in Seeing Like a State
The concept of blowback originated within foreign policy and espionage circles. Essentially, the term describes when a completed operation, whether successful or not in achieving its intended goals, creates a situation that engenders unexpected negative outcomes for the original actor. While the term isn’t used much in scholarly work outside foreign policy, I believe it’s the best description of what we see in both books. Technologies were adopted for specific purposes, and were in some case effective and in some case ineffective. But in almost all cases, these technologies have unforeseen or unforeseeable consequences.
The narrative structure of Russell’s War and Nature fits nicely with this model of techno-political blowback to high modernist zero-sum tactics. Russell traces the coevolution of chemical-based warfare and pesticides in the period between the first World War and the early 1960s. (I use the term chemical-based weapons or warfare, rather than chemical weapons, as Russell’s definition includes more than conventional chemical weapons, to including incindiaries and potentially battlefield defoliants.) As both technologies were based on the development of new toxic chemicals, sometimes even the same chemicals, chemical manufacturers were able to rapidly shift from wartime to peacetime production, rapidly expanding in the process. Moreover, pesticides were seen as important to war efforts, as insect-borne contagion could be as dangerous to troops on the ground as mortar shells.
In looking at the language used in describing both chemical-based weapons and pesticides, Russell finds a common language of extermination and elimination.
The language used to describe chemical weapons reflects the general principle of total war. Moreover, he finds repeated use of the trope of equating enemy troops with bugs or insects, and calling for extermination. When looking at the language of insecticide advertisements and propaganda, he finds the converse—metaphors of war on insects, and the diseases that come with them. Government etymologists called for an outright war on the blight of insects, saying that nothing short of their complete elimination could ensure the survival and progress of the human species. In both of these examples, as well as tactics used “on the ground,” as it were, we find an overarching philosophy that the only solution for the problem of insects or enemy combatants was complete elimination—the type of zero-sum thinking that is inherent to high modernist ideology.
The final chapter of Russell’s book, however, is all about the blowback effect. The publication of Rachel Carson’s Silent Spring in 1962 brought about a backlash against the widespread use of DDT, which had in the years since World War II been widely promoted as a safe insecticide, advertised both for its safety for users and its military prestige—it had been a key insecticide used by the American military during the war. Carson’s book promoted the idea that the chemical was environmentally disastrous and a carcinogen that was unsafe for home use. The chemical was banned within ten years of the book’s publication.
Around the same time, public opinion toward the military use of chemicals began to shift. While the US chemical industry was miniscule before the first World War, it had grown quite rapidly, and was now a key component of the “military-industrial complex” that Eisenhower warned about in his farewell address. By 1963, the use of chemical-based warfare was becoming a major point of contention in the escalating US presence in Vietnam. Those who opposed the war would point to the use of defoliants, and later napalm, as indication that the war had gone too far, had become too barbaric, while some on the right argued that the use of all-out chemical warfare would be the most efficacious way to decisively gain advantage in the war.
At around the same time, both chemical-based warfare and mass use of insecticide were suddenly met with a mass of public disapproval, after almost fifty years of being positively associated with US dominance as an international power.
David McBride’s Missions for Science deals with the impact of US scientific and technological interventions in four areas with Black Diaspora populations. In Haiti, Liberia, the US “Black Belt,” and the Panama Canal Zone, McBride chronicles the way that American scientific and technological interventions served the purpose of expanding US imperialism and hegemony. Regional leaders like William Tubman, Booker T. Washington, and “Papa Doc” Duvalier, often shared the faith in the high modernist ideology expressed by outsiders leading US intervention. But while the goal of expanding US imperialism, the hopes for the power of science and technology improving the lives of those in the affected areas often failed, sometimes catastrophically. Public health efforts in the Panama Canal Zone were initially effective, but those leading failed to continue with further, more far-reaching, measures. Technical education in the Black Belt failed to change the underlying disparity in the social and political makeup in the area.
The best illustration of the blowback against high modernist intervention is Haiti. In Haiti, you have all four elements that Scott describes as necessary to the creation of a full-on disaster of social engineering—the administrative reordering of society, high modernist ideology, an authoritarian state, and a prostrate civil society incapable of effective resistance. In Haiti, when the US took over the administration of the state in 1915, their public health efforts actually did much to upset the existing structure of medical care, while their efforts to eradicate epidemic diseases on the island were ultimately unsuccessful. By the time the US pulled out, the population was still impoverished, and suffered high disease rates. “Papa Doc” Duvalier, who began his career as a doctor and made a name for himself in the mass administration of penicillin, came of age in this period, and was educated according to US high modernist principles of medicine. In the case of Haiti, the blowback from high modernist scientific intervention not only included the destruction of a health care system more adequately suited to palliative care and abatement in an unsuccessful attempt at eradication of disease, but also included helping to create the ideology of a man who became a corrupt autocrat whose reign of terror greatly increased the suffering of the people that those intervening had originally intended to help.
