Comment on the WSJ Online 2010-07-25
This
discussion is frivolous in the extreme.
I fail to understand the relevance of
comparing the yields from owning a copyright to the yields from owning a
factory. A copyright and a factory are two assets whose economic properties
differ radically and can only exceptionally be considered substitutes for each
other. Their modes of acquisition, for starters, are completely different.
Consequently any conclusions drawn from such a comparison are meaningless in
the strict sense of the term. Why not compare copyrights to some other asset
instead, like a pet giraffe? It would be just as meaningful.
PS. This off-the-wall comparison between
copyrights and factories reflects the baneful influence on economic thinking
exerted by capitalism’s recent slide into the Total Market, where investors buy
petroleum futures with no intention of ever taking delivery of any petroleum,
just as a financial investment. The result is that the price of petroleum no longer
reflects demand and supply for petroleum, but instead mirrors general trends on
the financial markets.
One consequence of this pernicious trend
was the Great Food Crisis of 2006-2008. Prices of
foodstuffs rose rapidly worldwide although supply and demand for food remained
in balance. Why? Because a posse of hedge funds and other financial doomsday
machines realized that the subprime real estate market was going south, so they
stampeded into foodstuffs. This great triumph of the free market meant starvation
for many millions of people throughout the world.
Recent research has
refuted the alleged influence of fuel crops that was brandished by the system’s
apologists.
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