Short thesis summary: Government regulation of the private sector in Australia.

This is an extremely shortened version of the thesis proposal that was accepted. It is meant only as a basic summary.

Introduction

This thesis will analyse the growth and decline of that part of the international education industry aligned to the migration desires of its students to investigate ways in which governments go about creating regulatory and legislative frameworks to encourage and guide commercial activity in the furtherance of social aims while operating in a global economy.

Governance, Globalisation and Education:

Since the late 20^th Century the process of framing legislative and regulatory conditions to foster commercial activity in the furtherance of the social aims of a singular polity has become more difficult for a number of reasons, and particularly in the new service sectors. The rapid development of technology as driver and result of globalisation has meant that commercial entities in the services sectors are particularly nimble in creating systems to capture opportunities across individual polities as opportunities arise. In education, this has lead to conflict between the inherently national interests of single states and the international interests and capabilities of commercial entities and markets.

Farrell (2003) notes the anxiety about international trade in education services that arises in the national perspective held by singular polities:

There is concern among national education authorities over whether greater openness to trade in international education services through the GATS mechanism of the WTO represents a threat to the nature of education as a public good. (Farell 2003, p. 244)

While he notes that:

International education has grown rapidly over the last decade, driven by technological change and a growing demand for increasingly specialised education and training in developed countries. (Farell 2003, p. 247)

He also notes that individual polities generally sense that internationalisation can potentially present a threat to their own interests:

Most barriers to trade in services take the form of domestic regulations. In the area of education services, typical stated objectives of the regulations in place are to promote or protect culture and national traditions, as well as to provide training and education for consumers. (Farell 2003, p.247)

The enduring sovereignty of governments over different specific regional areas means regulatory changes in one polity, and in the interests of one polity, will impact upon the nature and scope of the commercial activity within that polity. But because of the international nature of commercial activities, government regulation in one polity can also change commercial activity in other polities, which can in turn have varying effects on the people of that other polity. The gap then between the capabilities of commercial entities to capture opportunities and government capabilities to create regulatory frameworks designed to foster or guide commercial activities has both national and international ramifications, while the polities themselves generally only feel accountable to the people who make up the individual polity. At the same time, the commercial entities themselves are becoming faster, more effective, and more integral to the provision of services nationally and internationally.

Along with the considerable level of unease about the effects of globalisation, particularly on higher education (Yang 2003), there has grown an understanding that globalisation may require a new way of thinking about the role of the state, or the way the state goes about playing its role:

While the problems of orthodox economic liberalism have become increasingly apparent, it is also evident that older orthodoxies that placed the state in a dominating economic role are not viable. (MacEwan 1999, p. 3)

This disconnect between the international capabilities of commercial entities and the national interests of singular polities creates great complexity around regulation when individual governments seek to design regulatory systems aimed at utilising commercial activity to further social aims:

Over-regulation can be as damaging, and even more damaging, as under regulation, especially in the new services sectors, where the dynamics of technological change and convergence between sectors make it particularly hard to regulate in a timely manner. Regulation has to be flexible enough not to stifle development . . . Regulators need to understand the consequences of the regimes and regulatory structures that they have erected. The political economy approach to regulation needs to define major interest groups engaged in regulatory rent-seeking, while the public interest approach is aimed at correcting various market failure situations. (Findlay & Sidorenko 2003, p. 3)

Concern about this is not necessarily new. Grant (1997), says:

The development of economic globalisation has not been counter-balanced by the development of appropriate mechanisms of governance. The 1980s [!!] have seen an accelerating process of economic globalisation, but a relatively limited development of political structures that can regulate this process . . . International firms create the need for improved international governance, but they do not and cannot provide it. (Grant 1997, p. 319)

Rogers Hollingsworth and Boyer (1997) have noted:

The old but pervasive dichotomy between states and markets has to be discarded, to be replaced by a broader array of institutional arrangements, which mix in varying degree the pursuit of individual self interest and social obligations, relations among equals, and power symmetries. . . Because each type of institutional arrangement simultaneously exhibits strengths and weaknesses, its performance and viability depends on the precise context and configurations of interests within which it is embedded. No single institution can pretend to have universal or eternal superiority – even such a celebrated institution as the invisible hand of the market. . . In the real world, any economy consists of a combination of institutional arrangements, all of which complement each other and thus acquire some efficiency. No institutional configuration can simply be borrowed and implemented in any given social setting. Institutional arrangements evolve according to a distinct logic within each society . . . Institutions are not static entities defined once and for all, but they continuously respond to changing contexts and emerging structural crises. This is of special importance, given the present transformation occurring in social systems of production and the changing status of sub-national regions, nation-states, and the world economy. (Rogers Hollingsworth & Boyer 1997, p. 53)

Governments are thus faced with the task of creating regulatory regimes that attempt to control or guide commercial activity but can generally only do so for spaces within their borders, while at the same time entities involved in commercial activity are becoming increasingly transnational either in themselves or through networks of entities.

