Even when there's plenty to go around for everyone, it seems we'd rather not let that happen.
[1] I have a strong feeling that economists have missed the memo from Popper regarding what is modern science. There seems to be quite a lot of unfalsifiable assumptions lying at the bottom of economics, starting from the utility maximizing agent.
There are other solutions that have been seriously considered or proposed. For example in copyright one idea is to allow things to be freely copied and have some rich entity pay creators. This was how it was done a long time ago, with the rich entity usually being a king or a ruler of a city-state or a wealthy lord.
Another idea is to pay creators via some tax on something that is roughly correlated with copying. An example would be a tax on blank tape.
A problem with these approaches is deciding who gets paid and how much. In the tax approach not many people seem to like the idea of the government deciding which artists should get funded. The usually way to avoid that is to have it based on how many copies are made. But then you need some way to get that data.
You could do it via some kind of polling. That was probably the only way back when copying was mostly physical, such as copying a record to a cassette tape. Nowadays when it is mostly digital you could do it by server side monitoring on download/streaming sites and/or device-side monitoring of playback--but then you are getting into areas that will worry many people for being an opening to more general surveillance.
For ordinary physical goods we don't have these problems--a free market (even the poor approximation of a free market that we have) works pretty good for determining what to produce. But that only works if the goods have certain properties, which copies of art do not have. (If anyone wants more information, look into excludable vs non-excludable goods and rival vs non-rival goods).
The approach of current copyright law is to legally give copies those properties so that the market can determine what art gets produced and how much the artist makes. This is a tradeoff, because it does mean that the consumer pays more for copies than the "correct" free market price (marginal cost of copying).
The other approaches mentioned above tend to make the tradeoff the other way--the consumer pays marginal cost of copying, but less art gets produced than consumers would like.
There's not really any way to avoid having either underproduction or underutilization when it comes to easily copyable art. Once you realize this things make a lot more sense.
One way to do so with IP/information/open source software, would be to give everyone access to just about all IP, but then when a surplus value is not known and needs to be accessed, you give people an option of what they value it. Get a statistically significant sampling group, then pick some percentage of the sampled group should get access, say 95%, and then query them using a Vickrey auction system what their true value is. The people who have the lowest 5% value don't get access to that item for some period. For everyone above 95%, they all pay that bottom 5% price for access to it, not their bid, like a Vickrey auction.
In this way only 5% of the sampled group, which may be 1% of the population lose access, and yet you still get to figure out the range of values throughout the population for that thing because Vickrey auction's incentivize that you bid your true value. Take some weighted average of the bid values and subsidize the IP owner with those funds.
One can infer a smaller supply of art, assuming standard economic assumptions. Some human activities seem to me not to be driven by these assumptions. Stories of artists who create what they seem to be driven to create, not what potential customers want at that moment.
Time is a scarce resource, both for creators and consumers. Some of us get more time than others, but we each get 24 hours per day; in that respect there is equality.
Under what conditions or assumptions might there be "enough" art created and copied?
Important to keep in mind that it's not just a tradeoff because it increases marginal cost, it's a tradeoff because it outright restricts the creation of new content.
In creative industries, it means that creators are sometimes unable to build on or adapt creative work to apply to new situations or to expand on artistic ideas. Many market consequences extend from this restriction for better and for worse -- there's a reason why Nintendo games don't work on PCs or have certain accessibility features, there's a reason why backing up save data for many of their games is still a giant pain in the neck, and it's because it's illegal for other companies to create those features for Nintendo games.
IP law also has the consequence of drastically raising the barrier of entry to creating new IP, since assets and universes can't be reused or repurposed without contracts.
And of course, this also has the consequence that certain utility innovations can't happen -- E-Readers in particular have been hobbled for a long time, not just because of patent law but because existing platforms are allowed to make it illegal to transfer legally purchased books into different ecosystems. This reduces market competition in the space, artificially driving up the cost of not just the content itself, but also much of the hardware used to consume that content. There are a lot of things we could build in the E-Reader space around universal annotations, accessibility features like live-reading, etc. IP law restricts a lot of that stuff, you may not build a competing E-Reader that reads EBooks purchased on Amazon.
