The Public Domain Part 23

People used to say that collaborative creation could never produce a quality product. That has been shown to be false. So now they say that collaborative creation cannot be sustained because the governance mechanisms will not survive the success of the project. Professor Epstein conjures up a "central committee" from which insiders will be unable to cash out--a nice mixture of communist and capitalist metaphors. All governance systems--including democracies and corporate boards--have problems. But so far as we can tell, those who are influential in the free software and open source governance communities (there is, alas, no "central committee") feel that they are doing very well indeed. In the last resort, when they disagree with decisions that are taken, there is always the possibility of "forking the code," introducing a change to the software that not everyone agrees with, and then letting free choice and market selection converge on the preferred iteration. The free software ecosystem also exhibits diversity. Systems based on GNU-Linux, for example, have distinct "flavors" with names like Ubuntu, Debian, and Slackware, each with pa.s.sionate adherents and each optimized for a particular concern--beauty, ease of use, technical manipulability. So far, the tradition of "rough consensus and running code" seems to be proving itself empirically as a robust governance system.

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Why on earth should we care? People have come up with a surprising way to create software. So what? There are at least three reasons we might care. First, it teaches us something about the limitations of conventional economics and the counterintuitive business methods that thrive on networks.

Second, it might offer a new tool in our attempt to solve a variety of social problems. Third, and most speculative, it hints at the way that a global communications network can sometimes help move the line between work and play, professional and amateur, individual and community creation, rote production and compensated "hobby."

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We should pay attention to open source software because it shows us something about business methods in the digital world--indeed in the entire world of "information-based" products, which is coming to include biotechnology. The scale of your network matters. The larger the number of people who use your operating system, make programs for your type of computer, create new levels for your game, or use your device, the better off you are. A single fax machine is a paperweight. Two make up a communications link. Ten million and you have a ubiquitous communications network into which your "paperweight" is now a hugely valuable doorway.

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This is the strange characteristic of networked goods. The actions of strangers dramatically increase or decrease the usefulness of your good. At each stage the decision of someone else to buy a fax machine increases the value of mine. If I am eating an apple, I am indifferent about whether you are too. But if I have a fax machine then my welfare is actually improved by the decisions of strangers to buy one. The same process works in reverse. Buy a word processing program that becomes unpopular, get "locked in" to using it, and find yourself unable to exchange your work easily with others. Networks matter and increasing the size of the networks continues to add benefits to the individual members.

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What's true for the users of networks is doubly so for the producers of the goods that create them. From the perspective of a producer of a good that shows strong network effects such as a word processing program or an operating system, the optimal position is to be the company that owns and controls the dominant product on the market. The owners.h.i.+p and control is probably by means of intellectual property rights, which are, after all, the type of property rights one finds on networks.

The value of that property depends on those positive and negative network effects. This is the reason Microsoft is worth so much money. The immense investment in time, familiarity, legacy doc.u.ments, and training that Windows or Word users have provides a strong incentive not to change products. The fact that other users are similarly constrained makes it difficult to manage any change. Even if I change word processor formats and go through the trouble to convert all my doc.u.ments, I still need to exchange files with you, who are similarly constrained. From a monopolist's point of view, the handcuffs of network effects are indeed golden, though opinions differ about whether or not this is a cause for ant.i.trust action.

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But if the position that yields the most revenue is that of a monopolist exercising total control, the second-best position may well be that of a company contributing to a large and widely used network based on open standards and, perhaps, open software. The companies that contribute to open source do not have the ability to exercise monopoly control, the right to extract every last cent of value from it. But they do have a different advantage; they get the benefit of all the contributions to the system without having to pay for them. The person who improves an open source program may not work for IBM or Red Hat, but those companies benefit from her addition, just as she does from theirs. The system is designed to continue growing, adding more contributions back into the commons. The users get the benefit of an ever-enlarging network, while the openness of the material diminishes the lock-in effects. Lacking the ability to extract payment for the network good itself--the operating system, say--the companies that partic.i.p.ate typically get paid for providing tied goods and services, the value of which increases as the network does.

