July 2007

Wealth of networks

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The Wealth of Networks – How Social Production Transforms Markets and Freedom

Author: Yochai Benkler
Published By: Yale University Press, New Haven and London
Pages: 527
ISBN-13: 978-0-300-11056-2 (alk. Paper)

This book begins with four economic observations. First, “the baseline conception that proprietary strategies are dominant in our information production system is overstated”. “The second economic point is that these expansions of rights operate, as a practical matter, as a tax on nonproprietary models of production in favor of the proprietary models”. “The third economic observation is that the basic technologies of information processing, storage, and communication have made non-proprietary models more attractive and effective than was ever before possible”. “The fourth and final economic observation describes and analyzes the rise of peer production, the cluster of phenomena from free and open-source software to Wikipedia and SETI@Home etc”. The book tries to demonstrate how the emergence of a substantial role for nonproprietary production offers discrete strategies to improve human development around the globe.

This book belongs to a class of literature that has argued that from the perspective of democratic discourse and a participatory republic, the networked information economy offers a genuine reorganisation of the public sphere. The networked information economy is seen as upsetting the dominance of proprietary, market-based production in the sphere of the production of knowledge, information, and culture. It is seen to likely result in significant redistribution of wealth, and no less importantly, power, from previously dominant firms and business models to a mixture of individuals and social groups on the one hand, and on the other hand businesses that reshape their business models to take advantage of, and build tools and platforms for, the newly productive social relations.

This is a rather hopeful position and one might cite many a statistics to look at the effect of liberal trade on distribution of wealth. Although it can be generally accepted that a truly transformative redistribution of wealth will not happen unless it is done by a welfare state, or the capitalist is under regulation to ensure a more egalitarian distribution of the profits. The author sees enormous potential in the new information economy to transform the exclusive nature of traditional markets. Many a developments are cited to support the claim for new models of information sharing and collaboration.

The rise of commons-based information production, of individuals and loose associations producing information in nonproprietary forms, is seen as presenting a genuine discontinuity from the industrial information economy of the twentieth century.

“It's a counterpoint to the received wisdom that creating and exploiting intellectual property (patents and copyright) is the only way to do business in the 21st century”. Benkler suggests that in 2003 IBM made twice as much money from providing open-source services as it did from intellectual property – despite the fact that between 1999 and 2004 it created more patents than any other US company. Benkler proposes that this is a pattern we will see repeated. Benkler points out that they will disappear overnight but that social production is more than a fad. It is no surprise to Benkler that: “We find ourselves in the midst of a battle over the institutional ecology of the digital environment.” One would have liked more attention being paid to the ownership schematics on the Internet. However, one can only be hopeful that digital publishing is able to cut through the price wall that stands between searchers and providers of knowledge. There is also the issue of credibility and on the whole proprietary knowledge seems to hold an advantage on that turf.

The book is released under a Creative Commons licence, so it can be download for free from the website (www.benkler.org). This is an important book and is an addition to the growing literature which expects a social transformation to come through technology enabled networking and communication.  However, it remains to be seen how these optimistic philosophies of community production fare in the real world where the communicative and collaborative networks have to evolve strategies to resist monopolistic domination of markets by large firms, to put the control of resources in the hands of people.  

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