productivity miracle or workhouse?

[Brad De Long]

>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