There is a growing uneasiness that technology is creating forms value that are not captured by GDP figures or other standard economic measures of well-being. This is sometimes seen in debates over income inequality when critics point out how much better life is for the relatively poor - the Walmart assertion.
But what about the revolution in media, such as well, this blog? Assuming (and this is a leap, I'll grant you) some value comes from my pecking away, it sure does not move the GDP meter at all. No ads, no income, no economic tracks at all. From my own perspective, the stuff I read easily now that used to be hidden in a haystack of information or physically inaccessible does improve my life in many ways, so should a flat or slow growing GDP be the single arbiter as to whether my life is getting better?
But it’s also insane not to realize that non-commercial endeavors have real value that doesn’t show up in national account statistics. If anything, people on the left should be eager to embrace the point that the market value of an activity isn’t the correct measure of its social value (a cure for baldness, for example, would be much more lucrative than a cure for malaria).
Of course this has always been the case. But one important consequence of the rise of the digital era is that it’s now much, much, much easier for goods produced on a non-commercial basis to be distributed. Yale professors have always been giving lectures, but now the lectures can go online. People have always performed music for their own entertainment but now it’s fairly easy to record that music and ship it all around the world. People have always wanted to show off their knowledge and engage with communities of interest, but now they can write Wikipedia articles and post on blogs.
To an extent this kind of thing can reverse some traditional thinking about certain policy questions. Traditional analysis, for example, treats leisure as a kind of private consumption good. If you’re doing work for money, then by definition someone else thinks it would be useful to them for you to do the work. You, in addition, presumably want the money. Thus when people are inspired to go do paid work, rather than sit around the house enjoying themselves, they are creating social value. Internet distribution of non-commercial production changes that calculation. If people are using (some of) their leisure time to contribute to open source software projects, to write interesting blogs, to post videos on YouTube, to record music, to write Wikipedia articles, etc., then value is being created for others. [More]
One of the great challenges to measuring how we are doing as individuals, or an industry (agriculture) or even a nation is capturing all the consequences of our policy and personal choices in some metric we can at least track over time. More and more, I suspect our standard accounting of such trends is slipping further from adequate.