FITA 1 - LADO A




I would like to thank Professor Steiner and Instituto de Estudos Avançados
da USP for the invitation for this important conference. As we know
Professor Yosha Benkler is a professor of Law at Yale Law School, the
conference Freedom and Justice in Commons, A Political Economy of
Information presents an innovative approach to the economics of
information. In 1978 I attended an extraordinary course on the economics of
innovation at Yale University offered by Professor Richard Nelson and since
then I have been working on this theme. As an economist, I would like to
say that the economics of information and knowledge starts with the
classical economists, since the 50s we have seen an increasing number of
studies and the consolidation of the field. Today, I would like to mention
two main visions, the first one is the Marxist tradition, from this point
of view, the evolution of capitalism is a process of increasing dominance
of capital to other areas of social life. The capital XXXX the social
activities, including the research made at universities. The second vision
emphasizes that production, distribution and consumption of information are
peculiar and crucial for the development of the system, besides, this
commodity is characterized by the presence of indivisibilities, when
information is one unit, externalities the question of appropriability,
where public goods is relevant, and uncertainty, the output can never be
predicted perfectly from the inputs. As a result of these aspects,
Professor Arrow in 1962 proved that the competitive system and underinvests
in inventive activities. Finally, I would like to read the prophetical
words of professor Arrow. "There is really no need for the firm to be the
fundamental unit of organization in invention. There is plenty of reason to
suppose that individual talents count for a good deal more than the firm as
an organization. If provision is made for the rental of necessary
equipment, a much wider variety of research contracts with individuals as
well as firms and varying modes of payments, including incentives, could be
arranged. Still other forms of organizations, such as research institutes
financed by industries, the government or the private philanthropy could be
made to play an even livelier role than they do now". Thank you.



I just said that I thank the invitation and I thank Professor Hélio for
presiding this session, and I was suppose to present professor Benkler, but
I think that the presentation professor Hélio made is much better than the
one I prepared. So I will just tell you how happy we are that professor
Benkler was able to spend these 4 or 5 days, 5 or 6 days with us, he has
been in São Paulo since Thursday and he has a very, very intensive program
of meetings and participated of the XXX workshop and now he is going to
spend today and tomorrow here at the University of São Paulo. So I think we
should much better hear what he has to say, so I think I will ask him to
talk about his subject, which is Freedom and Justice in the Commons, a
Political Economy of Information.



Thank you, with your permission, I will.

Yes, I think we will want to see your laptop from there.





First of all, thank you for inviting me.

You can hear me, at the back there, right?

Thank you for inviting me, it's been a pleasure and a tremendous,
tremendously instructive few days and I've been learning at a very high
base and that's wonderful. I very much appreciate the vice-rectors coming
and opening and I very much appreciate the opportunity to be here at the
Institute. I can skip half my talk now, after your introduction, but I'll
try not to that anyway, because it would be rude. When I spoke, last week,
I spoke in a good bit of detail about, at the XXXX workshop, I spoke in a
good bit of detail on the mechanics of peer production of radically
decentralized collaborative production and on (let me just make sure that I
have the time so that I don't bore you for too long), I spoke about the
mechanics and in detail the economics of the sustainability of large scale
decentralized collaboration among individuals using a social transactional
network, instead of the price system or the firm. In the context of
information production, which, as the vice-rector has explained, we have a
long standing understanding that it requires some non-market components or
the market won't produce it efficiently.

What I want to focus on today, I will repeat some of those things, but
there are many familiar faces here, so I won't, I can promise you I won't
repeat most of it. My emphasis will be on laying out what assuming the
importance, or the rising importance of non-market information production
and radically decentralized individual or collaborative creation, what are
the implications on three core liberal values: democracy, autonomy and
social justice or distributive justice, with an emphasis on human
development in particular. I will spend the least time on autonomy, in a
sense it's the technically, perhaps, analytically, philosophically
technically most nebulous of these concepts, I'll mention and talk a little
bit, but not too much.

So the focus of the talk is that there are two aspects that are central to
the technological economic condition we call the network information
economy, one is the emergence of non-market production, as an important
form of production, the other is radically decentralized production, some
of it can be for the market, it doesn't have to be necessarily outside of
the market, but it's the fact that it's radically decentralized, that is to
say, individuals acting effectively both through the market and not through
the market, playing a much more important role in producing the information
environment, the communications, the media, the media that we occupy, than
we saw during the industrial information economy of the 20th century.

Thank you for that particular piece of information.

Alternative, my basic claim, and I'll try to use examples and some theory
to justify it, is that these alternative modes of production, give us more
robust fulfillment of our commitments to democracy, to autonomy, to justice
and human development. And I'll close by mapping to you a very American
centric view of what the battle is today in the United States over the
institutional ecology of information production, that is to say, the
ecosystem within which this information production is occurring, from the
perspective of the constraints that law and regulation place on how we can
organize production, with obviously the implication being, I'll already
reveal the end, that if non-market production, if peer production are
valuable in terms of democracy, autonomy and justice, and nonetheless we
find a systematic preference in our regulatory system towards industrial
modes of production, we are undermining, or missing opportunities,
understood in these liberal political terms, because of a lack, a failure
to appreciate the sustainability, and indeed productivity, enhancing
effects of peer production and non-market production. So, I think it's
important to see that we are at a moment of opportunity.

Beginning with the introduction of the mechanical press and telegraph, we
saw a systematic increase in the physical capital costs of the necessary
requirements to communicate with the effective social audience one cares
about. Transportation made the relevant economic and social communities
larger, newspapers, high circulation newspapers and telegraph made it
possible to communicate across these larger distances and these larger
populations, but at the cost of increasing physical capital requirements as
a pre-condition to effective communication with the relevant community.
This replicated itself again in radio, not because of the necessities of
the technology, but because of a series of policy choices that were made
that ended up favouring relatively expensive, large scale transmitters and
cheap receivers, I have a piece on this called Overcoming Agoraphobia, that
if anyone is interested in, has a history of this, a synopsis, the real,
major history is Eric Barnell's "Power in Babel". What we see with these
changes happening is that public discourse adapts to a one way broadcast
model, we see the need to collect relatively high financing in order to be
able to communicate effectively and we see the emergence of an industrial
model of organizing information production in newspapers, in television, in
radio, in film, in music, condensing around the necessity of collecting
enough financing to be able to create and communicate the content and then
sales of the content on a large scale. Now, what we see with the Internet
is the possibility of a radical reversal of this particular model, that
begins with the capital characteristics of the means of communication,
which is to say, the difference between a router and a desktop is nothing
like the difference between a radio receiver and a radio transmitter
antenna, or between the little newspaper and the printing press. So we have
a flattening of the cost structure, of the capital cost structure, it's
still a very high capital cost total communications network, but much of
the network is user capitalized, so that the necessary physical capital for
building the communication system is much more widely distributed among the
society of users and, in particular, the necessary, minimum necessary,
physical means in order to participate in a large scale public conversation
is held in the hands of each individual or small groups of individuals, not
only, so, also, but not only in the hands of organizations that can
sustainably collect financing labour contracts, supply and distribution
contracts, in order to control the necessary physical capital.

The result is, if one wants to make a big statement, is that we are
entering a moment where human beings, rather than capital, can become the
organizing factor of our communication system and the information
environment that it makes possible. They don't have to be, we could
reorganize people in firms, but it's possible that's the single most
important, scarce resource, and the one that really presents the
condensation point is human capital. So, this is the part that I can skip
over, because the vice-rector already explained it and gave the quote and
all, but I'll say it anyway, just very much in brief. The standard now,
since Arrow, which is already over 40 years understanding in welfare
economics of the problem of information production really is combined of
two components, one information is a public good, that is to say, it's non-
rival, the fact there can be 100 people in this room, or 99, or 50, or 45,
once I produce the information, that is, this lecture, there's no marginal
cost to having an additional person listen to the information, there may be
in terms of the physical room, but not in terms of the information.
Obviously, economics needs, again, welfare economics relies on marginal
cost pricing to tell us that we are producing efficiently, if the marginal
cost is zero, the efficient access to existing information is when it's
zero priced, but if we price it at zero, we won't get any production in
terms of incentive, so we have the systematic non-rivalry public good
problem. The other problem is "on the shoulders of giants effect", this
problem of cumulative innovation, which already, again, exists in Arrow but
was developed further in a couple of papers by Susanne Scotchmere, ten,
fifteen years ago, and that's the problem that information is both an input
and an output of its own production process, and so, if we say, for
example, that the solution to the public goods problem is that, yes, we
don't get perfect allocation of the existing stock of information, but we
create incentives dynamically for the creation of new information, then
dynamically, at least, we're efficient if we have property rights, even
though we don't get efficient utilization today, but, of course, if
information is both an input and an output, if we get the intellectual
property too high, we are raising the cost of the major input into
information production too much, and part of the uses that we are getting
too little of is new innovation and new production. So there are these
systematic problems that are well recognized in information, well
recognized in the academic literature, perhaps less well recognized in the
U.S. trade representative's policies, but that has other issues.

The basic point is that some non-market, non-proprietary production is
necessary to maintain an efficient information production system, how much
is the genuinely difficult problem to solve, which is to say, we haven't
got the foggiest idea, but we do like this, and we treat it a little this
way and we treat it a little that way, but the basic point that matters for
purposes of this lecture is that we have a broad recognition that some
degree of non-market, non-proprietary production, is necessary to maintain
efficient information production. The cost of information production
includes the cost of communication, fixing and transmitting, the cost of
existing information as an input, and the cost of human creative work,
these are the primary issues, so, obviously the cost of communication was
the primary condensation point that I talked about, the cost of existing
information is the public goods problem, and the cost of human creative
labour, work, is the primary remaining cost after we see that low-cost
processors and ubiquitous network connections, plus the non-rivalry of
information really isolate that. So this is the somewhat more detailed
explanation of the initial claim, that we are reaching a moment where human
creativity is central. The interesting thing here, and this is important
for seeing why it is that we can see distinct value of non-market and
radically decentralized production, is that attributes that make human
beings central are not like the attributes of labour in a Taylorist or
Fordist model, these are not fungible one person who can pull a lever in a
particular way, these are creativity, wisdom, taste, individual experience,
lots of things that go into the ability of one person to look at a problem
and say: "Why don't we do it this way?", or look at a particular claim and
say: "That's wrong because of X", and in this, people are genuinely non-
fungible and so it's very hard to assimilate them into a purely economic
model. The other thing that's absolutely important, is the fact that human
beings act on diverse motivations, so as long as you have very high
physical capital costs that require financing, you have to structure
behaviour along a path that leads to funding of the physical capital, in
some form or another. Once you actually say that the central thing is human
beings and human creative action, people can act for all of the reasons we
act, we spend time with friends, we play, we do all sorts of things that we
consider usually as consumption, but now the network of information economy
actually begin to become genuinely productive activities, as we see in free
software, as we see in peer production, more generally. So, as a matter of
the organization of information of production, the physical economy, and
like it the industrial information economy, because of the physical cost,
largely settled on two modes, and this, I'm here basically playing within
the framework of Ronald Coase and Oliver Williamson "New Institutionalism",
two modes, markets and managerial hierarchy. Most people live productive
life as a part of organizations, as employees, or mid-level managers, or
whatever they are, following orders if you want to call it, if we are
trying to set up some of the claims about autonomy effects, and most people
live much of the rest of their lives consuming from menus of finished
goods, that are relatively heavily advertised and whose content is
determined to a large extent by managerial investment decisions with some
predictions about, obviously, about what the market, about what consumers
will want, but with a play back and forth between what we can produce, what
we plan to produce and then marketing what we have produced. And the
industrial information economy followed the same model, condensing around
the high physical capital requirements. So, if we try to characterize the
networked information economy, I emphasize two emerging phenomena, the
first is the increasing role of non-market information producers, so it's
always been the case that we've had much greater role in information
production, again, referring to the initial presentation, much greater role
from non-market, so academic science, for example, plays a role that is
clearly non-profit and not market driven and yet it is absolutely central
to our innovation and knowledge production systems. Public broadcasting
systems throughout the world have played an important role, even in the
United States, that has so heavily invested in its commercial networks,
still the public broadcasting system played an important role. If you look
even at consumer trust, the necessity of things like Consumer Reports,
which is a very important magazine in the United States, that actually is
the one place people go to get what they understand to be a genuine
judgment about the quality, the comparative quality of goods, that's non-
profit. So there's always played the important role that we don't see in
the production of cars, for example, or iron. Now, as a simple lower
publication costs, wider reach, increased the number of non-market
organizations that are efficacious and the overall effectiveness of these
non-market producers, so the exact same group of organizations, the exact
same motivations that we already see in the non-networked information
economy, become substantially more effective, where the cost of delivering
The New York Times to every desktop is low and the cost of delivering the
non-profit claim is low.

