http://www.project-syndicate.org/commentary/the-myriad-problems-of-intellectual-property-by-joseph-e–stiglitz

“Fortunately, what motivates most significant advances in knowledge is not profit, but the pursuit of knowledge itself. This has been true of all of the transformative discoveries and innovations – DNA, transistors, lasers, the Internet, and so on.”

This observation is in synch with a concept introduced by Csikzentmihalyi: “flow – the state in which people are so involved in an activity that nothing else seems to matter; the experience itself is so enjoyable that people will do it even at great cost, for the sheer sake of doing it.” (http://edutechwiki.unige.ch/en/Flow_theory)

Unfortunately modern world is dominated by another concept: “monetization”. “To monetize is to convert an asset into or establish something as money or legal tender. The term monetize has different meanings depending on the context.” http://www.investopedia.com/terms/m/monetize.asp.

In real life reaching the state of ‘flow’ is not enough, one also has to eat. Maslow’s pyramid is eloquent enough. If somebody wants to discern between two flow producing activities ‘profit’ comes in quite handy. Being profitable means not only a real demand for whatever is supplied but also that that activity is run by a diligent operator. In this sense profit is a very good efficiency indicator.

Contemporary economic and social life seems to be dominated by another logic. Profit has become a goal, not an indicator. Instead of trying to achieve the state of ‘flow’, people try to get rich. Instead of finding happiness by doing something meaningful people try to numb themselves by ‘consuming’. We have transformed ourselves from ‘free spirits’ into ‘consumers’.

It seems that we have forgotten what Max Weber tried to teach us. “As Calvinism developed, a deep psychological need for clues about whether one was actually saved arose, and Calvinists looked to their success in worldly activity for those clues. Thus, they came to value profit and material success as signs of God’s favor.” In this vision ‘profit’ is indeed an indicator and we should also remember about “Asceticism and the Spirit of Capitalism.” http://www.sparknotes.com/philosophy/protestantethic/summary.html

And yes, this is indeed an agency problem.

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