Extract: Yoshai Benkler: The Networked Information Economy

Here is some of the concepts and fundamentals that would help you to understand the problems of working without getting paid on the Internet and related things. If you want to dig it further please go to the original Yoshai Benkler's document "The Networked Information Economy."

The production of information is similar to the production of disinterested aesthetic values.

Rival consumption: What is gained in one hand is proportionally lost in the other.

Information is non-rival: Items are not treated as singulars but as generic, reproducible items.

Copyrights and patent laws restrict access to information  (static efficiency). Because of this limited access, information is priced and becomes profitable, therefore generating investments and getting more people involved in producing it as a source of income (dynamic efficiency).

Enforced copyright laws lead to inefficient under-utilization of information.

The case for copyrights patterns is weakened if producers of information can make a profit from it without having to control its exclusive distribution or if in any case they do not need to make a profit from it.

Input and output of information producing process: the “on the shoulders of giants effect”.

Because information produced today relies on information produced yesterday, enforcing copyright laws will double increase the price for information, which is untenable, does to the non-rival nature of information.

Today’s information consumer is also a tomorrow’s information producer. If we pass a law that imposes too much of a higher prices on information consumers today, the production of information for tomorrow will dwindle.

Because of the non-rival nature of information and the “on the shoulders of giants effect”, Excessive expansion of “intellectual property is detrimental.

When a country –either a developing or a developed one- increase its patent protection, it slightly decreases the level of investment on innovation by local firms. This is because due to the non-rival nature and “on the shoulder…” effect again: As the cost of paying for copyrighted information that ones need to use to develop invention increase, the margin profit for those innovations decrease (see Josh Lerner effect).

Where that information and information production comes from if not from intellectual-property based market actors? : From a mixture of non-market sources, both state and non-state. 2- Market actors whose business models do not depend on regulatory intellectual property laws.

Lowering the cost of production, being the first in the market or developing strong marketing relations gives more advantages than patents –except for the pharmaceutical companies.

We find the majority of sectors and businesses reporting that they do not rely on property rights for profit. Major economists believe that there is a substantial role for government funding, that non-profit research is more efficient than for profit research (I have doubts about the validity of this claim), than non-proprietary production can play an important role in our information production system”.

Types of information producing models:

“Romantic Maximizer”: The lonely creative innovator.

“Mickey”: The corporation that relies on a stock of copyright wealth and that pays innovators to build on existing owned patented models or create new ones at marginal cost.

“RCA”: Several copyright holders negotiate among themselves in order to share the market and prevent post-innovation monopoly to break down into the hands of competitors.

“Scholarly Lawyers”: They do not benefit so much from the production of innovations in itself but from the relations and services between client and producer that develop through this innovations.

Strong exclusive rights increase the attractiveness of exclusive rights based strategies at the expense of non-proprietary strategies, whether market based or non-market based.

While access to great masses of public in the 20^th Century required great investment of capital in advertising and distribution, today’s cheap processor allow for a drastic reduction of distribution –and production- costs, thus causing a reorganization of market strategies from commercial concentrated business models to non-proprietary appropriation strategies.

Given the zero cost of existing information and the declining cost of communication and processing, human capacity becomes the primary scarce resource in the networked information economy.

Individual human capacities, rather than the capacity to aggregate financial capital, become the economic core of our information and cultural production.

Supply-side (Know-How) model of business (Joe Einstein)

Demand-side model of business (Scholarly Lawyer).

Note: All the cases that the author mentions as Joe Einstein and Scholarly Lawyer producers in the Viking case have to earn their living doing other activities than their web sites maintenance. 

Therefore “free time” becomes working for free.

This increase the humane features of peer-to-peer communication and loneliness relief, but at the cost of making people to do extra-work for non-material gain.

When a teacher in Canada benefits from the labor of a blogger in Norway at no cost, and a Viking fan benefits from the labor of both, is this not “spiritual capitalism”? 

In other words, it is an enterprise with huge spiritual gains but low material gains.

Dramatic decline on the cost of means to producing, distributing and exchanging information, knowledge and culture has increased the efficacy of non-market production.

Social behavior that used to be relegated to the periphery of economic activities has become central to the economy of developed countries.

Non-market behavior has become central to producing our information and cultural environment.

Our worldview has become decentralized, non-dependent on advertising interests or profit based...

...Therefore technologically advanced societies become less homogeneous and standardized. 

Sameness becomes variety.

The outcome of the conflict between the industrial information economy and its emergent networked alternative will determine whether we will evolve into a permission (and prohibition) culture or into a society marked by a social practice of non-market production and cooperative sharing of information.

Knowledge and culture (by this logic, capitalism is bound to disappear, giving way to a cooperative model of society, but if information is going to be produced only in non-market conditions how advanced technological countries that depend on profit generated from the sale of information will survive?...

...In the other hand, countries that rely on manufacture and production of material goods rather that production of information will be more likely to survive).

Property implies an asymmetry that allows for an owner to decide what to do and or whom to do it.

Commons: No single person has exclusive control over the use and disposition of any particular resource in the commons.

4 types of Commons as two parameters:

1^st parameter; Common is either open to everybody or is limited to a certain amount of members

2^nd parameter: Whether the Common is regulated or unregulated.

Commons are symmetric: All, without being controlled by a single individual, can use them.

The term “common based” refers to what is characteristic of the cooperative enterprises, as they are not built around the asymmetric exclusion typical of property.

Open source and its adoption allowed for free software to move to the center of public debate about practical alternatives to the current way of doing things.

Work Cited:

Yoshai Benkler. The Networked Information Economy. Ch. 2. Some Basic Economics of the Information Production and Innovation.