Commercial and governmental organisations in the end fundamentally rely on each other, the one in order to pursue its commercial interests and the other to build the very polity it seeks to govern. The continuing acceptance of the sovereignty of governments means their ability to have populations and commercial entities generally obey their legislative and regulatory regimes will continue, but the increasing internationalisation of commercial activity means these regulations will need to be designed and implemented in ways that understand their effects and can in practice optimise social advantages through guiding and leveraging the increasing technological and international abilities of commercial entities. As this process of internationalisation and technological change continues, the way government goes about regulating may also need to change, and this thesis explores this issue.

The creation of the Education-Migration pathway as a case study in Government intervention in markets in a globalised economy:

The history of the creation and closure of the education-migration pathway provides a very useful and vivid example of governments designing legislative frameworks that foster commercial growth in order to achieve social aims. In addition, it is an example of governments doing so in an area of activity known to be highly globalised. Indeed one might even say that because it is to do with migration it is definitively globalised.

Governments in Australia have a long history of facilitating opportunities for commercial growth as a means of furthering social aims (Wells, 1989). The forms of these opportunities have varied from directly funded incentives such as the old assisted passage or the modern funded traineeships, to the deliberate construction of legislative and regulatory frameworks designed to advantage (or disadvantage) various modes of commercial activity.

In the late 1990's there was a widely held view that Australia was suffering from a skills shortage (DEST, 2002). Though there is some debate about the veracity of claims regarding the extent of the shortage (Mitchell & Quirk 2005), the perception in government that the skills shortage did exist was strong (Birrell, Hawthorne & Richardson, 2006, p.10).

One of the strategies adopted by the Commonwealth to ameliorate the effects of the skills shortage was to create a new skilled migration pathway for international students studying in Australia. This pathway required prospective migrants to become qualified, in Australia, in any of a number of specific trades.

Australia obviously has a long history of immigration, and so a long history of governmental regulation of immigration. The idea of international students happening to subsequently become skilled migrants is not in itself a new idea, but the creation of a specific pathway for this stream of skilled migrants, for the fulfilment of specific skill needs and thus social aims, was new, and held several key advantages. Ziguras and Siew-Fang Law (2006) nominated four:

First, they [international students who subsequently become skilled migrants] increase the recruiting country's pool of highly trained workers, who are increasingly important for economic development. Second, most economically developed societies have low birth rates and ageing populations, and recruiting young people who are at the beginning of their working lives helps to sustain the number of working-age adults needed to support the growing pool of retired elderly. Third, graduates of the recruiting country's own tertiary institutions are more readily employed than foreign graduates. Fourth, the prospect of migration gives some countries a marketing advantage in recruiting fee-paying international students, which is particularly significant in countries in which education is a major export industry. (Ziguras & Siew-Fang Law, 2006, pp59-76)

For parts of the private sector of international education in Australia a number of factors were aligning. Providers who were able to effectively bring together the large demand for the ability to migrate to Australia with the new pathways enabling people to do so, would benefit.

At the same time, advances in technology made possible the creation of new processing systems, both commercial and governmental, that meant the procedure for prospective migrants applying for student visas and enrolling in registered courses became significantly less burdensome in terms of time and money. Also, the rapid rise of the middle classes in India and China, along with the spread of better ICT and financial instruments in those countries, meant the number of people with both a desire to come to Australia and the means to do so was increasing (Das, G 2002).

In terms of achieving the social aim of increasing the number of prospective migrants using this new pathway, the scheme worked. In 2001-02 the number of onshore applicants who nominated their occupation as Cook or Hairdresser was 70. In 2004-2005 it was 470 (Birrell, Hawthorne & Richardson, 2006, p.15). In 2007 - 2008 more than 5,000 skilled migration visas for Cooks and Hairdressers were granted, and in 2010 there are currently 17,594 valid applications made by people nominating their occupation as Cook or Hairdresser (House of Representatives, 2010).

However, this astonishing success in terms of numbers of people attempting to access this migration pathway brought with it a number of problems. Not the least is the plain number problem that while the Commonwealth is issuing 61,500 skilled visas in the 2010 budget year, there are already over 147,000 applicants for skilled migration awaiting a decision on their application, the vast majority of whom are graduated international students (House of Representatives, 2010).

