The idea of a separation of the ethical economy of free sharing and cooperation, from the monetized economy, is really a crucial point of view of peer to peer theory. Of course that does not mean we do not want creative people and voluntary contributors to make a living, but only that this is a separate issue. Directly linking monetary incentives to free cooperation is counterproductive and results in a Crowding Out of the free volunteering.

This point is brilliantly made by Evan Prodromou, who heads Wikitravel, so I want to reproduce it exceptionally in full. His contribution has two parts, a critique of monetization, and suggestions for alternatives.

Paying Wiki-contributors is a bad idea:

“In the world of commercial wikis, the idea is often floated that all contributors should be paid for their efforts. I think this is a bad idea for a number of reasons. I’ve outlined them below.

1. Payment as disincentive. In his interesting book Freakonomics, economist Steven Levitt describes some counterintuitive facts about payment. One of the most interesting is that charging people who do the wrong thing often causes them to do it more, and paying people to do the right thing causes them to do it less.

The best wiki editing is done by people who believe in an important and powerful cause. As so many Open Content wikis show, people will move mountains to achieve a noble purpose. If you mix in money, you’ve instead changed the main motivation to $$$. You direct people _away_ from any noble purpose you have, and instead towards grubbing for dollars. What kind of people, and work, will you get out of that?

2. Low payment a disincentive. When people work for a noble purpose, they are told that their work is highly valued. When people work for $0.75/hour, they are told that their work is very low-valued. Which kind of work do you want to do?

3. Legalities. Speaking of payment: if you engage in an employment relationship with unknown, self-selected people from any country in the world, for any amount of money, you’re going to have to fight your way through labour laws and tax issues all the way to bankruptcy.

4. Market economics. If you have open content, I can copy your content to another wiki, not pay people, and still make money. So by paying contributors, you’re pricing yourself out of the market.

You don’t have to pay people to do what they want to do anyways. The labour cost for leisure activities is $0. And nobody is going to work on a wiki doing things they don’t want to do.

5. No fair system. There’s simply no fair, automated and auditable way to divvy up the money. If you do it by character count, you leave out all the people who engage in discussions, improve content by editing and thus deleting characters, or make hugely important changes with just a few characters. If you do it by number of edits (or non-rolled-back edits), you judge tiny and insignificant edits equal to large, well-thought-out and very productive edits.

Decisions about the relative value of different contributors to an article is too complicated to do automatically. But if you have a subjective system — have a human being evaluate contributions to an article and portion out payments — it will be subject to constant challenges, endless debates, and a lot of community frustration.

6. Gaming the system. People are really smart. If there’s money to be made, they’ll figure out how to game your payment system to get more money than they actually deserve. They’ll use long — no, lengthogonous — words pointlessly to jack up their word count. They’ll set up robots to twiddle out-of-the-way pages. They’ll work on “hot” pages to get more share of the higher profits, ignoring low-volume pages that need a lot of work.

You’ll end up in an antagonistic relationship with your users, rather than a cooperative one. They’ll be trying to get as much money out of you as possible, and you’ll be trying to give as little as you can to them — or at least only get them to work on what you want.

7. Paying for friends. If you can’t convince people that working on your project is worth their unpaid time, then there’s probably something wrong with your project. People are going to be able to sense that — it’s going to look like a cover-up, something sleazy.

If you think you need to pay people to work on your wiki, then you’re doing something wrong. Instead of trying to force your users to align with your business interests, by paying them, you should re-align your business interests to be more in tune with what potential contributors want and need. You shouldn’t have to pay for friends, and you shouldn’t have to pay for wiki contributors.

Other options

“Why should we work on this wiki if you make money off of it?” The facile answer, “We’ll pay you to work on the wiki,” is unworkable. So what other options are there?

The important thing to remember about this question is that it’s not really what people want to know. They want to know, “Why should we trust you to be the steward of our work?” and “Aren’t your motivations different from ours?” and “Are we being duped into working for free by an evil, manipulative entity?” There are a lot of other ways to answer these questions and reassure your contributors of your company’s good faith.

* Be Open. If you have an Open Content wiki, then anyone can make money off of the work there. Let your users know that they’re welcome to use the content, just like anyone else, to make extra dough. Encourage creative re-use of the work, for commercial or non-commercial purposes. The more that contributors understand that the work they do belongs to the whole of humanity, and not just your company, the more likely they are to participate.

* Donate. Set aside a good part of the profits from the site (if there are any…) to donations to related charities. Donations to Creative Commons, the Free Software Foundation, and Wikimedia Foundation are probably all good candidates. There may also be domain-specific charities you can contribute to; if you have a site about pets, say, you could contribute to the Animal Rescue Network.

* Sponsor. There are a number of wiki-related events that happen each year: RecentChangesCamp, Wikimania, and WikiSym. They could all use sponsorship. Your users will appreciate your association with these events. wikiHow has done a great job with this.

* Thank-you gifts. If you’d like to reward contributors for work on the wiki, consider giving thank-you gifts instead. “You’ve done a great job over the last few months — can I send you a WikiWhatever T-shirt?” Other possible gifts would be gift-certificates for online bookstores or sponsored (or partially-sponsored) trips to wiki conferences. It’s important not to make the gifts seem like payment : “You have reached level 4 of WikiWhatever contributor status after 1000 hours of work, and we are sending you a coffee mug.” Thank-you gifts should be in the spirit of the BarnStar.

* Hire from the community. If you’ve got really, really good people working on your site, and you want them to continue, hire them. Wikia does a really good job of hiring active users.

* Pay bounties. This is an option that’s worked well in the Open Source community. Companies will often pay a developer to implement a feature, fix a bug or build a plugin in an open source project that wouldn’t otherwise be a priority. If there’s a job that needs to be done on your wiki, and the community isn’t interested in doing it, offer a bounty to get it done. (Wikipedia has a loose system for third-party bounties that end up as donations to the Wikimedia Foundation, or rewards that go directly to the contributor.) “