The Price of Everything - Eduardo Porter [64]
THE CONFLICT BETWEEN makers and consumers of information is of paramount importance to our era. The American historian Adrian Johns argues that just as the key industry of the nineteenth century was manufacturing and the central industry of the twentieth was energy, power in the twenty-first century will gravitate toward those who are better at producing and managing knowledge and information.
Those extolling the social benefits of free online information see themselves as countercultural revolutionaries willing to liberate the era from the oppressive shackles of capitalism, lift it from under the thumb of profit-seeking corporations, and take us all back to our supposedly communitarian roots. But free lunches aren’t easy to find among precapitalist societies either.
Gifts play a big role in many societies. There’s the potlatch among the natives of the American Northwest and the kula among Melanesians of the Trobriand Islands, cycles of ritual gift giving among neighboring tribes. Bronislaw Malinowski, the anthropologist who studied natives of the Trobriand Islands off Papua New Guinea in the 1910s, witnessed farmers take mounds of yams and taro root to the fishermen’s village. Then he saw the fishermen reciprocate, taking mounds of fish to the farmers’ village.
But these gifts aren’t free. The French sociologist Marcel Mauss argued that such acts of conspicuous giving are designed to foster a sense of indebtedness in the receiving group, creating social pressure for it to reciprocate with a gift at least equal in value. This tends to act as a social bond. When Malinowski thought to have found a definitive gift with no strings attached—small presents husbands regularly gave their wives—Mauss objected that these presents, called buwana or sebuwana, were “a remuneration-cum-gift for the service rendered by the wife when she lends what the Koran still calls ‘the field.’ ”
The price of any commodity in a market transaction is the point at which both the buyer and the seller find the transaction to be profitable, leaving them both better off. Free things, even if only a mirage, can short-circuit society by introducing two distortions. They encourage consumers to consume much more than they otherwise would, and they discourage producers from producing enough to satisfy consumer demand.
Take spam. It amounts to around 90 percent of worldwide e-mail traffic. That’s because it’s virtually free to send. In 2008 researchers estimated that spammers’ costs for domain registrations, hosting fees, e-mail lists, and so forth amounted to next to nothing: $80 per million messages. So spammers send tons, and recipients pay the price. A study at a German university concluded that each one of its employees spent about twenty hours a year detecting and deleting spam. Considering the average wage in Germany amounted to about €20 an hour, spam was costing the university some €400 per employee. Across eight thousand employees it added up to €3.2 million.
If spam were costly to send, it would be less abundant. On April 1, 2002, the Korean Internet portal Daum started charging bulk e-mail senders a fee of up to ten won (about 0.8 cents) per message, depending on the volume sent. Inbound bulk e-mail fell 54 percent in the first three months of the fee.
Just as costless spam encourages its overproduction, free information inhibits its creation. Those who believe information