Australian Political Scientist & Research Administrator
On Friday, I’m presenting at the 12th Australian International Political Economy Workshop on the ‘Çorporations and Power’ panel. You can download my presentation slides here. Thanks to AIPEN and The University of Queensland for a travel bursary to attend and present at the Workshop.
Update: an iPhone recording of the AIPEN talk can be heard here.
This week after 8 1/2 years I’m submitting my political science PhD at Monash University to external examiners (update: I did so on 22nd November and my thesis is under examination). Over the past weekend I launched Vega Theory: a new blog about my post PhD research program at the nexus of strategic studies, terrorism studies, political economy and sociology. Follow @vegatheory on Twitter for regular updates. I’ll also be taking on-board the insights I learned over eight years whilst writing for and editing the former subculture search engine Disinformation – from 1999 to 2008 – and how the post-2016 environment has changed.
I’ve started to use Twitter’s List feature on my main Twitter account (@alexburns). The lists includes alumni from the classic era where I edited and wrote for the Disinformation website (1998-2008); people who I met whilst in Swinburne University’s Strategic Foresight program (2002-04); and past collaborations and current projects. I’ll continue to add to current and new lists. Enjoy!
Coauthor and collaborator Ben Eltham has recently argued for a new organisation to pay writers:
It is possible to imagine an organisation that pays Australian writers in an analogous way to a symphony orchestra.
With appropriate resourcing, an organisation could advertise for a series of full-time fellowships for writers at a reasonable wage. Writers could be selected by a panel of respected peers and then employed on 3-year contracts, with superannuation, sick leave and all the rest. In return, we would expect them to write. At the end of their contracts, a progress report would be submitted.
I’ve considered this issue at two times in my life:
In 1997-98, I was involved in initial discussions about a book imprint for 21C Magazine. Publisher Ashley Crawford, myself, and others worked on a book imprint proposal, book proposals, and marketing plans. But when 21C‘s European publisher withdrew funding the project did not proceed.
In 1999-2008, I was at The Disinformation Company Ltd (TDC) when it set-up what was for several years a successful book imprint. I was involved in discussions with publisher Gary Baddeley and creative director Richard Metzger when they hired Ultraculture‘s Jason Louv. In my view, the book imprint’s portfolio expanded too quickly, and Baddeley later divested it.
In academic publishing there are examples like Zero Books who promoted the late Mark Fisher’s writings. In music, Robert Fripp and King Crimson’s label Discipline Global Mobile remains a favourite. In both cases there is an intellectual property portfolio (to be defended), an online distribution platform, and effective marketing to a subcultural audience.
This is an area where Trebor Scholz‘s idea of a platform cooperative — a publishing company owned by its authors — might be another option. South Africa’s Skolion Writers collective (which includes authors Masha Du Toit and Nerine Dorman) illustrates how Scholz’s platform cooperative might be run.
Eltham’s proposal is an interesting one for arts policymakers to consider. In particular, Eltham highlights the Australia Council’s low investment in literature. I would personally go with a TDC, Zero Books, or Skolion Writers-like approach as suggested above. The Australian market is really too small for many local publishers to get a good return on their investment — or for authors to get a good royalty income stream.
“Clicks don’t pay the bills.”
That’s the brutal assessment of New Republic features director Theodore Ross about doomed digital media in 2016. Amongst the downsizing and casualties: The Guardian, Univision, the Huffington Post, Mashable, the International Business Times, Al Jazeera America, Medium, and Gawker. The disturbing trend for Ross? Google and Facebook capture of 85% of the digital advertising market. Pivoting to viral video seemed promising. “Companies have already begun to question whether video clicks really are the best clicks,” Ross notes. In a tweet on 14th December 2016 announcing his New Republic article, Ross mourned, “I will never be able to retire.”
I learned this the hard way in April 2000.
Five months earlier, I had joined The Disinformation Company Ltd (TDC) to edit and write for their Disinformation website. Publisher Gary Baddeley and Creative Director Richard Metzger agreed to sponsor me to work in the United States. I had to finish my overdue Bachelor of Arts degree first. We had great contributors. TDC’s parent company Razorfish was worth $US1 billion. The future looked very bright.
