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Why star actors only? Why not star barbers, or star carpenters? (Part 2)

In the earlier part to this post, we explored why celebrities are frequently surrounded by controversies, often willingly. In this part, we dig deeper into the question of celebrityhood or stardom. Why is it that we see star actors only? Why doesn't my barber get the status of a star even if he is arguably as good in his field as is Chris Hemworth in his? Is it about the man or the profession?

This can be explained by the differences that exist between the two markets that my barber and Chris Hemsworth cater to. 

In every market, every customer wants to avail the services of the best producer/service provider. At the same time, every customer (almost) wants it at the lowest possible cost. In the film industry, both of these criteria can be satisfied easily, thanks to the innovation of modern technological progress. When Chris Hemsworth performs, billions of people worldwide can watch him at the same time: there's no limit on the maximum number of customers he can serve at a given time. Also, because making multiple copies of a performance video costs near to nothing, everyone can enjoy the performance at a very low price. 

Things are a little different, however, with my poor barber. Even if he is incredibly quick, there is a limit on the number of customers he can serve in a day. So, even if he manages to gather 500 fans who want to avail his service, he can't serve them all possibly leaving some customers dissatisfied. Also, the moment he starts getting more customers, his services are going to get more and more costly to meet the demand. That'll make marginal customers like me switch to another cheaper barber who isn't as good as my star-(not)-to-be barber but charges less.

That explains the huge fanbase of performers like Chris or Beyonce and the few customers that visit my barber. However, interestingly, it explains a lot of other things! It also explains why some professionals like performers or athletes earn in millions while others don't. And thereby, it explains, in part, the discrimination in earning across occupations. 

If looked into with academic rigour, this points towards the significant role Intellectual Property policy may be playing in accentuating and furthering economic inequality and the resultant market inefficiencies. Here's how.

Information markets, by their very nature, exhibit following characteristics:

1. They exhibit strong returns to scale. 

2. Information is scalar, meaning that the winner takes all leaving nothing for others. 

3. Although Information should be an universally available resource in theory, in reality it's often concentrated amongst the few. The digital divide is a glaring example of this. 

4. Information tends to concentrate political as well as financial power, leading to creation of additional inequalities.

These characteristics match quite well with the characteristics we found out to be ensuring higher earning as well as stardom in our analysis contrasting Chris Hemsworth with my barber. The question, then, is, if information provides such returns to scale all by itself, wouldn't strong IP laws mean a case of unnecessary state protection to an artificial monopoly?

Chris Hemsworth will always be a star and will earn much more than my barber. But, with a better IP policy that cares more about the market and less about individual sellers or the funding they'll provide to the ruling party, better forms of price discrimination could be devised and the poor kids from my village could watch the Odia dubbing of Thor: Ragnarok without having to spend all their pocket money on it. 




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