Friday, March 02, 2007

Commons and markets

I attended a Fellows meeting last week at the Annenberg Center at USC last week. The topic that generated most interest was “the commons.” I began to suspect that “commons” is a frame that culture-studies people almost take for granted, in the same way that “markets” is the default for business-studies people. If the meeting had been organized by a business school rather than a communications center, the conversation would’ve been about markets. In both meetings, attendees would’ve argued that their world view was the most certain source of innovation.

While each side says the other is included in their approach, the terms function as shibboleths.

  1. collective, sharing, relationships, inclusion
  2. abundance
  3. public goods
  4. cultural studies, academics
  5. generates positive externalities
  6. socialism
  7. pro-government, state management, anti-corporation, liberal
  8. open, shared
  9. suspicious of profit, trusts in altruism
  10. feel threatened by the market “second enclosure”, concentration of ownership
  11. unlicensed spectrum
  1. competitive, exclusion
  2. scarcity
  3. private goods
  4. economics, business
  5. worry about burden of negative externalities being taxed; focus on internalities
  6. capitalism
  7. anti-government, pro-corporation, conservative, libertarian
  8. closed, proprietary
  9. trusts in profit, suspicious of altruism
  10. feel threatened by loss of property rights implicit in commons rhetoric – “theft”
  11. licensed spectrum

Commons and markets seem to function both as frames and as signaling devices. They’re frames because they each highlights certain aspects and suppress others; and they function as signals because someone who talks in terms of (say) commons will be trusted on a broader range of socio-political issues. Commons is a code for signaling a left-leaning political perspective; markets ditto for the right.

Conceptually they complement each other; commons and markets are like yin and yang. Each needs the other:

Markets need commons

  • public goods (defense, clean air) context in which market is embedded
  • common knowledge as basis for progress – incentive to publish inherent in limited time patent monopolies

Commons need markets

  • farming example: raise sheep on common ground, but sell meat/wool in a market; ditto for lobster fishermen
  • academics creating a knowledge commons are paid out of surplus wealth generated by market capitalism (taxes, foundations)

One can see the Internet from either perspective

  • common protocols, languages
  • commercialization ex VC investment: Yahoo, Google, Amazon, YouTube

That raises the question of what their superset might be. A possible containing frame for commons and markets is “decentralized coordination.” This is itself part of another dichotomy: centralized vs. decentralized coordination. An example from spectrum policy: wonks who argue about unlicensed vs. licensed allocations would agree that either is an improvement on the traditional “command-and-control” system of administration. Saussure may have been right that meaning comes from difference; in that case, there will never be a single non-contested perspective.

I’m most interested in the nexus: how do commons and markets complement each other, and how do you calculate how much of each you need? To what degree can one formalize the interdepence of markets and commons? One can do a simple calculation for real estate to show that a non-zero percentage of public parks increases property values. I’d love to do the same for spectrum, but haven’t figured out how, yet.

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