Douglas Rushkoff on Open Source Economy (Interview)

Odd that this just hit HN. I sent him an e-mail regarding his Colbert Report interview earlier.

Hey Rushkoff,

I saw your appearance on the Colbert Report the other day. In it, you made reference to how it would be economically beneficial if a great number of people caught cancer. Are you not familiar with the broken window fallacy?

You're following the flow of currency, which is the wrong way to go about it (mercantilism died in the 1700s). You need to follow the flow of value. When people contract cancer, they money that they would have spent on gifts for their children, personal luxuries, etc. is lost. The time that they would have spent working for their employers, etc. is lost. The money that the HMOs would have spent on whatever-it-is-they-spend-money-on (probably luxuries, but somebody paints the pool) is lost. And if some of these patients die, then we lose a great deal of economic value--years of working, perhaps. All of this to redirect some quick money into the hands of cancer doctors or researchers. This might look good on paper, and it might even artificially inflate the GDP temporarily. But in the long run, the value that is lost has a sharp negative effect on the economy. Effectively, we've sold an appreciating asset below its amortized value, which is always a bad idea unless there's some dire emergency.

Anyways, this is all Econ 101. I realize these sorts of appearances are entirely a marketing thing, but I would encourage you to be more thoughtful in your assertions on the future, even on a "comedy" show. I watch Colbert because he is subtly, deceptively deep.