Yesterday, Jared Bernstein and Dean Baker published a great OpEd in the New York Times, What Is Seinfeld Worth? The Bureau of Economic Analysis (BEA) recently made a change to how GDP is calculated and quite suddenly, the American economy is $560 billion bigger. That’s 3.6%. So the question is: what are you going to do with your extra $1,800 this year?
As you’ve probably already figured out, not only are you not richer than before, America isn’t richer than before. The BEA is just calculating GDP differently. Now it is treating intellectual property—like Seinfeld—as productive tools like an auto assembly robot. So every syndicated episode of a TV show is a new product. Ca-ching! Don’t you feel richer now?!
Bernstein and Baker don’t really get into what this means regarding copyright, but it is implicit in their argument. They note the fundamental problem with the GDP calculation (old or new) is that it only adds things; it never subtracts them. They write, “If we use hydraulic fracturing to reach deep pools of natural gas and in the process pollute groundwater, we will count only the value of the gas. There is no subtraction for the polluted groundwater or the greenhouse gas emitted when the gas is burned.” This relates to copyright because the laws have many downsides. But according to the BEA: it is all upside.
Related to this is the fact that so much of our entertainment content is not monetized. And therefore it is not part of our GDP. Clearly, if you are reading this it is of some value to you. And it isn’t just me. The same is true of the New York Times. Although the site is monetized, as a going concern, the BEA thinks its archives are valueless.
Of course, none of this matters. Bernstein and Baker note, “Over this recovery, real GDP is up 9 percent, while the typical household’s income is down 4 percent.” And we all know this. For the last three and a half decades we have seen pretty much all of the productivity growth go to the wealthy. So only the really old even remember the days when one’s own salary was tethered to productivity growth. So I guess it doesn’t much matter what the BEA does.