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"Getting Rich off Those Who Work for Free" [FOX 2007]
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It might seem very odd to look to a long-dead Russian
anarchist for business advice. But Peter Kropotkin's
big idea--that there are important human motivations
beyond what he called "reckless individualism"--is very
relevant these days. That's because one of the most
interesting questions in business has become how much
work people will do for free.
Kropotkin was an aristocrat who, after being imprisoned
for his insurrectionist activities, escaped and fled to
England in 1876. He also drew the first good topographic
maps of Siberia and wrote a memoir of his revolutionary
days that has become a minor classic. More to the point,
he proposed in his 1902 book, Mutual Aid: A Factor of
Evolution, that the survival of animal species and much
of human progress depended on the tendency to help others.
That I even know of Kropotkin comes courtesy of the Wikipedia
entry for the "gift economy," the current term of art for
this altruistic approach. Wikipedia is, of course, a prime
example of the gift economy at work. Argue about its
inaccuracies all you want, but the volunteer-authored online
encyclopedia is on its way to becoming (if it isn't already)
the world's dominant reference resource.
Open-source, volunteer-created computer software like the
Linux operating system and the Firefox Web browser have also
established themselves as significant and lasting economic
realities. That's not true yet in the worlds of science, news
and entertainment: we're still figuring out what the role of
volunteers will be, but that it will be much bigger than in
the past seems obvious.
"The question for the past decade was, Is this real?" says
Yale law professor Yochai Benkler. "The question for the next
half-decade is, How do you make this damned thing work?" Benkler
is a leading prophet of today's gift economy, and he fits the
part: his bounteous beard resembles Kropotkin's. He was
treasurer of a kibbutz, a cooperative farm, in his native
Israel. He doesn't mind being called utopian. But neither
does Benkler dream of a world without capitalism. Instead,
he has become an unlikely business guru, with a shop at the
intersection of Commerce and Cooperation. "It's very cool,"
he says. "I find myself talking to all sorts of weird hackers
one day and chief economists of major corporations the next
day, and they're all interested in similar things."
What might those things be? Take the case Benkler makes in
his 2006 book, The Wealth of Networks (available, free, at
www.benkler.org) for the economic benefits of "peer production"
of software and other information products--from journalism
to scientific research to videos of people mixing Mentos and
Diet Coke. Peer production by people who donate small or large
quantities of their time and expertise isn't necessarily great
at generating the original and the unique, but it's very good
for improving existing products (like software) and bringing
together dispersed information (Wikipedia). Often better,
in Benkler's telling, than corporations armed with copyright
and patent laws.
Clever entrepreneurs and even established companies can profit from this volunteerism--but only if they don't get too greedy. The key, Benkler says, is "managing the marriage of money and nonmoney without making nonmoney feel like a sucker." In software, where IBM and other companies charge billions of dollars to install and run otherwise free Linux systems, this seems to be working--in part because Linux volunteers can make money from their expertise and there's a clear understanding of what one can charge for.
In other fields, it's not so clear. In a critique of Benkler's work last summer, business writer Nicholas Carr speculated that Web 2.0 media sites like Digg, Flickr and YouTube are able to rely on volunteer contributions simply because a market has yet to emerge to price this "new kind of labor." He and Benkler then entered into what has come to be widely known in Web circles as the "Carr-Benkler wager": a bet on whether, by 2011, such sites will be driven primarily by volunteers or by professionals.
It's tempting for any professional journalist to root for Carr. I certainly don't want to be replaced by volunteers. But then, this magazine couldn't be produced without the volunteers, such as Yochai Benkler, who allow us journalists to interview them. Cable TV news channels are pageants of volunteerism, with much airtime filled by unpaid guests. The majority of these people aren't motivated by Kropotkin's spirit of mutual aid--they seek fame, an audience for their ideas, higher fees on the speaking circuit. But for those minutes on air, they are working for free.
To read Justin Fox's daily take on business, go to time-blog.com/curious_capitalist
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Fox, Justin (2007). "Getting Rich off Those Who Work for Free".
Time (www.time.com). News Article dated: 2007.02.15.
Downloaded on 2007.09.30 from -[http://www.time.com/time/magazine/article/0,9171,1590440,00.html]-
See also his blog: time-blog.com/curious_capitalist