NET 2.0: Post-Scarcity Economics and the problem with Google

THE Information Age was founded upon what one might call a fundamental error – the exchange of terms in an economic model that would lead us to a post-scarcity economy in which the traditional laws of economics no longer applied. It is the kind of error that a postal clerk might conjour up, and yet the people who keep mouthing: “The cheque is in the mail” are no less information scientists and cyberneticists of the caliber of Norbert Wiener, whose 1951 classic The Human Use of Human Beings introduced the Information Age.

So how does this new model work? Suppose one replaces the concept time with information. All our mathematical equations start to resemble flights of fancy that have very little to do with the real world. For example, remove gravity from E=MC2 and what one has, is a frictionless world in which inertia, the kind of thing that stops us from flying off into space, no longer exists. Since electronics can reproduce such errors, the world was quick to embrace digital, as an alternative to the real world.

The virtual world of the Internet enabled us to arguably, engage in the same error that cleaved Eve from Adam’s rib. What was once considered the fixed limitations of the real world, time and space, were now stripped of their meaning. Business would never be the same in the gravity-less Information Age .

The dawn of the post-scarcity economy was thus upon us. Henceforth, bits and bytes determined value. The move from the restrictions and limitations placed upon the ordinary provision of services, in terms of billable seconds, minutes and hours, to an infinite and unquantifiable supply of information, that could be sold bit by bit, was considered a fantastic and revolutionary new way of cybernetic thinking. 

The terrible result of this new electronic logic, is that everything in the information economy would come to resemble data. It is a fundamental error that cannot be solved without destroying the entire system, or reconceptualising the framework upon which information is based. Since on the Internet, no distinction is made between one bit and the next, economic theory, as it has traditionally been applied —  in which value is determined by supply and demand –, no longer holds. A book worth only 1.8 Mb, for example, ends up costing less than the commercial advertising the book or an audio version of the book (whose data might amount to a staggering 50mb) and yet arguably there is more information in a book.  

[NOTE: Observe the neat conjouring trick in which Rands have been converted into Bandwidth.] 

Seen through the prism of information engineering the new paradigm was sold as a frictionless economy in which the service providers would invariably prevail. The value chain of the external economy would eventually implode in cyberspace, but not before a virtual utopia, blind to such distinctions was created. 

You see, producers of information were soon, after the birth of the Net 1.0 equated with consumers, as distinctions between producer and consumer disappeared altogether. A technological miracle called Internet Protocol or IP had insured that only those companies which delivered information made real money, while a new kind of corporation and corporate economy emerged. Business leaders had quickly realized in the first decade after the launch of the World Wide Web, that a new form of currency was needed in the unbelievable post-scarcity economy it created, since the cornucopia of services unleashed meant a glut of products all veying for our attention, the bizarre result was that everything except the bits, was rendered worthless. 

Since only service providers supplying the actual data were making money, there would have to be a second web-based economy whose foundation was pure information. Page views, clicks-through’s, usage-figures, statistics, the kind of information which could be sold to advertisers and marketers desiring access to the new economy that was being manufactured upon the fundamental error already outlined. 

Next to the provision of services, the aggregation of information is the second biggest business on the Internet. Corporations like Google, not only sell this data that translates into audiences, markets (readership, viewer statistics) to advertisors, but have created a symbolic economy in which the links themselves have become a form of commodity. Without IP, the maps that link each computer to each other would be meaningless. In fact the Internet is the one instance in which the map is the territory. This flat-earth logic is crucial to understanding what happens in a virtual world in which one dimension has been removed. Time, Gravity, call it what you will, but the result is the same. Any company adding value to this new geography by manipulating the IP maps, which to begin with, were simply cold digits, was bound to have an impact. 

The development of Net 2.0 has attempted to replace this lost dimension through the creation of unique environments that allow users to view information through the added lense of particular concerns and individual needs. Whether social networks like Facebook, web aggregators like De.Li.Ci.Ous, or blog accumulators like SA-Based Amatomu, these new environments offer an intriquing alternative to the raw output of information, while traditional service providers continue to bill consumers at bits-per-rand.

