Category: News

Theories are great. I love theories. Usually they’re a wonderful conflation of thought and imagination. We all have our own pet theories on things and we teach them to do tricks or rub their tummies and have fun with them. For example, my sweetie, Mary, on a regular basis comes up with new theories of how the universe was created. They’re different each time and always fun. Sometimes they stumble near quantum theory and that gets a little spooky but, all in all, I enjoy them almost as much as she does.

My problem with theories is when they become ossified into dogma. This happens not just in religion but in all walks of life, including economics and business. Communism is a good example of an economic theory gone to dogma. One of its charming hypotheses was that, once communism had spread around the globe – as Karl Marx felt it inevitably would – all government would evaporate because we would have achieved the workers’ paradise. That theory, unfortunately, is not based on any human trait I’ve ever seen. Capitalism, on the other hand, being based on human greed, is and that’s one of the reasons it has survived and communism has not.

Capitalism and business, especially in recent years, have had their own bits of theories that are endlessly repeated like mantras until they too have become dogma. They’re applied whether they fit the situation or not, sometimes out of stupidity and other times from cupidity.

One of my least favorite bits of economic dogma is “They’re all widgets.” The word “widget” was coined, I believed, by playwright George S. Kaufman for his 1924 play Beggar On Horseback in which the protagonist must choose between his work as a composer and a steady but soul draining job in a “widget” factory. Since it was never defined, a “widget” – in the economic sense – is a synonym for “product” or, when dealing with a creative artist, the term “talent” is used. What it comes down to is that it doesn’t matter what the widget is, certain business and selling rules will apply. Soap, beef, talent, cars, drugs, beer, games, comic books, movies, TV shows – they’re all widgets. One theory fits all.

Except it doesn’t always do that. In 1989, Marvel was bought by Ron Perelman’s MacAndrews and Forbes; at the time, Marvel had maybe 70% of the sales of a very healthy direct sale market. Before Perelman’s little junket was done, Marvel was in bankruptcy and the market was in tatters. Why? Because they decided they were selling widgets. They didn’t need to know anything about comics or the market; they were going to apply sound business principles and make comics respond accordingly. (I had plenty of friends on the inside keeping me abreast of the latest theory.) Nobody could tell these guys nothing. Their business model was not simply Disney but McDonald’s which not only sells hamburgers but own the bakeries that makes the buns, the cattle ranches that supply the beef and so on.

Marvel started to bring its licenses inside the company with the idea that they would supply the product. Since trading cards were so popular, they would buy the trading card companies. They bought the companies after the interest in trading cards had already crested. Perelman’s suits were consistently behind the curve.

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