This obviously has consequences for the market itself; by embracing IP law, we have chosen to effectively kill off and completely eliminate competition in several areas of the free market, while making it illegal to build some meta-layers on top of platforms without enormous amounts of capital and negotiation power.
But it also obviously has cultural consequences since building on top of existing work and sharing cultural experiences (including stories) is something that is basically built into our DNA as human beings.
So we can debate whether there are advantages to IP law and whether they're wortwhile, but I do want to push back a little bit on the idea that marginal cost is the main consequence of Copyright. It's not, Copyright is a choice we've made to artificially eliminate certain parts of the market and to make certain projects and innovations practically impossible to build by anyone other than the biggest players in the market. It's not just about books getting more expensive, Copyright is a system with real tradeoffs, it increases the production of a specific kind of art at the tradeoff of drastically reducing the production of other kinds of art, and at the cost of shaping how art gets distributed and consumed and what things we can do with it, even privately.
It doesn't seem like that bad of an idea, if we take as given that a government service could actually provide as a good of a product as the modern streaming platforms do.
This is what proponents of IP claim. Many even think it is so obvious that there is no need for evidence, but anyway, I'd be keen to see some evidence for the claim.
I can think of a handful of immaterial goods that are not under IP (e.g food recipes and financial innovations). What is common on those is that I am quite happy with the amount available of those immaterial goods (what comes to financial innovation, one might argue that there have been a bit too much of that at some point of our history)
It’s not a bit more scientific than your argument. I do believe it’s true. But that is precisely my point. Whatever theory underlies IP and it’s benefit to society is entirely based in speculation.
Understanding this fact has led me to a thousand and one horrible "that's a feature, not a bug" realizations.
If resources truly do not have scarcity, there is no need to manage them. The need to manage a resource comes about only when it is scarce.
In fact, I can't think of any resources so abundant that they need no management. Even the oceans and the sky must be managed now, eh?
That's not abundance at all, its just scarcity.
> In fact, I can't think of any resources so abundant that they need no management.
Yes, scarcity is universal, which is why the idea of “post-scarcity” or resources that need managed in a categorically different way because they don't experience scarcity are nonsense.
Digital data.
That and other elements of rational choice theory are not unfalsifiable. In fact, some of them were from the outset not merely falsifiable but known false but tentatively held as useful approximations over large populations. In fact, in the scientific part of economics (and other social sciences; rational choice theory has wide impacts), the debate has long been over whether the rational choice model is a still even useful reference point against which to mark variations, given the extensive degree to which it has proven false. (OTOH, a number of higher-level phenomenon predicted by they model have proven predictively useful even though the lower-level model is known false.)
Of course, some of economics (e.g., the Austrian school) is overtly driven by a normative ideological agenda rather than pursuing descriptive, empirical science.
>Of course, some of economics (e.g., the Austrian school) is overtly driven by a normative ideological agenda rather than pursuing descriptive, empirical science.
This is actually one reason the Austrian school criticises the neoclassical school. The neoclassical school is just as much founded on ideological assumptions as the Austrian school (main difference is cardinal vs ordinal utility), as it's impossible to have a "theory of value" without some underlying philosophical notion of value. However the neoclassical school hides this value system under so many layers of maths in an attempt to convince people it's a real, objective science like physics or chemistry.
There is a form of economics that makes testable predictions with a reasonably high degree of accuracy, and isn't based on any underlying ideology: it's called "quantitative finance".
But mainstream empirical economics, including (but not limited to) the neoclassical school, does not have a theory of value. It makes predictions based on hypotheses of how individuals act given the existence of individual subjective value systems. There are plenty of valid criticisms to be made, but this is just projection by the Austrian school.
