It's like the old aristocracy days except for instead of the elite owning physical property and renting it out to the peasants, the elite own intellectual property and rent it out to the peasants.
Feudalism is one of the standard memes of history, as per David Brin.[1] The essay is well worth reading, as well as the thesis that a new meme ("otherness") arose within Western Liberalism. In my mind Otherness is a saddle point, and worth investing in to protect.[2]
Western Liberalism increasingly seems to just be a system by which you establish global feudalism. I guess it's good for a few generations. Hard to argue it's even good now though because even though we're wealthier than ever we're increasingly unhappy and mentally ill.
If you have a billion dollars in the U.S you can park it in treasuries and make millions and outsource the income generation to the government's tax collectors. Meanwhile, in China, the government just prints money electronically when they need it and billionaires have to be clever about where to park their billions to earn a decent return. That need to be clever contributes to creating useful capital that increases the wealth of society generally instead of just adding to the interest bill on the national debt.
> instead of just adding to the interest bill on the national debt.
the billionaires are lowering the interest bill as they compete to purchase treasuries. (the money is borrowed from whoever will accept the lowest interest for it. see https://www.treasurydirect.gov/instit/auctfund/work/work.htm under "Bidding".)
> Meanwhile, in China, the government just prints money electronically when they need it
The only country in the world that just prints money when they need it is USA. No other country can do it — it'll just cause hyperinflation. China is not an exception. They can't print US dollars. And if they would print more Yuan, it doesn't mean that China billionaires would be able to buy more houses in LA - the exchange rate of Yuan to dollar will simply drop and they will be able to buy exactly the same amount of goods in US as before.
USA can print almost unlimited amount of money because they control almost all the world and bend most of the governments to buy US treasuries. This is why there're US military bases in many countries and if some country decide to stop accepting US dollar for foreign trade, the next day it's invaded by US military.
Although many people predict that this uncontrollable printing of US dollar will cause US economy to collapse sooner or later. You simply can't do that forever.
That we're somehow wealthier than ever is a great misconception.
GDP per capita and even GDP per capita adjusted for PPP is also misleading because it uses the wrong basket of goods: focusing on things that dont matter.
People forget, wealth is not money. Wealth is the things you buy with money. Wealth is when you can afford the essentials of life: Shelter, food, water, medical insurance, education and transportation (with the costliest ones being Shelter and medical insurance). Consider the number of working hours the average person needs to expend to afford shelter and compare that to 500 years ago. I think you'll find that there hasn't been much improvement. In fact, in CA and bay area, I think you'll see that we're working even longer hours to afford basic shelter than 100s of years ago.
> That we're somehow wealthier than ever is a great misconception... I think you'll find that there hasn't been much improvement.
Of course we're wealthier. The shelter you get to enjoy today is leagues better than the shelter you got to "enjoy" hundreds of years ago. The net worth of humanity has gone up. Significantly. We have more advanced technology than ever before. Whatever GDP is measuring probably doesn't consider the fact that we have compounded knowledge and given ourselves things our 100 year old ancestors could not even imagine.
I'm so glad I'm alive at a time further into the future. I may not know how glad I am, because I may not be able to fully comprehend the loss of all of the things that I have today that were simply non-existent back then.
> Of course we're wealthier. The shelter you get to enjoy today is leagues better than the shelter you got to "enjoy" hundreds of years ago.
Those that argue we're no better off than we were 200 years ago are pretty unpersuasive these days.
I'm more worried about the next 200 years though. It took several thousand years of civilization to create the industrial revolution, and that was quickly followed by the information revolution. Both dramatically improved quality of life.
But what if this is the end of the exponential? What if Moore's law is dead, and breakthrough technologies like quantum computers or new propulsion systems aren't just "5 to 10 years away", but decades or centuries away?
There is a lot of evidence today suggesting that the industrial and communication revolution was a blip, closer to a step function in human development, preceded by slow linear growth and possibly followed by slow linear growth.
I'm not certain that this will indeed happen, but if it does, our entire society and world is in for a complete shock.
What passed for shelter 500 years ago wouldn’t attract any tenants these days, even if it was legal. No heating, plumbing, sewage, not to mention the fire code violations.
In a basic sense, that's what all wealth is. Income generating property. Debt produces interest. Company shares produce dividends Real estate earns rent. Capital produces revenue. It's all quite interchangeable.
The most famous rant on this is Marx & Engel's manifesto. Chapter one explains how history works, making similar comparisons from their day to older days. The second chapter describes communism's aims. It's also (largely) a rant about the bourgeois.
Anyway, like most Marx, it's hard to translate to concrete terms. One unambiguous line stands out though. "..the theory of the Communists may be summed up in the single sentence: Abolition of private property." - Communist Manifesto
In the very next paragraph, ambiguity re-enters. Even in theory, it's very hard to flesh this out. ...It's especially hard in the context he's most interested in: urban industry/society. Replacing all property with a "commons" is easier to imagine in a rural/village context. Rural commons exist.