The Commonwealth government has been acutely aware of this problem for some time, and has progressively changed the requirements for onshore skilled migration applicants since 2008. The cumulative effect of these changes is to close the pathway previously created. This has resulted in a number of social ramifications that were perhaps unseen and even unseeable at the time the legislative framework was implemented (Maley, 2010), (Bachelard, 2010).

While the program itself may be regarded positively or negatively depending on the varying ethical schemas one might apply, this thesis seeks to explore the ways in which the creation and closing of the program illuminates issues around how governments might go about regulating commercial activity in the new globalised world across the broad spectrum of attempts to achieve social aims by fostering commercial activity.

Australia, House of Representatives, 26th May 2010, Hansard (Laurie Ferguson, MP Reid)

Bachelard, M (2010, 6th June) 'Student Drop Hits Economy', The Age

Birrell, B, Hawthorne, L and Richardson, S. 2006, Evaluation of the General Skilled Migration Categories, Dept of Immigration and Multicultural Affairs, Canberra

Das, G, 2004 India Unbound: the social and economic revolution from independence to the global information age, Anchor Books, New York

DEST, 2002 ' Nature and Causes of Skills Shortages', Reflections from the Commonwealth National Industry Skills Initiative Working Groups, DEST, Canberra

Farrell, R 2003, 'Barriers to trade in education services', in A Siderenko and C Findlay (eds.), Regulation and Market Access, Asia Pacific Press, Australia, pp. 244 - 277.

Findlay & Sidorenko 2003 (eds.) Regulation and Market Access, Asia Pacific Press, Australia, p3.

Grant, W 1997 ' Perspectives on Globalization and Economic Coordination' in J Rogers Hollingsworth and R Boyer (eds.), Contemporary Capitalism: The Embeddedness of Institutions, Cambridge University Press, Cambridge, pp. 319 - 336

MacEwan, A 1999 Neo-Liberalism or Democracy? Economic Strategy, Markets and Alternatives for the 21st Century, Zed Book, London

Maley, P (2010, 17th of May) 'Hairdressers out as migrant skills list gets a trim' The Australian

Mitchell, W & Quirk, V 2005, Skills shortages in Australia: concepts and reality, Centre of Full Employment and Equity, University of Newcastle, Australia

Rogers Hollingsworth, J & Boyer R 1997 'The variety of institutional arrangements and their complementarity in modern economies', in J Rogers Hollingsworth and R Boyer (eds.), Contemporary Capitalism: The Embeddedness of Institutions, Cambridge University Press, Cambridge, pp. 49 - 54

Yang, R 'Globalisation and Higher Education Development: A Critical Analysis', International Review of Education, 2003 pp. 269 - 291.

Wells, A 1989, Constructing Capitalism. An economic history of eastern Australia, 1788-1901, Allen and Unwin, Sydney

Ziguras, C and Siew-Fang Law 2006, Recruiting international students as skilled migrants: the global 'skills race' as viewed from Australia and Malaysia in Globalisation, Societies and Education Vol. 4, No. 1, pp. 59–76

The Independents' Long Weekend

Upton Sinclair: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it."

Life throws us moral quandaries, and Oakeshott and Windsor (O&W) are certainly in the middle of one now. I can not speculate re Katter because I can not imagine what penguins slip around that man's brain and also because I have a history with him which I can not go into right now but in summary involved a heated argument and physical contact at about 3am at a hot dog stand in Canberra about fifteen years ago.

But I will be very interested to see how O&W go. In essence they have to decide between their jobs and their consciences. If they support Gillard they will almost certainly be thrown from Parliament at the next election. If they support Abbott they will need to convince themselves in some way that he is not the whacko nutjob they both know he is. They have been waiting two weeks for the Liberal party to convince their consciences that it would be ok to support Abbott, and for two weeks the Liberals have fluffed the opportunity.

The constituents of their seats are as anti-Labor as Adam Bandt's Melbourne constituents are anti-Liberal. If you can for a second imagine what would happen to the Green vote at the next election if Bandt had supported the Liberals, then you must understand that the same rapid evaporation of support will follow for O&W if they support Labor.

The problem is O&W are more politically engaged than their constituents. While they obviously understand they have a duty to represent the views of their electorates, they concurrently realise better than their constituents what a fruitloop Abbott really is. The most morally smooth way out for them would be if they could be convinced (or even just find an excuse to justify the belief that) Abbott is not going to be such an absolute baboon in office and that therefore O&W, as rational, experienced, non-fruitloop human beings could possibly countenance supporting him. Unfortunately for them the Liberals have not been able to provide the necessary lubricant to make this intellectual and moral transition viable for a thinking person.