You can layer an infinite number of possible idealized value systems on top of any mainstream economic theory to get a policy theory (and there's almost as many of those that have been layered on it as people making policy recommendations incorporating mainstream economic analysis, but that is a separate layer.
> There is a form of economics that makes testable predictions with a reasonably high degree of accuracy, and isn't based on any underlying ideology: it's called "quantitative finance".
QF is to economics as meteorology is to climatology.
It does; it assumes utility exists as some concrete thing that can be compared between individuals. The fact you weren't aware of that just shows how good mainstream economics is at hiding this. https://en.wikipedia.org/wiki/Utility#Discussion_and_critici...
Can you give an example what could you do to prove me that you do not maximize your utility? I mean, regardless how stupid thing you come up, I can always say "but that's what you chose to do, so that obviously was your preferred course of action and obviously you were then maximizing your utility"
I really hope there is discussion whether rational choice is useful, but the problem is that that discussion does not (yet) descend to the level of MBA economics and below. And that is unfortunately the level where politics are made.
Sometimes I oversleep accidentally, as an obvious example.
Or when I make short-term decisions like being lazy and laying on the couch watching trash, that hurts my long term utility and prevents me from maximizing it.
Or all the times where I'm not smart/awake enough to choose the option that will maximize my utility.
I have an economics degree. I'm not claiming to be an economist here at all, but I'm mentioning it because it's relevant to what I'm about to say here: What I learned throughout my undergraduate education is that economics is a social science built upon the _presumption_ of scarcity.
Classical economics doesn't apply if you break that invariant. We need something else if we achieve post-scarcity, and I'm not sure that it'd be another existing mainstream economic school of thought.
Note that I'm not disagreeing with you - your point is valid. I'm agreeing on the "create artificial scarcity" response that you're observing. I suppose what I'm trying to say is, whatever other unfalsifiable assumptions you're pointing at in economics shouldn't matter because the broken scarcity invariant breaks the rest of it. Trying to use an economic argument in a post-scarcity scenario is, to me, applying the wrong tool for the job in order to preserve a specific interest. That's my opinion, anyway, and I'm sure someone else who has more experience or education in the field beyond my 4 year degree 20 years ago could tell me I'm wrong.
In the stock market, there is an evergrowing pool of securities getting sequestered away into pension schemes and RRSPs. You can change what security you are in, but people/funds seldom get out of the market. When you cash our of your retirement (before actual retirement), there are huge tax disincentives to do so. For housing, people generally have a progression as they move to larger houses (as they have more kids, or kids get older). If all houses continue to get expensive, you just always stay in the housing market (well, until you go to a retirement home or expire).
Both seem to remind me of the classic definition of a ponzi scheme, except housing is a basic necessity. We are basically saying there is an evergrowing mountain of wealth - you just can't spend it till you retire.
Growth is natural, given that there are more people born, more money is printed and the economy expands to add jobs to meet those needs.
So yes, if tomorrow, no one else was born, a lot of systems would fall apart. Because growth would stall and liquidity would soon disappear as the last sellers find the last buyers.
There are disincentives around divesting your retirement funds because at that age you probably won’t have the physical capacity to work anymore. So encouraging investment into a vehicle that has shown generational abilities to generate growth and returns and beat deflationary effects seems only logical. The government creates this behavior by agreeing not to tax some income if you invest in your retirement.
However, this isn’t scarcity, stock markets are probably one of the most liquid assets on the planet besides literal cash.
If an economy is inherently inflationary then asset prices will literally always have to increase. In my mind this is less about house prices rising and more about the centralization of well paying jobs within specific economic hubs. There are millions of homes and hundreds of thousands of acres of lands that are practically worthless, but aren’t actually viable candidates because until recently you had to commute and the land lacked investment into the necessary infrastructure to support those jobs.