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I write a column for the Financial Times, but I lack the fervor of the true enthusiast in the "Great Game of Markets." By themselves, counterintuitive business methods do not make my antennae tingle. But as Larry Lessig and Yochai Benkler have argued, this is something more than just another business method. They point us to the dramatic role that openness--whether in network architecture, software, or content--has had in the success of the Internet. What is going on here is actually a remarkable corrective to the simplistic notion of the tragedy of the commons, a corrective to the Internet Threat storyline and to the dynamics of the second enclosure movement. This commons creates and sustains value, and allows firms and individuals to benefit from it, without depleting the value already created. To appropriate a phrase from Carol Rose, open source teaches us about the comedy of the commons, a way of arranging markets and production that we, with our experience rooted in physical property and its typical characteristics, at first find counterintuitive and bizarre. Which brings us to the next question for open source. Can we use its techniques to solve problems beyond the world of software production?

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In the language of computer programmers, the issue here is "does it scale?" Can we generalize anything from this limited example?

How many types of production, innovation, and research fit into the model I have just described? After all, for many innovations and inventions one needs hardware, capital investment, and large-scale, real-world data collection--stuff, in its infinite recalcitrance and facticity. Maybe the open source model provides a workaround to the individual incentives problem, but that is not the only problem. And how many types of innovation or cultural production are as modular as software? Is open source software a paradigm case of collective innovation that helps us to understand open source software and not much else?

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Again, I think this is a good question, but it may be the wrong one. My own guess is that an open source method of production is far more common than we realize. "Even before the Internet" (as some of my students have taken to saying portentously), science, law, education, and musical genres all developed in ways that are markedly similar to the model I have described. The marketplace of ideas, the continuous roiling development in thought and norms that our political culture sp.a.w.ns, owes much more to the distributed, nonproprietary model than it does to the special case of commodified innovation that we think about in copyright and patent. Not that copyright and patent are unimportant in the process, but they may well be the exception rather than the norm. Commons-based production of ideas is hardly unfamiliar, after all.

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In fact, all the mottos of free software development have their counterparts in the theory of democracy and open society; "given enough eyeb.a.l.l.s, all bugs are shallow" is merely the most obvious example. Karl Popper would have cheered.14 The importance of open source software is not that it introduces us to a wholly new idea. It is that it makes us see clearly a very old idea. With open source the technology was novel, the production process transparent, and the result of that process was a "product" which outcompeted other products in the marketplace. "How can this have happened? What about the tragedy of the commons?" we asked in puzzlement, coming only slowly to the realization that other examples of commons-based, nonproprietary production were all around us.

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Still, this does not answer the question of whether the model can scale still further, whether it can be applied to solve problems in other spheres. To answer that question we would need to think more about the modularity of other types of inventions.

How much can they be broken down into chunks suitable for distribution among a widespread community? Which forms of innovation have some irreducible need for high capital investment in distinctly nonvirtual components--a particle accelerator or a Phase III drug trial? Again, my guess is that the increasing migration of the sciences toward data- and processing-rich models makes much more of innovation and discovery a potential candidate for the distributed model.

Bioinformatics and computational biology, the open source genomics project,15 the BioBricks Foundation I mentioned in the last chapter, the possibility of distributed data scrutiny by lay volunteers16--all of these offer intriguing glances into the potential for the future. Finally, of course, the Internet is one big experiment in, as Benkler puts it, peer-to-peer cultural production.17 47

If these questions are good ones, why are they also the wrong ones? I have given my guesses about the future of the distributed model of innovation. My own utopia has it flouris.h.i.+ng alongside a scaled-down, but still powerful, intellectual property regime. Equally plausible scenarios see it as a dead end or as the inevitable victor in the war of productive processes. These are all guesses, however. At the very least, there is some possibility, even hope, that we could have a world in which much more of intellectual and inventive production is free. " 'Free' as in 'free speech,' " Richard Stallman says, not "free as in 'free beer.' "18 But we could hope that much of it would be both free of centralized control and low- or no-cost. When the marginal cost of reproduction is zero, the marginal cost of transmission and storage approaches zero, the process of creation is additive, and much of the labor doesn't charge, the world looks a little different.19 This is at least a possible future, or part of a possible future, and one that we should not foreclose without thinking twice. Yet that is what we are doing. The Database Protection Bills and Directives, which extend intellectual property rights to the layer of facts;20 the efflorescence of software patents;21 the UCITA-led validation of shrinkwrap licenses that bind third parties;22 the Digital Millennium Copyright Act's anticirc.u.mvention provisions23--the point of all of these developments is not merely that they make the peer-to-peer model difficult, but that in many cases they rule it out altogether. I will a.s.sert this point here, rather than argue for it, but I think it can be (and has been) demonstrated quite convincingly.24 48

