A few months ago in New Scientist, Annalee Newitz took the pessimistic view of the next cyber-movement in the making:
- “If web 2.0 is about generating your own content and sharing it, *web 3.0* will be about making information less free. Privacy fears, new forms of advertising, and restrictions imposed by media companies will mean more digital walls, leading to a web that's safer but without its freewheeling edge.”
Citing the commercialisation of blogs and the potential impact a major leak or private information theft would have, her argument is that a public backlash would reverse the current trend toward disclosure. To the amateur tech enthusiast, this is riveting copy; but like many journalists who specialize in media issues, her argument lacks depth of analysis.
In truth, it is only a matter of time before our politicians start arguing for the deregulation of information.
The Price of Data
Few people understand the roots of our unprecedented information wealth; often taking it for granted as a product of technological progress. The knowledge economy, they figure, is merely the product of advances that demand ever more skilled workers to operate. On the contrary, it functions in much the same way as an economy.
Case in point, some of you might remember that during the early 1990s, when the internet was first starting to gain popular appeal, .wav and .midi files were the only known types of file for playing audio. And back then, there were whole websites dedicated to short sound bites in these formats. The drawback, however, was that these formats were bulky and ill-suited to the standard dialup connection of 56k. Most clips would have been a few seconds at best, and took a while to complete.
In time, it was this disparity between demand and capacity that would later drive the rapid uptake of mp3s. Converting to the format meant that the customer could gain significantly more content for less data; and the changeover cost was little more than the time to download the software. Had there been a faster rollout of broadband and computer upgrades, we would not have the mp3, and higher capacity networks would offer a less efficient exchange.
By contrast, if we eliminate the pressure to streamline a product, we are left with what some have dubbed “Bloatware.” Which is a bit like verbose prose or a car with too many parts: sloppy, ineffective and a nuisance to repair. And, as any economist would predict, the biggest culprits are the monopoly producers like Microsoft, who have retained market share despite competition from free and higher quality alternatives.
If the community is to take full advantage of the information revolution, then we must take stock of the economic forces that govern the spread of ideas and utilize market forces for our collective benefit.
The Free Market of Ideas
Back in 1994, one of the more insightful takes on the economic impact of the internet was John Barlow’s piece on The Economy of Ideas for Wired. Starting with the realization that we cannot sell information if they cannot be contained in pages, CDs or DVDs; he anticipated an economy based on relationships rather than intellectual property.
Fourteen years later and look where we are – still trying to figure out sound policy while various cartels keep the intellectual market locked up. Be it through buying out patents to block products from market entry or perhaps by enforcing royalties for every time their music is played in a public space, these groups continue to argue that nothing would be produced if people were not paid for their creative efforts. Yet this is dead wrong, and all intellectual property serves to do is create red tape for innovation and drive up the price of functioning.
Case in point, the reason that Hollywood became the filmmaking capital of the world had more to do with artists fleeing Edison’s technology patent than anything else. If one major English speaking nation decided to abolish its intellectual property laws, the outcome would be a flood of investment in their local I.T. industry and more. Freed to borrow any idea you wished, all products would have to compete on individual merit and the onus would be on all businesses to innovate just to stay in the game. And, as Yochai Benkler points out in this video, crowd sourcing now presents vast opportunities for businesses willing to share their information with the public.
Too often, after listening to the intellectual property advocates, we forget that economies are supposed to moderate the supply of real products and services. And – on account of how readily they are reproduced – this is precisely why the true market value of ideas really should be zero. By protecting intellectual property, we prevent the market from doing its job and suffer the consequence of expensive inefficient products.