And this is sharp in the souls of O&W because they must be imagining the counter-scenario. If they support Gillard they will be deluged with blame for every Labor pinko policy that comes out. And be sure of this - someone in their electorates will call every Labor policy pinko-commie rubbish. And also be sure of this - that being called something is often the same as being something in politics. The facts don't matter. What does matter is the being-together-with-a-common-enemy. In their electorates the common enemy is Labor. If the independents support Labor, they are joining the common enemy.

The National Party would have a field day. They would heap curse and blame upon the independents who have stolen their votes. They would seek to rebuild legitimacy by doing this. It would be very ugly indeed, but providing the electorate with a figure of hate upon which they can heap the blame for everything the government says and does will not be a tactic that fails to draw support in their seats. O&W, of all people, know this already.

The Coalition knows it has lost the intellectual argument over who would be better to run the country. That's why they have switched to their red-baiting tactics today. It is an appeal directly to the constituents of O&W, and a very clear reminder to O&W that they will lose their seats if they support Labor.

It is also by default an admission that when the conservatives present their arguments in detail to people who have the time and intelligence to understand and judge their arguments, their arguments fail dismally. All they can do now is pander to the base prejudices of the constituents and by that appeal to the base instinct of O&W for political survival, and hope that trumps any conclusions O&W may have come to through rational thinking.

Lastly, there is the Parliament itself. Eventually Julia will almost certainly ask Quentin for permission to try to form a government. On the floor the conservatives will then put up a motion of no confidence. The independents will then be put solidly on the spot to support one or the other. If they support Julia they will be signing their own political death warrants. If they support Tony they will be betraying their own consciences.

That will be an interesting moment.

What they are not mentioning about immigration.

If you are under the impression that lowering skilled immigration to around 180,000 per year will result in our population being less than 36 million in 2050 you're wrong. The numbers both parties are using come from the Intergenerational Report 2010 (IGR). That report says that if we increase skilled immigration to 180,000 per annum we should reach 36 million by 2050. Opposition Immigration spokesman Scott Morrison actually acknowledged this in the initial immigration debate on the ABC. But somehow, in the general spin of an election campaign the message of the IGR got twisted into almost its exact opposite.

The IGR is also quite clear in showing that if its predictions are right, even this level of immigration will not necessarily ameliorate the effects of the problem the IGR was set up to look at in the first case. That is, the problem of Australia's ageing population.

Using migration and total population estimates from the IGR while failing to realise the framework problems the IGR is actually reporting on gives the electorate only half the story. The small half of the story.

The big part of the story is that even if we keep up that level of skilled migration, by 2050 there will be only 2.7 working aged people to every person aged over 65. Today there are 5 working aged people per aged person. And in 1970 there were 7.5 working aged people per aged person.

This is the reality that underpins our population problems. We need more people in order to support our ageing population, yet we are unwilling to accept more people if that means more congestion and further harm to our natural environment.

But unless we can more than double the productivity of every working aged person by 2050 we really have no choice other than to grow the population.

Of course, we could figure out some way of removing more old people. Labor have gone somewhat down this path by simply raising the retirement age for anyone who is currently under 52. But even this measure, implemented between 2017 and 2023, will not give us anything like the space we need to solve the problem.

It is also worth noting that we are not alone in this. Most of the Western World faces similar problems with an ageing population. This means the people we bring into the country to fill the gap will almost certainly come from China, India and South East Asia. Recent changes to migration rules are not doing anything toward making us a more attractive, or even viable, destination for people from these regions.

But in the medium term we must engage with these people. It is also in our long-term interest to design and implement a steady and predictable migration program, not one that changes with the short term election cycles as its primary motivation. The sooner we start bringing these people in, the longer their communities will have to assimilate and settle into the broader Australian community.

We also need the time to build infrastructure, and avoid the environmental impacts of having more people here.

The problem then is not about if we want to have a population of 36 million in 2050, but how we can reach that number while preserving our natural environment, providing adequate infrastructure and, while we're at it, doubling the productivity of the people. That is a challenge. Pretending to simplify this problem to mere number trading and racial dog-whistling does the electorate no service.

On Emotions

First up, to even use the term 'emotion' is to perch barefoot and precarious upon a stalagmite that has beguiled philosophy for millennia. From Plato's Forms to Russell's Paradox about classes and to modern versions of 'qualia' that problem is about the idea that there is a thing, and then there is the idea of a thing. 'Emotion' is not itself an emotion. Modern philosophy continues to do good work on objects and ideas like 'table', 'The King of France', 'red', 'word', 'meaning', and even 'goat'; but emotion and words like 'happiness', 'regret' or 'impatience' have not received anywhere near the amount of serious attention as word relations and meanings like 'red', 'bat', or 'meaning'.

