Posts Tagged ‘Econmics’

Thoughts on Creating Your Own Economy

Tyler Cowen refers us to his fascinating preview article of his upcoming book, Create Your Own Economy. In the article, he makes the following arguments:

  1. The economic concept of “production” has changed: More and more production is occurring internally, inside one’s mind, rather than in factories. The combination of one’s entries and work on different social networking tools (e.g. Twitter, Facebook, MySpace) results in production of internal “joy, emotion and suspense.” Accordingly, GDP tells us less about human well-being than it previously did.
  2. Since many of these productive web activities are free, they don’t generate jobs and appear to hurt the traditional economy. The fact that only 50 people work for Twitter is an example of this.
  3. Despite this, there is a bright side. Individuals get what Cowen calls a “human capital dividend” by reallocating time in the “free sector” and freeing former manufacturers and intermediaries to do more productive work.
  4. The other part of the “human capital dividend” is that people are A) becoming more socially connected with diverse groups of people and B) better able to keep track of long-term interests and stories because of the ease and low-cost of keeping track with the resources of the Internet. Rather than the Internet causing us to become increasingly impatient, it causes us to develop and maintain long-term interests and connections.

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