Less well understood, more radical, and what in my examples I will focus on
a little bit more, is what I spoke about on Thursday, which is the
emergence of large-scale commons-based peer production. So, in some sense,
this too is not a new phenomenon, science is a mode of commons-based peer
production, in the sense that each individual scientist doesn't take orders
about what to research from the Dean, doesn't decide on what to research
based on who is going to buy my article, but rather, based on a set of
social frameworks of reputation, respect, teaching, a sense of pleasure in
what we do, we look for what we do and then we share it in a community of
knowledge, not by saying: "If you want this, here, you must pay me", but
rather in a fairly free distribution that doesn't require enclosure. The
Oxford Dictionary is a classic example of a peer-produced dictionary, where
lots and lots and lots of different people looked up words in their own
literature and found the oldest piece of literature they could, sent it in
to one person on letters and he pulled it together as the OED. So, it
existed in the past, however, when it becomes very cheap, easy and
ubiquitous for any person to spend a few minutes here and a few minutes
there with their computer, contributing something like those little OED
definitions into a project that has an integration platform, the phenomenon
becomes not something that's peripheral or just in the academia or once in
a lifetime OED project, but actually becomes woven into normal behaviours,
just like people spend some time watching TV, they spend some time surfing
the Net and one of the things they do is they participate in collaborative
production enterprises. The one that is most prominent, has had the most
focus from economics literature, and obviously has the strongest arguments
on its side, at least in the United States, which is, billions of dollars a
year are made based on it, is free software. Much of my work over the past
few years has been to show that free software is a very salient example of
a much broader phenomenon of peer-production. What do I call peer
production? Peer production is, in general, collaboration among groups of
individuals, ranging off to very large scales that do not rely on the price
system or on managerial hierarchy, either for motivation or for
organization, instead, what we are seeing is the development of social
transactional networks, and we see things, we see elements of what we've
seen in the social capital literature being brought in, we see things in
what we've seen the social norms literature being brought in as multiple
organization, but what we see as the use of social transactional networks,
to motivate people to act out of a variety of diverse motivations, both
instrumental and non-instrumental, both intrinsic in terms of the pleasure
of it and the sense of well-being and participation, and extrinsic in terms
of trying to build reputation, trying to build social relations that can
then be leveraged into either stronger social relations or service-type
market contracts, but nonetheless focus very heavily on building social
networks and social relations. And I spent a good bit of time on Thursday
and I'm happy to go into it later on, if that's the focus that the
conversation wants to take, but I won't spend much more time on it now to
say we can see peer production as sustainable and possibly even as more
efficient than market production, at least in capturing the part of
people's day that is not devoted to their primary job, that is to say, the
ability to pull together variously diverse contributions, from people with
diverse abilities, so that one person who is employed in a particular line
of work, but has a hobby, a talent, an ability to solve a particular
problem elsewhere, can contribute elsewhere, in a project that is set up on
a platform that allows people to come, find problems that they know they
can contribute to, then collaborate on peer-reviewing their own respective
contributions, so that the output is in fact a collection of, perhaps, the
very best talent that is available, that is to say, not the best talent
necessarily in the world, of all possible ways, but the very best talent
available to work on this problem somewhere in the world, among the
universe of many actors, who are willing and interested to work on this and
then building platforms that have to do with both sometimes building
technical constraints into these systems, very often building social norms
into these systems, in order to avoid some of the defections that one often
expects with the absence of property rights and in order to coordinate who
does what and what contributions. This may be, for people who haven't, who
don't know about free software and weren't at my Thursday lecture,
difficult, as we go through the specifics of looking at the political
problems, I will, I will give examples, and I think that will make it
easier to actually feel what this looks like. So let's start by talking
about democracy, and I think things on the economics will also become
clearer as we talk about the democracy; so there are two basic critiques in
communications theory, particularly in the political



FITA 1 - LADO B



.my Thursday lecture, difficult, as we go through the specifics of looking
at the political problems, I will, I will give examples, and I think that
will make it easier to actually feel what this looks like. So let's start
by talking about democracy, and I think things on the economics will also
become clearer as we talk about the democracy.

So there are two basic critiques in communications theory, particularly in
the political economy of communications, two, they're wide diverse
arguments, but I think they boil down to two genuinely crystallized
critiques of the commercial mass media as a platform for democracies. The
first one I call The Berlusconi Effect, and the second The Baywatch Effect,
we'll talk about the second in a few minutes. The Berlusconi effect is very
self-describing, but my favourite quote that explains it is Howard Jonas's
of a small entrant into telecoms in the US a couple of years ago, and in an
interview says, sure I want to be the biggest telecom company in the world,
but it's just a commodity, I want to be able to form opinion, by
controlling the pipe you can eventually get control of the content. So,
that's the ambition that is the basis of a critique, and obviously, the
counter-argument usually people who like deregulation of media but  are
making their claims in terms of economics and not in terms of free-speech,
is but you know they're out to make money, if people don't want listen to
them they won't publish it, but nonetheless, we just in the past year have
had in the US a couple of decisions by Sinclair Broadcasting, Sinclair
Broadcasting is the largest owner of broadcast stations, it's not one of
the networks, but it's the largest owner of discreet broadcast networks,
including many affiliates of the networks, so a few months ago, one of the
major programs, news programs on ABC, just decided to do this horrible,
outrageous act of just reading the names of all the US soldiers who were
killed in Iraq, totally unpatriotic apparently, because Sinclair decided
that they would order all of their local affiliates not to air this
program, so as not lower the morale of the American people vis-à-vis the
war in Iraq. Just before this current election, Sinclair also decided that
they would air a one hour documentary, and this one hour documentary was
basically an expanded version of a particular anti-Kerry campaign, which
was called Swift Vote Veterans for Truth, which tried to attack Kerry's
Vietnam war record. So this is the ideal cases of what happens when you own
the means of communication, essentially, the question is how much potential
revenue are you willing to give in order to tweak the content in your
direction, or in the direction of your advertisers. Now, the story of the
anti-Kerry campaign, starts to raise the possibility of large-scale
cooperation, when you have these means. So there are a few bloggers,
particularly one called Joshua Michael Marshall, started saying this is
wrong, but they didn't just write a letter to the editor, what he did was,
he started setting up on the network advice for, he basically said let's
all call the local advertisers of these affiliates and tell them that we
are so angry at Sinclair, that we will be annoyed at the advertiser if they
continue to advertise. And then somebody else came in and said: "Here, I
have a Sinclair station in my area and here are its phone numbers, and here
are its advertisers", and somebody else says, "No, let's not call, somebody
else calls the station and the station says no, that's not very good",
somebody else has the idea: "Let's call the advertisers themselves, the
supermarket or whoever locally is advertising", Why those are the
particular points has to do with how revenues are distributed between the
networks and the broadcasters, it doesn't matter. Within less than 24
hours, there was a national network of people who set up sites that said:
"Here are the main advertisers of this Sinclair affiliate in this
particular area, here are their numbers, the most effective thing that's
worked for me was to talk to the advertising manager, not the content
manager, not the CEO of the advertiser or their public relations person,
but actually their advertising budget manager, and, within a very short
period, the Sinclair affiliates were starting to get calls from their
advertisers saying: "We're very uncomfortable with this", and Sinclair had
to pull back, Sinclair had to, they fudged, they changed it a little, but
basically they pulled back the program. So this is, just as a vignette, the
claim about the possibility of generating both a political movement and the
dissemination of information in terms of its role in controlling what's
seen in democratic discourse in a society. Now, another related issue, this
is the issue of, as I said, non-profits become more effective, Move On is
an organization in the United States, a grassroots organization that uses e-
mail, mailing lists and the web to organize, to organize political action,
and so what they try to do, they tried to come up with an ad campaign, a
television advertising campaign, against President Bush's economic
policies, focusing on the deficit. So they just said: "Who can come up with
a 30 second ad that we can use?" and they got hundreds of submissions, and
this is what they came up with.

Now they still needed to pay money to have it aired on TV, but the
production cost was, putting the request out there, having people go out
with their camcorders and think about ideas and pull together things, and
this is a very decent TV ad, very powerful, I think, at least in our mind
frame. So, again, when you have the physical cost of production
sufficiently low and communication, you can have a combination of people
who are politically motivated together with non-profits actually produce
fascinating things. Another dimension of organization is actual
organization of political action on the streets, and one of the things that
we saw that was fascinating in the lead up to the war was the day on which
mass demonstrations basically around the world on one Saturday, in March of
2003, just before the invasion, without a single television ad going
anywhere, no efforts, no use of mass media, all in this viral model of
communication on a small scale across multiple nations, this whole notion
that now Meet Up is an organization that's actually not a political
organization, it's a platform on the web that allows people who are
interested in all sorts of things, from wine to sewing, to find people in
their vicinity whom they could meet once a month or however as an actual
social group; but you see, again, n the context of very low level cost you
get an increase on ability for people to come together in a form of
political action. Another very important development, well, another
development that is consistent with this model of the emergence of non-
market production, though it's less relevant to peer production, is the
development of the blogosphere and blogs, right, what you see here is a
large-scale movement of people, millions of people moving from being purely
readers or viewers to being speakers. Some of them speak to exactly 3
friends about what happened in the afternoon, but some of them, many of
them in fact, not some of them, many of them, speak to 3 friends about what
happened to them in their afternoon, but we are also seeing the development
of a genuine, alternative form of journalism. Sometimes people from the
mainstream journalism who move out into the blogosphere for occasional,
sometimes people in the blogosphere who actually, one of the amazing things
in watching, again, this election in the US was the extent to which the
mass media would refer to "on the blogs, here's what's being said", it's
become essentially a media that's understood as important, where news and
views are disseminated, and one of the things is that, unlike in the short
two-minute segments on TV, you get a lot of nonsense, but also a lot of
real argument and detailed argument and a practice of pointing. All of
which brings me to my next example, which is the critique of the electronic
machines that Diebold produces, and here's a, I think you can't see a
thing, right, no, you can't see a thing. It doesn't really matter that
much, I'll explain it. Diebold is the maker of electronic voting machines,
Ah, wonderful, Diebold is the maker of electronic voting machines, there's
a steady question of whether these electronic voting machines are accurate,
whether they're easily manipulable, so if we think one of the main roles of
the press in democratic theory and in free speech theory, is the role of
the 4th state, the critic of the governing elites, the investigative
journalism that goes in. What actually happened in Diebold was that the
mainstream journalism, journalists, didn't actually go in and look at this,
what happened was a combination of individual actions, connected with a lot
of widely distributed actions that led to some substantial result. So we
start with, in January of 2004, one activist called Bev Harris found
somewhere on some FTP site, the source code for the machines, she then
published it on essentially a blog or a web-based magazine in New Zealand,
in which case it was taken up by a particular computer scientist Avi Rubin
in Johns Hopkins, who did an analysis of it and showed all of the security
flaws, in the middle, someone, inspired by this, looked for more Diebold
materials and found on some public, only in the sense that it wasn't well-
protected site, of Diebold. A very large cache of internal e-mail and memos
from Diebold people, which was then sent out to Wired magazine and put out
in a bunch of places on the web. It wasn't really published, or publicized,
until a group of students at Swathmore decided to put up a database that
would allow you to search these e-mails and access them. And so one of the
first things that I think is very attractive from the perspective of
democracy, and that is fairly standard now, the online journalism, if we
want to call it that, is see for yourself, right, it's not the "trust me,
I've read it", it's "here's the document, here's what my opinion is, the
right way to look at it, but here's the document, read it for yourself".
We've seen it happen in the mainstream media as well when some of the
reports that have come out of the administration over the past year, say
about Iraq, were put up online and available, but here's a context in which
you take this anonymous hacker's product of the e-mails, read for yourself.
The second thing we see is the potential threat and danger from
intellectual property or a closed infrastructure, because the second thing
that happened was that Diebold sent a Cease and Desist letter not to the
students, but to the University, which was their Internet service provider,
and said: "You have material that are violating our copyright, they belong
to us", under the Digital Millennium Copyright Act of 1998, once you know
that materials are available, you have to take them down. So the university
shut down the accounts of these students, however, these students had
already injected the information into another set of peer-based networks,
in this case, what is produced is peer-based distribution, rather than peer-
based content production, XXXX, E-donkey, Freenet, which is a censorship-
resistant peer to peer network, and effectively the documents became
unsuppressable, because they were widely distributed, cached in very small,
basically a whole bunch of people out there on the net contributed little
portions of their hard drives and their bandwidths to replicate, store and
deliver the data that was controversial, so that, despite the fact that the
ISP, in this case the university, had pulled the accounts, the information
was already out there. So, if you think of the critique, of the political
critique of mass media that has to do with control over the means of
communication, either to fit the views of the owner, or to be compliant
with what advertisers want, or to be compliant with what the government
wants, this is the classic case of how one layer after the other, beginning
with the cheapness of ubiquitous communication to capture the information,
adding the multiple work of multiple students to actually go through these
materials, find particularly interesting components, put it up on the web,
and all the way down to distributed computing, to distributed storage on
the p2p networks, you've created a very, a means of communication, critique
and investigation that is very difficult to suppress.