Emotions are different to things in two ways. Firstly, they are considered to be existentially different things to physical things. Secondly, they attract different judgements than do things.

But even regarding the first, there is considerable room for overlap about the way emotions and things are considered to be different things. For example, the emotion 'disgruntled' is not considered to exist in the same way as this computer, and that difference is largely to do with the perceived physicality of the different things. The computer is hard-sided and exists in space, while 'disgruntled' does not seem to have any edges, and exists not-in-space, and comes and goes, while the computer seems to obtain a certain permanency by its separate physical existence.

Yet actually the 'computer'-ness of this intricately arranged mess of plastic and wires is like an emotion I seep through the physicality of those bits and pieces that make up the computer in front of me. And the 'computer'-ness of these bits and pieces is transient. One day this computer will come apart and be a less usefully coherent tangle of wires and green boards. Being a 'computer' is the transient 'emotion' I impose on all those bits and pieces at the moment.

My 'disgruntle', while not apparently physically separate from me, has some advantages in existence not held by basic physical objects. It moves around with me. When I turn away from the computer I no longer see the computer, but my disgruntle is with me whichever way I turn. Not many physical objects have this ability to exist wherever I am, regardless of where I look (except my body itself). In this sense 'disgruntles's' existence could be more 'real' than the physical existence of the computer. Taking the analogy one step further, perhaps just as 'computer' is like the 'emotion' that defines and creates something out of the bits and pieces in front of me, perhaps the emotions I have running through the wobblier mass of my organic existence are just the same – a creating and defining set of characteristics that go toward me being. Disgruntled (or 'Human') does exist in space after all: it is to my flesh as computer is to the plastic bits in front of me. One day my body will cease to be in its current form and my disgruntled-ness will cease to happen to it, just as 'computer'-ness will cease to happen to the computer once it falls apart. After all, my body predates my consciousness and will continue to exist for some time once my consciousness ceases. I remember Joel Marks writing about this somewhere.

The point is that drawing a simple line between things and emotions and saying the difference is somehow in the existential differences between these two phenomena is problematic to say the least. Perhaps happiness happens to me in the same way as 'apple' happens to that roundish red thing over there.

But it is true that things and emotions attract judgements in different ways. We might say that table is 'bad', but what we really mean is that it does not conform with the way we wish the table to be. We don't mean the table is evil, or somehow morally delinquent. Nor do we call a table 'mopey' or 'bored'. Of the two things, we are more likely to make normative (in the ethics sense) judgements about emotions than about things. Strictly speaking, saying a table is bad is an understandable kind of non-ethical normative statement, but the crux here is that it is non-ethical. But once we understand the murkiness around the idea that emotions are non-things, as argued above, it can also seem sometimes uncomfortable to make ethically normative statements about emotions.

For example, most people would probably agree with a general statement like: 'Happiness is good'.

For me this is a pretty difficult statement to come to grips with. Firstly, there is no consensus about what 'happiness' actually means. And if we can't agree on what it is, we can hardly go adding normative descriptors to it and expecting agreement. Secondly, what does 'good' mean here? It could mean morally good, or it could just mean that it somehow feels good. Often there is a conflation of these two senses of good when it comes to feeling, well, good. Some are perhaps more comfortable with this conflation (see John Stuart Mill as an example) than others (see entire history of Catholicism as example). My point is that from an analytic point of view this conflation is probably epistemically unnecessary, even if it is morally twisty.

Of course one could theoretically necessitate 'good' with 'happiness' in a kind of Kripkean meaning-shackle, that is, define one as being necessary for the other's existence. But this would require us to either decouple normative ethical concerns from the term 'good', or else submerge all normative ethical concerns into the idea of happiness.

That is, we can either have meaningful statements like 'It's sometimes bad to be happy', or we can not. If we can that's cool, but we then have to reject the statement that 'It's good to be happy'. But if we can not have bad happiness, if we can only say 'It's good to be happy'; then (so long as we grant that sometimes people can feel good and happy about doing morally wrong things) we have to allow for there to be instances when good does not equal ethical righteousness, or else we have to define happiness as being in itself an ethically righteous thing to be, or define happy as being itself ethical righteousness, regardless of other conditions.

And that is just too slippery for me.

We know there is something that happens physically when someone says truthfully that they are happy. And if you were to concurrently ask that truthful person if they feel good, they will almost certainly answer in the affirmative. But I would posit that they are merely repeating themselves when they do so, and not taking into their sphere of current experience any ethically normative concern outside of the idea that it feels good to feel happy. They feel good, they feel happy. The person means the same thing, but they do not necessarily mean (intentionally or not) that it is good (ethically) to feel happy.

