Music Has No Economic Value; Convince Me Otherwise (TDE, Joakim Book) \ stacker news ~BooksAndArticles

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Music Has No Economic Value; Convince Me Otherwise (TDE, Joakim Book)thedailyeconomy.org/article/music-has-no-economic-value/

1725 sats \ 79 comments \ @denlillaapan 5 Dec BooksAndArticles

Recycling this, almost on its anniversary: https://thedailyeconomy.org/article/music-has-no-economic-value/

Music has no economic value, i.e. the market rate of music produced = 0.

Economically speaking, the pennies the musicians earn per stream land somewhere between donations and rent-seeking. Put in the language of a modern conversation about music, rights, and art, shouldn’t inventors be compensated for their work? Aren’t creators entitled to be paid for their work? As a matter of economic fact, no, they’re not. Since the retirement of the labor theory of value, labor doesn’t have economic value simply because it was expensed. Economic transactions and the property rights we use to guide them are intrinsically related to scarcity.

We only price things that are scarce; anything else becomes fluff.

(origin: Dudes gotta rant and pick fights, right: https://x.com/joakimbook/status/1864689590478446841)

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186 sats \ 33 replies \ @Undisciplined 5 Dec

I don't appreciate how Munger described me, but of course it's accurate and he's correct.

The broad thesis isn't right though. What's going on is that musicians tend to be poor entrepreneurs.

If music had no economic value, it would be hard to explain why people pay bands to play at their venues. The trick is creating a situation of scarcity for a good whose marginal cost can be near zero.

132 sats \ 4 replies \ @SimpleStacker 5 Dec

lol, are you referring to the 40 year old basketball player with a negative salary for playing ball? that's me as well

i know the article is meant to be fun and tongue in cheek, but I'd say the author is confusing consumption with production

The 40 year old basketball player paying for a YMCA gym membership is consuming basketball, he's not producing basketball for others' entertainment. Just like most songs on Spotify are actually consumption value for the musicians, they're just putting it on Spotify on the off chance that someone out there likes it and is willing to pay a bit for it (indirectly through Spotify)

It isn't much different from Stacker.News, honestly. Here we're mainly posting for fun (consumption value), but we sometimes get tipped (production of value for others)

12 sats \ 1 reply \ @denlillaapan OP 5 Dec

mmmm, not sure there's a meaningful distinction between consumption and production when the price hits (=goes below) 0.

That's Munger's point with the basketball players: production of basketball playing is actually consumption of it, since the non-elite guys are paying for the privilege to play. Similarly, musicians are paying for the privilege to play/make music, so what they're creating is consumption and not production.

27 sats \ 0 replies \ @SimpleStacker 5 Dec

Right but I wouldn't say it's of zero economic value. I think when people play music or sports, they're acting as both the consumer and the producer, and the analysis of economic surplus can proceed as usual. They produce and consume up to a quantity of music/sports until their private marginal benefit equals their private marginal cost. The total surplus is the integral over the marginal benefits minus the marginal costs.

The difference between an amateur and a professional is that the professional's playing adds marginal benefit not just to themselves, but also to others who watch/listen. They are then compensated in the market for that production.

10 sats \ 1 reply \ @Undisciplined 5 Dec

That's an interesting point, but aren't you and I producing basketball for the other old guys at the gym to consume, as well as consuming it ourselves?

41 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

Perhaps there is no market for the good you are contemplating. You can be both a consumer and a producer of a good. A dairy farmer produces milk as well as drink it.

44 sats \ 24 replies \ @denlillaapan OP 5 Dec

I think I explain that in the article...? (With Queen Taylor being the monopoly provider of herself; the music, an economically valueless commodity, being a prerequisite for that monopoly scarcity pricing)

9 sats \ 4 replies \ @Rothbardian_fanatic 5 Dec

So, what you and the author are claiming is that the music is bereft of any marginal value, but musicians make their money selling a unique experience (a live concert) or trademarked goods which have value only because of the band or song trademarked and used on the goods. Would you then not call the music a good of a higher order? Because in order to make the other products, you need the input of the song or band. You could not sell the other goods without the input of the music.

