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Tuesday, November 19, 2013

The replicator economy of digital publishing (publishing in the twilight of the printed word)

by John MacBeath Watkins

Matthew Yglesias has an interesting post on the economic system portrayed in Star Trek: The Star Trek Economy: (Mostly) Post-Scarcity (Mostly) Socialism. His argument is that in a world where replicators can provide as much as we want of anything we want, people freed from want are working from motivations other than money.

What he fails to notice is that we are increasingly experiencing this economy in the publishing world, except that we haven't worked out the economics. Computers can replicate information for very close to zero marginal cost for each copy, and can copy so easily that it is difficult to prevent people from replicating any information you may have spent great time and effort assembling. I've seen my own work reproduced on another blog without attribution, for example.

One result is that in constant dollar terms, the information sector of the economy has barely grown since the late 1980s, which pretty much coincides with the popularization of the internet. The New Yorker has an article up about this (linked to in the last sentence) that points out the problem with this -- while producing something at lower cost and selling it cheaper represents a gain in productivity, as soon as it becomes free it drops out of the economic statistics completely.  I'm sure Wikipedia has value, but how do you assess that value in national income accounting?

We know that people are consuming vastly more information with greater ease than ever, and yet, according to our government statistics, the information sector is stagnant, and the publishing industry is now not much larger than the video game industry. The U.S. book publishing is a $28 billion industry, the biggest sector of which is textbooks, while the much younger video gaming industry is turning over $20 billion a year in North America and growing at about 9% a year. This reflects, to some extent, the greater success of the video gaming industry in monetizing its activities while much of the publishing industry has seen its backlog of non-copyright books become free on the internet.

When I was in graduate school, one of the professors in my department had a specialty in the question of what we would do with our leisure in a future where productivity made it possible for us to labor less. I thought the answer was obvious; we'd enjoy our leisure as unemployment.

But there are alternatives. That icon among conservative economists, Friedrich Hayek, said in his 1994 book, Hayek on Hayek: An Autobiographical Dialogue, "I have always said that I am in favor of a minimum income for every person in the country."

Well, if the country was Switzerland, there's a possibility he could get his wish. The Swiss have a system of citizen initiatives, and they've gathered enough signatures to get a vote on whether to provide a basic income of $2,800 a month to their citizens. I believe that amounts to something like a third of Swiss GDP being redistributed. Switzerland already spends about a third of GDP on government spending, so that means to make this sustainable, they would need to tax about two-thirds of GDP.

I'm not convinced that the Swiss will vote for this or that it would be good policy. For one thing, only the information part of the economy is in Star Trek territory. We can't replicate food or transportation in the same way. We may be in a post-scarcity world as far as information goes, but we will always be faced with a limited amount of land.

The problem, in fact, is how we get people to keep producing information if they aren't paid. Wikipedia follows the public television system of requesting donations when they are short of money, pays almost no one, and is supported by a charitable foundation.

Something similar is happening to the software part of the information sector. Firefox is supported by the Mozilla Foundation, OpenOffice is supported by the Apache Software Foundation.

And I, of course, am writing this without being paid because I can't help myself. I'm the sort of person who likes to think and write in the way some people like to drink and dance, or watch television, or play video games. You are reading the output of a restless mind.

But once information is taken out of the market economy, motivations for providing information change. In its entry on the guaranteed minimum income, Wikipedia quotes Hayek saying clearly that he advocated a guaranteed minimum income, while in its section on the "basic income," the same source claims he did not advocate what he said he did, and quotes him on the difficulties of instituting such a policy.

It's the same policy under different names, and the differences in information provided by the different Wikipedia sections reflect the different motivations of its contributors. Wikipedia is famously crowd-sourced, and does not pay the people who provide the information. Therefore, the people who contribute may just like writing up information for people or they may have an agenda.

One of the cries of the founders of the internet was that information wants to be free. But those who gather information want to be paid. When information is free, providing information becomes a hobby.

Yglesias mentions a couple of the instances of what appear to be businesses in the Star Trek economy, such as Sisko's Creole Kitchen and Chateau Picard,which produce artesanal versions of widely available products. He clearly thinks these things are being done pretty much as a hobby:
"The point of running your restaurant or your vineyard is essentially to show off your mastery, not accumulate wealth. There may be some more-or-less formal exchanges, but the key point is to get the output into people's hands and not work so hard as to make yourself miserable."

The problem is, markets provide a system of value which allows us to allocate resources. How does this post-scarcity system work? How does the system learn what to produce, thereby avoiding scarcity? I'm afraid the Star Trek economy as envisioned by Yglesias is pure science fiction, and not the sort of hard SF that tries to justify its suppositions as possible.

The ethic that information wants to be free has devastated the news industry, with the result that in the state of Washington, the number of reporters covering the state legislature fell from 34 in 1993 to 10 in 2008. The ranks have recovered slightly since then, but the effects of taking information out of the market economy are certainly showing.

As a former journalist, I can tell you that no one goes into the profession to get rich. You have to believe finding things out and telling people is a public service, and see yourself as part of a higher cause in order to work as hard as most journalists do, for as little money and prestige as they receive. But such motivations are not enough. You must also keep body and soul together while you do it, and get the feedback that your work is valued. A paycheck helps with that.

Mr. Yglesias is no doubt like me, in that he would think and write as long as he had the resources to do so, but in the grand scheme of things, can we rely on selflessness for our information? Yglesias and I might be willing to do the writing we do to "show off your mastery," but the raw material we think with, the information reporters, statisticians, and others gather, is less likely to come to us that way.

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