This is just an example, and it obviously revolves around the duplicitous nature of the word 'good'. But you will find that this problem occurs with many emotion words. The problem arises because we are treating emotion words, and emotions, as something other than objects. We seem to wish them a position on a ladder of meaning that we do not wish upon physical objects. We require that 'happiness' or 'boredom' have some non-physical ideal relation to a matrix of ethical or religious or philosophical ideology. This in effect treats emotions similarly to the way philosophers used to treat 'meanings', and yes I am thinking of early Wittgenstein here. It leads to similar contradictions, and yes I am thinking of Russell and of later Wittgenstein here.

Instead, we need to free emotions of their 'meanings'. It is neither 'good', nor 'bad', to feel happy. Or better: 'goodness' or 'badness' has nothing to do with 'happiness'. There is no necessary connection between good and happy, or sad and bad. Sometimes you will be happy. Sometimes you will be sad. These need no more than that in order to exist.

Thinking that they do, and saddling them and us with ideologically fraught value judgements merely confuses the issue of meaning, and causes all sorts of grief in many ways. And that's bad.

Summer in Three Places: Different ways of getting wet.

Melbourne

Sunfire over rippling sheen,

and the slow rock of low waves.

Boats bobbing on water, quiet and ignored.

The heat dreams between creaking trees,

and the imaginable cold and clean grasp

of bay water.

So you shine, and this whole slow-motion world of days

vanishes into you.

You're laughing at the seagulls.

You're dropping twigs onto the water.

You're breathing quietly in your cup

of air – the frame of your ribs

embraces your physical heart. An insect

traces arcs across still water near the pier

and the heat keeps pressing.

Sydney

madness. Unbuckled streets engine their own noise.

Familiar muscular roads bulge with cars

but not faces.

The freshly radiant leaf-world reaches and splashes

green between houses, flats. Water you can feel flowing, pushing

thickly through the air itself,

and just over the ridge of orange rooves, your strung wires

looping and lazy in the teary haze, and nearby somewhere:

The ocean massing her shoreline.

Near Byrneside

Fragrant life has muddy fingers, and when he jumps

he tucks his knees up under his chin. Splashing in

the cool brown channel, a scatter cloud of insects whooshes away.

You can smell the freshness of horseshit, and you silent on the bank,

rest into long, faun grass. He appears again,

shaking the water from his head, serious about climbing out

to jump in again. He is practicing for the Olympics, just in case

Channel diving ever gets put in, you never know.

Tech Convergence and Vertical Integration in Publishing

Once you have released yourself from any delusions about being published by a commercial publisher, and from the idiotic idea of making real money from your writing, and flown up on the freedom that realisation gives you, you may want to (sigh) self publish.

I am completely cool with the idea that no publisher in OZ will touch my book. Probably that's a result of my completely giving up on the idea of writing for a clientele of regular human-type book buyers. In this way me and the publishers of Australia have a pretty solid understanding. Of course that didn't stop me sending it to them. They are a powerful network and their endorsement is respected and they still largely control which novels get to stick their heads up above the ever-rolling media ocean and at least get heard about by the public. So you'd be mad not to give it a go. A series of polite rejection letters followed with glacial regularity.

So now I am considering getting a few copies done for friends and family. Last time I looked at this the costs were just completely ridiculous. This time I am pleasantly surprised. But let me be absolutely clear – this is not a commercial operation. This is the whoopsie-bang version of stapling a poetry chapbook together and trading it for smokes in the university bar. In this case the copies will be given away, though of course if anyone decides they want to give cash that proposition will not be rejected.

My specs were 400 pages with a two colour cover in standard novel format. I wanted quotes for 1, 10, 25 and 100.

Quotes from four PoDs in Australia:

Quote 1: AUD11.08 per book if you get a minimum 100 printed

Quote 2: AUD11.08 per book with a minimum 10 printed

Quote 3: AUD14.25 per book for 25 copies, or AUD12.96 per book for 30

Quote 4: AUD35.60 per book for 10, or AUD16.41 per book for 100

[I can't put the actual names of the companies here alongside the quote because their individual emails have those confidentiality phrases at the bottom, and the quotes may vary according to location or something I don't know about. But if you would like to know the names of the companies I approached send me a direct email jkspencer_200@yahoo.com ]

Now combine that realisation with an understanding of these companies:

www.completelynovel.com, will do PoD and delivery in UK/US for ridiculously low prices.

www.smashwords.com, will manage your listing in all e-book spaces.

These are just two examples, there are other similar outfits around, though I think completelynovel.com is the first to offer the whole lot.