The Baywatch effect, is a basic claim that owners respond to the norm, they
produce bland, inoffensive fare, they try not to offend anyone too much and
not to challenge anyone too much and the critique here, there's a great
quote from Louis Brandeis, one of the great supreme court justices in the
United States that "few things are more dangerous than an inert public, a
public that doesn't care and just sits there".

So, again, if we look at the Iraq war, you can tell that this is something
that's been on my mind lately, the examples seem to come from there, but
still, for a long time there was a clamp down by the Pentagon on showing
coffins arriving from Iraq, none of the mainstream media revealed it, until
one person, with his one website, patiently waited for months for the
Freedom of Information Act, got the pictures and published them on his
website. Once these were out on the website, obviously the mainstream media
very, when I say mainstream, actually, usually when we say mainstream
media, there's, it's all mainstream, that is to say, it's all mass media,
and then there's mainstream or non-mainstream, depending on whether they
are critiquing or non-critiquing. When I say mainstream, I mean in their
mode of production mainstream, that is to say, they use a radio station or
a television station or a large-scale printing press as opposed to an
individual, or a non-profit, small-scale, peer production system. Once this
was out, again, this reflected back on to the mass media system and was
widely publicised; but again, like the case of Diebold we see that the role
of investigative journalism, the role of critique can now be played by
individuals, it was impossible, before the Net, for an individual, even if
he got hold of these pictures, really genuinely, to disseminate them within
a day to the entire United States and beyond.

So that's with regard to the political economy concerns with media.

There's another field of media criticism or communications theory that goes
into cultural studies, and this is the problem of how culture is produced,
who participates in producing culture, to what extent we occupy a culture
that we are passive actors in, as opposed to people to people who actually
created the culture, and one line of change that we see here is things that
have existed in the past, like fan fiction, people who are fans of a
particular line of literature, you know, Star Trek episodes being written
by fans, there's a lovely film that if you want to search on the Web, it's
20 minutes long, so I thought I'd save you the experience, called "The Jedi
Saga", where basically a 24-year-old firefighter with his camcorder, his
wife, his brother and a friend, put together a 20-minute version of Star
Wars, it's very clearly Star Wars, there's, it's amusing actually how easy
it seemed to be for him to put together things that immediately as you look
to it you know that it's within this genre, and you know he got to play
with the idea of fighting alongside his brother against soldiers of the
emp., imperial soldiers, and casting his wife as this femme fatale who's
playing both sides of the argument.

Is it a mass blockbuster? Of course not.

Is it a completely different interaction with your culture? In which you
can actually playact it, see yourself in it, produce it, begin to learn how
it's done, you become a better watcher and critic? I'm sure. Another very
interesting phenomenon that I'll show you a couple of pictures of in the
future, in a couple of minutes, is Second Life. Second Life is a multi-
player, massively parallel multi-player online game, which is a mouthful.
Basically, there are these games that each participant has an account in
what is essentially a server file, and then their account is represented by
an Avatar, they build their own house, they go and play and interact with
other figures, the other figures are people who are currently actually
connected to the same server file and the game is their interactions and
most of the very popular games are fairly tightly scripted, in the sense
that there are wizards, there are thieves and there are this and there are
that, and you choose a particular character and you play and it's mostly
about points gained in this form or another. These are not actually small
phenomena, the largest one is Lineage, it's got 4 million users in South
Korea, there are a couple of very amusing papers by Edward Castranova, in
one of them he claims that the GDP of Everquest, one of the largest, is
roughly equivalent to that of India, tongue in cheek, of course, but still,
there's an active actually trade on Ebay in things from these systems.
Second Life is the most interesting to me, because the company produced
nothing other than a platform and tools. When you walked in a year ago or a
year and a quarter ago into Second Life it was flat, there was practically
nothing there. 99% percent of objects in the game today were written by
users, 100% of the storylines were written by users, who have basically
made their own stories, at some point, after a few months suddenly people
started talking about, they were abducted by aliens, it turns out a that
couple of players built a space station and created alien Avatars and were
actually abducting people and putting them back into the game, and they
added an overlay of alien abduction stories. So again, in the context of,
the interesting thing about this is that this is peer production of
immersive culture, right? It's basically, if you think of Hollywood as an
industrial of creating strip and immersive stories, here you have a company
that's producing a platform and viewers, users, participants, called
authors, are the ones who are telling the stories.

Another point, and really the last point I want to focus on in the context
of cultural democracy, is transparency. Right, there's something about when
people actually produce their own culture that renders that culture
transparent to them, so that they can be more critical. It doesn't mean
that, they don't have to reject all culture, that they occupy, but they can
become more critical users of this culture. So let me talk about Barbie and
let me compare Wikipedia against Encarta, Microsoft's encyclopedia and
Google versus Overture. So here's the definition of Barbie on Wikipedia,
Wikipedia is an encyclopedia co-produced by about 30 thousand people in a
couple of dozen languages, although, with about 300 thousand definitions in
English and about 500 thousand definitions in a variety of other languages.
Each of these definitions, it's all volunteer people come in, it's all open
for the to edit, they can argue about editing, there's a history page that
allows you to see what the changes were in the past, you can edit this
page, you can discuss the definitions one way or the other. So here's a
group of people who are actually interested in discussing Barbie, and you
can see it's a fairly detailed definition, there's an issue of cultural
impact and controversies, and this is really what I wanted to focus on, is,
so you've got a semi-explicit definition of the fact that it's possible
that Barbie is being accused of encouraging young girls to focus on shallow
trivia. There are issues with her body image and the way that she looks,
and a counter-argument, or at least a moderation, of saying, however, when
you put it in context, in the time when Barbie was released, there were
baby substitutes, old dolls no adult dolls, now you have a range of
professions for Barbie accessories, so in fact, she may be affecting girls'
images of their future lives in a way that's positive, a very detailed
internal conversation to the definition, that renders the doll, which is so
enormously important as a cultural artifact, much more transparent And in
Wikipedia, you also have a talk page that doesn't go into the main
definition, because here people aren't trying to be objective. What they're
trying to do is say: "I don't agree with this, I don't like it this way, I
do like it this way", they're arguing about the meaning of their culture
and how they would define it in a way that is direct. So, again, this is,
for me, as far as a conception that could broadly be called cultural
democracy, or a participation in the definition of culture in a way that is
explicit, probably the best example. This, on the other hand, is what we
see from Encarta. This is it, I'm not hiding parts of the definition, this
is the definition of Barbie: "Large wardrobe, is reminiscent of the
extensive wardrobes of fashion dolls popular in Europe XIX century,
however, while clothes designers used fashion dolls to showcase, Barbie
dolls, created in 59, function mainly as toys. Manufacturers now more
commonly produce ethnically diverse doll, like this black Barbie". Press
release.

Now, this is a commercial encyclopedia, that one is a free encyclopedia.
The Columbia encyclopedia doesn't deign to talk about Barbie as a doll, it
only has Klaus Barbie.

Google is very interesting, because Google is a very successful commercial
company that has outsourced its single most valuable action to peer
production. Right? The thing that made Google so successful was that you
knew that if you went there, within the first page, you would find what you
were looking for, almost always. So it was not so much the finding of
everything that has the words, but ranking what is most likely relevant and
what is most likely credible, and how do they do this? They didn't come up
with the smartest algorithm in the world, looking at the materials. They
didn't hire a million employees to read these web pages and decide which
was better, they found an algorithm that went out and collected votes from
people around the web. Hundreds of thousands of people, millions of people
around the web, create their own websites, for their own purposes, and
sometimes they link saying: "This is important". They came and counted
those links, so they took their single most, most valuable component, and
what they did was they outsourced that judgment to the collective judgment
of people on the web, each making their own little contribution, not to
help Google, but because of something that was interesting to them and made
it interesting to them. So again, if you look at Barbie here, the top one
is Barbie.com, but very quickly you see political controversy coming up,
within AdiosBarbie, the body image for everybody site site. If, on the
other hand, you look at the classic market-based search engine, Overture,
in Overture, you're first, or second or third, depending on whether you've
paid Overture the most, or the second most or the third most. So, Overture,
basically auctions rankings to viewers and here you can go pages and pages
and pages and you won't find a single critique of Barbie, at least not last
time that I looked. And we also, by the way, as another example of the
relative efficiencies of peer production and price system in collecting
judgments, we see quite a difference.

So we also see this distinction between political democracy and cultural
democracy is not very clean, we see some combined things; here is Second
Life, Second Life at some point, the primary users didn't like the pricing
policy. So they set up a protest, a tax protest, Lyndon Lab, King George
Lyndon Lab, which is the company that runs Second Life, is taxing us too
much, and they started harping on all the anti-taxation themes from the
American revolution and they started setting up these sites, all of them,
of course, the users made, at some point they took a part of the, there was
a part that they had built called Americana, an area in the game that had
The Washington Memorial, so then they decided to put tea crates, in memory
of the Boston Tea Party and the Tax Revolt at the beginning of the American
Revolution, so they covered it up with tea crates and then they found a
baseball pitch that somebody had put in and they put in a large amount of
tea crates against there. So, basically, what you see is a situation where
when what the business is selling is access not to a finished product, but
to a collaborative production platform and what people are paying a monthly
fee of about US$10 a month is to play in an environment where they are co-
producers, the relationship stops being one that is very clearly production
and consumption. It's a relation of co-creation, it's a relationship of
people who are within a game and it's a ..


FITA 2 - LADO A






. these sites, all of them, of course, the users made, at some point they
took a part of the, there was a part that they had built called Americana,
an area in the game that had The Washington Memorial, so then they decided
to put tea crates, in memory of the Boston Tea Party and the Tax Revolt at
the beginning of the American Revolution, so they covered it up with tea
crates and then they found a baseball pitch that somebody had put in and
they put in a large amount of tea crates against there. So, basically, what
you see is a situation where when what the business is selling is access
not to a finished product, but to a collaborative production platform, and
what people are paying a monthly fee of about US$10 a month is to play in
an environment where they are co-producers, the relationship stops being
one that is very clearly production and consumption. It's a relation of co-
creation, it's a relationship of people who are within a game and it's a
relationship that's more one of governance than one of pure sales and
Lyndon Labs eventually changed their policy. Now let's see if this actually
works.

So as you can see culture and democracy tend to mix, and when you actually
radically distribute the means of taking from the cultural environment and
making political claims, you get some really stuff fun happening.

Ok, so, autonomy, as I promised I would say only a few words on, if you're
interested there's a piece of mine called "Siren Songs and Hamish Children,
Autonomy, Information and Law" that goes quite a bit into it, it's a very
nebulous, philosophical concept, it's a highly contested one, with some
fairly specific, quite conflicting conceptions. At a minimum, at a minimum,
what we can say that would be broadly accepted across conceptions, is that
to the extent that we structure our communication system in a way that
systematically puts some people in the position of manipulating the
information that is available to others "here, you can see this, but not
see that, because I own the infrastructure, because I own the information
itself", you get a potential skewing and a potential manipulation of end
users by the owners of basically whoever builds the window through which
they look at the world. There's a 1999 Cisco white paper on routers that
they were selling to cable companies that makes it most clear, this is at a
time that people were still thinking about, push broadcasts on the Net, and
they were still trying to make the Net look like broadcast, and they said:
"Here's what the router allows the owner to do, you could restrict the
incoming push broadcasts as well as your subscriber's outgoing access to
the push site to discourage its use, in other words, you could just slow
down the packets that go to this competitor, at the same time you could
promote your own or your partner's services with full speed features to
encourage adoption of your services, so the router actually lets you find
out at the packet level where it's coming from and where it's going and you
can decide: "Here, if you look through this window, that's mine, you'll see
much better my affiliates, than somebody else's, you'll have to wait for
longer, you'll drop more packets. And this is actually a fairly broad cross
conception concern with autonomy, when you actually see, when you actually
see the window through which you see the world being manipulated by others.


