The Carr-Benkler Wager

Though I am more sympathetic to Yochai Benkler than to Nick Carr, it certainly looks as though Benkler was wrong to argue the following in July of 2006:

We could decide to appoint between one and three people [that never happened] who, on some date certain – let’s say two years from now, on August 1st 2008 [this was later extended to five years, so the operative date was August 1, 2011] – survey the web or blogosphere, and seek out the most influential sites in some major category: for example, relevance and filtration (like Digg); or visual images (like Flickr). And they will then decide whether they are peer production processes or whether they are price-incentivized systems. While it is possible that there will be a price-based player there, I predict that the major systems will be primarily peer-based.

And now Carr is taking a victory lap:

So what’s happened over the last five years? Let’s look at the blogosphere. Many of the most popular sites in 2006 were strictly amateur productions, often written by a lone scribbler. Today, the most popular blog sites are almost all corporate productions, usually written by teams of wage-earners employed by corporations, often large media corporations. That doesn’t mean the amateurs have gone away; it just means they’ve been marginalized. Video? In 2006, YouTube was a playground of amateur videographers, uploading their work for kicks. The amateurs are still there, but the most popular videos today are corporate productions – from TV networks, film studios, recording companies, publishing companies, game studios – and even a lot of the amateur productions are wrapped in advertisements. Beyond YouTube, online video is dominated by sites syndicating professional productions: Hulu, Vevo, Netflix, and the various TV networks, et al. Online music? Definitely dominated by sites offering professional productions from record companies (iTunes, Pandora, Spotify, Amazon, etc.). Again, there’s still plenty of amateur music online, but the dominant outlets are fundamentally commercial. Even open-source software – one of Benkler’s core examples of peer production – has shifted in the last five years toward commercial dominance, with many contributors to the largest open-source projects being salaried employees of software firms.

There are certainly places where unpaid contributors continue to play a dominant role online – photography, Wikipedia – but they are exceptions to the net’s general evolution away from a populist medium and toward a commercial one. 

Social production has played a prominent role in political organizing, from the Tea Party to the Occupy movement to the Pirate Parties of northern Europe, and it’s not entirely clear to me that the the shift from social production to commercial production will continue indefinitely, or indeed if it makes sense to maintain a hard distinction between the two. Price-incentivized systems can co-exist with peer production. Consider, for example, Mike Masnick’s recent argument regarding Red Hat, and whether it is fair to characterize Red Hat as the first billion dollar open source company:

[T]he importance and impact of the “open source market” is not in the companies offering up open source software, but in the companies using open source software to offer amazing things to the world. In other words, I’d argue that companies like IBM, Google and Facebook are clearly “billion dollar open source companies” (actually, much, much more than just a billion) — because they all use open source software as the key component and key resource in building their business. Just as other parts of the music business used free music to boost their revenue, companies that used open source software built massive new markets and grew their own revenue streams.

Given that, I know there’s a lot of folks talking about Red Hat finally actually hitting that $1 billion revenue milestone — and it is a milestone worth noting. However, I think it’s wrong to suggest that Red Hat is therefore the first “billion dollar” open source company. In fact, just as IBM, Facebook and Google really make their money by leveraging open source software to do (and sell) something else, much of Red Hat’s revenue really comes in an ancillary manner to the software as well: from selling the service that goes with it. It’s great that Red Hat is doing well, and certainly it presents yet another useful data point to argue against those who argue there’s no money to be made if your key “product” is free, but I think it’s unfair and misleading to claim that it’s the first billion dollar open source company.

To make a strained analogy, parents invest a great deal of love and attention in their children as a form of “social production,” coordinated with peers and members of both kin-based and non-kin-based social networks; yet these investments have significant economic consequences as children go out into the working world. Over time, college-educated parents have actually been investing more time in child care, despite the significant opportunity cost. Yet this activity is relatively hard to measure.

Carr argues that Twitter and Facebook are not best understood as vehicles for social production:

But what is the nature of Facebook and Twitter? Certainly, most contributors are not getting paid for their activity, but many of the most popular tweeters and Facebook pages are motivated by commercial interests – entertainers and other celebrities promoting their (profit-making) careers, journalists contributing as an element of their (salary-paying) jobs, corporations using the networks as PR or marketing channels, etc. And, beyond the individual contributors, Facebook and Twitter are of course commercial entities that operate their sites for profit (or at least for IPO riches).

Another way of putting this, however, is that the infrastructure or backbone of a certain form of social production is operated on a for-profit basis, yet the for-profit entities in question are only capturing a relatively small share of the value that is being created for users. 

Regardless, I’d love to read Benkler’s reply. You can find a complete copy of Benkler’s seminal The Wealth of Networks at his website.

Reihan Salam — Reihan Salam is executive editor of National Review and a National Review Institute policy fellow.

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