BTW, perhaps Queen Taylor now has earned a reverse Midas touch, everything she touches turns to sh*t.

20 sats \ 3 replies \ @denlillaapan OP 5 Dec

what?! What has she done??

0 sats \ 2 replies \ @Rothbardian_fanatic 6 Dec

(S)he really blew it with politics and football. Perhaps, (s)he can at least get a good song out of it! :)

0 sats \ 1 reply \ @denlillaapan OP 6 Dec

Oh yes. My friend says she has a dozen songs about breakups but none about blowjobs. Might be the problem

0 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

Which, the breakups or the blow jobs? :)

12 sats \ 18 replies \ @Undisciplined 5 Dec

Fine, I'll read the article and then criticize it.

Just know that that is not how the internet works.

24 sats \ 17 replies \ @denlillaapan OP 5 Dec

Obvs :))

0 sats \ 16 replies \ @Undisciplined 5 Dec

Ok, here's my issue. I think you're conflating economic value and market price.

Economic value should be thought of as something like "how much would people be willing to pay for this thing.": In the case of music, and other non-scarce goods, this pretty much equates to consumer surplus.

The argument you're making pretty much equates economic value with producer surplus.

55 sats \ 14 replies \ @denlillaapan OP 5 Dec

that seems like definitionally true...? Of course economic value and market price is the same..

but let me think about this. My intuition is to answer you that at marginal price = 0, any quantity is entirely consumer surplus -- that's why we're willing to donate money in exchange for music (just like zapping for content on Nostr or SN). Producer surplus is the area above the cost curve but below the marginal market price. Given that artists -- like basketball players -- pay to make their music, their cost curves are always above marginal cost, and so there is no producer surplus.

Also, relevant to the point I'm making is that music is not (since digital files 20+ years ago _has not been) a scarce good. Oxygen, poems, or the letter X are non-scarce, thus can't have any economic value but consumer surplus, I believe

22 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

You may want to see an article relating directly to this subject: #797031 There are also possible answers to your questions there.

10 sats \ 3 replies \ @itsrealfake 5 Dec

music is not (since digital files 20+ years ago _has not been) a scarce good.

recorded music

ftfy

2 sats \ 2 replies \ @Rothbardian_fanatic 5 Dec

Since there are so many “pirates” (THEIR name, not mine) out there, digital music is almost free (you still have to invest your time into getting it). This is the problem with copyright in the digital age. Copyright was originally for a different purpose.

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0 sats \ 8 replies \ @Undisciplined 5 Dec

Economic value of the marginal unit is equivalent to market price. Air and gravity have economic value (we would pay for them if we had to), but a zero price.

13 sats \ 7 replies \ @denlillaapan OP 5 Dec

no, that's pretty clearly wrong. They don't have economic value, simply because they exist in abundance (any feasible demand summed up across all humans is less than what's plentifully available). Hence no price.

So yea, you're right that I'm equating those things. Should I not?

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0 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

I gave him the link to the article I posted about this. #797031

34 sats \ 2 replies \ @kepford 5 Dec

Exactly. I haven't read this article but the title alone misses the subjective value angle.

69 sats \ 1 reply \ @Undisciplined 5 Dec

It's heavy on the marginal value aspect, which is worth thinking about, but certainly not the whole story.

83 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

Exactly, marginal value is not the only consideration, but just one of many.

121 sats \ 5 replies \ @grayruby 5 Dec

Before getting into the the music thing I think this teacher/basketball player comparison is flawed. The guy who plays basketball at the YMCA is a basketball player, not a professional basketball player, just like when I teach my friend how self custody bitcoin or my wife teaches me how to make macaronic and cheese from scratch we are teachers, not professional teachers.

