Something for Nothing

As I was listening to an interview on NPR today I was really struck by one of the statements made by Michael Lewis, the author of The Big Short, Moneyball and now Boomerang – The Meltdown Tour. In discussing the potential default in Greece and in municipalities across America he said, “People want to have things they don’t want to pay for”.

This really shook up my thinking for a bit because I don’t see myself as someone who wants something for nothing. But then I started to really think about the shifts I see in products, services and even how I spend my time. I think it is very possibly true that we have trained ourselves to expect things at little or no cost. Is this because we’ve lost sight of value and/or cost of production?

A few examples just off the top of my head. I search the internet for tons of free information using Google or Bing – both free search engines. I use Firefox and Chrome – both free. I use Twitter and Facebook – they are both free. I am currently writing my blog on WordPress which is free and using a free template. I use gmail and yahoo mail – free. Wikipedia – free. I’ve used many internet listing services in the apartment business that are free. I use Craigslist to sell and advertise things and hire contractors – free. I have countless free apps on my iPhone. I started an online catalog for MRO supplies that was initially free to all our customers – we eventually charged them. I provide coaching and business consulting services for free on a fairly regular basis. There are countless entertaining games for free on the internet. Increasingly we get our entertainment for free over the internet using Youtube, Hulu and other services. I know more and more people who are out of working but doing work “for free” in hopes of making a connection or contact that will lead to something that DOES pay.

The AniPRGuy said, “Nearly everything I use online is free. My email, the software that runs my blog and most of the websites I visit. Most people will tell you that this is how the internet should remain. Bullshit. Nothing online is free. Every blog costs time, every app costs money and every program is created by someone looking to solve a problem. And we take that completely for granted.”

Many of these free products have serious economic repercussions. I don’t have to make as many phone calls anymore – no need for a land line. I don’t have to buy a dictionary, encyclopedia, software, or videos. When I stop buying these things someone eventually loses their job from the old economy but the new internet driven economy isn’t creating an equivalent number of jobs to offset the loss.

As I reflect on it, it appears fairly clear to me that we have become a society of people who expect things for free. Not only do we expect them for free but we expect them to be very high quality. I heard countless complaints about the most recent Facebook changes – a free service which there is no requirement that we use. Yet how can we sustain a viable economy if we are unwilling to pay for most of these innovations. How much money would go in to the economy if users were paying even $1-2/month for Facebook, Twitter, and Google search? At $1/month for Facebook that would generate $9.6 Billion in additional revenues for the company, some of which would go to Federal Income Taxes. For Twitter at $1/month, another $1.2 Billion and For Google there aren’t even any stats but the number is huge. So with all this creative genius providing us with all this cool stuff we don’t have to pay for are we robbing ourselves of tax revenues that would be generated were these companies to actually charge what they are worth to us? Could we solve some of our deficit problems by simply starting to pay a little something for all this free stuff? Are we even willing to do that or would we just stop using? I think not. Some would, but most wouldn’t.

We’ve had tremendous innovation over the past two decades but it doesn’t seem to be driving the economic engine of our country. Is it because we want something for nothing? What would happen if we paid just a little something for the big somethings we’ve been getting for free?

If you have the time to listen this is the NPR interview that sparked my thoughts on this – its about 38 minutes long.