Ideas differ fundamentally from scarce physical resources like iron ore: for iron ore one price miraculously does two jobs (motivating production of an extra unit AND allocating it to the right person), but for ideas this breaks down—society should pay a huge amount to motivate discovery, yet once discovered the efficient use price is zero because there is no congestion or cost in additional use.

definitionpending

Speaker

Paul Romer

Evidence Quote

what's the right price for deciding who gets to use it? Well, once that idea is discovered the efficient price for that idea is zero because there's no cost associated with using it

Source

Paul Romer on Growth 8/27/2007EconTalk
Created: 6/16/2026, 2:38:24 PM

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