You can't in one instance calculate only those that do something professionally for compensation (teachers) and in the other instance calculate anyone that undertakes that activity (basketball).

120 sats \ 3 replies \ @Undisciplined 5 Dec

The comparison isn't perfect, but it is relevant if you only consider the old guys at the gym who would play basketball at the highest level available to them and leave out those who are doing it purely recreationally.

On the margin, basketball players (those who are willing to play for compensation) have to pay to play, because there is such a glut on the market. The marginal teacher, on the other hand, gets paid to teach, because there is a shortage on the market.

There's a whole, much longer, discussion about why heterogeneity of labor makes all of these discussions very flawed.

65 sats \ 2 replies \ @Rothbardian_fanatic 5 Dec

Sometimes it is difficult to find the margin because people value things so differently. And, yes, I know, the marginal value is found in the last one bought. I think the liquidity of the market determines how easy it is to find the marginal value of the last bought good.

40 sats \ 1 reply \ @Undisciplined 5 Dec

You're right, because there's also the marginal unit of the next one to be sold (and we don't know what that one will be sold for).

65 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

BTW, I found the post where you and the Mises guy were going at it and cross posted this article there. I think he probably had some inkling of this being published and front-ran it.

37 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

There is a market value to music!! it is the value that someone will pay to buy it. It is subjective and different for every person in the market place. If they didn’t think they would derive more satisfaction from it than from the money, they would not make the exchange. That the exchange was made is proof that there is value in the music.

112 sats \ 14 replies \ @Manikese 5 Dec

I bought music using dollars. I’m not the only one. I’ve gone to concerts and paid using dollars. I’m not the only one.

10 sats \ 13 replies \ @denlillaapan OP 5 Dec

yes, it's called donations.

Your reply is infinitely replicable both technologically (1s and 0s are infinite) and linguistically (= words are free).

I will proceed to zap your reply. Have I now undermined the fact that your reply, being nonscarce, has zero economic value?

111 sats \ 6 replies \ @Rothbardian_fanatic 5 Dec

You are saying any exchange on the market is called donations? They are all barters using a medium of exchange, but donations? I think you are dodging the issue by changing the definitions of the words you are using. Do you know who does that all the time?

20 sats \ 5 replies \ @denlillaapan OP 6 Dec

No, I'm saying markets (and market prices) have a function -- directly related to scarcity.

When you're paying for something that isn't scarce, i.e. isn't an economic goods, what am I to call it but a gift or a donation?

10 sats \ 4 replies \ @Rothbardian_fanatic 6 Dec

When you pay, whether in money or other goods, you are exchanging. Donations, on the other hand, are outright gifts. Those are the differences. Does it matter whether the good being exchanged for is in plenty or scarce? No, not really, because there is an exchange going on. As I said before, there would be no exchange if both the parties to the exchange did not think what they were getting was worth more than what they were giving up.

10 sats \ 3 replies \ @denlillaapan OP 6 Dec

Let me "sell" you some air, sir.

How about my mother's recipe for chocolate cake? Or a^2+b^2=c^2?

0 sats \ 2 replies \ @Rothbardian_fanatic 7 Dec

Great, however I find no value and will not exchange. I already own the ones I want. As a counter offer I will take those goods if you pay me 5000 sats. Got a different offer?

0 sats \ 1 reply \ @denlillaapan OP 7 Dec

I gotta pay you for taking noneconomic goods?

Interesting, interesting... A little like how musicians as a group supply music at a loss?

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25 sats \ 4 replies \ @ek 6 Dec

yes, it's called donations.

You sure you want to call it a donation when I buy a ticket so I can see an artist perform live and have a great experience?

Sorry but that argument is so weak, I’m not sure you’re arguing in good faith.

Your reply is infinitely replicable both technologically (1s and 0s are infinite) and linguistically (= words are free).

That’s a very narrow view. Not all content is created equally. People pay to get access to content from some writers. Just because the vast majority of people write for free, doesn’t mean all content is free. It’s clearly not.

