Anna Schwartz and Benkler's Wealth of Networks

With Tom Glaisyer's invitation, I had the pleasure today of responding to the noted monetary economist Anna Schwartz' review of Yochai Benkler's book The Wealth of Networks. (Download any or all of the book here for free.) Using no notes, she delivered a trenchant series of critical reflections on Benkler's work for 20 solid minutes. And, one may mention as it is only to her credit, she is 93 years old. That's right, 93. Schwartz coauthored with Milton Friedman, perhaps the key neoclassical economic thinker of the last half of the twentieth century, the seminal A Monetary History of the United States (1963); she also reports she is working on a history US state intervention into foreign currency exchange from 1962, which continues her (truly) lifelong interest in money supply. May I be doing anything, let alone making 27 year-old PhD candidates very nervous, at 93! I found her charming and wonderfully ferocious.

She reads Benkler as arguing that the (intensive capital-holding, proprietary, market-based) industrial information economy is substantially different from the (low capital-holding, nonproprietary, nonmarket-based) networked information economy in that it allows social production to flourish in a new way that emphasizes individual voluntary choice of the factors of production. In the traditional industrial model, market signals or managers make such decisions; in Benkler's networked model, individuals self-select projects based on their capacity, producing ostensibly a low-cost model of production. Benkler, in her reading, would have the second subsume the first. (This last point is patently wrong: he argues for coexistence of market and nonmarket forces, not the domination of one over the other--and, to prove the point, he does so in the market-friendly terms. An argument for their separation would ostensibly do well to separate vocabularies as well.)

She counters Benkler's points with the assertion that all preexisting models of social production are flawed to date. The totalitarian model has under-performed as a non-voluntary mode of production; and almost all voluntary social production models have relied on charismatic leaders to urge production while requiring conformity and loss of individual freedom. The Kibbutz movement in Israel, among many other semi-religious communities (many in early American history), exemplify how social production can exhaust its founding community after a generation.

She wonders then whether there are sufficient signs of discontent or enthusiasm surrounding the idea of commons-based peer production to test the trajectory of such work; and points to omissions in the work such as an insufficient treatment of the networked model's incapacity to produce hard-material goods for consumers, like cars or barges or highways; that the internet is a tool and all tools can be used for good or ill; and lastly that copyright is only one restriction to information flow and perhaps not the most important subject for reform: rather that the state directly intervenes itself in ways to render unusable any material procured by Freedom of Information Acts requests.

My comments were more youthfully optimistic, uncertain but hopeful. The book's key points in my mind follow: Benkler's book boils down to a lesson we should have learned from Sesame Street, i.e. share nicely. It successfully critiques intellectual property policy as an inefficient way of marketizing non-rivalrous information in the public commons; the fact that the reproduction or distribution costs tend toward zero means property rights no longer need to tax nonproprietary models of production; nonproprietary models rely on altruism and other motivations that do not easily lend themselves to exchange values. They also rely on the 'excess capacity' or time off-the-clock of laborers in fields like education, arts, scientific, and industry research. Even the act of voting can be read as a leisure activity. Benkler's book looks to monetize social production in ways that will benefit all: in Lucas Graves' fine phrase, all ships will rise when the tide comes in.

Despite whatever complaints, the information networked economy produces incredible amounts of use-value. We use it all the time, we even give back sometimes. How use-value becomes exchange-value is not only the central question at hand, it may in fact be the problem. I wonder not only how should we do it, but should we do it at all?

Does employing the language of competition and zero-sum games of law and economics reduce nonmarket social production to a battle with market production logics, which it will surely loose on its own terms? That is, will Benkler's project of benefiting all by translating social production into the language of markets condemn it to the benefit of those most fluent in exploitation and enclosure? Finally, will the attempt to widen the calculus of competition, equilibrium, and efficiency to include previously unaccounted positive and negative externalities of the culture of social production, in the end, (a) monetize those factors into private gain for the well positioned, (b) break upon the corporate logics to the wider dynamics of industry survival (i.e. that everyone can benefit when we share knowledge), (c) both, or (d) something else? Is asking which one wins--nonmarket or market forces--already to have lost; should instead we ask how they can coexist? If so, what language do we have to ask it?

The questions we ask already perform the language we rely upon to answer the questions. If one asks about the utility of social sharing from a purely neoclassical economic point of view, his or her answer will tend to be pessimistic and backed by hard evidence. If one includes terms themselves based on optimism (altruism and other seemingly non-rational forms of generosity), his or her assessment will be more complicated and uncertain. Thank goodness for behavior economists struggling with the incongruities and gaps between human behavior and traditional incentive theory: may that field give economics, law, and the rest of us the language in which to ask better questions.

Benkler's work is both important and weakened because it focuses heavily on the present. However, the timelessness of writing a book on Internet-related case studies and examples quickly dates Benkler's book. A deeper historical perspective on the social production model implicit in human history can only fortify and stabilize the debate for itself. This is not a real critique, however. His one book does too much already, if anything. Future work in this vein should draw upon the past.

As Rasmus Nielsen has pointed out, it may also do very well to account for massive information infrastructure costs, the fiber optic cables, the wifi, and the laptops that the Benkler's optimism depends upon in the international development scene.

In response to Prof. Schwartz' comments, it is worth noting Kibbutz et. al. tend to be very close-knit, intense communities, whereas the virtue of peer production network communities tend to be the very weakness of that community. For the most part it is an interest in work, not a larger vision of relationships and life, that unites these communities. In Mark Granovetter's influential 1973 title, it is "the strength of weak ties" that matters here. Lucas Graves also points out that networked peer production communities are united by, if anything other than the will to work, the very ideology of sharing. Analysis of the incentives driving these communities, then, must include the more complex calculations of human behavior.

Lastly, the optimism of Benkler's book (or, for instance, his live wager against Nicholas Carr) may in fact be a structural component of his very argument. Both the economic logic and the tone it employs are, in a strong sense, faith-based. Faith, I argue, is fine provided one hard condition: that it leads to individual action. Without work, faith in any mode of human interaction is senseless. For those who would entertain Benkler's optimism, we cannot forget the incredible amount of labor implicit in his call to collaboration.

Altruism itself is preconditioned on the applied belief we will (personally, incalculably, and possibly calculably) benefit from helping and sharing nicely with others. It is not surprising its best arguments depend upon the same logic.