My Irrelevant Economc Power
Today, I am attending the annual meetings of the History of Economics meetings. Here is some background on what I will do tomorrow.
In 1991, I published the most incomplete or least developed book I have ever written: Information, Social Relations, and the Economics of High Technology (NY and London: St. Martin’s and Macmillan, 1991). The basic idea was that knowledge is the driving force of the economy.
I introduced the concept of meta-public goods. Unlike normal public goods, meta-public goods have a negative marginal cost — in the sense that the more knowledge is used, the greater its value can become. This idea bears a certain relationship to two other concepts. First, the modern idea of general purpose technologies captures the way that new knowledge can have significant impacts in unexpected ways. Second, meta-public goods resembles Marx’s concept of universal labor.
Marx is commonly represented as a proponent of a labor theory of value. In reality, he put great stock in his concept of universal labor — labor that produces new information that can be used over and over. Marx uses the example of the binomial theorem, which produces valuable new benefits, but whose effect is multiplied as people continue to build upon results of this theorem.
Despite its importance, the labor that went into the binomial theorem never gets counted as labor values. As a rational economy advances, more and more time will be devoted to universal labor and labor values will become more irrelevant.
The only person I know who the only person I know who actually picked up this idea was an English economist by the name of Steve Fleetwood.
I showed my work in a preliminary stage to Paul Romer after I heard him give a talk on endogenous growth theory, well before he had published his famous article. His response was that I had gone a lot farther than he did, which I took to be uncomplementary. I never heard from him again.
Nobody had to pay for the use of the binomial theorem before intellectual-property rights gained a vice-like grip in the United States. New technological ideas spread relatively rapidly at the time, especially because the courts were not very receptive to the claims of inventors.
This line of thought got me to turn to thinking about the effect of technologies with low marginal costs and high fixed costs — what Samuelson called quasi-public goods. Eventually, this research led me to produce my book, Railroading Economics. Tomorrow, I will present a paper based on part of that book. Here is a link to my paper