I’ve seen some arguments that no one wants live in small towns. And I don’t necessarily disagree, because the centralization of talent, competition and investment is often what makes large cities attractive. However, I would be remiss if I didn’t recognize the fundamental aspect that all large cities were once small towns.
If companies or individuals aren’t willing to take a risk and move to underdeveloped areas, then it seems only logical that scarcity will be created in centralized pockets and prices will be driven up doesn’t it?
Lastly, this idea that an object that for most people will be the most expensive purchase they ever make should be a static or deflationary asset is not something I understand. Home ownership isn’t cheap between maintenance and property taxes. Ideally those costs should be recouped somehow.
Eventually the government can only intervene with middle class public housing (eg in Singapore and a lesser extent Hong Kong).
Yes and no. Does that mean houses have to get bigger? Cars more "luxurious" and complicated (read: expensive)? Or higher education - for the same degree - also disproportionately more expensive?
Or are all these "givens" simply bad assumptions that have been nomalized?
Honda and Toyota built an absolutely massive market building low cost, reliable cars that have sold by the millions. Low end cars get more complex, because we find ways to make them safer which requires more technology.
You won't find an argument from me on education. I'm a firm believer in public education and that education is a cornerstone to providing economic mobility in any society. I wish our public universities were the crown jewels of the country and provided a low cost tuition to any student.
My only push back on the first two, is that it's not just growth in terms of the absolute size or quantity. It's just growth in terms of the monetary system which results in "growth" of the asset price.
The stock market? "Appears to show" - FIFY. I'm reminded of the periodic 401(k) presentations at our company before I retired; the pitchperson would always put up the same, tired, old, vague graph of the stock market rising at a 45-degree angle from the Great Depression to the present time. But that's not really true, is it? Indexes like the DJIA are mathematical models that get reformulated periodically and the suite of companies included in an index also changes over time. I believe this is called cherry-picking the data.
Actual investors in individual stocks or mutual funds have no guarantee of generational growth, of course. In NYT's Justin Fox's book about the stock market, IIRC, he said that equity mutual funds had an annual average growth rate a little above 2% between 1984 and the early 2000s, while the S&P 500's annual growth rate averaged about 12%. (Dates and growth rates are approximate as I don't have the book at hand). 401(k)ers didn't exactly make out like bandits.
That certainly sounds wrong, but even if it isnt, its a weird comment. Pretty much every 401k or other investment program will have the option to invest in a SP500 fund, or some other broad market US equity fund. If you want the returns of SP500, you can buy SP500. Maybe it was more complicated than that in 1984, but its not now.
I prefer small town life, and I'm sure many others do too. One upside of the pandemic is that with more companies getting comfortable with remote work, centralization of talent is not quite as big a deal as before.
Just if everyone wanted to live in a small town, there would be a ton of medium size towns instead.
That's scary.
Creativity was its own reward.
Just need the AI robots to feed us and we can stop worrying about the monetisation of digital assets.
The reward was the fact that something you did had permanence in a way that allowed others who knew how to see or interact with "it".
Now anyone with a phone can create and consume (and acknowledge). Taking that for granted was the 2010s. I suspect the 2020s will be about getting paid for it - and what better fuel than a COVID imposed lockdown to stoke the young blaze?
I'm waiting for those robots too!
> Did you know that the first Matrix was designed to be a perfect human world? Where none suffered, where everyone would be happy. It was a disaster. No one would accept the program. Entire crops were lost. Some believed we lacked the programming language to describe your perfect world. But I believe that, as a species, human beings define their reality through suffering and misery. The perfect world was a dream that your primitive cerebrum kept trying to wake up from. Which is why the Matrix was redesigned to this: the peak of your civilization.
When my kids want Robux I try to explain that they are paying real money to see their screen light up in a certain way and nothing more.
All software and media purchases can boil reductively down to "paying money to see a screen light up in a certain way".
If you have Blackrock and Vanguard buying up 20% of homes in the US at above market rates, that would do it.
