The networked world

The new kind of economy

Yochai Benkler writes in his "The Wealth of Networks": "There are no noncommercial automobile manufacturers. There are no volunteer steel foundries. You would never choose to have your primary source of bread depend on voluntary contributions from others. Nevertheless, scientists working at noncommercial research institutes funded by nonprofit educational institutions and government grants produce most of our basic science. Widespread cooperative networks of volunteers write the software and standards that run most of the Internet and enable what we do with it. Many people turn to National Public Radio or the BBC as a reliable source of news. What is it about information that explains this difference? Why do we rely almost exclusively on markets and commercial firms to produce cars, steel, and wheat, but much less so for the most critical information our advanced societies depend on?"

Benkler's approach is centered on three important things which are obtaining a more and more central position in our society - information, knowledge and culture. These three are equally vital for human development and freedom. While having been somewhat forced to the background in the industrial societies by the likes of capital, money and profit, they have been increasingly in the front since the beginning of the Internet age (here it means not the very birth time of the Net in 1969 but rather the emergence of the Web and Internet going into masses during the 90s).

According to him, the earlier industrial information economy, which did use and demand information but put it in service of industry only, is going to be replaced by the new kind of networked information economy (ct Castells, Handy and Himanen in the previous lecture). He wrotes: "What characterizesthe networked information economy is that decentralized individual action - specifically, new and important cooperative and coordinate action carried out through radically distributed, nonmarket mechanisms that do not depend on proprietary strategies - plays a much greater role than it did,or could have, in the industrial information economy. The catalyst for this change is the happenstance of the fabrication technology of computation, and its ripple effects throughout the technologies of communication and storage. The declining price of computation, communication, and storage have, as a practical matter, placed the material means of information and cultural production in the hands of a significant fraction of the world’s population - on the order of a billion people around the globe."

Three factors that explain the new, emerging system are the following:

• nonproprietary strategies have always been more important in information production than they were in the production of steel or automobiles, even when the economics of communication weighed in favor of industrial models. Education, arts and sciences, political debate, and theological disputation have always been much more importantly infused with nonmarket motivations and actors than, say, the automobile industry.
• the recent rise of nonmarket production to much greater importance. Individuals can reach and inform or edify millions around the world. Such a reach was simply unavailable to diversely motivated individuals before, unless they funneled their efforts through either market organizations or philanthropically or state-funded efforts.
• the rise of effective, large-scale cooperative efforts -peer production of information, knowledge, and culture. These are typified by the emergence of free and open-source software.

For people who have been immersed to the strictly monetary models for long time (and thereby having become the Econodwarfs as described by Eben Moglen), the new time is quite difficult to understand. Have people lost their taste for wealth or skill to make money? Probably not. But like we saw in the previous lecture, times have changed. While individual, conflict-competition approach may have been the best way to accumulate wealth, it seems to have lost some of its power. Instead new, seemingly 'softer' cooperative models have surfaced.