Some First Principals:

• It is difficult, and likely impossible to technologically restrict the duplication and redistribution of digital resources. In other-words, digitally accessible resources will never be scarce.
• Creators of content (music, literature, software) should be reimbursed for their work, and there should be business models that support these kinds of pursuits. In other words people should be compensated for the creation of content in a viable and sustainable manner.
• Information probably does want to be free. Creators of information, should want their information to be “free” because the information that has the most power and influence is that which is most accessible.
• The conveyance of physical objects (books, etc.) is a source of concrete value. Physicality is not the only basis for economic exchange, of course, but it’s a good place to start.

Questions and Answers:

• What is the “content problem?"

  I suppose the core of the problem with content these days is that we don’t have a good set of business models that can support the creation of new content in an ongoing sort of way. The industry around content is unstable and in flux: newspapers are hemorrhaging money and it doesn’t seem likely that they’re going to be able to do anything other than (maybe) prolonging the amount of time between now and when they collapse. Some paper companies might surrivive, but the consolidation and “flufification” of a great many newspapers, doesn’t seem to have a great deal of long term potential.

  Same thing with the book publishers. There are some that seem to be doing interesting things. Tor.com seems to be a good example of a step in the right direction. And maybe there will be an ebook platform that makes sense, or maybe we’ll see some sort of revival in niche-booksellers that will revive an interest in book collection.

  But the bottom line seems to be that we need to find some better way to support the creation of content. Because what we have now doesn’t seem to fit the bill. And whats on the horizon, doesn’t seem to be much better.

• Isn’t content a horrible word for this?

  I confess that the word “content” makes me a bit sick from time to time. Not only is it awkward to lump the concerns of musicians, academics, writers, journalists, and perhaps even software developers all in one label. I’m not even sure if the concerns of content producers as a whole, if we can address these folks as a group, are particularly aligned.

  Some academics use the term “knowledge production,” to refer to the core output of their work, and I’m using content in a similarly broad context. Writing/Literature/Music, “Art,” and even thought this might be a tad bit unconventional I think there’s not much that separates the consumption of software and the consumption of essays (for example.)

  There are also a number of different dimensions upon which we can think about content and the future of content: the experience of consumption; the process of generation; and the business models which support the creation and consumption of content.

• Owning Bits? What do you mean?

  I said, a few weeks ago of the whole DRM issue, that I thought “we needed to get away from the whole ‘owning bits’ metaphor for content distribution.” The whole DRM thing that so many of us find so onerous would be mostly become a non issue if we dropped the pretense that when you download a song or a book or a movie that you’re “buying them.” If you’re just watching the bits for a while, who cares what the digital restrictions are? If prices are reasonable for content, who cares if you can only “have” a half dozen books at once? I think it would all work out. But maybe that’s just me.

  The questions that result, however are much more interesting: What does it mean, socially and politically, if we don’t own information? What is reasonable and sustainable pricing? What kinds of distribution schemes make sense?

• Besides the general “fear of copying” that has heretofore plagued the content industry, what new technological challenges might the content industry face in the mid-to-short term future?

  One of the major issues that I think we’re going to have to deal with is the fact that digital information systems are too mutable.

  While this flexibility gives us lots of very powerful information resources, like Wikipedia and the ability to correct flaws in digital versions, it also means that Amazon can remove books from the Kindle at will. Furthermore, it means that creators and publishers can (attempt) to “take back” content if they have second thoughts about it. The mutability issue is obviously a mixed bag, but I think the most useful information and the most free information will have some sort of versioning information.

• What are the business models that will support content in the in the future?

  The one downfall of Project Xanadu is that it pushed forward an idea of “micropayments,” and the idea if we charge a la carte for content and have the per unit cost for content low enough that somehow it’ll all work out. The problem with this, however, is that the psychological border between “free” and “not-free” is much larger than the border between “a few cents” and “a few dollars.” The end result: micropayments keep failing.

  It’s a shame that this idea was the most successful idea to proliferate from Xanadu.

  My current bet is that some sort of subscription model is likely to win out. Pay a few dollars a month, and get access to some reasonable quantity of content. Have different levels of subscription to meet different needs and demands, and I think there’s potential there.

  The other prevailing model is the “rockstar” model, where the content creator goes on a tour and uses honoraria and merchandise sales to offset the cost of content creation. We see this both for authors who tour to support books as well as the musicians for whom I’ve named the model. It works, it focuses the transaction of physical objects.

