Friday 12 October 2012

Pixar vs Dreamworks: Karl Marx predicted it.

Below is the story about the feud between Pixar and Dreamworks, the two US competitors in the business of making computer generated imagery movies like 'Toy Story' and 'Shrek'. At one level, it's just another story of feuds in showbiz. At another it's a parable of modern capitalism.

Marx suggested that as capitalism develops, there is a demand built into competition that firms have to invest more in plant and what we now call 'new technology' in order to cut costs. What happens is that the proportion of labour costs to investment in technology costs changes. Relatively speaking, the proportion increases in favour of the technology costs. Marx developed 'the labour theory of value' ie that ultimately all value derives from human brain and body effort. So following from this change in the proportion, then the more the owners of businesses strive to cut costs through investing in technology the less able they are to make profit. Or, the rate of exploitation goes up ie the amount of profit per worker goes up, but the 'rate of profit' or 'profitability' goes down ie there is less profit to be made in the competitive world of shrinking labour forces and increasing technology bills. This is the 'decline in the rate of profit' theory of why capitalism is getting into difficulties. There are ways round this - some more effective than others: eg conquering countries that have large supplies of essential raw materials; finding ways of enforcing sales on people who may not necessarily want the goods; reducing wages by drastic amounts; enabling or encouraging massive tax evasion. Ideally, corporations start to yearn for all these solutions: ie war, protection, wage freezes, tax cuts, tax havens, tax dodges and so on.

However, this leaves out what we now call the 'finance sector'. They appear to have a semi-autonomous role within capitalism. Whether it is or isn't is not totally clear, but they too are bound by the need to make profits.  It soon becomes clear to them whether lending billions to vast corporations is going to bring them returns or not. And inevitably, the investment and venture funds will go towards what appear to be the places where the biggest and quickest buck can be made. At this point, lunacy takes over. People come up with seemingly plausible schemes for doing this: like selling debts in 'parcels' or lying about selling debts in parcels. To each other! It seems as if this is what the 'finance sector' cowboys did for several years, adding on percentages of debt each time they sold packages to each other, whilst pretending (it seems) as if the debts were smaller than they were and/or that they were 'secure' ie attached to things of value like houses and people who could pay back the loans given to them.

We now know that many people couldn't pay back the loans, the people who bought the debts (thinking that they could make money out of holding them and receiving dead cert interest payments for them) discovered that they were debts that couldn't be paid back, and if these 'people' were banks, the next thing that happened is that they told the governments in the countries they were based that they were about to go bust, so could the governments give them money to survive or indeed take them over. Some governments have said, yes, or said that they would if they had to and in so doing have hiked government debts to real or predicted new heights. This then puts the governments in a pincer grip whereby one set of banks are crying for help while another set of banks are saying that we'll only lend you the money if you cut public expenditure (ie sack people, close down welfare, health, schools etc).

That's where we're at.

But the chain starts with chunks of capital fighting each other over what I'm calling technology - investment in new faster, cheaper means of production - often called 'modernisation'.

Quite a lot of this goes on out of sight of mere mortals like us. We don't know or don't understand exactly how major corporations re-jig their production systems. And if we did know, we probably wouldn't get very excited by it.

But - and it's a big but (as my teachers used to say) - when it comes to movies, it's all a bit more naked and (I think) a bit more interesting. So what follows is a parable of modern capitalism. Old buddies falling out (that's the personal stuff) over what is really a massive struggle on the politico-economical level, a struggle predicted by Marx well over a hundred  years ago, a struggle over technology being used as the means by which firms need to do better than each other and in peacetime they have only one major way of doing it. And that's what Pixar and Dreamworks have done and are doing and it's expressed in personal terms as a row over 'A Bug's Life' and 'Antz'. Irony within ironies here: one reading of 'A Bug's Life' is that it's a moral fable about colonialism and/or imperialism: parasitic insects preying off others, milking them for their surplus. Yes, that is one way to try and stem off the inexorable mass of the decline in profitability.

Now hold it there, Rosen! You're beginning to talk as if deep down John Lasseter knows this... Are you, Rosen?

Well, anyway, here's the story as told by wikipedia:

