Yochai Benkler: Open-source economics
The Evolution of Information Production and Exchange
This section discusses the historical changes in information production and how it relates to the emergence of social production.
The Cost of Information Production in the Past
- In 1835, James Gordon Bennett founded the first mass-circulation newspaper in New York City, which cost about $500 to start.
- By 1850, starting a mass-circulation daily paper would cost around $2.5 million.
- This significant increase in cost over just 15 years highlights the critical change that is being inverted by the internet.
The Industrial Model of Information Production
- In the industrial model, high costs were required for producing information, knowledge, and culture.
- Producers had to raise financial capital similar to any other industrial organization.
- Consumers had limited choices from what this industrial model could produce.
- This characterized information production for 150 years with market-based or government-owned systems.
The Misconception of an "Information Society"
- The term "information society" has been used to describe what comes after the industrial revolution.
- However, this understanding is incorrect as we have already been in an information economy for 150 years.
- The difference lies in how information was produced and capitalized during this period.
A Different Story: Distributed Capitalization
This section explores a different narrative regarding distributed capitalization and its impact on information production.
Supercomputers and Distributed Computing
- In June 2002, Japan created the fastest supercomputer called NEC Earth Simulator.
- Later, IBM's Blue Gene surpassed it in terms of computational power.
- However, throughout this period, SETI@home project involved millions of users contributing their computer cycles to create a massive supercomputer used by NASA.
Radical Change in Information Production
- The picture of distributed computing suggests a radical change in information production and exchange.
- Capitalization is no longer less capital intensive, but the ownership and capitalization process have become radically distributed.
- Each individual in advanced economies has access to computation, storage, and communication capacity necessary for producing information.
The Shift in Economic Activities
This section highlights the shift in economic activities where communication and computation capacity are now in the hands of the population at large.
The Most Important Means of Production
- Communication, computation, and storage capacity are now accessible to practically every connected person.
- These components form the core economic activities of advanced economies.
- Unlike simple labor, human creativity, wisdom, and experience cannot be easily transmitted or replaced.
Free/Open Source Software as an Example
This section discusses the story of free/open source software as an example of how distributed production can succeed.
Market Share of Apache Web Server
- In 1995, two groups recognized the importance of the web and aimed to develop a better web server.
- One group consisted of volunteers who shared their work with others.
- The other group was Microsoft.
- Ten years later, the volunteer group acquired 20% market share despite not having control over what they produced.
Timestamps may vary slightly depending on the video version.
The Impact of the Internet on Content Creation and Relevance
This section discusses how the internet has changed content creation and relevance, highlighting examples such as NASA's experiment with image mapping and the contrasting information found on different online platforms.
The Power of Crowdsourcing in Content Creation
- NASA conducted an experiment where they broke down image mapping into small components and put it up on the web. 85,000 people used a simple interface to contribute their time, resulting in mapping that was practically indistinguishable from that done by fully-trained Ph.D.s.
- Online encyclopedias like Encarta provide limited information about certain topics, while Wikipedia offers more comprehensive articles written by passionate volunteers.
- Yahoo! initially hired people to determine website relevance for indexing purposes. In contrast, the Open Directory Project relies on 60,000 volunteers who spend time curating content based on their interests.
The Role of Community in Determining Relevance
- Google's critical innovation is outsourcing the decision of what is relevant to the community through page ranking. This contrasts with market-based mechanisms like Overture, where relevance is determined by whoever pays the most.
- Wireless networks are evolving to allow individuals to own machines like Wi-Fi devices and share bandwidth through a community sharing protocol. This enables communities to build their own wireless broadband networks.
The Evolution of Content Creation and Storage
- P2P file sharing demonstrates how distributed data storage and retrieval systems can be created through shared bandwidth and storage resources.
- A fourth transactional framework is emerging, beyond market-based or non-market-based systems. It involves decentralized collaboration facilitated by technology.
Timestamps have been associated with the corresponding bullet points to help navigate the transcript.
New Section
This section discusses the emergence of a new system of social sharing and exchange that has a major economic impact.
The Fourth System of Social Sharing and Exchange
- The fourth system of social sharing and exchange is characterized by decentralized authority.
- It does not require permission like a property-based system.
- Anyone can create, innovate, and share without restrictions.
- Social frameworks replace property and contract in coordinating information flows, identifying available resources, and motivating individuals.
New Section
This section explores the organizational approaches required for the new system of social sharing and exchange.
New Organizational Approaches
- Task organization is essential in the new system.
- Breaking down problems into smaller modules makes motivations trivial.
- People are motivated by interest, fun, meaning, or social relations rather than monetary rewards.
- Hiring individuals who know what they're doing becomes crucial.
New Section
This section highlights the emergence of a new social phenomenon as a form of competition and an opportunity for businesses.
A New Social Phenomenon
- Peer-to-peer networks challenge traditional industries like the recording industry.
- Free and open-source software competes with established players like Microsoft.
- Platforms like Skype disrupt traditional telecom companies.
- Wikipedia rivals online encyclopedias.
New Section
This section discusses the opportunities presented by the new social phenomenon for businesses.
Opportunities for Businesses
- Toolmakers have an opportunity to build more open tools instead of well-behaved appliances.
- Platforms for self-expression and collaboration become valuable assets.
- Surfers identify emerging trends and incorporate them into supply chains.
- The belief in the flow of information from connected human beings drives contracting and innovation.
New Section
This section emphasizes that social production is a significant long-term shift caused by the Internet.
Social Production as a Long-Term Shift
- Social relations and exchange become more important than ever as an economic phenomenon.
- In some contexts, social production is more efficient due to quality information, finding the best person, and lower transaction costs.
- Social production is sustainable and growing rapidly.
- However, it faces threats from incumbent industrial systems.
New Section
This section highlights the battle over the future of freedom in social interactions and the production of information, knowledge, and culture.
The Battle for Freedom
- Intellectual property decisions and telecoms decisions impact the future of social interactions.
- The industrial information economy seeks to maintain its current model while new models of production emerge alongside it.