It’s always so fascinating to learn how incentives completely unrelated to creative choices shape culture. I wonder how many iconic artistic decisions from classic movies (or even songs, fashion, etc) are actually just economic choices in a trench coat
Your closing discussion of Baumol’s cost disease caught my attention because it points toward an argument I have been making for nearly three years now -> the economic endpoint of generative AI in the arts, and especially in music, is the obsolescence of the body.
You do not make that claim, although you mention studios eventually using AI to replace “some human labor.” The word “some” is doing quite a bit of work there, lol.
Baumol’s classic string quartet example exposes exactly what is happening, as a quartet cannot become more productive without changing the nature of the activity itself. Making music is necessarily constrained (hence the “disease” labeling). Four people must inhabit the duration of the music together, and, of course, they bring their collective individual decades of study to get to that point. Generative AI exists to solve this cost “disease” by removing those bodies and collective histories and producing hyper-scalable simulations of the resulting sound, whose economic objective is to capture the anxious, directionless attention of a mass population seeking attention and witness.
My concerns, research, and writing on this topic do not lie in the employment segment of this. I argue music’s meaning arises from our encounter with an embodied act unfolding in time. Generated music preserves the audible signs of such an act while severing them from the act itself. As I wrote in a recent essay, AI-generated music is smoke without the originating fire. I am not trying to be cute; the semiotic and epistemological stakes are civilizational here.
I also learned when I got my grad degree in Public Administration with a focus on economics that there are solutions to this that do not portray a string quartet as “diseased,” but they would require changing the structural relationship of value. I was surprised in my studies that almost every single modern ailment we move through today, such as the unsustainable cost of housing and the idea that an unpaid internship is morally fine, has already been solved, and it is just that we choose to live this way rather than choose to live in another way.
I am a BIG believer in #StayInUSA - but #StayInLA is debatable.
From LA's perspective, it's a big deal. The film industry is part of their brand. But there's also no denying they took the biz for granted and dropped the ball in numerous ways.
Other states (and alas, other countries) picked it up.
But isn't it better to have many cities benefitting from the film industry instead of one?
I think in theory yes? But we should be sensitive to how that transition plays out in reality. Many efficiencies were achieved by the centralization - the best film schools are there, and the most experienced crew have been established in L.A. for decades. Shooting in Toronto, Georgia or Prague to chase the subsidies is likely to force those "L.A." people into a travelling occupation that they never wanted and didn't sign up for, because there isn't such an established base of film production crew in Georgia (yet). In the long term, perhaps we'll basically see a diaspora which, economically, could be a good thing.
But it's easy to see how, from the perspective of someone in the industry in L.A. today, it's sad and scary to think you may need to place a bet on one of these other cities, and have your professional circle that you've worked with for 10-50 years be scattered to the four winds.
High taxes, over regulation and operating costs have motivated businesses--including the film industry--to move elsewhere. I would also add that politics probably also plays a part. Unless LA, and California as a whole, adjusts their trajectory, I think even more industry will vacate to other locations that are more amiable.
It's so easy for politicians to lob grenades at "Big Business" in the form of taxes and regulations without really putting any thought into what would happen if a lot of those businesses just left, or just hollowed out their presence in California.
Housing cost is also a big elephant in the room - in this case it's Sacramento who is for once trying to do the sane economic thing by trying to force cities to allow new housing including dense construction. This one is being stymied by most cities' existing homeowners crabbing about "too much traffic/congestion/we have enough apartments already". This opposition is shockingly bipartisan.
So the crippling cost of living in L.A. actually reduces the advantage it used to have, draining creative talent to other popular production locations, and making those in turn more viable. In other words, *everything L.A. cities do to prevent housing from being built functions as a little "Anywhere But L.A." film production subsidy.*
I really like your stats evidence of the shift here. I've heard people in the industry say Hollywood lots are becoming small echoes of Detroit.
It makes me think about the way taxes and conditions for film labour shape the flow of productions...
An American Werewolf in London was made in the UK because of a tax break system then-called the Eady Plan. And The Machinist was made in Barcelona due to costs, with just a few LA-style street signs tactfully placed in the background. Just two examples there.
This sounds like a case for LVT (land-value tax!). "The Rent is Too Damn High" and cost disease are repeated themes of Lars Doucet's book Land Is A Big Deal, as well as his substack (progressandpoverty.substack.com). He specifically references California and alludes to the strangeness of Prop 13. Also - how the billionaire tax will only be a temporary fix - and how LVT will target the intended elites more effectively! All based on Henry George - someone who knew a thing or two about California's land problems when he started writing in SF at the turn of the century.
It’s always so fascinating to learn how incentives completely unrelated to creative choices shape culture. I wonder how many iconic artistic decisions from classic movies (or even songs, fashion, etc) are actually just economic choices in a trench coat
Interesting piece.
