This is Yihong-Ding’s response to some of our earlier remarks about the measurability of mind assets.
Yihong-Ding:
Thank you for blogging my post and raising these questions. Web evolution is an interesting, but also very important issue that is still less of well study until now. I expect that my thoughts may bring a few momentum for the exploration of this topic.
According to your arguments, I have the following comments.
1) how can something that exists in abundance (zero marginal reproduction costs in an open environment), have a tension between supply and demand, as required in a market for pricing purposes?
mind asset may not necessarily be “zero marginal reproduction costs in an open environment”. What you described is what I called the low-quality mind asset, or the static aspect of mind, such as the explanation of a term as if an entry at Wikipedia. On the Web, these mind assets are presented in digital forms that can be easily copied and pasted anywhere. As you said, we can hardly make charge on this type of asset. The charge is not about the potential value of the content, but is about the quality of the presentation.
At the same time, however, I want to emphasize that this low cost charge on the basic mind asset forms is the fundamental for allowing mind being public circulating asset.
Now let’s watch some other types of mind asset, which I call the higher quality mind asset. For example, a Web widget is a portable Web service that describes certain dynamic aspect of human mind. Although any user may freely embed the widget in his own site, the service provider still has the control over this piece of embodied mind asset. Moreover, based on the “mutual consent of producers and users”, the producers of this high quality mind asset may select to charge the users and the users may select to take the charge or switch to other free or low-cost services. Then you start to see that somehow the “free-market” phenomenon is also effective on measuring the value of mind asset.
But these Web services are still not the really high quality mind asset if we watch it in the grand picture of Web evolution. Humans are going to produce new forms of mind asset with higher and higher quality that is more and more costly to reproduce even in an open environment. Actually, it is similar to our real world of capital. Many of us know how to produce a car, but it does not mean that many of us can successfully produce a car because it requires so many capital input that is out of the capability of ordinary people. Just the same, the Web evolution is to produce mind asset with new quality that can serve people better and better. But at the same time, these high quality mind asset will become harder and harder to reproduce because it requires so much mind input that is beyond the capability of any single person.
By this mean, you can see the tension between supply and demand of mind asset. This is what I say that by presenting mind in Web resources, we are able to objectively measure its value. Superior mind that knows how to continuously produce higher quality mind asset will be granted the high value. Through this way, the respect of humanity becomes realized since the eventual value of public asset is bound to the thinking ability of human brains but not the amount of money that the human bodies own.
2) how can you measure the value of an idea, with its implementation in a marketplace? Can any idea really be ‘uniformly be measured as capital?’, as you claim?
I think I may have already answered this question by the answers I made earlier. But I would like to explain it in more details.
Measuring the value of a mind asset is not about measuring the value of an idea. If you perform a mind asset measurement in this way, you are treating the mind to be a type of capital asset but not a mind asset. By contrast, measuring the value of a mind asset is about how much this mind asset has the ability to produce more mind asset. Such an ability is also the mentioned “quality” of mind asset. The reason you get confused is that you still used to think of a mind to be a capital asset but not a mind asset.
In free market, how do we measure the value of a capital asset? We actually measure it by seeing how much more capital asset can be produced by owning this piece of capital asset. Stock and bond are typical examples.
In similar, the value of mind asset is about how much more mind asset can be produced by owning this piece of mind asset. By contrast, the value of mind asset is not measured by how much capital can be produced by owning this piece of mind asset.
By this understanding, you then may easily see why I tell that static mind asset has less value because they have less ability of producing new mind asset (but not about its own capitalized value). By contrast, dynamic mind asset often has greater value because they usually have greater ability of producing new mind asset (again it is not about its own capitalized value). Also, what I called Web-1.0-quality resources generally have less value than Web-2.0-quality resources because the former ones have less ability to produce more mind asset than the latter ones. By contrast, it is not about Web-1.0-quality resources are less valuable (in the sense of capital) than Web-2.0-quality resources.
Response to Yihong-Ding on the measurability of minds assets
I promised to Yihong-Ding to reply to this contribution of low vs. high mind assets
So here it is.
Yihong-Ding writes that “mind asset may not necessarily be “zero marginal reproduction costs in an open environment” and that there are “higher quality mind assets”.
Yihong Ding:
“For example, a Web widget is a portable Web service that describes certain dynamic aspect of human mind. Although any user may freely embed the widget in his own site, the service provider still has the control over this piece of embodied mind asset. Moreover, based on the “mutual consent of producers and users”, the producers of this high quality mind asset may select to charge the users and the users may select to take the charge or switch to other free or low-cost services. Then you start to see that somehow the “free-market” phenomenon is also effective on measuring the value of mind asset.”
I think there are different things at play here. There is clearly a difference between a simple piece of information and analysis, and dynamic software-based ‘information assets’ that can help generate a lot more information production. However, the complexity of a software piece does not preclude its copy-ability. A good example is a movie, very expensive to produce, but just as cheap to copy. Apart from the objective copy-ability, there is also the competitive pressure: if you want to have a popular widget, do you have any choice but to give it out for free, how else would you achieve network effects and market share.
The only ‘escape’ from this copy-ability is to achieve platform effects, which mean that because users are investing their knowledge, reputations, and relations in the platform, even when that platform is open, it creates a collective learning which is very hard to replicate outside of the platform. I would say Google Search, or delicious or flickr are good examples of this. You can create another search engine, as good as Google, but it would still have years of advantage in the collective learning process.
But from these examples, it is clear, at least so it seems to me, that the value is created through usage and community, not just derivate from the widget itself.
Granted, if such a platform is successful, this indeed creates a high ‘demand’ for the platform, and the community switching costs preclude an easy forking of the community from the platform. But the demand for that mind asset does not create a simple “price” for it, as it is the very openness and freeness of that platform, and the user-generated content, which creates the value in the first place. Hence, in terms of the monetary economy, the income streams are only derivative, as in selling the attention. What we see is that few companies are making money from selling the primary commodity, say search results, but rather from secondary, derivative, commodities, say the attention of the aggregated searchers.
Moreover, even as use value follows an exponential expansion curve, only a very limited part of that is translatable into monetary value. There is no one to one relationship betweeh the 100 million downloqded YouTube videos, and the income it can generate. The ratios are very low. This is what the crisis of value is about. Google may make a lot of money, but only a marginal number of websites makes money!! Most use value that is generated, even by high quality mind assets, does not generate a lot of monetary income.
Yihong-Ding then moves his argument to even higher quality mind assets.
“the Web evolution is to produce mind asset with new quality that can serve people better and better. But at the same time, these high quality mind asset will become harder and harder to reproduce because it requires so much mind input that is beyond the capability of any single person.”
This goes in the same territory of the argument about community that I just mentioned. It is through increasing participation and user generation that value is created.
This leads to the conclusion that the value of mind assets can be objectively measured: “measuring the value of a mind asset is about how much this mind asset has the ability to produce more mind asset. Such an ability is also the mentioned “quality” of mind asset. The reason you get confused is that you still used to think of a mind to be a capital asset but not a mind asset.”
So, what I understand is this: the value of a mind asset can only be measured by how many other mind assets it produces. In other words: use value is measured by use value. Yhong-Ding even stresses that such value should not be confused with capital.
But this is the problem isn’t it! We have use value, and we have monetary exchange value, but the one cannot be simply be valued by the other, and, as I would agrue, less and less so.
So the problem remains: what kind of value is that mind asset in terms of ‘use value’. How can one type of use value, say informational value, be translated either into monetary value, or into another form of use value that is material in its essence. So the issue remains: how can live from mind assets.
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