A case for a new "Information Economics"?

2008-06-27T05:08:13

Michel Bauwens asks: Can the experience economy be capitalist?. People who are unable to understand the logic of Free Software consider digital information to be exactly similar to material goods - which it is not! The rules of economics applied to scarce, rival goods will have to be re-written before they can be applied to the digital domain. This, and the fact that the open Internet forms a powerful disruptive technology by its ability to bring large number of people into direct contact with each other without the need for middlemen necessitates the birth of a new "Information Economics". Bauwens writes: In other words, we have a growing discrepancy between the direct creation of use value through social relationships and collective intelligence (open platforms create near infinite value through the operations of the laws of Metcalfe and Reed), but only a fraction of that value can actually be captured by business and money. Innovation is becoming social and diffuse, an emergent property of the networks rather than an internal R & D affair within corporations; capital is becoming an a posteriori intervention in the realization of innovation, rather than a condition for its occurrence; more and more positive externalizations are created from the social field. Can the actual "value" of free software be directly captured by money? We hear business magazines proclaiming that the "world automobile market is worth X billion dollars" - can we arrive at such an estimate of the "value" of Free Software by looking at exactly how much money was made "selling" Free Software? Is it not the case that Free Software creates "value" even when nothing is sold or bought? The backbone of capitalism, going by the way it is practiced in the US, is the constant churning out of goods to be consumed by a population which has been brainwashed by the media (especially Television) that endless consumption is the only way of life. Imagine for a moment what would happen were the people to suddenly become frugal and stop acting the way they are advised by the media. We will very soon have a "recession"! But what is wrong with this endless produce-market-consume/discard cycle which is the basis of the creation of so much "wealth"? The simple fact that material goods do not come out of vacuum - they need resources from the environment around us to be "manufactured", and these resources are not infinite. Now, let us look at the capitalist idea of wealth creation from digital information. A million copies of a program can be created at no additional cost - so how do you create "wealth"? Make it scarce by imposing artificial restrictions on copying - churn out techno-legal traps like DRM and go to court with ideas like "Intellectual Property". Isn't it interesting to compare these two "models"? One which takes essentially finite resources and creates wealth by exploiting them as if they were available in infinite quantities and the other which takes essentially infinite resources and creates wealth by making it appear as if they were finite!


Kishore

Fri Jun 27 12:31:31 2008

"Isn’t it interesting to compare these two “models”? One which takes essentially finite resources and creates wealth by exploiting them as if they were available in infinite quantities and the other which takes essentially infinite resources and creates wealth by making it appear as if they were finite!" It sure is. These two models really sum up the ploys used by the corporates to squeeze money out of the world, by making people believe what they want them to believe.

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