What “you” did is oppose higher-density construction, which means the homes that exist today are the homes everyone in the future has to compete for, if they want to live near population centers. NIMBYism makes the profit that attracts the sharks.
Which is essentially what Bitcoin does. There is a natural abundance of numbers but crytocurrency protocols make some more scarce/valuable than others.
1. A company can create more shares but the number of shares has nothing to do with the value of your holdings. The shares are not scarce, but the supply is controlled by the company in response to its need raise capital. It's not arbitrary.
2. Fiat money, by definition, has value by decree. It serves to provide liquidity to loans and other obligations within the economy. The amount of money relative to demand for payments, loans etc. in the economy determines how much a $ is worth. It's not scarce or printed willy-nilly, but rather to keep the economy going and maintain relatively stable prices. Again not arbitrary and therefore not artificially scarce.
Bitcoin is scarce because the number in existence is arbitrary/predetermined and doesn't change in response to demand, hence its extreme volatility.
Which isn't new (neither is mistaking a clear case of natural scarcity in an unfamiliar structure for natural abundance; the metaverse is limited by all the traditional dimensions of computing/information capacity—energy, processing capacity, storage, etc.—and it won't take long, if it actually exists in a usable form, before exploiting the superficial abundance results into usage running headlong into the real natural scarcity; artificial scarcity will be superfluous.)
I don't think anyone is intentionally putting their finger on the scale when it comes to real-estate prices.
Maybe, and this is not from any data I can pull up, it is those with deep pockets buying additional properties as investments/rentals. And now we have huge corporations flipping, building rental homes on a massive scale.... The only solution I can see is to tax the living hell out of 3rd, 4th properties (etc.).
Sure it is, because the jobs are everywhere internet is.
Semi-rural and rural property values should roughly follow fiber and Starlink rollouts.
How does an ICU nurse take care of a patient over the Internet? How does a cashier ring through groceries of a shopper over the Internet?
How many jobs in the U.S. can be done from the internet?
We should recognize from time to time that not everyone is an "information worker" like us and all our co-workers. In fact, we are few and are among an elite.
https://www.gamedeveloper.com/business/digital-real-estate-a...
There's plenty of we who want to see change. But not enough of us. There are still too many who buy into the web of the narrative spun by The They.
He would look at our weak but non-zero safety nets and say, "You can do so much better," and note that if they didn't exist then Capitalism would have ended a long time ago.
So I don't know what he'd predict from here. We're in a semi stable state, looking at a potentially more stable one but very afraid of it and even more afraid of upsetting the status quo. But if things got worse -- and they keep threatening to -- that would turn the semi stable state real unstable real quick.
He might be surprised at the extraordinary high level of false consciousness given the relative freedom of access to information (belief in the American dream, etc.) but he likely wouldnt look at it and think "there's a country on the verge of communism" just because of the high level of material wealth.
He wrote about America at some length, and accurately pointed out that America's ties to Europe would only last as long as there was free land west of the original colonies to take and give to its growing population, after which America would develop a factory working proletariat just as Europe had after the decline of feudalism, and then be far less welcoming of European immigrants as it sought to preserve the wealth the existing residents had built for themselves. In that respect his theory was proven true. Capital, not any sort of continental or feudal allegiance or concern for the future, would be the driving ideology.
"Money, then, appears as this distorting power both against the individual and against the bonds of society, etc., which claim to be entities in themselves. It transforms fidelity into infidelity, love into hate, hate into love, virtue into vice, vice into virtue, servant into master, master into servant, idiocy into intelligence, and intelligence into idiocy.
Since money, as the existing and active concept of value, confounds and confuses all things, it is the general confounding and confusing of all things – the world upside-down – the confounding and confusing of all natural and human qualities."
-- Economic and Philosophic Manuscripts of 1844, "The Power of Money"
In a post-scarcity world capitalism would make no sense, because there would be no need for an economy, since everything would be infinitely abundant.