Saturday, August 08, 2009

Thoughts from Michael Perelman

Some interesting ideas to think about.

Note that Michael Perelman left a comment replying to my comment on intellectual property rights as it pertains to musicians.

a strong economy is not conducive to replacement investment. As a result, without crises, an economy would tend to run down as its capital stock ages. In addition, an expanding economy freed from crises would create insufficient incentives for business to become more efficient. In short, efforts to maintain economic health actually cause the enfeeblement of the economy. Capitalism needs crises. These crises, however, can destroy capitalism, since the same crises that cause waves of replacement investment also destroy the value of existing capital.


Just as in the case of the classical political economists discussing the rural sector, the major economists of the last nineteenth century wrote elaborate treatises about the perfection of free markets at the same time that they strongly recommended that the corporations be permitted to create trusts, cartels or monopolies. Indeed, beginning in the late nineteenth century, a great merger wave consolidated industry after industry. Over the next decades, competitive forces weakened until the Great Depression broke out.

I realized that in the US economy trust in the market pulsated. For a period, economic forces would get a free hand until the inevitable crisis occurred, then popular pressure would demand the exercise of control over the market.

Next, I returned to the subject of information and high technology in Class Warfare in the Information Age (1998). This book went into more detail about how markets were inappropriate for handling information. A more fundamental theme was that the information economy would be used for monitoring and control than to provide goods and services that would improve the people’s lives.


As I mentioned before, competition in both information and manufacturing businesses cause deflationary pressures that tend toward crisis. I showed that high labor costs as well as high resource costs as a result of regulation both tend to produce offsetting pressures that reduce the tendency toward crisis.

On a deeper level, this book calls the conception of competition into question. I show that intense competition is equivalent to a depression, yet most economists believe that competition is good and depressions are bad.


I then returned to the question of intellectual property in Steal This Idea: Intellectual Property and The Corporate Confiscation of Creativity (2002), which analyzes the destructive nature of intellectual property. In this book, I describe how corporate powers have erected a rapacious system of intellectual property rights to confiscate the benefits of creativity in science and culture. This system threatens to derail both economic and scientific progress, while disrupting society and threatening personal freedom.

I have mixed feelings about this. I am a songwriter who knows how much time and expense goes into writing a song and getting it into a form to share with others, and knowing that the odds are great that I will never get back more than a small amount of whatever I invest, if any. This problem is greatly increased by the technology that allows widespread stealing of other people's work. On the other hand, I certainly don't support misuses of intellectual property rights by big business, who use their power to steal ideas from individuals who can't afford to protect their ideas and investments. Also, things like patenting processes whose development was done with taxpayer money; patenting drugs from natural source. As usual, I see the matter as needing balance.

Michael Perelman left a comment in reply to this.

1 comment:

Michael Perelman said...

My main concern was writing about scientific information rather than cultural contributions. Even so, I know that musicians, except for those heavily promoted by the corporations, receive very little -- or even nothing -- from their recordings. I would like to see a world in which artists are not dependent upon commodification of their work in order to earn a living -- a world supports them for their art rather than for their commodities.

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