March 30 1999, the Dow Industrial Average passed 10000 for the first time. Late August/Early September 2010 the Dow Industrial Average passed 10000 half a dozen times. The Nasdaq in the same period has been cut roughly in half. The recent Census finds that 1 in 7 Americans, the most since the 1960s, are now living in poverty. Not just dull manufacturing jobs have been shipped overseas, but a hoard of IT and Customer Service too.
My generation shouldn't have a rosy view of the economy. We came of employment age when the dot-com bubble burst and graduated from college in the midst of the sub-prime-mortgage-turned-credit-turned-financial-turned-economic crisis. As Napster morphed to Soulseek to Limewire to iTunes and bitTorrent we all realized we were the first generation since the era of Ragtime that would not have "rock" stars, just professional musicians barely living off of the long-tail economy. Waiters, some nurses, doorman, stock brokers, human resources departments and a whole host of other professional and not-so-professional positions will be held by robots within 12 years. Many of us have five or six digits worth of student debt. Most of us live with our parents. Most of our parents only significant savings is in the form of home-ownership and hordes of them are getting foreclosed on. Those that haven't seen foreclosure have seen shriveled net worth and credit limits. The list of negative Dust-Bowl-sounding gloom and doom items is endless.
And yet we feel like millionaires. All of us. As long as we can reach the critical salary mass to afford a fast computer, broadband, a mobile computing device and an unlimited data plan. Why? Because all we ever wanted was information and now information is free. Don't get me wrong, we still have a couple of stragglers whose greatest wishes include SUVs and fine wines and other things that are impossible (at least today) to transmit via 0s and 1s. Pound for pound though, we are a people whose interest is media and increasingly so.
Remember the late 1990s? Remember the money you spent on media? I had a friend (a high school student working in Pizza Hut, mind you) who bought about $10,000 worth of CDs in 1998 from ColombiaHouse. I remember planning on taking two summer jobs, one day and one night with about a half-hour of leisure budgeted daily when I was in 9th grade with the sole purpose of buying the ultimate collection of DVDs. A hot CD in 1999, like Juvenile's 400 Degreez or that Santana record that got played to death (think Rob "Matchbox 20" Thomas and that Maria, Maria song) sold for about 18.99 or more at your local mall. The graver robbery was the singles, 5 to 7.99 to get the hit, the remix of the hit and the probable next single (provided the test groups give it the go). Movies, forget about it! I lost my cousin's VHS copy of "Jerry Maguire" in 1997 and my dad made me pay over half my life savings, 22.97 to replace it. Renting a movie from Blockbuster for 3 days nearly cost $6.
Flash-forward to 2010. I've got stations like Pandora and LastFM that generate music based algorithms to please my most particular favorite traits, be the variables mood, chronological, genre, tempo or instrumentation. I even start BlackHat Pandora accounts with the sole purpose of bending the station to playing the songs I want. Via a few well placed BookMarks and ThumbsUp I have a station that plays just The Strokes three records and assorted singles, about 57.97 worth of value in 1998 dollars. File-sharing is inconceivably various , so I can peer-to-peer with best friends, go to sites, swap Flash drives, share over a common wi-fi or even just bump smartphones. High-speed internet means pirates can get their hands on whatever movies they want and get them fast. It also means those people in the street who used to sell $10 copies of crummy hand-held-captured films now sell $5 high-def BlueRay discs and carry portable players so you can check for Quality Assurance before purchase. A $20 Netflix subscription lets you stream endless content in 30-odd languages and order two physical discs at a time from a nearly universal catalogue.
If the quantitative facts about changes in media are so significant, it's really shocking to sit back and feel the qualitative ones as well. YouTube means anyone can put up content anytime, anywhere. File-sharing means artists like Mos Def and The Strokes can be some of the defining artists of early 2000s without ever really getting heard on the radio.
The Bed Intruder phenomenon was an incredible rebuff to the record industry. The greatest hit of the summer of 2010 was a clip from the news auto-tuned by some brothers and ensuing ocean of multi-genre
covers of the auto-tuned news clip. The funniest things of our generation aren't sitcoms or standup or variety shows but YouTube classics like
Greatest Cry Ever and
David After Dentist.