The point is, then, that there is a chance that a new (or old, but underrecognized) method of production could flourish in ways that seem truly valuable--valuable to free speech, innovation, scientific discovery, the wallets of consumers, to what William Fisher calls "semiotic democracy,"25 and, perhaps, valuable to the balance between joyful creation and drudgery for hire. True, it is only a chance. True, this theory's scope of operation and sustainability are uncertain. But why would we want to foreclose it? That is what the recent expansions of intellectual property threaten to do. And remember, these expansions were dubious even in a world where we saw little or no possibility of the distributed production model I have described, where discussion of network effects had yet to reach the pages of The New Yorker,26 and where our concerns about the excesses of intellectual property were simply the ones that Jefferson, Madison, and Macaulay gave us so long ago.

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LEARNING FROM THE SHARING ECONOMY 50

Accept for the sake of argument that the free software community actually works, actually produces high-quality products capable of competing in the market with proprietary alternatives.

Concede for a moment that the adoption of Creative Commons licenses shows there are millions of creators out there who want to share their works with others. Many of those creators even want to allow the world to build on their material. Indeed, let us concede that the whole history of the Web, from Wikipedia to the obsessive and usefully detailed sites created on everything from Vikings to shoe polishes, shows a desire to share one's knowledge, to build on the work of others one has never met.

These efforts are remarkably varied. Some are ultimately aimed at profit--even if their results are free. Think of IBM's open source initiatives or musicians who release Creative Commons- licensed work in order to get more club gigs. Some are provided as a volunteer act of benevolence or civic duty, even if they "compete" with expensive proprietary alternatives. Think of Wikipedia or MIT's OpenCourseWare. When the infrastructure for this collaboration does not exist, it gets a.s.sembled--and quickly. Both the GPL and Creative Commons are examples. Accept all of this. So what?

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Lesson number one comes from the nonprofit activities--everything from Wikipedia to Web sites created by enthusiasts. People like to create and wish to share. In many cases they will do so without financial reward. A surprising amount of useful, creative, or expressive activity is generated without any financial incentive at all.

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Should this cause us to throw out the economic case for copyrights? No. But it should lead us to rea.s.sess it. As I explained in Chapter 1, copyright provides an incentive for two distinct activities. First, it offers an incentive to create the work in the first place. The author of Windows for Dummies or Harry Potter gets a right to exclude others from copying the work, a right that he or she can sell in the marketplace. The goal is to offer a financial reason to devote time to this particular creative activity. It is this incentive that is most often cited when attempting to persuade policy makers to expand protection. Second, it offers an incentive to distribute the work--to typeset and print large quant.i.ties of the work and to sell it to bookstores, or to broadcast it, or put it on movie screens.

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Each medium is economically different, of course. The economics of the feature film are different from those of the book, the magazine, or the operating system. Thus, we have never had very good figures on the relative importance of these incentives. We can only guess at how much of the incentive from copyright goes to encouraging creation and how much to distribution. Until recently, most types of distribution demanded higher levels of capital. The industry structure that resulted often consisted of creators who worked as wage or contract labor for distributors--either never acquiring copyright in their work in the first place or immediately transferring that copyright to their employers. Because distribution was expensive, our experience with material generated for fun or out of a love of sharing was an essentially private and local one. You might have a neighbor's photocopied sheet of baking recipes that worked well at high alt.i.tudes, or of fis.h.i.+ng techniques that worked well on a particular lake, a song that a friend created for a special occasion, or a short story you wrote for your kids--and then typed up for them to tell to theirs. Financial incentives were not needed to encourage the creation of the work, but the cost of distribution dramatically limited its dissemination.

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The single most dramatic thing that the Web has done by lowering the cost of communication and distribution, at the same moment that other electronic tools lowered the cost of production, is to make this local and private activity a global and public one.

