DEBT & THE PROBLEM WITH MUSIC: STEVE ALBINI AND DAVID GRAEBER
EPISODE 21 MUSIC IN PHASE SPACE
Steve Albini‘s oft-referenced article is from the early ’90s. David Rolfe Graeber is an American anthropologist and anarchist activist, perhaps best known for his 2011 volume Debt: The First 5000 Years.
“Eleven pesos, then; and as you can’t pay me the eleven pesos, that makes an other eleven pesos-twenty-two in all: eleven for the serape and the petate and eleven because you can’t pay. Is that right, Crisero?”
Crisiero had no knowledge of figures, so it was very natural that he said, “That is right, patron.”
Don Arnulfo was a decent, honorable man. Other landowners were a good deal less softhearted with their peons.
“ The shirt is five pesos. Right? Very well. And as you can’t pay for it, that’s five pesos. And as you remain in my debt for the five pesos, that’s five pesos. And as I shall never have the money from you, that’s five pesos. So that makes five and five and five and five. That’s twenty pesos. Agreed?”
“Yes, patron, agreed.”
-B. Traven, The Carreta
Once upon a time, humans held all things in common in the Garden of Eden, during the Golden Age of Saturn, in Paleolithic hunter gatherer bands. Then came the Fall, as a result of which we are now cursed with divisions of power and private property. The dream was that someday, with the advance of technology and general prosperity, we would finally be in a position to put things back, to restore common ownership and common management of collective resources. “Primitive communism” did once exist in the distant past, and someday it might return.
Peter Freuchen, the Danish explorer, tells how one day, after coming home hungry, he found a successful hunter who gave him several hundred pounds of meat. He thanked him. The man objected indignantly: “Up in our country we are human!” We don’t like to hear anybody say thanks for that. What I get today you may get tomorrow. Up here we say that by gifts one makes slaves and by whips one makes dogs.”
Similar statements about the refusal to calculate credits and debits can be found throughout the anthropological literature. Rather than seeing himself as human because he could make economic calculations, the hunter insisted that being truly human meant refusing to make such calculations, refusing to measure or remember who had given what to whom, for the precise reason that doing so would inevitably create a world where we began “comparing power with power, measuring, calculating” and reducing each other to slaves or dogs through debt.
David Graeber
Graeber identifies three main moral principles of economic relations among humans. In our lives, we often switch back and forth between them. He concludes that often, there is no definition of which type an economic relation actually is, which creates conceptual confusion in economics. Mathematical models of markets certainly do not cover all of these aspects.
Communism:
A kind of “base communism” is basis of a lot of our daily lives, mostly in small, but numerous interactions. The summarizing motto could be framed as “From each according to their abilities, to each according to their needs”. “A lot of us act like communists a good deal of the time.”
Exchange:
Here, economic relations are all about equivalence between the actors. An act of giving one thing and receiving another (especially of the same type or value) in return. It can either be exchange with the goal of profit maximization, within impersonal interactions (which in reality, is almost never 100% true) or exchange of gifts. Gift exchange economies often insist on inexact retribution of gifts, in order to keep the system out of equilibrium (and in motion). With gifts, honor enters the picture and with it, the third moral principle:
Hierarchy:
People or groups are ranked one above the other according to status or authority. Here, one party is the superior (corporation and contractor, employee etc, king & peasant, the king gets a large share of the harvest, the peasant gets “protection”). This relation is often built on precedent rather than actual value of the goods/services. Precedents often happen not with the actual intent to create this durable relation — examples are violent acts (e.g. conquering) or giving one-time gifts for appeasement, which actually sets a precedent for a hierarchy relation.
One might even say that it’s one of the features of capitalism that most capitalist firms, internally, operate communistically. True, they don’t tend to be democratic. Most often they are organized around military-style top-down chains of command. But there is often an interesting tension here, because top-down chains of command are not particularly efficient: they tend to promote stupidity among those on top, resentful foot-dragging among those on the bottom.
SO WHAT IS DEBT?
A debt, then, is just an exchange that has not been brought to completion. Money can be seen, in human economies, as first and foremost the acknowledgement of the existence of a debt that cannot be paid.
