Breedlove liked the idea of moving to a more rural community with less pollution, a shorter commute, and safer schools. Menlo Park, like many urban areas at the time, did not seem to be heading in the right direction. In the end, Breedlove quit his job, sold the Silicon Valley house, packed, and moved the family to Visalia. He was not the only one. Many well-educated professionals at the time were leaving cities and moving to smaller communities because they thought those communities were better places to raise families. But things did not turn out exactly as they expected.

In 1969, both Menlo Park and Visalia had a mix of residents with a wide range of income levels. Visalia was predominantly a farming community with a large population of laborers but also a sizable number of professional, middle-class families. Menlo Park had a largely middle-class population but also a significant number of working-class and low-income households. The two cities were not identical—the typical resident of Menlo Park was somewhat better educated than the typical resident of Visalia and earned a slightly higher salary—but the differences were relatively small. In the late 1960s, the two cities had schools of comparable quality and similar crime rates, although Menlo Park had a slightly higher incidence of violent crime, especially aggravated assault. The natural surroundings in both places were attractive. While Menlo Park was close to the Pacific Ocean beaches, Visalia was near the Sierra Nevada range and Sequoia and Kings Canyon National Parks.

Today the two places could not be more different, but not in the way David Breedlove envisioned. The Silicon Valley region has grown into the most important innovation hub in the world. Jobs abound, and the average salary of its residents is the second highest in America. Its crime rate is low, its school districts are among the best in the state, and the air quality is excellent. Fully half of its residents have a college degree, and many have a PhD, making it the fifth best educated urban area in the nation. Menlo Park keeps attracting small and large high-tech employers, including most recently the new Facebook headquarters.

By contrast, Visalia has the second lowest percentage of college-educated workers in the country, almost no residents with a postgraduate degree, and one of the lowest average salaries in America. It is the only major city in the Central Valley that does not have a four-year college. Its crime rate is high, and its schools, structurally unable to cope with the vast number of non-English-speaking students, are among the worst in California. Visalia also consistently ranks among American cities with the worst pollution, especially in the summer, when the heat, traffic, and fumes from farm machines create the third highest level of ozone in the nation.

Not only are the two communities different, but they are growing more and more different every year. For the past thirty years, Silicon Valley has been a magnet for good jobs and skilled workers from all over the world. The percentage of college graduates has increased by two-thirds, the second largest gain among American metropolitan areas. By contrast, few high-paying jobs have been created in Visalia, and the percentage of local workers with a college degree has barely changed in thirty years—one of the worst performances in the country.

For someone like David Breedlove, a highly educated professional with solid career options, choosing Visalia over Menlo Park was a perfectly reasonable decision in 1969. Today it would be almost unthinkable. Although only 200 miles separate these two cities, they might as well be on two different planets.

The divergence of Menlo Park and Visalia is not an isolated case. It reflects a broader national trend. America’s new economic map shows growing differences, not just between people but between communities. A handful of cities with the “right” industries and a solid base of human capital keep attracting good employers and offering high wages, while those at the other extreme, cities with the “wrong” industries and a limited human capital base, are stuck with dead-end jobs and low average wages. This divide—I will call it the Great Divergence—has its origins in the 1980s, when American cities started to be increasingly defined by their residents’ levels of education. Cities with many college-educated workers started attracting even more, and cities with a less educated workforce started losing ground. While in 1969 Visalia did have a small professional middle class, today its residents, especially those who moved there recently, are overwhelmingly unskilled. Menlo Park had many low-income families in 1969, but today most of its new residents have a college degree or a master’s degree and a middle- to upper-class income. Geographically, American workers are increasingly sorting along educational lines. At the same time that American communities are desegregating racially, they are becoming more segregated in terms of schooling and earnings.

Certainly any country has communities with more or less educated residents. But today the difference among communities in the United States is bigger than it has been in a century. The divergence in educational levels is causing an equally large divergence in labor productivity and therefore salaries. Workers in cities at the top of the list make about two to three times more than identical workers in cities at the bottom, and the gap keeps growing.

Cities with a high percentage of skilled workers offer high wages not just because they have many college-educated residents and these residents earn high wages. This would be interesting but hardly surprising. But something deeper is going on. A worker’s education has an effect not just on his own salary but on the entire community around him. The presence of many college-educated residents changes the local economy in profound ways, affecting both the kinds of jobs available and the productivity of every worker who lives there, including the less skilled. This results in high wages not just for skilled workers but for most workers.

I consider the Great Divergence to be one of the most important developments in the United States over the past thirty years. The growing economic divide between American communities is not an accident but the inevitable result of deep-seated economic forces. More than traditional industries, the knowledge economy has an inherent tendency toward geographical agglomeration. In this context, initial advantages matter, and the future depends heavily on the past. The success of a city fosters more success, as communities that can attract skilled workers and good jobs tend to attract even more. Communities that fail to attract skilled workers lose further ground.

The growing divergence of American communities is important not just in itself but because of what it means for American society. While the divide is first and foremost economic, it is now beginning to affect cultural identity, health, family stability, and even politics. The sorting of highly educated Americans into some communities and less educated American into others tends to magnify and exacerbate all other socioeconomic differences. For example, there are vast differences in life expectancy among inhabitants of American cities, and these differences have been expanding for the past three decades. The divorce rates, crime rates, and political clout of different communities have also been diverging. These trends are reshaping the very fabric of our society.

