Market and antimarket: The story of the Berkeley Electronic Press

William Davies writes:

The​ words ‘market’ and ‘capitalism’ are frequently used as if they were synonymous. Especially where someone is defending the ‘free market’, it is generally understood that they are also making an argument for ‘capitalism’. Yet the two terms can also denote very different sets of institutions and logics. According to the taxonomy developed by the economic historian Fernand Braudel, they may even be opposed to each other.

In Braudel’s analogy, long phases of economic history are layered one on top of another like the storeys of a house. At the bottom is ‘material life’, an opaque world of basic consumption, production and reproduction. Above this sits ‘economic life’, the world of markets, in which people encounter one another as equals in relations of exchange, but also as potential competitors. Markets are characterised by transparency: prices are public, and all relevant activity is visible to everyone. And because of competition, profits are minimal, little more than a ‘wage’ for the seller. Sitting on top of ‘economic life’ is ‘capitalism’. This, as Braudel sees it, is the zone of the ‘antimarket’: a world of opacity, monopoly, concentration of power and wealth, and the kinds of exceptional profit that can be achieved only by escaping the norms of ‘economic life’. Market traders engage with one another at a designated time and place, abiding by shared rules (think of a town square on market day); capitalists exploit their unrivalled control over time and space in order to impose their rules on everyone else (think of Wall Street). . . . Capitalism, in Braudel’s words, is ‘where the great predators roam and the law of the jungle operates’.

Interesting. Put this way, it all seems obvious, and I guess this must all be well known in economics, but I’ve never thought of it that way.

There can be no sharp distinction between “economic life” and “capitalism” or between “the market” and “the law of the jungle”—even the largest companies have to compete in some way in order to make payroll—but, yeah, the idea of capitalism as an antimarket, that makes sense. I was already familiar with the idea that firms are, in the words of Dan Davies, “islands of central planning linked by bridges of price signals,” but I hadn’t thought about this as a sort of definition of capitalism. (Dan Davies is, I assume, not directly related to William Davies who was quoted above.)

Here’s an example. Later in his article, Willam Davies writes:

Academic publishing, for example, is one of the most egregious rent-grabs around. Scholars, editors and reviewers work for free, so that large copyright-protected conglomerates can charge libraries several thousand pounds a year for digital access to journals they can’t do without. The profit margins of the big scientific publishers run as high as 40 per cent, enough to make the boss of Shell blush. Hence the enthusiasm for projects such as the not-for-profit Open Library of Humanities, set up by Birkbeck academics in 2013, which now publishes 33 open access journals per year. When it’s capitalism that’s the problem, and not markets, the only alternative is post-capitalism.

There’s some truth to that. I use Arxiv and my home page and, for that matter, this blog, to communicate scientific ideas directly without paying rent to Elsevier etc. I also publish articles in journals and I publish books with for-profit and non-profit publishers, so you could say I operate in some sort of mixed economy of publication.

But then I can tell you a story that puts us back into the capitalism-as-antimarket situation.

About 25 years ago, my friend Aaron Edlin started a set of journals which he called the Berkeley Electronic Press. The clever idea was that his journals would be online-only and freely accessible to all and, if you published a paper for one of his journals, you agreed to review some number of submissions. Also, the journals were arranged in four different tiers: you’d submit an article, and the editors would decide based on the reviews which tier your article would go in. Aaron’s an economist, and these innovations seemed like great resolutions of the problem of hassling reviewers and the problem of deciding what to publish. I published a paper in one of Aaron’s journals, back in the day, and it all went very smoothly. My article ended up in the third-tier “Contributions” category, and it’s only been cited 30 times, but, hey, what are you gonna do? The experience was much better than the usual story with academic journals where they act like they’re doing you some sort of huge favor for publishing your article. It was all very efficient and low-key. Aaron got his friends to edit some of these journals. He asked me too, but I was too busy.

In any case, their original business model didn’t seem to have worked out. Now they’ve just become one more crappy series of paywalled journals. I went to the Berkeley Electronic Press website and saw this: “In 2011, bepress chose to exit the commercial subscription-based journal business in order to focus all of our energies on our open access services; this meant selling the 60+ bepress journals which we had published for the last decade.”

I’m thinking that the mistake was to have 60+ journals in the first place. How can you possibly keep track of all of that? Maybe they should’ve just capped their number of journals at 10, and then it could all have worked out, I dunno. I don’t fault Aaron for this—I’ve started all sorts of projects that didn’t continue the way I’d originally planned, and nothing lasts forever in any case. He did keep those journals going for a few years, which isn’t nothing.

The relevance to the main theme of this post is that the Berkeley Electornic Press started out as some sort of cooperative or possibly market-based system but then got sucked into the capitalist antimarket.

We think of capitalism = market and cooperative being the opposite of a market, but in this case the connections go differently. The cooperative and market versions of the Berkeley Electronic Press are similar in that they involve some sort of open exchange between independent agents, whereas the capitalist antimarket version is all happening behind many layers of obscurity.

I recognize that none of this is new to economists. This particular perspective was new to me, though, hence this post.