Literature Under Capitalism
The author looks to literature as an example of the individualistic basis of the capitalist philosophy. Where the customer is able to choose for himself, he selects literature based upon his own tastes. There is no central authority that determines what he may (or even must) read. And from the writer's side of the deal, the writer is free to produce according to his own tastes and visions.
However, the freedom of both consumer and producer is subject to the "democracy of the market" in which customers use their dollars to reward producers whose product suits their taste. That is, a writer may write whatever he chooses, but that does not guarantee that he will be able to make a living as a writer if there are not enough customers who want to purchase his work. And a reader with highly idiosyncratic tastes may find that there is not any writer who is willing to write the kind of book he wants to read - there must be sufficient readers offering sufficient reward for a writer to serve them.
(EN: Perhaps he'll get around to it later, but this is a bit of an oversimplification because of middlemen and influencers in the literary market. There are critics who influence demand, but only by suggesting to readers what books they ought to read. There are also the booksellers who may choose or refuse to handle the work of a given writer. This could be argued to be a democratic network of censors, but in the present age of the Internet there are fewer filters/barriers to prevent a writer from finding an audience.)
In a free-market economy, it is the same for all products: there is no central control over what is produced or what is consumed. Consumers can have anything they like, provided that they like it enough to offer sufficient incentive to those who produce it; producers can put out any product they like, but will not be profitable unless consumers are willing to pay enough to cover their costs of production. This puts power in the hands of every person to decide for himself.
Prior to the industrial revolution, the printing press, and free markets, writing was an "unremunerative art" that was undertaken as a hobby. Most of the writers who produced literature of the classical age through the renaissance held other jobs. A lucky few writers had patrons, who provided for their material needs so that they had the leisure time to engage in writing. And in all cases, the publication and dissemination of writing was strictly control by authorities: kings and princes would grant permission to publish, and would punish any writer who published without their permission, or communicated ideas that were contrary to the interests of the state.
Even in the best of cases, where a writer had a patron who was both wealthy enough to support him and powerful enough to shield him from political backlash, writers were not free as they are in a capitalist system. Their writing had to please their patron - whether it pleased anyone else was immaterial because the patrol was their whole market. The hobbyist writer who worked without a patron and published his own work still had to work under the shadow of the despot - and in fear of who the next despot might be, as their whim is unpredictable. There is no freedom of expression under these conditions, no any freedom of thought.
The author believes that this is significant, because literature is about dissent. Those people who are happy with the status quo and the ideas that are condoned by the state have little motivation to write - they cannot say anything that everyone else does not already know and believe. It is those who are unhappy with the status quo and who disagree with the state-sponsored ideas that wish to communicate, to find the rare few others who share their perspective, and to convert others to their way of thinking. It is for this reason that most totalitarian states exercise strict control over publishing: any though that would question their legitimacy must be squelched to ensure the obedience of the masses. Books must be burned and their writers censured or executed to protect the interests of the state.
There is a brief mention of the downside of this system: the ability of people to have anything they want creates a market for things that others find objectionable. The pornography industry caters to tastes that many find offensive, but it exists because there are consumers who want to have it and will pay for it to be produced. Where people have the liberty to do as they please, some will choose to do things others find unpleasant. But this is a throwback to the old system, in which a central authority decides what literature and what ideas are fit for others to consume.
There can be no argument that what is most often produced in a free market is uninspired and offensive to the intellectual. The masses, who buy the most books, offer great reward to the writers who suit their tastes, and the tastes of the common man are by definition vulgar. So most literature produced in a free market caters to what most buyers care to have.
Those who blame capitalism for this are mistaken in their estimation of cause and effect - the root cause of poor literature is the poor taste of those who buy books, not the system by which they serve their tastes. They are also fond of the fallacious argument that capitalism prevents the production of great books and inspiring ideas - this is still entirely possible, but there is a smaller market for it.
And from this, we can see the folly of the censors: they believe themselves possessed of superior taste than the common man, and they believe this makes them fit to decide what others should be permitted to consume. The desire to control what others say and think is clearly narcissism and megalomania, though it may be draped in a costume of nobility and concern. Few such critics are willing to give of themselves to sponsor the writers that they consider worthwhile, and to absorb the losses that result when society rejects what they feel ought to be embraced.
(EN: There is a bit more about the popular genres of the author's time, and a suggestion about what ideas resound with the people as evidenced by the popularity of certain writers - but this is dated. It's an interesting notion, and probably a good one, to look to popular literature and entertainment in general to get a sense of a culture's values and concerns.)
Journalism and the Theater
The difference between literature and journalism is that that literature makes no pretense of being factual whereas journalism often does - but the principles that have been discussed about literature in general also apply to journalism: in a free market it is driven by consumer demand, and under despotism it is controlled by a central authority. Where the state takes control of journalism, its status as nonfiction becomes questionable. Whereas a writer in a free market can be held accountable for his lies, the state will never hold itself accountable for its own.
It's suggested that the freedom of the press is one of the most fundamental rights that is upheld in nations that respect the rights of their citizens. It represents the right of the individual to have his own thoughts, to communicate them to others, and to engage in civil debate where there is a disagreement of ideas. It is also one of the most telling signs of despotism when the press is controlled by the state and people are not free to disseminate ideas.