• You seem to like subscription models. What are the implications of a shift toward subscription models in terms of the way people relate to the information (music, writing, etc.) that they consume?

  I’m not sure. I think creating a technological limitation which stores version information in some sort of immutable index. I don’t think publishers will really go for this.

  I think subscription models may also revive (in part) the interest and power of the physical-object-market. In the way that Libraries don’t cannibalize booksales (and may encourage and support the sale of real books,) I think digital content subscriptions could have the same effect on content.

As always I look forward to your thoughts and responses to these questions. See you in comments!

I’ve been thinking, a little, recently about frugality. Cast On finished a series earlier in the summer about frugality and consumption, and I’ve been talking with people in a couple of different contexts who think about their own consumption habits (of meat and other comestibles, of material things, of cars and transportation, and so forth) as political acts, in one capacity or another, and I think this all deserves some more extended reflection on my part.

Just to be clear, I think it would be safe to classify myself as a “frugal person.” I’m pretty simple in my attitudes and my consumption habits. I have stuff, more stuff, probably, than I actually need. I also buy things that I think are almost certainly luxuries. But I’m sort of minimal about the things I have and I’m pretty good about making sure that when I’m done with something, its either unusable by all of humanity or goes on to someone who can make better use of it.

Largely I think of this as a personal quirk. Having a bunch of stuff is sometimes anxiety producing. While many knitters enjoy buying yarn, frankly it makes me jittery, unless my “stash” of yarn is pretty small and I’m actively knitting a lot. Also, as a writer, and a technologist-type, the things I do “for fun,” mostly involve sitting behind a computer and typing furiously, so while computer stuff is probably my largest “luxury expense,” I’m not particularly guilty about it, and lord knows I use a lot of computer stuff.

And beyond this, I tend to think of frugality as being an extened form of common sense. Finding the shortest way to work, finding the best way to get the most nutrition and pleasure from the food you buy, finding the best way to use old computers, using yarn efficiently, and so forth.

Now, I’m well aware that common sense is a culturally constrained and all, but that aside, I’m unsure if frugality constitutes a political statement, or a political act. Refusing to participate in consumer society on the grounds of a frual-ethic is admirable, and I think a sane way to approach the world, but I’ve often found myself thinking that acting against superstructural cultural phenomena is the kind of thing that isn’t exactly something that starts at home. I mean, changing your own habits is a good thing, because it’s likely to make you more happy, healthy, and economically resilient; nevertheless, I think to constitute a political act, “working against consumption” would require contributing to efforts that create viable opportunities for other people.

So then, politics are what happens when you get together with a lot of people and do something, not what happens when you’re at the store. I think, at least.

I’m not sure if this logic holds up either, but it’s a start…

The world is a weird place sometimes.

I realize that with all this blabbering I’ve been doing about social organizations, and politics, particularly the post on Health Care Cooperatives, some of you may have read something into my thinking that I think is very much not there. I think this resonates with the way people people read a certain kind of libertarian streak in Cory Doctorow’s work, which is I think is an uncomfortable association, at least in my reading.

There are two parts of my thinking that I think are important:

First, I think there is a not particularly insignificant range of social and economic functions that fall into the broad category of the “public interest,” that I think would (and are) ill served by the private institutions which are their current guardians. This was the crux of the argument of my health care argument, but I think there are other things that fall under the public interest: education, banking, “utilities” (water, sewage, power, TCP/IP data,) health care, and infrastructure (roads, public transit, rail, power distribution, ), as well as some operations that benefit from centralized organization like aviation.

Second, I would assert that “Market Forces,” are not sufficiently understood to merit trust in their efficacy. Furthermore, the large-scale global markets that have ruled supreme in the recent past tend to sacrifice long-term authenticity, for short term gains at the expense of individuals. This is the problem with corporations that I’ve been harping on for a long time. The way, as far as I can tell to de-incentivize this kind of economic activity, is to focus economic development on more smaller ventures and to decrease the importance of initial capital outlay on business models.

And that’s simply not something you can regulate or deregulate around. To erase the impact of corporate-styled business models on the economy, you have to hack scarcity in some way. Corporation-sized ventures beat cooperative-sized ventures today, because in most areas economies of scale in the production of concrete material, doom cooperative-sized enterprises. One of the effects of the development of technology in the next {{few}}¹ years will be, I suspect, to decrease the advantages of economies of scale.

If nothing else it’s an interesting time to be alive.