The United States is not in particularly high spirits these days. Fear of economic decline is widespread, and insecurity about America’s standing in the world and its economic future is growing. Talk of the “death of the American dream” is everywhere, from well-articulated op-ed pieces to crude talk radio shows, from casual barbershop conversations to highbrow academic symposia. In a nation sharply divided along political lines, concern about the economy is shared almost equally by those on the left and on the right.

On the surface it seems we have good reason to be worried. Middle-class salaries are declining. Good jobs are scarce. Take the typical forty-year-old male worker with a high school education: today his hourly wage is 8 percent lower than his father’s was in 1980, adjusted for inflation. This means that for the first time in recent American history, the average worker has not experienced an improvement in standard of living compared to the previous generation. In fact he is worse off by almost every measure. On top of this, income inequality is widening. Uncertainty about the future is now endemic.

But the economic picture is more complex, more interesting, and more surprising than the current debate suggests. America’s labor market is undergoing a momentous shift. While some sectors and occupations are dying, others are growing stronger, and still others, just born, promise to alter the landscape dramatically. Most of all, the geography of jobs is changing in profound and irreversible ways. While these trends are national, even global, in scope, their effects are profoundly different in different cities and regions of the country. For example, the effects of globalization, technological progress, and immigration on American workers are not uniform across the United States. They favor the residents of some cities and hurt the residents of others. As old manufacturing capitals disappear, new innovation hubs are rising and are poised to become the new engines of prosperity. An unprecedented redistribution of jobs, population, and wealth is under way in America, and it’s likely to accelerate in the decades to come.

Some of the changes in the economic map reflect long-run forces that are outside our control. Others can be shaped and managed. But none of them are random, chaotic, or unpredictable. In the end, they all reflect clear and rather basic economic principles. Unfortunately, they tend to be obscured by the flood of data on the fluctuations of the stock market or the latest employment numbers. The focus on short-term events often results in information that is incomplete, irrelevant, or both. What happened today, this week, or even this month is not very illuminating, because the fundamentals of an economy evolve at a much slower pace.

But if we take a step back and look at the big picture, the forces that have been driving these changes reveal themselves very clearly. They are far more fascinating and much more important than the daily movements of the Dow Jones. This book examines the long-term trends that really matter to our lives—the vast changes that have taken place in the American labor market over the past three decades and the economic forces underlying these changes. But it also looks forward, seeking to provide insight into the trends that will shape our economy over the next three decades.

Economists like to distinguish cyclical change, the ups and downs of the economy driven by the endless cycle of recessions and expansions, from secular change, the long-run developments that are driven by deep-seated but slower-moving economic dynamics. Most of the current public debate on the economy—in the media, in Congress, in the White House—focuses on the former. The time horizon in this debate is six months or a year at most: How do we end the recession? What should be in this year’s budget? How will unemployment affect the next election? In this book, the focus is almost entirely on the forces that drive long-run trends. Understanding why these changes are taking place, where they are occurring, and how they are affecting individual Americans is crucial. Our jobs, our communities, and our economic destiny are at stake.

The changes taking place in the United States can be seen around the globe. New economic powerhouses are displacing old ones. What used to be tiny, barely visible dots on the map have turned into thriving megalopolises with thousands of new companies and millions of new jobs. Nowhere are these changes more obvious than in the Chinese city of Shenzhen. If you have not heard of it, you will. It is one of the fastest-growing cities in the world. In just three decades it has gone from being a small fishing village to being a huge metropolis with more than 10 million residents. In the United States, a fast-growing city like Las Vegas or Phoenix may triple or quadruple in size over a thirty-year period. Shenzhen’s population has grown by more than 300 times in the same period. In the process, Shenzhen has become one of the manufacturing capitals of the world.

Shenzhen’s rise is truly remarkable because it parallels almost perfectly the decline of U.S. manufacturing centers. Thirty years ago Shenzhen was an unremarkable small town that no one outside of southern Guangdong Province had even heard of. Its fate—as well as the fate of millions of American manufacturing workers —was sealed in 1979, when the Chinese leadership singled it out to be the first of China’s “Special Economic Zones.” These zones quickly became a magnet for foreign investment. In turn, that flow of investment led to thousands of new factories. These factories are where many American manufacturing jobs have gone.

As Detroit and Cleveland have declined, Shenzhen has grown. Massive production facilities of all kinds carpet the region. Every year the skyline adds new high-rise offices and apartments, and its workforce swells as more and more farmers leave rural areas to look for better-paying jobs in its cavernous factories. The Chinese call it the city with “one high-rise a day and one boulevard every three days.” As you walk along its wide streets, you feel the city’s energy and optimism. Shenzhen has been China’s top exporter for the past two decades and has built one of the world’s busiest ports, a sprawling facility dotted with huge cranes, enormous trucks, and containers of all colors. Twenty-four hours a day, seven days a week, 365 days a year, these containers are loaded onto enormous cargo ships bound for the West Coast of the United States. Twenty-five million of these containers leave the port each year, almost one per second. In less than two weeks that merchandise will be on a truck headed for a Walmart distribution center, an IKEA warehouse, or an Apple store.