In general, when we look at the diversity of the view points available,
when we talk about democracy, it's also for the purposes of autonomy, when
you have a broad range of views, a broad range of views about what the
universe looks like, what are the range of alternative options, which one
is better, you become more autonomous. For a narrower way of looking at
autonomy or a narrower set of theories, the substantive theories of
autonomy, we see two moves essentially from consumers to users, from
employees to peers, I talked about the blogs and "The Jedi Saga", I talked
about Second Life, so the Gander Academy is a small primary school in
Newfoundland and if you go and Google Vikings or Viking Ships, it'll
probably show up first or second. One sixth grade teacher, who basically
just decided to build a teaching tools around Vikings, for his own
students, but also becomes very much a site that everybody else likes too,
because he's become so effective. So, at that level, if you just think of
this individual teacher, shifting from being a consumer of professional and
commercially produced teaching materials, to being the person who
constructs his own teaching materials for his students, shares them with
others, collaborates with others who are interested in Vikings to enrich
the site and then makes it available to everybody else, you see a genuine
shift in terms of the ability of someone to imagine their role in the
system that they occupy, not as one someone that's simply a taker, but one
that actively makes your own environment. With regard to employees to
peers, again, free software developers, a shift from a situation of taking
orders to a situation of very much being the ones who construct their own
agenda, even within firms, Xerox had a program called Eureka, has a program
called Eureka, where basically what they do is, the technicians have a
database where they will, when they come up against a machine that breaks
down, it used to be that they had to open the manual that the engineers
wrote and they had to follow the manual, and then it turned out, when they
looked the manuals were always full of notations of the things they had to
learn from experience, so they took and basically created a database where
all the technicians are now considered part of the development team and the
photocopier is no longer finished when it leaves the factory door and
afterwards you just service it, it's actually a learning machine over time.
And the technicians basically have a peer review system: "Here it broke
down this way, does anybody know?", and somebody else says: "Why don't you
hit it on the left side and turn these three screws", and somebody else who
is a little more senior says: "That sounds reasonable, try it", and they
report back: "It actually worked", or "It didn't work" and they've created
a database where the technicians are no longer just the recipients of
instructions from the engineers, but actually part of the learning
machinery.

So we're beginning to see this mode of production even embedded within
firms and restructuring the hierarchy within firms.

I want to talk about justice and development. Particularly important now,
human development, more of what makes the human welfare and freedom, now
depends on information. We just look at the HDI, the Human Development
Index that we've been using for the past few years to compare human
development across countries, the three components are health and life
expectancy, education and literacy and GDP per capita or growth, each of
these is dependent on information production. Food security, medicines,
research and journals, outcomes data, in other words, outcomes of actual
health practices,  all of these are absolutely central to health and life
expectancy. If we think of education, books and teaching materials,
remember the Gander Academy and the Vikings, computation and communication
systems, libraries, academic centres, journals, again, all absolutely
dependent on the information production and innovation system. And finally,
at least, since Robert Solos' work we know that growth is driven by
innovation and information everywhere and it's obviously of particular
concern for Net information importers for later developing countries,
because the access to existing modes of production, the existing high
technology modes of production become central to starting on a level plane
field for growth going forward. And obviously these interact with each
other, when you have better education and literacy, you get better funding,
you get better education and better human capital, etc. And the
relationship is recursive.

So the capital structure of computers and communication systems diffuses
the functional ability to compute and communicate and we just said, this is
just repeating, more that can be done through non-market and non-IP basis,
by individuals alone, by traditional non-profits with greater reach and by
newly emerging practices of production. So, if we look, we can map a whole
range of industries that are relevant to human development in roughly these
baskets, IP-based industry, non-IP-based industry, NGOs and non-profits,
governments, universities and individuals as stable components of
information production systems. Now, usually we have a mismeasure, we call
anything that is an information, that's information business, IP-dependent,
but that's in fact not true, the easiest example is a newspaper, if
tomorrow you eliminated copyright, newspapers would practically be
unaffected, because anyone whose business model is to copy verbatim
yesterday's newspaper and tried to compete will lose. And, in fact, when
you look at the annual reports of all of the major news organizations of
the United States, at most 6% of revenue can be attributed to copyright and
that's access to existing, to archived materials, 94% are subscriptions and
advertising, and, as I said, actually if you look into their other
activities, only a small portion of that is copyright dependent.

And this is true of many industries, that you have this large sector of non-
intellectual property-based systems that now, with the Internet, can become
more effective. So the place where it's most mature, obviously, is
software. Right, if we look just at the United States, which is the only
thing I know about, sadly, 'though I'm learning, software publishing, which
is the only IP-dependent portion, is about one third of total revenues from
software production in the United States, two thirds are software service,
systems analysis, custom installation, etc. And we also see a very heavy
role in government funding, national science foundation, very heavy DARPA,
the defense investment, we see universities playing a central role in
research and design, we see individuals acting through the free software
movement and open source software development, connected also through
organizations like the Free Software Foundation, like the Apache Software
Foundation, but also, less directly related to free software and more
related to the development of standards, we see the World Wide Web
consortium, the Internet Engineering Taskforce, neither of those is just an
American, none of these are purely an American phenomenon, a US phenomenon.
What you see in the software area, is an ecology of non-IP dependent
actors, feeding each other to create a tremendous amount of innovation and
a tremendous amount of growth in these areas and stability outside of the
IP-dependent system, so in a sense this is the gold standard of an industry
where we can actually see this working and we can see the results in terms
of adoption of Apache Web Server, Linux, and a variety of other free
software applications.

In scientific publications, it's also getting there, but not quite. What we
see from the commercial side is the commercial publishers like Elsevier,
but also the professional associations, which are largely operating as
commercial vendors, in the sense that they sell journals for high fees. But
we're also seeing the development of a substantial sector of non-market
development, one question now is: "Is there a way of moving the
professional associations, which really represent us, rather than a
publishing model, from the model of IP-dependent to the model of non-IP
dependent, but nonetheless, in this sense, businesses, or maybe they would
be moving down to NGOs, where we pay our fess as members, rather than as
subscribers. One of the main problems with the development of things like
Biomed Central, which is a model of publication that releases materials on
free in exchange for author payments, The Public Library of Science, which
does the same thing but on a non-commercial basis, or ArchSiv, the Los
Alamos archive, where basically there is no peerage, it's primarily
physics, people upload their papers, there are peer reviews exposed. People
also use a lot of self-archiving, they put their work in papers and web-
based self publishing, and here's a problem Imrae and I were just talking
yesterday about: how one creates enough of a good algorithm to search and
this becomes the alternative. Again, the point here is we have a system of
publication, that is the dominant system, that excludes a lot of people and
a lot of users from the fruits of scientific production because of cost.
And we have a way, that was not feasible before when you needed the high-
quality press and the distribution system in order to publish, even just
physically to publish, but is feasible now, so that effectively, you could
create a system that would be free and its effect on development and on
distribution would be very high.

Agricultural biotech, again we see a similar structure, we are seeing the
development now of pilfering, the major universities trying to extract
rights from Monsanto and Dupont, which occupy about 74% of the market, in
exchange for access to the basic research, so as to make the materials
freely available. We see organizations like Canbia or Bios in non-profits
that are trying to create platforms of collaboration, where universities,
for-profits and individuals, in this particular case, farmers, create
collaboration platforms, contribute their patents to a common patent pool,
contribute to a common defense, as it were, against protections and gain
the benefit of improved innovation in areas that they, otherwise, might be
behind.

In health, we have, one of the things that is hardest to get over is the
fact that it's still very hard for individuals to play, except perhaps for
individual scientists. We do have obviously a very important role for
governments and basic research in universities, but also a very heavy, much
more heavy reliance on patents here than in practically any other industry.
But then we do have a generics industry though it seems that the Indian
generics are more of a potential source of solution globally and your
generics, which seem to be particularly focused on service in Brazil
itself. And we are beginning to see the emergence of non-profit health.

I was overly ambitious in what I wanted to cover, so I am going to skip a
chunk of things that go into detail on how we can do health on this model.
What I want from this series of platforms, just to set out as a basic point
is, because of low-cost communications, because of low-cost computation, it
is now feasible for us to produce information that is a central input into
human development in a way that is much cheaper or where costs are much
more widely distributed, so that pure cost of access to the outputs of
information doesn't become a barrier to the benefits of innovation. If all
of this is true, then what I've just tried to go through in the past 45
minutes or so, is to suggest to you that the emergence of an increasing
role for non-market production generally, for individuals creating both
alone and in collaboration can improve democracy, improve individual
autonomy and improve distribution and justice, without, and this is
critical, without decreasing productivity. Because, in fact, we can
actually get efficiencies, rather than inefficiencies out of these non-
market production systems, by harnessing social-psychological motivations
and organizing through social transactional systems.

All of this will lead me to quickly focus on the political economy today.

This is threatening to the giants of the industrial information. Hollywood,
the recording industry, to a lesser extent, but still to some extent, the
telecommunications carriers, are threatened in their business models,
pharmaceuticals are threatened less so, at least as things are standing at
the moment, are threatened in their business models by the emergence of
commons-based information production. What we are seeing is a very broad
attack across a lot of different areas, on the institutional ecology, that
makes it more expensive to produce information, and therefore harder to
produce information on a non-profit, non-market basis and requires a
greater shift to the market. We see it in property in spectrum and private
infrastructure, a focus on private on infrastructure as opposed to open
wireless networks, like wi-fi and the mesh architectures that are emerging,
we see it in the Digital Millennium Copyright Act and in trusted systems,
where we're basically getting a technology industry required to design its
system so as to restrict copying, we se it in a variety of other things
that I won't go into, but I'm happy to talk later, if anyone wants to,
about each one of them.

One way of mapping this is to think of a technical description or a graphic
description of what it takes to become a communications system, you need a
physical medium to communicate, you need things that people say to each
other, content, and you need some logical system to translate from human
meaning into machine transmissibility and back. If we look at the physical
layer, we see at the transport that cable, via cell satellite, license
owners, these are all owned, proprietary, there is no real commons there,
free for anyone to use, and in the United States we only really have two
pipelines, or one and a half pipelines, which are not particularly
competitive, but open wireless networks that we're beginning to see now in
a primitive form in wi-fi networks offer one possibility and a number of
municipalities are working on municipal fibre to the home, so that
essentially what you get is basic fibre connectivity is brought by the
municipality just like sewer or roadways, etc. And applications go over
that. That is one set of models. The extent to each PCs will be closed and
handhelds will be closed, or not, and whether we'll get things that are
more like PCs or less, will also decide the extent to which this will be an
open layer. But, if we have a trusted system requirement, that is to say,
by law all producers of digital equipment will have to comply with
standards to make sure that the material is trusted against the user, that
is to say, that the content provider can trust the machines against the
machine's owner. And we have Induce Act in Senate, that's being debated,
then really we are creating a physical layer barrier to free exchanged, to
commons-based exchange. At the logical layer we've got some things that are
completely open like lower level protocols like TCP/IP, the operating
system, obviously Microsoft encloses a large chunk, but the GNU Linux
system creates some degree of alternative and openness, and in applications
we have a wide range, some of which are more closed, some of which are
less. Again, here the introduction of trusted systems like the Digital
Millennium Copyright Act, quality of service, potential concerns raising
that this will create divergence from the openness of TCP/IP, and finally
at the content layer we've got this cultural battle almost, between the
strong exclusive rights -based systems and file sharing and peer production
and creative commons that are trying to create an open content system that
then will be self-replicating and become its own inputs. At a lower level
something that has always been in the background, censorship laws,
filtering requirements, monitoring and the question of how we deal with
these across different areas, versus censorship resistant systems like
Freenet, which we talked about in the context of Diebold, that is to say a
system that distributes information in such a way that it's not amenable to
censorship. Altogether, what we see is that there are lots of different
areas of policy that are rarely seen as related to each other, but
nonetheless together come to the question of whether we have at least some
slice of the information environment that is completely open, some slice
that is open for anyone to use, whether they're market players or non-
market players, whether they have IP rights or whether they don't have IP
rights, in order to engage in these forms of non-market production or
collaboration that I suggested are so central and so valuable.

