[ba-unrev-talk] Linux and the nature of the firm
http://www.benkler.org/CoasesPenguin.html
full paper is a pdf from that page. (01)
Dan Gillmore of the San Jose Mercury News has a discussion of the paper at
http://www.siliconvalley.com/mld/siliconvalley/3723325.htm in which he says:
"Open source may, in fact, be a model for a radical shift in the way we do
things. Yochai Benkler, professor of law at New York University and a
longtime observer of information technology's relationship to our lives,
says open source signals ``a broad and deep emergence of a new, third mode
of production in the digitally networked environment.'' (02)
Here's the paper's abstract: (03)
For decades our understanding of economic production has been that
individuals order their productive activities in one of two ways: either as
employees in firms, following the directions of managers, or as individuals
in markets, following price signals. This dichotomy was first identified in
the early work of Nobel laureate Ronald Coase, and was developed most
explicitly in the work of neo-institutional economist Oliver Williamson. In
the past three or four years, public attention has focused on a
fifteen-year-old social-economic phenomenon in the software development
world. This phenomenon, called free software or open source software,
involves thousands or even tens of thousands of programmers contributing to
large and small scale project, where the central organizing principle is
that the software remains free of most constraints on copying and use
common to proprietary materials. No one "owns" the software in the
traditional sense of being able to command how it is used or developed, or
to control its disposition. The result is the emergence of a vibrant,
innovative and productive collaboration, whose participants are not
organized in firms and do not choose their projects in response to price
signals.
In this paper I explain that while free software is highly visible, it is
in fact only one example of a much broader social-economic phenomenon. I
suggest that we are seeing is the broad and deep emergence of a new, third
mode of production in the digitally networked environment. I call this mode
"commons-based peer-production," to distinguish it from the property- and
contract-based models of firms and markets. Its central characteristic is
that groups of individuals successfully collaborate on large-scale projects
following a diverse cluster of motivational drives and social signals,
rather than either market prices or managerial commands.
The paper also explains why this mode has systematic advantages over
markets and managerial hierarchies when the object of production is
information or culture, and where the capital investment necessary for
production-computers and communications capabilities-is widely distributed
instead of concentrated. In particular, this mode of production is better
than firms and markets for two reasons. First, it is better at identifying
and assigning human capital to information and cultural production
processes. In this regard, peer-production has an advantage in what I call
"information opportunity cost." That is, it loses less information about
who the best person for a given job might be than do either of the other
two organizational modes. Second, there are substantial increasing returns
to allow very larger clusters of potential contributors to interact with
very large clusters of information resources in search of new projects and
collaboration enterprises. Removing property and contract as the organizing
principles of collaboration substantially reduces transaction costs
involved in allowing these large clusters of potential contributors to
review and select which resources to work on, for which projects, and with
which collaborators. This results in allocation gains, that increase more
than proportionately with the increase in the number of individuals and
resources that are part of the system. The article concludes with an
overview of how these models use a variety of technological and social
strategies to overcome the collective action problems usually solved in
managerial and market-based systems by property and contract. (04)
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XML Topic Maps: Creating and Using Topic Maps for the Web.
Addison-Wesley, ISBN 0-201-74960-2. (05)