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55 sats \ 14 replies \ @denlillaapan OP 5 Dec \ parent \ on: Music Has No Economic Value; Convince Me Otherwise (TDE, Joakim Book) BooksAndArticles
that seems like definitionally true...? Of course economic value and market price is the same..
but let me think about this.
My intuition is to answer you that at marginal price = 0, any quantity is entirely consumer surplus -- that's why we're willing to donate money in exchange for music (just like zapping for content on Nostr or SN).
Producer surplus is the area above the cost curve but below the marginal market price. Given that artists -- like basketball players -- pay to make their music, their cost curves are always above marginal cost, and so there is no producer surplus.
Also, relevant to the point I'm making is that music is not (since digital files 20+ years ago _has not been) a scarce good. Oxygen, poems, or the letter X are non-scarce, thus can't have any economic value but consumer surplus, I believe
You may want to see an article relating directly to this subject:
#797031
There are also possible answers to your questions there.
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music is not (since digital files 20+ years ago _has not been) a scarce good.
- recorded music
ftfy
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Since there are so many “pirates” (THEIR name, not mine) out there, digital music is almost free (you still have to invest your time into getting it). This is the problem with copyright in the digital age. Copyright was originally for a different purpose.
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Agreed, and we pay Spotify etc for the tech and the convenience in giving us the songs we want when we want them.
They made a scarce service out of non-scarce foundations. That's their innovation, their value-add
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Any turd can make movies, cellphone cameras are ubiquitous, movies are not scarce, theaters are productizing delivery, that's their magic. movies have no economic value
^^ obviously this is an inaccurate statement. but it's functionally identical to your claim that music has no economic value.
good movies aren't easy to make. same as good songs. they're scarce.
scarce service out of non-scarce foundations.
wrong.
their [Spotify's] value-add
ownership of the song isn't changing. they're streaming you bits... phone's converting that to sounds, yes.
it's a nice noise, that you pay for the comfort of hearing.
you're not paying for songs. you're paying for the service of listening to them (you continue to lean on this argument while you're making the point (which I disagree with) about the value of music).
song ownership is not changing through the transaction with Spotify.
Spotify is the same as paying a theater to watch a movie.
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Economic value of the marginal unit is equivalent to market price. Air and gravity have economic value (we would pay for them if we had to), but a zero price.
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no, that's pretty clearly wrong. They don't have economic value, simply because they exist in abundance (any feasible demand summed up across all humans is less than what's plentifully available). Hence no price.
So yea, you're right that I'm equating those things. Should I not?
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Economic value is the value that person places on an economic good based on the benefit that they derive from the good.
I just grabbed this from investopedia, not because it's authoritative of course, but I think it might help orient the discussion.
The way I think about economic value is that it's equivalent to what people would pay for something. What people actually have to pay for things involves a bunch of factors beyond subjective valuations, so it seems less relevant conceptually and further removed from the source of value.
Abundance can only generate consumer surplus if the abundant things are valued.
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uh-hu, what's our disagreement, then?
An abundant good (or free good, like air or gravity or atmosphere or whatever) is entirely consumer surplus. The market price is zero. If there were a recipient on the other side of that I can choose to give some of the consumer surplus value back -- i.e. donating or zapping or giving money to musicians.
But the fact that we would or could pay for something is distinct from its economic value I would say; and it's what turns paying for music into donations rather than consumption of a produced good/service. I give out of my consumer surplus; but you as a producer have no scarcity value such that you could charge a price
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the fact that we would or could pay for something is distinct from its economic value
That is the disagreement. The value of a good is what the consumer is willing to pay for it. Price and willingness to pay are totally different concepts.
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They value is subjective, the price is objective. Only the consumer knows what satisfaction he will derive and where on his priority list it lies and therefore the value of the good. The price is what is exchanged on the market for the good and can be objectified very quickly and easily: look at the receipt.
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You are stating the subjectivist argument here.
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Yep. I think we're both trying to make subjectivist claims, though.
Even though prices are objective, there is a sense in which they help us classify things:
- Goods have positive prices
- Bads have negative prices
- Neuters have zero prices.
The subjective element that's missing from this is the willingness to pay. Some things are bads for one person, but goods for another: industrial waste products that are an input for another industry, for instance.
Price only tells us the status of the marginal unit of that good, rather than the entire stock.
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Yes, however only the consumer of the goods can determine if it is a good, bad or neutral. For instance: fluoride that THEY put in the water is supposedly a good for the population, but it is a bad for the fertilizer industry because it is a toxic waste. Tooth decay is bad for the consumer but a good for the dentist and toothpaste industries. What is good for the goose is not always good for the gander in this case.
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