33 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

I pointed out that this is just changing the definitions of the words being used.

0 sats \ 2 replies \ @denlillaapan OP 6 Dec

I explicitly use the concert example in the article. You're welcome to read it, sir.

A concert, unlike infinitely replicable digital files, has plenty of scarcity -- which is why Taylor etc can charge tons for them.

0 sats \ 1 reply \ @ek 6 Dec

Do I need to read the article to point out that replying with

yes, it's called donations

I’ve gone to concerts and paid using dollars

doesn't make sense? But I see, I think you only wanted to reply to the first part:

I bought music using dollars

I still don't agree with you but it at least makes more sense now

0 sats \ 0 replies \ @denlillaapan OP 6 Dec

Yea, the dude said he's bought "music using dollars". And then in later sentence he mentioned concert.

So that's what I was replying to.

Concerts are scarce economic goods (well, services). No argument there. But that's not what I'm talking about

0 sats \ 0 replies \ @Manikese 6 Dec

Music has become less valuable since Napster and the ability to get copies of music without the requirement of a physical medium to hold that music. I do see your point. However even though music is much cheaper, there are still services providing a selection of music and those services charge a fee. What you get in return is music.

Also, importantly, words themselves may be free, however the ideas held in them can be immensely valuable.

125 sats \ 2 replies \ @Aardvark 5 Dec

I would totally agree if humans were automaton and had no emotions.

You're emotional state has a direct effect on your ability to produce. If there was no economical value to art, then a group of workers sitting in a grey quite box should produce as much as group that has access to art and music and all manner of things that bring them joy and meaning.

I'd say a will to live has to exist prior to having a will to produce

11 sats \ 1 reply \ @denlillaapan OP 5 Dec

I'd say a will to live has to exist prior to having a will to produce

Fuck...gotta think about that.

0 sats \ 0 replies \ @Rothbardian_fanatic 5 Dec

Not much to ponder there, is there?

12 sats \ 0 replies \ @7e6e393a56 5 Dec

Music or any artistic expression has always been a commodity and each era has its own peculiarities of financing. Let it be freely demanded by consumers and financed spontaneously by those willing consumers. The instrument for this is called free market. Spotify is not a parameter for further analysis

30 sats \ 1 reply \ @Shugard 5 Dec

We all love Mike!

Music has no economic value, i.e. the market rate of music produced = 0.

At first glance, it's so provocative and I want to say no!

but then again, I don't pay for music. I don't have Spotyfy.

0 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

I don’t pay, either. I use CDs borrowed from the public library and pirate them if I like them! YouTube also has a nice variety of music.

10 sats \ 2 replies \ @LowK3y19 5 Dec

The only money musicians get these days are from the merchandise and ticket sales and that’s only a percent they still got to split it with the Venue

0 sats \ 0 replies \ @denlillaapan OP 6 Dec

Yes, cool -+ now read my actual argument instead of making up strawmen

0 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

Isn’t that called “business”? There are costs for production that have to be taken into consideration by the entrepreneurs.

0 sats \ 0 replies \ @OT 5 Dec

I recently found this out after joining a local amateur orchestra. The conductor gets paid but the musicians need to pay for the space and insurance. It wasn't much, but I couldn't do it cause of my background (I used to work as a professional musician).

About monetizing music, there are some forms of music that aren't easily monetized. Orchestras tend to have more band members than the audience. Free jazz is not very popular unless you have already made a name for yourself. There are heaps of experimental genres tgat practically have no way to make money. You might get lucky by getting your song in a movie and collect royalties, but apart from that it is very hard.

Making art for art sake needs a commission, grant or just a rich person that loves the work.

0 sats \ 4 replies \ @DesertDave 5 Dec

I don't even know what to say about this.

