Published on:

Free sharing on the net is not incompatible with markets

latest Mind and Matter column
in the Wall Street Journal:


Human beings love sharing. We swap, collaborate, care, support,
donate, volunteer and generally work for each other. We tend to
admire sharing when it’s done for free but frown upon it-or
consider it a necessary evil-when it’s done for profit. Some think
that online, we’re at the dawn of a golden age of free sharing, the
wiki world, in which commerce will be replaced by mass communal
sharing-what the futurist John Perry Barlow called “dot

Certainly, in recent years we all rushed to put our reviews on
Amazon, our travel experiences on TripAdvisor, our photographs on
Flickr, and our innermost secrets on Facebook without expecting to
profit from doing so.

But as the float of Facebook shows, commerce still seems alive
online. The law professor and economist Thomas Hazlett of George
Mason University jokes, “There sure are a lot of billionaires in
this new wiki economy.”

Facebook’s founders, like Google’s, once expressed their disdain
for profit-motivated sharing. Mark Zuckerberg
told the Harvard Crimson
in 2004 that he did not create the
website with the intention of generating revenue. In the same way,
Sergey Brin and Larry Page initially
supporting their search engine with advertising: “The
issue of advertising causes enough mixed incentives that it is
crucial to have a competitive search engine that is transparent and
in the academic realm,” they wrote in 1998.

This is not necessarily hypocritical. Many entrepreneurs
genuinely want to change the world, rather than make a living, and
these three were almost certainly no exception. It’s just that they
discovered that the best way to change the world was to take
venture capital, or ad revenue, and then to have an IPO, as a means
to sharing the product with as many people as possible. The market
is the ultimate “commons” in that it is a forum granting powerful
incentives to share.

Just as farmers with privately owned real property grow ever
more food so they can share it with others, not to hoard it, so
private enterprises in the virtual world share the innovations that
allow people to share information. Dr. Hazlett points out that the
ultimate sharing forum, the mobile Web (which enabled Web surfing
from cellphones), had its first big success in Japan, on a private
platform owned by NTT DoCoMo.

Yet online sharing keeps defying the gloomy prophets who have
been forecasting the enclosure of the digital commons by selfish
landlords, wielding patents, for more than a decade. (Lawrence
Lessig’s “Code and Other Laws of Cyberspace,” written in 1999, was
notably pessimistic about the chances of the Web staying open to
all.) “From each according to his ability, to each according to his
need” has come closer to realization in cyberspace than it ever did
in, say, Minsk.

Even profit, once you look at it more closely, seems more like
sharing than most people think. After all, the “consumer surplus”
of Facebook-the estimated value that people get from using it-is
far greater than the firm’s profit, while “shares” issued to
shareholders make these investors members of the Facebook corporate
commons. Says Dr. Hazlett: “Capitalism really knows how to
appropriate all the good kumbaya, doesn’t it?”

There may be an ancient parallel. The very first
hunter-gatherers to start trading (about 120,000 years ago,
according to the hazy archeological evidence) probably already had
an ethos of communal sharing within the tribe-and an ethos of
violent predation of other tribes. That’s roughly how chimpanzee
society works today. Then they gradually discovered a way to share
with other tribes that was mutually beneficial: trade.

When the limitations of barter became too obvious-what the other
lot has in surplus may not be what you need right now-a common
currency was invented. But that only encouraged sharing through
trade. Likewise the monetization of the Internet’s sharing ethos
will only spread it.

By Matt Ridley | Tagged:  rational-optimist  wall-street-journal