Do economists really understand the essence of what’s going on in the economy, or are they like fish who don’t know what water is, assuming can openers to solve what ails it?

Vox had an article on what Pokémon Go says about capitalism. The gist: all the money from the digital economy goes to a few people in large companies like Apple Inc (NASDAQ: AAPLE) and Nintendo Co., Ltd. (OTC: NTDOY), and the rest of the world is in a brutal race to the bottom.

Now, that’s not 100% true...Pokémon Go creator Niantic is a startup, if an unusually well-heeled and well-financed startup. But it feels essentially true.

The reason I started writing this long and digressive rant, is that I posted the Vox story about Pokémon Go in an economics forum, and it got banned for not contributing to the economic discussion. The notion that there could be secular stagnation, and it could have to do with income distribution, and there might be policy implications, was, to some folks, not even a proper subject for analysis and debate.

We’re in a world where something like Pokémon Go can achieve global scale, and the results accrue to relatively few. Lower income folks who receive an additional dollar of income immediately spend two or three times as much wealthy folks. So, if growth in personal income goes mostly (or entirely) to the wealthy, it doesn’t boost demand as much.

In a digital winner-take-all land grab economy, with the returns accruing to fewer people...the spending multiplier doesn’t ripple through the economy, except in $10,000/square foot NYC apartments in the sky...The literal land grab for people lucky enough to have acquired NYC/SF real estate before it took off.

These days, you don’t need to build big factories and infrastructure to create a tremendous amount of value. Messaging company WhatsApp had 55 employees when they were bought by Facebook Inc (NASDAQ: FB) for $19 billion!

Meanwhile old-world messaging company Verizon is for all intents and purposes exiting land lines, not rolling out FiOS to compete in competitive markets like e.g. NYC, laying off employees who picket stores, while spending big on mobile, digital, content like Yahoo! Inc. (NASDAQ: YHOO). (Verizon Communications Inc. (NYSE: VZ) snookered an NYC franchise out of Mike Bloomberg with a promise to roll out FiOS — don’t get me started on their non-competition/collusion with cable companies, and FCC net neutrality shenanigans.)

Invest in FiOS, or a restaurant, or a hotel, or a transportation fleet, be lucky to earn any risk-adjusted real return...meanwhile Seamless, Airbnb, Uber take 15%+ off the top line and earn huge returns on equity and make billionaires of a lucky few big winners.

The phone is the new car, the totemic identity-defining product that drives the economy. If you want your teenager to stay in line, threaten to take his or her phone away. Or is that now considered child abuse?

In the old days the threat would have been to take way TV privileges, or car privileges. The phone is now the teenager’s passport into an independent social life away from parents’ watchful eyes.

But when kids drove cars, they would drive to the mall, spend money, or at least get exposed to the mindset of expressing themselves through consumption within their own generational subculture. They would buy records and CDs and go to movies...now they download and share on social media all day, watch YouTube and Netflix, Inc. (NASDAQ: NFLX) and listen to Spotify for much less money.

Mass media, car culture, consumer goods, they all came of age in the postwar era. Is it possible that, without a new social contract, they will all decline in tandem, as Ben Thompson has suggested?

Capital utilization becomes more and more efficient. In our lifetimes, trains of driverless trucks will be dispatched by central software, making whomever develops it rich, drafting to avoid air resistance, taking up less road, needing less fuel, fewer gas stations and truck stops, and of course drivers.

Map the most common job in every state, drivers is at the top of the list...what is it going to be in 30 years? I’m not too sure ‘app developer’ is a good candidate.

The more the economy develops, the more abstract it gets. Instead of being constrained by labor, capital, energy, everything becomes a land grab for screen real estate, network effects, or mind-share (branding being a franchise in brain real estate).

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