0 sats \ 3 replies \ @denlillaapan OP 5 Dec

read the article and tell me where I'm wrong

0 sats \ 2 replies \ @DesertDave 5 Dec

I'm not concerned with right and wrong. I'm not the type to understand economic value. I treasure music above most everything and art is super valuable to me. I want to see artist in all form taken care of. I am sure you are right about what you are saying. It's just not a framework that my mind can understand. I think in the future music will be openly free and artists will get tipped directly like wavlake. How that relates to economic value doesn't concern me.

11 sats \ 1 reply \ @denlillaapan OP 5 Dec

then I would suppose we're in complete agreement!

10 sats \ 0 replies \ @DesertDave 5 Dec

Perfect. I just didn't read it and I jumped to conclusions. That's on me. Thank you for clarifying.

0 sats \ 7 replies \ @itsrealfake 5 Dec

Music has no economic value, i.e. the market rate of music produced = 0.

bullshit. i'm a dj. i pay for it, to the tune of $1.95/song

great tracks, in hi-resolution audio formats, that fit the style/energy that i'm looking for are very scarce

0 sats \ 6 replies \ @denlillaapan OP 5 Dec

hm... not sure the music would be the thing that's scarce. The tech and the discovery process (at least in a landscape of close-to-infinite informational overload) would be valuable, but not the music itself...?

0 sats \ 5 replies \ @itsrealfake 5 Dec

you could grow/prepare your own food, but you eat at a restaurant because it's convenient. same argument.

the labor is scarce.

i pay for music because i need the musicians and producers (and discovery platforms, yes) to keep doing their part so i can do mine.

0 sats \ 4 replies \ @denlillaapan OP 5 Dec

not same.

this part of the article:

As a matter of economic fact, no, they’re not. Since the retirement of the labor theory of value, labor doesn’t have economic value simply because it was expensed. Economic transactions and the property rights we use to guide them are intrinsically related to scarcity. We don’t price or transact oxygen, words, or the recipe for your grandmother’s meat stew — not because they don’t have value (they’re immensely valuable!), but because they don’t have scarcity or rivalrousness. One person’s use of them doesn’t prevent another person from using them.

The restaurant and its production line has scarcity; when I'm occupying a table, another person can't -- the food in my mouth cannot simultaneously be consumed by someone else. Music (in the digital world) is different: much more like recipes and oxygen than steak and restaurant tables

30 sats \ 3 replies \ @itsrealfake 5 Dec

it's hard to compose my thoughts without interjecting some snarky music attitude, so i'm just gonna lean in and get this dig in at the top, in the friendliest possible way:

if you don't think music has value, i pity what i imagine to be an much lower quality experience of life, and i'm grateful that i don't share that opinion

now i've said the thing, and tried to be a little bit funny, while also engaging with (and acknowledging) the emotional nature of the position i've taken in this philosophical discussion, which may not have a right answer.

i think it would be helpful to define "music" for the sake of the discussion. in the meantime, here's this...

via investopedia

maybe you would say something like "music isn't commensurable, only CDs and records are, and therefore the song doesn't have a price".

music creation is a service.

music performance is a service.

music amplification (loudness, fidelity, etc..) are services.

each of those have benefits to individual market participants. it's not so different from V4V.

i'm willing to pay a limited price for recordings of specific songs, not recordings of just any song. this indicates that it's not the recording that's special... it's the song. that price is the economic value of the song.

digitizing something doesn't suddenly remove it's value.. it merely makes it digital & readily duplicable. multiple copies of a file are not the same as the contents & structure & meaning of the file (see also: the timechain)

5 sats \ 2 replies \ @Rothbardian_fanatic 6 Dec

This is a very cogent economic argument. Subjective valuation of goods and services. Well done!!

10 sats \ 1 reply \ @itsrealfake 6 Dec

awe, thanks

0 sats \ 0 replies \ @Rothbardian_fanatic 6 Dec

You’re welcome!

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0 sats \ 0 replies \ @nitter 5 Dec bot

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