Tag Archives: economics

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The economics of fiction

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No, nothing to do with bailouts or closed banks; this video is seven minutes of discussion between two economists, Tyler Cowen and Robin Hanson, on the economic value of fiction:

If you’re not too familiar with the language of economic academia (it’s a little opaque, to say the least), Bill Benzon’s summary of their points might be helpful:

It’s about signaling (a term of art in economics). Your preferences in fiction, and the way you articulate those preferences, signal your attitudes, values, and ideas to others. Fiction is a way of “getting people in touch with each other.”

The point is also raised that fiction can in some cases have intrinsic cognitive value as well, but the central idea – that your taste in fiction is an external signal about the sort of person you are – is an interesting one, especially for fans of genre fiction like ourselves. The obvious (and over-simple) response would be a kind of “fans are Slans” argument… but that would be to fail at being properly objective about the whole thing, to ignore the need for a proper examination of what makes genre fiction different to ‘straight’ fiction (which I suspect is, in many respects, a much smaller difference than it may seem from this side of the fence).

But what is it about science fiction that has made it such a socially cohesive artform by comparison to, say, romance novels? Is this simply a function of its minority status in the larger field of literature, or is it something to do with the riffs it tends to repeat, and the way those riffs resonate with readers? Or is it a separate (but related) part of the mindset that science fiction just happens to appeal to?

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Rushkoff on the economy: “let it die”

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restaurant pricing - the credit crunch modelUnsurprisingly, everyone everywhere is talking about the economy. The usual twist on the topic is to ask “how can we fix it?”, but Douglas Rushkoff would like to suggest that the global financial collapse is a blessing in disguise and that we should just let it die, as it gives us a chance to reassess the assumptions that our monetary systems were built upon:

… it’s even more important for us to come to grips with the fact that the system in peril is not a natural one, or even one that we should be attempting to revive and restore. The thing that is dying—the corporatized model of commerce—has not, nor has it ever been, supportive of the real economy. It wasn’t meant to be. And before we start lamenting its demise or, worse, spending good money after bad to resuscitate it, we had better understand what it was for, how it nearly sucked us all dry, and why we should put it out of our misery.

His point is that, at every level, the system was designed to benefit those who set it up at the long-term expense of everyone else – it’s almost miraculous it’s lasted as long as it has:

An economy based on an interest-bearing centralized currency must grow to survive, and this means extracting more, producing more and consuming more. Interest-bearing currency favors the redistribution of wealth from the periphery (the people) to the center (the corporations and their owners). Just sitting on money—capital—is the most assured way of increasing wealth. By the very mechanics of the system, the rich get richer on an absolute and relative basis.

The biggest wealth generator of all was banking itself. By lending money at interest to people and businesses who had no other way to conduct transactions or make investments, banks put themselves at the center of the extraction equation. The longer the economy survived, the more money would have to be borrowed, and the more interest earned by the bank.

Just in case you think Rushkoff’s a sneaky pinko or something, it’s worth considering that he’s an advocate of local economies and currencies, and opposed to any form of centralised control; even if you don’t agree with what he has to say, he raises some talking points that we’d all do well to at least consider. As he points out, we may not get another opportunity… and you know what they say about life handing you lemons. [image by Cory Doctorow]

But what do you think? Should we build a new world where value is produced by actual effort, or can the financial system be fixed to ensure we don’t all strive for the profits of a few?

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Bruce Sterling: “People don’t pay attention to novels”

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The BBC has an interview with Bruce Sterling and, despite being a man with a new book to plug (which I’m about 0.25 of the way through reading, incidentally), he doesn’t have much faith in the power of science fiction novels to change the world, despite their greater modern relevance:

“People don’t pay attention to novels. The socially important parts of American communication are not taking part in novels. You can write them but they are not changing public discourse.

“You can also say that everybody in society has moved up a notch and everybody just wants the executive summary.”

[snip]

Science fiction, he says, has as much relevance in today’s world of seemingly relentless scientific endeavour across many different fields as it did in the past when the perception of the pace of change was arguably slower.

He says: “Science fiction writers are not suffering from the pace of development. We’re suffering much less than stockbrokers and financiers from that pace of change.”

That makes a certain amount of sense; after all, an sf writer is trying to steer his imagination through the currents of the near future, while a stockbroker is trying to steer an intangible and evaporating block of digital money that in many respects doesn’t really exist at all… I know which job I’d rather have. 😉

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Digital travel and the price of oil

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rusty old oil barrelsIt may be mercifully low again at the moment, but it’s safe to assume that once the global economy adjusts to recent events, the price of oil will obey its historical trend and start climbing once again.

Over at The Guardian, Charles Arthur suggests one of the major outcomes of increasing oil prices will be that travel – be it for work or pleasure – will become much less of a reflex action, at least for those of us who aren’t ridiculously wealthy:

If you need a shorthand for thinking about the future, then, it’s this: analogue will be increasingly expensive; digital will be increasingly cheap. Getting in a car or on a train or a plane? Analogue. Expensive. Non-renewable. By contrast, downloading an album, watching a webcast concert, watching TV: digital. Endlessly replicable, virtually instantly transmitted, cheap.

What, in turn, does that mean for our society? Apart from fewer cars on the roads (though possibly with more people sharing rides in them), it means more time working at or near to home, if your work involves things that can be done digitally. For all those jobs that need to be near to physical things – that is, where you make things like cars or food or whatever – you’ll have to be based nearer the place you work.

I hasten to point out that this is not exactly a new suggestion, but what would have been delivered as a slightly comedic tongue-in-cheek piece of journalism ten years ago (doubtless complete with a reference to “sci-fi futures of virtual travel”) seems much less ludicrous in the light of our new-found interest in frugal living. [image by Atli Harðarson]

I seem to remember one of Stephen Baxter’s Destiny’s Children books featuring a very-near-future Earth where travel is achieved by a kind of mash-up of telepresence and VR technologies. Can anyone think of any other sf stories or books with a similar theme?

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Gold-farming still big business

World of Warcraft gold vaultVia BoingBoing, here’s a Guardian article on the MMORPG gold-farming phenomenon:

These virtual industries sound surreal, but they are fast entering the mainstream. According to a report by Richard Heeks at Manchester University, an estimated 400,000 Asian workers are now employed in gold farming in a trade worth up to £700m a year. With so many gamers now online, these industries are estimated to have a consumer base of five million to 10 million, and numbers are expected to grow with widening internet access.

As I mentioned last time, what interests me most about gold-farming is that it seems to be comparatively immune to the economic slump. WoW gold or weapons are surely luxury items by any economical definition, but for some reason they’re not going the same way as bling and gas-guzzler cars. Is this due to the low ticket price, combined with the fact that gaming is a comparatively recession-friendly pastime? Is it also a recognition that the one thing we value more than our money is the time to achieve what we want (virtual or otherwise)? [image by fernashes]

Looking forward, though, how soon before the market saturates? The collapse of Chinese manufacturing has resulted in an expanded pool of labour, but that just means more competition for the work. If, as some economists have suggested, the recession is a prelude to greater financial parity on a global scale, will gold-farming or its equivalents become an increasingly attractive employment option in the West as the traditional options for blue-collar work erode?