Monday, May 23, 2005

Failing to Connect

Lawrence lessig writes of a talk he gave in South Africa promoting Creative Commons. he writes:

there was a general view at the conference that this was wrong. That we hurt developing nations, for example, if we give them knowledge for free. They should have to pay for the truths we create. It weakens them, the argument went, if they can just take what we have discovered. Better to encourage their industry of science than to destroy it by simply spreading the truths that science here has created...

the extremist from the CR economy sees what they've done as good, and assume more of a good thing is better. It's not. And it is demonstrably true that it's not. And as is my way, I will now spend weeks of regret for so totally failing to find a way to make that completely pedestrian point clear.
I replied to Lessig as follows:

I don't hink that the point you were trying to make is pedestrian. And while I doubt that your talk was a failure, I think that the point you were making was less obvious than you perceive.

After all, it has its analogies in the world of the production of physical goods. There are three models here as well:

- ER - you buy something, you pay for it

- CR - the government buys things, compensates producers, and provides them to consumers for free

- FR - you receive foreign aid

One of the significant problems with a developing economy is that there isn't a lot of money. This weakens the utility of CR, because the government doesn't have enough money to compensate producers, and hence, you get an economy of poorly compensated and hence poorly produced goods. CR assumes a certain level of prior wealth, which for developing countries and for all practical purposes leaves the choice as between ER and FR.

Now it is frequently argued that in developing countries, except in emergency situations, the net effect of foreign aid is to hinder development of a local economy. The dumping of free food on a nation, for example, prices food below the level of sustinance for local farmers, in effect killing the local farming industry. After the Tsunami, for example, it was common for governments to refuse certain types of aid for precisely this reason.

That leaves ER as the only means for a developing nation to generate any level of internal wealth, and so, it is not surprising that this was the option favoured.

I don't think it's a straightforward thing to argue against this line of reasoning. Starting from the basic presumptions that (a) professors want to make a good living, and (b) their governments don't have enough money to pay them well, it seems a bit much to expect them to cheerfully contribute their production for free, nor either to welcome the importation of free and competitive product from wealthy nations.

My response has two parts.

The first part is that the argument thus far has been told from the point of view of the producer. This something I commonly encounter when speaking to university audiences. Producer audiences take producer perspectives. But the primary beneficiaries of non-ER forms of distribution are consumers. So I try to be clear that my intent is to address the needs of consumers. And that CR and even FR are of great benefit to consumers, so much so that they become almost inevitable, and that the road producers need to travel with me is an exploration of how to preserve the interests of producers in a consumer oriented economy.

It is at this point I advocate for something like a CR model. And while I agree that governments of developing nations cannot afford to pay for CR distribution, I argue that it is clear that more wealthy nations can pay this amount, and that therefore the direction we should take is to ensure that producers in developing nations are able to share in the paymen ts made by wealthy nations to producers.

This, indeed, addresses the same problem with FR. If foreign aid were composed of aid purchased from local economies by rich nations and distributed to the poor, it would have no negative impact on the local economy; indeed, by stimulating demand an d an infusion of capital into the local economy, it would have a positive effect.

Had I been in a similar situation - and with benefit of your experience (for I confess I would have taken a line very much like the one you did) I would argue for FR and CR economies on the basis of their potential to generate payments for production of goods for which there is no local demand (because of cost, not need), and where local distribution isw thereby enabled. In other words, you get to sell your product to an export market and keep it locally.

Interestingly, though, in order for this to happen, the greatest changes need to take place, not in developing nations, but in developed nations. A characteristic of many foreign aid programs is that the materials purchased to provide foreign aid are purchased from the donor country. It is necessary, in order to ensure a worldwide distribution of revenue, to spread these pruchases around, to ensure that content creators in less wealthy nations are paid through programs funded by wealthy nations.

I have no illusion that this short ourline is a complete answer. But it does give me a frame for any remarks I would ever make in such a context. I would not say something along the lines of, "Here's what you should do..." Rather, I would say, "Here's what I think my country should do, and the steps I am taking at hoime to ensure that this happens." I suspect that if I told such an audience I am trying to develop a market for their production, I would receive a much warmer reception.

But, of course, this - like all predictions - is subject to empirical verification.

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