. . . Today, knowledge, not things, rule. . . . This is a version of one of the cornerstones of New Paradigm thinking is the curious doctrine that "brand equity" -- the financial value that stock markets assign to names like Nike and Mickey Mouse -- is a kind of capital . . .
I would suggest that hostility to this idea is premised on an implicit hostility to mass consumer preferences. Much as I despise Nike, it seems fair to say that if Nike spends umpteen billion dollars persuading the public that wearing a swoosh is cool, and everyone comes to believe that swoosh is cool, well then wearing Nike becomes cool from the consumer's standpoint, and that's value. Hence the brand is a capital asset, if we agree to define capital narrowly as something that generates benefits over an extended period. Not unlike the Verso edition of the Communist Manifesto.
This happens to come up in tax econ, where there is an ongoing debate over whether a firm should be able to 'expense' its advertising costs, rather than depreciate them over time. The latter is less advantageous to the firm (deductions spread over time, rather than right away). But the brand or trademark clearly has some lasting value, from the standpoint of profits, if not of 'value.'
" . . . But a "brand," as Naomi Klein puts it in her excellent book No Logo, is a kind of "collective hallucination." . . . "
As above. Beware left criticism of mass consumption preferences, say I.
" . . . Lev has some more curious ideas, the most curious perhaps being that accounting is far too fixated on the "transaction," the exchange of money for a good or service. . . . "
This and what follows is not curious, but a restatement of the phenomenon of decreasing cost industries, far as I can see. In these industries, the tendency is towards monopoly. Prices cannot match marginal cost because the firm would not recover its capital costs. I don't think it has anything to do with the stock market, except in the sense that because price has nothing to do with marginal cost, valuation of the firm's capital is more speculative than it might otherwise be. Perhaps Lev oversells what seems a pedestrian insight as something new and groovy.
In general I agree w/DH's point about the overselling of the 'new.'
. . . who are mostly female.) Or, services formerly performed by nonprofits, like education, are increasingly the realm of profit-seeking entities, from Chris Whipple and Benno Schmidt's Edison Project to the University of Phoenix.
The Edison stuff is still a pinprick. I'm not sure what else would fall into this category. There are ancillary services to public schools that have grown (e.g., Sylvan Learning Centers). Most non-public schools are non-profits.
On the whole a good rant which, according to my spies, and putting it kindly, compared well to the rest of the rethinking going on.
mbs