Digital sharecropping

Ed Felten reports on a blog entry by Nicholas Carr:

“What’s being concentrated, in other words, is not content but the economic value of content. MySpace, Facebook, and many other businesses have realized that they can give away the tools of production but maintain ownership over the resulting products. One of the fundamental economic characteristics of Web 2.0 is the distribution of production into the hands of the many and the concentration of the economic rewards into the hands of the few. It’s a sharecropping system, but the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money, and, besides, the economic value of each of their individual contributions is trivial. It’s only by aggregating those contributions on a massive scale – on a web scale – that the business becomes lucrative. To put it a different way, the sharecroppers operate happily in an attention economy while their overseers operate happily in a cash economy. In this view, the attention economy does not operate separately from the cash economy; it’s simply a means of creating cheap inputs for the cash economy.”

To which Ed Felten replies by separating use value from exhange value:

The most interesting assumption Carr makes is that MySpace is capturing most of the value created by its users’ contributions. Isn’t it possible that MySpace’s profit is small, compared to the value that its users get from using the site?

Underlying all of this, perhaps, is a common but irrational discomfort with transactions where no cash changes hands. It’s the same discomfort we see in some weak critiques of open-source, which look at a free-market transaction involving copyright licenses and somehow see a telltale tinge of socialism, just because no cash changes hands in the transaction. MySpace makes a deal with its users. Based on the users’ behavior, they seem to like the deal. ”

I would like to add the following commentary on my own. If we accept a hierarchy of sharing engagement, starting from 1) doing things for your own benefit alone (collective side effects are secondary); 2) sharing is icing on the cake (as in Delicious tagging); 3) it is a community project building a common resource (Linux and free software, Wikipedia), then the attitude might be different. In the first two cases, the users have very atomized (case 1) or weak (case 2) links, and their motivation for recognition obviates the need to profit in any other way. But in the third case, though the logic is nonreciprocal, meaning usage is free, there are strong links between the user community, and they do not lightly aspect profiteering that is at the expense of the commons. However, when the company contributes in a positive manner to the open ecology of peer production, such companies are well accepted.

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