Review of The Wealth of Networks

In “The Wealth of Networks,” published in 2006 Yale University Press, Harvard Professor Yochai Benkler describes a new model of economic production that he calls the networked information economy. He maintains that the declining price of computation, communication, and storage have placed the material means of information and cultural production in the hands of a significant fraction of the world’s population – on the order of a billion people around the world. Benkler breaks his study of the networked information economy into four areas:

1. Analysis of the role of technology.
2. Analysis of the effects of networked information economy on individual autonomy.
3. Examination of the shift from the mass-mediated public sphere to a public mediated sphere.
4. Emphasis and discussion of individual action in non-market actions.

The signs are all around us. Newspaper revenues are on the decline and some have predicted the demise of the fourth estate as we know it. Book publishers caste about in search of a new model. Benkler’s own publication is printed by Yale University Press but is also available on his Web site for free download under Creative Commons license. The entertainment industry is undergoing major transformation. It is no longer necessary to distribute music or movies on rivalrous media. The digits of computing have made non-rivalrous options available. The opportunities to share, mix, and re-use content abound. The power to produce compelling content that can be shared widely is now in the hands of the individual. Enterprise level software is produced by volunteers. This is software that legitimately competes with industry giants such as Microsoft, Apple, and Oracle. Benkler offers a powerful and persuasive argument for an economic model that explains this profound shift in the way that a significant portion of humankind communicates and the economics of that shift. He calls upon powerful examples of social production that have arisen in the first 5,000 days of the World Wide Web:

• Wikipedia
• Seti@home
• Linux
• Slashdot
• Google

In the old industrial information network, the cost to enter the market was prohibitive. Large and expensive presses were needed to produce printed mass media. For entertainment, expensive cameras, recording devices and studios were required. Broadcast media required access to one of only a few channels available and then millions of dollars in equipment and staff to maintain a network. The motivation for engaging in these enterprises could really only be one thing, revenue. Now, anyone with an $800 computer, a broadband connection, some software, and a little talent can reach millions of people. Money is no longer the only reason for participating in content production. People engage for a variety of reasons, for example, status, reputation, community, truth or fun. The ninth largest Web site in the world, Wikipedia is produced almost entirely by volunteers. Today everyone is a content producer. Very few cell phones come without cameras. Blogs, wikis, forums, and social networking site gives anyone with a connection to the network an opportunity to contribute.

Benkler’s arguments find their roots in the free software movement and the hacker ethic. Benkler argues strongly for setting information free and enabling wherever possible, the ability for people to share and collaborate. He argues that government’s role, particularly in North America and Europe, has been heavy handed on the side of the status quo. At times, there is a temptation for me to step back from Benkler’s arguments and wonder if he is just another wild eyed academic liberal who has lost touch with the world in a finely feathered nest called tenure. Under analysis, however, I feel that his arguments hold. Due to technology the way that people communicate has changed. It is a change that is on the scale of the alphabet or the printing press. It has happened and it is undeniable. His perspective on this shift is undeniably liberal. I would be interested in reading a conservative companion piece to balance his view but to date, I am aware of no equal.

I highly recommend The Wealth of Networks to anyone who wants to understand the economics of the internet and digital media. If you have time to read one book on this subject, this is the one to pick. It can be dense. It can be challenging. This is not a book that you will breeze through in a weekend. Rather, it is thought provoking and can inspire contemplation and further investigation. In my opinion there is no higher praise for a book. I predict that this is a book that you will reference time and time again.