The Information Economy Is Not About Selling Information

from the bingo dept

What took me a whole series of posts to explain, Cory Doctorow has summed up succinctly in a column for Information Week: the "information economy" is not about selling information -- it's about using information to make everything else more valuable. The problem is that many in the US believe that the information economy is about selling information, and that mistake explains many of the strategic mistakes made over the past few decades that we've been describing here. Unfortunately, as we've been noting, the US has bet so strongly on the idea of the information economy being about selling information that it's pushing other countries to put laws in place that support the US's position on this -- and doing so under the false banner of "free trade." The purpose of real free trade is that it's beneficial to both parties through the efficiencies afforded by comparative advantage. In this case, however, these new protectionist policies are only beneficial to the US -- and, as Cory notes, this means they'll eventually be ignored. The benefit is too strong not to ignore them. And, once that happens, then it's those other countries that gain the benefits of recognizing that information makes everything else more valuable, while the US suffers under the modern equivalent of information mercantilism. It's not good for the US economy. It's not good for US businesses -- and yet due to this one incorrect belief, it's what we're left with.
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  1. icon
    Mike (profile), 12 Jun 2007 @ 3:06pm

    Re: Tired Old Arguements

    And he's implicitly making the same wrong-headed assumptions to make his case. Creating information and, especially knowledge, is not free.

    John, I'm not sure why you keep saying that no one pays for stuff. That's not the argument we've made at all. Yes, absolutely it costs money to create information. I've never said otherwise. In fact, that's a key point in the business model I've described.

    Where you're confused is you think that paying directly for the information is the only way to monetize it. That's absolutely false.

    If no one pays for it, then a lot less of it will get created, especially in formats that are widely useful.

    Again, we're not saying no one pays for it. However, the idea that "less" will get created without IP laws is false. Go look at the research about how IP laws tend to decrease creative output. Study after study has shown that stronger IP laws have a negative impact on creation of content.

    Understanding why is pretty simple. Without IP, creators rely on other business models that encourage them to keep creating content. With IP, they have incentives to rest on their laurels and just keep charging for old content.

    So, your assumption is wrong. Look at the research.

    Selling information is a huge industry. And it always will be.

    No. That's simply not true. People sell *access* to information. Or they sell *aggregating* the information. Or they sell *filtering* the information. Or they sell the *creation* of information. The information itself they're not selling.

    Almost every information business fits into one of those business models: aggregating, collecting, filtering or creating information. Each of those is a service, not a product.

    This will discourage investing time in the significant amount of work it takes to publish a book or piece of music or painting

    This shows a total lack of knowledge about history and economics. Go look at the research and get back to me.

    the people who created the data still lose something and make less from something that they created than they otherwise would.

    This is false. There is no "loss" there is a marketing failure. They have failed to get someone to buy. That's different than a loss.

    Mike, stop trying to justify stealing by using your tired, amateurish, refuted theories.

    First of all, I'm not justifying stealing. I'm not even justifying infringement. I have said repeatedly that it's illegal and I do not suggest anyone do it. DO NOT put words in my mouth when they are the exact opposite of what I've said. It suggests you are reacting emotionally, rather than intelligently.

    As for "refuted" theories, you have yet to refute them or point to any evidence that refutes them. I have a whole stack of research here that all seems to support the points I've made.

    Try living somewhere where property is not protected by the law and see how you like it there.

    You are confusing infinite goods with scarce property. Property is one thing. Ideas are something entirely different. Pretending one is the other doesn't get you very far.

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