Rethinking Traditional Economics In An Age Of Intellectual Property Andy Kessler, who likes nothing better than forcing people to rethink the status quo, has dropped in a submission about his latest Wall Street Journal op-ed piece explaining why economists who are worried about too many people being employed leading to inflation are living in a time before intellectual property economics became clear. Kessler argues that with intellectual property being our main output, traditional economics don't apply in the same way: "How much does it cost for another copy of Windows. Zilch. Stressed about prices? Take another Xanax, it costs almost nothing to make. Same for Lipitor. Their high costs go to fund FDA trials, not factories. How much does it cost to enable another Google search? Music download? Email? Phone call? Nanocents. The output gap of intellectual property is almost infinite. Full (and high wage) employment in research jobs is what we want." This is the very concept behind things like "increasing marginal returns" that show that intellectual property, when opened up frees up the economy to do more, not less. So, the more we can encourage that, the better off our economy is. Unfortunately, it's taking a while for economists to realize this -- and apparently those economists all read the Wall Street Journal. Kessler reports: "Hate mail running 2:1. A good sign!" Indeed.  [via Techdirt]


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