Philosophical Conversations Public Opinion Junk for code
"When philosophy paints its grey in grey then has a shape of life grown old. By philosophy's grey in grey it cannot be rejuvenated but only understood. The owl of Minerva spreads its wings only with the falling of dusk." -- G.W.F. Hegel, 'Preface', Philosophy of Right.
Links - weblogs
Links - Political Rationalities
Links - Resources: Philosophy
Public Discussion
Cafe Philosophy
Philosophy Centres
Links - Resources: Other
Links - Web Connections
'Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainity and agitation distinquish the bourgeois epoch from all earlier ones ... All that is solid melts into air, all that is holy is profaned.' Marx

the networked information economy « Previous | |Next »
April 19, 2006

Over at public opinion I've often deployed the duality of the old and new economy as a shorthand way of conceptualizing the structural changes that have been taking place in culture, society and the economy since the 1980s. I've argued that Australia seems to be stuck in the old industrial economy (agriculture, mining and manufacturing) and is lagging behind the shift to the new economy when compared to countries like India.

However, I've never really explored what is meant by the 'new economy.' Is it a new mode of production? Or is Iinformation technology and the internet layered onto an old industrial economy that is opened out to a global market? Something basic is shifting in the economy, but I've found it hard to put my finger on it.

I can begin to do that now as Brad Delong reports that Yochai Benkler, a professor of law at Yale Law School, has just published The Wealth of Networks: How Social Production Transforms Markets and Freedom (Yale University Press). The book and individual chapters -- is available from Benkler under Creative Commons with an associated wiki so as to provide a real research tool, annotated bibliography, and platform for collaborative learning.

In Chapter One Benkler says that two main shifts can be discerned in advanced economies:

The first move, in the making for more than a century, is to an economy centered on information (financial services, accounting, software, science) and cultural (films, music) production, and the manipulation of symbols (from making sneakers to branding them and manufacturing the cultural significance of the Swoosh). The second is the move to a communications environment built on cheap processors with high computation capabilities, interconnected in a pervasive network---the phenomenon we associate with the Internet. It is this second shift that allows for an increasing role for nonmarket production in the information and cultural production sector, organized in a radically more decentralized pattern than was true of this sector in the twentieth century.

That's a description of the new economy. So what is Benkler argument about the significance of these shifts?

Benkler says that the basic argument in the first part of the book is that we are seeing the emergence of a new stage in the information economy, which I call the "networked information economy." This is displacing the industrial information economy that typified information production from about the second half of the nineteenth century and throughout the twentieth century:

What characterizes the 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.

The removal of the physical constraints on effective information production has made human creativity and the economics of information itself the core structuring facts in the new networked information economy.

What this means is that nonmarket production coupled with basic nonproprietary, motivations and organizational forms are becoming more important to the information production system; nonmarket production is very important as individuals can reach and inform or edify millions connected to the network around the world; and rise of effective, large-scale cooperative efforts---peer production of information, knowledge, and culture typified by the emergence of free and open-source software, Wikipedia, and the powerful supercomputer SETI@Home. The best way to view this in terms of 'a new mode of production emerging in the middle of the most advanced economies in the world---those that are the most fully computer networked and for which information goods and services have come to occupy the highest-valued roles.' The result is a flourishing nonmarket sector of information, knowledge, and cultural production, based in the networked environment.

John Quiggin has blogged on blogs and wiki, to Wikipedia; written an op.ed. on innovation and the internet; and given a lecture on the role of non-economic motives in Internet-based innovations, including open source software, blogs and wikis. But I'm not sure whether he has made the theoretical shift to a new (nonmarket) mode of production. Benkler's shift to this is a significant conceptual shift.

| Posted by Gary Sauer-Thompson at 10:40 AM | | Comments (4)


Gary, I call the new economy the "age of abundance" as we are moving from scarcity to abundance. When nano-tech replication finally kicks in then manufacturing will fall into the abundance era too. All the economic structures of the industrial era revolved around scarcity, real or artificial. Where there wasn't scarcity the government moved to create it, ie patents, copyright, etc.

Under the abundance economy the point of scarcity is the creator rather than the distributor. Which is why creative occupations such as law, software, etc are able to maintain high remuneration in spite of the pressures of globalisation.

Software is the first of the abundance technologies and new methods of knowledge, paradigms of production and collective behaviour have emerged from it. These new structures have been totally spontaneous too.

It will ultimately affect government too. At the moment government is set up for the industrial era . Adam called the industrial style of government, abundance of state and scarcity of government, when it should be the other way around. I think we will see more citizen involvement in the actual process of government rather than just at election time. I reckon citizen auditors would be a great start.

patents, copyright, etc. are an integral part of the new economy. They are not just characteristics of the old industrial economy.

Gary, Intellectual property is an artificial construct by the industrial era. The copyright, patents, trademarks, DRM, broadcast flag etc etc etc are all the death throes of a scarcity minded economy.

We have seen in recent years distributors of content extract massive rents from government in these areas. Copyright is now perpetual. DRM is legislated. Uniqueness of patents has fallen to absurdity. And worse, in the case of copyright what was once a civil action has now become criminal with state enforcement.

The problem is, these parts of the economy do not follow scarcity rules. They are post-capitalist. So the only way the scarcity economy can maintain its hold on those areas is to create artificial scarcity by having the government expand/maintain monopolies for them.

Okay point taken.

I see that Philip Ruddock, the federal Attorney-General, has made a minor move over relaxing copyright. The news report says that Ruddock has signalled he favours:

....a relaxation of Australian law to allow people to enjoy copyright material at their leisure and on the format that suits them. The change, which is expected to be debated by cabinet in coming weeks, could legalise "time shifting" - where consumers record programs and watch them later, and "format shifting" - where digital material, such as a CD recording, is transferred to a different device.

However, it does not look as if Ruddock will incorporate 'fair use' into the forthcoming legislation.

Any change, even time and format shifting,is being opposed by Australia's television networks,(the Nine and Seven networks).They are arguing that any relaxation of the law would encourage piracy.

The nonmarket mode of production depends on fair use does it not?