Here’s another one for the “economics” collection of posts that I’ve been working on for a while. Way back when, I started this series by thinking about Kim Stanley Robinson’s Mars Trilogy and by the model of economic development presented in the final two books. In short economic activity is organized around ~150 person co-operatives that people “buy into,” and then work for as long as the co-op exists or until they sell their spot so that they can work on a different project/co-op.

In the series, these co-operatives arose as part of a response to the multi/trans/meta-national corporations which were the books antagonists. Corporations which had grown so big, that they resembled nations as much as they did companies in the contemporary perspective. The co-ops came around in part as a response to the metanat’s, but then the corporations themselves restructured in response to an ecological/sociological catastrophe, so that they eventually started to look more like the cooperatives. The “progressive,” meta-national corporation was called “Praxis,” in the stories and Praxis was the organization that lead the transformation from metanational capitalism to, what followed. As part of this series, I’d very much like to think about Praxis and what kinds of lessons we can bring back from this thought, beyond the simplistic “cooperatives good, corporations bad,” notion that I’ve been toting for months. Thus,

• The corruption and disconnect from authentic economic exchange in that the metanats display in the Mars Books, far outclasses anything that’s happening today. On the one hand, given the nature of Science Fictional criticism, this isn’t such a great barrier to importing ides from the books; on the other, we must also imagine that Praxis is able to “out compete” traditional meta-nationals because of the scale of the issue. That is, the Praxis critique and solution may be valid today, but things may have to get much worse before a Praxis-like solution becomes economically viable.

• Praxis succeeds in the story, not because it can out compete the meta-nationals at their own game, not because it’s “right.” I appreciate fiction (and reality,) where the winning economic solution wins on economic rather than moral terms. While I’m hardly a Market proponent, it’s hard to divorce economics from exchanges, and I think the following logic fails to convince me: “we change current cultural practice to do something less efficient that may create less value, because it complies better with some specific and culturally constrained ethic.”

  One part of my own thinking on this issue has revolved around looking for mechanisms that produce change and I think Praxis is particularly interesting from a mechanistic perspective.

• Praxis presents a case of a revolutionary-scale change, with evolutionary mechanisms, which is something that I think is hard to argue for, or encourage as the change itself is really a result of everything else that’s going on in the historical moment. Nevertheless, everyone in the story world is very clear that Praxis-post transformation is fundamentally not the same kind of organization that it was before. In a lot of ways it becomes its own “corporate successor state,” and I think that leaves us with a pretty interesting question to close with…

How do we setup and/or encourage successor institutions to the flawed economic organizations/coroprations we have today without recapitulating their flaws?

I’ve been flitting about the relm of political economics, technological infrastrucutre, and cyborg-related topics for a number of weeks, maybe months, and I haven’t written very much about open source. This post is hopefully a bit of a return to this kind of topic, mostly because I’ve been staring at a blog post for weeks, and I finally have something that’s nearly cogent to about an article that kind of pissed me off. Here goes

The article in question seeks to inform would-be-software entrepreneurs how they ought to compete against open source software, and to my mind makes a huge mess of the whole debate. Lets do some more in-depth analysis.

“Open source is only cheap if you don’t care about time,” is an interesting argument that sort of addresses the constant complaint that open source is “fussy.” Which it is, right? Right. One of the best open source business models is to provide services around open-source that make it less fussy. Also I think Free Software is often “a work in progress,” and is thus only occasionally “fully polished,” and is often best thought of as a base component that can be used to build something that’s fully customized to a specific contextual set of requirements. That’s part of the value and importance of free software.

I don’t think we can have our cake and eat it too on this one, (the cake is a lie!) and in a lot of ways I think this is really a positive attribute of free software.

The complaints regarding open source software seem to boil down to: “open source software doesn’t come with support services, and installation polish” (we’re working on it, but this is a commercial opportunity to provide support around open source products in general.)

So to consolidate the argument, the author seems to suggest that: “in order to beat open source software, which sucks because it’s not polished enough and doesn’t have support, I’m going to write a totally different code base, that I’ll then have to polish and support.”

My only real response is. “Have fun with that.”

Before I lay this to rest, I want to give potential “Commercial Software Vendors” (proprietary software vendors?) the following qualifications on the advice in the original article.

1. Save your users time: Sound advice. Though I think the best way to save users time is probably to integrate your product with other related tools. Make your product usable and valuable. Provide support, and take advantage skilled interaction designers to provide intuitive interfaces. Don’t, however, treat your users like idiots, or assume that because your product might have a learning curve it’s flawed. The best software not only helps us solve the problems we know we have, but also solves problems we didn’t know we had, and in the process creates tremendous value. Don’t be afraid to innovate.

