Substack became an appealing sanctuary for media’s heterodox refugees because people are most likely to pay for a newsletter that offers them something they can’t get from other outlets. Ironically, thanks to the cancellation artists, viewpoint diversity is one thing that’s getting harder to find in bigger places with more resources.
That’s not the only thing people look for on Substack — newspapers also don’t provide 1,500-word missives on the history and preparation of craft cocktails, which is why my husband, a political writer, runs a successful cocktail newsletter on the side. But viewpoint diversity is obviously profitable. So profitable, in fact, that one wonders why woke capital doesn’t do what capital normally does and go after a lucrative economic niche.
Recently, economist Cameron Harwick suggested one possibility: We actually are witnessing woke capital do what capital normally does, if the capitalist controls a monopoly. That is, extracting excess returns from the market — what economists call “rents.”
Companies with valuable monopolies typically force higher prices from customers, a.k.a. “economic rents.” Labor monopolies, however, often prefer fringe benefits to straight cash. And woke capital, Harwick argues, is actually the creation of a labor cartel: the highly progressive monoculture of professional workers. To keep them happy, institutions that employ a lot of professionals have been pressured toward a narrow ideological consensus, corresponding to the views of roughly the left-most 8 percent of the American electorate. It’s a hidden fringe benefit that Harwick dubs “ideological rents.”