One starts to wonder why bother with Publishers anyway? There is no reason to think that going with a traditional publisher is going to get your book wider distribution among your intended audience (particularly if your target audience is about 25 people), nor to think publishers are going to get you more money for the effort. If you accept you are never going to be able to give up your day job, why not seek to maximise control and ROI?

On the other hand, what if you are a really well known writer like say John Birmingham or Margaret Atwood, both of whom are active users of e-networks? (I chose these two to illustrate the variety of writers now engaging with the Interverse). Wouldn't these costs also present an opportunity to an established writer? Here's the rub. If you are not JB or Margaret Atwood, ie you're not going to sell thousands of books: why go with a publisher who's hardly going to support you anyway, and you get only like 10% of the cover price? Get your own 100 copies printed and take 50% of the cover price. In other words, for every 5 books a publisher sells you can make the same amount of money selling 1. This of course assumes you don't use booksellers or any other ticket-clippers as a distribution channel.

On the other hand, if you are JB or Margaret Atwood, why go with a publisher when you could so easily set up your own website and supply chain and sell directly through your own distribution channel to your already established readers? And again, you'd get like $10 per book instead of $2 per book from your publisher. Even if you only sell half as many books you're still two and a half times better off financially. And believe me, if JB or Margaret Atwood announced they were going to drop their publishers and sell only through their website that in itself would generate publicity and drive sales further.

This is the inevitable squeeze the Publishers have to deal with. In business terms it's nothing new, it's just the convergence of technology creating easier paths to vertical integration. This has been happening since the birth of capitalism. Some might even say it is one of the driving forces of capitalism. It's just that it is happening faster now, and as I have been in Corporate Land for a while I didn't notice the speed at which it is occurring in publishing.

The publishers used to control a valve through which production flowed. The tightness of that valve was the barrier to entry of being able to afford to publish a book with a printer who required a minimum print run of a few thousand. But that's gone daddy-o. The other valve was access to exclusive distribution channels to the public through bookstores. That one has also gone.

The point is emphatically not that now suddenly you will be able make money out of writing because these barriers have gone. If you're a weirdo like me there's probably only a market of a few dozen people who would buy your book anyway, regardless of the production methods and distribution channels used. But even if you are a writer who can command a large following, you also have no need to accept the losses incurred when you go through the old barriers / valves. And that is what is terrifyingly beautiful. Be as cynical or as wondrous as you want, but I truly believe this convergence is going to have as radical an impact as the Gutenberg Press. And the impact will not just be in the number of books printed and read, but in the exponential expansion of the ideas that get out into the world.

Because importantly, the Gutenberg Press not only increased the production of normally approved texts, it also provided the opportunity for texts that previously would never have been published to come out. Then, the removal of a layer of control (the Church) allowed texts that would not have been approved to get printed, so long as you had enough money. The publishers are / were essentially just groups of people with enough money and access to networks to engage printers at a price that made it economically reasonable for the printers to print. They controlled production and access, they were the entities who gave permission for something to get out into world or vanish. But they won't be for much longer. And THAT is what is going to change the world.

Of course this is not going to happen by next Wednesday. In the meantime those publishers that survive will evolve. Just as when this kind of convergence occurs in any other industry the survivors will be those who can specialise, capture new valves, or provide a new value proposition. My hunch is that specialist publishers of high quality lit will survive, more as marketing services providers and editorial selectors for their own readership. Publishers like Sleepers in Melbourne are probably on to a fairly good thing in that they have built a brand that has value in terms of their ability to select kick-ass books. If they publish something I want to read it because their opinion on what is worth my reading has been proven. I follow Sleepers per se, just as much as any of their writers. Whereas you take someone like HarperCollins, well, I don't really believe their spin, their publishing activity is so wide that they are too far removed from my own interest for me to believe them.

You can see there is a parallel here, in that what publishers like Sleepers are doing is getting closer to the consumer, in essence following the shrinking chain and building trust (which is 'brand') and thus creating a value proposition.

Alternatively publishers can do what completelynovel.com is seeking to do and position themselves as a convenient tool for writers/readers to communicate. This is not exactly the same as a valve as the barrier to entry is so low in this model that there needs to be some other kind of proposition to keep customers buying. We'll see.

Update: Here's a fantastic video about all this by Richard Nash.

On Success and Failure

This is going to twist around a bit.

One of the great lies this society propagates is about determination and success. It goes something like this:

If you really believe in what you want to do, and you work really hard at it, eventually you will succeed.

Even on brief reflection this is arrant nonsense, for what makes those who succeed so remarkable is that they have done so while many others have failed. Even people who have worked harder, with more determination, and for longer.