So, to sum up, technology has periods of relative openness followed by
stabilization, radio move could have been point-to-point or small scale
from about 1899 to 1924-26, but then we had the networks emerge, telephone,
in the US there was competition in every city in 1907, by 1920 it was
closed up in a monopoly. We're really standing at a moment where the basic
material conditions of communications are being negotiated and these have a
direct effect on democracy, on autonomy, on justice, in ways that don't
require us to give up productivity, they actually enable us to sustain
productivity while making improvements in all these areas. But, this won't
happen on its own, this is not something that the technology will just push
by some deterministic process, there's a genuine battle going on between
industries whose interest is to preserve the industrial information economy
in the 20th century, there are genuine opportunities now on the other side.
We have to understand these concerns in terms of political morality while
at the same time consistently analising them to make sure that we're not
reaching for a goal that will collapse under its own weight after 50 years
because it's not internally sustainable as an economic system, but I do
think we have an opportunity to do that now. Despite claims.



Just a second, we have a ritual here. We have two debaters, Professor
Gilberto Tadeu Lima and Professor Tom Dwyer. They are going to ask their
questions. They have a preference to ask their questions, ok? Then
Professor Benkler will answer those and after that we will open for the
audience for questions, ok?

That's the systematic of this kind of lecture, ok?



Ok, my name is Sérgio Storch, I'm from the Brazilian Society for Knowledge
Management and I'd like to ask a few questions

Just a second. I'm just saying that first we will have the questions from
the debaters.



I would like to pass to Professor Gilberto Tadeu Lima, from FEA, USP, to
ask his questions. And make his deposition.



First of all I'd like to thank the organizers for inviting me to this quite
interesting presentation, the experience of reading the paper and listening
to the presentation itself was quite rewarding an experience for me and so
it was very nice for me to engage in this discussion. Well, I have some
idiosyncratic comments that I would like to share with Professor Benkler
and I will refer to them as the key map, during my reading, but they follow
some common tracks and I will refer to them.

First of all let me say upfront that, of course, information is very
important, knowledge has been modeled as an engine to growth in economics,
it has a very profound impact on citizenship, on production, and so I will
not dispute that. But, probably, in spite of having this gender agreement
with Professor Benkler, I think that he pushes the argument too far. I
think that he has too optimistic a view on how changes, how deep changes we
can make in society's economic structure through technology, broadly, or
through Internet, more specifically. So, the thing is how deep can we go,
or how deep have we been going through changes, through changing the rules
of the game in a capitalist society through these kinds of technologies?
So, this has, let's say, some different ramifications and I will refer to
them. First of all one thing we should ask ourselves is



FITA 2 - LADO B




I will refer to them as the key map, during my reading, but they follow
some common tracks and I will refer to them.

First of all let me say upfront that, of course, information is very
important, knowledge has been modeled as an engine to growth in economics,
it has a very profound impact on citizenship, on production, and so I will
not dispute that. But, probably, in spite of having this gender agreement
with Professor Benkler, I think that he pushes the argument too far,
probably he has too optimistic a view on how changes, how deep changes we
can make in society's economic structure through technology, broadly, or
through Internet, more specifically. So, the thing is, how deep can we go,
or how deep have we been going through changes, through changing the rules
of the game in a capitalist society through these kinds of technologies?
So, this has, let's say, some different ramifications and I will refer to
them. First of all one thing we should ask ourselves is how actually good
is to have too much information?

For instance, how should we evaluate how this whole diversity can and
should be seen as necessarily being a good thing? So, in that sense, my
feeling is that technology in general, technological communication in
particular, will bring at least as many dangers as possibilities as raised
by Professor Benkler. Because, sometimes, by reading the paper and by
following the presentation, of course that, this whole bunch of
technologies will open the way for the good guys to put up their message,
but so will the bad guys. So sometimes by reading the paper I have the
feeling that now we have an opportunity for those good guys who could not
speak their voices to reach the world with the true meaning of how life
should be, of how they should denounce the bad guys, now they have a
chance, now they have the internet, now they a way of sending a message to
the farthest place of the world. But then the question remains, so will the
bad guys.

So, in that sense, of course, this is a more mediated issue, but to some
extent it's just a way to communicate something, which can be for the good,
which can be for the bad, which can be done by the good guys, but can be
done by the bad guys too.

When I open my e-mail everyday I get a lot of Viagra announcements, I get
every time I open my e-mail, I must be the luckiest guy in the world,
because everyday I was selected by ten, fifteen sweepstakes around the
world, so I must be the luckiest guy in the world. So you have this whole
issue of pornography, you have this whole issue of drug dealing on the
Internet, so my basic point is, at least, what these examples show, these
bad uses show, is that this kind of technology brings, at least, as much
danger as possibilities. And the whole issue is, if the underlying society
that produces bad things, or that used to produce bad things even before
the Internet get not changed, they will not continue producing them and
diffusing them through the Internet. So, I must say that I don't have a
final position on this, I just would like to raise these kinds of issues,
probably the way things are communicated is just one aspect of the whole
issue of how bad things, bad devices, bad evils are produced within
society. So when we come, for instance, to, ok, now people can make better
choices, people can make better political choices, because now you have
people who can denounce some, let's say, in a more transparent way, things
that they could not before. I'm not quite sure about that. Despite all the
amusement that we got from George Bush and Tony Blair, the election got the
result that we saw. So this is one thing.

But then, let me make just another comment on this issue of, so this first
set of issues has to do with how trustful can we be on the potential of
communication itself to change the underlying society structure in a way
that will avoid people from making bad use of that. It's not communication
itself, so, unless we can show that, by having better ways of communicating
things these underlying structures, these underlying values, will change,
people will simply use technology for worse. So, it's not a question of
communication availability, it's a question of the underlying societal
structure be changed in a way that will induce people to do good use of
that. Then we have this whole issue of, let's say, whether too much, or
let's say, more broadly, more information is necessarily good. You talked
about Ken Arrow, Arrow is not my favourite Nobel economist, but my
favourite Nobel economist is a guy called Herbert Simon, with the notion of
bounded rationality, and see, to some extent, too much information can be a
source of uncertainty, too much information can be a source of cognitive
confusion, despite better communication processing capabilities that the
information technology has brought us.

So, what I would like to raise is, again, since it's a better way of
communicating things, everybody will have access to it, so we can end up
having, let's say, an information traffic jam that will simply prevent
people to actually sort out from this whole more availability, what's
really, let's say, the message that we have to pass, or that we would like
to pass. What if AdiosBarbie gets into an information traffic jam that
people simply won't be able to sort out from it what we would like to see?

So, this second issue has to do with whether we should see more information
as necessarily a good thing, because in the limit we can get jammed by too
much of it.

So there is this issue, one issue that you didn't have a chance to go
through, probably you would like to elaborate on it, on the issue of
autonomy, labour market issues; the thing is to what extent can we see
labour market relations between capital and labour getting really improved
by commons-based peer production? So, that's a thing that would matter,
because you said in one slide, now information, human beings can be, let's
say, the direct producer of information, have more access to it. But unless
they have jobs, unless they can make a living out of their productive
participation in the economy, that's not enough, that's not enough. So, the
thing is, how far, or how trustful can we be about the prospect of people's
position in the labour market, their bargaining power with capital, be
improved through commons-based peer production effectively? Because, still
we will, unless other changes take place, we will still be living in a
market economy, despite we get engaged, more than before, in non-market
activities, the rules of the game are of a market economy. If I go for
shelter, if I go for clothing, if I go for food, I will still have to
provide most of it through market forms, so, unless I can, by relying on
non-market activities, make a living, which means, in a market economy,
make money, sorry professor, I will not be able to enjoy the wonderland of
the Internet in this way.

So, just to finish, so we have enough time for discussion, I would not like
to spoil the audience from their time to participate. And this has to do
with, let me see, sometimes I have the feeling that you have too romantic a
view of science, in the following sense, when you say that the marginal
cost of producing information in this room is zero, either because you can
have either ten more people, if you, provided you have physical space, to
some extent, information, knowledge, science, is not produced with some
Voltarian, candid view of producing welfare, in that sense. People go for,
let's say, reputation, scientists do their research by being socially
constrained, so you have a whole discussion in the sociology of knowledge
and probably Tom can speak much better than I about this, you have this
whole discussion in the sociology of knowledge regarding the sociological
influences on science decisions, and here I report a marvelous book by a
guy called Phillip Mirowski, he was a professor of mine at Notredame, and
he has a very nice book called "Economics as Cyborg Sciences", and it's a
very nice description on how economics in the US, through the last century
was greatly influenced by the interests of the military complex, and that's
the name: "Economics as Cyborg Sciences". So, even the , and then you have
people like John Neumann, people like John Nash, see they're not doing
science in a vacuum, they are doing science which is socially constrained,
so, in that sense, the issue that I would like to raise is, if that's the
case, let's say, that is, if even in my metaphorical figure, even if the
bad guys, or, sorry, the good guys have better access to communicate their
ideas, they are not outside some social context which will, probably, which
may induce them to become, let's say, bad guys. So, even, this, if I want
to, to some extent, or to a great extent, we are here trying to persuade
the audience, there is a rhetorical motivation behind our speech, we
believe in some things and would like to persuade the audience that, so, in
that sense, an additional piece of information doesn't have a zero marginal
cost. Because depending on the profile of the audience, it may cost me more
pieces of information to persuade the audience of my ideas. So, I would
like to thank again the opportunity to share these comments, feelings,
views, with Professor Benkler, I could go further with more points, but
again, I want to leave as much time as possible for the audience to speak,
but the main thing is: Where is ideology in this whole discussion? Thanks.



Professor Benkler.



It's a good thing that you ended with "where is ideology", because it was
fairly clear that that was underlying a lot of the concerns.

It's very important to make clear, if it wasn't clear in the presentation,
that I'm not claiming that the market will disappear, that this is an
intervention that will completely replace the market system. Instead, the
claim is narrower, but in a sense, I think, therefore stronger, which is
that given a market production system, given a market production system for
material things, an overlay of a substantial non-market component in the
communications and information infrastructure can lead to these particular
effects that I described, that are improvements in all of these domains.

As I said, this is a liberal theory and it's intended as such.

There are specific questions, there are specific questions that you ask,
that I think are necessary to clear, before the broader, really the
broader, deeper questions that you ask.

The first one: "Is more information necessarily good?", I think it's
important, the reason that I focused, for example, on the Google / Overture
distinction, on the difference between the Talk Page and the actual
Definition Page at Wikiepedia, the centrality of peer review in these
systems, is that relevance, accreditation are themselves information goods.
So, to say there will be more and better, more information doesn't
necessarily include spam, more information includes a better system to
separate spam from non-spam, and the possibility of building a system on a
collaborative basis, in a wide-scale basis, that will eliminate spam; and
the concern, and the hypothesis that if you have a system of production
that users themselves participate in and that is driven by social
relations, rather than by market relations, you're likely to find something
that is, levels of accreditation, or types of accreditation, that are
directly driven by the interests of the users and by the interests of the
social groups that set them up, rather than being driven by some
accommodation between willingness and ability to pay of users, and
willingness and ability to pay of people who want to send the spam. So, the
general issue of Arrow versus Simon is to say that generating usable
information is itself an information good that we see constantly produced
in these systems on a collaborative nature and actually produced better
through peer production, often, than through the market.

