reply to Pathfinder critics

Jose G. Perez jg_perez at SPAMbellsouth.net
Wed Nov 1 20:58:07 MST 2000


>>Jose posted prices from Pathfinder and then a series of other publishers.
like Monthly Review, Ocean Press, South End Press.

>>Of course, a key difference here is that these other publishers either
don't have their own in-house press or, if they do, they pay actual wages.
Also, these other publishers have to pay distributors, whereas Pathfinder
gets a great deal of free distribution via the Barnesite branches.

>>Thus Pathfinder's production and distribution costs are massively lower
than these other presses.   So, even if they charged the same for their
books, there is a substantial profit being made.<<

*    *    *

My good friend Philip, who was the one who TAUNTED me to PROVE Pathfinder's
prices were NOT out of line, has now changed his mind, and while conceding
the  prices are normal for the kinds of books Pathfinder publishes (well,
almost normal), he argues they are too high considering that Pathfinder has
a much lower cost structure than other publishers because they have their
own press and because their labor costs are so low, and in addition they get
free distribution via "Barnesite branches."

I'm going to try to unravel the various strands in this.

First, on distribution. I don't believe Pathfinder, meaning the central
operation in New York, enjoys any great advantages there. Branch bookstores
get the same discount as any other bookstore, they buy at wholesale. Such
income as the branch might clear from book sales is more than offset by
expenses like rent, phone, etc. Also, by and large many of the sales are to
the members and "active supporters" (ex members who are still sympathetic)
of the branch, so even if one could say there was some sort of financial
surplus being generated locally, to a very significant extent it would just
be one more contribution by the SWP's members and supporters to financing
the party's activities, different only in form.

Vis a vis the rest of us, the important thing to note is that Pathfinder is
selling us the books pretty much at their value, the prices they charge are
pretty much what these sorts of books go for in the U.S. Economically
speaking, they are neither ripping us of nor giving us a break, it is
roughly an even exchange.

Now as to the printshop and that part of the SWP's costs. I was going to
write about it separately but I'll let this post do.

It is not clear to me that the SWP's print shop brings it tremendous savings
or income. Not anymore.

When the shop was set up in its current facilities around 1970, printing was
still an extremely labor-intensive activity.
There was typesetting, creating headlines by hand, proofreading all the
stuff, making dummies and then mechanicals of the pages, shooting those,
retouching the negatives, stripping those negatives into flats, burning and
developing the plates and so on.

The actual printing took very little labor, the web press could be set up by
one or two people in less than an hour and it printed something like 15,000
copies an hour, although it was usually run a little slower for various
technical reasons. So even when the Militant had a circulation of somewhere
around 40,000 at the height of a couple of subscription campaigns, you were
talking here about a three or four hours press run, tops. The significant
thing to note is this: the printing itself was not labor intensive, it was
capital intensive. Much more labor intensive was everyhting that came
before, as well as the addressing of subscriptions making up bundles
afterwards.

In the case of books, it was the same, except that after the press run you
had to collate signatures, put the cover on, glue it together and trim it to
the right size.

What's happened since then, of course, is that virtually all the pre-press
activity I described above has completely disappeared from up-to-date print
shops. Plates are generated from computer files provided by the client (or
editorial departments). The post-printing process of bundling and addressing
subscriptions is also completely automated (although I'm not sure to what
degree the SWP shop has automated that end of things as the Militant's
distribution is so modest) as are binding and trimming.

For about a year, through last fall, if I remember right, the SWP ran an
extremely shrill and cataclysmic capital campaign. The goal was huge, and it
was to be used for direct to plate (from computer files) equipment and to
pay off some note the print shop had been forced to take out. I believe what
happened is that the print shop fell behind in technology as the industry
became less labor and more capital intensive, to the point where it was
largely decapitalized and, even with its low labor costs, uncompetitive.

But even with the new equipment, I wonder how "profitable" such a shop can
be today. The only advantage it has over similar establishments run on a
for-profit basis are lower labor costs, but printing is not labor intensive,
it is capital, technology and machinery intensive, and on that score it is
hard to imagine the SWP printshop is leading edge.

    So, for example, if the print shop still has the old presses, I would be
very surprised if newer equipment that is significantly faster isn't
available, which would mean the advantage from lower labor costs would be
reduced or wiped out by the extra time it takes to print on this slower
equipment. And I also would be quite surprised to learn that Pathfinder's
new platemaker isn't being significantly underutilized. I suspect that a
modern print shop designed from the ground up for today's technology would
have several sets of presses being fed from one platemaking machine.

