Sunday, January 06, 2013

"Nobody ever suggested that Picasso should spend fewer hours painting per picture in order to boost his wealth or improve the economy."

In the middle of a very wise post about the long term value of accumulated intellectual capital that is often difficult or impossible to measure in monetary terms when it is first produced, Kevin Kelly uses the above example of Picasso as an argument.

It's a very poor choice, because Picasso was enormously successful at monetizing his intellectual output, and acutely aware that he could produce more faster by selling prints and book illustrations than by making individual drawings.

It's a poor example, but his fundamental argument is correct and important. There's a tremendous amount of intellectual output that's completely invisible to conventional measures of GDP. I learned about Kelly's article through Steve Muhlberger's blog. Steve doesn't carry advertising, so his blog is a free gift to the world. In conventional terms, its direct contribution to the economy is zero, but so much the worse for conventional measures of economic activity.

There's a whole enormous but difficult to quantify gift economy where we spend time making things for friends and strangers: blog posts and cat photos and Improv Everywhere performances, mostly unmediated by the exchange of money. We're like a planet of Kirstendalers, living well by spending time as each others' servants.

And one of the great strengths of this gift economy is that transaction costs can be very low. As the citizen of a rich society I can afford to spend my leisure as I wish. I can give it away if I want to.

Now a lot of this simply gives pleasure to friends and strangers, not that there's anything wrong with that. Those that do this do well.

Some fields, like my primary interest of history, don't do a lot to put bread on the table of the poor. Still, those that know their own past better are richer for it. Those that do that do better.

But, some ideas are so powerful that they can clearly make a society richer as long as the society survives, and successors that inherit it until they perish, and so on until the end of time. Those that do this do best of all.

One of the great ideas of the 20th century was nonviolent civil disobedience. It made the world better, and once invented could not be uninvented. But the inventors who brought it forward drew no worldly profit from it, but the reverse.

But think of the unlocked potential at the end of the struggle! How many U.S. citizens would prefer the laws and norms of 1954 to those of today? Few, I hope.

There are a lot of ideas like that, although few as powerful. Sometime the first draft is flawed (See: French Revolution 1.0) The second great strength of the 21st century gift economy is that each of us can throw our thoughts into the marketplace of ideas, and others can refute them or improve  on them, and we can respond to do better. Rinse, lather, repeat.

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