Yochai Benkler: Open-source economics

75,393 views ・ 2008-04-21

TED


Please double-click on the English subtitles below to play the video.

00:12
One of the problems of writing, and working, and looking at the Internet
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is that it's very hard to separate fashion from deep change.
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And so, to start helping that, I want to take us back to 1835.
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In 1835, James Gordon Bennett founded the first mass-circulation newspaper
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in New York City.
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And it cost about 500 dollars to start it,
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which was about the equivalent of 10,000 dollars of today.
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By 15 years later, by 1850, doing the same thing
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-- starting what was experienced as a mass--circulation daily paper
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-- would come to cost two and a half million dollars.
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10,000, two and a half million, 15 years.
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That's the critical change that is being inverted by the Net.
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And that's what I want to talk about today,
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and how that relates to the emergence of social production.
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Starting with newspapers, what we saw was high cost as an initial requirement
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for making information, knowledge and culture, which led to a stark bifurcation
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between producers -- who had to be able to raise financial capital,
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just like any other industrial organization --
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and passive consumers that could choose from a certain set of
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things that this industrial model could produce.
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Now, the term "information society," "information economy,"
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for a very long time has been used as the thing that comes after
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the industrial revolution. But in fact, for purposes of understanding what's happening
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today, that's wrong. Because for 150 years, we've had an information economy.
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It's just been industrial,
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which means those who were producing had to have a way of raising money
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to pay those two and a half million dollars, and later, more for the telegraph,
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and the radio transmitter, and the television, and eventually the mainframe.
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And that meant they were market based, or they were government owned,
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depending on what kind of system they were in. And this characterized and anchored
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the way information and knowledge were produced for the next 150 years.
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Now, let me tell you a different story. Around June 2002,
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the world of supercomputers had a bombshell.
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The Japanese had, for the first time, created the fastest supercomputer --
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the NEC Earth Simulator -- taking the primary from the U.S.,
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and about two years later -- this, by the way, is measuring the trillion floating-point
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operations per second that the computer's capable of running --
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sigh of relief: IBM [Blue Gene] has just edged ahead of the NEC Earth Simulator.
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All of this completely ignores the fact that throughout this period,
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there's another supercomputer running in the world -- SETI@home.
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Four and a half million users around the world, contributing their
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leftover computer cycles, whenever their computer isn't working,
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by running a screen saver, and together sharing their resources to create
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a massive supercomputer that NASA harnesses to analyze the data
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coming from radio telescopes.
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What this picture suggests to us is that we've got a radical change in the way
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information production and exchange is capitalized. Not that it's become
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less capital intensive -- that there's less money that's required
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-- but that the ownership of this capital, the way the capitalization happens,
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is radically distributed. Each of us, in these advanced economies,
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has one of these, or something rather like it -- a computer.
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They're not radically different from routers inside the middle of the network.
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And computation, storage and communications capacity are in the hands of
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practically every connected person -- and these are the basic physical
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capital means necessary for producing information, knowledge and culture,
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in the hands of something like 600 million to a billion people around the planet.
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What this means is that for the first time since the industrial revolution,
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the most important means, the most important components of the core
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economic activities -- remember, we are in an information economy
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-- of the most advanced economies, and there more than anywhere else,
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are in the hands of the population at large. This is completely different than what we've
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seen since the industrial revolution. So we've got communications and computation
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capacity in the hands of the entire population,
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and we've got human creativity, human wisdom, human experience
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-- the other major experience, the other major input --
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which unlike simple labor -- stand here turning this lever all day long --
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is not something that's the same or fungible among people.
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Any one of you who has taken someone else's job, or tried to give yours
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to someone else, no matter how detailed the manual, you cannot transmit
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what you know, what you will intuit under a certain set of circumstances.
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In that we're unique, and each of us holds this critical input
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into production as we hold this machine.
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What's the effect of this? So, the story that most people know
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is the story of free or open source software.
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This is market share of Apache Web server
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-- one of the critical applications in Web-based communications.
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In 1995, two groups of people said,
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"Wow, this is really important, the Web! We need a much better Web server!"
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One was a motley collection of volunteers who just decided,
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you know, we really need this, we should write one,
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and what are we going to do with what --
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well, we're gonna share it! And other people will be able to develop it.
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The other was Microsoft.
