Does the intangible have value?
Saturday, March 29, 2008 at 11:52AM Like most posts having to do with the ethical use of information, last Tuesday's "If I can't get it legally is it OK to steal it?" drew a number of comments. Among them were those by Peter Rock, a teacher in Taiwan, who often weighs in on these issues. More often than not, we disagree on issues. Our conversation this week, in part, went like this:
Me: [Intellectual Property is] not a legal term but a common means of describing a general category of property
Peter: It doesn't describe property at all. Copyright, trademarks, and patents are not property. While there is an entire industry devoted to making the public think in terms of "property", this does not make it so. This does not make the intangible tangible.Me: Ah, but the intangible can have even greater value than the tangible. You think I have a future as a Zen master?
Peter: No, but the RIAA or MPAA might be interested in your services. But seriously, how does the fact that an intangible can (depending on the particular comparison) have more value than a tangible back up the "property" view? I'm not following. Can you explain this?
I'll do my best. I am no economist, but some of this seems to be common sense. This is how I would look at the components that give a thing economic "value" and justify its price:
Price = Materials + Production Costs + Intangible Value
For example, if I were to buy a book for $10 and the materials and production costs were $4, its intangible value would be $6. (I am including things like transportation, marketing, editing, etc under production.)
So it seems to me we could have some fun putting things on a scale of low to high intangible value:
Low intangible value: gold bullion, gasoline, raw meat -> -> -> High intangible value: jewelry, DisneyWorld tickets, gourmet meal.
You can do this within a product category such as cars, too. Assuming all cars have a (relatively) similar cost in materials and production then:
Low intangible value: Toyota Corolla -> -> -> High intangible value: Lamborgini
Information or entertainment packages are interesting here. But I think you could place these on a scale as well:
Low(er) intangible value: physical books, CDs, DVDS -> -> -> High intangible value: mp3 files, live concerts, e-books.
(But I would argue that even on the low side, the bulk of the value in information and entertainment is intangible.)
Peter, it seems to me (and I am happy to stand corrected), that you are arguing that if you can bring the cost of material and production of something to near zero, one is also obligated to bring the intangible value of that thing to zero as well. Personally, I don't believe that.
Pink in A Whole New Mind uses the Michael Graves designed toilet brush as an example of how real value can be added to something through design, and that this value-added, intangible component is growing as the amount of disposable income in the world grows as well. It's an idea I hope my own children internalize - especially my son who hopes to earn a living doing production and design work.
Anyway, this is how I would explain how something intangible can have even more value than the tangible. I appreciate the challenge. As always, Peter, you make me think harder about things than I really care to do!
Now I am trying to put "experience" on a low to high tangibility scale.
Low intangible value: visit to the chiropractor-> -> -> High intangible value: attending a Broadway play.
Sort of works.
Reader Comments (14)
@ Doug
Love the reference to Pink. I was fortunate enough to hear him give the keynote at the annual NCEA conference. Another potential concept to evaluate in terms of potential value is the whole world of option and futures trading. In these cases especially in options you are trading the theoretical value of the right to buy or sell an underlying commodity that does not exist yet. Fortunes are made and lost everyday using such complex financial tools.
For any readers unfamiliar with Daniel Pink, here is link by Steve Richards that "mind maps" A Whole New Mind: http://steves.seasidelife.com/2006/02/19/a-whole-new-mind/
The blog entry display is a bit off on my computer, if you have the same issue, scroll down the article for a .pdf version. Great stuff!
I think that we should question the concept of 'having value' itself. This is a quantification of what otherwise might be called 'goods' in our society. It creates the idea that something is a good if and only if (a) that good can be identified as specific instances, and (b) tehse instances can be counted.
Things can be 'good' without 'having value'. For example, I can have a peaceful thought right now. This is a good. But the having of this peaceful thought might have no beneficial consequences - it might not lower my blood pressure, it might not give me a moment of insight.
Even if the good *does* produce beneficial consequences, what I'm saying here is that the good can remain good independently of those consequences. That the good this, whatever it is, can be good in and of itself. The idea of having 'value' is that everything that is good must be assessed against something. What I am saying is that something that is good does not need to be assessed against something. It just *is* good. How do we know it is good? We *recognize* it as being good.
In the same way, the purpose of things that are good is not to stand as a unite of accounting to measure the worth of other things. The 'peaceful thought' that may in and of itself be a good does not stand as the arbiter of value for other things that may or may not lead to peaceful thoughts. There isn't a calculus that occurs here, there isn't a measurement of the goodness of entities in terms of each other.
The act of assigning value to a thing is the act of commoditizing it. It is the act of thaking the thing, and subjecting it to the marketplace. It is a way of suggesting that the good can be replaced 'for an equivalent item of equal or greater value'. It is a way of assessing the amount of good a good has in terms of its cost. It is the conversion of a good to... a good.
