Umair Haque

“…Sales of his recordings through Sony’s music unit have generated more than $300 million in royalties for Mr. Jackson since the early 1980’s.”

Want to know why we have a zombieconomy? Because the beancounters killed the incentives to create real value.

Let’s use MJ’s tragic death as a mini case-study. $300 million over, for example, 25 years? That’s $12 million a year.

I’m deliberately leaving out ads, endorsements, concerts, etc., to focus on the the structural problems in one industry: music.

If the world’s biggest pop star only made $12 million a year from his recordings, why would anyone make serious music? Where did the rest of the money go? Why, straight into record labels’ pockets. Did they make better music with it? Nope — they made Britney and Lady GaGa. And that’s how they killed themselves: by underinvesting in quality, to rake in the take.

Wait a second — that sounds familiar. You can add back in the endorsements, etc. now — they only double the figure: to about $25 million.

If the world’s biggest pop star only made $25 million a year in total, something’s very, very wrong. Where’s the rest of the money? Why can’t a resource as scarce as the King of Pop capture more value?

After all, that’s not even mega-rich.

The world’s top hedge fund “managers” regularly pull in hundreds of millions. That’s an order of magnitude difference.

No wonder everyone wants to be a banker, investor, or [insert beancounter here]. There’s no money left in anything else.

That’s the big problem behind the zombieconomy. We don’t reward people for creating, growing, nurturing, or even remixing assets. We just reward them for allocating the same old assets.

That ‘s not an economy: it’s just a game of musical chairs.

Hence, no new finance, healthcare, educational, auto, or, yes, music, industry — for decades.

“…Darkness falls across the land
The midnight hour is close at hand
Creatures crawl in search of blood
To terrorize y’alls neighborhood.”

Indeed. Everytime you look at today’s economic landscape — you should see the Thriller video playing in your head. Because what we’ve built is a zombieconomy, where little net value is created.

And MJ’s death-by-financial-desperation should be a case study in that zombieconomy if ever there was one. Yes, he spent money on absurdly ludicrous stuff. But if top hedge fund managers can do it — why couldn’t the world’s most famous singer?

PS — The ultimate irony? I can’t even link to the Thriller video. It’s unavailable on YouTube in the UK…”due to copyright restrictions”. Lulz.