Shenzhen is where the iPhone is assembled. If there is a poster child of globalization, it is the iPhone. Apple has given as much attention to designing and optimizing its supply chain as to the design of the phone itself. The process by which the iPhone is produced illustrates how the new global economy is reshaping the location of jobs and presenting new challenges for American workers.

Apple engineers in Cupertino, California, conceived and designed the iPhone. This is the only phase of the production process that takes place entirely in the United States. It involves product design, software development, product management, marketing, and other high-value functions. At this stage, labor costs are not the main consideration. Rather, the important elements are creativity and ingenuity. The iPhone’s electronic parts—sophisticated, but not as innovative as its design—are made mostly in Singapore and Taiwan. Only a few components are made in the United States. The last phase of production is the most labor-intensive: workers assemble the hardware and prepare it for shipping. This part, where the key factor is labor costs, takes place on the outskirts of Shenzhen. The facility is one of the largest in the world, and its sheer size is extraordinary: with 400,000 workers, dormitories, stores, and even cinemas, it is more like a city within a city than a factory. If you buy an iPhone online, it is shipped directly to you from Shenzhen. Incredibly, when it reaches the American consumer, only one American worker has physically touched the final product: the UPS delivery guy.

At a superficial level, the story of the iPhone is troubling. Here you have an iconic American product that has captivated consumers everywhere, but American workers are involved only in the initial innovation phase. The rest of the process, including the making of the sophisticated electronic components, has been moved overseas. It is therefore natural to wonder what might be left to American workers in the decades to come. Is America entering a phase of irreversible decline?

Over the past half century, the United States has shifted from an economy centered on producing physical goods to one centered on innovation and knowledge. Jobs in the innovation sector have been growing disproportionately fast. The key ingredient in these jobs is human capital, which consists of people’s skills and ingenuity. In other words, humans are the essential input—they are coming up with the new ideas. The same two forces that have decimated traditional manufacturing, globalization and technological progress, are now driving the rise of jobs in the innovation sector. The Great Recession has temporarily halted this growth, but the long-term trend points upward.

Globalization and technological progress have turned many physical goods into cheap commodities but have raised the economic return on human capital and innovation. For the first time in history, the factor that is scarce is not physical capital but creativity. Not surprisingly, innovators capture the largest share of the value of new products. The iPhone is made of 634 components. The value created in Shenzhen is very low, because assembly can be done anywhere in the world. Even sophisticated electronic parts, like flash memories and retina displays, create limited value, because of strong global competition. The majority of the iPhone’s value comes from the original idea, its unique engineering, and its beautiful industrial design. Essentially this is why Apple receives $321 for each iPhone—much more than any part supplier involved in physical production. This matters tremendously, not just for Apple’s profit margin and for our sense of national pride, but because it means good jobs.

The innovation sector includes advanced manufacturing (such as designing iPhones or iPads), information technology, life sciences, medical devices, robotics, new materials, and nanotechnology. But innovation is not limited to high technology. Any job that generates new ideas and new products qualifies. There are entertainment innovators, environmental innovators, even financial innovators. What they all have in common is that they create things the world has never seen before. We tend to think of innovations as physical goods, but they can also be services—for example, new ways of reaching consumers or new ways of spending our free time. Today this is where the real money is. A part of the $321 that Apple receives ends up in the pockets of Apple’s stockholders, but some of it goes to Apple’s employees in Cupertino. And because of the company’s great profitability, it has the incentive to keep innovating and to keep hiring workers. Studies show that the more innovative a company is, the better paid its employees are.

You might think that the rise of innovation is pretty exciting if you work for, say, Google or a biotech company but that it doesn’t matter all that much if you’re a teacher or a doctor or a police officer. After all, the majority of Americans will never work for a high-tech startup. Why should they care about the rise of innovation? As it turns out, however, innovation matters not only for the well-educated workers who are directly employed by high-tech firms—the scientists, engineers, and creators of new ideas—but for most American workers.

If you take a walk in one of America’s cities, most of the people you see on the street will be store clerks and hairstylists, lawyers and waiters, not innovators. About a third of Americans work either for the government or in the education and health services sectors, which include teachers, doctors, and nurses. Another quarter are in retail, leisure, and hospitality, which includes people working in stores, restaurants, movie theaters, and hotels. An additional 14 percent are employed in professional and business services, which include employees of law, architecture, and management firms. In total, two-thirds of American jobs are in the local service sector, and that number has been quietly growing for the past fifty years. Most industrialized nations have a similar percentage of local service jobs. The goods and services in this sector are locally produced and locally consumed and therefore do not face global competition. Although jobs in local services constitute the vast majority of jobs, they are the effect, not the cause, of economic growth. One reason is that productivity in local services tends not to change much over time. It takes the same amount of labor to cut your hair, wait on a table, drive a bus, or teach math as it did fifty years ago. By contrast, productivity in the innovation sector increases steadily every year, thanks to technological progress. In the long run, a society cannot experience salary growth without significant productivity growth. Fifty years ago, manufacturing was the driver of this growth, the one sector responsible for raising the wages of American workers, including local service workers. Today the innovation sector is the driver. Thus, what happens to the innovation sector determines the salary of many Americans, whether they work in innovation or not.

