Archive for November, 2009

Local Bookstores, Social Hubs, and Mutualization

November 17, 2009

Last month, the American Booksellers Association published an open letter to the Justice Department, asking Justice to investigate Wal-Mart, Target, and Amazon after they lowered prices of best-selling books to under $10. The threat, the ABA says, is dire: “If left unchecked, these predatory pricing policies will devastate not only the book industry, but our collective ability to maintain a society where the widest range of ideas are always made available to the public, and will allow the few remaining mega booksellers to raise prices to consumers unchecked.”

Got that? Lower prices will lead to higher prices, and cheap books threaten to reduce the range of ideas in circulation. And don’t just take the ABA’s word for it. They also quote John Grisham’s agent and the owner of a book store, who both agree that cheap books are a horrible no-good very bad thing. So bad, in fact, that the Department of Justice must get involved, to shield the public from the scourge of affordable reading. (Just for the record, the ABA is also foursquare against ebooks being sold more cheaply than paper books, and thinks maybe Justice should look into that too.)

There may have been some Golden Age of Lobbying, where this kind of hysteria would have had led to public alarm. By now, though, the form is so debauched there’s probably a Word macro for describing competition as a Looming Threat To The Republic. (or The Children, or Civilization Itself. Depends on your audience.)

It’s not surprising that the ABA would write stuff like this — it’s their job to make self-interested claims. What is surprising is that there are members of the urban cognoscenti who still believe these arguments, arguments that made some sense twenty years ago, but have long since stopped doing so.

* * *

Twenty years ago, when we had Barnes and Noble but no Amazon, there was all kinds of literature, from 2600 to Love & Rockets, from Heather Has Two Mommies to Duplex Planet, that survived mainly in the independent ecosystem, but whose host bookstores also needed to sell enough Stephen King or M. Scott Peck to stay open. Fifteen years ago, when use of the web was still a minority pursuit, online bookselling changed this game, but hadn’t yet ended it. Even ten years ago, when more than half of U.S. adults had already become internet users, there were still many book lovers not online. Though the value of bookstores in supporting variety had shrunk, it was still there.

Those days are over. Internet use is as widespread as cable TV, and an internet user in rural Utah has access to more books than a citizen of Greenwich Village had before the web. Millions more books. Like record stores and video rental places, physical bookstores simply can’t compete for breadth of offering and, also like the social changes around music and moving images, the internet is strengthening rather than weakening the ability of niches and sub-cultures to see themselves reflected in long-form writing.

The internet also moderates the competitive threat, because the competition is only a click away. Amazon lists millions of books, but so does eBay, and publishers like O’Reilly or McGraw-Hill or Alyson can sell directly to the reader. If you had to choose between buying books only offline or only online, the choice that maximizes the number of ideas in circulation is unambiguously clear. Even if all but a dozen online booksellers were to vanish, there would still be more places to buy books on the web than there are bookstores in the average American city today.

* * *

Despite the spectacular breadth of available books created by online book sellers, many lovers of bookstores echo the ABA’s “Access to literature is at stake!” argument. In my experience, people make this argument for one of three reasons.

This first is that some people simply dislike change. For this group, the conviction that the world is getting worse merely attaches to whatever seems to be changing. These people will be complaining about kids today and their baggy pants and their online bookstores ’til the day they die.

A second group genuinely believes it’s still the 1990s somewhere. They imagine that the only outlets for books between Midtown and the Mission are Wal-Mart and Barnes and Noble, that few people in Nebraska have ever heard of Amazon, that countless avid readers have money for books but don’t own a computer. This group believes, in other words, that book buying is a widespread activity while internet access is for elites, the opposite of the actual case.

A third group, though, is making the ‘access to literature’ argument without much real commitment to its truth or falsehood, because they aren’t actually worried about access to literature, they are worried about bookstores in and of themselves. This is a form of Burkean conservatism, in which the value built up over centuries in the existence of bookstores should be preserved, even though their previous function as the principal link between writers and readers is being displaced.

