10 January 2013

Market failure, creativity, and online gouging


Cory Doctorow has written an article in the Guardian entitled "Just because everything has value doesn't mean it has a price". Cory Doctorow: Charging for everything kills creativity About the implications of charging for every little bit of imagined use that can be extracted from an online offering. It's part of a series called "Digital rights, digital wrongs". It's interesting because of its focus on something that capitalism just can't handle, namely "externalities". Better otherwise known as "market failure". His line is that charging for everything will kill creativity.

I commented:
We're back with the problems Marx faced trying to work out the relationship between social production and private appropriation, value, price and profit, and the inadequacies of Adam Smith and Ricardo's attempts to resolve them.
Nothing of value is produced without our labour. So it's natural to expect an equivalent return for it. The problem is a) what is a true equivalent, and b) who will determine this and implement it in society.
Marx resolved the problem of "true equivalence", so problem a) is taken care of. But problem b) is in complete contradiction to the findings of a), since the people determining and implementing equivalence exploit most of us (wage-earners) by creaming off what we produce above and beyond survival (keeping body and soul together at the normal standard of living for our society) and making it their private wealth instead of our shared social wealth.
Cory D ignores this, and ends up arguing for Utopia, since he implies there's a way of accommodating a) with b). This is nonsense, cos ownership is all in our society, and ownership of capital (control of other people's work) is a class monopoly.
This is a pity, cos the main thrust of his argument goes some way along the constructive realistic road discussed seminally by Walter Benjamin in The Work of Art in the Age of Mechanical Reproductionhttp://www.marxists.org/reference/subject/philosophy/works/ge/benjamin.htm
The thing is that the whole of capitalist production today is a market failure. In other words the traditional (or post-traditional, imperialist) market is a useless mechanism for coordinating and eliciting socially useful effort. Market techniques can be very useful in some kinds of distribution, in that they provide spontaneous feedback and self-organization, but they're no good when it comes to deciding social priorities at the limits of resource availability, and they're disastrous in relation to the inevitable necessity of disaster management.
Production and distribution today is a huge social problem worldwide, and some of its most glaring effects are in the realm of ideas and culture. But the solution isn't going to come from economic measures but from political measures that affect the economic foundations of our society.
Till we introduce socialism (non-capitalist ownership and control of production) there will be no solution and Cory will have to keep repeating himself and running on the spot (not to mention the idiots who claim that locking everything down and charging us for the air we breathe is the right way to go).