    Today in the U.S., the cost of actually PRINTING a book is a small
fraction of the book's retail price, about 17% (one-sixth), on average,
according to a publishing industry web site. I got quotes from an online
broker about what it would cost to print a 400-page book similar to those in
Pathfinder's catalog, and these are the results:

Perfect bound 5.5" X 8.5" (i.e., "trade" or "quality" paperback)
# of copies    Price each
   100                $8.36
 1000                $4.14
10000               $1.36

Hardbacks are just a couple of dollars more, for example, 1,000 copies of
that book would be $6.08 each. These are FOB prices, you have to pay all
transportation costs from the printer's facility.  If you do the math,
you'll see that the cost of the 9000 additional books AFTER the first 1,000
is $1.05 each. Looking at those kinds of numbers, I don't see where there's
a lot of room for Pathfinder or the whole SWP publishing operation to derive
huge benefits from having their own print shop any more, because virtually
everyone in the production chain between me when I was editor of Perspectiva
Mundial and the press operator is gone, as are all the savings in labor
costs associated with all those people. Those functions have been removed
from the printshops and fused with the editorial departments, for example,
the "type" is "set" by the writers themselves when they create computer word
processing files.

The motivation for the shop originally wasn't strictly financial, and
actually making money from outside jobs wasn't a major consideration. The
big plus was seen in being able to respond very quickly to upsurges like the
May 1970 one, putting out extra editions of the Militant, doing much bigger
press runs, creating instant pamphlets, catering exactly to the movement's
needs without paying outlandish rates for quick turn around, oddball jobs,
etc. The SWP, for example, printed huge amounts of internal bulletins and
given the small press runs for those, being able to get them done with
movement labor was a big savings.

The outside jobs, and if I remember right to begin with there weren't many,
were viewed as a temporary expedient to keep shop idle time from being a
drag on party finances. It was a temporary thing, until the movement grew
enough to keep the shop busy full time. The size of the shop itself was a
function of the technologies and equipment available then for what we wanted
to do. You couldn't necessarily scale it back some without losing entirely
some of the functions we wanted to have.

By the late 70s, generating income from outside jobs had become part of the
shop's mission. The pace of political activity had slowed considerably from
the heady days of 1968-1972, and the rapid growth of the peak of the student
movement had become a very slow accumulation of forces. That, of course, was
about to turn into a long hemorrhage of cadre but we didn't know that. We
all anticipated the pace would pick up in the next year, or two or three,
and in a few years the shop would be doing 100% movement work. In the
meantime the outside work helped pay the bills and print all those Trotsky
books some people think are so overpriced.

A long-time SWP leader (whose name I won't mention because I haven't asked
permission from the person) sent me an email privately a few days ago
pointing out there was a certain political cost associated with the way the
SWP set up and operated the printshop, and that is that we tended to lose
people released from the shop at a higher rate than other comrades released
from national assignment. And I half remember some discussion about this in
the leadership, and an effort to restrict the shop to more-or-less normal
workweeks so comrades would have time to participate in branch life. And
moves were made to strengthen the shop leadership "politically", as we used
to say. (Those of us in the editorial departments tended to work quite long
hours, six days a week. And in the YSA National Office, I recall pulling a
few all-nighters to put the YS to bed).

Of the original reasons for setting up such an ambitious print shop, at
least as I remember them, not much remains, in my opinion. The pace of mass
movement activity, despite the pickup in the last year or two, and the SWP's
distribution capacity, are nowhere near what it would take to make putting
out extra issues of the paper or quicky pamphlets worthwhile. The long-term
cost saving from using what is essentially movement or volunteer labor in
the print shop is now much smaller, print-shop labor is now a much smaller
component of the cost of printed materials, and this also means the REAL
free cash flow from outside jobs the shop takes on (after ALL expenses,
including depreciation/capital costs) is hardly likely to be huge,
especially if the SWP has learned a lesson from the crisis a couple of years
ago and is making provisions for the shop's capital equipment requirements.

In terms of responding quickly to political events, print TODAY, even a
daily, is way too slow. The way to respond NOW is with a frequently updated
news and commentary web site, and why none on the "Leninists" on the left
seem to have figured out that THIS is the Iskra for the 21st Century, I'm
sure I'll never understand. And it costs a lot less than printing, shipping
paper all over the country, and so on (although I do not think that the
Internet can already replace all periodicals for left groups, we're not
there yet). It is true that only half of US households have a computer, but
we have to remember the primary audience of the Left is not all US
households but fundamentally young people. Computer use among young people
is ubiquitous.

As for the books, at the kinds of prices for printing that I discovered, my
guess is Pathfinder could send all its books out to be printed without
raising prices and without tying up tons of money in printed books that lie
around for years because you wanted to do a big enough press run to make it
worthwhile for the shop to print the book. About $25 is what Pathfinder
charges for a lot of the Trotsky writings, so the $4 and change for printing
cost of 1000 copies would put it right at the industry average of 1/6th the
retail price.

The SWP as a whole would still retain a "cost advantage" thanks to low labor
costs in all the work done up to plate making a lot of which was
traditionally part of the print shop and today is in the editorial
departments. It doesn't sacrifice anything in those areas by going out of
house for printing.

That pretty much leaves only the bulletins, and if I were the SWP, I'd look
into moving completely online with those, either through email distribution
or a private web site (they already have one for the leadership). This would
mean owning an Internet-capable computer would become virtually a
requirement of membership, but refurbished P-133's with 32 megs of ram,
complete with monitor and modem are readily available from places like Tiger
Direct for $300, and for $200 or less from used computer stores. Internet
access is free from a half-dozen ad-supported ISP's. And Just the 12
internal information bulletins published last year (some were double issues)
added up to $60 or more, and that doesn't include any discussion bulletins,
education bulletins and other stuff, so for the members, a $300 computer
would pretty much pay for itself over 2-3 years, just in bulletins costs.