This sort of commitment to bookstores is a normative argument, an argument about how things ought to be. It is also an argument that might succeed, as long as it re-imagines what bookstores are for and how they are supported, rather than merely hoping that if enough nice people seem really concerned, the flow of time will reverse.

* * *

The local bookstore creates all kinds of value for its community, whether its providing community bulletin boards, putting rocking chairs in the kids section, hosting book readings, or putting benches out in front of the store. Local writers, harried parents, couples on dates, all get value from a store’s existence as a inviting physical location, value separate from its existence as a transactional warehouse for books.

The store doesn’t get paid for this value. It gets paid for selling books. That ecosystem works — when it works — as long as the people sitting in those rocking chairs buy enough books, on average, to cover the added cost of having the chairs in the first place. The blows to that model have been coming for some time, from big box retailers stocking best sellers to online sales (especially second-hand sales) to the spread of ebooks to, now, price wars.

Online bookselling improves on many of the core functions of a bookstore, not just price and breadth of available books, but ways of searching for books, and of getting recommendations and context. On the other hand, the functions least readily replicated on the internet — providing real space in a physical location occupied by living, breathing people — have always been treated as side effects, value created by the stores and captured by the community, but not priced directly into the transactions.

If the money from selling books falls below a certain threshold, the stores will cut back on something — hours, staff, rocking chairs — and their overall value will fall, meaning marginally fewer patrons and sales, threatening still more cutbacks. There may be a future in which they offer less value and make less money in some new and stable equilibrium, but beneath a certain threshold, the only remaining equilibrium is Everything Must Go. Given the margins, many local bookstores are near that threshold today.

All of this makes it clear what those bookstores will have to do if the profits or revenues of the core transaction fall too far: collect revenue for the side-effects.

The most famous version of this is bookstore-as-coffeeshop, where the revenues from coffee subsidize the lingering over books and vice-versa, but other ways of generating revenue are possible. Reservable space for book clubs, writers rooms, or study carrels; membership with buy-back options for a second-hand book market run out of the same space; certain shopping hours reserved for members or donors; use of volunteer labor, like a food coop; sponsorships from the people or businesses in the neighborhood most interested in the social value of the store and most interested in being known as local machers.

The core idea is to appeal to that small subset of customers who think of bookstores as their “third place”, alongside home and work. These people care about the store’s existence in physical (and therefore social) space; the goal would be to generate enough revenue from them to make the difference between red and black ink, and to make the new bargain not just acceptable but desirable for all parties. A small collection of patron saints who helped keep a local bookstore open could be cheaply smothered in appreciation by the culture they help support.

* * *

Treating the old side-effects as the new core value would in many cases require non-profit status. This would push small stores who tried it towards the NPR model, with a mix of endowment, sponsorship, and donations, a choice that might be anathema to the current owners. However, the history of businesses that traffic in physical delivery of media has been grim these last few years. (This is the story of your local record store, RIP.)

Any change from a commercial to a cooperative model of support would also probably have to be accompanied by a renegotiation of commercial leases. Street level commerce seems to be undergoing some of the same changes urban warehouses and lofts went through in the 1960s and waterfront property went through in the 1990s, where the muscular old jobs of making, storing, and transporting goods receded, leaving those spaces open for colonization as dwellings.

In the current case, the spread of electronic commerce for everything from music to groceries is part of the increase in empty store fronts on shopping streets, leaving a series of Citi branches, ATT outlets, and Starbucks that repeat at regular intervals, like scenery in a Hanna-Barbera cartoon. Even when the current recession ends, it’s hard to imagine vibrant re-population of most of the empty commercial spaces, and it’s easy to imagine scenarios in which commercial districts suffer more: consolidation among pharmacy chains, an uptick in electronic banking, the end of our love affair with frozen yogurt, any of these could keep many street level spaces empty, whatever happens to the larger economy.

