Viviane Serfaty • “The Flawed Economics Of The Internet”Note: This article is part of PolicyMic's Office Hours, in which professors weigh in on topics of expertise. Ask questions and respond to the article, and the professor will reply to your comments.
On the internet, conventional wisdom about ownership and property seems to be turned upside down. Very early on, partly under the influence of the then-popular theory of cybernetics and its arguments in favor of the free circulation of information, the file transfers and e-mail protocols essential to the internet were given away for free by the programmers who developed them. The Unix operating system was initially created by AT&T and subsequently passed on at no charge to the computing community to comply with anti-trust legislation. It was then continuously improved by programmers the world over, resulting in the myriad versions of Linux.
The culture of sharing promoted by the early computing community influenced commercial companies such as Netscape, which was the first to offer its navigator for free. The offer of free goods is such a powerful competitive advantage that all other players must align. And sure enough, all of the major developments that have emerged subsequently — Google and Facebook, to name a few — offer their services at no charge to the user. The contribution culture that is so prevalent on the internet has spilled over the business world and pushed a new model we might call a “gift economy.” Wikipedia is the perfect illustration of this trend: With people contributing for free and using it for free as well, the site thrives and triumphantly belies the “tragedy of the commons” theory — the idea that whenever anything is available at no charge, some people will overuse or otherwise deface the resource and deplete it.
So why do people care enough to edit a Wikipedia article or create a killer app that will very likely not pay its own way? Why do they bother to rate hotels or review books on Amazon? Why do they devote so many hours to writing blogs and responding to reader comments?