A second reason that the rise of innovation matters to all of us has to do with the almost magical economics of job creation. Innovative industries bring “good jobs” and high salaries to the communities where they cluster, and their impact on the local economy is much deeper than their direct effect. Attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services. In essence, from the point of view of a city, a high-tech job is more than a job. Indeed, my research shows that for each new high-tech job in a city, five additional jobs are ultimately created outside of the high-tech sector in that city, both in skilled occupations (lawyers, teachers, nurses) and in unskilled ones (waiters, hairdressers, carpenters). For each new software designer hired at Twitter in San Francisco, there are five new job openings for baristas, personal trainers, doctors, and taxi drivers in the community. While innovation will never be responsible for the majority of jobs in the United States, it has a disproportionate effect on the economy of American communities. Most sectors have a multiplier effect, but the innovation sector has the largest multiplier of all: about three times larger than that of manufacturing.

Excerpted from The New Geography of Jobs, by Enrico Moretti. Copyright © 2012 by Enrico Moretti. Reprinted by permission of Houghton Mifflin Harcourt Publishing Co. All rights reserved.

But electronics industry insiders caution against celebrating a labor victory too soon.

It will only be a matter of time, they say, before contract suppliers simply shift operations to cheaper Asian destinations and replace hundreds of thousands of Chinese jobs with robots.

“It’s just cost efficiencies. Like any other company they’re trying to cut costs,” said John L’Epagnol, a managing partner of Goldhawk International, which marries Western buyers with Chinese factories.

“The increased labor demands will continue to push them into places like Vietnam or further into automation,” he said, adding that he’s been seeing “a lot more automation taking place,” even before Foxconn’s announcement.

The pressure on Apple and its key manufacturer has been particularly intense since May 2010, when labor activists claimed that at least 14 Chinese workers committed suicide at the strictly regimented plants.

Since the suicide revelations, there have been reports about illegal overtime hours, cramped dorm rooms, employee blacklists, shadowy security personnel and a weird corporate culture built around Foxconn founder Terry Guo, who owns a $30 million castle in the Czech Republic and counts 13th century Mongolian warlord Genghis Khan as his personal hero.

But insiders say that this latest round of pressure applied to Foxconn — which makes about 50 percent of global electronics and has a market capitalization equal to its 10 closest competitors — came about through its close ties to Apple, which first overtook Exxon as the world’s most valuable company in August last year.

The Taipei-based company — which also counts Sony, Nokia, Dell, Nintendo and Motorola among its clients — had already increased workers’ wages by 16 to 25 percent in February.

“The main reason Foxconn is under such a bright microscope is because it’s a foreign company and it works with Apple. Actually, for what it does, it has some of the highest wages in the industry and treats its workers much better than local Chinese outfits,” said L’Epagnol.

But critics claim that Foxconn, a subsidiary of Taiwan’s Hon Hai electronics company, is also under scrutiny because it dominates the global electronics supply chain and is a litmus test for industry-wide labor practices.

Where Foxconn goes, its competitors are likely to follow. So, the question is, where will Foxconn go?

“Robots and automation are definitely increasing trends. So are Foxconn’s moves into central China where labor costs are lower [than coastal China],” said Ying-dah Wong, a Taiwanese labor activist.

“They want the cheapest possible labor while escaping the most basic labor laws. That’s why you will see them connive with dictators and autocratic governments in places like Vietnam and Cambodia, so they can ensure their interests are always protected,” Wong added.

Foxconn has factories operating in Hungary, Mexico, India, Malaysia, Brazil and Vietnam. It’s the largest exporter in the Czech Republic. But it may be the communist state to the south of China that becomes the biggest recipient of the company’s “largess.”

The minimum wage in Vietnam is about $85 per month, a figure that’s substantially lower than Shenzhen’s $207. Guo, Foxconn’s founder, was also reportedly so impressed after meeting Vietnam’s president and other top brass that he offered to increase his $80 million investment in hardscrabble Bac Ninh province to $5 billion, sprinkled throughout the country.

“Communist and other autocratic countries just want jobs. It is as much a security and social order issue as it is an economic issue,” says Ying.

As for the iRobots, global industrial robot sales surged by 18 percent in 2011. Foxconn alone said it will produce 300,000 robots by next year, and 1 million by 2014. If all goes according to plan, an estimated 500,000 of Foxconn’s 1 million Chinese jobs will soon be obsolete.

In an email to GlobalPost, a Foxconn representative confirmed the move toward technology, but downplayed any potential negative impact. “Automation is playing an increasingly important role in our operations as our manufacturing processes and the products we produce become more sophisticated. This development is allowing many of our employees to move up the value chain,” the emailed statement read.

However, the International Federation of Robotics predicts that China will be the top robot market by 2014, and labor activists fear that if major companies like Foxconn set a precedent, millions of jobs in developing countries will be lost.

“Foxconn sets the pattern for others in the industry. Rising wages are a good thing for Chinese workers, the Chinese economy and the global economy, but only as long as productivity improves in tandem with wages,” said Chang-hee Lee of the U.N.-backed International Labor Organization.