Then there's the question of the sociological influences on science
productions, reputation, the fact that information production is socially
constrained. That's, in a sense, not a bug in my analysis, that's a
feature, I see this as, I see the availability of social structures as an
alternative organizing mode to the market. The market, in a sense, is an
organizing and coordination system that cuts through social relations and
overlays a  certain set of signals and a certain set of incentives and
constraints that are, I wouldn't quite say orthogonal to the social system,
but are certainly independent of it, put pressures on it. That's exactly
the problems we see occasionally with critiques on the market putting
pressures on social relations. So the claim is not that we are reaching a
point of these solipsistic individuals, floating in the world, free of all
constraints, all listening collectively to Panglos and collaborating
nicely. Though it is true that my last piece is called "Sharing Nicely",
but what can you do? Rather, it's the claim that constraint exists, social
constraint, market's constraint, government constraint, physical, material
constraint. Freedom can be found in diversity of constraint, rather than in
a hypothetical purely free state, and the thing that I find attractive
about the emergence of a more substantial role for social relations, not
relative to nothing, not relative to completely free floating soul, but
relative to a situation where market relations and property relations are
the primary forms of constraint on behaviour, I find the diversity of
constraint, and the possibility of weaving one's life through the market
system and when that locks you, through the social system, potentially
sometimes through the government system, depending on what you can achieve
in each one. It's the fact that now you have these robust, more
significant, and my focus has been on the increase significance of social
systems exactly depending on reputation, on social relations, on the
ability and need to create social ties, that allows us to have more
resources necessary for own purposes and more frameworks through which we
can transact productively with others that are outside the market. And so
the claim with regard to freedom in the broad sense, both autonomy and
democracy, is that it's the diversity of constraint, just as I spoke, when
I spoke about justice, about the diversity of systems, both market and non-
market, both individual and organized, both government funded and civil
society, it's the relatively high efficacy of a diverse set of actors in a
diverse set of constraints, that allows the individual to then start
negotiating and surfing between those systems. Perfect freedom, no, a
greater degree of freedom because of an increased capacity to route around
blockages in the market, the emergence of new social structures, alongside
the old ones, so that you can find the small teenager, be able to reach out
of their repressive local culture, and find some souls with which they can
talk and then, sure, they're still there when they wake up in the morning,
they're still there with their repressive family, but there's a way for
them to imagine a different life and for them to begin to negotiate a path
to that different life, without physically having to move to a different
environment, which may be difficult or impossible.

So the claims are limited in that regard, but I think in that regard,
perhaps more robust than you suggest.

The issue of the labour market and labour market relations is a genuinely
hard one, at the moment my focus has been on the way in which we take,
basically, at least most of my work, has been on the way in which we take
free time and use it in ways that are productive and effective for us as
citizens, as participants in a culture. There are some early, the ways in
which free software development has usually ended up being a source of
living for people, has been through the service market, so it ends up being
through a contract with a company and moving into the labour force and
splitting one's time between the two. There are some early proposals for co-
ops of people actually doing on a peer production the actual ultimate
service, I haven't seen any that have actually worked and I don't see this
as replacing the labour market. The claim is that within that range of
life, which is quite substantial for most people, where we're not
necessarily keeping body and soul together for tomorrow, we have new
opportunities and new opportunities for learning and new opportunities for
finding new modes of new places in which to make money and perhaps to
shift, so, still, a great, somewhat greater, freedom of learning and
mobility within the traditional labour market, but not a replacement of the
traditional labour market.

And to the extent of what comes, and we come back to your last question
about ideology, to the extent of, and your question about superstructure
and infrastructure, or the superstructure and base, to the extent that one
believes that the central defining social relations are those in the labour
market, and to the extent that one, then my claims are relatively limited;
which goes to the very last, your first question and the underlying deep
question, and that's the question of ideology or control over behaviour,
freedom, individuals through the construction of a cultural system and a
social system that constrains people, and here I have to say that I really
differ with you, because I think that the primary means of communication,
the primary means of exercise of ideology in the 20th century has been
through mass mediated market culture. And I think that creating a set of
social practices that allow people to question, that was my point about
questioning Barbie and going into the details of questioning Barbie, to the
extent that we build systems where people can criticize together, build
their own, tell their own stories, criticize each other, talk about them. I
think you do go quite basically into how we structure social relations, how
we understand them, the extent to which we live with them without
resistance and without critique and the extent to which we actually learn
enough to be able to critique and support each other in the ability to
critique and create new cultural spaces to understand how our life or isn't
how we would like it to be and how it could be; and in this regard, I
actually think that this is, to say it's just about the means of
communication, about what we would have anyway, as opposed to say that the
way in which we produce information, the relative space we have for non-
market action, to produce culture and to produce our common understanding
of how the world is, how it might be and how our role in it might be,
understates dramatically the role of human communication in the structure
and of our understandings of how we are and of how we could be.



Thank you very much. I think maybe we should pass to Professor Tom and then
maybe return if you want to continue this discussion, ok?



Thank you, first Imrae for the invitation to be here, and thank you to the
Instituto de Estudos Avançados also for hosting this forum. I would like to
say that I think the work of Professor Benkler can be read as a significant
contribution to the production of a theory of information society. This
dimension of contemporary societies, which one can call informationalism,
is just one of the various dimensions of the changes that the advanced
economies are going through today, and we're talking in terms of
globalization, cosmopolitanism, risk and other dimensions to characterize
this. So, this is just one of a series of factors that are occurring in
advanced economies If we look at Brazil, which is a country in development,
of course we see at least two other dimensions, which are the problems that
are existential in everybody's lives, on one hand an increase in urban
violence, which is an enormous problem here, and of course, the question of
decadence, in other words, a decline .


FITA 3 - LADO A




I think we should pass to Professor Tom and then maybe return if you want
to continue this discussion, ok?



Thank you, first Imrae for the invitation to be here and thank you to the
Instituto de Estudos Avançados also for hosting this forum. I would like to
say that I think the work of Professor Benkler can be read as a significant
contribution to the production of a theory of information society. This
dimension of contemporary societies, which one can call informationalism,
is just one of the various dimensions of the changes that the advanced
economies are going through today, and we're talking in terms of
globalization, cosmopolitanism, risk and other dimensions to characterize
this. This is just one of a series of factors that are occurring in
advanced economies, if we look at Brazil, which is a country in
development, of course we see at least two other dimensions, which are the
problems that are existential in everybody's lives, on one hand an increase
in urban violence, which is an enormous problem here, and of course, the
question of decadence, in other words a decline in real incomes over the
last ten years, these are factors that must be behind, sit behind all that
we think about, about the advanced economies in our world. One of the
things about Benkler's work is that it set me to thinking about a large
number of issues I had thought very little about. Open source, for example,
as a social movement, the social role of hackers and crackers, cyber-crime,
these are all things that Benkler's work instigates one to think about. Of
course it led me to think about other things I've already been thinking
about, like human capital, I do research young people and their use of
computers, I do research computer use in schools, so these are things that
there was resonance. But as a Brazilian researcher and a Professor of
information society issues, Benkler's work alerts me to a very strong
deficit in two areas of reflection, on the one hand an economic reflection
on information society, and I do think this is missing a I've asked every
economist I meet, I say: "Who's thinking these issues?", and I don't get
many replies, and the legal reflection of this, there are projects in
Brasília on various of these issues, but we do not have a profound legal
culture thinking about it. So these are two things that I think where his
work will certainly have an impact.

But, so today I would like to make both a sociological and a Brazilian
contribution to the issue "Freedom of the Commons Towards a Political
Economy of Information".

The first point I shall make is that the structural position that drives
discussion in Brazil around these issues is, of course, very different to
the United States, if we look at the XXX surveys we have something like 14%
of the population has Internet access, in the United States it's something
around 70%, then of course, we look at Digital Divide issues we see that in
the United States the poor population has much less access as in Brazil, so
there are asymmetries and disymmetries, symmetries and disymmetries. And,
of course, the other thing is that when you buy a computer in Brazil with
all the software, it costs a hell of a lot more, in terms of people's
income, than in the United States, it costs about ten times more. It still
costs every thousand dollars in the United States a thousand dollars here,
but with our product it processes to roundabout three thousand three
hundred dollar here, it's around about ten times more in terms of product
what it takes to buy a computer. This is an extraordinary barrier, of
course we have this in various other areas, whether it's proprietary work
going on, generic medicines, which led to the whole battle, one about
Brazil centrally run generics, etc. And I think we now in this area have to
start looking to China, because the Chinese have a project for a computer
at around about three hundred dollars, their red hat has become a red flag,
so they're developing open source software and I certainly imagine that
there will be South-South dialogue in this area, and what I'm not quite
sure what this will mean for computer science but for Brazilian computer
users it may mean, a lot, over the next ten years a different kind of a
configuration.

Secondly, the free software movement, so that's a first structural kind of
observation, the free software movement, which is a very important center
of Professor Benkler's analysis, has certain sociological similarities and
differences in both countries, which I will go through very, very briefly
later on, but that's important, there are similarities and differences.

And third, the approach that Professor Benkler has suggested today is based
on certain assumption, not all of which transport very easily, one is
methodological individualism, in Brazil, except for the upper-middle class,
engineers essentially, there seems to be a more of a collective
orientation, I would say. Certainly one sees a more collective orientation
in France and in China, and these are things that societies have
individualism or collectivism as a series of values.

Freedom of speech is another part, obviously in China that's not such a
government-valued thing. Intellectual property must be a servant, not a
master, of information society, this is a very important idea, that is,
intellectual property has to be seen in a light, obviously the United
States Government, which is one of its enemy in terms of intellectual
combat, and the software industry and the computer industry in general, is
against this particular view. Here's also a, this approach is what one
calls in political science New Institutionalist, this is an approach that,
obviously, it's based on an American reality and it's spreading around the
world, it has limits when it's applied in Brazil to how you think about
things.

Oh, and the other thing that I think is very important, is that it is all
based in English language, this for many of you working in computing is not
an important issue, but for people who work in almost every other area,
law, social sciences, social interaction, this is an extraordinarily
important issue, because once we have to move to another language-base, we
lose part of our capacity to express. But he goes, he has a very important
observation that goes way beyond the American shores, and that is people
spend time on the Internet to communicate, to help others and even to
produce items of value, for which they do not charge, charge money. This is
called a peer-to-peer production. And he hypothesized that this is a new
revolutionary form of economy and the institutional framework, in other
words, the laws and things, must be adjusted not only to guarantee the
survival of this form of economy, which he sees as threatened by monopoly
power, and this is a very important message from his work for me, it's
something I've learned to take more carefully and it's going to enter into
everything that I think about now, and that this institutional framework
must be adjusted to guarantee the survival of this.

He talks, of course, mainly of the United States, and eventually of
international legal organizations, the World Commerce Organization, WIPO,
etc. But the absence of one international organization really intrigued me,
and this, of course, is UNESCO.

UNESCO is an organization which always defended access to information, I
take three of its objectives: The preservation of information and universal
access to it. The participation of all the emerging global information
society. Ethical, legal and societal consequences of ICT development.

UNESCO has been working this way for many, many years, we see it in Africa,
we see it in Latin America, we see it in Asia, and we certainly see it in
Europe, I know the Unites States was out of UNESCO for a long time, but for
me, if we're talking about international debates and forums, UNESCO must be
a central reference in this work, and curiously not even in the
bibliographies of the articles I did not see reference to UNESCO's
documents, so this intrigued me, of course.

But Marshall Mcluhan has an idea that we drive into the future looking into
the rear-view mirror of the past. It's a very powerful idea, and I would
like to raise a certain sociological issue, based in the work, around the
work of Alan Touraine, who you well know was one of the first people to use
the concept of post-industrial society in 1979, 1969, sorry, three years
before Daniel Bells with the same title, came out, and his reflection of
this new kind of society is based on what we think of the past.

So let's just look for a minute at the British working class movement and
then look at parts of the Linux open source movement and it may be somehow
equivalent or different. This is not just an academic exercise, I think we
have to try and get some understanding more or less of what the essence of
the new forms that are emerging, that we will only be able to see long
after I'm dead. That's one of the problems, that we're so close to the
object that we cannot get the distance to understand what is happening.

The British working class movement, we look at the 1840s, looks for
political, economical, cultural expression and it looks to make tools, has
mechanics institutes, discuss engineering, and what they are interested is,
they're all Illuminists, and they are interested in developing industry to
produce progress, but this progress will be appropriated by the workers and
not by the bosses. So this has a little resonance in Linux open source, we
don't want Microsoft, we want us, people who program things, to make, maybe
not the money but at least get the glory, so this is the first thing.

