Which side are you on in the Amazon-Hachette war?
Is this a case of a nasty big corporation trying to stomp on a not quite so nasty and slightly less big corporation? Is Amazon trying to create a monopoly where it sells everything worth selling? Or is a brave and forward thinking company trying to create a new and modern marketplace for books, where there are gazillions of readers and they all want to buy my books?
Or are you thoroughly confused and fed up with all of it?
On Goodreads recently there has been a debate about whether big business is good for us, or an evil that we could well do without.
I’d like to offer my humble opinions, wrapped up in a little story about Ug’s hammer.
Who knows? Maybe one day, Ug’s hammer will be a well-known concept. People will mention it in the same breath as Schrödinger’s cat, Foucault’s fulcrum, Flaubert’s parrot, Michael Jackson’s monkey or Freddie Starr’s hamster. Until then, it’s just a story.
Once upon a time, there was a primitive cave dweller called Ug. His wife, children, grandparents and friends were also called Ug. His cave was called Ug, and the sky and .. you get the picture.
One day, Ug was in the middle of his morning commute from his cave to woolly mammoth feeding grounds where he worked. It was there that he stubbed his toe on a large sandy brown rock hiding by the side of the path. Had this happened several millennia later, our hero might have realised that he had been involved in an accident that was not his fault. He could call one of those nice injury lawyers and earn a bundle in a no-win no fee sort of deal.
But it wasn’t several millennia later, and so he didn’t.
What he did do was to shout the worst and foulest swear word known to Neolithic man at the top of his lungs. The rocky canyon resounded to the echoing sound of him yelling “UG!!”.
Then he did what all Neolithic men did in such situations. He knelt down and gave the offending rock an almighty punch, or as he would call it an almighty ug.
And then his hand was hurting as well as his foot.
At this point in the story, events could have taken a very different turn. He might have cut his losses, carried on walking and later complain to his co-workers that he had stubbed his ug on an ug and it had ugged like ug, and so he ugged it and that ugged even more.
But Ug was a resourceful fellow. He spotted another rock not far away. A rock about the same size as the first, but much tougher looking. A macho rock. He picked up this rock, marvelling not for the first time that opposable thumbs had their uses. And then he brought the second rock crashing down onto the first.
The second rock disintegrated into a satisfyingly large number of pieces. As Ug could not count, any number larger than three was satisfyingly large. And this certainly qualified.
Mostly by accident, Ug had just invented mankind’s first tool. We now know it as a hammer, but back then he decided to call it his uggity ug. Ug was so impressed with his uggity ug, that he decided to take it with him. He wrapped it up in a fold of his fur loin cloth, incidentally also inventing the world’s first pocket.
When he arrived at their semi-detached cave later that evening, his wife noticed that something was different.
“Is that an ug in your pocket,” she said. “Or are you pleased to see me?”
“It’s an uggity ug. I can ug things with it.”
He then went on to extol the virtues and advantages of mankind’s very first tool. With this very ug, he could build stone walls, fashion a castle, build an empire, erect a pyramid to honour the gods they hadn’t invented yet, conquer nations and eventually put a man on the moon.
“If it’s so marvellous, why don’t you put those shelves up at the back of the cave,” she said. “If you do that, I’ll treat you to an uggy ug under the mammoth skin duvet.”
What self-respecting red-blooded troglodyte could resist such an offer? And thus was the barter system created. Before long, news of Ug’s marvellous hammer spread around the neighbourhood. Everyone wanted to borrow it, although history does not record whether this was to put up shelves or to barter for more ugging under their own mammoth-skin duvets.
It didn’t take much longer for Ug to realise the next obvious step. He decided to become a maker and purveyor of hammers. His first uggity ug was just the prototype. Soon he extended the range. There was the wooden-handled hammer, the pointy pin hammer, the war-hammer, the mallet, the sledge – even the classic shape with the hook attachment for pulling out nails (which also hadn’t been invented yet).
Soon business was booming. Ug was quite the talk of the cave-town. He had all the barters he could possibly want plus lots of ugging under the woolly mammoth duvet. So much in fact, that they had to invent money in order to pay him when they ran out of things to barter.
It couldn’t last. Soon other Neolithic men were looking enviously at Ug’s success, both in the pocket (which he had invented) and under the duvet. They also decided to make and sell hammers. And thus was born the free market. People could now buy Ug’s original hammers, or they could wander down the canyon to the cave where Ag was undercutting Ug on price. Not only that, but there was that new fella living in a tent who would sell you two hammers for the price of three.
The days of competition had arrived. You might think that Ug would be annoyed to have rivals. And, to tell the truth, he was pretty ugged off about it all. But then a strange thing happened. The competition actually forced them all to make better hammers.
This is the part of the story to cheer the heart of people who like a free market. Ug couldn’t just sell any old hammer. His customers wouldn’t accept fist-sized rocks any more. He had to sell the best or the cheapest or … the something-est. Anyone selling rubbish hammers would go out of business. The people selling the best hammers would thrive.