Then in late March 2000 the dotcom crash began to happen. On 14th April 2000, I wrote about the unfolding crash for Disinformation in real-time. “The new e-poor,” I commented. Razorfish’s stock price soon imploded. The US move fell through. I continued to work for TDC as an overseas independent contractor. They later pivoted to television, book, DVD, and Video on Demand production. I finished my Bachelors degree, started a Masters, and then worked in university research for the Smart Internet Technology CRC based at Swinburne University.
In 2006, I met a Fairfax Media online editor at a telecommunications conference. He talked passionately about the algorithms that ranked stories for readers. Age and Sydney Morning Herald readers preferred celebrity and sports coverage. The algorithms drove Fairfax Media’s publishing platform. I privately reflected that watered down op-ed columns had replaced a strong editorial vision.
You have to follow Jim Collins’ advice and confront the brutal facts. The Disinformation experience taught me that web content is a loss leader that builds you an audience. You then offer other content and services such as ebooks, documentaries, or web-based training to earn revenues. You cut costs. You have something to offer more than digital advertising. You cross-promote other sites and authors. You use Facebook, Twitter, Google Scholar and other free tools as outreach. Your authors need to be accessible to their audience (whilst also still protecting sources if needed).
Fairfax Media and the rest of Ross’s doomed digital media did not follow these lessons. They initially funded journalism with high overhead costs like traditional print media. They focused on digital advertising and not other revenue sources. They published content that was noise: it was not distinctive and did not have a unique, compelling voice. They let marketing algorithms take-over editorial policy. They diversified into too many other areas.
I discovered similar mistakes in the university research world. In the past, universities invested in early career researchers to fund conference travel, projects, publishing, and skills development. University research institutes built a large infrastructure to promote their programs and teams. This all involved a lot of money, a lot of administration time, and a lot of negotiation. In other words, high transaction costs. Universities did this in part because they used to take a long-term view of career and talent development.
But in today’s austerity world these high transaction costs are no longer feasible. They are regarded as inefficiencies or overheads. Universities have cut funding for early career researchers (known as ECRs) who compete for precariat, short-term contracts. An ECR’s average career path is between three to eight years before burnout if there is no ‘up or out’ promotion to the professoriate. University research institutes have had to embrace contracts, donor philanthropy, and strategic partnerships. They have had to diversify their funding sources as grants become more competitive.
A race to the bottom drives both digital media and university research. The average academic journal article has between 800 and 1100 unique views. The average book by a university publisher has a 300 copy print run. Authors often assign their copyright and other intellectual property rights to publishers — and so don’t earn licensing or residual fees. These facts and norms are little known outside academia and they highlight the high cost and waste of much research. The Conversation website illustrates some of these trends: it curates academic research to a broader audience but it also doesn’t pay its academic contributors.
I told the Fairfax Media online editor in 2006 that he needed to take a more proactive approach to publishing content. The model I was grasping towards is an event-driven, stream-based approach like the Bloomberg financial news network or complex event processing. The publishing platform helps you to anticipate, respond to, and shape coverage. What is also needed is to build a portfolio of branded intellectual property that discovers and engages with a passionate audience. It’s less like traditional news or university research, and more like Creative Artists Agency (James Andrew Miller’s Powerhouse), perpetual deal-making (Robert Teitelman’s Bloodsport), or even life-hacking (Tim Ferriss’ Tools of Titans).
You will probably still need another job. And, multiple income sources.
How do financial elites gain effortful power? What are their wealth management secrets?
Chrystia Freeland’s book Plutocrats: The Rise of the New Global Super-Rich (New York: Penguin Group, 2012) suggests three factors:
1. Anti-fragility or positive growth from the interaction of volatility and time. Freeland focuses on forces like entrepreneurship, globalisation, technology and political change. The “anti-fragility premia” is perhaps best discussed in Nassim Nicholas Taleb’s options trading and philosophy work.
2. Capital Accumulation as inter-generational wealth creation. Pick a famous dynastic family like the Carnegies or the Rothschilds. Capital Accumulation can be expressed as the positive growth of wealth over time expressed as a Present Value to Future Value cashflow. This process can also be considered in terms of the financial decisions that we make over our lifespan: decisions today set-up the potential favourable conditions for tomorrow. Warren Buffett’s official biographer came up with a memorable image to describe this process: The Snowball.