I think Marx got the idea from a rural context. Formal and informal privatisations of agricultural commons were part of his stated inspiration, iirc.
Anyway, I think the basics are trivial. Property is effectively income generating by definition. If aristocracy is immoral, then property owning is immoral.
To me, this is a reductio ad absurdum for fundamentalist thinking... kind of like the monty python witch trial.
Intellectual property didn't used to be rent seeking. It's a relatively recent phenomenon where you can no longer buy-to-own, you can only subscribe-to-use.
Virtually every company is moving toward this model - Microsoft, Adobe, Disney, etc. That's my main complaint.
Liberal economists use this term the most, they usually mean large companies trying to get goodies from the state. Lefty ones tend to mean something like "profiteering."
X-as-a-service businesses models aren't exactly new in intellectual property. The patent/copyright systems explicitly assume licensing and royalties. But, I agree that subscriptions are pretty new in consumer-land.
But we need a different term rent seeking already has competing usages.
Rent seeking [0] typically means exploiting a captive market without providing value. I don’t think that fits either of your definitions. The key piece is they basically squeeze without proving value. So buying IP and then upping the rent fits that.
A very large number of early economists railed on rentiership (Adam Smith, Herny George, of course Marx).
With regard to intellectual property, "ownership" is effectively monopoly because nobody else has the right to produce the good. There might be "inferior" or replacements goods with pop music, but maybe not even that when it comes to things like patents.
However I disagree with your assertion that wealth is income generating property. If I store $5mm under my mattress, I have wealth without generating income: the wealth can be used to purchase a large amount of services over a sustained period of time, but it is not generating more wealth.
The argument about "private property" is not hard to understand, it is just confusing for many people because of the way we use the term in modern language. It is not only to be compared with public property, but also personal property: for example, the apartment I live in, or the comb I use to brush my hair. Interestingly, personal property is almost by definition a form of wealth which does not produce income/accumulate value. Here's a good explanation:https://en.wikipedia.org/wiki/Personal_property#Personal_ver...
There are all sorts of practical exceptions, but it's still all backed by income generating wealth.
That $5mm under your mattress is backed by bonds, income yielding bonds. That's why it's worth $5mm. If the country or bank that issues those bonds were defunct, the money would be worthless because the bonds would no longer be income generating.
You could say that gold is nonproductive wealth. Adam Smith sorta argued that gold isn't wealth. You could use a sack of grain as an example..
These examples are theoretical though. IRL, the majority of wealth is equity, bonds, real estate, etc. The value of that property is determined by the income it generates for its owner. If you really had that $5mm, it would probably be in equity, bonds, real estate, and generate a yield... like most wealth in the world.
No, the millions is not backed by bonds. It is a complex topic, but Brazil stopped their inflation by issuing a new currency and implementing price controls.
Much of economics depends on expectation, there is nothing inherently logical about any of it.
With regard to any property, ownership is a monopoly or oligopoly, so long as more of identical or equivalent good cannot be easily produced. Ownership of land, or natural resources, is the same in that regard.
>If I story $5mm under my mattress, I have wealth without generating income.
This isn’t true. The $5mm is merely representational. The social dynamics that maintain it’s exchange value, i.e. security, is circumstantial. The security is exercised by way of capital.
>personal property is almost by definition a form of wealth which does not produce income/accumulate value.
This is ahistorical. In a capitalist society, personal property is a means to produce value all the same. Capitalism comprises relational circumstances that deem your toothbrush, comb, computer, school supplies, and your quiet home all as means to produce value.
Seems that's the way society ended up being structured. Perhaps we will all end up selling houses to each other and no one will have to make anything at all!
I swear, even the Aztecs had a less destructive system.
We need about 1% of people to grow the food and perhaps 9% of the people to make stuff we need.
The other 90% then have to convince the 10% that do the actual work that they are worth the time to produce a surplus for. IP barriers are one way of doing that. Even farmers like pop songs.
Close. About 1.4% for farming and under 13% for all other tangible goods.[1]
Take a close look at that table. It's really important.
Growth areas: Health care and social assistance, educational services, leisure and hospitality, and construction.
That 90% does not live on IP, they live by offering medical care, police service, education, roads, reservoirs and aqueducts. By transporting those farm goods, inventing new tractors and efficiently managing all these things.
And while pop songs artists may deserve compensation, society does not crucially depend on someone collecting royalties for generations after the guy's death.
On the farmer analogy (and inspired by the recent .org tld acquisition), if one really wanted to extract rents, simply acquire the land they work on and set them all to sharecropping.