During the production of A Bug's Life, a public feud erupted by DreamWorks' Jeffrey Katzenberg and Steve Jobs & John Lasseter of Pixar. Katzenberg, former chairman of Disney's film division, had left the company in a bitter feud with CEO Michael Eisner. In response, he formed DreamWorks SKG with Steven Spielberg and David Geffen and planned to rival Disney in animation.[14] After DreamWorks' acquisition of Pacific Data Images (PDI) —long Pixar's contemporary in computer animation— Lasseter and others at Pixar were dismayed to learn from the trade papers to learn that PDI's first project at DreamWorks would be another ant film, to be called Antz.[15] By this time, Pixar's project was well-known within the animation community.[16] Both Antz and A Bug's Life center on a young male, a drone with oddball tendencies who struggles to win a princess's hand by saving their society.[17] Whereas A Bug's Life relied chiefly on visual gags, Antz was more verbal and revolved more around satire. The script of Antz was also heavy with adult references, whereas Pixar's film was more accessible to children.[17]
It was clear that Lasseter and Steve Jobs believed that the idea was stolen by Jeffrey Katzenberg.[3][14] Katzenberg had stayed in touch with Lasseter after the acrimonious Disney split, often calling to check up. In October 1995, when Lasseter was overseeing postproduction work on Toy Story at the Technicolor facility on the Universal lot in Universal City, where DreamWorks was also located, he called Katzenberg and dropped by with Stanton.[14][18] When Katzenberg asked what they were doing next, Lasseter described what would become A Bug's Life in detail. Lasseter respected Katzenberg's judgment and felt comfortable using him as a sounding board for creative ideas.[18] Lasseter had high hopes for Toy Story, and he was telling friends throughout the tight-knit computer-animation business to get cracking on their own movies. "If this hits, it's going to be like space movies after Star Wars" for computer-animation companies, he told various friends.[3] "I should have been wary," Lasseter later recalled. "Jeffrey kept asking questions about when it would be released."[14]
When the trades indicated production on Antz, Lasseter, feeling betrayed, called Katzenberg and asked him bluntly if it were true, who in turn asked him where he had heard the rumor. Lasseter asked again, and Katzenberg admitted it was true.[3] Lasseter raised his voice and would not believe Katzenberg's story that a development director had pitched him the idea long ago. Katzenberg claimed Antz came from a 1991 story pitch by Tim Johnson that was related to Katzenberg in October 1994.[3] Another source gives Nina Jacobson, one of Katzenberg's executives, as the person responsible for Antz pitch.[16] Lasseter, who normally did not use coarse language, cursed at Katzenberg and hung up the phone.[19] Lasseter recalled that Katzenberg began explaining that Disney was "out to get him" and that he realized that he was just cannon fodder in Katzenberg's fight with Disney.[3][16] In truth, Katzenberg was the victim of a conspiracy: Eisner had decided not to pay him his contract-required bonus, convincing Disney's board not to give him anything.[16] Katzenberg was further angered by the fact that Eisner scheduled Bugs to open the same week as The Prince of Egypt, which was then intended to DreamWorks' first animated release.[16][19] Lasseter grimly relayed the news to Pixar employees but kept morale high. Privately, Lasseter told other Pixar executives that he and Stanton felt terribly let down by Katzenberg.[16]
Kaztenberg moved the opening of Antz from March 1999 to October 1998 to compete with Pixar's release.[16][20] David Price writes in his 2008 book The Pixar Touch that a rumor, "never confirmed," was that Katzenberg had given PDI "rich financial incentives to induce them to whatever it would take to have Antz ready first, despite Pixar's head start."[16][19] Steve Jobs was furious and called Katzenberg and began yelling. Katzenberg made an offer: He would delay production of Antz if Jobs and Disney would move A Bug’s Life so that it didn’t compete with Prince of Egypt. Jobs believed it "a blatant extortion attempt" and would not go for it, explaining that there was nothing he could do to convince Disney to change the date.[3][19] Katzenberg casually responded that Jobs himself had taught him how to conduct similar business long ago, explaining that Jobs had come to Pixar's rescue by making the deal for Toy Story, as Pixar was near bankruptcy at that time.[10] "I was the one guy there for you back then, and now you’re allowing them to use you to screw me," Katzenberg said.[19] He suggested that if Jobs wanted to, he could simply slow down production on A Bug’s Life without telling Disney. If he did, Katzenberg said, he would put Antz on hold.[3] Lasseter also claimed Katzenberg had phoned him with the proposition, but Katzenberg denied these charges later.[11]
As the release dates for both films approached, Disney executives concluded that Pixar should keep silent on the DreamWorks battle. Regardless, Lasseter publicly dismissed Antz as a "schlock version" of A Bug's Life.[13] Lasseter, who claimed to have never seen Antz, told others that if DreamWorks and PDI had made the film about anything other than insects, he would have closed Pixar for the day so the entire company could go see it.[3][17] Katzenberg and Jobs would not back down and the rivaling ant movies provoked a press frenzy. "The bad guys rarely win," Jobs told the Los Angeles Times. In response, DreamWorks’ head of marketing Terry Press suggested, “Steve Jobs should take a pill."[19] Despite the successful box office performance of both Antz and A Bug's Life, tensions would still be high between Jobs and Katzenberg for many years. According to Jobs, Katzenberg came to Jobs after the success of Shrek (2001) and insisted he had never heard the pitch for A Bug's Life, reasoning that his settlement with Disney would have given him a share of the profits if that were so.[21] Although the contention left all parties estranged, Pixar and PDI employees kept up the old friendships that had arisen from spending a long time together in computer animation.[11]