Also, **save yourself time*, you can create more value for your customers by not reinventing the proverbial wheel. Use open source software to bootstrap your process, and if the value you create is (as it always is) in support and polish, you can do that to open source just as well as you can to your own software.

2. Market Hard, might work, but it’s all hit and miss. Open source might not be able to advertise, or send people on sales calls to enterprises, but open source has communities that support it, including communities of people who are often pretty involved in IT departments. Not always, mind you, but sometimes.

If you’re a “Commercial Software Vendor” you’re going to have a hell of a time building a community around your product. True fact. And word of mouth, which is the most effective way to predict sales, is killer hard without a community.

4. Focus on features for people who are likely to buy your product, is a great suggestion, and really, sort of the point of commercial software, as far as I can see. Custom development and consulting around open source if you can provide it, achieves the same goal. At the same time, I think a lot of open source enterprise software exists and succeeds on the absence of licensing fees, and so I think would-be-software vendors should be really wary to think of the enterprise as being “cash cows” particularly in the long run.

So in summary:

• Create value, real enduring value. Not ephemeral profitability, or in-the-moment utility.
• Be honest about what your business/endeavor really centers on, and do that as best you can.
• Understand the social dynamics of open source, not simply the technological constrains of the user experience.

And…. done.

I began to get to this in my post on health care and cooperatives, and governmental reform but I think it’s important to get to this point in its own post.

I guess what I’ve been gunning at (whether or not I realized it) is, “the shape of social/political change” in the contemporary world. What does change look like? What mechanisms can we use to create change? How do the existing ways that we think of revolutionary change fail to address the world we live in?

Samuel R. Delany, in his essay(s) Time Square Red, Time Square Blue presents what he calls “Contact” a potential instrument of social reform, of social “activism.” Contact, boils down to unstructured, seemingly random, intermingling of people in urban contexts. He argues for direct relationships, for an increase in cross-class cross-race relationships, by avoiding “gentrification” and social segregation. And he illustrates the efficacy of these methods with a number of pretty effective examples.

When I read this the first time, as well as the second and third, I thought remember thinking “wow, that was the first social critique I’ve read that not just presents an overwhelming critique of a cultural phenomena (gentrification, the sequestering of public sexuality) but that also presents a mechanism for social change.”

The problem with presenting mechanisms to promote social and political change is that the details are incredibly difficult to clarify, and it’s easy to present a valid critique without presenting an idea of how to effect change. It’s easy to call for action, and leave the nature of that action up to the in-the-moment activists. It’s far too easy to point out a social problem, even a superstructural issue, and then default to the methodology of previous generations (and issues,) to attempt to solve the problem. Here’s an example:

We see a lot of “recursion to Marxist-inspired methodology,” without much (I’d say) thinking about the industrial/material implications of Marx. This happens, to varying degrees in a number of areas: I think in some more casual Marxist-Feminism, in (some) environmental movements, and other movements that present “revolutionary social/political” critique. Revolutionary moments are indeed important times for some renegotiation of social values and systems, but it’s too easy to say “after the revolution….” and get all misty eyed, and forget that the critique at hand has very little to do with the disconnect between the ownership of resources, labor, and social power.

Furthermore, I think there are a lot of contemporary civil rights movements (Gay and Lesbian, Women, Immigrant) that refer back to the American Civil Rights Movement in a way that ignores the complexities of the current issue, or the complexity of the earlier issue. In any case, interlude over, I think I’m gunning for a way to get past this trap of casting contemporary struggles in the methodological terms of past struggles.

My contention is that in the next, 20 or 30 years¹ the biggest force of social change won’t be (exactly:) the mustering of revolutionary regiments, it won’t be about who we elect to legislatures and executive offices, it won’t be about where we march; but rather, about the communities we form, about the relationships we develop in these communities.

But tycho, I know you’re interested in communities, but *revolution?*

Indeed, it’s a stretch, but here’s the argument: when people get together, we make things. We see this in free software, we see this in start-ups, we see this in fan communities on the Internet. This production, is going to be an increasingly important part of our economic, political, and social activity, and the conversations the cross-class contact that occurs when people get together to work on something of common interest. Communities are the substrate for the transmission of ethical systems, and are the main way in which ideologies are transmitted to people. This is all incredibly important.

But tycho, materialism isn’t dead, you’re ignoring *things* which continue to have great importance!

