productivity miracle or workhouse?

Brad De Long delong at econ.Berkeley.EDU
Mon Feb 14 19:38:55 PST 2000



>Michael Perelman wrote:
>
>>As United States moves further into relying on intellectual property rights,
>>productivity is bound to soar since the labor component is minimal for most
>>intellectual property goods. It's all fixed costs.
>
>In response to that, and to Brad's stuff on New Economy goods, I
>wonder: just how significant are they to overall output? Movies and
>software are chic, but they're not *that* big a share of GDP. IP is
>important to chip design and drug manufacture, but those things
>aren't easy to duplicate unless you spend lots of money setting up
>manufacturing plants. So what are we really talking about here?
>
>Doug

Well,things that are not charged for have a zero weight in GDP. The market, after all, is the domain of scarcity and constraint. Things that are abundant and free simply don't appear. So the right question is nont how much does it contribute to GDP, but how much does it add to our collective powers and capabilities.

The answer to that question I honestly don't know. For intellectuals, it has the potential to give us Godlike powers of observation and reference. At lunch earlier this week some of the UCLA economic historians were wondering how they had survived before they had fast internet connections to http://www.jstor.org/, the Mellon Foundation's academic journal storage website. And if the NLR ever gets its back issues online its intellectual influence will go way, way, way up.

For other people? I don't know...

For businesses? It has enormous potential to alter the shape and organization of business and production. But whether this transformation will have relatively minor or enormous effects on productivity I don't know...

Brad DeLong



More information about the lbo-talk mailing list