Streams

Revisiting the Creative Class

Thursday, July 26, 2012

Richard Florida, director of the Martin Prosperity Institute at the University of Toronto's Rotman School of Management and a senior editor at the Atlantic, is the author of The Rise of the Creative Class, 10th Anniversary EditionAs his book celebrates its tenth anniversary, Florida discusses how things have changed.

Guests:

Richard Florida

Comments [24]

Intellectual Property Monopolies worsen inequality


The "creative class" benefits from extensive government
granted and government enforce monopolies. These
monopolies - including copyrights, patents and trademarks -
worsen wealth inequality. They give a disproportionate
amount of wealth to those few members of the "Creative class"
who won the race - while leaving many working members of this
class poorer or broke. These monopolies also grossly distort
asset allocation in the economy - encouraging businesses to
spend hundreds of millions of dollars making THOR III, rather
than investing in more practically useful activities. This
also REDUCES creativity and diversity in the output of the
"creative class" and concentrates wealth at the top. These
monopolies induce a surplus of people to try to "win big" by
entering these fields - instead of other practical areas of
the economy. Furthermore, IP monopolists tend to charge
US consumers more for the SAME products than they charge
other consumers elsewhere in the world. This lowers US
competitiveness thereby lowering US standard of living,
and reduces consumer welfare. Finally, most IP monopolists
use legal tax dodges - like transfer pricing - to avoid
virtually all US taxation - further siphoning off wealth
from the US economy.

Brian, You should examine the role of IP monopolies in
worsening inequality and harming the average US citizen.

Jul. 26 2012 05:06 PM
scott from soho

The US is a land of opportunity, not the land of guarantee. It takes individual drive and effort to make things happen. Once you run a business or teach a class you realize that people are different. Not everyone in society is destined for greatness. Take a look around you, there are achievers and underachievers all around. Some strive to reach a higher level of financial or artistic success and some make excuses why they have not reached their goals.

I wonder if Brian feels that he has worked harder or more intelligently than others in his field? Does he think he just got lucky and anyone can do his job if given the chance to sit behind the microphone? Not everyone has the ability to be successful but we all have the opportunity to try.

I also agree with both of David's comments.

Jul. 26 2012 03:35 PM
David

The only good news to come out of the Aurora tragedy is that gun sales are up. It always takes an incident like this to wake more people up to the fact that the first person at a crime scene is you, the victim. Police are re-active to crime, not active.

Jul. 26 2012 12:13 PM
David

I tell people that I don't believe in capitalism, I believe in the free market. We sure as hell have capital in this country investing in businesses (i.e., capitalism), but we sure as hell don't have a free market.

Anyone who believes that the United States (or any other country in the world) has a free market is either economically-ignorant or a liar.

The vast majority of business regulations passed in this country have always been supported by entrenched big businesses to either get rid of their competitors or to prevent new competitors from entering the market.

http://www.huffingtonpost.com/anthony-gregory/obama-business_b_1687374.html

Jul. 26 2012 12:06 PM

50 years ago, the manufacturing out of Pacific Rim countries was considered 'ricky ticky' - good enough to get the job done but not built to last. In the 70's, the Japanese converted this by an intense focus on quality in automobiles. The electronics revolution turned the standard view of quality upside down where the desire to upgrade hits long before the useful service life of a product is over such that quality is less important. American capital was used to build the plants to construct microprocessors, hard disks, and other electronics in low-wage countries. Such investments do not deserve a lower capital gains rate, in my opinion.

If we want to demand premium wages, we need to build and sell things that people can't get any where else. Neil Tyson has it right. Innovate, innovate, innovate. Right now all the U.S. builds are airplanes and military technology. If our workers can't afford to buy what they are building, then we are making luxury items. Can you build a strong economy solely building luxury items? I don't think so.

Jul. 26 2012 12:05 PM
David

jgarbuz from Queens: Perhaps you might find these two writings on Intellectual Property (i.e., patents) rights interesting in light of your comment about how patents = wealth and power:

Against Intellectual Monopoly:
http://www.micheleboldrin.com/research/aim.html

Against Intellectual Property:
http://mises.org/journals/jls/15_2/15_2_1.pdf

Jul. 26 2012 12:00 PM
Mark from Brooklyn

Yet another guest who doesn't know what he's talking about. "China isn't a creative economy": what about the major industrialization of a dozen of their cites in the last 15 years? Gigantic dams, electrification, and telecom projects? Their solar power production industry? Their production of engines and tools? The idea that the Chinese simply "copy" is wrong. And then his premise that "the creative class" are all self-motivated individuals: he doesn't account for the close connection between private industry and university labs, intellectual property regulation, and US govt funded science--- included the reality that a huge amount of govt-sponsored research is for weapons. The bottom line: another author who sells aspirational class dreams: "you too can be a creative genius... and be wealthy."

Jul. 26 2012 11:35 AM
Amy from Manhattan

"Culture of honor"? I don't see any "honor" in starting a fight because someone insulted you.

Jul. 26 2012 11:34 AM
jgarbuz from Queens

They guy is just another liberal academic with the usual liberal arguments that end up nowhere, as usual.

Jul. 26 2012 11:33 AM
Robert from NYC

Well there you go, he's afraid that a systemic change is frightening because it's "unknown" and he fears what could happen. Well ain't that sweet. In this age of technology that only happened in the past 20? 30? years we basically came out of a period of stagnation by folks who don't think like this guy. He has the audacity to speak about the "creative class"? Well he doesn't sound like he would fit in that class with his fear of changing and economic/financial system. He's content in his state of being. This guy is in conflict with himself.

