THE loony music video “Gangnam Style” surpassed two billion views on YouTube this week, making it the most watched clip of all time. At 4:12 minutes, that equates to more than 140m hours, or more than 16,000 years. What other achievements were forgone in the time spent watching a sideways shuffle and air lasso? It took 50m man-hours to complete the “supercarrier” USS Gerald Ford last year. Had people not been watching PSY—the South Korean pop star who released the song in July 2012—they could have constructed three such ships.
Having just covered the concept of opportunity cost in ECON110 last week, a short discussion of this seems timely. The opportunity cost of something is defined as "its cost measured in terms of the best alternative foregone". I can see two problems with The Economist's superficial evaluation of the opportunity cost of Gangnam Style outlined above.
First is the issue of 'best alternative foregone'. For most people, I suspect that the best alternative they forewent in order to watch four minutes of K-Pop wasn't contributing to the construction of an aircraft carrier or a replica of the Burj Khalifa. Maybe their next best alternative was contributing an article or revision to Wikipedia, but that seems unlikely too. So, it's not correct to measure the opportunity cost of Gangnam Style in terms of aircraft carriers foregone, or Great Wonders foregone, since that isn't what was actually foregone. I suspect it's more correct to be measuring the opportunity cost of Gangnam Style in other-music-video-watching foregone, or even cat-video-watching foregone. I also suspect that if the opportunity cost was framed in this way, most people would care a whole lot less about it as 'wasted time'.
Second is the issue of substitutability of labour. Even if we set aside the first problem above and believe that the next best alternative foregone really was building an aircraft carrier, then in order for the opportunity cost of 140 million hours of Gangnam Style to be 2.8 aircraft carriers, then the people watching Psy instead of aircraft carrier building would have to be as equally productive as those who actually built the USS Gerald R. Ford. Given that the top demographic watching Gangnam Style is girls aged 13-17 (followed by boys of the same age), it seems unlikely that the watchers are perfect substitutes for aircraft carrier construction workers (not to mention the higher-skilled occupations involved in designing and outfitting the ship). So, the opportunity cost of Gangnam Style in terms of aircraft-carriers-foregone is likely to be substantially overstated.
On a final note, as Dylan Matthews on Vox notes, comparing consumption benefits with construction costs is "weird and incoherent" anyway. I'll give him the last word here:
Taken to an extreme, the "what a waste of time" takeaway here implies that human life is meant to be spent toiling and any time off for enjoyment is a lamentable waste, which in turn implies that we should spend our lives building things no one ever gets to enjoy. It's a bizarre, dystopian way to think about the world.[HT: Matt Roskruge and Zerohedge]