Everybody’s been writing about Alan Krueger‘s talk at the Rock and Roll Hall of Fame. Who is Krueger? The original drummer of the Jimi Hendrix Experience? The guy who wrote “Wild Thing”? A rock historian? No, no, and no. He is the chairman of the White House Council of Economic Advisers—the kind of person who often gives talks at the Rock and Roll Hall of Fame.
The talk was titled “The Land of Hope and Dreams: Rock and Roll, Economics, and Rebuilding the Middle Class.” Neil Irwin was the first person I saw report on this and he focused on the most shocking bits of data about income inequality in the music industry. In 1982, the top 1% of musicians earned 26% of all concert revenue. In 2003, it had increased to 56%—more than double! So as bad as our economic inequality is generally, it is even worse in the music business. That probably doesn’t come as a big surprise, but why it is so is hardly obvious.
Based upon work by a couple of sociologists, it turns out that our tribal instincts make music much more of a winner-take-all market than would be indicated by artists’ actual appeal. Put bluntly: people are much more interested in music that they know is popular. I know this from my own experiences. Whenever I spend time with people who listen to what is more or less “Top 40” radio, I am struck by how generic and uninteresting the music is. It seems that it is popular because it is popular. I don’t say this as a snob. There is plenty of music I don’t personally enjoy that I still think is great. I think I am in a position to distinguish between music I don’t like and music that has all the creativity of a GM assembly line.
Dean Baker added to this discussion by noting how the ever increasing copyright length adds to inequality. Marketing new artists is an expensive endeavor. It is much cheaper to just re-release yet another version of an old band. As a result, the money just keeps flowing to Paul McCartney and Peter Frampton—both of whom are already wealthy. Baker also noted the extra profits that certain artists made as people switched from vinyl to CDs to MP3s and then, of course, back to vinyl. No one need buy “The Man from San Sebastian” more than once.
E.J. Dionne focused his attention on Krueger’s point about the luck that is involved in being successful in the music business. And of course, it is as about as true of the economy generally. Dionne wrote:
And that gets to Krueger’s main point that we need to grow the economy from the middle out. We’ve spent the last 35 years growing the economy from the top down. Unfortunately, what has happened is that the economy has grown and those at the top are the only ones who have benefited. The real problem is that the rich can take care of themselves. Even if the government enacts laws designed to take money away from the rich, they have the ability to protect themselves. But when the government enacts laws designed to give money to the rich, there is no counter balance. The middle class are in no position to protect themselves. And that leaves us where we are today.
It is good to know that Obama has people like Alan Krueger around him. I still don’t expect much. Recent history indicates that under Republican administrations, income inequality gets much worse. Then, under Democrats, it gets slightly better or at least only marginally worse. Countering the last 35 years of dysfunction is going to take a lot more than incremental improvements. I suspect Krueger knows that. But whether he has the strength of conviction is hard to say. Regardless, I know that Obama doesn’t.