But while much is made of the responsibility contract suppliers have in the developing world’s labor food chain, others aren’t so convinced.

“People don’t understand that companies like Apple drive these practices. Our margins are super, super low. They come in and say: ‘We want this produced. We want this many units. We want them delivered by this time. And this is what we are going to give you. If you can’t do it, someone else will,’” said a price analyst at a Foxconn rival who spoke on condition of anonymity.

“The days of bidding or putting quotes up with these big American companies are long gone,” he said.

Foxconn declined GlobalPost’s repeated interview requests.

Daisey responded on his own blog that, as “a theatrical piece,” his one-man show “uses a combination of fact, memoir, and dramatic license to tell its story, and I believe it does so with integrity.” His mistake, he concludes, was allowing excerpts from the show to be excerpted on “This American Life,” which is “essentially a journalistic -­- not a theatrical ­– enterprise, and as such it operates under a different set of rules and expectations.”

I know the required response here is to jump all over Daisey for taking such liberties with the truth, but I have to say, I more or less agree with him — except for one crucial point. Personally, I wouldn’t be angered to learn that portions of any staged monologue, be it Daisey’s or Spaulding Grey’s “Swimming to Cambodia,” had been reshaped for dramatic effect — in fact, I’d be surprised if they weren’t. Drama does not present itself as documentary.

This is a matter of framing, rather than absolutes. “This American Life” is not drama. It’s not exactly reportage, either, and I expect some of the memoir-like segments the show airs also constitute “reshaped” events and facts. Nevertheless, the program presented “Mr. Daisey and the Apple Factory” as something very much like journalism, evidenced by their decision to fact-check it.

That Daisey obfuscated during the fact-checking process indicates that he was acting in bad faith, not just making a mistake. People don’t cover up what they’ve done unless they suspect they’ve done something wrong.

So, I’d say: “The Agony and the Ecstasy of Steve Jobs” is OK, but “Mr. Daisey Goes to the Apple Factory” is not. What do you guys think?

Mary Elizabeth Williams: First of all, I don’t think anybody goes to the theater expecting to see the newspaper. You understand when you’re in the hands of a monologuist that you’re in the hands of a storyteller, who will craft drama out of life.

But you don’t get to enjoy your glory as the crusading avenger who blew the lid off Apple when you are making stuff up. And you certainly don’t hem and haw about the facts of your account of events when “This American Life” comes a-knockin’, go ahead and pass off your tale as true, and then blather about how what you’re doing is about “human connection.”

The fact that a lot of the response to Daisey’s exposure has been so blase reminds me of the response I got when I wrote about James Frey last year. Oh hey, what’s the big deal? It’s entertainment! OK, well, Rush Limbaugh’s an “entertainer” too, and he spent three days of airtime making things up about Sandra Fluke and birth control. And most of us think that was pretty uncool.

When you’re speaking about real people and events, you have a responsibility to be clear how far into fantasy you’re going. You can do that and still create interesting work — nobody believes Neil Patrick Harris, actor, is Neil Patrick Harris, character in the Harold & Kumar movies. But what Daisey did was wildly, knowingly disingenuous, grandly self-serving, and all around gross.

Andrew O’Hehir: Mike Daisey definitely crossed a line from acceptable storytelling into unacceptable misstatements of fact, but Ira Glass was correct in saying that “This American Life” has to take much of the blame for it. As Laura points out, that show has an ambiguous status, and I had not known until now that its producers consider their work as journalism. That’s not quite an adequate label, frankly. But it’s clear that once they decided to fact-check Daisey’s work for their radio show, and he actively misled them about the fact that some details were fictionalized, the Rubicon had been crossed.

To be clear, I have no problem with an artist or writer taking liberties with a somewhat true story in order to make a dramatic point or a social argument. That describes almost everything Dickens ever wrote, and everything else from Frank Norris and Theodore Dreiser to “All the President’s Men,” “Silkwood” and “The Hurt Locker.” The larger problem is that our society lacks basic standards of literacy that would allow people to understand the distinction between fiction and journalism, and the varying pathways to truth (and definitions thereof) that each can offer.

We’re obsessed with the question of whether things are “real,” which betrays our doubts about whether anything we encounter in the media should be considered real. So the appearance of authenticity becomes a valuable commodity, and people seek it out when they don’t deserve it. Every other Hollywood movie professes to be “based on a true story,” which often is just an excuse for shoddy storytelling. What’s doubly or trebly unfortunate about this case is that most of what Mike Daisey says about working conditions in Chinese factories is apparently true. He doesn’t deserve comparison with someone like James Frey, who essentially tried to sell a novel as autobiography.

Daisey streamlined some details and fictionalized an important episode. It was totally OK to do that onstage, and totally not OK to do it in the context of a radio news program. The two contexts have radically different standards, and however he managed to seduce himself into forgetting that, he has now tainted his entire career with the flavor of bogosity.

Mary Elizabeth Williams: I think Scott Rosenberg summed it up well in Grist — “So there’s no such thing as a neutral story. But there is such a thing as an honest story.” When Will Reiser wrote “50/50,” people knew that he’d had spinal cancer, like his character. The film cast his real friend Seth Rogen. But he’s always maintained that the work and characters are fiction. See what he did there? That’s how you base something on a true story — you use elements of your experience without pretending it’s journalism.