 Part of the allure of Net 2.0 is the prospect of free information. Downloadable items such as songs, music videos, practically anything that can be transmitted in the form of digital packets of information, is available. Not everything is “free”, in fact there are elaborate schemes to entice consumers to part with their cash. Online casino’s that demand credit card details, subscription porn services, extra bandwidth at a fee. The price for free however, has and always will be, the initial cost of the service.

 In South Africa, bandwidth comes at a premium. In an environment in which broadband copper cable is the major source of bandwidth, the only alternative is wireless.  Fibre optic, which is faster and more efficient, is still rare and so broadband Internet is available only at a pinch. Service providers, no doubt wanting to protect the artificial economy created out of the provision of bits are doing everything they can to avoid the introduction of fibre direct to the door. Since, with a larger carrying capacity optic cable pushes everything else out of the water. Imagine a world in which only one profession were allowed to make money?

The new world created by engineers, is a wonderfully egalitarian place if one chooses to ignore the uncomfortable fact that, for the most part, we are paying for this freedom. If you are a coder, a programmer, or a net engineer, you may sell your services. If you happen to be an artist or writer, the problem becomes a lot more complex when the value of an object is dependent. not upon its use, but rather its aesthetic or moral value. RU Sirius, former editor of Mondo 2000 summed up the problem at a recent Net 2.0 conference in Amsterdam: “Get people to work for free.” That has essentially become the motto of the post-scarcity economy.

On the one hand, it is wonderfully communitarian. Marx or Lenin could not think up a better method of getting today’s  microserfs to co-operate. But in an environment in which billionaires exist alongside those living in the developing world, the dispossessed, there is something sinister about all this utopian, to coin a phrase, net-nonesense. How are we to survive as producers and creators in an age, in which value is no longer determined by scarcity, but rather the accumulation of bits and bytes, the 1s and Os that describe information?  

Here are two possibilities:

 a)    We embrace a genuine and authentic freedom in which today’s broadband services are provided for free, in which the provision of fast and reliable Iinternet is granted as a sovereign right, so that as user-consumer-producers we are not forced to pay to get online.

 b)    We figure out a system of revenue sharing, in which the exchange of information is granted value. Such systems already exist. One podcast site promises to share revenue based upon the amount of times a particular podcast is downloaded. Such schemes generate income via advertising and pass this on to the user. Instead of fleecing clients with the promise of opportunity, so-called opt-in schemes which we know are readily available elsewhere, these scheme are rather turned into revenue generating systems that reward the producers of information. 

Google, via its advertising scheme has already attempted to compensate those who provide information. But to date, I know of no-one who has personally received the mythical Google cheque in the mail. It would seem that the scheme is either a giant fraud, or a terrible failure. Perhaps we are asking a lot from information consumers  Perhaps Google’s advertising scheme hasn’t hit the mark in a revolutionary way because it doesn’t reward clicks to ones own site, bur rather clicks to the person who places the advertising? 

As the owner of a website, I do not receive any compensation for Google clicks to my site. What I receive is the “opportunity” to place free advertising sponsored by Google on my site, which may or may not end up generating revenue.  The recognition that revenue is an important factor in the datastream, in which a network of service providers collude to provide information, that has, as its origin, the information producer, is a fundemental shift from the view, which sees information as essentially free.

As long as you pay for services, information is only partially free. That some of this revenue is shared, in a system that would make us all, truly equal, is a right that should be fought for with the same vigour that encourages democracy. 

One day we will awake to find the proverbial Google cheque in the mail. It will be a dividend in which all the clicks on the internet have been divided by the total population of the world and squared with the amount of money earned by the earth’s service providers. The legend will say: You are user # 51 298 123 187 here is you ten-cents (US$) for the 8kb of data we actually siphoned off your site. We know its yours, because the IP number says it’s yours. 

The result, I predict, will be a practical and infinitely rewarding utopia  in which everybody would have a guaranteed income, courtesy of Google Corporation. This is the kind of error, which could make life worth living.         

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