Bookmarks: Why buying records is as a good as a pension

Stumbling And Mumbling sees every penny invested in David Bowie records as a penny wisely spent:

It lies in the concept of consumption capital (pdf), described by Gary Becker and George Stigler.

When we bought and listened to Bowie records in the 70s and 80s we accumulated a stock of consumption capital. And the utility we derive from this is so great that a new addition to it naturally has low marginal utility.

In other words, what we think of as consumption is, in many cases, a form of saving - something that gives us utility in future years.Just as saving builds financial capital which we can draw on in future, so spending builds up a stock of satisfaction which we can draw upon in the future.

Does anyone really think the money they spent on Hunky Dory would have been better invested in the stock market? (If you do, leave now; you're not the sort of reader I want.)

Gordon in the morning: We're all in this together

It's a time of tightened budgets and headcount culls, and even the Beckhams are feeling the pinch. They're doing the sackings part, obviously:

THE Beckhams have culled their staff by a third after a horrified accountant warned: "You're pouring money down the drain."

Richard White, a lowly showbiz reporter, has the details:

Victoria called in the money expert to overhaul their finances because she feared the high-spending lifestyle was inappropriate at a time when ordinary people are tightening their belts.

Ah, that's so sweet; knowing people are finding it hard to get by she's decided to make a load of people unemployed, despite still being a multimillionaire. That's really sharing in the pain.

A friend said: "This very no-nonsense accountant gave it to Vic straight and said, 'You CAN afford to employ all of these people. But why the hell DO you?'"

So, really, this is less a story of the Beckhams feeling the pinch, and more about rich people clinging on to even more money they don't actually need.

A heartwarming tale of our times.

Copyright "kills innovation", say economists

Michele Boldrin and David K. Levine of Washington University have just published a book, Against Intellectual Monopoly, which suggests that far from driving a knowledge-based economy, copyright (and patent law) actually drags the economy down:

"From a public policy view, we'd ideally like to eliminate patent and copyright laws altogether," says Levine, John H. Biggs Distinguished Professor of Economics. "There's plenty of protection for inventors and plenty of protection and opportunities to make money for creators. It's not that we see this as some sort of charitable act that people are going to invent and create things without earning money. Evidence shows very strongly there are lots of ways to make money without patents and copyright."

Levine and Boldrin point to students being sued for 'pirating' music on the internet and AIDS patients in Africa dying because they cannot afford expensive drugs produced by patent holders as examples of the failure of the current system. Boldrin, the Joseph Gibson Hoyt Distinguished Professor in Arts & Sciences and Chair of the economics department says, "Intellectual property is in fact an intellectual monopoly that hinders rather than helps the competitive free market regime that has delivered wealth and innovation to our doorsteps."

The pair are realistic - they're not expecting to argue the rules out of existence - but hope that they can shift a debate to a point where intellectual property law starts, slowly, to reflect its original purpose, of stimulating inventiveness, rather than smothering it with monopoly. Good luck with that, guys.

Bjork steps in

When Iceland's economy froze as part of the global panic, the witty thing to say was that now the country only had Bjork to rely on. As is often the case, this turns out to be nearer the mark than you might have thought: Audur Capital's attempts to regrow the Icelandic economy have called in Bjork for some heavyweight celebrity endorsement.