PPT from a graduate course, summarizing concept's in Yochai Benkler's seminal book, The Wealth of Networks.

1. The Networked
Information Economy
The Wealth of Networks
[ pages 1–90 ]
Presentation by Mindy McAdams

2. 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?

3. 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

4. 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

5. ► 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
The Wealth of Nations, good of everyone
Adam Smith (1776)
► What benefits those who
reap large profits will
benefit society as a whole

6. Non-market production
ignores
traditional market motivations
(i.e., profit)

8. Does a market economy
require democracy?

9. Does democracy require
a market economy?

10. 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

11. Source: Annual “Freedom in the World” survey by Freedom
House, 2005
http://www.freedomhouse.org/uploads/pdf/Charts2006.pdf

12. What is this difference
between “free”
and “democratic”?

13. Liberal Democracy
► “Ifa 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

14. If people depend
on information products
for their individual well-being,
does a market economy
for information products
interfere with
their rights as citizens
in a democratic society?

15. Decentralization
vs. 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

17. 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)

18. A Balancing Act
► Controllinginformation 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)

19. 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

20. Why would a movie studio order the removal of a movie trailer?

21. 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

22. You might care more
about low start-up costs
and less
about large outputs

23. 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)

24. 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

26. If the Internet is governed
as a commons,
will everything turn out okay?

27. 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

28. “... Each man is locked into a system
that compels him to increase his herd
without limit -- in a world
that is limited. Ruin is the destination
toward which all men rush,
each pursuing his own best interest
in a society that believes
in the freedom of the commons.
Freedom in a commons
brings ruin to all.”
(Hardin, 1968)

29. 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

30. 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

31. 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

33. Peer-generated Relevance

34. Peer-generated Credibility

35. 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

36. The End
The Wealth of Networks
[ pages 1-90 ]
All sources used are on the handout.

37. The Networked
Information Economy
Mindy McAdams
University of Florida
2006