A debt creates relationships. Not being able to pay off a debt creates hierarchy (subordination). Debt, in fact, is the basis for society and the primary vehicle through which power is exercised.
If there is any notion of “society” here — and it’s not clear that there is — society is our debts.
COMMUNISM: SMELLS LIKE TEEN SPIRIT
There’s this band. They’re pretty ordinary, but they’re also pretty good, so they’ve attracted some attention. A kind of “base communism” is basis of a lot of their daily lives, mostly in small, but numerous interactions. The summarizing motto could be framed as “From each according to their abilities, to each according to their needs”. A lot of the members act like communists a good deal of the time.”
The reason is simple efficiency: if you really care about getting something done, the most efficient way to go about it is obviously to allocate tasks by ability and give people whatever they need to do them. The greater the need to improvise, the more democratic the cooperation tends to become. Music groups, Inventors have always understood this, start-up capitalists frequently figure it out, and computer engineers have recently rediscovered the principle: (ie freeware)
Sharing is not simply about morality, but also about pleasure. Solitary pleasures will always exist, but for most human beings, the most pleasurable activities almost always involve sharing something: music, food, liquor, drugs, gossip, drama, beds. First, we are not really dealing with reciprocity here — or at best, only with reciprocity in the broadest sense. What is equal on both sides is the knowledge that the other person would do the same for you, not that they necessarily will. There is a certain communism of the senses at the root of most things we consider fun.
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They continue to rehearse in garages, buy liquor and sound systems for parties, gifts for friends; they even insist on continuing to hold events, regardless of whether this is likely to send them skirting default or bankruptcy — apparently figuring that, as long as everyone now has to remake themselves as miniature capitalists, why shouldn’t they be allowed to create money out of nothing too?
The more elaborate the feast, the more likely one is to see some combination of free sharing of some things (for instance, food and drink) and careful distribution of others: say, prize meat, whether from game or sacrifice, which is often parceled out according to very elaborate protocols or equally elaborate gift exchanges. As with society at large, the shared conviviality could be seen as a kind of communistic base on top of which everything else is constructed. It also helps to emphasize that sharing is not simply about morality, but also about pleasure.
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This is presumably also why in the immediate wake of great disasters a flood, a blackout, or an economic collapse-people tend to behave the same way, reverting to a rough-and-ready communism. However briefly, hierarchies and markets and the like become luxuries that no one can afford. Anyone who has lived through such a moment can speak to their peculiar qualities, the way that strangers become sisters and brothers and human society itself seems to be reborn. This is important, because it shows that we are not simply talking about cooperation. In fact, communism is the foundation of all human sociability. It is what makes society possible. There is always an assumption that anyone who is not actually an enemy can be expected on the principle of “from each according to their abilities,” at least to an extent: for example, if one needs to figure out how to get somewhere, and the other knows the way.
EXCHANGE: PAY TO PLAY
Los Angeles is home to some of the most famous venues in the world. Places like the Whiskey, The Roxy, The Troubadour used to be the places where bands were discovered. Bands did anything they could to get booked at these venues but this is back before these venues became pay-to-play.
Exchange:
Here, economic relations are all about equivalence between the actors. It can either be exchange with the goal of profit maximization, within impersonal interactions (which in reality, is almost never 100% true) or exchange of gifts.
Now, anyone who has a slight reputation and a willingness to sell pre-sale tickets (or enough cash) can play any one of these venues. But that doesn’t mean that you are going to have 500 people show up to see you play. These and many other venues don’t come with a built crowd (ever seen what parking is like in LA)
Now, if they could only get their band on the local show when a nationally known headliner will be playing. You know… the show that everyone who is anyone will be attending. Well, it’s not hard… they just have to agree to sell 200 pre-sale tickets at a discount price of $22.00 each. It is going to take a lot of hustling to get that many tickets sold. But what if they don’t sell every one of those pre-sale tickets before the show… Well, in some cases they will have to pay the difference while in others they pay for the tickets outright.
NOTHING CAN STOP THEM NOW
But they don’t have to like it. Imagine they’re being scout by to be signed to a moderate-sized “independent” label owned by a distribution company. The band is a little ambitious. A little communism goes a long way and their heart is torn but they’d like to get signed by a major label so they can have some security you know, get some good equipment, tour in a proper tour bus — and maybe have a little bit of the hedonistic lifestyle music magazines talk about. To that end, they got a manager who knows some of the label guys, and he can shop their next project to all the right people.