When Jack Donaghy jokes on “30 Rock” that he had a one-night stand with Nikki Finke, everybody knows it’s a joke — one that employs a real person. What Daisey did was to say, unvarnished, I was there and this happened. He did it in service of some self-proclaimed greater good. But in the end, he wound up blatantly misleading his producers at “TAL” and his listeners. He reminds me of “Nick Smith” in “Metropolitan,” hiding behind the excuse that his story was a “composite” that could have happened. Could have isn’t did. Happened to someone else isn’t happened to you.

Andrew O’Hehir: You know, there’s more to be said about the NYT’s Daisey pile-on than I can say succinctly here, but it’s noteworthy that the newspaper of record has unleashed two attacks on him, with David Carr writing that “the heroic narrative of a fearless theater artist taking on the biggest company in the world is now a pile of smoking rubble.” Taking Apple’s side against a guy who does theatrical monologues feels uncomfortably like the long Times tradition of speaking power to truth, if you follow me.

But I was struck by this passage in Charles Isherwood’s piece: “The weight, authority, emotional power and — like it or not, theatricality — of ‘The Agony and the Ecstasy of Steve Jobs’ derive precisely from the assumption that Mr. Daisey is telling the truth about the events he describes.”

He definitely has a point here. From the outset, Daisey enlisted himself in a semi-documentary tradition where the facts matter and poetic license is assumed to be minimal. That makes it a fair bit different from examples cited by me (Dickens, “The Hurt Locker”) or Laura (“Swimming to Cambodia”), where a real situation is referenced, but we all understand that it’s likely the specific details have been massaged for dramatic effect.

Mary Elizabeth Williams: Tell a story. Make it lively. Then tell the truth about what’s real and what isn’t. Doing a piece on harrowing work conditions in China is not the same as doing a piece on your stint as a Macy’s elf.

But it turned out that Daisey had invented some scenes, exaggerated others, and could not prove the veracity of still others. The flim-flammery was uncovered by a China-based “Marketplace” reporter who heard the Daisey episode and thought it sounded fishy. He tracked down Daisey’s translator — whom Daisey, during the “TAL” fact-checking process, had told Glass and his producers could not be found — and she said, in effect, that much of what Daisey said in his show, and on the radio, had not happened that way.

For the details, go listen to “Retraction” — not for nothing did Steve Martin tweet, about this episode, “A standing ovation and a boy scout salute to the dignity of ‘This American Life.’” Or you can read the transcript here. Not only is the episode Tylenol-like in helping a trusted brand recover from a notorious tampering scandal, but it reveals Ira Glass to be a ruthless cross-examiner. The scenes in which he grills Mike Daisey about his deceptions — in which we hear Daisey’s long silences, which Glass cruelly refuses to edit out, and Glass’s blunt declarations that “I don’t believe you” and “I think you’re kidding yourself” — reveal Glass to be something of a radio avenger for truth. When print journalists fabricate stories, or even just make severe errors, we readers are never privy to their dressings-down by their editors. Daisey had the misfortune of going unethical on a radio show, on Ira’s show, and now Ira goes all Foxconn on Daisey, as America listens.

There is no question that Daisey got what he deserved, and that Glass did what he had to do. In fact, I can’t get over the schadenfreude of hearing a malefactor get his comeuppance so publicly.

On the other hand, I still like Mike Daisey.

Mike Daisey should not represent as literal truth what he has edited and exaggerated for dramatic purposes. I don’t buy the excuse he presented to Glass that what he does is okay onstage, and only problematic when transferred to public radio. (Before Sunday’s show, which included some changes to the script to make it more accurate, he stood by his work as a whole, and said news organizations like The New York Times verified his big-picture story about working conditions at at the Chinese factories.)

That said, there but for the grace of my own inferior career go I. If people paid me to tell stories onstage, I know I would exaggerate the heck out of them. It would not be right, but I am not sure I could help myself.

There is a difference between the personality of the raconteur and the personality of the journalist. Raconteurs love a good story, while journalists love nailing down elusive facts. There is overlap between these two types, lots of overlap: the best journalists love it when the facts come together in an elegant narrative arc. But it’s a useful distinction. Even though he worked in print, the New Yorker’s Joseph Mitchell, for example, was clearly more raconteur than journalist; his favorite people were storytellers, his own writing always story-driven, and we know that he sometimes did not let the facts get in the way.

Fortunately, there is work for people who prefer raconteurship to reporting: they can become fiction writers, perhaps thinly veiling the facts of their own life, but taking liberties with them. Or they can become storytellers, as on the popular “Moth Radio Hour” or, as it happens, on “This American Life,” whose David Sedaris has been charged with improving on the facts. Or they can become monologists like Spalding Gray, or like Mike Daisey. What they can’t do is claim that taking liberties with facts gets them closer to the truth.

