The Consumer Surplus Decade

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"The Consumer Surplus Decade"

Obviously US GDP growth from 2000 to 2009 was dismal.

But I do think a lot of the commentary about a “lost decade” ignores the extent to which technology has enabled a lot of additional consumer surplus. Wikipedia doesn’t create a lot of economic value that pops up in GDP figures—if anything it reduced GDP by hurting the business model of encyclopedia publishers—but it’s very useful and I’m glad it exists. Similarly, people’s ability to waste time at work in an enjoyable manner has been vastly enhanced by blogs, in a way that’s way out of proportion to the value of blogs as a business enterprise. The music industry is in much worse shape than it was ten years ago, but someone consumers who want to locate and acquire new music are in much better shape than they were ten years ago.

Obviously you can’t say that iTunes Genius makes up for 10 percent unemployment, but the point is that technologically driven improvements in quality of life steam ahead in a way that’s not that tightly linked to the macroeconomic statistics.

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