Bryan Caplan  

Becker versus the Comics Code

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In the early 1950s, American comics were edgy.  Newsstands carried the usual kid stuff, but they also featured genres like graphic horror, true crime, and noir.  Then came a fear-mongering psychiatrist, a Congressional inquiry, and threats of censorship.  The industry decided to preempt criticism with self-censorship, setting up the absurdly skittish Comics Code Authority.  Soon the Comics Code seal was de rigueur to get on the newsstands, and edgy comics all but vanished from the U.S. market for a generation.

If you're familiar with Gary Becker's The Economics of Discrimination, these facts ought to surprise you.  This looks like a classic case of consumer-on-consumer discrimination: Newsstands refused to carry unapproved comics because they were worried that they would offend other customers - especially uptight parents.  The standard Beckerian prediction is segregation: Some stores will cater to prudes, and the rest will specialize in edgier fare.  While this happened to a slight extent - "alternative" comics were often sold side-by-side with drug paraphernalia - the Comics Code seemed to have a huge effect not just on where edgy comics were sold, but on whether they existed at all.

It's tempting to blame government, but hard to give it more than a supporting role.  When an industry falls under government scrutiny, the classic response is to promise better behavior, make token changes, and wait for the government spotlight to move on to the next scapegoat.  But the comics industry remained puritanical for decades.

What gives?  Before you answer, consider Iron Age's account of how the Comics Code came crumbling down:
In 1972... New York convention organizer Phil Seuling made an arrangement to purchase comics directly from publishers rather than from newsstand distribution organizations.  Gathering together orders from the few stores at the time specialized in selling comic books, Seuling convinced the publishers to waive shipping costs in exchange for purchasing the comics on a non-returnable basis.  With that agreement, the direct market for comics was born.

A direct distribution channel between publishers and stores benefited both ends... The non-returnable orders from the direct market not only allowed the publishers to escape that risk [of returns], but also helped them set their print orders more precisely.  In return, publishers could give stores in the direct market a high discount... Moreover, specialty stores receive their comics sooner and in better condition than those sent to newsstands, attracting more of the growing number of comic book collectors to their stores...

Growth of the direct market in the 1970s was slow and steady, but during the 1980s that growth became explosive.  In 1979, the direct market represented 6 percent of Marvel's gross sales; by 1985, that number had risen to 50 percent, and the other major publishers were seeing similar numbers... The readers and collectors coming into a direct market store were focused, returning every month and often every week for the latest comics. 
In the direct market, breaking the Comics Code with titles like Wolverine actually became a plus: "The cover (and the series) might have caused controversy if it were sold at newsstands, where parents passing by still believed comics were children's fare.  In the direct market, it was a hit." (Iron Age)

So why did the Beckerian segregation mechanism take decades to work?  Kids seem to have been the key friction.  When kids like a product and their parents don't, setting up specialty stores doesn't work very well.  The kids don't just depend on their parents for money; they need them for transportation!  Once the adult fanboy market hit critical mass, though, market forces cut loose, just as Becker would have expected. 

Triumphalist upshot: Now that parentally-disapproved material is never more than a mouse-click away, self-censorship has no future.  If you don't print what the customers want, someone else will - even if the customers are way too young to drive.


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COMMENTS (8 to date)
Franklin Harris writes:

My suspicion is the larger publishers sought to use the Comics Code to ward off competition. Most of the edgy comics came from upstart publishers, like EC Comics, which were using that edginess to compete with larger publishers like National/DC and Archie. For the major publishers, the Code wasn't a major bother. For EC and others, it was devastating.

National/DC also controlled its own distribution, which gave it leverage over the newsstands. So, basically, the Code was a cover for collusion, which the major players used to drive out the smaller players, and which could be enforced through vertically organized distributors down to the retail level. (I touched on this in a Reason piece I wrote in 2005, but I didn't play up the collusion angle enough, in retrospect.)

agnostic writes:

"self-censorship has no future. If you don't print what the customers want, someone else will"

Unless, that is, the customers want you to self-censor, as you alluded to at the beginning. That's not just parents -- even kids can be prudes and bores.

Your example is of kids during the 1950s -- has everyone already forgotten how tame and prudish the decade was, minus the last couple of years? It wasn't just parents who lost interest in edgy stuff; it was the kids too.

Look at how little T&A there is in movies. I've actually collected data on that, and it started falling in the early-mid-'90s. Movie studios don't make it anymore. Why? People kids aren't interested in it anymore in the wake of the sexual counter-revolution of the early 1990s.

Same with explicit violent or sexual themes in pop music -- kids aren't interested in it anymore. Male stars in rap brag about what a bigshot and big-spender they are; in "rock," about how boyishly awkward they are around the girl. Female stars in rap / R&B brag about how great and unobtainable they are; in "rock," about how neat a thing a girly crush is.

agnostic writes:

To answer why the demand for prudery among the majority doesn't result in a mainstream/niche split, but instead keeps most niche stuff from getting made in the first place -- superstar effects (nearly infinite scalability).

All cultural production is highly risky and usually goes nowhere in terms of capturing market share and consumer dollars. To make it, you have to hit one out of the park, which will be unimaginably rare.

So as long as you're looking at a big chance of nothing and a 1 in a million chance of making a superstar, why not target the audience where the revenues from a superstar would be greater -- by orders of magnitude?

To give another example, lots of people still own and play old video game systems, yet no one makes new games for them at all. Why? Most players may demand no such investment from a game developer be put toward that use -- they demand instead that it be put toward games for current systems.

Why doesn't this lead to segregation, with most developers making games for current systems but a good handful making new games for Nintendo and TurboGrafx? Infinite scalability. Most of those games for old systems would earn nothing, and even a superstar would only get dollars from a small niche audience. A superstar could get the same dollars per customer but for an audience that's orders of magnitude greater.

agnostic writes:

...if they made this superstar game for a current system.

Steve Sailer writes:

How's the comic book market doing these days?

Kevin writes:

Agnostic all you're saying is that the bid is too weak in niche markets. This has nothing to do with superstars. If Turbografx gamers were willing to pay hundreds (thousands? millions?) of dollars per customer, developers would produce for them, even knowing that they can't have a superstar. Ferrari knows it won't sell a million cars, but it still produces because there is a strong bid for their small volume of output.

Also, about sex and violence in movies, you say you have collected data on the decline of T&A and while I can't say the same, I note that Piranha 3D is coming out next week to a decent amount of fanfare, so be on the lookout for a change in your trend.

Hyena writes:

Wait. So, you're saying that the market failed to provide an obvious and profitable product for decades because of the mechanics of that market?

Scandalous!

Tracy W writes:

To answer why the demand for prudery among the majority doesn't result in a mainstream/niche split

But we do see, normally, a mainstream/niche split. For example there are a lot of genres in fiction (SF and Fantasy, Romance, Crime, Literary...). Every now and then there's a big crossover hit, like the Harry Potter series or the Da Vinci code, but it's clearly profitable to publish books for only a genre.

Same with movies, rom-coms, arthouse, horror, documentaries, etc. Music - classical, country, jazz.

It's the comic books that are unusual, not the general principle.

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