It's also suggested that where the state controls the press, it also controls the people: the writers, pressmen, and all other workers involved in producing state literature are not free to refuse to work or to choose other professions, and in many instances the readership of state literature is compulsory. The state leverages the educational system to disseminate literature of its choosing to an unwilling audience, and it leverages the court system to ensure citizens read the state newspapers to keep abreast of what is "safe" to talk about from one day to the next.
There's a brief mention of the theater, as plays (and later films) are merely ways of communicating ideas. In a free state there are no controls over entertainment, and it can often be seen that entertainers are openly critical of the state. Where the state controls thought, plays and performances are regulated. Censors must be appeased to put on a play or show a film, or the writers and producers recognize that they may be "held accountable" in arrears for the ideas communicated by any performance.
And again, he distinguishes between censorship by the audience and censorship by the state: if a film or play is disagreeable to public sentiments, the public itself will object and the entertainer will not be paid for his work (and must consider in advance what the public is prepared to accept). But where the state controls entertainment, the entertainer must allow his work to be edited or dictated by an authority figure, who maintains sole control over what is acceptable or unacceptable to show to the public.
(EN: It's also been suggested that in an oppressive society, it is impossible to know what is acceptable. A film that is acceptable one day may be ruled unacceptable the next, a performance that is approved by a low-ranking official might later draw the ire of a higher-ranking official. The safest route for anyone in such an environment is not to speak or produce work at all, which is why there is often very little art or literature in oppressive societies.)
The Bigotry of the Literati
There has long been the accusation of control of the literary market by a few powerful individuals, as if there is a cabal among the owners of the largest publishing houses and media outlets. This is ironic, given that the most tightly controlled "market" is one in which the state controls all publishing and all media.
But again, there may be some truth in that publishers must provide what the buying public demands, so most of what is published is chosen based on the tastes of the majority of the market. However, there is an important difference between the market in which most (but not all) literature is controlled by a few large firms: there is still the ability of smaller firms or even individuals to publish works for the niche market.
Those who advocate for state control of publishing will occasionally attempt to rectify this by suggesting that the state press would be used for anyone to publish anything - but this is a statement of fantasy. There historically has been no open press managed by the state, as resources are always limited and a decision must be made as to how to allocate ink, paper, and press-time. In a capitalist system this is done by the publishers, who own the presses and stake their personal fortunes on their ability to determine what the public wishes to consume - and ultimately the public validates this decision. In a socialist system this is done by the state, who has no responsibility to the public and whose decision is never validated.
It also cannot be denied that, under either system, those who manage the press and decide what is to be published will act according to their own values. A free-market publisher may decided to forego the publication of any material he feels is objectionable for personal reasons, just as a state-owned publisher may act on his own whims rather than his duty to the state. The free-market publisher who does so is sacrificing profit, and may do so as long as he can maintain his operations from the income of what he publishes. The state-owned publisher who does so is violating his loyalty to his superiors, and may be punished at the whim of his superiors when his disloyalty is discovered.
It's also mentioned, with some irony, that the opponents of capitalism make contradictory claims. One on hand, they will claim that the publishers pander to the lowest ranks of society and produce the most vulgar work that fails to elevate social standards. On the other hand they will claim that the publishers ignore the desires of the people and promote their own values through their selections. These are incompatible arguments - and either could be said of those who manage a state-controlled publishing operation.
(EN: Here, the author seems to take off on a tangent, about the apportioning of "national income" among different industries, about the division of profit between investors and entrepreneurs, about the way in which the amount customers pay determines the wages of labor, and a succotash of other ideas. It never does get back to the topic of literature/publishing.)
Socialist Literature
The main issue with socialist literature (novels, plays, etc.) is that it does not portray socialist ideas at all. It is merely a criticism of some of the unsatisfactory conditions of capitalism that implies that these conditions would not exist under a different system. There is no clear depiction of how socialism would do this, merely the assumption that it will. In this sense, it is a work of fantasy that panders to the dissatisfaction of the audience.
The case against capitalism is also not made with much conviction: the audience is meant to blindly accept that capitalism is to blame for whatever social malady the author chooses to blame upon it, and just as blindly accept that socialism will automatically eliminate the problem. Just as in the dogma if Marxism, the details of the causal relationship are not disclosed and the audience is meant to accept the ideology on faith and without evidence.
And therein is their fundamental failure: to claim that farming is the cause of starvation and that people would have plenty of food if farming were abolished, that manufacturing is the cause of poverty and the people would have wealth if the factories were torn down, and so on.
He suggests that those who produce and consume this literature belong to various classes of men who are divorced from reality. The first class is those who were born into poverty and do not understand how wealth is produced, and the second are those who were inheritors of wealth who likewise do not understand how it was produced. There are no authors or advocates of this genre of literature who have achieved success by their own effort - such man can recognize the premises of these stories as utter nonsense that contradicts their experience.
It's also mentioned that socialist literature, like religious texts, tends to be black-or-white in that it goes to extremes. There is no depiction of a character who is a realistic balance between good and evil - all are lionized or demonized in whole. A good character has no flaws and an evil one no virtues, and the audience is presented with an all-or-nothing proposal: to accept the story or reject it.
There is also the sense that when dogma is presented as literature, it is often ignored and considered to be benign. Those who recognize its flaws regard it as silly and nonsensical, and not worth a moment's thought, and do not recognize its power as a weapon of propaganda.