He takes his cut, sure, but it’s only 15%, and if he can get them signed then it’s money well spent. Anyways, it doesn’t cost them anything if it doesn’t work. 15% of nothing isn’t much!
Steve Albini
HIERARCHY:
RELATIONSHIPS OF OWNERSHIP THEY WHISPER IN THE WINGS
Here, one party is the superior (e.g. king & peasant, the king gets a large share of the harvest, the peasant gets “protection”). This relation is often built on precedent rather than actual value of the goods/services. Precedents often happen not with the actual intent to create this durable relation — examples are conglomeration of power (corporations) violent acts (e.g. conquering) or giving one-time gifts for appeasement, which actually sets a precedent for a hierarchy relation.
DEAL MEMO
One day an A & R scout calls them, says he’s ‘been following them from a distance for a while now, and would they like to meet with him about the possibility of working out a deal with his label? He’s like one of them. He’s been there, done that. Everything is copacetic. He says anything is possible if we all pull together as a team.
Just in case he’s not allowed to write contracts. What he does is present the band with a letter of intent, or “deal memo. Since the word “contract” implies something legally detailed and binding, the term “memo” is used to suggest an agreement somewhat less formal. Do not be mislead; Deal Memo is a contract and is binding. That is, once the band signs it, they are under obligation to conclude a deal with the label. These letters never have any terms of expiration, so the band remain bound by the deal memo until a contract is signed, no matter how long that takes. If the label presents them with a contract that the band don’t want to sign, all the label has to do is wait. The band cannot sign to another company or even put out their own material unless they are released from their agreement, which never happens.
Back to David Graeber
The logic of identity is, always and everywhere, entangled in the logic of hierarchy. It is only when certain people are placed above others, or where everyone is being ranked in relation to the king, or the high priest, or Founding Fathers, or that one begins to speak of people bound by their essential nature: about fundamentally different kinds of human being.
The moment we recognize someone as a different sort of person, either above or below us, then ordinary rules of reciprocity become modified or are set aside. About roman law and how it may have shaped our image of property today:
“At this point we can finally see what’s really at stake in our peculiar habit of defining ourselves simultaneously as master and slave, reduplicating the most brutal aspects of the ancient household in our very concept of ourselves, as masters of our freedom, or as owners of our very selves. It is the only way that we can imagine ourselves as completely isolated beings. There is a direct line from the new Roman conception of liberty — (…) as the kind of absolute power of ‘use’ and ‘abuse’ (…) — to the strange fantasies of liberal philosophers like Hobbes, Locke and Smith, about the origin of human society in some collection of (…) males who seem to have sprung from the earth fully-formed, then have to decide whether to kill each other or to begin to swap beaver pelts.”
p. 332:
“The story of the origins of capitalism, then, is not the story of the gradual destruction of traditional communities by the impersonal power of the market. It is, rather, the story of how an economy of [personal] credit [among people] was converted into an economy of interest; of the gradual transformation of moral networks by the intrusion of the impersonal -and often vindictive- power of the state.”
David Graeber
EASTERN PROMISES
(The title could cover a dozen meanings, one being the promises told to poor young Eastern girls about a better life in the West)
THE CONTRACT
The final contract, it’s not quite what they expected as they turn it over to a lawyer–one who says he’s experienced in entertainment law and he hammers out a few bugs. They’re still not sure about it, but the lawyer says he’s seen a lot of contracts, and theirs is pretty good. 360 deals are contracts that allow the record label to receive a percentage of the earnings from all of an artist’s activities rather than just earnings from record sales. 360 deals, also called “multiple rights deals,” are contracts where the record labels earn a percentage of the artist’s ancillary rights. Ancillary rights may be the earnings made from: concert revenue, merchandise sales, endorsement deals, and ringtones. In exchange for receiving a larger percentage of the money made by the artists they represent, the labels say they will commit to promoting the artist for a longer period of time and will actively try and develop new opportunities for them. Essentially, the record label will serve as a manager and look after the artist’s entire career rather than focusing only on selling records.