If commercial space does follow the warehouse-and-loft pattern, then we’ll need to find ways to re-purpose those spaces. Unlike lofts, however, street level living has never been a big draw, but turning those spaces into mixed commercial-and-communal use may offer a viable alternative.

This also comes with the standard disclaimer that it may not work. The gap between the money needed to stave off foreclosure and the money available from local beneficiaries may not match up in any configuration. Vehement declarations of support for local bookstores may turn out be mere snobbishness masquerading as commitment. The transition of revenue from “transactional warehouse” to “social hub” may be too fitful to create the needed continuity. Landlords may prefer to hold empty spaces at nominally high rents than re-price. And so on.

All of which is to say that trying to save local bookstores from otherwise predictably fatal competition by turning some customers into members, patrons, or donors is an observably crazy idea. However, if the sober-minded alternative is waiting for the Justice Department to anoint the American Booksellers Association as a kind of OPEC for ink, even crazy ideas may be worth a try.

A Speculative Post on the Idea of Algorithmic Authority

November 15, 2009

Jack Balkin invited me to be on a panel yesterday at Yale’s Information Society Project conference, Journalism & The New Media Ecology, and I used my remarks to observe that one of the things up for grabs in the current news environment is the nature of authority. In particular, I noted that people trust new classes of aggregators and filters, whether Google or Twitter or Wikipedia (in its ‘breaking news’ mode.)

I called this tendency algorithmic authority. I hadn’t used that phrase before yesterday, so it’s not well worked out (and I didn’t coin it — as Jeff Jarvis noted at the time, Google lists a hundred or so previous occurrences.) There’s a lot to be said on the subject, but as a placeholder for a well-worked-out post, I wanted to offer a rough and ready definition here.

As this is the first time I’ve written about this idea, this a bit of a ramble. I’ll take on authority briefly, then add the importance of algorithms.

Khotyn is a small town in Moldova. That is a piece of information about Eastern European geography, and one that could be right or could be wrong. You’ve probably never heard of Khotyn, so you have to decide if you’re going to take my word for it. (The “it” you’d be taking my word for is your belief that Khotyn is a town in Moldova.)

Do you trust me? You don’t have much to go on, and you’d probably fall back on social judgement — do other people vouch for my knowledge of European geography and my likelihood to tell the truth? Some of these social judgments might be informal — do other people seem to trust me? — while others might be formal — do I have certification from an institution that will vouch for my knowledge of Eastern Europe? These groups would in turn have to seem trustworthy for you to accept their judgment of me. (It’s turtles all the way down.)

The social characteristic of deciding who to trust is a key feature of authority — were you to say “I have it on good authority that Khotyn is a town in Moldova”, you’d be saying that you trust me to know and disclose that information accurately, not just because you trust me, but because some other group has vouched, formally or informally, for my trustworthiness.

This is a compressed telling, and swerves around many epistemological potholes, such as information that can’t be evaluated independently (“I love you”), information that is correct by definition (“The American Psychiatric Association says there is a mental disorder called psychosis”), or authorities making untestable propositions (“God hates it when you eat shrimp.”) Even accepting those limits, though, the assertion that Khotyn is in Moldova provides enough of an illustration here, because it’s false. Khotyn is in Ukraine.

And this is where authority begins to work its magic. If you told someone who knew better about the Moldovan town of Khotyn, and they asked where you got that incorrect bit of information, you’d have to say “Some guy on the internet said so.” See how silly you’d feel?

Now imagine answering that question “Well, Encyclopedia Britannica said so!” You wouldn’t be any less wrong, but you’d feel less silly. (Britannica did indeed wrongly assert, for years, that Khotyn was in Moldova, one of a collection of mistakes discovered in 2005 by a boy in London.) Why would you feel less silly getting the same wrong information from Britannica than from me? Because Britannica is an authoritative source.

