Corrections appended.

Amanda Palmer, the singer who raised a spectacular sum on Kickstarter to fund her new solo album and then asked for volunteers to play with her for no pay when she went on tour with her band, Grand Theft Orchestra, a few months later, is the Internet’s villain of the month.* Her hypocrisy becomes particularly egregious when you consider her supposed artistic lineage. She started out as half of Dresden Dolls, a band that achieved cult popularity in the aughts, and which she described as “Brechtian punk cabaret.” Bertolt Brecht and punk rock suggest some affinity for social justice—or even anti-capitalist militancy. Now she is a folk singer, a genre that often takes up the cause of social justice. This throws her peculiarly unjust plan into still sharper relief. Beneath that, however, is an interesting set of problems about art and work in an age when the mechanisms for valuing them have broken down.

A brief primer on what happened: when the Dolls went on hiatus near the end of last decade, Palmer set forth as a solo artist. The familiar channels of label-funded “artist development” have narrowed, and are now thick with pirates. So Palmer did a reasonable thing, given such obstacles: she circumvented the major-label ecology, and asked fans to become more or less direct investors, to take an ownership share in her work. Depending on the pledge, they would receive some items from the planned cornucopia: music recordings in various formats, a related art book, chances to party with the artist herself. Top-tier supporters would even get the occasional bonus item of artisanal nature. Palmer’s Kickstarter page shows her proffering a Dylanesque hand-lettered sign proclaiming, “THIS IS THE FUTURE OF MUSIC.” She may be an authority on this topic—having asked for a hundred thousand*, she got $1.2 million. That is not a particularly folksy sum, but not yet the stuff of ignominy.

Album in hand, Palmer prepared to tour. She advertised for local horn and string players to help out at each stop along the way: “join us for a couple tunes,” as the post on her Web site had it. Even better, “basically, you get to BE the opening ACT!”

Just one thing, local musicians. There would be none of this million-plus dollars available for you. Supposedly, Palmer had spent it all on producing her album, along with things like airfare, mailing costs, and personal debt, and so couldn’t afford to pay anyone else. She promised instead to “feed you beer, hug/high-five you up and down (pick your poison), give you merch, and thank you mightily.” This is a compensation package which, honestly, might be worse than nothing. Depends on the beer.

Cue furor, via the usual music, snark, and music-and-snark Web sites. Palmer has since renounced her hornsploitation scheme and will pay the pickup players*, but the outrage remains. It seems plain enough that it arises most of all from the way the two parts of the story snap together. After all, some artists get rich from their art, and fans tolerate this, or even have a taste for it. Moreover, lots of musicians get colleagues to gig with them for little more than a bit of vodka and limelight, and perhaps the expectation that the favor will be returned at a later date. That, too, is in reasonably good taste.

It’s just that these two tastes don’t taste good together. One is the vertically oriented star-fan model, and one is the horizontal cohort-of-struggling-artists model, and as Amanda Palmer has learned, it is not looked upon with favor to try both at once.

The outrage over this incident is, however, more complicated than it might at first appear. It’s entangled with the current debate about wealth inequality that has animated both the Occupy movement and the Presidential campaigns: the sense that even newly minted haves, like Amanda Palmer, really need to treat have-nots, such as local musicians, a whole lot better. Thus a long-standing music-biz scam (Chuck Berry’s ill use of local musicians is the stuff of industry legend) suddenly takes on the aspect of plutocrat and prole in a contemporary drama. It only adds piquancy that Palmer adopted the posture of the moustache-twirling boss. As she told the New York Times, “If my fans are happy and my audience is happy and the musicians on stage are happy, where’s the problem?”

This is a time-honored dodge, which might be called “the Oompa-Loompa defense.” It goes something like this: outsourcing labor to people who will work for less is fine because they are “happy” to do it. Such practices and accompanying rationales have been continually refined—think the helpline that dials a tech in Bangalore. But the fantasy of the happy worker has taken on newer and more mind-bending aspects, as has work itself. It now includes things like the unpaid microlabor of providing content for Web sites. It includes the amateur photographer who provides her images of, say, the police killing a young black man to the local news as an “iReport” for nothing but a credit and a T-shirt. Or a music lover scratching out a review on some hip site for a byline alone. Or consider the subtlest and arguably the most exemplary case: how, in wandering the byways of Facebook and Google, you are diligently rendering gratis a host of information about the preferences and habits of you and your friends—data they sell to advertisers. This, too, is unpaid labor.

In general, there is the boom in such practices that seems tied to the digital era; you can’t spell Internet without intern. As the argument goes, you are paid in access to a desirable milieu, or the chance to do good. Work for nada at an N.G.O.: you are being paid in justice itself. Oh, you might also get the vague promise that such valuable experience will pay off later. This promise is packaged with the threat that if you don’t take the gig, you will be closed out of the disastrous job market altogether. You had better be happy about it.

Ideally, you don’t even know you are working at all. You think you are keeping up with friends, or networking, or saving the world. Or jamming with the band. And you are. But you are also laboring for someone else’s benefit without getting paid. And this, it turns out, was exactly Amanda Palmer’s hustle.

We might also consider the matter from the other side of the labor divide, that is, from the perspective of the investor, who is concerned primarily with shareholder value. Should we not expect a better return on our three hundred dollars than some fancy vinyl, a backstage meet-and-greet, and another exploited trombonist? Musician, producer, and industry gadfly Steve Albini has offered up the knowledgeable assessment of costs for the items on offer; so has Owen Pallett, who performs as Final Fantasy. It will come as no surprise that Palmer’s backers do not seem to be getting their money’s worth.

The discrepancies in Palmer’s ledger are in truth kind of dull. “I know how much an art book costs and this is too much”—yeah, yeah. But the pricing question gets far more compelling if we understand it as putting a value on Palmer’s own creative capacity. How do we value that, when the market—the very mechanism that we rely upon to set value—has imploded, and most anyone can listen to a new album for free? What happens to art, be it Amanda Palmer’s or Azealia Banks’s (or Thomas Pynchon’s or Kathryn Bigelow’s), when people can get it for free without facing arrest? Or, to put it more starkly, what is the fate of art after private property is done away with? Will people keep making it? Will they keep reproducing, marketing, and distributing it?