inequality in the digital economy

Posted on: Fri, 01/10/2014 - 00:33 By: Tom Swiss

I haven't read Lanier’s book (yet), but this summary is interesting. It is true that those striking in rich in the digital economy are often doing so on the work of others -- just like the old economy, come to think of it. Just riffing on the general idea here, but maybe we need a tax on ISPs and search engines and social networking sites, anything making money off other people's content, with that tax funding payments to content creators.

Will Digital Networks Ruin Us?

Which leads nicely to Lanier’s final big point: that the value of these new companies comes from us. “Instagram isn’t worth a billion dollars just because those 13 employees are extraordinary,” he writes. “Instead, its value comes from the millions of users who contribute to the network without being paid for it.” He adds, “Networks need a great number of people to participate in them to generate significant value. But when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth.” Thus, in Lanier’s view, is income inequality also partly a consequence of the digital economy.

It is Lanier’s radical idea that people should get paid whenever their information is used. He envisions a different kind of digital economy, in which creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. A digital economy that appears to give things away for free — in return for being able to invade the privacy of its customers for commercial gain — isn’t free at all, he argues.