3. Rent-Seeking: Rent-seeking is control of financial / real assets that allow for Capital Accumulation to occur (as an extraction premia). Gordon Gekko exemplifies this in the Oliver Stone film Wall Street. Rent-seeking may be done via entity structures (such as a pass-through vehicle like a limited liability partnership) and through wealth management strategies (such as funds management and legal tax minimisation).
Freeland and others suggest that Superstars are able to use these three factors to gain cumulative career and financial advantages.
This leads to the following equation for elites: rent-seeking control of PV and FV cashflows + anti-fragility + volatility (where the first two are stronger than volatility, which in the case of events like the 2007-09 global financial crisis, can still lead to significant drawdowns).
An example from my own life: the 1998-2008 period of work with The Disinformation Company Ltd (now TDC Entertainment):
1. Pick an anti-fragile trend – such as pre-millennialist conspiracy theories in the mid-late 1990s and a web portal platform during the 1995-2000 dotcom speculative bubble.
2. Set-up a structure for capital accumulation: TDC as a Delaware-registered company that engaged in book, television, DVD, web, and conference projects and that built an audience.
3. Rent-seeking over time via the free cash-flows from the project portfolio.
You can find and understand examples from your own life.
I have a new Academic CV and Publications track record (PDF).
The document integrates for the first time my academic research; PhD and Masters studies; Disinformation website work (mainly from my first editorial and writing tenure in 1998-2003); journalism; and subculture research. There are some known gaps in the publications history – notably the Black Box magazine project in 2002, two small REVelation excerpts in 1996-97, and many more Rabelais student journalism articles / reviews from 1994. It’s as near complete a list that I’m likely to get – unless I do further archival work. Many of the Disinformation articles in 1998-2003 are available at Archive.org. Much of the academic research is available from this website or in the specific academic journals.
A personal reflection:
I spent much of my first decade of public writing as a freelance journalist, subcultural researcher, website editor / writer during the end of the dotcom speculative bubble, and then in the Swinburne University Masters program in strategic foresight. This period covered several phases: (1) a 1994-95 period of primarily New Journalism experimentation; (2) a 1996-97 period of immersive subculture research and magazine articles which largely ended in March 1998; (3) a 19998-2003 period of my first Disinformation editorial tenure; and (4) my 2002-04 Masters studies which were largely a reflection cycle on the prior periods and the lessons I had learned. This period transitioned when I joined the Smart Internet Technology CRC research consortium in December 2003.
I spent my second decade as a researcher; pivoted into research management; did Masters and early PhD work on counterterrorism and political science; and then collaborated with others on academic research. This period covered several phases: (1) a 2003-2007 period of Smart Internet Technology CRC research in which I also pivoted out of doing magazine research due to employment contract restrictions; (2) a 2007-09 pivot period of moving into research management and transitioning my academic research career into political science; (3) a 2010-14 period of collaborative research articles; and (4) a 2009-present period of focus on PhD research about pattern languages and strategic culture, and applied research on hedge funds / terrorist organisations as strategic subcultures.
Collectively, I put in 10,000 hours of deliberate practice over the 20-year period in journalism and research. The 1994-95 period of New Journalism was skills acquisition and experimentation. The 1996-97 period of subculture research benefited from close work with several talented magazine editors, and led to new insights during the 2003-07 period at the Smart Internet Technology CRC. This was a period in which I enjoyed a brief publicly visible profile as an editor and writer. The 1998-2003 period at Disinformation led to a renewed focus in 2009 on event arbitrage and understanding hedge fund strategies. I experienced personal crises in 1997 and in 2006-07 over financial and ‘decision to publish’ issues that led to life-changing pivots. The 2002-04 and 2007-09 periods were active reflection cycles on these pivots. In Spiral Dynamics terms, the 20-year timeframe of writing involved several sequences of skills cultivation (Alpha new state), rapid growth (Delta surge), life crisis (Gamma Trap problems), and pivot to new opportunities (alternation of Beta questioning and new Delta surge).