Their managers and attorneys will probably tell them not to rock the boat and not to risk your “relationship” with your record company by taking a stand. Most attorneys and managers are conflicted. Almost all entertainment law firms represent both artists and record companies. Lawyers can’t take a stand against record companies because that’s where they get most of their business. Even the best managers often have business relationships with labels and depend on record companies to refer new clients.
Wow. It’s really happening. They conclude the evening by taking home a copy of a deal memo they wrote out and signed on the spot. The A & R guy was full of great ideas, dropping names here and there, even talked about using a name producer Butch Vig, michael Biehorn, who know maybe even Rick Rubin does some work outside of Columbia. Can you imagine us up there mingling with Rock Royalty, not that we care about that. We’re the best that we can be. We’ve played those fifteen tunes a hundred times
RECORDING
They decided to go with (redacted). The Grammy-nominated music producer has played a pivotal role in the making of many of the top records of the last four decades. (Redacted)10.
His recordings have achieved combined worldwide sales of more than 45 million albums, and he is one of only a handful of producers to have two separate recordings debut in Billboard’s Top Ten in the same week, which also earned him a Grammy nomination for Producer of the Year.
He had these technicians come in and tune the drums for them and tweak their amps and guitars. He had a guy bring in a slew of expensive old “vintage” microphones. Boy, were they “warm.” He even had a guy come in and check the phase of all the equipment in the control room! Boy, was he professional. He used a bunch of equipment on them and by the end of it, they all agreed that it sounded very “punchy,” yet “warm.” All that hard work paid off.
Steve Albini
HORMONES
They get drunk at the signing party. Polaroids are taken and everybody looks thrilled. The label picked them up in a limo. Now they’re on the golf course trippin’ wit’ The Osbournes. They’ve seen the show with Travis Barker: “Rockstar Mentality” They’re jumpin’ in the crowd just to see if they would carry them.
ADVANCE + TOUR SUPPORT
The first year’s advance alone is $250,000. Just think about it, a quarter million, just for being in a rock band! And they can do with it everything they want. Well, almost everything. Everybody thinks it’s a great deal, especially the large advance.
PUBLISHING COMPANY
Besides, the label owns a publishing company that will take the band on if they get signed, and even give them an advance of 20 grand, so they’ll be making that money too. They can get a lot of licensing deals, advertising on TV, Film Trailers, Soundtracks, video Games, Network Tv, Advertising online, Cable TV, and Apps. The manager says publishing is pretty mysterious but licensing not so much, and nobody really knows where all the money comes from, but the lawyer can look that contract over too. Hell, it’s free money and free exposure
BOOKING AGENT/TOURING
The label is happy to get the ball rolling they will put on a 28-day tour. 24 shows in 23 cities around the United States. There’ll be crowd surfing etc. After the tour sold just under $100,000 in tickets, and they got to rock out with people They love for a full month. They sold 1129 tickets in San Francisco at the Fillmore. They’ll remember that night for the rest of my life.
BAND MEMBER NET INCOME EACH:
$ 10,750
CASE STUDY: DEBT IN THE MUSIC INDUSTRY
The band feels on top of the world. They feel they hit it big time, when the album hits the charts and generates the sale of a quarter of a million albums and their 5 week tour is sold out.
Overall, the album, publishing, merchandizing and tour have generated $3,243,000.
Little do they know that things are not as sweet as they seem. When all is said and done, the members of the band will only ever see $10,750 each .%1.65-% 2 of the advance goes into their pockets. Compare yourself to actors and baseball players. Like the music business, the film and the sports industries generate billions of dollars in income each year, but those industries offer far better benefits to the men and women who create their wealth. The Screen Actors Guild offers a fantastic health care plan to its members. That health plan is paid for by the contracts that SAG has negotiated with film studios. The baseball player’s union has negotiated a pension plan that ensures that NO major league player ever finds himself without an income.
Multiplatinum artists like TLC (“Ain’t 2 Proud 2 Beg,” “Waterfalls” and “No Scrubs”) and Toni Braxton (“Unbreak My Heart” and “Breathe Again”) have been forced to declare bankruptcy because their recording contracts didn’t pay them enough to survive.
