Has knowledge capital been depreciating more rapidly?

The excellent Michael Mandel writes:

Over the past 10-15 years, the strengthening of information flows into developing countries meant that knowledge capital was being distributed much more quickly around the world.  As a result, the normal process of knowledge capital depreciation greatly accelerated in the U.S. and Europe–beneath the radar screen, because no statistical agency constructs a set of knowledge capital accounts.  

I agree with the conclusion but I am not sure that globalization was the mechanism.  I sometimes think of an imaginary economy with two sectors: music and bathtubs.  I believe that my bathtub is over thirty years old, yet for me it works fine and I have no desire to buy a new one.  When it comes to music, most people want to listen to what is new and hot, not Bach's B Minor Mass.  Furthermore, even within the music sector, acts seem to have declining longevity, in part due to the decline of the iconic album, the rise of the iTunes single, the fall of entry barriers, and the proliferation of genres.  The Rolling Stones are still around, or U2, but more rapid turnover is the trend. 

A while ago I read a good article about how few people on Netflix rent or stream the indie movies from the 1980s or 90s.

The more that your economy "looks like" the music sector, the more rapid the rate of depreciation for production capital and knowledge capital.  This means we may be overestimating our national wealth.

Here is Michael on our aging capital stock.


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