Paul Krugman Joins The Infinite Goods Brigade

from the the-concept-is-getting-through dept

It looks like Paul Krugman is the latest economist to join the growing group of folks who recognize the impact of infinite goods on business models -- and how it's not a bad thing, just an inevitable shift in the market. Unfortunately, his writeup on the issue is a little weak. He references Esther Dyson's predictions about this from fourteen years ago and the recent Rolling Stone article we discussed last month. What's disappointing is that, as an economist, he should have been able to look at the fundamental economics and understand why this makes sense, but he chooses not to do so. That leaves him open to criticism. The next stage of this debate is going to be showing, fundamentally, why this inevitable change isn't a bad thing. Some people already recognize this, but it clearly is going to require a lot more convincing evidence.
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Filed Under: business models, economics, infinite goods, paul krugman


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  1. identicon
    dorpus, 6 Jun 2008 @ 1:40pm

    Re: yes, dorpus

    If the production cost of a given good approaches zero, then the cost of goods with finite supply that are consumed in association with the good will approach infinity.

    Whether it costs $50 or $0 to produce a copy of music, it does not affect the cost of oil. The oil necessary for the plastic USB storage device still costs $130/barrell. If people want to make infinite copies of music on USB drives, then the cost of plastic will go up to infinity, as the finite supply of the world's oil is used up making trillions of USB drives.

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