Down with profit!

For my 300th post, I thought I’d go a little high-brow and talk about a book I’ve been reading called Beyond the Profits System by economist Harry Shutt. The subtitle is “Possibilities For a Post-Capitalist Era,” so that should give you a pretty good idea of what he’s about. I’m really not interested in economics and things like that, but I picked up the book for five bucks when I was buying a textbook, and it was certainly worth the price. It’s a pretty rough read, though - the writing is very academic, and I think it might actually be intended for use as a textbook. Considering I’ll never take the class it was used for, I can’t really verify any of what was in it. A cursory search reveals pretty much no information on it or the author, but that’s normal for a textbook.

With all that being said, I’m going to assume the book is credible until proven otherwise. The basic idea is that the current model of capitalism, focusing solely on growth and profits, is doomed to fail and needs to be replaced for the sake of public good. First of all, there’s the matter of absurd inequality - not only do we have countries that are far more prosperous than others, but within individual countries, there are people starving to death and others making money faster than they can spend it. Second of all, there’s something called “the business cycle” inherent in capitalism: eventually profits bottom out, and in order to get back the huge growth rates of the past, there needs to be a huge recession. I won’t get into it too much, but from what I understand, the idea is that capitalism revolves around investing excess capital in order to continuously get more. But eventually profitable investment opportunities run out, because there’s too much excess capital. So then you have crashes like the Great Depression, followed by comparatively amazing recovery.

The part that I found most interesting was a section on how companies could survive without pursuing maximum profit. Ideally, in whatever new system would replace capitalism, non-profit ownership of enterprises would be encouraged. Privately owned companies like we have now would be encouraged in different ways to not accumulate profit, such as tax breaks for distributing the money to their shareholders or employees. New companies could be publicly owned (nationally, or even locally) or owned cooperatively (for example, social enterprises). It’s hard to say which is more interesting - the problems this shows with capitalism, or the good that could be done by the alternatives.

The way things are currently, the shareholders and so on who create companies basically receive all the profits the company makes. I.e. the people who have lots of money, get to make more money. Employees get more or less the same salary regardless of how profitable their work has become for the company. Meanwhile, the goal of the company is to do one thing: maximize profits. Doing the “right” thing doesn’t matter, unless it happens to be the most profitable thing.

There are some pretty big parallels between the business of book publishing and video game publishing, so I’ll use those as examples. Some of the similarities are…

most aren’t profitable, and it’s mostly a gamble on the part of the publisher that any individual product will be popular enough to turn a profit
the ones that do turn a profit are used to help fund the ones that aren’t
publishers essentially pay the creators with loans, leaving them entirely dependent upon the publisher until they achieve widespread success
artistic merit or quality, generally speaking, don’t matter as much as profitability
the price you pay for the final product includes a cut for everyone involved in its creation - the publisher takes their cut, the manufacturer takes theirs, and so on, until the actual creators receive their tiny portion
depending on the publisher and the terms of their agreement, the actual creator may not have much control over what they create, whether that be in the form of rights or the actual content itself

There are probably more similarities, and there are differences too (for example, authors are usually expected to promote their own books these days) but you should see the problems here. Economically, it makes perfect sense that only the most popular products actually turn a profit. It makes sense that writers/game developers wouldn’t get anything from the sale of their product until it actually turns a profit. They wouldn’t be doing it if it didn’t make economic sense, right?

But it doesn’t make any logical sense, or emotional sense for that matter. Authors who don’t become massively successful with their first novels are basically forced to write until they can somehow pay off their initial advance. Game developers that don’t put out a huge success are shut down, and hundreds of jobs are lost. Publishers can gamble with people’s livelihoods by deciding what books and games are published. The vast majority of the time a game developer is closed down by a publisher, it’s really not their fault - see the Guitar Hero series, wait for the Call of Duty crash, and the closure of Pandemic Studios after the release of, arguably, their best game. Then we as consumers have to pay heavily inflated prices, mainly because of things like production costs that could be avoided through digital distribution.

This is why it’s so interesting to imagine how books and games could be funded in other ways, and in a way that puts the focus on the actual creators. I love holding a physical book, but I don’t like paying thirty dollars for a book - especially when the author gets, at best, a few dollars of that. Reading on my Kindle is wonderful, and paying ten bucks for a digital version of a book is lovely. I like to have a game’s case in my collection, too, but getting an indie game from Steam for ten bucks is almost absurdly convenient. Steam and Amazon probably take their cut from this, but otherwise, someone could create a game or a book and get actual money for it, right away. These services already exist! We don’t even need to change anything to take advantage of them!

As for funding, Kickstarter is pretty much the perfect example, although it could probably use some more accountability from the people getting the money. The Kickstarter for the PC version (and enhanced 360 version) of Cthulhu Saves the World is a perfect example of this. They only needed $3000, but they got twice that much. Now they’re going to sell the game, and a previous game they created, for $3 on Steam. Two games for three dollars. Development funded by the kind of people awesome enough to donate $750 dollars. If you look at the page, what amounts to a “pre-order” of the game was originally $24. They only needed 125 people to pitch in $25 in order to fund the game, and they got 110. The other fifteen people gave fifty dollars instead. And I’m going to get the game for three bucks! I really want to donate $25, but three bucks is a lot better for my budget :(

It’s probably a little bit harder with books, but I guess a great idea for a game could easily turn out badly, just as a great book idea could be poorly written. Even so, you create a Kickstarter or something, ask people to pay for the product in advance, and then you have enough money to survive while you’re creating it. Everyone wins in this situation. There are, literally, zero downsides. Except for publishers and retailers, who are no longer necessary in this system. Darn.

Just to wrap up, think of it this way: if you were a self-employed game developer or writer, you wouldn’t really need to “profit” from what you make. As long as there was enough money coming in, you could pretty much keep doing what you love forever. No need for a fragile salary based job, no need to worry about publishers, just a direct connection between the money and the creation of the game.

Down with profit!

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