This 20-year writing arc has led to a current personal synthesis: (1) PhD and recent academic publications as a new phase of skills building; (2) applied research as a strategy to address the life circumstances of the 1997 and 2006-07 crises; and (3) this blog as a way to capture and communicate some of these ideas to a public audience. My writing is more focused and often more private. I publish more slowly in academic journals than in past internet and magazine work. I work with a smaller group of collaborators. I have a more sustainable daily routine.
I’m grateful for the past experiences. I’m looking forward to sharing new writings in the future with you.
This week I’m reading Josh Brown and Jeff Macke’s Clash of the Financial Pundits (New York: McGraw-Hill, 2014) during my work commute. Brown and Macke interview financial media pundits and bloggers. Minyanville’s Todd Harrison has overshadowed the book’s release in announcing that the popular financial news site will pivot to financial services:
Our current business model does not extend to financial services, and that’s OK — it’s broken anyway. I do, however, believe that what we’ve built is extremely valuable to a broker-dealer looking to leverage a fertile audience, acquire new customers, optimize the social sphere, turn clients into community, market through new channels, engage next-generation investors, and build a lifetime relationship.
This, in my view, can be accomplished by attaching Minyanville to an existing financial services firm as an incubation lab and allocating our assets and abilities across their business model. There are several reasons this makes sense — among them, education, credible content, and creativity are rare commodities on Wall Street.
Financial institutions have been reticent to embrace the online world given regulatory and reputational concerns; they now understand the digital realm isn’t going away and the millennial generation — along with a massive transfer of wealth — is quickly approaching. If they don’t incubate the human capital and creative elements necessary to service the entire vertical across multiple channels, they will be left behind.
Minyanville provides a plug-and-play, end-to-end solution that delivers smart market commentary with editorial rigor through a FINRA- and SEC-compliant mechanism. This is not traditional research; content is the best online currency — engage the audience in a daily dialogue with one foot inside the firewall (give them a reason to stay in the walled garden) and the other foot outside the firewall (broaden the brand shadow and more effectively target the marketing spend).
Over 14 years ago when Richard Metzger and Gary Baddeley hired me to edit the Disinformation website they were pivoting to television production, publishing, DVD, and video-on-demand interests. Stratfor’s George Friedman planned the StratCap hedge fund before Anonymous hacked his geopolitical intelligence website.
Behind all of these moves are two strategic realities: (1) most web content generates zero income – a painful truth for editors and writers; and (2) value creation often lies in tailored products and services for a website’s audience. Minyanville’s version of (2) was a subscription service for premium content. Disinformation’s version was book, DVD and video-on-demand projects — the site became mostly user-generated content from March 2008. This was all prior to Henry Blodget’s career ‘second act’ with BusinessInsider.
I made a series of decisions about these shifts over the past decade. After undergraduate and postgraduate school I pursued a university-based research career from 2004 whilst doing a second editorial stint with Disinformation. I stopped freelancing for magazines during this period due to publishing embargoes that the research consortium I worked for placed on my research. After leaving TDC Entertainment on 29th February 2008, I turned down several offers to edit websites or to be involved in publishing projects. After March 2007, I self-funded my academic research. Today, I blog – as Josh Brown does – primarily for self-education.
On the surface Harrison’s pivot decision for Minyanville to partner with financial services as an “incubation lab” looks like an entrepreneurial venture. I’m a little skeptical:
(1) As Brown and Macke show in their new book, most financial commentary is noise that is unhelpful to traders. Twitter, Andrew Ross Sorkin’s Dealbook section in The New York Times, and a Bloomberg or Wall Street Journal subscription provides most of the major financial news and the major newswire services.
(2) Harrison omits that most website content is usually either for subscription traffic, or is a loss leader.
(3) I read Fundamentals of Stream Processing (New York: Cambridge University Press, 2014) and it confirmed that the real alpha is already in complex event processing, machine learning algorithms, news analytics, and high-frequency trading algorithms. This area is at least 4 to 5 years old in quantitative finance already. It may continue to disrupt the broker service model that Harrison has in mind. How many of Minyanville’s customers really have the financial assets to become high net worth customers for a broker?
