The “New Economy” of Internet Volunteers

Time Magazine, Feb. 26, has an article called “Getting Rich off Those Who Work for Free.” It talks about highly visible new-digital-economy success stories that rely heavily on volunteer labor—Linux, Wikipedia, Firefox notable among them.

Is this the benevolent side of humanity emerging? Altruism? Cyber-generosity?

Chief guru for this movement-trend-whatever is Yochai Benkler, currently of Yale Law School, author of “Wealth of Networks”—downloadable for free, as befits the spokesperson for the “gift economy.” I downloaded it last year—all 515 pages of it. (I got through some of it).

Benkler talks about the economics of peer production, and what it’s good for. Is this the Next Big Thing?

Benkler says, “The question for the past decade was, Is this real? The question for the next half-decade is, How do you make this damned thing work?”

Not so fast—I’m still back in the last decade on this one.

First of all, Benkler’s a good example. He’s not a volunteer. He’s being paid—probably quite well—by Yale. He gets a lot out of writing free books and chatting up Web 2.0-erati. Office; health care; pension; tuition for the kids; that sort of thing. His potential consulting rate, whether he has used it yet or not, is pretty high.

His free book got him a lot of publicity—because free’s unusual for books. Try putting out a free CD of music. Not so unusual.

What does Yale get in return? Less talk about being the alma mater of a C+ president. More identification with a hip guru of the new economy. As the commercial says, priceless. I sense a sensible economic transaction.

What looks like volunteering is often just financing. Linux programmers are often paid by large companies, and/or are themselves investing in job training.

At the front end of new markets, high tech labor has its own version of venture capital. The “volunteers” are making investments; the cash flow problem is solved by financing—either through employment at old companies, or in the form of a loan to be paid back by greater job marketability later.

Back in the day (way back) when AOL begin outdistancing Compuserve, AOL had volunteer sysops for all the topical areas. My guess is, that role is no longer done by volunteers. (Any AOL’ers still out there to confirm?) But I’d bet there are a lot of ex-sysops whose experience with AOL helped them quite nicely, thank you.

Then there is the “Carr-Benkler” wager. Carr is a business writer who bet Benkler that, by 2111, sites like Digg, Flickr and YouTube will be run by paid people, not volunteers. Shades of the Simon/Ehrlich bet of 1980 (check the link, it’s really interesting).

Benkler’s no dummy—Harvard Law, Yale Law, Supreme Court clerkship—but I think he’s playing the Ehrlich role here (Ehrlich lost. Big time.)

Generosity is in fact an under-appreciated driver of human behavior, and linked to trust. We can see dozens of tiny examples of generosity every day on a small scale, and sometimes on a large scale.

I’m just not sure we’re seeing it here.

I’m happy to volunteer on cool cutting edge stuff—because it lets me get in on the cool cutting edge. And oh yeah it helps save the world. But hey I’d like some credit for my volunteering after I graduate, or when I make the VC rounds to do my own IPO. Or at least a job interview.

It’s the same old Invisible Hand at work here, we don’t need to invent a new one.