I created the Wikipedia entry for Scroogenomics. It could use some work.

His phrase… “orgy of wealth destruction”… is so much fun. This happens when we receive gifts that don’t really match our preferences. Like, if I received a box set of country music CDs.

Honestly I can’t even remember the last time that I bought any music. If I’m the rule rather than the exception, then it means that the demand for music is largely unknown, which means that the supply of music is largely incorrect. Most of the music that society receives really doesn’t match its preferences… therefore it’s an “orgy of wealth destruction”.

A huge part of the problem is the very economically ignorant belief that people’s preferences are revealed by views/votes. All the people who watched Trump’s speech really didn’t equally value it. All the 304 people who gave a thumbs up to Tons Confession by Blonde Redhead really don’t equally value it.

The solution looks something like this… Cent. If you sort by “Top” and select “All Time” you’ll see that the most highly ranked post is a music video by the rapper Kelechi. Well…

There are a few caveats. The first is about speculation. Kelechi received some portion of that $170 dollars, the rest was divided among the earlier investors in his post. This system is referred to as “seeding”. You can read about Simon de la Rouviere’s similar idea… Automated Network Investment Contract: Ownership In The 21st Century.

So because of the investment aspect, it’s not so clear what the actual value, or relative value, of that music video is.

Personally I think that I’d prefer pure tipping. Part of the incentive to tip would be to help move a post higher up in the rankings so that it would receive more attention. How people divided their limited money among the content would reveal how they want society’s limited attention to be divided between it.

One issue with Cent is when you click on the #music tag there still isn’t the option to sort the posts by “Top”. If this option existed then I’d be more inclined to spend my money to help improve the rankings. Another issue is that each post can only have one tag.

Honest Cash (HC) doesn’t have these two issues… #art, but the sorting by “Top” is a very new thing for the tags/categories.

Now I’m listening to Room At The Top by Adam Ant. There’s always room at the top? In any case, the occupants of this lofty position should be determined by crowdfunding (the market) rather than by the lowest common denominator (democracy).

Anyways, I might be missing something, but according to Waldfogel’s own economics, or at least his earlier economics, you’re right and he’s wrong. Of course most of the music is going to be crap, given that its quality is largely unregulated by the market. Fortunately this problem can be solved by websites like Cent and Honest Cash.

Both these sites would greatly benefit from your input, but I’m personally leaning more towards Honest Cash.

If you sign up then hopefully sooner rather than later I’d be able to go on your profile and see all your valuations. I’d be able to quickly see which song, book, and movie you value most highly. This system would minimize the chances that we’d overlook the most valuable things. Given enough eyeballs, and brains, all treasure is found.

You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete. ― Buckminster Fuller