Technology won’t make material things matter less at least in the way that this statement assumes. What technology will almost certainly do is make it possible for fewer people to do the work that once required required great infrastructure and capital outlay. Technology will allow us to coordinate collaboration over greater distances. Technology will lower the impact of large economies of scale on the viability of industries (smaller production runs, etc.) The end result is the things that take huge multi- and trans-national institutions (corporations) to produce today, could potentially be the domain of much smaller cooperatives.

We’ll realize, I think only somewhat after the fact, that the world has changed, and all the things that we used to think “mattered” don’t really. And I think, largely, we can’t plan for this. The “work” ahead of is, is to make things do work with other people, to collaborate and draw connections across traditional boundaries (nations, class, race, discipline, gender, skill sets), in the present and let the future attend to itself. These kinds of ad-hoc institutions are already forming, are already making things. And that’s incredibly cool.

Thoughts? I need to improve the history section of this, a good bit, and come up with more examples of the kinds of communities that exemplify this kind of organization, but this is a start.

This is I think part of a “phase two” of a series of articles I wrote a few months ago about political economies, about corporate structures, about “hacker centric” business models. In that vein of thought, I suppose this post was inevitable.

My argument, in “phase one” was that big “corporations” were poorly constituted to develop sustainable business models, to act in the public interest, and to further the best interests of their employees and customers. I made the argument that we needed structures in corporate law (and in culture at large) to recognize “co-operative” (coops) organizations that promoted organic self-organization, and more nimble institutions that could participate in “authentic economic exchange.”

I’ve been having a lot of conversations in the past few weeks that have revolved around the current progress of the health-care “reform” process in America, and I find that I keep coming to the same conclusion:

The rising costs of health care in the United States, is largely due to the overhead imposed by the insurance industry. Both in the increased bureaucracy that service providers have to endure (so service providers raise their fees to cover this cost,) and secondly in the form of the insurance companies' own profit margin.

As a result, I’ve become convinced that the problem with rising health care costs is the insurance companies themselves and that any scheme that sees legitimacy in attempting to address “the health care problem” by taking the interests of the insurance companies as being integral to the solution, rather than the root of the problem has already failed to address the problem at hand.

What I’ve been saying, is we need to work backwards through this problem. The prevailing logic seems to be to figure out how much procedures cost, how much we as “clients” need to pay, and how much our employer/the government can afford based on those projections, and then how much we have to pony up to cover the gap. I think it makes much more sense to figure out how much people (doctors, nurses, technicians, clinical providers, etc.) need, how much supplies cost (lab work, supplies, chemicals, physical plant things,) include some fringe expenses (e.g. educational expenses, preventative outlay, technological infrastructure), and then figure out how to pay for these costs: co-pays, tax funding, health care trusts. That’s at least a viable solution.

With the base expenses taken care of, providers are more free to organize in complementary groups, in co-operatives that provide various kinds of general purpose and centralized services. Alliances can be formed to distribute clerical and management responsibility, on smaller scales. Makes sense.

Good luck in seeing that happen.

In my post against the venture capital model I think one key question that I think I failed to answer is “If we do away with venture capital, where does innovation happen?” This post locates a number of potentials answers to this question.

1. Innovation happens in academia and research-oriented institutions. This is where innovation has often happened, and it makes sense: you get smart driven people together and you give them resources and you say learn about the world, and see what new things you can make and think that haven’t been made and thought of before. The problem is that research is hard to fund and support, and the Academy is often drawn toward the other great role it fulfills in our society (education).

2. Innovation happens in external communities. Red Hat, and Sun both externalize innovation via the Fedora Project and Open Solaris projects. Many web-development consultancies externalize their innovation to Open Source projects like Ruby on Rails, and Drupal. It’s a pooling of research and development via externalization, and I think it’s a trend that we’ll probably begin to see more of.

3. Innovation will happen during 20% time. Google was famous for doing this, initially and I think it’s something that we don’t hear much of as corporate purses begin to tighten as maximum productivity reappears as the leading way to save corporate business models (See, flawed system,) but I think the concept that some measure of unstructured time will lead to innovation is generally a sound concept.

4. Innovation, start-ups, the same way that they are formulated now, except without venture capital, so that innovation still happens in start-ups, but business plans will have to be focused on sustainable growth, scaling practices, and profitability. This shifts the focus of start-ups to think about “how do we implement this cool idea in a way that will work,” rather than “what would happen if we did this cool thing.” Seems a productive nearly-paradigm shift.

Other ideas?