This is to assign to each good in the world - a sigh of happiness, a baby's face, an end to war - a type of commonality with all other goods. This commonality is the unit of value, whatever it may be. In criticism of utilitarianism, philosophers used to speak of 'hedons', or units of happiness. Today's capitalism assigns to each good a monetary unit.
But this commonality is completely artificial. There is in fact no commonality between a sign of happiness and a daisy blowing in the wind (or, more accurately, if there is a commonality, it is accidental, and represents no essential substrate of commonality between the two events). It is a property we *bring* to our perception of the good. It is not a part of the good itself.
This artificiality has several consequences. For one thing, because it is created, it can be manipulated. It can be attached to things that are not actually goods. It can be used to convince people to exchange what is genuinely a good for things that are not goods, for things that - once they have them - they recognize as being absent of the goodness they were fooled into believing they have.
The traffic in artificial goodness is widespread and it is pervasive. It is a traffic that depends on altering our means of perception itself, on creating in us perceptual errors. The good that is, say, a life of love, is replaced in advertising and media with a 'good' that takes the form of, say, Paris Hilton. This good is then used to sell cars. And when we finally obtain that good, and buy the car, we are at a loss to explain why we expected a relationship with a car to be like the relationship with a love.
The units of 'good' are themselves pervasive. I recall reading a criticism of Dave Pollard (if someone could remind me of this reference I would appreciate it) wherein the author said, essentially, that people responding against capitalism simply substitute some other form of accounting in place of money. In the case of Dave Pollard, the critic said, it is a substitution of love for money - the good comes to be measured in terms of the love we have in our lives (as though those who are not loved could feel no good in the world).
I think that we each need to have a 'good' in their lives. I think that there are several kinds of goods they need to have. Some goods are extrinsic - the need, said, to be told that you did good, for example. Or to be told that you're a beautiful person. Or whatever. And others are intrinsic. That happy feeling. A sense of equilibrium in the world. The sensation of being in love.
I think that we need these things, and I think that these things need to form the center of the purpose of our being. These constitute, literally, the 'meaning' of life. They can be things that we create - as is Kierkegarrd's 'leap of faith', for example. They can b things that we inherit by example from our parents and ancestors. They can be things that are taught to us by our spiritual leaders or through media.
These good are, therefore, in their own sense artificial. They are themselves created. What makes them 'goods' is that thy are good in an of themselves; they are not goods in the sense that they lead to other goods. They are artificial, but they are not arbitrary. The perception of a 'good' is very much like the preception of 'red'. We can be (have to be!) trained to recognize what counts as being 'red', but at the same time, our perception of a thing as being 'red' is not random, not arbitrary. It is the same with good.
And just so, just as we do not say that things that cause something to be 'red' are themselves red, we do not say that things that cause something to be 'good' are themselves good. You cannot, for any number of units of exchange (you cannot, for love or money), trade something that is red for something that is not red, and have, as a result, something that is red.
Indeed, the very thing that makes something a good is the fact that you *can't* trade it for something that is not a good. If a certain sensation is not a 'good' sensation, then you cannot trade your 'good' sensation, plus a sum of money, in for the non-s=good sensation, in such a way that you have somehow retained the 'goodness' you started with. At the very best, you are now left in a position where you need to exchange your money in an effort to obtain the original 'good' feeling again (not one of equal or lesser value, for every 'good' is unique), and - as people with money know - this is a very uncertain transaction.
Things that are good are not equivalent to sums of things that are non-good. Goods are not equivalents to sums of things that are other goods. Goods are non-transferable - which makes any economy of goods, any valuation of goods, a fallacy.
It felt good to write this post. In a way that no sum of money could replace.
Terry,
Interesting diagrams. Thanks for sharing these.
Doug
Hi Charlie,
I think Pink is dead on - and that he has a lot to say to educators!
http://www.ala.org/ala/aasl/aaslpubsandjournals/kqweb/kqarchives/volume35/354/354johnson.cfm
Doug
You, Stephen, ARE the Zen master!
My original post was referring to the "economic" value of things. No question that there are "good" things that are not connected to the tawdry world of commerce.
Your posts, for example.
All the best and thanks for the considered comment,
Doug
Hi Doug. It's been almost 2 years since I read Pink's book so maybe I'm missing something...but I don't see how your reference backs up the "property" view of copyright. I've responded to your post over here. Thanks for the continued dialog.
"Does the intangible have value?" caught my eye because I took it as a nonsense question. Not only does the intangible have value; the fact is easily demonstrated. I'm taking value in its economic sense, not morally.
Google stock is selling for $450/share which makes its market capitalization $137 billion. That's Google's value to investors because it's what they are willing to pay.
