Sunday, March 25, 2007

Workers Compete Against Other Workers

From "Free Exchange," The Economist's blog:

"The biggest problem that musical artists have is not the recording industry. The main problem musicians face is other musicians. There are too many of them.

The reason almost no musician ever makes much money is that there is a huge excess supply of people who want other people to listen to them sing or play an instrument. When all the primates are vying to get up on stage to impress the other primates, there's little reason to pay the primates much."

Amen. A couple points from a recovering musician:

1. Music is a "tournament labor market," like the market for acting and the market for crack cocaine (see Freakonomics, the chapter "Why Do Drug Dealers Still Live With Their Moms?"), where there are the select few who win the music tournament (Prince, Christina Aguilera, Norah Jones, BB King, Eric Clapton), and then everybody else - the thousands upon thousands of "struggling starving artists" all over the country. Talk about a "disappearing middle class" - music NEVER had a middle class, it has always been a few rich tournament winners and thousands of poor artists trying to make it to the top, with almost nobody in the middle income category.

2. The problem ALL workers face is other workers! There are many effective ways to reduce competition from other workers: form a union to restrict the supply of workers (autoworkers, carpenters, plumbers, electricians, etc) or create occupational liscencing laws to restrict the supply of workers (doctors, accountants, lawyers, barbers, appraisers, etc.).


At 3/26/2007 9:03 AM, Anonymous Anonymous said...

A lot of times reducing competition increases competence and protects the consumer or customer. Just as I completed an apprenticeship to receive my journeyman’s card, you completed an academic program to receive your Ph.D. I think both of our employers benefited from our efforts. Would you propose that we lower those requirements?

I don’t see how increasing the number of unqualified workers benefits society. Sure a lot of people who have not met the requirements can do what we do, and maybe even better. But, the lack of necessary information to determine that is sorely lacking, so licensing and degree completions are required as a standard in lieu of that information. Do you have a better solution?

At 3/26/2007 4:29 PM, Anonymous Anonymous said...

The problem is not too many musicians.

The problem is too few performance and publishing outlets.

A few large businesses have used legal and illegal means to artifically restrict the number of publishers which artifically increases their profitability at the expense of both artists and consumers.

For example, if Yugo had been able to bribe the government to ban all other cars, then no matter how bad their cars were, they would be able to sell them for a profit. And the workers would have no other car company to work for, so their only choice is to take the scraps they're offered or to get out of the business.

That is the state of the media industry today.

At 4/03/2007 10:10 PM, Anonymous Anonymous said...

I think the musical middle class is largely invisible: the music instructors, music professors, studio musicians, orchestra members and such. These groups make a modest living filling a need instead of relying on the recording artist lottery.

Creating an artificial competency requirement for musicians wouldn't really change anything. Yes, an employer or booking agency can be sure of a minimum standard of musicianship, but they'd still have to determine if the musician is worth the price asked and also meets their needs. Some musicians are much better than others, and some charge much more than others. It also wouldn't reduce competition, since the good musicians aren't competing with the novices anyway.

I'm not certain there's a shortage of venues. At the small end, bar owners can easily meet customer demand. But in many cities there just isn't enough desire to see relatively unknown bands play to make it lucrative. It takes a while to create the larger venues to see big-name bands, but if the demand is there, eventually it will be met. And if customers are willing to pay, musicians will be willing to play.

At the publishing end, the big four do have the advantage of size. Still, they have to pick and choose which of their musicians get the bulk of their promotion dollars. The rest will languish. But the independent labels do provide an alternative to this, and there's plenty of them. Still, because each only has a relatively few musicians, their income makes it even tougher to their best bands, particularly against the big four. At least the independents have created a lobbying association so they aren't completely disadvantaged.

In music, as in working for a business, success sometimes amounts to who you know and being at the right place at the right time. But in general, the best rise to the top and garner the bulk of the consumer spending.


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