As monumental as all that is, its really just information we used to store in physical objects like tapes and CDs made digital. More interestingly, now even processes are becoming digital or at least partially so, and therefore depreciating as well. Dating, for instance, remains a process in which it is virtually impossible to avoid all costs. Yet hope is not lost. Dating Services, with their broad connectivity and matching algorithms, serve to eliminate those frequent dating experiments with no ROI. Facebook, 4square, Google Latitude, Yelp's Monocle and other location-based services help create the kind of coordination and environmental knowledge that makes dining, partying or getting a haircut much more successful endeavors.
My personal favorite is the OpenCourseWare. Since I was about 11 I've seen the tragic look on people's faces when they find out they can't attend a particular university. I saw a kid cry when his mom told him he couldn't go to MIT and I saw a coworker at a Fortune 10 banking institution crushed when he received word neither of the Ivy-League MBA's he'd applied to had accepted him. Those who do settle for universities on their budget constraint line while seriously yearning for a superior system can develop misanthropic habits and miss out on majors ill-explained to them. At best, they waste a lot of money just for a diploma and sign a contract for a much higher lifetime opportunity cost of networking. I don't think I even have to talk about high schools.
OpenCourseWare amends so much of this. August 24th, CNET reported iTunes U's
300 millionth download. That's about as many university lectures downloaded as there are American citizens. I've personally felt the power of this. I majored in Spanish Linguistics and Economics in college, thinking that knowing Linguistics and Economics while also speaking Spanish was the best I could do with my life, my budget, my time constraints and those of college programs. I went to City University of New York, A) because it's the most esteemed public university in America (Gordon Gekko, Andy Grove and Colin Powell went there) and B) because in most other states people (like employers) get the weird impression that you went to NYU when you say City University of New York and it's not lying if your response is always, "NYU is a great school".
Needless to say, I felt cheated. I felt abused by market forces. I felt like I got felt up by Adam's Smith's invisible hand. I wanted to be a Computer Science Major at Stanford. I wanted to study Philosophy at Harvard. I wanted to study Linguistics at MIT. And I wanted to do them all at once. By working and not taking a loan I didn't even have a schedule that would permit me to study Engineering at CUNY. I was jealous of the rich and my envy hurt me. I kept my bitterness inside as I noticed quickly that bringing up class's correlation with success is not appreciated in conversation, especially amongst the successful. I soon learned I wasn't alone though. I heard my suspicions echoed in offices and bars and publics places of all kinds. I realized most people were dissatisfied with their college education and the few that had nothing to complain of their school generally filled that void in conversation by ruminating on their tremendous debt.
Then one day Google saved my educational life. I was watching YouTube, cruising through some programming tutorials, a recent discovery of mine, jumping from C++ to Python, and Primitive Operators to Lists. Great short tutorials that taught me about the syntax of computer programming languages but not great sources for contemplating the spectacularity of their possibilities. See a three-minute video on an implementation of a simple list and realizing how to type it correctly such that you get the data structure is nothing like the truly incredible consequences lists can have on your life. What I really needed was a conceptual tour of the key ideas of software building. One day I was prompted to a page of one of the true-content producers of YouTube, this guy named
thenewboston, who has around 955 tutorials (as of 9/22/10) in multiple languages, most under ten minutes, perfect for median-intelligence people and great for above-intelligence folks new to programming who know how to fast-forward tactfully and realize when the guy is just mumbling incoherently. Gazing momentarily rightward, in my YouTube Suggestions I caught sight of a blackboard, a man and the words MIT. The mouse attacked for me:
I discovered
MIT's Intro to Computer Science, one of the most ample offerings in OpenCourseWare. This MIT course includes 24 lecture videos, 2 Complete Texts, Selections of Others, Assignments and Exams. People are now even forming informal study groups so they can execute the class socially. Although much OpenCourseWare is of this par of completeness just seeing the videos never hurts either. The most charming, effective teacher I've ever known is Mehren Sahami doing
Programming Methodology at Stanford whose videos I recommend to people of all ages, seriously entertaining by force of his tremendous personality to watch as though it were a sitcom about learning JAVA. I've taken Computer Science, Mathematics and Economics Courses at Stanford, Harvard, MIT, CMU and UC Berkeley. I sat through graduation speeches by both
Steve "the Ninja" Jobs and
Bill "the Borg" Gates.
