What Miley Cyrus Can Teach Us About Inequality

A blog about business and economics.
Nov. 28 2011 2:05 PM

Miley Cyrus and Inequality

One of my favorite blog posts from my last job was about "Miley Cyrus and American Exceptionalism," so I'm superexcited that she's made a new video on an Occupy Wall Street theme, offering this economics writer an ideal pretext to write about Miley Cyrus:

Cyrus is the 1 percent. What's more, she's a clear beneficiary of some broad structural changes in the world economy that tend to exacerbate inequality and all relate to the economics of superstardom. Superstar earnings depend crucially on market size. Norway is considerably richer than the United States of America, but being an American prime-time news anchor is drastically more lucrative than being a Norwegian prime-time news anchor simply because there aren't very many Norwegians. America, in other words, has a much higher "prime-time news anchor" coefficient than does Norway. This is one reason why the late Peter Jennings migrated from his home and native land to work for ABC. Larger potential audience equals larger earnings. Back when Thriller was released, there were about 4.5 billion people on earth. Today it's 7 billion. That alone represents a 35 percent increase in superstar earnings potential. On top of that, the general trends toward globalization and digitization have made it easier for superstars to reach the largest possible share of the world population. But the good news for Miley Cyrus doesn't stop there! A number of poor countries, led by China, have been growing much faster than rich countries like the United States. For the most part that's simply because a poor country can grow faster than a rich one since it just needs to "catch up" by copying technologies and production techniques from the richest countries. Americans don't really have the ability to engage in Chinese-style growth. One major exception to that rule is superstar entertainers like Miley Cyrus, who can now sell many more copies of their (zero marginal cost to produce) songs to richer Chinese consumers in a way that's precisely proportional to Chinese income growth.

Advertisement

So good for Miley Cyrus! The strange thing is that even as Cyrus has been able to take advantage of a number of underlying trends that increase the economic returns to superstardom, we've been moving as a country to making the federal government less redistributive and to increasing the strength of government-sponsored monopoly rights for copyright holders. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.