Expanding consumer surplus in the digital era
Matthew Yglesias makes an astute point about how digital technology makes it easier to create things that promote the general welfare without necessarily creating wealth:
Consequently, the realm of activities with gigantic divergence between measured GDP and welfare value is vastly expanding in ways that I don’t think policymakers and civil society donors are yet responding to in fully appropriate ways. The case for finding ways to directly and indirectly subsidize the creation of such goods is extremely strong. But more generally, I think we should expect the significance of this kind of thing to expand in the future.
The negligible marginal cost of producing multiple copies of digital works is the enabling factor. I think so many people get caught up in the mentality of “monetization” that they fail to step back and look at the sheer number of interesting, entertaining, and useful works that are now being produced simply because people find it fulfilling or entertaining to produce them.
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