And what we do see in there is the proletarians, the labour aristocracy,
even industrialists like Owen, coming in and making part of this movement,
we do see also the Ladites, who come in and destroy, ok, they're an
important part of the movement, and like the English movement, we see today
open source and things going beyond its shores, because the English working
class movement was internationalist, the way you produced things in those
days was newspapers that you'd run off with and hand around, with the laws
of peer-to-peer production, they had cells where they would talk about
politic, others where they would talk about engineering or mechanics
institutes. And this movement came through a struggle to be legalized, it
wasn't legal until 1869, if I remember, the Universal Suffrage, started to
be able to elect people to parliament, who became responsible for laws for
working class support and through time came to play a huge role in the
formation of social democracy, which I would remember, of course was a
movement that sought to combat the worst excesses of industrial capitalism,
in other words, it sought to combat inequality, it sought to combat
socially produced want, by redistribution mechanisms organized by a central
state, so, you know, there is a principle, it's not all market.

And of course this same movement had an impact on another movement, another
writer who observed it was Karl Marx, he was in London to observe what was
going on, wrote the communist manifesto 'Capital', which led also to
another virtue/vertent that was communism. Now in it, what they did was
they constructed this new society together with their class adversaries, in
the parliament, being elected, in commissions, they constructed the welfare
state, and this is very important, they had a common field that both agreed
upon, both parties, even though they were adversaries. The common field was
democracy and industry, both defended democracy and industry, they did not,
for example, combat colonialism, so they had a relation to the outside
world that was somehow exploitative; and what they really fought about was
the collective or the individual appropriation of benefits of industry and
democracy.

Today we are in the midst of changes which we little understand, we are not
distant enough, as I said before, and in spite of a lack of understanding,
actually must be carried out, if not we're in a state of crisis and I think
Professor Benkler's work, when I heard him on Friday, is action-oriented,
it's policy-oriented, the idea is we have to respond to these issues,
because we cannot leave it to the powerful to decide what happens to the
rest of society, and as an earlier crisis of post-industrialism in Brazil,
where we had, in Brazil we had protectionism, and accelerated
informationalism under state control, and barriers, huge errors were made
here, they're heavily made here, they're heavily made outside Brazil. Now
how will the future be? Nobody knows, however we must be able to act, and
be able to say, so Benkler represents one current in a room, new, it's an
anti-dominant group movement that he represents, it seems to me, correct me
if I'm wrong on this, that is located in the US and has worldwide
implications, that is, legalist, capitalist, egalitarian, individualist,
liberal in the English language.

We can identify other parts of this movement, some of which comes with
traditional money and resources, IBM, Sun, for example, support open
source, and others which have started making money and careers, programmers
and people like this. In Brazil, of course, we have a lot of people who
make money and careers out of cyber-crime, which is one of the issues today
not talked about too much, and, of course, child pornography, these are
part of the whole package, just as in the United States union movement was
in strong part connected to the mafia as a way of survival, so how do you
build the labour movement when you are partly connected to the mafia,
obviously you try and bring them into legality, how will you build a new
social movement when you've got people working with child pornography?
Well, one you don't, with US puritan concepts, but you try at least to have
a new idea of sexuality and respect what comes from it. So, in Brazil we
see the option for Linux being defended on grounds of nationalism, included
in parliament, the labour market for computer science graduates, it's quite
common, we must have Linux because that's the way graduates are going to
have a labour market, economic reasons, and of course a whole anti-
Microsoft, US, imports substitution, which is partly economic and partly
political.

It is clearly a movement in Brazil that has coherence, that has leaders,
that has books, it does not have yet a strong reflection on law and
economics and it's not thought about very much in social sciences.

So, my question is what does this new movement represent sociologically, is
it in fact an equivalent that maybe 20 years, or 30 years, or 40 years from
now will be a bit like the workers' movement in a society, because
societies for me, organize, and this is a basic, apart from when we have
modernity, they have a central cleavage, and this is one against the other,
so we take the civil rights movement, was a movement for the vote, for
public rights and it opposed aristocracy and the people at the end of the
French revolution, there was a central cleavage, a right to talk, to
organize, to be, an industrial society has a central cleavage between
workers and industrialists. So, an information society, for it to be
manageable, conceptual, must have a central cleavage. Are we seeing in open
source essentially something like will end other movements around or
something like the beginning of the organizing principles of a new central
cleavage in society.

So I will now move towards my point, it seems to me it is an attempt to
build an ideology which unites traditional and new American values and
thinks about technology, the new technologies and then creates a way and a
space to provide. It seems to me it's an academic exercise and an attempt
to build an ideology in order to change the institutional structures in
such a way as to permit a new basis for economic and social activity to
prosper, one based on computers and a new form of wealth production, peer-
to-peer production.

I'll leave it at that, my time will not allow me to go further. It seems to
me that peer-to-peer production is probably not a form of economic
production, it produces economic goods, but we also do this to produce
politics, to produce friendships, it's a type of relationship that we've
always had through time and we'll have in the future as a laboratory
sector, and I can't quite see it as a lever of a new economic system, but
I'll leave it at that.



Professor Benkler.



Well thank you for a very interesting set of observations. It's true that
I'm, my work is very deeply embedded in the US and my observations about
the US, it's true that it's methodologically individualist, it's true that
it's heavily based in a freedom of speech culture, some things I can
explain pragmatically, others I will simply hold as my normative
commitments.

But then logical individualism, is there for, I mean this is very odd, I
find myself, I find my work occasionally attractive to libertarians and
occasionally attractive to anarchists, but that's because they are
basically the same once you take property out of the equation.

It's a little flip, but not too bad.

So, the point about methodological individualism, to some extent it's
pragmatic and to some extent it is a question of normative commitment.
Pragmatic because I think in order to create explanations that are
sustainable within existing policy debates and existing regulatory debates,
you have to come up with, certainly in the United States, and given the
United States' relative power in international institutions and bilateral
relations, I think in general, you have to be able to make an argument that
is internally consistent within an economic framework, within
methodological individualism, in order to be able to make not an outsider's
critical claim on the inside, on the core of American politics, but
actually to be able to claim: "Here, change this, it works". And certainly
in my work on wireless communications it has proved to be effective and we
see today the US probably more aggressively opening for wireless commons,
prospective commons, than anywhere else. Freedom of speech, I am also
someone who actually holds very dear the idea that individuals are
fundamentally autonomous, embedded, constrained, valuing their relationship
with others, but, that, to begin one's analysis from placing the normative
emphasis on the community, is not what I do. It is generally a liberal
political theory. Nonetheless, I'd say this, there is enough, I hope, in
the work, that is capable of being used across culture, across economic
conditions as a basic description of what seems to be a quite fundamental
shift in the economic constraints on social relations, on the extent to
which, the results of, as you saw, the British workers' movement, the
results of the industrial period and its debates between capitalism and
communism, capitalism and socialism, were in some large degree affected by
the technologies of production, which ended up leaving us with capitalism
versus statism, as opposed to a genuine collaborative ownership and
production by individuals, and one of the emphasis of my work and the
reason that I've been focusing so much on looking at the period of
transition from the mechanical press and telegraph and on, is precisely
because I think this is one context in which we can find a way of
reorganizing the social relations of production, not through the state, but
around it, as well as around the market, alongside it, in a way that the
state can help and the state can hurt.

In the United States, I suspect that the primary role of the state is to
try to hurt in the context of defending industrial information producers,
and I suspect that the relative wealth of the society is such that if you
simply remove the government levers against peer production and free
software development, it will take care of itself.

I think precisely the point that you make about the wealth disparity and
the low levels of penetration of technology requires a lot more state
support here, in order to achieve a situation where it's not just that
there's just ten percent of the population that participates in this and
gets abstracted from the rest of society, but rather that you can actually
go and build connectivity and allow people to communicate everywhere. And
I've seen some of this in my work on, around, in my relations with people
working on agriculture, where you actually get computers, a computer in a
village, that will nonetheless substantially change the degree to which the
farmers can communicate to markets, to get a sense of what, where they
should market, how they should market, to share information about what
techniques have worked and haven't worked and there, that doesn't happen
without some form of intervention to actually bring the basic means of
communication to people who can't otherwise afford them. So there are
obviously very important ways in which one needs to apply differently, in
different places, given distribution of wealth, given level of wealth, and
I try to be as explicit as possible about where I assume a certain level of
wealth and what can be done otherwise and the role of the state can change
according to this.

Ultimately, yes, I think that this could be a very big change, that it'll
take time to get it to make a very big change, but I think that it'll be a
change that is genuinely liberal, as opposed to this notion of liberal
basically being a proxy for markets, that is to say, liberating for
individuals, enabling for them to do more, for and by themselves, more for
and with others, in domains both political and cultural and economic, and
that's all.



Thank you very much, I think it's time we pass it to the audience, ok? And
see their questions, you were the first one to ask a question. I would ask
everybody to identify themselves, ok, please.



Well, my name is Sérgio Storch, from the Brazilian Society of Knowledge
Management, and I have a few questions, from both from the organizational
theory and the political theory perspectives. I think that your speech
poses a set of questions that should be addressed by research in the
universities and so on. For example, what are the adequate means of
organizing these collective producers in this commons-based peer mode of
production, so that we can have really effective products and services of
good quality delivered to the market. So I think that these new
possibilities are not yet followed by new ways of organizing of regulating
this kind of work, and I think this question also addresses the labour
market perspective that Professor Gilberto posed before me.

From the political science perspective, I think that some of the things
that Professor Tom Dwyer asked are very pertinent, I think that having this
new technology, technological possibilities does not resolve the issue of
how to establish social controls or the powers that can, that will decide
which information we will receive and which information we will be able to
produce. So I think there is a lot of new issues from the standpoint of
political science, the nature of the state, I think these are not such new
questions, these questions have been posed in the Communal of Paris in the
19th century, they are very old questions which confronted anarchists
versus socialists and they should be actualized now, on the basis of these
new technological possibilities. And I think also an issue that has been
very under critiqued in these discussions is the role of hierarchy, I think
the suppression of hierarchy has been romanticized in a great view, and I
see that, for example in open software development, in the Linux community,
there is an hierarchy, there are people with more power than other people
to select, to edit, to approve and so on, and I think that network
organization is not exclusive of hierarchical organization, that what we
should seek is a balanced combination of these two apparently opposing
modes of organizing.

So, these are my questions.



Ok, so they're three very different questions.

With regard to hierarchy and networks, clearly for analytic purposes, I
separate the modes, as a matter of analyzing the different economic models,
very clearly starkly, clearly firms use social relations when they build
teams, and they try to use social relations when they build teams, when
they have employee of the month, when they do all sorts of things like
that, and firms occasionally try to use market mechanisms internally, by
creating incentive payment systems, by creating pools of internal research
funds, that are like venture capital funds internally and they try to mix
and match. Still, in order to understand what's different and special about
this new emergent modality of production, one needs to segregate out the
salient characteristics.

So, for example, when you talk about hierarchy and free software, it's a
hierarchy that is fundamentally different from a hierarchy in a firm. First
of all, in the conception









FITA 3 - LADO B




. a balanced combination of these two apparently opposing modes of
organizing.

So, these are my questions.



Ok, so they're three very different questions.

With regard to hierarchy and networks, clearly for analytic purposes, I
separate the modes, as a matter of analyzing the different economic models,
very clearly starkly, clearly firms use social relations when they build
teams, and they try to use social relations when they build teams, when
they have employee of the month, when they do all sorts of things like
that, and firms occasionally try to use market mechanisms internally, by
creating incentive payment systems, by creating pools of internal research
funds, that are like venture capital funds internally and they try to mix
and match. Still, in order to understand what's different and special about
this new emergent modality of production, one needs to segregate out the
salient characteristics.

So, for example, when you talk about hierarchy and free software, it's a
hierarchy that is fundamentally different from a hierarchy in a firm. First
of all, in the conception of the problems to be solved, they don't come
from mid-level management, or upper management, they come from people who
decide there's something they want to do. Second, in execution and
assignment of roles, they don't come from the hierarchy, they come from:
"Here, I can solve this", and then through a peer review system of
conversation about whether this work or doesn't work, and you actually see
whether the thing works or not.

So really hierarchy comes in as one mode of integration among a network of
contributions and even there, you don't tell the CEO of any company: "I
don't like your choice, I will fork and take 90% of what you've done and I
will add my 10% and we will see who will win out", you do  that in free
software, or at least you can credibly threaten to do that, which
profoundly changes the relationship between one of a hierarchical manager
to one that is at most a 'Primos entre Pares', so a First Among Equals. So
I think even those large-scale programs that do have a hierarchical model,
the hierarchy there functions very differently from in a firm and
represents a very different mode of organization, in fact, what it provides
one out of a whole suite of solutions to the problem of integration that we
see in free software and other peer production models that include software
mediated peer review like in Slashdot or Corrosion, that include simple
negotiation and eventually collective decision through mediation or
arbitration as in the case of Wikiepedia over the meaning, over the
phrasing of particular definitions.