Authority thus performs a dual function; looking to authorities is a way of increasing the likelihood of being right, and of reducing the penalty for being wrong. An authoritative source isn’t just a source you trust; it’s a source you and other members of your reference group trust together. This is the non-lawyer’s version of “due diligence”; it’s impossible to be right all the time, but it’s much better to be wrong on good authority than otherwise, because if you’re wrong on good authority, it’s not your fault.

(As an aside, the existence of sources everyone accepts can be quite pernicious — in the US, the ratings agencies Moodys, Standard & Poor’s, and Fitch did more than any other group of institutions to bring the global financial system to the brink of ruin, by debauching their assertions to investors about the riskiness of synthetic assets. Those investors accepted the judgement of the ratings agencies because everyone else was too. Like everything social, this is not a problem with a solution, just a dilemma with various equilibrium states, each of which in turn has characteristic disadvantages.)

Algorithmic authority is the decision to regard as authoritative an unmanaged process of extracting value from diverse, untrustworthy sources, without any human standing beside the result saying “Trust this because you trust me.” This model of authority differs from personal or institutional authority, and has, I think, three critical characteristics.

First, it takes in material from multiple sources, which sources themselves are not universally vetted for their trustworthiness, and it combines those sources in a way that doesn’t rely on any human manager to sign off on the results before they are published. This is how Google’s PageRank algorithm works, it’s how Twitscoop’s zeitgeist measurement works, it’s how Wikipedia’s post hoc peer review works. At this point, its just an information tool.

Second, it produces good results, and as a consequence people come to trust it. At this point, it’s become a valuable information tool, but not yet anything more.

The third characteristic is when people become aware not just of their own trust but of the trust of others: “I use Wikipedia all the time, and other members of my group do as well.” Once everyone in the group has this realization, checking Wikipedia is tantamount to answering the kinds of questions Wikipedia purports to answer, for that group. This is the transition to algorithmic authority.

As the philosopher John Searle describes social facts, they rely on the formulation X counts as Y in C — in this case, Wikipedia comes to count as an acceptable source of answers for a particular group.

There’s a spectrum of authority from “Good enough to settle a bar bet” to “Evidence to include in a dissertation defense”, and most uses of algorithmic authority right now cluster around the inebriated end of that spectrum, but the important thing is that it is a spectrum, that algorithmic authority is on it, and that current forces seem set to push it further up the spectrum to an increasing number and variety of groups that regard these kinds of sources as authoritative.

There are people horrified by this prospect, but the criticism that Wikipedia, say, is not an “authoritative source” is an attempt to end the debate by hiding the fact that authority is a social agreement, not a culturally independent fact. Authority is as a authority does.

It’s also worth noting that algorithmic authority isn’t tied to digital data or even late-model information tools. The design of Wikileaks and Citizendium and Apache all use human vetting by actors prized for their expertise as a key part of the process. What seems important is that the decision to trust Google search, say, can’t be explained as a simple extension of previous models. (Whereas the old Yahoo directory model was, specifically, an institutional model, and one that failed at scale.)

As more people come to realize that not only do they look to unsupervised processes for answers to certain questions, but that their friends do as well, those groups will come to treat those resources as authoritative. Which means that, for those groups, they will be authoritative, since there’s no root authority to construct from. (I lied before. It’s not turtles all the way down; its a network of inter-referential turtles.)

Now there are boundary problems with this definition, of course; we trust spreadsheet tools to handle large data sets we can’t inspect by eye, and we trust scientific results in part because of the scientific method. Also, although Wikipedia doesn’t ask you to trust particular contributors, it is not algorithmic in the same way PageRank is. As a result, the name may be better replaced by something else.

But the core of the idea is this: algorithmic authority handles the “Garbage In, Garbage Out” problem by accepting the garbage as an input, rather than trying to clean the data first; it provides the output to the end user without any human supervisor checking it at the penultimate step; and these processes are eroding the previous institutional monopoly on the kind of authority we are used to in a number of public spheres, including the sphere of news.