(4) Harrison looks to the Millennials as the new investor class – but most of them can save money and time by paying US$1 for William Bernstein’s monograph If You Can: How Millennials Can Get Rich Slowly; investing in a low-cost index fund like Fidelity or Vanguard; and reading free web commentary for self-education. More Millennials are likely to use mobile services than subscription-based websites.
(5) As George Friedman found with his StratCap venture, developing alpha/edge in investment and trading is a very different skillset to financial news or commentary. My experience from several different contexts over a 10-year period is that news arbitrage strategies are hyped by journalists and editors — but have significant alpha decay for traders — particularly in a market dominated by high-frequency trading algorithms and low-latency arbitrage. Brown and Macke confirm that this is the case for retail traders who try to trade the news on Bloomberg or CNBC – and that the major news outlets are set-up with availability and disposition biases in mind.
(6) Thomas Frank’s One Market Under God: Extreme Capitalism, Market Populism, and the End of Economic Democracy (New York: Doubleday, 2000), Thomas Schuster’s The Markets and the Media: Business News and Stock Market Movements (Lanham, MD: Lexington Books, 2006), and Dean Starkman’s The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Financial Journalism (New York: Columbia University Press, 2014) show that the financial media-retail trader nexus has been a problem noted in the 1995-2000 dotcom and 2003-07 real estate speculative bubbles, and also in the 2007-09 global financial crisis.
I will keep an eye on what Harrison’s Minyanville evolves into and what it incubates. However, Harrison’s pivot decision looks like an exit.
Thomas Pynchon‘s new September 11 novel Bleeding Edge (London: Jonathan Cape, 2013) is now out and has a subplot featuring the Montauk Project conspiracy theory. The Counterpunch and Atlantic Monthly reviews mention the Montauk allegations. Pynchon likely found out about the conspiracy from an interview that Alexandra ‘Chica’ Bruce and Richard Metzger did for the Disinfo Nation television show (Channel 4, United Kingdom) which was later included on the Disinformation DVD and Disinformation: The Interviews book. (Both were on-sale prominently in St. Marks and other New York City bookshops.) Richard has blogged at his site Dangerous Minds about how the interview came about. Montauk fits Pynchon’s worldview and the themes of earlier, very influential novels like Gravity’s Rainbow and The Crying of Lot 49.
For me, Bleeding Edge evokes the period between the 2000 dotcom crash and the September 11 terrorist attacks, when I first edited the Disinformation website. I wrote about both incidents; as well as experiencing others like Enron’s collapse and the 2000 United States election outcome. I visited New York City between 20th and 25th September 2001, in part to visit author Howard Bloom. Pynchon’s subplots involving the darknet DarkArcher and stockmarket speculation echo some PhD-related work I am doing on the strategic subcultures of event arbitrage hedge funds: several ‘shorted’ airline stocks as the September 11 terrorist attacks unfolded.
The plausible Montauk-Disinfo-Pynchon connection highlights how subcultural ideas and memes can diffuse into mainstream society. Author Robert Anton Wilson likened this to strange loops. Author Don Webb described it as a fictive arcanum.
Discovery Communications (NASDAQ: DISCA) has unearthed a new revenue stream: faux documentaries on pseudo-scientific and occulture topics. Slate‘s Chris Kirk observes:
These faux documentaries, which can best be described as anti-educational, seem to have grown more common on in recent years. The Disney-owned History channel, for example, has earned criticism for airing pseudoscience programs like Ancient Aliens, UFO Files, and the Nostradamus Effect instead of programs about, you know, history.
I originally wrote about this for the alternative news site Disinformation when Fox broadcast its Lunargate documentary in 1999. I was skeptical: the main reason for Fox’s decision appeared to be the combination of cost-effective content, a large audience, ratings, and profitable licensing markets. At the time, Disinformation’s founder Richard Metzger was shooting the Disinfo Nation television series for Channel 4 which would later be pitched to the SyFy Network in the United States. The series led to a DVD and book, and to straight-to-DVD and streaming video releases. There’s a long history of these documentaries: Jacques Bergier and Louis Pauwels created the genre with The Morning of the Magicians, and I recall Arthur C. Clarke’s Mysterious World book and television series from the 1980s.
Today, I treat such work as an information and sociological model of rumours, and psychological receptiveness to fringe ideas.