Top bracket from U.S. Federal Marginal Income Tax (Photo credit: Wikipedia)

This is necessarily speculative and I can’t claim to have bottomed out all the potential issues with this framing. It therefore stands as one of the “thinking in progress” posts I promised earlier in the year. Nonetheless it does seem like an interesting framing to pursue an understanding of scholarly communications through.

The idea of “the market” in scholarly communications has rubbed me up the wrong way for a long time. Both the moral and political superiority claimed by private and commercial players for the presumption that markets should be unregulated and protected from “public interference” and the simplistic notion (acknowledging I’ve been guilty of doing this myself) of pointing to the market as “broken”.

A market, whether meant in the sense of a system of exchange that optimising complex pricing for a (set of) good(s) or in the political sense of a protected space for free private exchange, requires the ability for free exchange across that “market”. In it’s political sense it should also be somehow “organic” – that is it develops free from direct subsidy or indirect government control. None of these are true of the scholarly communications system: there is neither free exchange amongst providers, nor purchasers, there is as we shall see effectively compulsion on purchasers and providers, and the whole system only exists because of government subsidy.

Pointing to market failure isn’t helpful if there isn’t really a market. Nor is claiming that markets support better innovation and customer service. It’s poor politics but its also poor system analysis. If we want to make things better, we need a better framing that actually explains, and ideally predicts how changes might play out. After a conversation this morning I’m wondering whether general taxation is a better framing of the scholarly communications system.

Mancur Olson, in The Logic of Collective Action lays out the problem of how large groups can provision what he calls a “collective good”, today we would use the term “public good”. While he focusses on other examples he keeps the case of general taxation in the background. His conclusion is that large groups, which he describes as “latent”, need some form of compulsion to provide public goods. Buchannan, Ostrom and others would later work on the way in which smaller groups can successfully manage public-like goods that have some (differing) elements of private good-like natures. Buchannan focussed on “local public goods”, what we now call “toll goods” or “club goods“, which are non-rivalrous but excludable, Ostrom on “common pool resources” (CPRs) which are non-excludable but rivalrous. In both cases they diagnose limits on the scale of groups that can successfully manage these resources. Neither Ostrom nor Buchannan looked in great detail about the gradation from their ideal types (pure CPRs and club goods) as good become more public-like. We therefore need an economics of “public-making”.

The scholarly community (at least as currently configured) is far too large to provide public goods without compulsion or to manage CPRs or club goods. Yet research is about the generation of public goods (or at least public-like club goods). We therefore have a provisioning problem, and according to Olson one that requires compulsion to resource. We need tax.

That publishers provide a public-like good is easy to demonstrate for subscription articles. Once a PDF is created it is an almost pure public good in the wild. It can be distributed infinitely (non-rivalrous) and is almost impossible to stop (non-excludable). Equally the provision of metadata that is freely available for re-use is also a public good provision. The benefits of the review process are available to all who can access the article so that is also a public good. But herein lies a paradox. If these are public goods then classical economics tells us they won’t be provided by private enterprise. So what is going on?

One of Olson’s key insights is to separate the issue of public vs private (which is a vexed division in scholarly communications anyway) from systems that can impose the compulsion that provide public or collective goods. He notes for instance that in the early to mid-20th century workers in many US firms voted overwhelmingly in secret ballots to impose union membership on themselves and to create closed shops. Although we don’t get a vote on it, the world of academic publishing is not so different from the closed industrial shops of 50s America. If you don’t publish in the right places, you’re not part of the club. So there is a “tax” on the supply side, although the dues are paid in the effort of authorship (and refereeing) rather than as union membership fees. That compulsion is how knowledge as a club good is made more public-like.

But what about the demand side? What about the real money? Publishers are also providing a public good for institutions. It’s the system that matters from an institutional perspective, the exposure that their researchers get, the credit for publication and therefore “membership”. One journal more or less doesn’t really matter. Again the classical economics says there should be a substantial free rider problem with each library gradually cutting back on subscriptions to bring down expenditure (this argument has nothing to do with the serials crisis, it would still follow with a flat, or even dropping over all expenditure). In practice libraries don’t really have a choice about dealing with the Big 4 publishers and not that much choice about what they pay. Fees are configured so that there are only marginal savings in cutting the big deal and going a la carte. Indeed fees are based on a bizarre set of historical factors that have no real basis in reality. Effectively there is compulsion. It is more like tax than a market.

If the Big 4 are a bit like Federal income tax in the US system (yes, the analogy breaks down a bit there but there are multiple strands of national tax in some countries, such as “National Insurance” here in the UK) then the smaller publishers are a bit similar to US state income taxes. If you want you can move to a state with low or no tax, and you can equally have an institution that does no humanities, or no chemistry and avoid paying out to SAGE or the ACS, but those are not the regular choices, and they limit your opportunities to operate. Article Processing Charges are equivalent to a sales or consumption tax. The analogy works right down to the political argument about how consumption taxes can in principle reduce income tax evasion (or redistribute the burden of the scholcomms system back towards the biggest players) because even those who can afford good accountants (or in our case subscription negotiators) still consume goods (or publish articles), but often in practice also raise access barriers for the poor, particularly those seeking to raise their income above the local tax-free threshold.

The serials crisis is then the unconstrained rise in collective provisioning. Far from being a market response to demand, it is a self-reinforcing increase in provision that can’t possibly be subject to proper market discipline, because a market can never truly operate. I don’t need to spell out the political consequences of this argument, but I find it fascinating that we can frame the system as a European general taxation system run by organisations that espouse American fiscal politics. It certainly creates a moral equivalence between “private” provision of these public goods and collective provisioning, such as through repository systems. There really isn’t a difference. It’s simply a question of which form of provision is better suited and better value.

The economic consequences are that we cannot constrain costs through market oriented actions. The only way to constrain run away collective provisioning is through collective action. But collective action is hard because we operate in an existing collective system, with its existing mechanisms of compulsion. The evolution of systems that provide public goods is slow, compared to that of private goods (I am minded to compare manuscript submission systems with government websites as an example). Change will come locally, with local changes of rules. The local governments in the system, the scholarly societies, perhaps some institutions and University Presses, are where change can start, where there are small groups, those that Buchannan and Ostrom as well as Olson identify as able to act.

Ostrom in particular notes that very large scale management of common pool resources is possible within communities (and that privatisation and nationalisation both tend to fail) as long as institutions are built that can coordinate groups of groups. Federations of societies and groups of institutions alongside collective mechanisms like Open Library of Humanities and Knowledge Unlatched offer some possible directions, as does an interesting increase in the number of endowed journals being launched. Ostrom’s prescription is to build institutions that support communities working together effectively, so they can build these large collectives.

And the big governments? Well they can be changed or their orientation shifted from “big” to “small”. And if I recall correctly issues with taxation are often at the root of that change.