By Larry Marsh, Kansas City Star Midwest Voices columnist 2009

Watching all those fashionable TV shows, but too poor to buy the products? Don’t worry; the rich are paying for your entertainment.

In the 21st century many new products require more initial brain power (fixed costs) and less physical inputs (variable costs) than ever before. As you recall from Econ101, variable costs increase with increasing output, while fixed costs are initial costs that remain unchanged as output increases.

First there was primitive agriculture where variable costs dominated in the form of labor, seed and fertilizer to produce simple, unprocessed products. Then came mechanized agriculture and manufacturing which added some fixed costs to produce processed products.

Now we move around bits and bytes to produce virtual prototypes (at high fixed cost) whose replication is virtually free (zero variable costs). At each stage value-added depends more on mental inputs and less on physical inputs.

Your free web browser is just the tip of the iceberg. Facebook, MySpace, Twitter, Hi-5 and a host of other networking and gaming sites are free. The rich pay the upfront costs through optional upgrades, services and both online and offline purchases.

You can even get Internet access for free. (OK, so you have to sit through a few ads.) Don’t you feel sorry for those rich people who have to bear the burden of those initial high fixed costs?

Personal computers used to be very expensive. Back in the day, paying $30,000 for a computer and printer was the norm. Even earlier in grad school, we all chipped in together to get a group discount on calculators that could add, subtract, multiply and divide for a cool $250 a piece.

We all hear about the first-mover advantage. What about the first-mover disadvantage? Who’s buying those Tesla Motors electric cars at $100,000 a pop? You won’t see me in one any time soon. No doubt you feel sorry for those poor rich people who have to cover those fixed costs.

Even at a price of $40,000, will the average middle class family be able to afford GM’s upcoming “Volt” electric car? No problem; the rich to the rescue. We ruthlessly exploit the rich who don’t even realize how much they’re being taken.

Once the rich have paid all those research and development costs and economies of scale kick in, it’s all downhill for the price from there.

Yes, Virginia, there is a Santa Claus (or should we say a Robin Hood) and an upside to income inequality. If you’re rich, don’t despair; if you act poor, you can exploit the rich, too.

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Also see:

Aliens have taken over Planet Earth

Stem cells and nanosurgery may change what it means to be human

Reprogram your subconscious mind to commit terrorism or lose weight

Make money just by wearing an electronic 'ink' tee shirt

One day will nanobots fight wars in nanospace?

Forget Mars, there's plenty of land under our oceans

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