Ug made his hammers out of flint. His competitors discovered metal and moved into the bronze age. Ug retaliated with iron. His competitors invented steel.
He made his hammers by hand. His rivals used steam power. Ug switched to electricity. They invented the production line. He branched out into robotics.
The Ug corporation bought sailing ships and sent his merchants into far-away lands to find new ways to make hammers and exotic materials to make them from. Although Ug didn’t know it at the time, his hammer-selling business was driving the advancement of human society.
Mankind’s inventions and scientific breakthroughs have not simply happened because of our need to learn or our curiosity about the world. We have grown as a civilization because of our love of money, and the need to build a better hammer. Okay, and a few other things as well.
When we started making things, we quickly found that we needed craftsmen. This then drove both the agricultural and industrial revolutions. We started to live in villages, then towns, then cities. We traded with each other, swapping Ug’s hammers for duvet time and other goods. From this came language and counting, and all manner of good things.
This is the dream of the free marketeers. Competition forces businesses to develop better products and/or ways of making those products more effectively. This drives innovation. It also makes Ug and his descendants filthy rich and that drags thousands if not millions of people with them. The state should not try to intervene in the market. The market is good. The market will regulate itself.
By now, Sir Ronald Ug, the 3 thousandth, is sitting pretty as the head of Ug Inc – an international company specialising in the manufacture of domestic tools. History – and prehistory – has been good to the Ug family, just as it has been good for all of us. It is undeniable that the free market has helped to shape our civilization. It is demonstrably better than the alternatives. The capitalist economies won the cold war, didn’t we? The market is good – yes?
Ah, no. There is a problem. In fact, there are several. If we stopped now, we would only be telling half of the story. You see, the Ug corporation has a confession to make.
Competition doesn’t just give us the good stuff – better products and more efficient manufacturing processes. It also brings along a host of things that are a lot less welcome…
… the early Ug factories used child labour to clean the machines – working long hours and in unsafe conditions. When the Western world decided that this wasn’t a good idea, the Ug corporation exported all their manufacturing to third world countries so they could carry on using child labour.
… the Ug corporation built the ships that made the slave trade possible.
… they merged with smaller companies to create a monopoly
… they used their dominant market position to drive other companies out of business, making their workers unemployed.
… they used smart marketing techniques to make their customers to buy stuff they didn’t need.
… they exploited any tax loophole they could find.
… they helped to destroy the environment, whilst telling their customers that they had an ethics and morality policy.
The Ug corporation didn’t want to do all this. But they knew that their competitors would use these techniques if they didn’t. In order to maintain their competitive edge, businesses have to keep on looking for advantages over their rivals. They have little choice.
And in the meantime, this system has created a world where there is a huge disparity between those who have money and those who don’t. We invented money so that we could swap our labour for the things that we wanted, such as Ug’s hammer. What we now have is a monster which we cannot stop, where most of that money has gathered into big blobs under the control of a very small number of people. That wasn’t what Ug intended when he first stubbed his toe on a rock.
It is probably no surprise that many people are highly suspicious of big businesses. In order to be competitive, the Ug corporation has to find every single way to drive down costs, increase sales and improve profits. But they also have to present a friendly and trustworthy face to their customers.
They have no choice. They have to be shifty and they also have to hide just how shifty they are being. The market forces them to do this.
And that’s the conundrum of capitalism. It has been remarkably successful at creating our civilization. It works. We don’t yet have anything better to replace it with. But it creates massive problems and there is an immense amount of distrust about it.
Let’s return briefly to Amazon vs Hachette, although we will give the last word to Ug in a little while.
Amazon needs to make money. More money than it is making right now. To do that, it needs to build a monopoly and it needs to sell ebooks cheaply, which in turn means taking on the Hachettes of this world. We could see that as nasty Amazon trying to take over the world. Or we could see it as the free market in action – in all its glory and its problems. If Amazon didn’t do it, someone else will. And if Amazon don’t do it now they will try again later. They have to.
Don’t blame a sabre-tooth tiger for being a carnivore. Or Ug for wanting to sell more hammers.
Which probably means that the future is more likely to be Amazon’s approach of a monopoly selling books cheaply, but we don’t have to like it.
For me, the bigger question is whether capitalism and the free market is still fit for purpose. But maybe that’s a story for another time. What seems very certain is that we are a long long way from Ug and the dream of the perfect hammer.
Let’s end with Sir Roland Ug the thousandth. Today he has stubbed his toe on something new. One of his researchers is demonstrating a 3D printer.
A machine that can make just about any object, including a hammer.
A machine that may one day be cheap enough to be available in any home.
A machine that will totally take away the need to pay peanuts to third world workers for working in awful conditions, but also depriving them of an income.
A machine which could put every single manufacturing company out of business.
At that moment in time, Sir Roland shouted the worst and foulest swear word known to modern man at the top of his lungs. His steel and glass office resounded to the echoing sound of him yelling “UG!!”.