So what we see is these are social transactional networks, they need to
come up with coordination solutions that don't include: the CEO gives an
order and you have no choice, otherwise you are fired and you have no
access to whatever your contributions were because of intellectual
property, or because of prices. And some of these are technological and
some of these are social norms, and some of these are the reintroduction of
a moderated or a very much changed mode of hierarchy or clearance at least
of judgments.

Then there is the question of, actually I think that actually answered the
first question as well, if I remember it correctly, the question of how one
deals with the variety of different kinds of contribution and different
kinds of threats, and effectively you use the same set of mechanisms, like,
for example, preventing people who are not members from posting, or, that
you get in things like Corrosion, or preventing people from commenting too
often, and you implement it with that. The political theory question I
succeeded in loosing track of in my answers.



If you can just.



Goodness of information overload, who will decide, how will be decided
which information we will have access to?

And this question addresses the issue of social control, of the
institutions that we need to create, they do not exist yet, and the
challenge to create new institutions through which we can exert social
control over the production and distribution of information.

It's not, there's currently a debate in Brazil about censorship and the
appropriation by the state, and the freedom of speech and so on, and I
think a new question.



Well, this is actually, again, as I say, mine is very much a liberal
theory, I tend to prefer systems that allow people to speak and exchange
information and create, and then criticize each other. Systems that allow
people to avert their eyes from what someone else is saying, clamping down
on it.

I think that we've seen in the industrial information economy is two
systems of constraint, one in states that had strong systems of censorship
and the other in states, like the United States, that had strong market-
based systems, that constrained what could be said and that determined what
was worth hearing, based on who, essentially who could pay the most, or who
was most likely to attract advertisers. And so you have these two systems
of constraint that operated to a greater and lesser degree in many
countries, as long as you had this centralized model of communication.

I think what we're seeing today is the feasibility of creating a situation
where the way in which we organize what information is available and what
is not, how it's available and how it's valued can itself be a radically
distributed function, so that you don't need, necessarily, the state and
you certainly can route around the market, this whole notion of the commons
that I showed in the last slide, is to understand that there is one set of
resources all the way from the physical layer up to the content of the
cultural environment that's available for anyone to use for any purpose
without asking permission of anyone. And then if you just had someone who
wants to listen to you, you already have a community and you can start
saying I do want to listen to this third person or not. But it's very much
based in individuals and selected communities of communication, rather than
in focusing on calibrating the degree to which the state controls and the
degree to which the market controls. So if we go back to spam, my
preference is very much towards systems implemented by end users in
collaboration with other end users, rather than systems that would regulate
inside the network to create a structure that would dampen it down, because
I think, although those might solve the problem to some extent, they would
so at the expense of dampening our ability to communicate with each other
as we choose, rather than going through centralizing points of control.



Some other question. Ok.



Everybody is tired, ok, it's lunch time. All right, I would like to make a
little question, last question, maybe.

So, you are proposing a new vision of a state, of a society and you are
alerting that our society has certain dangers, and certain steps which
would be desirable to take in order to get there. So, could you, very
briefly, just before lunch, ok? Tell whether you have some concrete
proposals where we could begin, which might be interesting, I think.



You're all very patient, it's very impressive.

Yes, this was the last few slides that I rushed through. But the basic
point is this, one it's important to keep the integrated proposal in mind,
what needs to happen is a systematic evaluation of each component.

In the context of the physical layer, I've been pushing for a number of
years now, the adoption of open wireless networks and, in places where
there's not enough density or where there is the political will, municipal
fibre to the home, which is to say that bringing fibre to the home, to the
curb some combination, the basic idea is to have a physical channel for
communication that isn't owned by anyone but is open for everyone to use as
they please. They hang on whatever electronics they want, with whatever
service provider they want, whether it's non-profit or for profit,
commercial or non-commercial, and we're certainly seeing some movement in
that way in the United States, in municipal fibre to the home, in Canada
even more.

So that's at that layer.

At the level of the PCs, I think it's primarily the issue of resisting
trusted systems and keeping open architectures, at the logical layers,
that's what I note and that's what I mentioned with regard to trusted
systems and resisting trusted systems. Making sure that laws that are
intended to help closed proprietary software are not extended in a way that
undermines the freedom that free software provides, so we have always the
proposals for software patents and the International Patent Convention with
the idea of tightening up incentives assuming that all the market that's
relevant is the market of the patent-based industry, which is in fact
entirely false, and in software more so than anywhere else. One of these
great pieces of information that I also mentioned on Thursday was that IBM,
which is the biggest patent holder in the technology industries in the
United States has doubled the revenues from Linux-related services that it
has from all patent and royalty and licensing and sales.

So at the logical layer, it's focusing, to some extent on resisting the
idea of strong protection for digital rights management systems, strong
protection for patents for software, allowing free software space to
develop.

As an industrial policy, that is to say, as a way in which one can imagine,
for example, in the context of Brazil, to leapfrog into some of the most
advanced applications and services, one can imagine an affirmative
government policy of actually supporting free software using it for
government procurement so as to actually create a base of, a software
services-base. Part of what I mentioned in the talk was that, in the US two
thirds of revenues from software comes form software services, so if, in
fact, IBM can make over two billion dollars a year of Linux related
services, these are not based on intellectual property, they're based on
services provided by programmers who know how to use the GNU Linux system
and implement it through servers and services, one can imagine looking at,
say, the Indian outsourcing call-centre industry and imagining a situation
where if you've got more companies in the United States, in Europe, moving
towards Linux-based systems, and you have a very highly trained base of
programmers who are very conversant in the GNU Linux system, you begin to
develop a way of developing a serious services industry around free
software, with the advantage that you don't need the capital, the capital
necessarily to buy into IP, if you were supporting a closed system. You can
actually come to the state-of-the-art, look at the thing, learn it and play
on a level playing field with anyone else because you don't need the start-
up capital to buy the intellectual property, to be permitted to work on it.
So that's another dimension. Going back to the physical layer, I think what
I heard about the proposals to create tele-centers in lots of places is a
version that is appropriate to a much poorer population of municipal fibre,
where you might not have fibre to the home because it's too expensive and
nobody can buy the machine at the end, but if you bring fibre and a tele-
center with someone to train, to the neighborhood, then you've done the
equivalent of fibre to the home, you've created a mechanism for large-scale
access locally, but again, as long as you keep it open, not if it becomes a
place to control the population that's using the machines.

Now another option is something like a National Science Foundation, or
actually in addition to procurement, trying to provide grants, as we do for
science, on the model of that's then licensed and publicly available on a
free software model.

Finally going up to the content level, I would mostly, I, at least, mostly
support negative policies, not positive policies, that is to say, not
actual support for paying people for producing, well, that's actually I'm
not sure, it depends, because we have, in a sense National Science
Foundation does support content, so you could imagine that, but primarily,
the real issues we have now are major political battles. In the US at the
national level, at the international level, in TRIPS, the WIPO, the World
Intellectual Property Organization, the bilateral free-trade agreements the
US is now negotiating, there's an across the board move, this was my long
list that I never read of enclosure movement; a long list of discreet
regulatory moves, intended to tighten up on exclusive rights and
information, so that it becomes easier to appropriate through selling
intellectual property, but at the same time, again if we go back to the
notion that information is input as well as output, the "on the shoulders
of giants", it raises the information costs for everyone else. And so as a
practical matter it creates a burden on everyone while only giving a
benefit to a cluster of techniques of production, the industrial
production. So the primary proposals that I've made there have been
negative, rather than positive: don't pass this, overturn this, get out of
the way of free innovation, get out of the way of people's ability and will
to cooperate with each other, and they will. And then you have a situation
where you can plausibly talk about a market system that competes with a
social system without the legal system being strongly biased in favour of
the proprietary production system.



Thank you very much. So, are there any questions, any more questions?
Pedro?

Wait a minute, use the microphone.



Pedro Resende from the University of Brasília. What do you know about the
CBDPTA? The proposal for regulation on computer industry that will impose
controls at the hardware level on which software can run on legally
produced and distributed hardware in the future.



Well this is the place where my cynicism about democracy in America works
in my favour. It makes me optimistic.

It goes like, roughly like this, the CBDPTA is a statute that basically
would require computer manufacturers, consumer electronic manufacturers and
component manufacturers to comply with a set of standards and regulations
that would make sure that the machine would only "boot" in a safe mode,
which is to say, the machine would only work if it certified to the CPU
that all of the components were completely reliable, that their owner
couldn't tinker with them. And then you could load Microsoft Office, you
could load the movies, etc., and it would make sure that you couldn't copy
them, because the machine was now secure as against you, its owner.

And the reason that I say that my cynicism about the system makes me
optimistic is that the industries that benefit from this rule had a total
revenue in 2002 of about 70 to 75 billion dollars, and the industries that
have to be regulated by this rule is about 750 billion dollars, and since I
have a strong belief that in the United States a 750 billion dollar
industry won't be regulated in favor of a 75 billion dollar industry,
despite its enormous cultural power, I am optimistic.

But one has to be cautiously optimistic.

Because the truth is Hollywood and the recording industry bring the stars
out to the Senate and they just have stars in their eyes and they get all
warm and fuzzy over it and say "Sure we'll pass this act". But CBDTA will
stop, the Induce Act, which was its most current version was stopped. Intel
for the first tie has a real lobbying office in Washington D.C., IBM is
beginning to understand, Cisco is beginning to understand that this could
be very bad for them. And so, there's, the Consumer Electronics
Manufacturers Association is becoming very strong an opposition to this.

So, I think just about in time, they were too late to stop the Digital
Millennium Copyright Act, they didn't understand that they were being
regulated by this law, but I think they do understand now that they're
regulated by this law. They're still a little timid, what I had hoped would
happen with the Induce Act, with the most recent iteration of this law,
would be that hardware and software and consumer electronics manufacturers
would pick up the phone and say: "Never, it's dead, tell them that, tell
them that", that hasn't happened. But they have been there, they have made
calls to their senators, and it has been blocked. So, I am cautiously
optimistic that the economics behind keeping the hardware open are
sufficiently visible now, and the players are sufficiently aware of the
downsides of agreeing that if we ever get anything at all, it will be a
very modified version, and I'm hopeful that we'll see, as we saw with the
database legislation in the US, that once there's a stable and powerful
lobby against it, it won't pass.



Even with the cyber-terrorism card being played now at full-hands?



That's just rhetoric, it's not money. I'm saying it's my cynicism about the
system that makes me optimistic on this one. It's just the amount of money
involved in the industries that would effectively have to submit their
central most valuable thing, which is their innovation process, to approval
by a standard setting process that would be dominated by Hollywood, is too
high a price for them to pay. And it's too high a price for the US to pay,
economically. You know?

Have I been wrong about where US culture is taking us in the past few
years?

Occasionally, but this one seems to go to the very heart of what we care
about, there's a lot of money at stake.



OK.



Just a quick comment. See, this is a crucial issue and we are still relying
on the price system to believe that the wrong thing will not be done.



It's true, but, as I said, unless you imagine a completely free, perfect
tomorrow, the question is always how things are moving, what sort of
freedoms are open.

The idea of pursuing a perfectly free environment is a mirage. What there
is are different systems of constraint, and what one needs to do is one
needs to navigate one's behaviour to try to structure whatever one can so
as to retain the most freedom, the most diversity of constraint, so that
one can weave, and bob, and eventually set up a system that is as free as
possible, within the facts of constraint, economic, political, social, as
they are. Given, you might call it a pessimistic view about the fact that
we always operate within constraint, it seems to me that there's room for
optimism on the introduction of a genuinely new framework through which we
can interact with each other and a framework that, in which we can play a
larger role and a more autonomous role than we did in the systems of both
heavily statist and heavily market-based.



Well, I think I will close the session here, and in closing I would like to
thank Professor Benkler for this fantastic opportunity to reflect, you
know, and just the fact that during lunch hour, everyone is sitting here,
listening bewildered to this reflection, I think this is the best sign, ok,
of the success of this event. And I would like to express how glad I am
that he could come and give us this opportunity to reflect.

So I will ask you to join me in thanking him for this opportunity.



Thank you.