Googles's book value (assets less liabilities) is $23 billion.
Where does the $114 difference between market value and book value come from? It's the premium investors are willing to pay because they expect Google to be worth that much and more in the future. It is 100% intangible.
A quarter century ago, intangibles accounted for less than a third of the value of the S+P 500 companies. Ten years ago, intangibles made up more than 80% of the value of the S+P.
To me, "intellectual property" is a misleading metaphor because it implies that the owner of intellectual property should have the same rights as the owner of physical property. Some people may believe that, but that is a radical view outside of our historical views (and laws) on copyright and patent. If intellectual property is just like physical property, then why should patents or copyrights ever expire? Our legal tradition is that intellectual property isn't like physical property, and the justification for protection on what's call intellectual property is completely different than the rationale for the protection of tangible property.
The real kick in the eye is that contemporary intellectual property extremists want limitations on IP that go far beyond limitations that we've ever considered placing on physical property, like preventing consumers from modifying a product they've lawfully purchased.
Hi folks,
Please read Peter's response. Not only is it interesting, but it is generating some interesting comments in its own right. Here is my response to it:
_________________
"An Author" expresses my concerns quite nicely.
I don't see why both "values" about creative work - that is should be protected for individual gain or that it should be distributed for the public good - cannot co-exist. The creator ought to have the choice of how he/she decides to share his/her work. Being forced into making all one's intellectual endeavors fall immediately into the public domain, seems to me the equivalent of form of socialism (or eminent domain universally applied.)
Thanks for the considered response to my blog entry.
Doug
Hi Tom,
Let me play the devil's advocate here (and this is just thinking out loud).
When copyright law in the US was first set down, the vast majority of both national and personal wealth was in the form of physical property - land, natural resources, buildings, etc. This wealth was well-protected by the Constitution. And while one can certainly debate the ethics of capitalism, one can hardly doubt its efficacy when considering the standard of living we've achieved in the US.
What has changed is how wealth is generated for many US workers. It comes not from factories or farms, but from creative, innovative ideas, entertainment, and improved service techniques. What I call "intellectual property." Copyright, trademarks, etc. provide the same protection for this form of wealth generation that property laws did for land and factories. Eminent domain is still highly controversial in this country - taking away an individual's private property for the public good.
While I've read Lessing and his discussion about how the Founding Fathers provided a set time frame for copyright protection 200 years ago and by continuing to extend the protection ever longer is perverting their intentions, I am not so sure, given how wealth is being generated today, if we are perverting the intention of the laws or adopting them to suit a new economic reality.
Just some random thoughts from an author not willing to relinquish all rights to his "intellectual property" ;-)
All the best,
Doug
Doug says:
"Being forced into making all one's intellectual endeavors fall immediately into the public domain, seems to me [...]"
The more I read what you have to say on this issue, the more I'm convinced you perceive copyright to be an all-or-nothing endeavor. Who is advocating for no copyright (i.e. public domain) at all? Who is advocating that "all one's intellectual endeavors" be immediately forfeited?
I don't get it Doug. Why did you put a CC license on your blog? Did you do it while understanding what the license means? I agree that there can be co-existence. But co-existence can only occur when the two extremes settle on a reasonable middle ground. For example, CC.
"The creator ought to have the choice of how he/she decides to share his/her work."
Either you (the "property" advocate) meant to say "if" (not "how"), or you have a very odd view of what it means to "share". All Rights Reserved is, obviously, not a form of sharing.
Hi Peter,
Well, I freely admit that I am woefully ignorant sort of person, but I do think I get the gist of Creative Commons. For nearly 20 years, I have sold to publishers only the rights to first publication to my writing and kept ownership of my work - just so I could post it on my website for others to use without charge. (I did this before CC was even a glint in Lessig's eye.)
I have been fortunate to find ways to make income from my writing while still giving it to others to use (as people like Mr. Downes suggest). My professional writing is really a means for people to get to know my work who then hire me to speak or consult. While I would never sniff at my book royalties or fees paid to write an article, 90% of my income made outside my day job comes from speaking fees. So I think I am an exemplar of how one can use CC and still make enough money to help their kids through college.
But that is not to say one day my circumstances might change. There may come a time that I can no longer travel, no longer speak or no longer get days off from work. At that time, my writing may become a more important source of income for me. So I obviously wish to reserve the right to protect it, sell it, and control it. And I hope to have a legal means of doing so.
I don't believe co-existence means everyone compromising on using CC. It means that individuals all have the choice about how their work is used and protected. You can give it way; Stephen King can sell it. Neither's choice diminishes the rights of the other.
All the best,
Doug
Yes, it is the all or nothing frame that becomes problematic. The devil is entirely in the details.
"You can give it way; Stephen King can sell it."
Why not do both?