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Now, if I told you that 10 years later, the motley crew of people, who didn't control
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anything that they produced, acquired 20 percent of the market
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and was the red line, it would be amazing! Right?
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Think of it in minivans. A group of automobile
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engineers on their weekends are competing with Toyota. Right?
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But, in fact, of course, the story is it's the 70 percent,
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including the major e-commerce site -- 70 percent of a critical application
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on which Web-based communications and applications work is produced in this form, in
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direct competition with Microsoft. Not in a side issue --
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in a central strategic decision to try to capture a component of the Net.
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Software has done this in a way that's been very visible, because
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it's measurable. But the thing to see is that this actually happens throughout the Web.
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So, NASA, at some point, did an experiment where they took images of Mars
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that they were mapping, and they said, instead of having three or four
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fully trained Ph.D.s doing this all the time, let's break it up into small components,
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put it up on the Web, and see if people, using a very simple interface,
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will actually spend five minutes here,
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10 minutes there, clicking. After six months,
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85,000 people used this to generate mapping at a
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faster rate than the images were coming in, which was, quote,
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"practically indistinguishable from the markings of a fully-trained Ph.D.,"
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once you showed it to a number of people and computed the average.
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Now, if you have a little girl, and she goes and writes to
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-- well, not so little, medium little -- tries to do research on Barbie.
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And she'll come to Encarta, one of the main online encyclopedias.
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This is what you'll find out about Barbie. This is it, there's nothing more to the definition,
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including, "manufacturers" -- plural -- "now more commonly produce
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ethnically diverse dolls, like this black Barbie." Which is vastly better
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than what you'll find in the encyclopedia.com,
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which is Barbie, Klaus. (Laughter)
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On the other hand, if they go to Wikipedia, they'll find a genuine article
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-- and I won't talk a lot about Wikipedia, because Jimmy Wales is here --
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but roughly equivalent to what you would find in the Britannica, differently written,
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including the controversies over body image and commercialization,
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the claims about the way in which she's a good role model, etc.
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Another portion is not only how content is produced, but how relevance is produced.
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The claim to fame of Yahoo! was, we hire people to look -- originally, not anymore
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-- we hire people to look at websites and tell you --
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if they're in the index, they're good. This, on the other hand, is what 60,000
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passionate volunteers produce in the Open Directory Project,
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each one willing to spend an hour or two on something they really care about,
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to say, this is good. So, this is the Open Directory Project, with 60,000 volunteers,
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each one spending a little bit of time, as opposed to a few hundred
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fully paid employees. No one owns it, no one owns the output,
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it's free for anyone to use and it's the output of people acting out of social
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and psychological motivations to do something interesting.
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This is not only outside of businesses. When you think of what is the critical innovation
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of Google, the critical innovation is outsourcing the one most important thing --
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the decision about what's relevant -- to the community of the Web as a whole,
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doing whatever they want to do: so, page rank.
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The critical innovation here is instead of our engineers, or our people saying
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which is the most relevant, we're going to go out and count what you,
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people out there on the Web, for whatever reason -- vanity, pleasure --
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produced links, and tied to each other. We're going to count those, and count them up.
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And again, here, you see Barbie.com, but also, very quickly,
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Adiosbarbie.com, the body image for every size. A contested cultural object,
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which you won't find anywhere soon on Overture, which is the classic
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market-based mechanism: whoever pays the most is highest on the list.
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So, all of that is in the creation of content, of relevance, basic human expression.
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But remember, the computers were also physical. Just physical materials
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-- our PCs -- we share them together. We also see this in wireless.
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It used to be wireless was one person owned the license, they transmitted in an
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area, and it had to be decided whether they would be licensed or based on property.
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What we're seeing now is that computers and radios are becoming so sophisticated
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that we're developing algorithms to let people own machines, like Wi-Fi devices,
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and overlay them with a sharing protocol that would allow a community like this
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to build its own wireless broadband network simply from the simple principle:
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When I'm listening, when I'm not using, I can help you transfer your messages;
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and when you're not using, you'll help me transfer yours.
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And this is not an idealized version. These are working models that at least in some
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places in the United States are being implemented, at least for public security.
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If in 1999 I told you, let's build a data storage and retrieval system.
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It's got to store terabytes. It's got to be available 24 hours a day,
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seven days a week. It's got to be available from anywhere in the world.
