Nearly six years ago, we wrote about the ridiculousness of Nick Carr's suggestion that Web 2.0 was all about "digital sharecropping", in which online service providers are somehow "exploiting" users to take the fruits of their labors. I would hope that, with six years of hindsight, people would still remember what a completely nonsensical argument this is -- based as it is on the economically clueless suggestion that the only possible benefit someone could get from using an online service is money. Of course that's not true. The reason that so many people use something like YouTube isn't because they're being exploited, but because it enables something wonderful and powerful for free. Prior to YouTube, if you wanted to put up a video, you had to install complex or expensive server software, pay a ton for bandwidth... oh yeah, and hope that whoever wanted to watch the video had the proper software to view it. YouTube took all of that away, and made it all free (and even added easy ways to monetize it). If that's exploitation, sign me up to be exploited. Similarly, look at a platform like Twitter, which has enabled amazingly powerful real time communications that has connected me with people worldwide in ways never before possible. That's not exploitation. It's called providing something of value.

So it's a shame to see the IEEE basically rehash Carr's silly argument as if it were still relevant, setting up a strawman about how "Web 2.0" (really, is anyone still using that term?) was all about empowerment, but the reality is that (*gasp*) there are companies involved. And some of them... (wait for it...) make money!

But the road to Utopia all too often ends up detouring through the business district, and Web 2.0 has been no exception. By offering the means of production free to their users, other leviathan sites, such as Facebook, Twitter, and YouTube, have generated enormous amounts of content at almost no expense. Even better, this content is a gold mine for targeted advertising.

Over in Utopia, the “workers” who generated all those articles, photos, tweets, and videos would get a cut of the profits they helped to generate. In the business district, however, users retain their amateur status, while the companies they labor for rake in billions. Worse, contributors don’t even own the content they create. The smallest of the small print in the terms of use, which you must agree to in order to get an account, states that the company can use your content as it sees fit.

Beyond the fact that this is a common misreading of the terms of service of most of the sites he's talking about (which merely request a license to make sure that their hosting of the content you put up is legit), author Paul McFedries completely ignores the tremendous value that people get for using those platforms... almost all of which is given out for free. While economic value is often measured in dollar terms, that doesn't mean that people don't get value if actual dollars aren't exchanged. The people using these platforms aren't being exploited -- they use them because they really, really value them.

Anthony De Rosa, a product manager at Reuters, calls this digital feudalism and laments that we “are being played for suckers to feed the beast, to create content that ends up creating value for others.”

And this is equally misguided. All sorts of things people do create value for others. Almost no economic activity is entirely contained so that only the person doing the initial activity retains 100% of the benefits. Concepts like externalities and spillovers exist in economics for a very good reason -- and part of the problem is people who don't understand that creating excess value that benefits others is actually a core reason we have economic growth in the first place. Creating value for others is of tremendous economic value. The problem is that people ignore the fact that those doing the creating are getting back more than enough value directly or they wouldn't be doing the activity in the first place.

It's a shame that we're still having these discussions today, after we've had many more years of experience with all of these valuable services to recognize that it's not exploitation to get a tremendously useful service for free, while also increasing value for others. It's actually how we innovate and grow the economy itself.

I assume you've been hearing all about how sites like the Huffington Post are exploiting workers like a slave master by having them work for free. It's all, as Nick Carr has noted, digital sharecropping, as "free" is really all about exploiting others. And, of course, what it comes down to -- as Billy Bragg pointed out a few years ago -- is about who profits from all of that "free" stuff. According to Jonathan Tasini, that's "unjust enrichment."

Since we've established all of that, I have to ask the big question that really represents the elephant in the internet room: When will people stop exploiting Google?
You see, I recently read on Kevin Kelly's site about how Google provides about $500 worth of value to the average searcher. And we got it all for free. But, but, but... you say: we're paying for that in the advertising we see. Oh, how naive. Why, that's just like saying that Tasini got paid in exposure (how do you measure that?!?) or that Bragg got paid in getting a free platform to promote his music. Others will point out that Google made the choice to offer its service for free -- but, again, that applies to the people screaming about being "exploited" by Arianna Huffington as well. Then, of course, some will say that those situations are different because they involved companies cashing out. Yet, according to the Kevin Kelly piece, there's approximately $65 billion in consumer surplus from Google that the company is not capturing. $65 Billion. How can the company possibly go on knowing that the public has made so much money off of its hard work?

So, all of you using Google without paying your $500 directly to Google, when will you stop exploiting that poor company?

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Okay, got that out of the system. A bit more seriously, you really should read the Kevin Kelly article which combines a few different studies to determine how much Google is worth to users. The really key point in all of this is the pure economic growth created by this. It's not in Google's bottom line (though, that's part of it), but in the massive consumer surplus created by tools like Google that allow people to do things they simply couldn't do before and do other things much more efficiently. If you understand how economic growth works, this is a perfect example. What are sometimes called "spillover effects" or "consumer surplus" is really economic growth in action. It's when the sum is greater than the parts, and that value can be more widely distributed. This is a good thing, and it would be nice if people stopped getting confused by "free" and thinking that it means an economic disaster, rather than an economic multiplier, as it often is...

