Geeks Pledge $3 Million To Save Enterprise

[Ephemera]

I’ve always called it a tsunami, for what it’s worth, and my post has nothing to do with the Indian Ocean unpleasantness.

[Maeglin]

@jackelope

Warning: Brief lesson in simple economics ahead.

These arguments (“They shouldn’t give their money to save the TV show,” “Cameron Diaz didn’t deserve the $42 trillion she made last year,” “The money would be better spent on charity”) are invariably presented with the attitude that the money somehow evaporates when it’s used for a frivolous purpose. This is patently ridiculous; sure, these folks are going to spend their money on the show, but it’s going to pay people; writers and camera operators and carpenters and so on. And those folks will in turn spend it on other stuff, and it will continue to circulate. This is called “an economy.”

Remember: It’s always a good thing when people (other than you) spend money. Encourage it. Even if the $3 million is not spent on charity, it still circulates; it pays salaries that keep people from needing charity.

Wow, a brief lesson in economic nonsense.

Transfers of this kind do not increase consumer or producer surplus. Your $3m does not magically appear when you decide to donate it. The assets you liquidate to make this donation are providing capital that, say, pays someone’s salary or generates other kinds of value. This is simply a transfer, not generation of wealth.

The reason why “you should give that money to charity” is such a stupid argument is because it presumes that the donator cannot already do both, and that the marginal impact of an additional $3m on either cancer research or saving a tv show is the same. Another $3m ain’t gonna cure cancer but it might just save a show, build a robot, etc.