Dear All,

Please, look at the success (?) of open source programmes! We are slaves of our manipulators mainly because of the information management.

I must say I haven't read this book and I am looking forward to reading it. However, I have the following comments.

"Free information" is perhaps a misnomer. All information and services available for "free" over the internet is paid for, either by the service provider or by the customer. Gmail users do not pay money for the service. The price they willingly pay is reduced privacy and shared personal information. One of the ways Google makes money is by selling targeted advertisement.

People have "limited resources and infinite wants". Resources freed by reduced transaction costs may be spent elsewhere. Chances are that the savings resulting reduced transaction costs will be spent on additional goods and services rather than hoarded.

Thank you for bringing this book to my attention.

Yes free riders are too many, but a such could enhance sharing vital knowledge and in turn boost the economy.

Free information in my opinion will shrink the profit margins in an economy, since low hanging fruits will become available and cannot be charged for it. As information becomes more prevalent it will make the opportunity to charge for services increasingly difficult.

While Ra'ed's comment is true that sharing vital knowledge and in turn boost the economy, it will do so for a smaller segment of the economy that has the resources to provide increasingly aggregated or complex pieces of information that can be charged for. This will leave a segment of the knowledge economy competitors out of the game. This will have a negative effect on the overall economy as productivity indexes diverge from hiring indexes due to automation, since the profits will be clustered ever more tightly among few individuals.

While it may be argued that this frees individuals to pursue more refined, I would also argue that at one point or another the law of diminishing returns will also come into play.

Just a thought

I concur with Francine that information from the internet is "not free". The seeming free information from the net is part of a "come-on" or marketing strategy so that people will use the net and paying advertisers will post.

We can just imagine the volume of sales of computers brought about by the net.

For example, I do not consider myself a free rider because I am one of those who bought something because of a paid advertisement from the net.

The seeming "unpaid" moneys brought about by the net will only be temporary. Eventually governments, tax collectors, will be able to adjust to this new set-up and catch up.

Dear Martin,

Non-payment culture would have an enormous impact on cultural and thinking distribution and on emancipation of the common sense.

However, regarding that the general motivation of people is influenced by not really important even superficial fashionable things, the mind manipulators will continue easily the deceiving of people.

Dear All,

Please, look at the success (?) of open source programmes! We are slaves of our manipulators mainly because of the information management.

Is it a problem if the economy shrinks? The economy is just a measure of money moving about, not wealth. Money itself has no value to a community, only to individuals. The total value of all the money in a currency is zero to the community using it (burn it all and nothing is lost), because money is just an indication of one person being 'owed' by others. A growing economy is only of importance to those who do nothing while their money grows for them, is it not?

First the productivity, quality and reliability or simply the utility of products and services developed with limited knowledge will not be the same as those created without such a restriction. This utility will vary proportionally with the amount of useful knowledge applied to planning, design, production, etc.

I also believe that secrecy causes an inefficient use of resources in economies where similar research and development efforts are repeated many times without gains in general knowledge or welfare. Secrecy also favors a more monopolistic economy where companies with the best secrets can obtain economic profits at the expense of the consumer.

The purpose of patents is to reward the innovation of inventors while adding their 'secret' knowledge to the common pool of human understanding. If the knowledge found on the internet is part of such a common pool then any transaction costs and access fees are a complete windfall for those that receive them and use up funds that would likely be used elsewhere in an economy to better effect.

So the removal of the constraint of non-patent fees and rents on information likely represents within an economy; a reduction in the fixed costs of doing business, a reduction in waste of finite research and development resources, and a general increase of product & service utility to 'state of the art' levels.

Are non pay and free the same thing. It occurs to me that the massive state subsidies that enabled the technology, expertise and research that formed the internet has created the biggest economic opportunity for a long time. We should expect new business models, however, like freemium. Might add that lower entry costs might boost the economy.

If non-payment culture provide better standard of living, the economy is getting better rather shrinking.

Dear all,

thank you for your interesting answers. Sorry that I didn’t respond for such a long time.

As far as I understand Lanier, the middle class of the producers of content (writers, researchers, musicians, artists and many more) will be depraved by the non-payment culture. They are no longer the owners of their data, when these data are free. Anyway there are big collectors of these data (search engines, platforms, social media etc.). These collectors will be the owners of the data because they have the means to collect them, to store them, to analyze them and to process them.

Producers of content may be forced to earn their living by other kinds of work than by performing their quintessential skills once their ideas are freely available.

Shrinking of the economy is caused by the depravation not only of the creative sector but also of the sector of middle size data processing-economy like travel agencies, book stores, etc.

E.g. travelling becomes cheaper but the money needed for paying it will be earned by work that is less skilled and less paid.

Jonathan, it seems to me that it makes a difference whether it is a national economy or the global economy that shrinks. I am not an economist but as far as I understand, money is not only a measure of wealth but a means to pay for goods before they have been transported or even produced. That makes money decisive for a functioning economy. Less money - less motion. When the economy shrinks (first, because there is less money), there is less confidence on the side of the producers to be paid later. Then they will produce less.

A 'non-payment' culture will impact distributors far more than it will affect producers of knowledge. The current system is setup so that creative input is bought off with a pittance and massive profits are generated by distributors during their exclusive ownership through copyrights, licensing and patents. 

In a system where content is self published, your 'non-payment' system, the materials merit will determine its revenue generation. The margins of the publishing business shrink as the barriers to entry continue to decrease and the market becomes more crowded. In these conditions of zero economic profit the only differenciators are unique, interesting and original content or possibly massive advertising. The rational behavior of weak producers iin these conditions is to quit and do something they can  make money at.

