My blog doesn’t depress wages

I’m going to go out on a limb here and say Paul Bradshaw is wrong. The argument goes like this: drive up the supply of journalists, drive down the unit price of a story. Sounds fine, until you think through the argument more carefully. It only matters that hacks bloggers are giving away drivel content for free if their competition drives wages down.

What reduces the value of something economically? Increased supply or reduced demand are two key factors. And indeed, journalism as a profession has been consistently devalued economically as a result of one of those factors: increasing numbers of people who want to be journalists and who will work for free, or for low wages. The result is that the wages of journalists are very low – a pattern which predates the internet and the rise of blogging, etc.

This is rife with the same fallacies that convinced Lou Dobbs that unskilled immigrant labor drives down middle class American wages. Bradshaw’s pseudo-economic analysis treats journalists like fungible, undifferentiated commodities, just about the same as feed corn.

There are lots of markets where giving some stuff away doesn’t make the other stuff worthless. In fact, free-beer software creates entire business ecosystems for software, hardware, and services. Strategic giveaways are good business strategy. For more on that, read Tapscott and Williams or Chris Anderson.

Then there’s the question of whether blogs and papers are in the same market. They’re not. Newspapers do the hard job of editing: screening, curating, and fact-checking stories. The whole reason that you’ll pay to read the Financial Times but not my blog is because of their hard-won reputation for excellence.

If your newspaper is printing roundups of the “Here’s what the blogs are saying about…” variety, it’s time to switch your subscription.

Bartering: food for thought with value creation

Wall Street Journal’s Raymund Flandez reports on businesses beating the recession through barter.

In return, Bureau Blank is helping Mr. Hunt shape his company’s communications strategy, as well as designing the company’s logo and Web site.

“It’s a result of the economy being a lot tougher now,” says Mr. Blank, who estimates the traded work amounts to about $10,000 worth of services.

He adds: “I wouldn’t have done the project if I had to pay the cash.”…

Atlanta Refrigeration Service Co. worked out a deal with a local sandwich shop that was 90 days overdue on a $1,500 bill: The sandwich shop paid $500 and agreed to cater lunch to Atlanta Refrigeration’s office five times over the next six months.

Bartering is “critical to us in this recession,” says Dave Brautigan, chief operating officer of the Atlanta-based refrigeration company. “As more and more of our clients find themselves in positions where they cannot pay the bill in full, it becomes our responsibility to figure out how to get that money in.”

What does the GDP tell us about these transactions? They are bad for business. Transactions that are not paid in cash won’t be reflected in statistical measures, for the same reason that favors and work done in the household are not counted. Value creation analysis gives a much better measure of the role that barter transactions play in the economic recovery–transactions that won’t be counted when economic historians assess the timing of the recovery.

The benefits of cell phones in emerging markets

Why do cell phones have such an enormous economic impact in emerging markets? What are the economic impacts of cell phones in emerging markets? How big are the economic benefits of cell phones in emerging markets?

The marginal value of cell phones in emerging markets is particularly great precisely because the available substitutes are expensive, slow, unreliable, or just hard to figure out. Whereas in an economy with good infrastructure, cell phones can be replaced with land lines or email, an economy with only cell phones would otherwise have to rely on expensive and slow face-to-face visits, mail, radio air time, and print publications to replace the calls.