There is a fundamental fallacy in the high modernist faith belief in zero-sum games, when it comes to science and technological intervention. Social intervention of this type cannot take into account all the variables—future discovery, the wisdom of existing social structures, and the inability of social engineering to account for the complexity of such structures—it is impossible to verify that a strategy is a zero-sum game when one cannot account for all the players, the rules, or the changes that may occur with future research. So it’s quite possible that blowback is inevitable.
However, both of these books reflect what strikes me as a rather wise ambivalence toward scientific intervention. On one hand, there are many examples of this sort of blowback, with often disastrous consequences. On the other hand, certain scientific advances, especially in medicine, are so groundbreaking and present so much opportunity for the betterment of peoples lives that denying access to such medicines and technologies seems inhumane and immoral. It’s a complex question, but both of those books help to shed light on the difficulties and complexities, and will hopefully help to inspire further research and thought on the topic.
Nov/070
Herbert Hoover and the Corporatist State
One of those questions that Americanist grad students in History get asked a lot is, "What was new about the New Deal?"
At first it struck me as a pretty obvious question– of course EVERYTHING was new about the New Deal. That’s definitely the story I heard growing up… But when you look at it, things get murky– Hoover wasn’t the laissez faire capitalist he’s often made out to be. In fact, he was a proponent of an interventionist federal government. FDR outspent every president before him on social welfare, but Hoover outspent every president before HIM.
So looking to resolve the question, and looking into it a bit, I’ve come up with– well, at least a theory. Hoover was a corporatist and an associationalist. He was for intervention, but not for the type of big state programs that the New Deal ushered in. And when he needed big state programs, he didn’t like to leave their management in the hands of the state alone.
In his essay “Three Facets of Hooverian Associationalism” Ellis Hawley argues that Hoover, in his time as Secretary of Commerce and President, created a new approach to federal regulation with regard to “problematic” industries, one that he sees as an outgrowth of progressive associationalism. While earlier progressive associationalism had approached the regulation of industry by the bringing together of interest groups that had a stake in the industry, from management, labor, and consumers, Hoover’s regulatory approach to troubled industries was essentially corporatist—characterized by the rationalization of troubled industries by new governmental agencies that were headed by individuals within the industry. Hawley further argues that the definition of “problem” industries included not only industries in decline, but nascent industries whose primary “difficulty” was a failure to efficiently meet their full potential. F. Robert van der Linden’s Airlines and Air Mail and Douglas Craig’s Fireside Politics, two books that draw on Hawley’s work, both bring this particular dynamic into much closer focus, looking at the new industries of commercial aviation and radio, respectively.
Robert van der Linden draws very directly on Hawley’s work, framing his book in its introduction as an expansion of “Three Facets.” (viii) Where Hawley’s article focused primarily on the role Hoover played in regulating commercial aviation as Secretary of Commerce, van der Linden expands upon this work, looking at the arguably far greater role played by Hoover’s Postmaster General in regulating and rationalizing the industry after the Watres Act. While the Watres Act was essentially an expansion of Federal authority—giving Brown almost unchecked authority over the young airline industry, which was still dependent upon government subsidy in the form of Air Mail contracts—the way he went about implementing this authority is an excellent illustration of Hoover’s corporatist approach to regulation of industry.
In the conference of airline operators held May 19, 1930—the notorious “spoils conference”—Brown used the powers given him by the Watres Act to bring together the heads of the top companies to discuss, and resolve by means of cooperation, how to best rationalize the airline industry. This meeting, while it stunk of collusion to many contemporaries, embodied Hooverian corporatism. The nascent industry was a “problem” industry because it was failing to reach its potential—commercial airliners were failing to gain the desired numbers of air travelers, routes weren’t standardized, and there was a level of competition which, in the estimation of Brown and the heads of the top carriers, was unhealthy for the young industry. Brown brought together industry leaders to force consensus on these and other issues. The goal, more than simply the negotiation of Air Mail payment rates, was fairly explicitly to reshape the industry itself to something more in keeping with Taylorist notions of rational industrial management. The result was vertical integration of the industry, fusing several of the largest players to create a tighter oligopoly, and the exclusion of small upstart players to benefit “competition” among the remaining three behemoths.