Your closing discussion of Baumol’s cost disease caught my attention because it points toward an argument I have been making for nearly three years now -> the economic endpoint of generative AI in the arts, and especially in music, is the obsolescence of the body.
You do not make that claim, although you mention studios eventually using AI to replace “some human labor.” The word “some” is doing quite a bit of work there, lol.
Baumol’s classic string quartet example exposes exactly what is happening, as a quartet cannot become more productive without changing the nature of the activity itself. Making music is necessarily constrained (hence the “disease” labeling). Four people must inhabit the duration of the music together, and, of course, they bring their collective individual decades of study to get to that point. Generative AI exists to solve this cost “disease” by removing those bodies and collective histories and producing hyper-scalable simulations of the resulting sound, whose economic objective is to capture the anxious, directionless attention of a mass population seeking attention and witness.
My concerns, research, and writing on this topic do not lie in the employment segment of this. I argue music’s meaning arises from our encounter with an embodied act unfolding in time. Generated music preserves the audible signs of such an act while severing them from the act itself. As I wrote in a recent essay, AI-generated music is smoke without the originating fire. I am not trying to be cute; the semiotic and epistemological stakes are civilizational here.
I also learned when I got my grad degree in Public Administration with a focus on economics that there are solutions to this that do not portray a string quartet as “diseased,” but they would require changing the structural relationship of value. I was surprised in my studies that almost every single modern ailment we move through today, such as the unsustainable cost of housing and the idea that an unpaid internship is morally fine, has already been solved, and it is just that we choose to live this way rather than choose to live in another way.
I am a BIG believer in #StayInUSA - but #StayInLA is debatable.
From LA's perspective, it's a big deal. The film industry is part of their brand. But there's also no denying they took the biz for granted and dropped the ball in numerous ways.
Other states (and alas, other countries) picked it up.
But isn't it better to have many cities benefitting from the film industry instead of one?
I think in theory yes? But we should be sensitive to how that transition plays out in reality. Many efficiencies were achieved by the centralization - the best film schools are there, and the most experienced crew have been established in L.A. for decades. Shooting in Toronto, Georgia or Prague to chase the subsidies is likely to force those "L.A." people into a travelling occupation that they never wanted and didn't sign up for, because there isn't such an established base of film production crew in Georgia (yet). In the long term, perhaps we'll basically see a diaspora which, economically, could be a good thing.
But it's easy to see how, from the perspective of someone in the industry in L.A. today, it's sad and scary to think you may need to place a bet on one of these other cities, and have your professional circle that you've worked with for 10-50 years be scattered to the four winds.
No denying it sucks for the workers, and I suppose centralizing the industry does make sense.
That said, once the dust settles, there may be several places to make a living in film/TV, not just 1-2. That'd be a good thing.
High taxes, over regulation and operating costs have motivated businesses--including the film industry--to move elsewhere. I would also add that politics probably also plays a part. Unless LA, and California as a whole, adjusts their trajectory, I think even more industry will vacate to other locations that are more amiable.
It's so easy for politicians to lob grenades at "Big Business" in the form of taxes and regulations without really putting any thought into what would happen if a lot of those businesses just left, or just hollowed out their presence in California.
Housing cost is also a big elephant in the room - in this case it's Sacramento who is for once trying to do the sane economic thing by trying to force cities to allow new housing including dense construction. This one is being stymied by most cities' existing homeowners crabbing about "too much traffic/congestion/we have enough apartments already". This opposition is shockingly bipartisan.
So the crippling cost of living in L.A. actually reduces the advantage it used to have, draining creative talent to other popular production locations, and making those in turn more viable. In other words, *everything L.A. cities do to prevent housing from being built functions as a little "Anywhere But L.A." film production subsidy.*
I really like your stats evidence of the shift here. I've heard people in the industry say Hollywood lots are becoming small echoes of Detroit.
It makes me think about the way taxes and conditions for film labour shape the flow of productions...
An American Werewolf in London was made in the UK because of a tax break system then-called the Eady Plan. And The Machinist was made in Barcelona due to costs, with just a few LA-style street signs tactfully placed in the background. Just two examples there.
Most people from oversees can distinguish one American city from another, they recognize some iconic landmarks, but that is all.
Just the idea the industry touts declining admissions as record-breaking box office numbers tells us the PR game has is out to sea.
This sounds like a case for LVT (land-value tax!). "The Rent is Too Damn High" and cost disease are repeated themes of Lars Doucet's book Land Is A Big Deal, as well as his substack (progressandpoverty.substack.com). He specifically references California and alludes to the strangeness of Prop 13. Also - how the billionaire tax will only be a temporary fix - and how LVT will target the intended elites more effectively! All based on Henry George - someone who knew a thing or two about California's land problems when he started writing in SF at the turn of the century.
Great analysis. I was aware of this trend but not the specifics. It’s really remarkable that movie cost is so predictive of location.
I have seen plenty of CGI I consider remarkable