Last week, or maybe it was earlier this week, there was a lot of debate about an announcement from Jason Calacanis that he would hire away the top users of social news sites, like Digg. Whether such a plan would work or not isn't particularly interesting, though it certainly aroused a lot of debate about whether users of these sites should get paid, if their contributions are valuable. There was almost a moralistic tone to the debates, as if a site that didn't pay its users was exploitative. This relates to something I've been thinking about lately -- one's opinion about who should do what, or what is right, is completely irrelevant.
Consider some things you commonly hear:
- Teachers aren't paid as much as they should be, because their skills aren't respected.
- Investment bankers and CEOs make too much money.
- The stock market doesn't know how to value our company.
- Fast food shouldn't be so cheap; for that matter, neither should organic foods.
- Drugs should be made more affordable.
- Housing should be more affordable.
- Basketball players make too much money (that one seemed particularly popular in the 90's).
Unfortunately, for those who make these statements, prices aren't generally set on the basis of opinion. The only person whose opinion might matter is the Treasury Secretary. We've never been able to figure out what his job is except use the power of jawboning and jibber-jabbering to push the dollar up or down. Other than that, what we say about prices and wages doesn't matter too much. If Jason Calacanis makes a good business by hiring the top Diggers, that's great. If Digg can thrive without paying users, that's great too. The proof, as they say, is in the pudding. Write or wrong has nothing to do with it. Assuming that Diggers aren't being held against their will, it's really not a moral question.
Of course, I want to make it clear that I'm not suggesting that analysis and advice are wrong. It's perfectly reasonable for an observer to say "movie theaters should cut ticket prices cause they'll fill more seats". That's a different kind of statement. And it's also ok, if the issue in question creates significant externalities. So if you argue that driving should be more expensive so that the driver bears the cost of environmental damage, that's a reasonable stance (though we may disagree on that).
Now, laws on the other hand certainly deserve to be met with rebuke. For example, the Chicago City Council shouldn't have passed a law requiring Wal-Mart to pay $10/hour with another $3 in benefits. That's a bad move.