I’m off to California next week to visit relatives in Los Angeles, but we are flying into Phoenix first.
I’m off to California next week to visit relatives in Los Angeles, but we are flying into Phoenix first. I love Phoenix for quite a few reasons, not least the Botanical Gardens and the Frank Lloyd Wright home at Taliesin West. But best of all is the sneaky right-wing thrill you get from driving into Scottsdale along a handsome road called Goldwater Boulevard, named after the libertarian Arizona senator and presidential candidate Barry.
If you have libertarian inclinations (and I do), you’ll find yourself in good company online. Self-declared libertarians seem rather more at home on the internet than in the real world, and among bloggers and online commentators support for social and economic freedoms is far more prevalent than in print. There is even an extraordinary blog (calulmann.com, since you ask) called ‘Where hiphop and libertarianism meet’.
Given the entrepreneurial feats achieved online, this free-market enthusiasm isn’t altogether surprising. The only problem is that certain aspects of the digital economy actually show the invisible hand as being slightly arthritic.
The problem arises, I think, with Darwin. We have evolved with an inner bias which gives us a high readiness to pay for tangible, scarce things which we can hold and own outright — while we tend to undervalue those things which are ethereal, abundant and enjoyed communally. For the first few million years of our existence, this instinct made sense. But in a digital, networked world, it may cause us to misdirect our spending.
Digital music is perhaps the starkest example of this bias. In terms of what economists would call ‘utility’, digital music is a great improvement on the tangible kind. It takes up no space in your luggage or your home, you can buy songs one track at a time and you can find music in seconds, rather than grovelling around for hours squinting at the illegible spines of CDs. Yet our willingness to pay for intangible music is much smaller; in fact, where we can, we try to get it for free. I have just typed ‘J.C. Bach’ into Spotify and found music which would have cost me £500 on CD in 1993. But my inner caveman is still too tight-fisted to pay the £9.95 for Spotify premium membership.
Or take the BBC licence fee. Even though, in keeping with my image as a libertarian nutter, I like to complain about this, I can’t really deny that, since the invention of Sky+ and the BBC iPlayer, the value I get from the Beeb has increased by a few hundred per cent. While they still persist in screening vulgar entertainment, rather than spending the money on the kind of mildly Aspergic factual television which I enjoy (my idea of heaven would be a documentary entitled Routemasters of the Serengeti), when they do produce something decent I almost always get to watch it. Ten years ago I would have missed almost all of it. Has anyone suggested this extra utility might justify a slightly higher licence fee? I don’t think so. Even your Spectator subscription shows this same distortion of value. Now, once you subscribe, you can sit in a café in Shanghai on a Wednesday afternoon and read the latest issue on your iPad or laptop two days before it lands on your doormat back home. There is a searchable archive going back years. Yet all this is given away free. It’s the tangible, paper copy people pay for.
Why is this a problem? Because it means all the money gets spent on ‘things’. We all end up with shiny new iPhones, but won’t pay for mobile data, meaning that the mobile data networks on which our phones depend are usually appalling. It’s the technological equivalent of Los Angeles — where the cars are magnificent but the roads atrocious.
Rory Sutherland is vice-chairman of Ogilvy Group UK