Dear Martin,

I am not an economist either but I think that may be a good thing. It is perfectly clear from the recent financial disasters that economists do not understand their own subject. I knew the 2008 crash was going to come soon in 2006. I was surprised it had not arrived already, yet governments advised by economists claimed nobody could have predicted it. 

You say that less money means less movement, but why? And where did the money actually go. Nobody burns sterling notes, or dollars. The amount of money is the same during a crash - and its total value is zero. I have a feeling that most people do not understand money at all. If goods and services become almost free then we are all richer because our money buys more. The only issue with making certain things cheap is that some people may have to earn money a different way. In the past information was traditionally free or secret. (The Portuguese told nobody that they were catching cod in Canada before Columbus, so the story goes.) Isaac Newton was paid a living by Trinity College because his production of ideas was a good advert for the business of teaching rich students. Throughout my life I have produced information on the understanding that it was freely available to everybody. The US system of trying to make all information a commodity has always seemed to me far less efficient and productive. About twice as much is achieved with about ten times the resources.

To my mind cheap information and culture or anything else is only a worry for those who believe in capitalism and it is now quite clear that capitalism is defunct. Just look at the FTSE for UK stocks and shares - since 1985). (https://uk.finance.yahoo.com/q/bc?s=%5EFTSE&t=my&l=on&z=l&q=l&c=) For 15 years it has stayed flat, with dips. The high priests do not seem to realise that Atahualpa is dead. The only advantage of lots of money moving around is to the people who get a rake off from money movement - bankers etc. In a more collective system these people could be doing something useful, like nursing the sick, or mending roads or composing beautiful music. What is the point of the poor salmon pumping more and more anaemic blood around its veins when all this achieves is to feed more lampreys gorging at its throat?

Dear Jonathan,

I was in the same boat with the economists and did not predict anything…

You gave a lot of interesting points – let me try to comment on some.

Agreed, the situation of free information is a much better situation compared to the past. And this is acknowledged by Lanier, too. But he depicts also the dark side, and the core problem is mentioned by you: “… some people may have to earn their money a different way…”

One argument in Lanier is that the producers of more or less automatically distributed knowledge will have to earn their money with jobs “outside”. These jobs will not correspond to the most developed skills of these people. So the level of skilled work statistically decreases.

If I may say this, the older generation (I am talking of my generation) is in the comfortable position to be paid not for single contributions but for a “job with a permanent function” and with a guaranteed income.

A question for Lanier: why couldn’t the situation go on where successful researchers achieve a position “with a permanent function”? As far as I understand him, he is saying that nobody can make a living from producing things that are free and the incentive to produce them will not last for long.

Less money? – Indeed, the money wasn’t burnt. – But isn’t it now in the hands of those who got enough and who won’t spend more of it to consume, while the average consumers have less of it? (I am not sure, we would need some empirical data. Moreover this is not the main point.) – Assumed there is more money now – then we should see inflation, shouldn’t we?

My remark about “less movement” (not “motion”, thanks, Jonathan) was about a future situation where everything gets cheaper. I think there will be less incentive to produce anything. This is the “producer’s view”.

When there is a dissent between different views here, then it is not about a “rightist” or “leftist” view, but about a “consumer’s view” vs. a “producer’s view”. Am I right?

There were many more interesting points in your comment, in particular about information that is kept secret. Let me take more time to think over these points.

Regards,

Martin.

Dear Martin,

I don't pretend to know the answers to all this but I think there are two different issues.

If new knowledge and creative material is available for free and that 'shrinks the economy' as judged by GDP does it matter? I can't see why. We produce far too much rubbish and we only have to in order to keep tax levels low and still have a government revenue, because of an obsession for keeping tax rates low. All that happens is that we pay the same amount of tax but have to grind our lives away trying to raise it.

If free distribution discourages production of new knowledge and creative material then that would be a pity but I doubt it would. The creative urge and the thirst for knowledge run rather deeper in the human psyche than money. Van Gogh hardly sold a single picture. Einstein was never paid for special relativity. I sense a degree of whinging going on!

And I agree that there is nothing rightest or leftists about this - just a bit of common sense.

Dear Jonathan,

This discussion is going to give me new ideas. Couldn’t be better. I’ll keep it short:

Shrinking is perhaps no problem for a shrinking population but a big problem for a growing one. It should be regarded in a statistical way – not as a problem of distribution among a handful of people who know each other. It should be viewed as a more global process where at a certain point in time there will be less goods (if my “Incentive theory” is right).

Knowledge: let’s distinguish two sorts of knowledge: a) knowledge that is relevant for a society such as medical and engineering progress, - b) “irrelevant” or “luxury-” knowledge such as the rediscovery of forgotten knowledge, quiz shows etc. Now we are getting a problem:

Production of knowledge is a matter of time. When the younger ones have less time (because they must earn money) then the production of knowledge is in the hands of the older ones. This group is interested in other questions (“luxury – knowledge”?) Even when the older ones are interested in relevant knowledge (e.g. medical progress for the older ones) they, too, have less time because of the administrative obligations in their jobs.

Result: less production of knowledge, less novel knowledge, more knowledge that has to be rediscovered because it had been forgotten. There is less novelty in the knowledge, because there had been a reason to forget the forgotten knowledge, in this respect we can be sure. The rediscovery is at best a repetition unless it leads to new combinations of pieces of information. This is not something that happens three times a day. 

I do not claim that historical knowledge such as the information provided by you in your post is worthless. It can give us new ideas and insights, of course.

Regards,

Martin.