The democratizing element of OpenCourseWare is a great social thing in the industrial world, but when it hits the third world things will never be the same again. When broadband and tablets become cheap enough for distribution throughout the poorest of the nations (within 3-5 years) the endogenous growth functions attributable to the percentage of the population involved in STEM fields of those countries are going to explode. Countries that never so much as had a research facility will suddenly be teaming with experts in Physics, Information Sciences, Mathematics and Engineering. It is a note of national pride for Americans that we've innovated nearly everything (with a little help from Europe) over the past 200 years. What most people don't realize is that losing our technological edge is not absolutely negative. Imagine you're diagnosed with Lung Cancer….will you care that the cure was invented in China? You lose your leg in accident…is it relevant enough to worry that it's bionic replacement is product of Indian Engineers?
The etymology of the OpenSource Movement (and a frequently-heard phrase of its exponents) is that it's "free as in free speech, not free as in free beer". I beg to differ. As automation progressively takes care of all our animal needs and bioinformatics our health, people will continue to create meaningful content without ever occurring to them that they should monetize it. This utopian day may be very far away but as consumers that doesn't really matter to us, as long as people are willing to distribute content for ad revenue from businesses. It's a beautiful thought that people someday would create content to inspire, inform and educate other people. It's a beautiful life we live in today, in 2010, because our inspiration, information and education is largely being subsidized by businesses chasing super-specified ad revenue enabled by companies like Google and Facebook.
I close with a crude-back-of-the-napkin-calculation. In 1998-dollars I'm making hundreds of thousands of dollars just living. Not everyone can be as lucky as me. If some people had such a large stipend, they might spend it on other things like wine and women. I luckily, would spend it all on content anyways, content as data, content as information and content as knowledge. The first two are nearly always free and the third is getting there. On the other hand, I don't pirate much at all, just make due with manipulating the legal distribution channels so I'm sure there's some regular Joes, some store clerks and some Government Assisted-Living people out there pulling in as much as millions of yearly media-salary.
I run through 6-8 films a week. At 5.68 1998 Blockbuster dollars, that's $~2000 in income a year. As I almost only watch documentaries and foreign films and would certainly have to resort to buying (and some cases spending significant time searching for) some, I apply a premium and multiply it times 1.25, to 2500 of 1998 Video Content Dollars. Musical Albums I love. With age I've grown and lost some of the ritualistic attachments American teenagers develop with pop music. When programming, writing, studying or researching I like to find an album that is just pleasing enough to play from start to finish. Since I do these four activities many of my waking hours, I'm consuming at least 4 albums a day (if the outlier super-music filled weekends are counted and the fact that music I consume mutually with friends was probably obtained freely too (unless by those saints who actually buy songs on iTunes)). Some are certainly popular enough to cost the $18.99 in popular 1998 album dollars, some not-popular enough to cost less and yet some so unpopular in a physical object market like that of Compact Discs to cost a lot more so we'll make the price of a CD 17 in 1998 dollars. Assuming music was a simple as listening to albums from start to finish, I'd have had to have budgeted $24,820 strictly to the purchase of LP discs. Of course, when I feel like I need to be inspired and just look the song up on YouTube, when I leverage the fact that Android FroYo on my htc Evo 4G has Flash so I can go to any number of music-vendor sites that let you listen to whole songs for free without purchase, when I stream some artist's I love/hate's new single to sample, when I consider that Pandora is often turning me on to songs I'd never have discovered with 1998 radio I'm buying like 10 1998 singles a day. That's another 23500. The 2010 GDP per capita of the United States is about 46,400. The mean-American earner would be stuck with about a $5000 deficit after buying as much 1998-priced media as I do. I assumed he'd be hard-pressed having a good time and getting a good education. I wasn't. I don't keep accurate enough books to tell you how much money I've blown in bars and restaurants but I live in Manhattan, New York and I'm sure with 4Square, Facebook, Twitter, Google Maps, Yelp, a Smartphone and the assurance that everyone I know has one too, I'm saving myself at least 8 spend-a-lot-of-money-yet-have-no-fun-nights who in Manhattan often cost at least 100 before you realize you got to take that cab home (another 20 bucks), so right there you have it, I earn the entire GDP per-capita seated and then some in front of a screen in leisure activities.
Saved Educational expenditures probably more than double my content-income as I doubt I have to remind remind you that taking 12 classes at 5 Ivy League Schools this year probably dwarfs all the opportunity cost dollars I just laid out in the last paragraph...