The back-door collusion of this meeting eventually led to scandal when Hugo Black began his investigation and Roosevelt’s Postmaster General James Farley revoked the Air Mail contracts and assigned the military the task of flying the mail. However, military aviation quickly proved unable to safely and efficiently perform the task, and Air Mail contracts were re-awarded to the big three airlines. Moreover, the consolidations that Brown had overseen remained, and the three airlines created out of this conference remained as the core of the industry for half a century.
While Hawley and van der Linden see Hooverian corporatist regulation of “problem” industries as springing directly from the earlier principle of progressive associationalism, Douglas Craig interprets it as resulting from a failure of associationalism. Craig argues that the radio conferences of the 1920s reflect a more pure associationist approach, bringing together various interest groups to help steer the direction of the industry with direct Federal intervention being held back to a minimum, primarily in the maintaining of the Radio Act of 1912. Taking a stricter definition of associationalism, he argues that it is only when this sort of interest-group consensus building failed under the weight of the rapidly growing industry that Hooverian corporatist regulation came into play with the Radio Act of 1927 and the creation of the Federal Radio Commission.
Under the Radio Act of 1912, regulation of radio fell under the Department of Commerce, and thus—through most of the 1920s—under Hoover. When Hoover announced in 1926 that radio would be subject only to voluntary self-regulation until congress passed new legislation better defining the government’s rights and responsibilities in regulating radio, it could be argued that after his loss in court to the Intercity Radio Company, he decided that the young radio industry had officially reached the point of being a “problem” industry, and thus required a shift in tactics, away from traditional associationalism and toward corporatism.
The FRC was a clear example of corporatist regulation. The commissioners often were men who had worked within the industry, and often went on to executive positions within the networks after leaving the FRC. Moreover, the FRC favored commercial networks over the noncommercial independent operators, often placing a greater burden of proof upon them with regard to their commitment to public interest. While the commissioners were more overtly given the right to do so in legislation than Brown had been with the airlines, the FRC was also similar in that it helped to directly shape the industry, apportioning and taking away licenses of operators. While some of this reshaping was done in response to political pressures asserted by outspoken politicians, as with the rewarding of licenses to Southern operators to the detriment of operators in the North and East, it was always done in a spirit of cooperation with the major networks, who were also given a disproportionate number of clear channels.
As with the airline industry, the Hoover-era act that created this corporatist alignment of Federal and oligopolies’ interests was replaced by a New Deal piece of legislation that had little net effect. In the case of the radio industry, it was the creation of the FCC in 1934. Craig argues that the new, larger commission had only minor, almost negligible differences from the FRC when it came to issues of radio broadcast.
Both books further our understanding of Hawley’s initial argument. Hoover was an associationalist, but when a new industry became “problematic,” either by growing too slowly like commercial airliners, or too quickly, as in the case of radio, he felt that a greater deal of state intervention and regulation was necessary. Rather than the direct state intervention preferred by New Dealers, Hoover’s solution was to create regulating bodies that would represent the interests of both the state and the most successful companies in the industry. The result in both cases was the creation of an oligopoly—a collection of the “big three” companies that would submit to government regulation, and in exchange, were given the lion’s share of the industry and an opportunity to participate in their own regulation.
The authors don’t necessarily agree, however, on the net effect of this pattern. Robert van der Linden seems to be a fairly enthusiastic advocate of Hooverian corporatism, refusing to see collusion in Brown’s “spoils conferences,” and indeed avoiding the words “spoils” or “scandal.” He makes a point of mentioning Black’s membership in the KKK, but avoids the topic of Ford and Lindberg’s Nazi sympathies. Despite his enthusiasm for Hoover’s policies, however, one doesn’t get the impression that he lets it effect the quality of his scholarship, even if it colors his treatment of the subject. Craig, on the other hand, seems to mourn radio’s lost potential, especially the possibility that American radio could have adopted the Australian/Canadian model of public and commercial radio—something that the US didn’t achieve until the Johnson administration.
However, both authors seem to agree on the lasting impact made by Hooverian corporatist regulation. Both books end in the Roosevelt era, with that administration making little impact on the overall structure of the industries as they were engineered under Hoover. The big three networks and two of the big three airlines are still dominant. The FCC is still around. And as much as some people evoke the lasting impact of FDR’s interventionist state, we can see shadows of Hoover’s corporatist model in the way the Federal Government regulates many industries today.