Jul. 26 2012 11:29 AM
John from NYC

On this theme of paying reasonable wages for employees, I recall one interview. Years ago Michael Moore had a summer show on NBC, I believe it was titled "TV Nation". Mr. Moore goes across the Texas border to Mexico to show the various factories which are operating in Mexico. He is allowed access inside a factory where they produce washing machines and other appliances. He asks the factory supervisor if the workers can actually afford to purchase these products which they are assemble. The supervisor response is along the line of they don't have to be worried about that since where they live they don't have running water in their homes.

Jul. 26 2012 11:27 AM
koren from Aspen, CO

We have a worker supply and demand problem. Ever-increasing productivity through technological evolution has made the average worker so much more profitable. Employers have no pressure or incentive to pay workers the livable levels of bygone decades.

What can change this?

Jul. 26 2012 11:26 AM
jgarbuz from Queens

"Biblical" capitalism, or capitalism + lots of charity for those who cannot work or help themselves, is the only realistic model that can survive. Otherwise we go back to slavery. The old socialist ideas have collapsed in the face of the brutal reality of a truly globalized economy/

Jul. 26 2012 11:26 AM
John A.

The Patent troll question is very important. Experts will say that the quality of patents is horrible, since they still pend in out somewhat underpowered courts.

Jul. 26 2012 11:26 AM

Innovative..Quality..Low Price

Pick two.

The imagined better alternatives are easy. How do we reasonably transition from here to there?

Jul. 26 2012 11:25 AM
Alyson from Garment District

I work in an industry that has a variety of knowledge/ creative workers as you say; marketers, designers, entrepreneurs etc. The industry still seems to run like the garment industry at the beginning of the last century, focusing on low cost goods that are a sure bet to make money at the expense of good design and environmental responsibility. Do you have any suggestions on how this could change for the fashion industry?

Jul. 26 2012 11:23 AM
RJ from prospect hts

What about actually valuing these "service workers"? They're called "unskilled labor," "contingent," "marginal." People begin tearing their hair out when janitors and residential doorpeople threaten strikes (not to mention the transit workers)--then they forget when the threat passes. Until recently blue collar work was valued--people were proud of the products they built; cleaners work hard to spit-shine their buildings (try coming in to work some morning and not having them so--you'd notice then!). These are not only valuable labor but often public health essentials--those sweaty, limited-English people carrying out the garbage in the back of your favorite restaurant are keeping your meals safe.

Jul. 26 2012 11:22 AM
jgarbuz from Queens

Patents = wealth and power. IBM today produces nothing but services and patents. Over 70,000 of them. Patents are gold in the modern virtual reality economy.

Jul. 26 2012 11:22 AM
Bonn from East Village

About TD Bank, "America's Bank," which I knew was Canadian: What wonderful things have they done for New Yorkers? All I know is that when they moved into the East Village, they refused to take down their green flags fluttering on our historic block. No other branch that I have noticed has green (or any other color) flags on their building. Number two: I handed the branch manager a proposal for an art project, which he said he would pass onto the higher ups. Never heard back from him, despite my many phone calls and stopping in the branch. So much for support of your "creative" class.

Jul. 26 2012 11:20 AM
dorian from manhattan

There's a prominent story in the Wall St. Journal today about businesses unable to fill positions that require skilled workers. At the same time, you talk about all the workers on the lower rungs having so much trouble these days. Do you have a suggestion for how to solve both issues? Should government fund training of the less-skilled workers to help them get jobs that are going wanting? Something else?

Jul. 26 2012 11:19 AM
Jesse Kanner

Can you please ask Mr. Florida about onerous patents, patent trolls, the patent wars... what threat do these pose to the longterm value of the Creative Class ?

Jul. 26 2012 11:16 AM
jgarbuz from Queens

Actually, we are really moving towards a "virtual reality" economy, where reality is replaced by virtual reality, and we have been moving in that direction since the first cave paintings were made.

All art and entertainment, including reading, is actually virtual reality. That is, distraction from the brutality of reality. Reality in the cave man era meant constant hunting and gathering of food. Coming back to a cave and seeing some pictures was probably "entertainment"of sorts. So were religious rituals. So was music.

Today it is movies and now video games, which I believe is the culmination of all of this escapism. Escaping reality is progressed by "creative people" like that first cave artist. The "creative class" is the one who distract the rest of us from the brutality of reality.

Jul. 26 2012 11:14 AM

Prof. Florida,

A small [not leading] question...for Prof Florida :]

The orthodoxy of urban planning as taught by institutions of higher learning seems a template that inhibits our communal creativity, quality of life and real diversity of place and society.

How can we encourage the progenitors of this orthodoxy [policy makers, designers, planners, architects, developers, business people] to think out of the box and develop our urban environments to be urban [not faux suburban], dense, livable and dynamic?

Willy X. the Urban Verb

Jul. 26 2012 11:12 AM
antonio from baySide

We could have hundreds of Williamsburgs/Bococa's upstate if we just build a hi-speed train to get to them AND an artery of bike lanes, street cars to traverse once you're there!

Jul. 26 2012 11:09 AM

Leave a Comment

Email addresses are required but never displayed.

The Morning Brief

Enter your email address and we’ll send you our top 5 stories every day, plus breaking news and weather.