Shifting Economics of a Digital Age | Econproph[Comp. Systems 2016]

The world today is vastly different from the world of even 50 years ago. We talk as economists about concepts that really only apply to things which hold a physical medium. The coming of the Digital Age forces us as a society to rethink how something is profitable. At the onset of the Digital Era people questioned what it means to “own” something, what does it mean for them to own a copy of a CD if it is not unique? The answer economists provided was that whoever makes a product is entitled to distribute it however they so desire. Now, if what is produced is a physical object, I agree with this for by selling that product the producer is denying themselves the use, but if what is being sold is intangible, than what is sold should not be owned by any one group or person. In the example of CD’s what is being sold is not the physical medium of the CD, but the knowledge contained on said CD.

The entertainment industry struggles with this as a whole as when they create new ways of saying things people copy the knowledge bypassing the need for a physical medium all together. The entertainment industry business model though is based in a material society instead of a digital one. Instead of forcing everyone to pay before watching, because it is almost impossible to prevent the spread of information, the Entertainment Industry should instead make money based on the amount of people at a given time watching a given piece of knowledge. As Netflix grew it was found that the amount of people “pirating” movies decreased, this is because people were no longer being barred from access, but instead being asked to pay for access to the information. Now that Netflix has gone global the Entertainment Industry is now trying to region lock information once more, and Netflix is going along with it. I expect to see an increase in “piracy” in the coming months because the walls around knowledge will not last.

tatef 12:54 am on April 26, 2016

I agree with you but I wonder about the last line. Not that its inaccurate it just makes me think about schools, our traditional dispensers of knowledge and this last unit which is focused on revaluating our traditional models, paradigms, economic goals and the like.
What is the purpose of college in the modern day? We all paid for this class but in terms of knowledge it could be replicated by someone familiar with the material, lets call them Jim, posting readings on a facebookish page and all of us chatting about them (Thanks to you all, its nice to see a discussion board with actual discussions). It wouldn’t have to cost money and the knowledge would be out there.
Even 200 years ago this could have worked through the mail (Still not sure how online classes are different than the correspondence classes of back in the day). So what is it that colleges offer students and is there a cheaper way we could deliver it? Relationships can be formed outside of college, partying can be done outside of college, knowledge can be learned without college classes.
What they provide is a degree, which shows that you have actually acquired a specific amount of knowledge. We need the degree to get jobs. Why are we paying for job training? Couldnt that be done by employers and supplement knowledge with application? Couldnt we prove a level of knowledge by taking an online test that evaluates what you did or did not learn? I know I have taken classes that I remember almost nothing from but I have a piece of paper saying I know it.
Obviously colleges arent going anywhere but with the ever increasing college bubble forming what will happen when it pops?
- Alex Latunski 1:19 am on April 26, 2016
  
  I would argue that colleges and universities provide more than job training though that does seem to be a big portion of them now days. They also provide access to “research” and knowledge which is kept isolated from the public sphere by virtue of it’s obscurity, and many of the ideas and concepts which are taught in university classes tend to be more informative than what one would learn on the job. People have tried for ages to find the perfect test, because there is no one way by which people display knowledge, all existing ways are flawed. I think with the increased prevalence of sites like Kahn Academy and edX, the “bubble” is already starting to pop.
  - tatef 5:44 pm on April 26, 2016
    
    Kahn and edX are great examples of knowledge distribution. The issues I was thinking about is that the US owes more in student loans than credit cards, for profit colleges (some that are being sued), the increase in tuition and the fading return on investment as ever more people go to college “because they have to”, and the increase in nontenured adjunct positions for the actual instruction of undergrads.
    I agree research is a huge reason, but what about majors that are less research intensive, like history or business? There are few, if any, undergrad research positions there. Even the obscure knowledge could again be put out there by anyone who had recently graduated with an upper level degree, which I do think the current system is probably best for as it allows closer mentoring with experts in the field.
    - Alex Latunski 1:12 am on April 27, 2016
      
      I agree college debt is an issue, but it is a symptom of people getting degrees they are unable to find work for. Debt is a part of the American economic system, but it has only been in the last 40 years that student debt has become so outrageous. I would argue though that this is because there are less apprenticeship and trade jobs now than there was back then. I would also agree with your earlier point that the system needs to change. My aunt (who does hiring for the state) was talking about how she had people with their masters degree applying to be glorified secretaries at minimum wage.
      I think that what is taught in business classes can in most cases be picked up easily on the job, but because of the existing atmosphere of credential-ism that exists in companies even jobs that “anyone” can do require a certificate, if only as a way to “level” the playing field.
Branden Garbin 2:40 pm on April 28, 2016

Hey alex i really liked your post it was very interesting and i agree with what you are saying. But i believe that this scenario has allot to do with convince or ease of access. For example you talk about Netflix reducing the amount of pirated movies. I believe that this trend was due because Netflix convenience for watching movies outweighed the need to pirate movies. Another example is the pirating of music. no one in our day and age likes to pay for the music it almost seems meaningless especially with programs like Pandora and Spotify out there. But new innovations in the way we deliver music such as Apple Music is making it even more convenient for people to listen to music of their choosing and is gaining steam. I believe in a digital age the name of the game is convince. Another example is blockbuster, it was a great idea for the times of the 90s because it was convent but in todays society why should i half to get in my car and drive to a blockbuster when i can watch the same movie on HBO, Netflix or Hulu?