Someone, somewhere, will have written the guide to fis.h.i.+ng on that lake, baking at that alt.i.tude, was.h.i.+ng windows, or treating stings from Portuguese man-of-war jellyfish. Someone will have taken a photo of the Duke Chapel or explained the history, economics, and chemistry of shoe polish or distilling. Someone might even have created a great cla.s.s on music theory or C???programming. Someone will have written a handy little program to manage DNS requests on a local network. Bizarrely, at least as far as the economists were concerned, these people all wanted to share what they had made. Because of the genius of search engines, and the implicit peer-review function that those engines deduce from patterns of links to pages, I can find that material when I need it.

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True, much of the material on the Web is inane or insane, confused, badly written, tendentious, and inaccurate. (It should be noted that this is hardly a problem confined to the Web or volunteer-generated material. Personally, I would not want People magazine or Fox News in a time capsule to represent my civilization. But some of the material on the Web is clearly worse.) Yes, Wikipedia is occasionally inaccurate--though in one test in Nature it stacked up well against the Encyclopedia Britannica, and it is obviously much more encyclopedic in its coverage. But all of this misses the point.

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Consider how your expectations about information retrieval have changed in the last fifteen years. We now simply a.s.sume that questions about a piece of architecture, a bit of local history, a recipe, or the true author of a song can all be answered within seconds. We have forgotten what it is like to be routinely in ignorance because of the unavailability of some piece of information. One podcaster I talked to called it being a member of "the right-click generation": "When I am walking around and I see a building, I almost feel as though I ought to be able to 'right click' it and have the architect's name pop up." Consider that it now seems normal for a gay Iraqi man in Baghdad to have a blog that offers hundreds of thousands of readers around the world a literate and touching account of the American occupation from a perspective entirely different from that provided by the mainstream press.27 We think it normal for a person of moderate resources to be able to speak to the world from a war zone, whether or not he is affiliated with a newspaper or credentialed by a corporation.

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These examples are not the end of the process. Our methods of sorting, ranking, and verifying the material generated are still evolving. They may improve even beyond this point. We are only fifteen years into this particular experiment, after all. And a huge amount of this material is produced by our fellow citizens without the profit motive.

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Does this mean that we no longer need copyright or patent protection to encourage the production and distribution of creative work? No. The fis.h.i.+ng tips are great, but I still might buy a handsomely ill.u.s.trated guide to take on the lake with me or, even better, just stay at home and read A River Runs Through It. The New Yorker, and not a sheaf of printouts from the Web, still sits on my coffee table, though much of the high-quality content I read comes to me online, for free, from strangers who are generating it for pleasure, not profit, or who profit from open sharing, not closed control. The online blogosphere provides a vital counterpoint to mainstream media, but it exists in a symbiotic--some would say parasitic--relations.h.i.+p with that media and the network of professional news gatherers for which it pays. Some of the most interesting open source production methods actually rely on copyright. Even if they did not, open source production would not suffice to run our pharmaceutical industry (though it might help with certain stages of the drug discovery process).

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Still, just as it would be silly to dismiss the importance of intellectual property based on our experience of blogs and Wikipedia and open source software, it would be equally silly to underestimate what the Web has taught us. The Web has enabled an astonis.h.i.+ng flowering of communication and expression, an astounding democratization of creativity. We have learned just how strong, and how useful, is the human urge to express, communicate, invent, and create--provided the barriers to sharing are lowered. These are the very things that copyright and patent are supposed to encourage. For us to portray the Web--as the Internet Threat story line does--as predominantly a threat to creativity is simply perverse. For us to base our policies only on that notion would be a tragedy. We might end up stultifying one of the greatest explosions of human creativity the world has ever seen by treating it as an unimportant marginal case and instead designing our rules around the production processes of commercial culture in the late twentieth century.

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The shape of our copyright and to a lesser extent our patent system comes from a world in which almost all large-scale distribution was an expensive, capital-intensive enterprise. The roles of gatekeeper and financier, producer and a.s.sembler, distributor and advertiser, tended naturally to coalesce into vertically integrated firms or symbiotic commercial partners.h.i.+ps. Those firms were presumed to be the proxy for the public interest when it came to intellectual property policy.

Who would know better than they what was needed? Occasionally, device manufacturers would provide a counterweight--as in the Sony case--where the defense of a particular "consumer freedom"

actually created a market for a complementary product. Artists and authors might be trotted out as appealing spokespersons, though the laws that were made only sporadically reflected their economic and artistic interests. Librarians and educational inst.i.tutions had influence at the edges. Most of the time, though, it was the a.s.semblers and distributors of content whose voices and a.s.sumptions about markets would be heard.

