Rockonomics: What Bono and Mick Jagger Can Teach Us About the Global Economy

749px-Bono_Edge_Foxboro_09212009_U2360It’s only rock ‘n roll, but there are a lot of economic lessons to be learned from it.

Alan B. Krueger, chairman of the Council of Economic Advisors, calls it “rockonomics” and he just recently discussed his rockin’ theory at the Rock and Roll Hall of Fame in Cleveland:

“Particularly at a time when economic forces have been chipping away at the middle class for decades, I think it is essential to have institutions like the Rock and Roll Hall of Fame that can bring people together, and remind us that we are one nation, united by our hopes and dreams,” he said.

This isn’t the first time Krueger has tackled the business of rock.

In 2005, he and Marie Connolly co-authored a lengthy paper for the National Bureau of Economic Research about the music industry. In that paper, they wrote, “[B]ecause emotion and non-traditional economic concerns loom large in popular music, the industry can be a breeding ground for new insights into economics.”

In his most recent speech, Krueger said the current atmosphere in the music business is a microcosm of the country’s present economy. Mega-rock stars, like CEOs of mammoth corporations, have long earned a huge slice of the musical money pie while some very good musicians take home very little. Krueger points out that the top five percent of the top performers take away 90 percent of all concert venues.

Meanwhile, the middle class is the struggling indie artist who wants a ride in the black limo and to pop open the bottle of Dom Perignon with a groupie or two.

“The lucky and the talented – and it is often hard to tell the difference – have been doing better and better, while the vast majority has struggled to keep up,” Krueger said.

Like with the global economy, technology has drastically shifted the music industry, and with that comes pros and cons. Musicians can reach more potential fans which means more sales, but it also makes music easy to copy. Lost sales occur, and concert prices rise in order for performers to make a profit. This, Krueger said, is the real reason for escalating concert tickets. Rock stars, though, have to walk a tightrope – charge too much and fans will rebel against extreme prices. The same happens in any marketplace.

And Krueger, 52, is not to be dismissed. He knows his stuff, and it’s not everyday a Washington bureaucrat quotes David Bowie.

“In this spirit, David Bowie once predicted that ‘music itself is going to become like running water or electricity,’ and, that as a result, artists should ‘be prepared for doing a lot of touring because that’s really the only unique situation that’s going to be left,’” he said.

So how does all of rock and roll business really impact Americans who only belt Karaoke in a working class bar?

The same gap between rich and poor musicians exists in America between the wealthy and the impoverished. Kids of rock stars often get a lucky break in the music business – think Julian Lennon, John Lennon’s son, for example. The same is true for children of corporate or political millionaires – think the Romney or Bush kids or even Chelsea Clinton.

“Children of wealthy parents already have much more access to opportunities to succeed than do children of poor parents, and this is likely to be increasingly the case in the future unless we ensure that all children have access to quality education, health care, a safe environment and other opportunities that are necessary to have a fair shot at economic success,” he said.

Such inequality in education, health care and wages will ultimately undermine the middle class – just like it has for mid-list musicians. The Bonos and Jaggers of the world will naturally prosper. The Crackers and Wilcos, however brilliant their songs are, will sadly continue to struggle.

Suzi Parker is an Arkansas-based political and cultural journalist and author of “Sex in the South: Unbuckling the Bible Belt” and “1000 Best Bartender’s Recipes.” She writes frequently for Reuters, TakePart, and numerous other publications. Follow her on Twitter at @SuziParker.

Image via Wikimedia Commons/Creative Commons License

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