Losers Magazine (tm) Article No. 4 (10/5/95) by Carl E. Person

The Star System for Wealth Distribution

As I see the problem, from many economic viewpoints, there is a star system working in most economic areas, in which a few persons or corporations make most of the money and the rest get very little or nothing.

The obvious place where this is true is in movies, where about 10-20 top stars command multi-million dollar payments per movie plus a percentage of the box office for the top stars, meaning $10,000,000 to $100,000,000 for each of the top stars in a period of several years.

These amounts are justified, it is explained, because the star is expected to bring in far more than than in box office and other revenues. And this is true. Also, the faiure to use a star in many cases would cause the film to lose money, and this is al so true.

What is also true is that the September, 1995 acquisition of ABC by Disney will cause the earnings of top stars to go even higher, not because of anything the star does which is different, but merely because of the acquisition and further concentration of capital. Together with the increased compensation and profits for the top stars and Disney goes a reduction in earnings and opportunities for others.

There could come a point at which some of the current top stars are no longer needed because of a reduction in the number of opportunities for them caused by increased concentrations of capital.

Also, basketball, baseball and football stars obtain huge salaries or compensation not because of their skills as much as the non-competitive market (network or cable television) in which the stars' services are being sold. Whoever licenses the airways f rom the U.S. government determines who becomes the highly-paid stars, and how much they get paid.

The media also creates a higher hourly rate for the lawyers who are given frequent publicity. It's not the lawyer, but the broadcast licenses which create that value, something which few lawyers can share in. There are perhaps 700,000 lawyers in the Uni ted States right now, and perhaps 50 have high-publicity or star status. The cases and higher fees go to them rather than to the other 699,950.

Toys sold in television commercials and items sold as a result of movie character licensing divert millions of dollars to a few by reason of the broadcast licenses, for which the networks receive their share.

Much of the economy is pushed by the media, particularly the television networks, which results in over-compensated stars and under-compensated others, especially persons in the middle class.

The large media, including cable systems, television networks, radio networks, and newspapers, are worth many tens or hundreds of millions of dollars, or even billions of dollars, because of their ability to move money into the hands of a favored few, at the expense of the others.

But large media is only one way in which this occurs. The ohter way is by other means of distribution, many of which use the media to build and maintain their distribution systems.

Thus, if an inventor of a new product is lucky enough to get Sears or K-Mart to distribute the new product, the financial rewards to the inventor are virtually guaranteed. Inventors without this distribution get nothing. Another star system.

The star system as I describe it isn't necessarily good or bad. Whether it is good or bad in a specific instance depends on a lot of factors, which the articles will discuss.

I would like the readers to be able to develop their own analysis of a specific instance, using tools drawn from Loser Magazine articles, to come to their own conclusions. Also, I want readers to be able to understand where the system breaks down and nee ds repair.

If by reason of restraints in the economy a certain few persons obtain the substantial rewards of stardom, I would like readers to consider whether there isn't a better way, for more persons to participate in the rewards, on a more competitive basis.

Anyway, what I'm trying to say is that the star system has some inherently unfair aspects arising out of practices which may well be unlawful. Whether the courts and attorney generals (federal and state) would determine that the practices are unlawful is only another part of the multi-cubicle problem. Legal problems become political problems when the courts fail to enforce the law, for whatever reasons. Political problems raise the issue of how elections are conducted and financed, and how political po wer is bought and exercised.

It's fair to say that many problems fall into the multi-cubicle status, where identification and resolution are more difficult. But that doesn't mean we shouldn't look at the problems to try to identify their causes and possible solutions. Losers Mag azine is going to make the effort.

Copyright © 1995 by Carl E. Person. Permission is given for non-commercial users to send a copy of the data processing file for this work by electronic means to a specific individual for his or her own use, and then only if the entire file is sent, including this copyright notice, but no permission is given for anyone to copy or transmit this file for or to any person for public viewing or downloading. It is intended by the author of this work that the work shall be made available in electronic fo rm only through LawMall (tm).