The essential issue is whether spending on Research and Development, and on the production of creative works, should be regarded merely as an input to other production processes, or instead as an investment in the creation of a distinct value-bearing asset. The BEA report observes that “expenditures for R&D have long been recognized as having the characteristics of fixed assets — defined ownership rights, long-lasting, and repeated use and benefit in the production process,” and that therefore the BEA “recogniz[es] that the asset boundary should be expanded to include innovative activities.” Likewise, “some entertainment, literary, and other artistic originals are designed to generate mass reproductions for sale to the general public and to have a useful lifespan of more than one year.” Thus the need for “a new asset category entitled ‘intellectual property products,’” which will encompass both types of property.

What the BEA calls “expanding the asset boundary” is precisely the redefinition of the property form that I’ve written about — only now it is a statistical rather than a legal redefinition. And that change in measurement will be written backwards into the past as well as forwards into the future: national accounts going back to 1929 will be revised to account for the newly expansive view of assets.

Here the statisticians are only following a long legal trend, in which the state treats immaterial patterns as a sort of physical asset. It may be a coincidence, but the BEA’s decision to start its revisionist statistical account in the 1920′s matches the point at which U.S. copyright law became fully disconnected from its original emphasis on limited and temporary protections subordinated to social benefits. Under the Copyright Term Extension Act, creative works made in 1923 and afterwards have remained out of the public domain, perpetually maintaining them as private assets rather than public goods.

A careful reading of the BEA report shows the way in which the very statistical definitions employed in the new accounts rely upon the prior efforts of the state to promote the profitability of the intellectual property form. In its discussion of creative works, the report notes that “entertainment originals are rarely sold in an open market, so it is difficult to observe market prices . . . a common problem with measuring the value of intangible assets.” As libertarian critics like to point out, an economy based on intellectual property must be organized around monopoly rather than direct competition.

In order to measure the value of intangible assets, therefore, the BEA takes a different approach. For R&D, “BEA analyzed the relationship between investment in R&D and future profits . . . in which each period’s R&D investment contributes to the profits in later periods.” Likewise for creative works, BEA will “estimate the value of these as­sets based on the NPV [Net Present Value] of expected future royalties or other revenue obtained from these assets.”

Here we see the reciprocal operation of state power and statistical measurement. Insofar as the state collaborates with copyright holders to stamp out unauthorized copying (“piracy”), and insofar as the courts uphold stringent patent rights, the potential revenue stream that can be derived from owning IP will grow. And now that the system of national accounts has validated such revenues as a part of the value of intangible assets, the copyright and patent cartels can justly claim to be important contributors to the growth of the Gross Domestic Product.

The BEA also has interesting things to say about how their new definitions will impact different components of the overall national accounts aggregate. They note that the categories of “corporate profits” and “proprietors’ income” will increase — an accounting convention perhaps, but one that accurately reflects the constituencies that stand to benefit from the control of intellectual property. Thus the new economic order being mapped by the BEA fits in neatly with Steve Waldman’s excellent recent post about late capitalism’s “technologically-driven resource curse, coalescing into groups of insiders and outsiders and people fighting at the margins not to be left behind.”

The changes related to R&D and artistic works may be the most significant, but the other three revisions in the report are worth noting as well. One has to do with the costs associated with transferring residential fixed assets (e.g., the closing costs related to buying a house), while another has to do with the accounting applied to pension plans. Only the final one, a technical harmonization, has to do directly with wages and salaries. This is perhaps an accurate reflection of an economic elite more preoccupied with asset values than with the direct returns to wage labor.

Finally, the reception of the BEA report provides another “peril of wonkery,” related to the one I described in my last post. The Wonkblog post about the report makes some effort to acknowledge the socially constructed nature of economic statistics: “the assumptions you make in creating your benchmark economic statistics can create big swings in the reality you see.” And yet the post then moves directly on to claim that in light of the statistical revisions, “the U.S. economy is even more heavily driven by the iPad designers and George Lucases of the world — and proportionally less by the guys who assemble washing machines — than we thought.” This is no doubt how the matter will be described going forward. But the new measurement strategies are only manifestations of a choice to attribute a greater share of our material wealth to designers and directors, and that choice has more to do with class struggle than with statistics.