Friday, December 9, 2011

Yochai Benkler on the new open-source economics

In this TED Talk given back in 2005, Yochai Benkler talked about how the development of "social production" is the long term shift caused by the Internet. Examples of this include
  • Linux - note that 70% of critical web servers are controlled by Linux
  • Wikipedia (of course)
  • Google - in the sense that they have esentially outsourced the decision of what is relevant to the web community as a whole in its page rank algorithm.
  • Seti@home - which was for a time the most powerful supercomputer cluster in the world
Why is this happening? Yochai says that for the first time in history, the capital for generating and distributing information is cheaply available to everyone. Previously it was too expensive to have decentralized production. What we're seeing now is the emergence of social sharing and exchange that in some contexts it is more efficient than markets or firms. It is sustainable and growing fast.

Yochai also makes the amusing observation that money is not the greatest motivator. If you leave a $50 check after dinner with friends, you do not increase the chances of being invited back. If the dinner example is not obvious, think of sex.

The biggest disagreement I have with his view is that this is not the first time this is happening. Open source collaboration is in fact the fundamental operating model of the scientific method. Applied science and engineering is often done for economic profit and protected by patents. Basic research however is freely shared with everyone, and done more for social status and personal enjoyment than to achieve large monetary gains.

Developeronomics and the Rise of the Internet and Software

There was an interesting article recently in Forbes titled The Rise of Developeronomics by Venkatesh Rao. It talks about software developers and how important it is for companies to hire and hold on to the best ones.  One interesting claim is that good software developers are not just somewhat better than the average developer, they are often 10x better than the average one, and can make a very big difference to a company.

The most interesting quote, however, is how the development of software has been changing much of the economy, especially once the Internet was developed:
Speaking of history, let’s put all this in perspective for non-software-industry types who still don’t understand just how epochal the birth of the software industry is for the rest of the economy.

As Alan Kay, a major pioneer of today’s software-eaten planet,  pointed out recently, the Internet doesn’t have stop, shut down, or rewind buttons. Once it was turned on,history was essentially rebooted. Software began eating away at the pre-software layers of civilization on the planet, and depositing software-infused layers instead. 
One of these days, we’ll recognize the enormous significance of what’s going on and replace the BC/AD distinction with BI/AI (Before Internet/After Internet), with January 1, Year 0 reset to October 29, 1969, the day the Internet was turned on (if you want to start right, 2012 is actually Year 43, AI).
And yes, this time, there will be a Year 0, if programmers have anything to do with it.
This type of argument suggests that the technological singularity is happening now, and we're living in the middle of it. It's taking a few decades, but that's a blink of the eye if you take a longer term historical perspective.