Corrupt recording agreements forced the heirs of Jimi Hendrix (“Purple Haze,” “All Along the Watchtower” and “Stone Free”) to work menial jobs while his catalog generated millions of dollars each year for Universal Music.
Florence Ballard from the Supremes (“Where Did Our Love Go,” “Stop in the Name of Love” and “You Keep Me Hangin’ On” are just 3 of the 10 #1 hits she sang on) was on welfare when she died.
Collective Soul earned almost no money from “Shine,” one of the biggest alternative rock hits of the 90s when Atlantic paid almost all of their royalties to an outside production company.
Merle Haggard (“I Threw Away the Rose,” “Sing Me Back Home” and “Today I Started Loving You Again”) enjoyed a string of 37 top-ten country singles (including 23 #1 hits) in the 60s and 70s. Yet he never received a record royalty check until last year when he released an album on the indie punk-rock label Epitaph.
AFTERMATH: INTERVENTION
p.319:
“Scholars have long been fascinated by Spanish debates about the humanity of the Indians. (…) The real point is that at the key moments of decision, none of this mattered. Those making the decision did not feel they were in control anyway; those who were did not particularly care to know the details. (…) Charles V himself was deeply in debt to banking firms in Florence, Genoa, and Naples. (…) Despite a lot of initial noise and morel outrage (…) such decrees were either ignored or, at best, enforced for a year or two before being allowed to slip into abeyance.”
The band is now 1/4 of the way through its contract, has made the music industry more than 3 million dollars richer, but is in the hole $30,000 on royalties. The band members have each earned about 1/3 as much as they would working at a 7–11, but they got to ride in a tour bus for a month.
The record company would lie to talk to them. There are testimonials by those whose lives have been destroyed by the ban’s harmful behaviour. There are compassionate but severe admonitions by the label boss, who here plays the part of priest or revivalist. There’s a moment of seeing the light, followed by repentance and a promise never to do it again. There’s a penance imposed-snip, snip go the scissors on the credit cards-followed by a strict curb on-spending regimen; and finally, if all goes well, the debts are paid down, the sins are forgiven, absolution is granted, and a new day dawns, in which a sadder but more solvent man you rise the morrow morn.
The next album will be about the same, except that the record company will insist they spend more time and money on it. Since the previous one never “recouped,” the band will have no leverage, and will oblige. Tell people that they are potential equals who have failed, and that therefore, even what they do have they do not deserve, that it isn’t rightly theirs, they are unlikely to be pleased, but this surprisingly rarely leads to armed revolt.
YOU HAVE TO PAY YOUR DEBTS
“‘But,, ‘they’d borrowed the money! Surely one has to pay one’s debts.’” Graeber reminds her that even in standard economic theory, “a lender is supposed to accept a certain degree of risk.” Indeed, the higher the anticipated return, the more likely the danger of default. Yet the premise that “surely one has to pay one’s debts” is so persuasive, Graeber writes, “because it’s not actually an economic statement: it’s a moral statement.” A debt, by definition, is something you owe that must be repaid.
After all, isn’t paying one’s debts what morality is supposed to be all about? Giving people what is due them. Accepting one’s responsibilities. Fulfilling one’s obligations to others, just as one would expect them to fulfill their obligations to you. What could be a more obvious example of shirking one’s responsibilities than reneging on a promise, or refusing to pay a debt?
SATISFIERS
It’s fascinating that what Graeber is saying is that people exploit themselves by taking out debt to invest in the same corporations that then own them. Insofar as it was borrowed for what economists like to call discretionary spending, it was mainly to be given to children, to share with friends, or otherwise to be able to build and maintain relations with other human beings that are based on something other than sheer material calculation. One must go into debt to achieve a life that goes in any way beyond sheer survival.
People are trying to continue to do what they have always done which is provide for their tribe but instead of that debt being communal it has become capitalistic and charged interest rates, reducing individuals to slaves (of markets).
Ultimately, it’s sociality itself that’s treated as abusive, criminal, demonic. To this, most ordinary Americans —and others who are formerly excluded from credit — have responded with a stubborn insistence on continuing to love one another.
