Feb 26

Tim O'Reilly

Tim O'Reilly

The Carr-Benkler Wager

In the entry on if:book I wrote about the other day, I came across a mention of the Carr-Benkler wager: the debate between Yochai Benkler and Nicholas Carr over whether the internet content economy would continue to be volunteer and user driven (what Benkler calls peer production) or an economic marketplace.

It seems to me that Nicholas Carr has the winning side of this wager. But I also think that any account that places these alternatives in stark contrast is just wrong. Peer production is indeed an incredible source of value, but it will be harnessed by economic engines. You have only to look at open source software, where peer production is now integrated into the business models of companies (see Nat's rant yesterday, the cry of the idealist at the incorporation of the ideal into the mainstream), or at Web 2.0 companies like Google, Amazon, digg, or, which are harnessing peer production (what I call "harnessing collective intelligence" and "architectures of participation") to build products and services.

We all "volunteer" for Google whenever we link one site to another, but we also engage in an economic transaction with Google when we put adsense on our pages. We blog because we're passionate about a topic, but we may also monetize that blog with advertising, or out of band sales of products we promote.

Any economy is always a mix of passion and profit. We don't yet know the full shape of the future user-generated-content economy, but there is no question in my mind that it will be an economy, not just a playground.

tags: web 2.0  | comments: 1   | Sphere It

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Comments: 1

  Alex Tolley [02.26.07 04:01 PM]

The wager is too binary and might not even be measuring the right metrics. Yes newspapers, radio, tv, movies etc are dominated by institutions using the price mechanism, but that is partly because the costs of creating and distributing their productions has been very high. But more importantly, they tend to create large but bland markets that are not particularly satisfying. I would note that in Hollywood, much of the interesting new movies are made on a shoestring by independents, but the profit system then destroys the very talent it seeks to harness.

It is probably better to look at this from an economic perspective. The gift economy will work best where the costs are bearable by the giver and the modularity of the product is high, reducing management co-ordination costs (c.f. Ronald Coase) and the social payback exceeds the likely monetary reward. It is easy to see that newspapers would be highly vulnerable in this context, big budget movies far less so.

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