Tuesday, September 04, 2007

Economists have long used the terms Public Good and Private Good to describe categories of valued and useful goods and services with the latter being rivalrous and excludable and the former not. The arrival of information technology and an online culture has birthed a strong intellectual movement in favor of an intermediate, collaborative and robust " creative commons", as promoted by such thinkers as Lawrence Lessig, Howard Rheingold and the authors of Wikinomics, Don Tapscott and Anthony Williams (Wikinomics is, incidently, an excellent book. A highly stimulating, must read).

Historically, the intellectual atmosphere available to millions in "the creative commons" of the internet was something available to a rarified and usually economically advantaged, few. Only until very recently, it required a career in a university or at think tanks like RAND to find such an atmosphere. In previous centuries, it was the salons of Paris, London's Royal Society and the courts of the Italian Renaissance that served as hubs for intellectual ferment. American founding fathers like Thomas Jefferson, John Adams, Benjamin Franklin and Benjamin Rush among many others, kept up a voluminous correspondence in order to grasp at the straws of such interaction.

Today, all that is required is a cheap PC and a reliable ISP connection and more brilliant intellects are potentially available for connection to any given individual today than ever before. The magnitude of such interactions are greater than at any time in history and as social networking and Web 2.0 apps, wikis and iPhone type devices become as ubiquitous as email and webpages, this trend is likely to continue upward for decades. Which leads me to ask if these interactions and the forums in which they take place ought not to be considered " cognitive goods" transitioning between those that are public and private?

While intellectual activity can be considered a non-economic pastime or an amusement in the traditional sense economists have contemplated pleasure-seeking activities, cognitive goods are somewhat different. Obviously, these experiences are highly valued by their participants who invest considerable time on intellectual give and take on blogs, wikis and listserv groups, but they do not rise to the category of a financial investment in formal research ( though they could easily lead to that happening). While intangible, cognitive goods are frequently stepping-stones or catalysts to productive economic activity down the road and the creation of new or improvement of existing private or public goods, unlike say, eating a piece of cake, playing volleyball or watching television.

Moreover, the creative commons licensing structure encourages concepts to be kept in play for others to use, adapt and expand at a future date into useful goods or services. Arguably, the case can be made that cognitive goods would serve a transitional, facilitating or storage function for potentially, economically productive, ideas (Tapscott and Williams have an interesting chapter on the forums themselves that they term "ideagoras").

I'm not settled on this concept and I'm interested in hearing reader thoughts, particularly if you are well versed in economics, IP issues or related fields but the floor is open to anyone. Good idea ? Poor? Redundant? Needs more work? What ?

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This is pretty mind-blowing stuff. Perhaps material for a series?
Hi a.e.,

Thank you!

There will be an in-depth review of Wikinomics, relatively soon. Perhaps an additional post on an another implication of the book that Tapscott and Williams do not spell out.

OK, I'm not an economist (and I often joke that all the economists of the world, laid end-to-end, would still not reach a conclusion). But I do appreciate the value of economics in providing a context for trends -- especially on a macroeconomic scale.

Your "Top Billing" Blogroll for this past week (Art Hutchinson's brilliant post on risk, prediction and rationality) is one such example of "cognitive goods" that enhance our creative commons.

Another (perhaps more apt) notion that was buried in the intellectual troposphere until recently was the Nobel-winning work of Prof. George Akerlof at my alma mater, the Univ. of California. [Note: When you see "U.C.", pun intended, it means Berkeley. All other, lesser U.C.s need caveats: UCLA, UCSB, etc.]

Akerlof won the 2001 Nobel in Economics for work leading to his 1970 paper on the "Lemon Law": a critique of the depressive effect on prices (values) where there is a deficit of trust and information. His metaphor (the used car market) opined that there is a trust deficit between a buyer and a seller of a used car, and that the buyer lacks the "perfect knowledge" (or at least guarantees) he would have for a new car. Therefore, he is less willing to pay for the value of the car -- even though it may be in perfectly fine shape.

The impact of imperfect information is what has vexed strategists and planners for millenia -- a vexing that has increased with today's adaptive adversaries who play by different rules.

Perhaps the intent of "creative commons" licenses are to preserve some semblance of attribution in the exchange of cognitive goods. But more likely, I think we will see a dramatic right-sizing in the marketplace around the notion of intellectual property. "Better is the enemy of good enough" -- and the quality of free ideas (or of artisans willing to share their ideas openly, like the Dave Matthews Band) will push the non-competitively priced out of the marketplace.
My initial reaction is: "Holy Crap"! (Note: this is a positive/excited response)

I will think a bit more on this before replying.
Hey Shane,

Art is definitely whip-smart. He doesn't post very often but it's always of a very high quality level.

Thanks for the part on Akerlof (hey someone outside of Chicago has a Nobel in Econ ???) -Tapscott and Williams feature Coase but Akerlof would appear to be hand in glove here, conceptually speaking.

Information tech has fundamentally changed playing fields. You are correct -eventually there must be a "right-sizing" but when ? Right now the leverage point comes from the fact that while the potential is broad, best practice (or even "better practice")in harnessing information is radically unevenly distributed. The comparative advantage of the early adapters right now is vast.
Hi purple,

Thanks! Glad you liked it. Take your time -I'll still be here :O)
Brilliant, Mark. A quick thought - I'd agree that even a good post/comment thread is a valuable commodity. I'm confused as to how a 'right-sizing' would play out - or what that would even look like. I think the value of cognitive goods (and, yes, I think you're on to something there) is additive in such a way as to preclude devaluation. Maybe I'm not seeing the marketplace for the goods. I must think more on this.
Shane, love it! (no caveat) and Cal Band Great!
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