When is a booming economy bad news? When its an economy structured like Californias.
In a new study making the rounds, when the personal-finance website WalletHub fed the Golden State to its experts, they spit out great numbers top-five-in-the-nation rankings for high-tech job growth, fast-growing firms, and, yes, startup activity. All told, the site concluded, Californians enjoy the nations third-best economy.
California has blossomed into the seventh-largest economy in the world, the experts cheered, boasting a [gross doemstic product] of $2.3 trillion, which was comparable to Brazils $2.2 trillion, in 2014.
On the face of it, thats news everyone can enthuse over. But for Democrats, it offers a special set of prized talking points. Californias one-party state is a very important test case for a fundamental economic promise: that Big Government can deliver a big economy. It looks like conservative arguments that the state stifles business through taxes and regulation arent holding water, as the LA Weekly put it.
Sure enough, something different is going on. But even though it requires a closer look, it isnt hard to see. In fact, the reality of Californias political economy has been captured in a single statistical snapshot content and usage patterns on YouTube.
As we all know, YouTube is a Google property and a huge symbol (right down to its name) of the democratizing power of the internet. With YouTube, perhaps even more than any other platform, everyone can become a content creator. In the face of that sweeping promise, and all the promises of significance, exposure, fame and raw entertainment that come along with it, Americans signed on in droves pushing YouTubes audience to heights that lead some analysts to conclude it will eventually eclipse the viewership of traditional media companies.
One such analyst, Carlos Kirjner at Bernstein Research, recently crunched the numbers on the ways all those people consume all that stuff. What he found feels obvious in hindsight, but it still gives tremendous pause.
Content and usage seem to be relatively concentrated across several dimensions, Kirjner found. 1 percent of YouTube videos correspond to 93 percent of views since inception; 94 percent of viewing time (since inception) is also concentrated in about 1 percent of the videos in the library. Similar patterns of concentration, he observed, have developed across genres.
At first blush, these numbers harshly indict the promise of the internets democratized economy. The literal 1 percent are massively dominant, with almost everyone else pushed far to the margins. But on reflection, the situation is even less flattering to our prejudices.
YouTubes numbers dramatically show that democratization itself is responsible for the dominance of the 1 percent. In an economic ecosystem stuffed with so much trivia, amateurism and sheer noise, people gravitate en masse to the best, most popular content. Nobody has time to discover diamonds in the rough and hidden gems especially not when the most immediate and accessible of the best content is right at their fingertips, and right on the lips of everyone in their neighborhood, in their workplace, and in the media.
Its a phenomenon thats hardly restricted to YouTube. Across all fields of human endeavor, the same patterns are playing out. Just as theres only one YouTube, theres only one LiveNation, only one Amazon, only one HBO, only one Apple. Sure, theres often a big second-fiddle option for those who insist on alternatives for alternatives sake Samsung, Pepsi, whatever. But the theme of the post-internet economy is that 1-percenter dominance results from a deeper equality, consumers who are all pretty much the same rejecting oceans of insignificant choices in favor of the consensus biggest and best.
This is where Californias political significance comes in. The state is almost a real-life reproduction of the logic of the commercialized internet: uniform ideas, preferences and habits have produced one dominant political party that encourages and rewards market dominance. But state Democrats have a powerful incentive to turn the pattern into a policy platform. If Big Government allows a tiny elite to pursue parabolic growth, it can keep even an otherwise restrictive and hobbled economy afloat. And it wont matter how much the middle class contracts, the lower class expands or small entrepreneurs and laborers struggle for purchase for a while, anyway.
California and Democrats being as they are, if Sacramento can prove this concept well enough to sell it to Americans already conceptually primed to embrace it, you can bet that leading national Democrats will want to give it the same trendy bellwether status as everything else Californians do. Holdouts for the old ways will simply obsolesce including figures like Gov. Jerry Brown, who has had to fight tooth and nail to hedge the state budget against structural bubbles.
For Big Government blue state liberalism, California promises a new twist and lease on life: If society is now so equal that shared tastes inevitably run toward the dominant 1 percent of products, top-shelf policymakers will be given a free hand if they clear the field for elite producers even if their policies run sharply against the deeper interests of societys lower tiers.
Luckily for proponents of this new model, todays many populists seem unable to rally together against it. But in a final twist that any Silicon Valley denizen could ruefully appreciate, the more the model scales nationally, the more the resistance against it is likely to scale, too.