Daisey’s genius has been bringing an investigative zeal to his monologues, which often have an edge of social criticism. They are about monopolies, or homeland security, or, in the case of his monologue “Truth,” about the responsibilities that art owes to life. “Truth,” from 2006, was about the cases of James Frey, J.T. LeRoy and Fernando Pessoa — which prior to Daisey himself were among the most famous recent cases of writers who were not what they said they were, and the prices they paid, or did not pay, with audiences. Daisey’s project has involved bringing journalism to raconteurship: going out and finding the stories, traveling for them, rather than just recounting what life has strewn in his path.

This appealing fusion of the dramatic, raconteuresque monologue and investigative journalism surely helps explain why audiences responded to Daisey as an original talent. The problem that Daisey has not yet solved — and that, in “The Agony and the Ecstasy of Steve Jobs” — he chickened out of solving, is how to artfully construct a monologue that is not purely factual and not lose an audience in the process. How about if he tries this: Trust the audience and tell them that’s what you’re doing. When artists of nonfiction, whether in radio or in print, shade the truth while refusing to call their work fiction, they are trading on the frisson, the immediacy, that audiences feel when something powerful is also true. Thus the impulse to call something memoir when it’s not memoir, or to collapse time and rearrange events for effect (like George Orwell in “The Road to Wigan Pier”). There’s a way to train audiences to love the mostly-true, the improved-but-still-basically-factual. We need to learn how to love this hybrid, because as Mike Daisey shows, it’s the next great art form. But we need to be honest about what it is. Our love must be true, not purchased with lies.

Publishers actually make less money with the agency model, so why have they insisted on it? The change was designed to limit the growing dominance of Amazon over American book retailing. On Monday, Scott Turow — the bestselling author of “Presumed Innocent” and other legal thrillers, and the president of the Authors Guild — posted a letter to members on the Guild’s web site. In it, he pronounced the Justice Department’s actions bad news for authors, “grim news for everyone who cherishes a rich literary culture,” and (contrary to first impression) ominous for book consumers. I called him up to find out more.

What are some of the Guild’s problems with Amazon?

First of all, so that I don’t get dismissed as an ingrate, I should say that Amazon has been a boon for bestselling authors. Authors get paid on the basis of the cover price for a hardcover book. By discounting, which is something that chain stores started and Amazon continued, they have lowered the barriers to book buying in ways that have been personally extremely beneficial to me.

Because you get paid the same amount regardless of how much the retailer charges for the book, and the discounting encourages more people to buy the book?

Exactly. These are not personal complaints. There are lots of things about Amazon for which they deserve credit. They’re innovative. There are lots of very, very happy Amazon customers. I’m not here to dispute that Amazon has been personally good for me or to say that they haven’t been, so far, good to their customers.

So what’s the problem?

The concern is that they are getting so large and they compete so ruthlessly that there’s a lot of fear for what the world with Amazon in charge is going to look like.

The Guild’s beefs with Amazon became pronounced over the issue of the resale of new titles some years ago. This was something that Amazon pioneered. They would sell you a [just-released] book on Day One, buy it back from you on Day Two, and then resell it to another customer on Day Three. This was legal, but certainly not what anybody ever intended.

Traditionally, in hardcover, that’s been basically a split of the proceeds between the author and publisher. (An aside: That’s something we’re fighting with publishers about in the digital world.) So Amazon decides to go into competition with the publishers by reselling the book they just bought. The publisher gets paid nothing, and neither does the author. It’s a pure profit for Amazon.

Now, the reason you don’t see used bookstores within new bookstores is that the used books compete with the new books and the publishers supplying the new books would object. Either you’re doing business with me or you’re competing with me. I’m not going to sell you books so you can take some percentage of sales.

The problem of course was the Amazon had gotten so big that publishers were afraid to resist that. It’s not the mere fact that they’re competing [with their own suppliers]. I can certainly understand that it’s good for consumers to be able to buy a book two days later at a lower price. It’s the fact that the publishers were afraid to dismiss Amazon.

Which is what they would do with a regular retailer who was doing the same thing but had viable competitors?

Right, and of course, Amazon was undercutting authors in the process. We tried to persuade them to just window this [delay making used copies of brand-new books available for a period of time, the way the release of the DVD of a movie is delayed until after it has played in theaters]. That didn’t work. It was a muscle-flexing exhibition by Amazon, saying, “We’ve got so much market power, you guys can’t do what you’ve traditionally done and take your goods elsewhere. We represent at least 30 percent of the book market.”

I don’t like losing sales, but the real problem is at the margins. Midlist authors have been struggling to survive for decades now. If you start eating into the publishers’ returns, then at the bottom of the food chain, those books are just not going to get published. We have seen that happen.

Are there other examples of Amazon using its predominance?

They now control the print-on-demand market. That’s when you buy a book and only then does a service print a copy — literally on demand. [This is a method used by academic and small presses, as well as by authors with otherwise out-of-print books.] Amazon bought a POD service called BookSurge. Then they informed their customers — university presses and some other publishers who the Guild had organized to do POD for Authors Guild members — that they would not list their books on Amazon’s site unless they paid BookSurge more for their services.

I don’t know how they defend themselves on this one. That’s another very ominous sign to the book industry and authors.

What about their history with e-books?

