The Benkler of Networks

The author of The Wealth of Networks says that the biggest changes caused by the internet are changes we already take for granted.

by Alex Goldman ISP-Planet Managing Editor [March 9, 2007]

In his essay, Coase's Penguin, or Linux and the Nature of the Firm, and later in his book, The Wealth of Networks, Benkler said that the internet enables a new mode of production, collaborative production, in which we are neither employers nor employees (think of everything from open source software to the value of your reputation on eBay).

The book is ambitious, its title a reference to the most influential book on economics ever written, The Wealth of Nations. Adam Smith's book described the rise of the nation state and the dawn of the industrial revolution, and Benkler's is equally of its time, describing the economics of the rise of the internet.

In the industrial economy, he says, we became accustomed to seeing large producers serving passive large audiences. But recently, distributed actors have been catching up to the monoliths.

A distributed economy
For example, the teraflops achieved by SETI@Home are comparable to the teraflops achieved by supercomputers from IBM and similar companies. Benkler says this neat example demonstrates a widely known truth. "This captures for me a core fact, the rapidly decentralized capitalization of computation, storage, and communications," he says.

"In the network economy, inputs can be widely distributed. Inputs that have been on the periphery of the economy, such as helping strangers with directions, such as friendships and collaboration, become part of the economy."

People are no longer individuals in firms, following the direction of managers, or individuals in markets, following price signals. People are acting within an online trust economy.

"The economics of information is different from the economics of physical things," Benkler says. There is no exclusivity or scarcity. If I use information, others can use that information too.

That's how Apache server can compete with Microsoft server (as demonstrated regularly in the Netcraft server surveys).

Give that crowd a Ph.D
A similar nugget of truth can be found in the success of NASA's clickworkers program. You can take a break right now and undergo training to analyze photos of Mars and help NASA identify craters. But even if you choose not to do so, the point is that NASA found a way to get casual online users help with a routine task that had previously required experts with Ph.Ds.

"The core problem is to structure the task to allow millions of people to spend 5 minutes or 40 hours on one task. You need to achieve modularity, granularity, and integration. It requires careful task construction. It takes advantage of self selection. It must provide transparency and fairness."

It's not easy. "We're not all selfish rational actors [as classic economics assumes]," says Benkler. "Nasty people exist. You need fairness, which is different in different culture. Money can muck things up, particularly with regard to motivation. We're used to the zero sum game. Cooperation has generally been outside the market."

The gatekeepers are losing power. "The BBC found that during the bombings in London, the only available images from inside the subways were from mobile phones. They now have a 'help us make the news' section that includes the warning, 'please do not endanger yourself.'"

In the U.S., many newspapers are working hard to collaborate with the public. USA Today, for example, has a whole new reader-centric portal feel.

As the news changes, there's a strong "see for yourself" ethic. Websites publish entire legal documents, and ask readers to go through them.

The empires strike back
There's also a pushback. "There is a battle by incumbents to make distributed production more costly, harder, or subject to permission. In telecoms, we see a battle over institutional ecology. We see a broadband duopoly, almost entirely deregulated, versus highly regulated municipal broadband."

It's true of other industries too. "We see 'trusted systems' which are trusted against their owners versus general purpose devices. We see software patents, proprietary standards, and a desktop monopoly competing with free and open source software. We see the DMCA and uncertain liability fighting the increasing success and practice of sharing and open innovation. We see a broader copyright: right to read, fair use narrowed, criminalization, copyright term extension, clickwrap licenses versus strong sharing, the A2K movement, Free Culture, and the Creative Commons."

Independent ISPs are on both sides of this. Many take advantage of open source softeware and the expert crowd (on our own ISP-Lists, for example) and many help other ISPs, but many also hope to sell proprietary services and build proprietary networks.

Larger ISPs have their own support forums on Broadband Reports, where users and techs can help other users.

There is a clear dichotomy between the business practices of the past and the future, but no clear date for the extinction of the dinosaurs. This isn't your everyday market competition. This is a conflict about the rules of the market. Today, the rules of the market are stacked against you. But that could change.

—End