Deadspin Economics

Deadspin’s dead, and capitalists killed it.

I took economics, the softest social science, as part of my undergrad. That it is the softest social science is uncontroversial among people who know anything about it. The reason why it is soft is because anything below a doctorate level (and a great deal above the doctorate level) is hypothetical. The models are far too simple to be either applicable or predictable. Indeed, it’s pretty reliable that the difference between a Republican talking about economics Democrat is that a Democratic one also knows that inflexible demand curves exist.

Don’t get too proud, Dems. Remembering the second lecture of econ 101 isn’t all that more impressive than only remembering the first one.

Anyway, the problem with economics as it is taught is it frequently assumes people as a group act in their own rational self-interest to make the models more simple. The problem with this is that (1) they provably do not, even in groups and (2) wealth isn’t evenly distributed. Twenty-six people own half the world’s wealth. That is how uneven the distribution is. And because wealthy people are that wealthy, and because there are so few of them, they and their behavior are by definition weird. There simply aren’t enough wealthy people for their behavior to be modeled like a large population’s!

Before moving on, may I just say that teaching undergraduate economics in the way that we do, divorced from the material reality of the economy, ends up making students less informed? It is incredibly peculiar.

Anyway, onto topical things: Deadspin was a popular online sports website. I say “was” because they were instructed by their new owner and CEO to “stick to sports.” He didn’t like the political bent many of their stories took. Problem with that? Those political stories got the most hits. The CEO fired the editor-in-chief for standing by Deadspin’s editorial independence (and long-term profitability), and many of the other writers and editors quit in solidarity.

Here’s the thing: despite what you’ve probably been told, a website like Deadspin isn’t just branding. Its reputation is built by the people who write it. And Deadspin now has a third of the hits it used to. Whatever you think of Deadspin, it is not good for consumers to have fewer choices, and it did not die because it was an inferior product. It was made an inferior product, on purpose.

What should be noted is that Deadspin was bought by a private equity firm. Private equity firms often buy successful businesses to tank them. They’ll transfer debt from other assets to the bought asset, then declare bankruptcy on that asset. They’ll sell ads which, long-term, will decimate the website’s views, but which will short term allow them to reap high profits and bonuses. Large companies will use some of their assets as laboratories for off the wall ideas, or simply to make their main assets look good in comparison (Amazon owns a lot of other book selling websites for these two purposes).

So tanking Deadspin wasn’t stupidity for its owners. They profit immensely because┬áless choice is bad for consumers, not despite it.

The economy is not run by an average of all people looking out for their own best interests. It’s run by a handful of people with outsized power who are looking out for their best interests. Not yours. Their lives are alien to you. In the case of a recession, they’ll be fine. They won’t be the ones who’ll die in global climate disasters. They don’t live in polluted areas. They can pay and opt out of every consequence of their malice and stupidity. You’ll be the one to pay, and that’s fine by them.

You may not believe in class warfare. You may not believe in taking away from people what they’ve earned.

Too fucking bad, because they do.

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