Our efforts towards achievement occur within a network of so many interconnected contingencies and just plain happenstances that to claim that the cause of anyone's 'success' can be solely ascribed to their personal effort is just ridiculous. Of course, nothing would occur without effort (except for within the ranks of the uber rich), but effort alone (assuming you are not uber rich) will not make you 'successful'.

This effort to success argument is endlessly repeated by those who have already achieved 'success', and as you will necessarily never hear from those who have not achieved that 'success' in the space in which 'successful' people proselytise to us, the room for any other argument is small. For example, you will never see a failed talk-show host on their own talk-show talking about how it is not just hard work that makes you a successful talk-show host because if you did, they would not be a failed talk-show host. Or, I often read of 'successful' writers claiming that you will succeed if you keep working hard at the writing etc, but of course you will never read in a major publication a failed writer writing about how they worked hard at their writing for fifty years but never succeeded, because again, if you did read it they wouldn't have been a 'failure'. (This blog an exception).

One of the reasons we so often hear this argument is that people who have achieved success often feel a need to justify to themselves and others the disproportionate possession of the world's resources (money) that success has given them. They like to tell themselves and us that it is not as a result of mere chance and luck they have become rich, but as a just reward for serious efforts undertaken by themselves, in the face of great hardship blah blah blah.

One danger in the hard work breeds success argument is that it makes people who work hard and don't succeed feel that perhaps they are not working hard enough, when in reality no amount of hard work is going to result in their success. It makes them anxious that perhaps they have 'failed' through their own fault when this is not the case.

Another danger is of course in the equation of success with riches.

I am wary here of seeming to put out some other trite platitude about the attainment of riches not being a worthy assessment of success, when for society-at-large, the attainment of wealth is seen as the evidence of success. Certainly the attainment of poverty is not often considered a successful outcome to an endeavour. But it is still valid to decouple the attainment of wealth from the attainment of success.

That might sound strange but I strongly believe it is important if you want to be happy. Now, this needs to be seriously tempered with the condition that whatever you do you have a modicum of material wellness. If you are skint you have no choice. But if we can get one step beyond this and assume just for the moment that you do have the ability to feed, house and put clothes on your family, only then can we talk about what personal success might mean beyond the admittedly large and first hurdle of getting a job.

In societal terms I myself have experienced a modicum of failure and success in my own humble measure. I have seen great failure and success in societal terms in others. I do not believe that really hard work has anything to do with it as I have worked just as hard and failed in societal terms as I have and succeeded in those terms. This is where this post is going to twist, for I have come to agree with the great lie mentioned above, so long as it is decoupled from the belief of success necessarily equalling wealth, and so long as we understand that a certain amount of material well-being must be present to satisfy basic needs. That is, you are not homeless.

[Parallel to this is the phenomenon I have seen repeatedly: That many people I have met who have attained wealth have not actuality chased it as an end in itself. The wealth has come as a by-product of chance, hard work and luck as well as, sometimes, bastardry. For we should never mistake, as the wealthy often do, the attainment of wealth with the practice of virtue. This common false attribution itself leads to all sorts of wickedness which I will not go into here.]

Conversely, I have known people who have attained wealth but not success if we equate success with happiness. I suspect this is because happiness needs to grow from a real personal achievement, and when someone becomes wealthy from sources not related to their own achievement; and they can not mislead themselves into believing otherwise, their wealth really does become hollow. I have known seriously sad wealthy people. Before I knew people like this I would have dismissed their sadness as affectation, and railed at their thanklessness to the fates that bestowed them such advantage. But now that I have sat with them, drank with them, heard their stories, I know that it is possible to be wealthy and a complete failure. I really pity them.

Of course I have also known happy rich people. Some are happy because they honestly believe they deserve their wealth. Some are happy because they can just accept and even revel in the sheer good luck they had to acquire wealth. Some are all these kinds in one.

But the truth within the great lie is that so long as you accept that whatever it is you do will probably not result in you being wealthy, if you completely separate being wealthy from being successful and replace it with a definition of success along the lines of the endeavour itself, then hard work and determination can get you great success, which for many is probably the mastery of some trade or activity.

For example, I have come to realise that for me personally the completion of my fourth novel has given me by far a greater feeling of success than the project of my last job. The novel will almost certainly never be commercially published, never make me any money, and has cost me a great deal both financially and in time. But I believe it works. It does what I set out to make it do. Or, I know it is the best that I can do at this time. I will shortly put it aside and start another, but for the rest of my life I shall notch it up as a really great achievement. My last job was no failure, it was a wonderful time and afforded me the ability to have time off to write the novel. But the job will fade in memory. My daughter in twenty years time will probably not even know what that job was, but I feel certain that if she reads the manuscript she will be proud. That, my friends, is success.