Freebies, Part 2 – Pricing Creative Labor

I’m writing a series of posts in response to several issues that author Tim Kreider raised in his op-ed in the New York Times called “Slaves of the Internet, Unite.” In Part 1, I discussed how trading free work for exposure isn’t always a con: Sometimes it’s just how the business works. In this part, I’d like to discuss some of the economics of pricing mental labor.

Kreider laments:

I’ve been trying to understand the mentality that leads people who wouldn’t ask a stranger to give them a keychain or a Twizzler to ask me to write them a thousand words for nothing.

The difference is in how the price is established. If people asked him to give them a commercial product, they would be asking him for something that he paid for himself — something which, in fact, they could buy themselves at the exact same price. That’s not much different than asking him for money.

Asking Kreider for his writing is different: First of all, Kreider is the only source of Kreider’s writing, so they can’t just buy it from a store; they have to ask him. Second, writing costs Kreider almost nothing out-of-pocket, so it’s not like they’re asking him for the equivalent of money. Third, and most important, the value Kreider places on his time is entirely up to him, and there’s nothing preventing him from setting the price as low as he wants.

Pricing creative labor is a lot like the confusing process of pricing airline tickets. Having paid maybe $100 million for an airplane, the airline wants to charge enough money to earn a good return on their investment. And once they schedule and staff a flight, they’ve already committed to the cost, so they want to make as much money off it as possible. In an ideal world, they’d like to fill every seat with a business traveler paying the full $1000 airfare on his company’s expense account.

But seats on a flight are a perishable good: Just as spoiled fruit can’t be sold at any price, once the plane leaves the terminal, the value of every empty seat falls to zero. That’s why 10 minutes before takeoff the airline will be happy to sell those $1000 seats to standby passengers for $75. As long the airline recovers the small cost in food and fuel for adding an extra passenger — maybe $50 for a coast-to-coast flight — anything else is money in the bank.

Accomplished artists like Kreider are in a similar situation. Kreider has made a large investment in his own human capital. He’s spent 20 years  building up his skills and reputation, so that 1000 written words from Kreider are a valuable thing, worth a lot more on the market than 1000 words from the rest of us. And just like an airline, he now hopes to put that investment to work for him so he can earn a decent income, selling his words for as much as possible.

On the other hand, whether he’s writing for pay, writing for free, or staring blindly at the wall of his dentist’s waiting room, each hour that goes by is an hour that he’ll never get back. At any given time, Kreider will be best off financially if he does the thing that pays the most. So if he’s got an opportunity to do a writing job that will earn him $1000, it would be a financial miscalculation for him to spend the same amount of time doing anything that pays less. On the other hand, on a day when he has no paying work anyway, he loses no income by writing for free. And like an empty seat on a plane, he loses the time whether someone is paying for it or not.

My parents…put my sister the pulmonologist through medical school, and as far as I know nobody ever asks her to perform a quick lobectomy — doesn’t have to be anything fancy, maybe just in her spare time, whatever she can do would be great — because it’ll help get her name out there.

In order to perform the lobectomy procedure, the pulmonologist would need to rent time in an operating room, rent a bunch of specialized medical equipment, hire an anesthesiologist, maybe a surgical assistant, two or three nurses, purchase consumables, run lab work…and whatever else you need for major surgery. So of course she can’t do it for free — it costs a fortune even without her labor.

But if you do work that has a low out-of-pocket cost — writer, musician, photographer, lawyer, programmer — you have little to lose financially by working for free if you’re not foregoing paying work.

I suppose people who aren’t artists assume that being one must be fun since, after all, we do choose to do it despite the fact that no one pays us. They figure we must be flattered to have someone ask us to do our little thing we already do.

I will freely admit that writing beats baling hay or going door-to-door for a living, but it’s still shockingly unenjoyable work.

That’s unfortunate for him, and it leads to one of the things that rubs me the wrong way about his article: He seems to have a contemptuous attitude not only toward people who ask for free work (understandable at times), but also by implication toward people who are willing to do free work.

The fact is, however, that a lot of us get enjoyment out of our work. It’s not exactly a crazy good time, but the human brain seems to be wired so that when we learn a useful skill, we enjoy the chance to use it. We get a rewarding feeling of accomplishment out of doing something we’re good at. So, if it costs us nothing, and we enjoy doing it, why wouldn’t we do it for free every once in a while?

Not only do I write this blog for free, I’ve done software development to support it. Last year, when I moved this blog to WordPress (Part 1, Part 2), I probably did about $10,000 worth of programming at my consulting rate, but I didn’t lose $10,000 by doing it. And in addition to porting the blog, I felt the rewarding sense of a job well-done: The port went really well.

Last spring I helped a friend set up a WordPress blog for free. At my consulting rate, the work I did probably would have cost about $1600, but that doesn’t mean I lost $1600 by doing it for free: He would never have paid that much for a website, and I did it in my spare time when I wouldn’t have been earning money anyway. I enjoyed the chance to use my skills to help someone out. I’m not saying I’ll work for free just for the sheer joy of doing so, but show me a project that’s interesting, and I just might take it up.

On the flip side, I’ve benefited from the effects of spare time and enjoyable use of skills by others. Years ago, I asked science fiction writer Joel Rosenberg to contribute to this blog for free (I didn’t realize he was a published author when I asked), and he joined me here for a while, writing several dozen posts. I don’t know exactly why he did it, but I assume that spare time and enjoying writing had something to do with it.

More recently, law clerk Marilou Auer has been proofreading some of my posts for me. I’ll post something, and a few hours later she’ll email a list of suggested corrections. I do this blog for free, so I couldn’t afford to pay her commercial proofreading rates, but she tells me she does it to keep up her mental agility.

Over the years, several lawyers I know through the internet have offered advice for free, presumably for similar reasons. (I’m not naming them because I suspect I wouldn’t be repaying their kindness by boosting their placement in a Google search for “free lawyer.”)

All of this free work irritates Kreider:

So I’m writing this not only in the hope that everyone will cross me off the list of writers to hit up for free content but, more important, to make a plea to my younger colleagues. As an older, more accomplished, equally unsuccessful artist, I beseech you, don’t give it away. As a matter of principle.

And that kind of contemptuous attitude irritates me.

Update: Part 3 is up.