Are NFTs Property?

Are non-fungible tokens (NFTs) property?

It’s a good question. Spoiler alert: I don’t know the answer. However, I think a good definition of NFT would be helpful toward deciding one way or the other. And as big as NFTs have been this year, I’ve seen not a single definition that wasn’t lacking (or outright wrong) in some significant ways.

Here’s my attempt at a definition:

An NFT is a unit of data stored on a digital ledger (i.e. blockchain) that certifies a digital asset to be unique and (therefore) not interchangeable. An NFT can be associated with anything, but is (thus far) usually associated with a digital asset of some kind — photos, videos, audio files, etc. But theoretically, this kind of ledger could represent even physical items.

Another angle: An NFT is a deed. And whereas a normal deed (say, to a house) is recognized and upheld by some governing authority, an NFT is defined by the fact that it requires no such authority to recognize or enforce. The author of some asset associates his or her work with an NFT, and then every transfer is logged in the NFT itself.

I think that’s a pretty good definition and explanation.

Now, given this definition, can an NFT actually be property?

Block on Non-Competes

Over at Econlib, Walter Block tackles the banning of non-competes.

After pointing out that non-competes yield compensating differentials, Block also makes the following insightful point:

Another supposed flaw is that these pacts limit mobility. Of course they do. But we do not want infinite mobility, wherein workers switch jobs every millisecond. Rather, if we want economic development, we need optimal mobility. It would appear we could locate closer to that ideal on the basis of freely agreed upon contractual arrangements rather than by precluding options.

The History of The Corporation

Yale Law School will be holding a virtual workshop on the history of the corporation June 10th.

Here’s the description:

In anticipation of the sixth Global Corporate Governance Colloquium, which will be hosted by Yale Law School on 11-12 June 2021, the organisers will present a virtual workshop on ‘The History of the Corporation’ on 10 June 2021. The workshop will journey through Imperial Russia, turn of the century Egypt and China, Edwardian Britain and the Gilded Age US, exploring issues of corporate governance that continue to resonate in the present day. The morning sessions will examine the relative performance of western-style corporations and their indigenous alternatives in Russia, Egypt, and China. The afternoon papers will re-examine structures of corporate governance and control in the US and Britain in the late-nineteenth and early-twentieth centuries. The conference will end with commentary that draws out the broader implications of these historical studies, setting up themes that will run through the discussions of the next two days.

Distinguished scholar of organizations, Henry Hansmann, is an organizer of the conference.

Rapinoe and the Soccer Pay Gap

Megan Rapinoe is a great soccer player.

She’s demanding equal pay for equal work.

Let’s analyze.

First, let’s define terms: What’s the work here? Kicking a soccer ball?

That’s hard work, but it’s hardly work.

The fact is, athletes aren’t paid according to their skill. They’re paid by companies with the resources to monetize their talent by selling tickets, merchandise, and advertisements. They’re also paid by brands who use their names to sell more product (Rapinoe herself has inked deals with Nike and Samsung).

The fact that she (or anyone—Lebron James, Tom Brady, Serena Williams, etc.) is a good athlete adds probably no value to anyone’s life. It’s only when people can watch and be inspired by her skill that her talent becomes valuable. And only when people can see her skill do they want to buy merchandise.

The same isn’t true for, say, the best plumber in the world. We don’t have to watch the best plumber work in order to benefit from his or her labor. What matters is the finished product.

A plumber produces good plumbing. A soccer player produces an event.

Few would care who won the World Cup — men’s or women’s — if no one could see it happen. Imagine the World Cup, but played secretly and without fans or TV crews.

In this sense, Megan Rapinoe is an entertainer. That’s her work. She’s paid in proportion to how many people care to watch her.

So we’ve defined our terms. Megan Rapinoe is an athlete. Athletes are entertainers—compensated according to how many people enjoy watching.

Now what about the context?

Yes, it’s true—the USWNT (World Cup winner) is relatively better than the USMNT (didn’t qualify for the World Cup). And the USWNT earns revenue comparable to the USMNT.

But that last sentence actually undermines Rapinoe’s case for equal pay. The USWNT won the World Cup, but only barely beat the non-qualifying USMNT that year?

The fact is, few people care about women’s soccer. The women’s World Cup brought in about 1/50th the revenue of the men’s World Cup. Major networks did not show the women’s games.

Again, professional athleticism is about the show. If you cannot see an athlete’s performance, it’s not worth much (or even anything)—there is no “finished product” aside from whatever is captured on video.

Now: Does it make sense for one entertainer with a small audience to demand equal pay as anther entertainer with a large audience?

I don’t think so.

The popular conversation shows that many don’t understand how wages are formed (or even that they’re “formed”) or why wages rise. Until they do, we can’t expect most to be curious about the wide array of contractual forms that characterize the commercial world, including that of sports.

For instance, constraining the impulse to maximize individual stats at the cost of team performance has obvious analogues to more traditional commercial contexts (i.e. preventing empire-building at the expense of shareholder value). Curiosity about those questions won’t come until people grasp the basics of what a wage is.

As Bryan Caplan might say, it’s “labor econ vs. the world.”