That assumes the amount each individual person "works" remains the same. Why not full-time employment at 15 hours a week, with 30% of people making stuff we need?
Most of our efficiency gains are presently being funneled into a glut of overproduction of nonsensical "goods" (eg overfinancialization and overadministration) rather than direct quality of life improvements of everyone being able to work less.
That assumes fungibility and substitution. The reason we have 1% of people making the food is because that is the specialisation we can't eliminate by mechanisation and automated processes.
The "Spreading the unemployment" argument is a bit like saying we don't need all those violin players in the orchestra, just ship a few unemployed people in and give those violin players Thursday and Friday off.
Sure, abstractly. But to continue the analogy - there is presently a glut of violin players and other musicians, and everyone currently making up the orchestras have no time to do anything else.
And yeah, the "best" orchestra is going to face an insatiable demand for their specific time, and likely enjoys performing as much as humanly possible. But these conditions are exceptional, rather than the situation faced by basically everybody else.
I was saying what the numbers would change to at the same level of technological progression, but with policy changing to make the work more evenly distributed.
Obviously the long-term goal is ever-more automation. But current economic policy is based around creating full full-time employment, which is fundamentally at-odds with ever-less needing to be done due to automation. Hence the proliferation of anti-productive "bullshit jobs" where people ultimately aren't ultimately helping to produce anything (eg the entire medical billing system), but still need to cling on and go through the motions so they can eat.
It's actually kind of brilliant. Mercuriadis et al are getting some of the rights to well-known intellectual property through the presumably underpaid, behind-the-scenes contributors. His competitors say he's paying too much, but is that just because they've been paying too little?
I was biased against the guy when I started the article, but if the status quo ante was other execs paying pennies to songwriters for their rights, and then doing little to nothing with them, maybe Mercuriadis is onto something.
When you hit 40 you start to see in real time how valuable those old songs are. Your friends and other people in your age group hate the new music so they only listen to music from when they were young. All of the commercials play music you thought would never be used in a commercial. Walking through the grocery store or waiting in an elevator you start to bop your head because one of your favorite songs from high school is now elevator music. A popular song has a lot of long tail value, sometimes you have to wait a generation to start to see the returns.
"Your friends and other people in your age group hate the new music so they only listen to music from when they were young."
Young people hate a lot of music made these days and listen to older music. It's not just a 'when I was young' thing anymore.
There's something very profound that comes from artists who make music, as opposed to a producer who makes some licks, a mediocre singer who belts it out, and a label that brands it.
When the brand/hype/marketing of the 'current flavour' dies down, what is left?
Music older than 4 years has to compete on its own merits, and most of it is forgotten, the better stuff hangs around.
Because music is ever more produced and less created, a lot of the stock today just stand the test of time.
When I was young you'd hear 50's music in the grocery store. Now you hear 80's music. But I think in 30 years we're still going to hear a lot of 80's music (and 60's, 70's and other eras) but the ratio of 'recently contemporary' to older music will be a lot lower.
You will always have some young people who like an older sound. But no, those songs that you think people will hate will be called classics in 10 years time. As a former DJ I have seen that cycle over and over again. When I go to grocery stores I hear mostly 90s music. Most of the commercials I see have 90s or 80s music in it. And when 20 year olds get in their 40s it wil be the same pattern.
There was a "classic rock" radio station playing in the store where I get my morning coffee, and it was playing the same songs as 25 years ago, from the 70s or 80s. By now shouldn't they be playing music from 1995-2005?
Old songs have greater surface. Many more people have heard it over something popular today which 20% might have heard of. New music is usually much cheaper. Even within the same artist. Would you lic. Bieber's Baby, baby O or something new. More extreme example would you lic gangnam style or anything newer by that artist?
Not really its why TV shows have to be careful with the budget for licences - though this can work very well "sinner Man" as used in an episode of Person of interest.
It's not just than new ones are pumped out, it's that people lose interest and move on. Taylor Swift will do better than someone less popular, but people still listen to "Blank Space" more than "Love Story." Going back further, kids these days are less likely to know the Beatles.
You are correct, Piketty provides empirical evidence that supports this theory in "Capital in the Twenty First Century". Essentially the return on capital investment is always greater than labor. He also suggests this rule and feature of capitalism threatens capitalism itself as long as wage earners make no efforts to themselves invest their wages. There was a brief period post war where wage earners did invest their wages but that fad has ended, now we spend all our wages plus some. The 'plus some' is often at interest rates the mafia would be proud to charge. Any salary increases earned are generally spent to pay off this debt while incurring more debt to enhance our lifestyle. The dollar will collapse eventually, maybe not in the lifetime of anyone reading this, but it will happen.
He’s considering launching a songwriter’s union, something akin to the Screenwriters Guild, that would give songwriters more leverage to extract better deals from the industry’s power brokers.