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It has to support over 100 million users at any given moment. It's got to
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be robust to attack, including closing the main index, injecting malicious files,
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armed seizure of some major nodes. You'd say that would take years.
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It would take millions. But of course, what I'm describing is P2P file sharing.
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Right? We always think of it as stealing music, but fundamentally,
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it's a distributed data storage and retrieval system, where people,
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for very obvious reasons, are willing to share their bandwidth and their
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storage to create something.
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So, essentially what we're seeing is the emergence of a fourth transactional
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framework. It used to be that there were two primary dimensions along which
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you could divide things. They could be market based, or non-market based;
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they could be decentralized, or centralized.
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The price system was a market-based and decentralized system.
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If things worked better because you actually had somebody organizing them,
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you had firms, if you wanted to be in the market -- or you had governments
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or sometimes larger non-profits in the non-market.
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It was too expensive to have decentralized social production,
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to have decentralized action in society. That was not about society itself.
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That was, in fact, economic.
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But what we're seeing now is the emergence of this fourth system
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of social sharing and exchange.
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Not that it's the first time that we do nice things to each other, or for each other,
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as social beings. We do it all the time.
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It's that it's the first time that it's having major economic impact.
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What characterizes them is decentralized authority.
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You don't have to ask permission, as you do in a property-based system.
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May I do this? It's open for anyone to create and innovate and share,
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if they want to, by themselves or with others,
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because property is one mechanism of coordination.
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But it's not the only one.
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Instead, what we see are social frameworks for all of the critical things that we use
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property and contract in the market: information flows to decide what are
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interesting problems; who's available and good for something;
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motivation structures -- remember, money isn't always the best motivator.
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If you leave a $50 check after dinner with friends,
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you don't increase the probability of being invited back.
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And if dinner isn't entirely obvious, think of sex. (Laughter)
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It also requires certain new organizational approaches.
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And in particular, what we've seen is task organization.
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You have to hire people who know what they're doing.
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You have to hire them to spend a lot of time.
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Now, take the same problem,
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chunk it into little modules, and motivations become trivial.
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Five minutes, instead of watching TV?
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Five minutes I'll spend just because it's interesting. Just because it's fun.
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Just because it gives me a certain sense of meaning, or, in places that are more
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involved, like Wikipedia, gives me a certain set of social relations.
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So, a new social phenomenon is emerging.
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It's creating, and it's most visible when we see it as a new form of competition.
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Peer-to-peer networks assaulting the recording industry;
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free and open source software taking market share from Microsoft;
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Skype potentially threatening traditional telecoms;
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Wikipedia competing with online encyclopedias.
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But it's also a new source of opportunities for businesses.
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As you see a new set of social relations and behaviors emerging,
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you have new opportunities. Some of them are toolmakers.
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Instead of building well-behaved appliances
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-- things that you know what they'll do in advance --
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you begin to build more open tools. There's a new set of values,
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a new set of things people value.
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You build platforms for self-expression and collaboration.
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Like Wikipedia, like the Open Directory Project,
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you're beginning to build platforms, and you see that as a model.
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And you see surfers, people who see this happening, and in some sense
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build it into a supply chain, which is a very curious one. Right?
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You have a belief: stuff will flow out of connected human beings.
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That'll give me something I can use, and I'm going to contract with someone.
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I will deliver something based on what happens. It's very scary
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-- that's what Google does, essentially.
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That's what IBM does in software services, and they've done reasonably well.
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So, social production is a real fact, not a fad.
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It is the critical long-term shift caused by the Internet.
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Social relations and exchange become significantly more important than they ever
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were as an economic phenomenon. In some contexts, it's even more efficient
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because of the quality of the information, the ability to find the best person,
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the lower transaction costs. It's sustainable and growing fast.
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But -- and this is the dark lining -- it is threatened by
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-- in the same way that it threatens -- the incumbent industrial systems.
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So next time you open the paper, and you see an intellectual property decision,
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a telecoms decision, it's not about something small and technical.
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It is about the future of the freedom to be as social beings with each other,
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and the way information, knowledge and culture will be produced.
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Because it is in this context that we see a battle over how easy or hard it will be
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for the industrial information economy to simply go on as it goes,
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or for the new model of production to begin to develop alongside that industrial model,
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and change the way we begin to see the world and report what it is that we see.
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Thank you.
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