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The Networked Information Economy
The Wealth of Networks[ pages 1–90 ]
Presentation by Mindy McAdams
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Information Production
►“Non-market” production – e.g., “Not for sale”; not Big Business
►Peer production and sharing Open source software – one example
►“Less dependence on commercial mass media” (p. 9)
►Why is this possible now? Why was it not possible earlier?
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Information “Products”
►Writing: Stories, novels, journalism, blogs
►Music: Songs, recordings, MP3 files►Movies: On DVD, on film, as downloads►TV programs, news, entertainment►Radio programs►Photographs: All formats►Software: As downloads or on CDs►Graphics, illustrations, maps
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Networked Information Economy
►A system of production, distribution, and consumption of information goods
►Characterized by: Decentralized individual action Wildly distributed, non-market means Not dependent on market strategies
►“The market” = capitalism, up to now
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►Division of labor leads to increased productivity
►Governments help progress best when they permit laissez-faire markets
►The “invisible hand” of the market moves toward the good of everyone
►What benefits those who reap large profits will benefit society as a whole
The Wealth of Nations,Adam Smith (1776)
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Non-market productionignores
traditional market motivations(i.e., profit)
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Does a market economyrequire democracy?
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Does democracy requirea market economy?
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Democratic Countries
Out of a total of 192 countries in the world …
►122 countries are electoral democracies
►89 countries are “free” (46 percent of the world’s population)
Source: Annual “Freedom in the World” survey by Freedom House, 2005 http://www.freedomhouse.org/template.cfm?page=70&release=317
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Source: Annual “Freedom in the World” survey by Freedom House, 2005 http://www.freedomhouse.org/uploads/pdf/Charts2006.pdf
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What is this differencebetween “free”
and “democratic”?
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Liberal Democracy
►“If a country holds competitive, multiparty elections, we call it democratic” (Zakaria, 1997)
►“Constitutional liberalism … is not about the procedures for selecting government …” Liberal: An emphasis on individual liberty Constitutional: The rule of law
►Nothing to do with Liberal vs. Conservative
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If people dependon information products
for their individual well-being,does a market economy
for information products interfere with
their rights as citizensin a democratic society?
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Decentralizationvs. the old mass media
model►Production and distribution of --
Information Culture Knowledge
►These have been concentrated in fewer and fewer hands, over time
►Giant multinational corporations own the majority of media companies
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Economics (1)
►Information is “non-rival” You give it away to other people, and you
still have it►Industrial goods (such as cars) are “rival”
►To make profit from non-rival goods, a commercial entity puts constraints on them E.g., copyrights and trademarks
►Benefits not only the seller -- also the creator (such as a writer or musician)
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A Balancing Act
►Controlling information goods (such as books and videos) makes possible the production of more
►Too much control, however, would lead to less production
►Why? Because … existing information goods are used in the production of new ones -- “standing on the shoulders of giants” (Benkler, pp. 37-39)
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When to Let Go
►Innovation might be more profitable than repeated revenues from the same old stuff (e.g., Disney animated films)
►Charging for custom work or consulting might be more profitable if you give some things away for free (e.g., lawyers)
►Putting clips on YouTube might bring more people into the movie theater
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Why would a movie studio order the removal of a movie trailer?
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Economics (2)
►Music business as an example: Huge expenses to produce and promote a new album
►Costs associated with physical production (e.g., CDs) and physical distribution
►In contrast, a band can produce an album cheaply, without a contract
►Distribution online – very low costs
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You might care moreabout low start-up costs
and lessabout large outputs
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Inputs to Information Production
1. Existing information, culture, and knowledge (all are “non-rival” goods)
2. Mechanical and physical means for capturing, processing, producing the new items
3. Human communicative capacity: creativity, skill, experience, and cultural savvy (Benkler, p. 52)
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Motivations
►People create and share new information for many different reasons
►Not all of these are material►Not all creative efforts are made for
the sake of money … or even fame►“You have to play to win”? Maybe …
you have to give to get
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If the Internet is governedas a commons, will everything turn out okay?
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Enclosure of the Commons
►Middle Ages, Europe: “Commons” were shared lands
►Villagers used them to hunt, plant crops, gather firewood
►“Enclosure” in one sense is building fences
►Enclosure is also private ownership►What once was free and open to all
becomes property of one
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“... Each man is locked into a system
that compels him to increase his herd
without limit -- in a worldthat is limited. Ruin is the
destinationtoward which all men rush,
each pursuing his own best interestin a society that believes
in the freedom of the commons.Freedom in a commons
brings ruin to all.” (Hardin, 1968)
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Open Source (1)
►The creator retains copyright►But … the creator licenses the product
for (re-)use by anyone►You can copy, distribute, and modify it►But … the copies you distribute MUST
allow everyone else to do the same►You retain copyright on your own
contributions
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Open Source (2)
►You can sell it, if you want to (e.g. Red Hat Linux)
►No bosses, deadlines, or schedules
►Unmanaged collaboration
►As of July 2002, the Linux OS listed 418 contributors from 35 countries
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3 Functions in the Process►Utter (or create) content
Mark or classify craters on a map of Mars Write a new Wikipedia article
►Assess relevance and credibility Rate or criticize the content Allow it to pass through a filter or “gate”
►Distribute the content; add value Pass it on, e.g. by linking to it Possibly enhance or improve the content
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Peer-generated Relevance
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Peer-generated Credibility
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Who Can Play?
►Benkler doesn’t ask this question in pp. 1-90
►All this peer-produced information comes from whom? People who … Have free time Have computer access Are literate and technology-literate
►Who can benefit? Anyone … who has access
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The End
The Wealth of Networks[ pages 1-90 ]
All sources used are on the handout.
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The Networked Information Economy
Mindy McAdamsUniversity of Florida
2006