Price incentives and peer production

by Rob Horning

4 January 2008


This recent post by Nicolas Carr, about Amazon’s vaguely creepy “Askville” campaign—a World of Warcraft-like scheme in which consumers win virtual money for use in Amazon’s virtual world by supplying real world tips and facts—offers another way to explain the point I was fumbling toward in the previous post. Carr, a techno-skeptic who generally sees nothing especially liberating about the internet, details a long-running debate he has had with Yochai Benkler, author of The Wealth of Networks, who touts the internet’s transformational possibilities.

In July of 2006, I entered into a quasi-wager with Yochai “Wealth of Networks” Benkler about the ultimate economic structure of the most popular social media sites. I predicted that the dominant sites would pay for their content - that they would, in Benkler’s terms, be “price-incentivized systems.” Benkler predicted that the sites would be pure “peer-production processes” existing outside “the price system.”
So what happens if people get paid with virtual gold: Is that price-incentivized or not? I would argue that it is. If you’re working for gold, whether real or fake, you’re putting a price on your labor. I mean, if you take beads in trade for something of value, then the beads are money, right? But of course I’m biased, being a participant in the wager. Maybe Benkler would argue that fake gold is more like a token of esteem or a gift of the heart than like a wage.
One thing’s for sure, anyway: If you can pay your workers with virtual money, you’ve got a helluva labor strategy.

Yesterday I was trying to make the case that we are conditioned to be price-incentivized, and this makes it hard for us to process culture that’s not assimilable to that logic; we tend to import market thinking to our manner of appreciating culture, even when the cultural is not distributed through a market, or produced with profit incentives in mind. Carr seems to consistently argue that non-financial incentives are illusionary, utopian, or really monetary motives in disguise, and I’ll admit that this sort of cynicism rings true to me. But then I wonder whether if that case holds true only for firms and doesn’t necessary apply to individuals, who are more flexible in their motives, and can win in other ways than registering profits. People clearly are willing to work at public tasks not for money but for inclusion, recognition, and the sheer pleasure of social participation. It may be that people like integrating themselves into networks not necessarily with a view to any definite advantage, but for its own sake, out of a species-driven urge toward gregariousness. Being a part of a network for its own sake is at least as plausible as accumulating money for its own sake.

Anyway, Carr is mainly concerned with production: Can you extract quality without paying for it through the sheer size of a network? This is sort of a belief that a million monkeys gleefully and spontaneously typing online will ultimately produce Hamlet, even if each monkey only contributes a word. Yesterday I was wondering about consumption, and whether we need price incentives to motivate us to consume, to cue us to the value of what we might consume and to give us a framework for manufacturing desires. Or could some networked system of peer recommendation replace prices as cues to what culture is valuable? Also, will we be able to conjure limits for ourselves in the absence of cultural scarcity, a condition that was created by the transformation of cultural activity into a product. In other words, is the internet decommodifying artistic production, leading to new (or a return to old) ways to experience cultural phenomena?

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