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Out of this pattern of habit and influence, and out of much deeper notions about authors.h.i.+p and invention that I have explored elsewhere, developed an ideology, a worldview. Call it maximalism. Its proponents sincerely believed in it and pursued it even when it did not make economic sense. (Think how lucky the movie industry is that it lost the Sony case.) It has been the subject of this book. Its tenets are that intellectual property is just like physical property, that rights need to increase proportionately as copying costs decrease, and that, in general, increasing levels of intellectual property protection will yield increasing levels of innovation. Despite its defense of ever-increasing government-granted monopolies, this ideology cloaks itself in the rhetoric of free markets. The b.u.mbling state, whose interventions in the economy normally spell disaster, turns into a scalpel-wielding genius when its monopolies and subsidies are provided through intellectual property rights rather than regulatory fiat. Above all, this way of seeing the world minimizes the importance of creativity, expression, and distribution that takes place outside its framework and ignores or plays down the importance of the input side of the equation--the need to focus on the material from which culture and science are made, as well as the protected expression and inventions made from that raw material.

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This process was not--let me stress--was not a simple process of economic determinism or industry conspiracy. Anyone who claims that is the thesis of this book simply has not read it.

(Reviewers beware.) Let us start with economic determinism. It was not a situation in which the law mechanistically recorded the interests of the most economically important industries in the area. This was the creation of a worldview, not the steely- eyed calculation of profit and loss. Not only did many of the rules we ended up with make no sense from the point of view of some of the largest economic players in the area--think of the device manufacturers, the search engines, and so on--they frequently made no sense from the perspective of those proposing them. Attempting to twist the law to make it illegal for technology to interfere with your old business method is frequently bad for the industry seeking the protection, as well as for the technology, the market, and the wider society. Since this worldview makes inc.u.mbents systematically blind to profit- making opportunities that could be secured by greater openness, rather than greater control, it actually disables them from pursuing some of the most promising methods by which they could have made money for their shareholders. Again, the chapter on the Sony decision offers a salutary example.

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Economic determinism does not explain the rules we have. Neither are those rules simply a result of the manipulation of elected officials by inc.u.mbent industries through crafty campaign contributions and distorted evidence (though to be sure, there was a lot of that as well). Many of the people who put forward this worldview--both lobbyists and lobbied--sincerely believe that more rights will always lead to more innovation, that all property rights are the same, that we do not need to think about both the input and output sides of the equation, that cheaper copying techniques automatically require greater protections, and so on.

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What of the modest suggestions I put forward here? We could sum them up thus: do not apply identical a.s.sumptions to physical and intellectual property. Focus on both the inputs to and the outputs of the creative process; protecting the latter may increase the cost of the former. Look both at the role of the public domain and the commons of cultural and scientific material and at the need to provide incentives for creativity and distribution through exclusive rights. More rights will not automatically produce more innovation. Indeed, we should confine rights as narrowly as possible while still providing the desired result. Look at the empirical evidence before and after increasing the level of protection. Pay attention to the benefits as well as the costs of the new technologies and the flowering of creativity they enable.

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To me, these points seem bland, boring, obvious--verging on tautology or pablum. To many believers in the worldview I have described, they are either straightforward heresy or a smokescreen for some real, underlying agenda--which is identified as communism, anarchism, or, somewhat confusingly, both.

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This account smacks of exaggeration, I know. How could things be so one-sided? The best answer I can give came from a question I was asked at a recent conference. The questioner pointed out politely that it was unlikely that the policy-making process would ignore such a fundamental and obvious set of points--points that I myself observed had been well understood for hundreds of years. I had used many examples of intellectual property rights being extended--in length, breadth, scope. Why had I not spoken, he asked, of all the times over the last fifty years when intellectual property rights had been weakened, curtailed, shortened? Since human beings were fallible, surely there were occasions when the length of a copyright or patent term had proved to be too long, or the scope of a right too large, and the rights had been narrowed appropriately by legislation. Why did I not cite any of these? The answer is simple. To the best of my knowledge, there are none. Legislatively, intellectual property rights have moved only in one direction--outward. (Court decisions present a more complex picture, as the previous chapter's discussion of software copyrights and business method patents shows.) 67