In terms of the specifics, this also really does a nice job of demonstrating the difference between price and value. The technical "price" of using Google is free, but we value it a lot more than that. Google offering up search for free doesn't "devalue" search, as some suggest. It does the opposite. It creates more value. Kelly asks what would happen if Google decided to try to "capture" that excess value by charging. I'm sure a ton of people would pay. But, really, the question is would that be sustainable? The second Google did something like that, you could bet that Microsoft would suddenly jump to being the number one search engine, and it would open up all sorts of opportunities for new upstarts trying to enter the market. And, really, that's the key point we keep making. Certain things can't really succeed at a long-term price over zero, because the competition will just eat them alive. But, a la Google, it doesn't mean there isn't a ton of money to be made. You just have to figure out what to charge for. There's no exploitation going on here. Just economics.

When we recently wrote about yet another journalist complaining about how Google exploits their content, someone in the comments made a really salient point that should get wider exposure. If you go by the journalist's own logic, then the truth is that they are exploiting the newsmakers they cover. After all, it's really the newsmakers who are "creating" the story, and all the journalists are doing is writing up an account of it, for commercial purposes, and not rewarding the newsmakers who make their jobs possible in the first place. Journalists have been freeriding on the backs of the people who actually make the news for too long! I think it's time that everyone who is in a news story start standing up for their rights, and demanding that journalists pay them to stop this free riding. Perhaps some newsmakers will band together and create a new consortium, where journalists can just pay a one time regular subscription fee, to be divided up among newsmakers, based on who makes the most news. Yeah... that's the ticket...

We already wrote about how ridiculous it is to compare Somali high seas pirates with music, movie and software fans downloading an unauthorized copy of something off the internet -- and even the press is starting to question the wisdom of calling unauthorized file sharing "piracy." Yet, that hasn't stopped the BSA, masters of misleading through questionable stats from ramping up a marketing campaign that purposely tries to compare software file sharers with Somali pirates. As Gordon Haff at News.com notes:

"This has got to be one of the most tone-deaf and cynically opportunistic PR pitches I've seen for quite some time. It's one thing to figuratively equate piracy with making digital copies of software, music, movies, or books. We can debate endlessly whether such actions are truly stealing or not. But that's not the point. It's that to literally and deliberately equate the two in the wake of pirates taking a ship's crew hostage and the US Navy subsequently killing three of the attackers...Well, words fail me."

Earlier this year, at the Mesh Conference in Toronto, I had the pleasure of meeting Nancy Baym, a professor of communications at the University of Kansas. She's been doing tremendous research into questions concerning online "fan" communities around musicians. She's just posted her latest paper, with Robert Burnett from Karlstad University in Sweden, examining the question of whether or not Web 2.0 "fan communities" are really about exploitation or empowerment. This is a question we've addressed before, given that web 2.0 critics, such as Nicholas Carr, like to ignore that there are non-monetary benefits in the economy, and thus assume that any activity done for reasons other than money are exploitation.

The paper takes a balanced look at the Swedish independent music scene, which relies heavily on fan communities to act as filters and promoters of the music. The record labels don't focus so much on "selling music" so much as building up attention that can then be monetized in many different ways. Thus, they encourage fans to share and promote their music for them. So, is this use of fans exploitation?

The paper shows that, contrary to the "exploitation" view, the fans often get plenty of value out of the whole process, if not directly in monetary terms. As the paper notes, the concept of "exploitation" suggests a cost to the participant, but if they get more out of participating than they give up, then it hardly seems like exploitation. Instead, it's a reasonable choice in a non-monetary market, where they get more value than they put in. Plus, the paper notes that some of the fan participants eventually do make some money out of their efforts as well. That shouldn't come as much of a surprise. There are plenty of folks who became highly involved in a hobby and are eventually able to turn that into a business.

But the bigger issue for many fans, is simply being able to build relationships with the musicians they love -- and with other fans. To them, that's worth a lot more than money, and it's hard to see how building strong relationships and friendships can be seen as exploitation.

On top of that, the paper notes that the fans also make use of certain strategies to make sure -- implicitly or explicitly -- that they're not being exploited. In other words, whether they realize it or not, they're aware at some level of the possibility of being exploited by the situation, and they make certain choices to protect against that possibility. Overall, a very interesting paper that's worth reading, and I look forward to more research on this topic.

A few people have sent in the recent story about how Facebook has relied on volunteer users to translate the site into other languages. That story has resulted in something of a debate from users who feel that this is somehow exploiting these translators, since they're working for "free" for a company that is supposedly valued at $15 billion (despite revenues of about $150 million). This is the same old bogus Nicholas Carr argument that this is somehow exploitation because the users aren't getting paid in cash for their labor. That, of course, is missing the point. No one is being forced or compelled to do these translations. They're doing it because they are getting compensated in their own way. It's either recognition from the community, or merely the fact that doing this enables them to use Facebook more effectively -- and that's compensation enough. For the users who do the translation, it's obviously a fair trade, otherwise, why would they take part?