There is something of interest to be gleaned from this little story about Taylor Swift and her interaction with Apple's new music streaming service:
Apple has apparently changed its policy and pledged to pay musicians for the use of their work during a free trial of the Apple Music service following an open letter from US pop star Taylor Swift.
We'll admit that which young lady warbles away at the front of the latest popular beat combo is not normally our thing. [Speak for yourself! – Sam] But it's worth noting who has the economic power here. On the one hand, the most valuable publicly listed corporation on the planet, one that makes a Bill Gates sized fortune in profits each and every year, with cash reserves measured in the hundreds of billions. On the other one young lady in her 20s.
Yet when the two clash over the division of revenues it is that young lady who wins. The interesting economic lesson being that it is not size, or the corporations, or wealth, that wins. It is who controls the scarce resource that does.
Swift's music is (oddly to us but there we go) extremely popular. It is a must have for any music streaming service. Thus she being the one hold out will make that giant corporation change the terms it offers to everyone.
It is not size, or who has the most lawyers, or the most money, which wins in a market economy. It is scarcity that rules. Which is, of course, just how we like it, for our task in an economy is to decide how scarce resources are allocated.