Thorstein Veblen was a cranky Norwegian-American economist best known for his 1899 book The Theory of the Leisure Class where he coined the term conspicuous consumption, which meant that if former Tyco CEO Dennis Kozlowski bought a $9000 shower curtain with company money he should probably go to prison… and did. Veblen instantly came to mind this morning when I read about how nine of the top editors were leaving Engadget for a new gig no longer associated with AOL. There’s a lot to think about in this move, which Veblen (who died in Palo Alto in 1929) would have appreciated.
Veblen, you see, was a socialist of sorts but really he was more a dour Norwegian who respected hard work and the accumulation of knowledge, if not wealth. Give a man enough pickled herring, Veblen thought, and what else did he really need?
Veblen was fascinated with what he called engineers, by which he meant the folks whose ideas and expertise made possible technology-based economic output. Veblen had no time for workers or bosses, but he loved engineers, seeing them as the heart of any real enterprise. In this Engadget story those nine editors constitute the engineering class as opposed to workers who are a commodity and bosses who are parasites.
Veblen thought correctly that production workers couldn’t fix the very machines they ran and neither could the bosses, so he saw the real power in an organization lying with the engineers, whether they knew this or not. If the engineers walked out, Veblen theorized, then the enterprise was screwed. But this ignored the importance of capital (provided by the big bosses in exchange for those shower curtains) and didn’t anticipate the global pool of technical talent available today, where almost any geek can be replaced.
There’s a long tradition of techies hitting the road en masse. Gordon Moore, Bob Noyce and the rest of the traitorous eight did just that when they left Shockley Semiconductor to start Fairchild Semiconductor back in the 1950s. The eight had had enough of Shockley and so took their balls down the road to Fairchild where, ironically, the big boss wasn’t a geek at all but a much more traditional hands-off tycoon.
At Engadget we see the top editorial talent (the word-engineers) leaving because they didn’t like the factory machinery (blogging software that hadn’t been upgraded since 2003) and felt unappreciated and under-rewarded in an organization that I have in the past referred to as a sweat shop. I think it didn’t help, either, that AOL just spent $315 million in cash for the Huffington Post, giving Arianna Huffington — a very smart (and smart-ass) executive who tends to see technologists as a commodity — oversight of Engadget.
Maybe Huffington was intending to clean house at Engadget, but probably not. More likely she made comments about how she and her crew were going to fix things — things that this new traitorous nine may not have seen as broken.
Any time new management asks you to re-apply for your own job it is a sign of zero professional regard.
There’s a wonderful experiment here, in which we’ll shortly see just how valuable are those nine editors and, for that matter, Engadget itself. The Engadget brand stays with AOL, but will the readers? Or does the real value lie with those departing editors?
My guess is that both will fare well. Huffington now has an incentive to throw a little money at Engadget, so that crappy blogging platform will no doubt be improved. The editors taking over will rise to the task and get raises to boot. Yet at the same time the departing editors will create something interesting at their new site, whatever it is called, and readers will love that, too.
The reason why all this happiness will ensue is something Veblen never considered: this is a frictionless information economy where more is nearly always better.
When it comes to information there is no such things as conspicuous consumption and none of us are ever information-rich enough.
If I am right, what does it say about brand value? It says AOL paid too much for the Huffington Post, that building and buying in this market are comparable efforts if you take into account the cost of time, and neither deserves a premium as a result.
The engineers neither win nor lose in this while the big bosses will learn that their factories and shower curtains may not be worth so much after all.