They deserve a lot of credit for the Kindle, for yoking e-ink with this nationwide wireless network. It’s a great innovation. And they said to the publishers, “It’s really important to us in introducing this platform that e-books appear at the same time as the hardcover edition.” Publishers said, “Oh, we’ve seen your tricks before, Amazon! Why would we ever do that?”

So Amazon says, “We’ll pay you the same amount we pay you on a hardcover.” So publishers think that sounds fine, how can they complain about that? They agree and are then stunned when Amazon announces that they’re going to sell every e-book at a loss, for $9.99. That’s an average loss of $4 to $5 a book.

Why would Amazon do that?

I suppose they could argue they were doing it to sell devices and that may well have been one of their intentions. It had the additional benefit of making it much harder for any of their competitors to enter the market.

For example: A lot of people have the habit of going into a physical store, looking at books and then turning around and buying the e-book wirelessly from Amazon. Had it not been the case that you had to sell an e-book at a $5 loss, bookstores would have been able to say, “Sure, bring your device with you and we’ll sell you the e-book right here.”

Bookstores are pretty hard-pressed by book discounting as it is, and the idea of selling ebooks at a loss made it impossible for them to enter the marketplace in competition with Amazon.

What about the proprietary format of Kindle? Didn’t that also make it hard for competing e-readers to enter the market?

You couldn’t read all those books you bought from Amazon on a competitor’s device — you can now, if you have an iPad, but you couldn’t then.

The nook is widely regarded as the better e-reader device, but if you’ve accumulated a library of Kindle titles, you can’t take them with you if you decide to switch. [Technically, you can, but most users would find this quite challenging.]

Barnes and Noble developed the nook because they really had no choice but to compete with Amazon. They were struggling at that point, and I personally don’t think they’d have been able to survive while losing $5 on every book. There simply were not a lot of people jumping into that market to compete, not with the prospect of losing $5 on every book sale. From the outside, it looks like the pricing was not just a loss leader on the devices, but a way to discourage competition.

How did Amazon’s e-book pricing affect authors?

One way that 25 percent of net became the standard royalty for e-books was because publishers said, “We all know they can’t go on selling e-books at a loss forever and sooner or later this pricing structure has got to change.” They told authors they couldn’t agree to a different royalty because everyone knew that Amazon wouldn’t be paying them $14 to $15 per title indefinitely.

You’re implying that Amazon planned eventually to use the consumer’s habituation to $9.99 books to force publishers to charge Amazon lower wholesale prices for books. They’ve tried to do that recently with some small presses, removing their titles from Amazon unless the presses agree to sell their books at rock-bottom wholesale prices. And publishers would have no choice but to agree because every other competitor would also have been driven out of the market by Amazon’s predatory pricing?

Certainly, that’s what publishers assumed.

The other thing Amazon could have done once they had the market to themselves — and this is virtually inevitable — is that they would have raised prices to consumers.

That’s part of the less-known history behind anti-trust laws. Once a large company has spent its capital to fund predatory pricing and drive its competitors out of business, there’s no reason to keep selling for cheap. The low prices don’t last.

Right. Look, if what they’re into is maximizing profits, then if they were to have a monopoly there’d be no rationale not to use the monopoly power to increase prices to consumers. Now, if I were on the other side, working for Amazon, I’d say “Show me where I’ve done that.”

Presumably, they haven’t done it yet because they haven’t achieved the monopoly yet. Historically, that’s what monopolies always do.

Correct. That is historically what monopolies do. There is plenty of precedent for that. It’s only rational to fear what they’re going to do with this accumulation of power.

Again, the concern from the author’s perspective is that e-books are putting a tremendous downward pressure on the price of books in general. That’s putting tremendous pressure on publishers to survive. And I think a world in which online book selling is driving bookstores out of existence is a pity.

How did Amazon respond to the entrance of Apple and the agency pricing system?

Apple offered to sell books on the iPad using the agency model — which is what they use for iTunes — and the publishers one by one agreed to that. Then they told Amazon they were going to follow this new model, and that they were going to produce the e-books themselves rather than Amazon doing so.

When the first publisher, John Sargent [of Macmillan], told them that, Amazon responded by removing the buy buttons not just from all of Macmillan Publishing’s e-books — about which you can say, yeah, there’s a legitimate dispute — but from their print books, too. Paper, physical books! It was another demonstration of their ability to abuse their market power.

They used their market power over an item where pricing was not in dispute to punish a publisher for taking what Amazon regards as an unfavorable position in a different market.

Why should where their books are bought make a difference to authors?

New authors traditionally are nurtured by bookstore personnel, especially in independent bookstores. These people literally hand sell books to their customers, by saying, “I’ve read this. I think you’re going to love it.” Not to mention the fact that a bookstore is a small cultural center in a community. That’s definitely a loss.

Again, my concern is for the sake of literary diversity. If the rewards to authors go down, simple economics says there will be fewer authors. It’s not that people won’t burn with the passion to write. The number of people wanting to be novelists is probably not going to decline — but certainly the number of people who are going to be able to make a living as authors is going to dramatically decrease.

When that decreases, the diversity of the literary culture decreases. The store of new ideas and the richness of the discussion all decreases.

Further reading

Scott Turow’s letter to the Authors Guild membership

The Wall Street Journal on the Justice Department’s threat to sue Apple and five book publishers for price fixing