The rational reason I see for keeping the print shop is not that it is
generating a huge amount of free cash flow. Unless the financial campaign to
save the shop was a fraud, which I don't really believe, I suspect the SWP's
experience has been that a shop of that size in today's much more
capital-intensive printing industry is a marginal economic proposition, even
with updated equipment.

The rational reason the SWP might have to keep the shop, as I see it, is
simply that it's already there. To put together such a shop is extremely
expensive, so even if right now it isn't paying off that much, it could make
sense to try to hang onto it for as long as you can, for the time when
political activity picks up to such a degree that having the flexibility
such a shop gives you can really pay big political dividends. And if you
read some of the articles the SWP put out around the print shop crisis a
year or two ago, you'll see this was a big motivation for them. Another part
of this is cost, and especially cash flow. Although it isn't at all the way
a capitalist would look at it, you can look at all that equipment and say,
it's paid for, I can use it for free, all I have to do is pay for paper, ink
and electricity and make sure the comrades in the shop get the same modest
subsistence payment everyone else gets, and that's going to be less than
paying commercial rates. Long term that won't really work, you're
decapitalizing the shop, the equipment is being used up (or becoming
outdated) and you've made no provision to replace it. But in the short run
it will.

Frankly, I'm skeptical, I don't buy it, I think the SWP is being routinist
in continuing to do things like print internal bulletins and mailing them
all over the country. There are all sorts of little hidden costs to that
sort of thing, and a lot of wasted time and mindshare, collecting $3.95 for
this bulletin and $5.00 for that one from each member, having the branch
treasurer deposit all the money, writing the N.O. a big check for $53.70 for
the bulletins for the six members of your branch, which are then carefully
tracked by comrades in the financial office in New York who will send you
bills and late payment notices if you've fallen behind. Instead they could
just bundle the articles the comrades have submitted to a discussion, or the
stuff the leadership wants to send out into something like adobe acrobat or
html format, and post them on some sort of private web server or email an
encrypted version of the file. That's going to be TONS easier, quicker, and
cheaper. But that's their lookout.

If I thought the SWP was doing such wonderful work in the mass movement or
in its propaganda that it really was a terrible shame to tie up 20 members
or whatever in the print shop, I might try to figure out a way I could
influence the comrades to analyze whether those assignments still made
sense, and to figure out a plan to wind down the printing operation or scale
it back. But then I'd probably still be a member. As things stand, though,
my attitude is that it is really the SWP leadership's lookout, they're the
ones who've decided to turn their backs on the rest of us in general as the
"petty-bourgeois left" and write lying articles about my "class line"
against me in particular. And if they think they can run --as a sideline-- a
little print shop better than some capitalist manager who is totally focused
on his business and this in a highly competitive industry which has been
going through uninterrupted technical upheavals for a quarter century, well,
more power to them.

The reason I'm upset with what I view as irresponsible and basically
apolitical charges about SWP profiteering around Pathfinder and the
printshop isn't at all that I'm moved by a deep sense of outrage that people
could think badly of a poor, persecuted saint like Jack Barnes, but because
of what such methods of political combat do to US and the broader
revolutionary and working class movement.

And, as a practical matter, I do not believe it helps in the slightest in
convincing people who still may have illusions about the SWP's wisdom or
just an emotional attachment to it for old time's sake think through for
themselves a whole series of issues related to that group.

José


----- Original Message -----
From: "Philip Ferguson" <plf13 at it.canterbury.ac.nz>
To: <marxism-digest at lists.panix.com>
Sent: Monday, October 30, 2000 5:13 PM
Subject: re: reply to Pathfinder critics


Jose posted prices from Pathfinder and then a series of other publishers.
like Monthly Review, Ocean Press, South End Press.

Of course, a key difference here is that these other publishers either
don't have their own in-house press or, if they do, they pay actual wages.
Also, these other publishers have to pay distributors, whereas Pathfinder
gets a great deal of free distribution via the Barnesite branches.

Thus Pathfinder's production and distribution costs are massively lower
than these other presses.   So, even if they charged the same for their
books, there is a substantial profit being made.

As for Jose's comments about a campus bookstore in NZ engaging in
price-gouging and this explaining the high cost of Pathfinder there.  This
is clearly not so.  There are loads of books cheaper than Pathfinder in the
campus bookstore.  Pathfinder prices compare to the most expensive academic
texts, and these prices are set by *publishers* not a mere campus bookshop.

I would assume that university presses, who are the main people producing
academic texts, make money.  So, with much smaller costs, Pathfinder, by
charging the same prices, must be making a fair bit.

I think Jose should be a bit more cautious in making a big moral defense of
Barnes.  When the cult comes apart, he might end up getting some shocks he
wasn't prepared for, just like the people who wouldn't believe a bad word
about Stalin,  Mao or, closer to home, Healy.

I've seen plenty enough - and I left 16 years ago! - to not be surprised by
anything with the Barnes cult.

Philip Ferguson












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