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CHAPTER 1. Introduction: A Moment of Opportunity and Challenge
1. Barry Wellman et al., “The Social Affordances of the Internet for Networked Individ
ualism,” JCMC 8, no. 3 (April 2003).
2. Langdon Winner, ed., “Do Artifacts Have Politics?” in The Whale and The Reactor: A
Search for Limits in an Age of High Technology (Chicago: University of Chicago Press,
1986), 19–39.
3. Harold Innis, The Bias of Communication (Toronto: University of Toronto Press, 1951).
Innis too is often lumped with McLuhan and Walter Ong as a technological deter
minist. His work was, however, one of a political economist, and he emphasized the
relationship between technology and economic and social organization, much more
than the deterministic operation of technology on human cognition and capability.
4. Lawrence Lessig, Code and Other Laws of Cyberspace (New York: Basic Books, 1999).
5. Manuel Castells, The Rise of Networked Society (Cambridge, MA, and Oxford: Blackwell
Publishers, 1996).
PART I. The Networked Information Economy
1. Elizabeth Eisenstein, Printing Press as an Agent of Change (Cambridge: Cambridge ?1
University Press, 1979). 0
476 Notes to Pages 36–46
CHAPTER 2. Some Basic Economics of Information Production and Innovation
1. The full statement was: “[A]ny information obtained, say a new method of produc
tion, should, from the welfare point of view, be available free of charge (apart from
the costs of transmitting information). This insures optimal utilization of the infor
mation but of course provides no incentive for investment in research. In a free
enterprise economy, inventive activity is supported by using the invention to create
property rights; precisely to the extent that it is successful, there is an underutilization
of information.” Kenneth Arrow, “Economic Welfare and the Allocation of Resources
for Invention,” in Rate and Direction of Inventive Activity: Economic and Social Factors,
ed. Richard R. Nelson (Princeton, NJ: Princeton University Press, 1962), 616–617.
2. Suzanne Scotchmer, “Standing on the Shoulders of Giants: Cumulative Research and
the Patent Law,” Journal of Economic Perspectives 5 (1991): 29–41.
3. Eldred v. Ashcroft, 537 U.S. 186 (2003).
4. Adam Jaffe, “The U.S. Patent System in Transition: Policy Innovation and the In
novation Process,” Research Policy 29 (2000): 531.
5. Josh Lerner, “Patent Protection and Innovation Over 150 Years” (working paper no.
8977, National Bureau of Economic Research, Cambridge, MA, 2002).
6. At most, a “hot news” exception on the model of International News Service v. As
sociated Press, 248 U.S. 215 (1918), might be required. Even that, however, would only
be applicable to online editions that are for pay. In paper, habits of reading, accred
itation of the original paper, and first-to-market advantages of even a few hours would
be enough. Online, where the first-to-market advantage could shrink to seconds, “hot
news” protection may be worthwhile. However, almost all papers are available for free
and rely solely on advertising. The benefits of reading a copied version are, at that
point, practically insignificant to the reader.
7. Wesley Cohen, R. Nelson, and J. Walsh, “Protecting Their Intellectual Assets: Ap
propriability Conditions and Why U.S. Manufacturing Firms Patent (or Not)” (work
ing paper no. 7552, National Bureau Economic Research, Cambridge, MA, 2000);
Richard Levin et al., “Appropriating the Returns from Industrial Research and De-
velopment”Brookings Papers on Economic Activity 3 (1987): 783; Mansfield et al., “Im
itation Costs and Patents: An Empirical Study,” The Economic Journal 91 (1981): 907.
8. In the 2002 Economic Census, compare NAICS categories 5415 (computer systems
and related services) to NAICS 5112 (software publishing). Between the 1997 Economic
Census and the 2002 census, this ratio remained stable, at about 36 percent in 1997
and 37 percent in 2002. See 2002 Economic Census, “Industry Series, Information,
Software Publishers, and Computer Systems, Design and Related Services” (Wash
ington, DC: U.S. Census Bureau, 2004).
9. Levin et al., “Appropriating the Returns,” 794–796 (secrecy, lead time, and learning-
curve advantages regarded as more effective than patents by most firms). See also
F. M. Scherer, “Learning by Doing and International Trade in Semiconductors” (fac
ulty research working paper series R94-13, John F. Kennedy School of Government,
Harvard University, Cambridge, MA, 1994), an empirical study of semiconductor ?1
industry suggesting that for industries with steep learning curves, investment in in 0
formation production is driven by advantages of being first down the learning curve ?1
Notes to Pages 47–87 477
rather than the expectation of legal rights of exclusion. The absorption effect is de
scribed in Wesley M. Cohen and Daniel A. Leventhal, “Innovation and Learning:
The Two Faces of R&D,” The Economic Journal 99 (1989): 569–596. The collaboration
effect was initially described in Richard R. Nelson, “The Simple Economics of Basic
Scientific Research,” Journal of Political Economy 67 (June 1959): 297–306. The most
extensive work over the past fifteen years, and the source of the term of learning
networks, has been from Woody Powell on knowledge and learning networks. Iden
tifying the role of markets made concentrated by the limited ability to use informa
tion, rather than through exclusive rights, was made in F. M. Scherer, “Nordhaus’s
Theory of Optimal Patent Life: A Geometric Reinterpretation,” American Economic
Review 62 (1972): 422–427.
10. Eric von Hippel, Democratizing Innovation (Cambridge, MA: MIT Press, 2005).
11. Eben Moglen, “Anarchism Triumphant: Free Software and the Death of Copyright,”
First Monday (1999),
CHAPTER 3. Peer Production and Sharing
1. For an excellent history of the free software movement and of open-source develop
ment, see Glyn Moody, Rebel Code: Inside Linux and the Open Source Revolution (New
York: Perseus Publishing, 2001).
2. Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective
Action (Cambridge: Cambridge University Press, 1990).
3. Josh Lerner and Jean Tirole, “The Scope of Open Source Licensing” (Harvard NOM
working paper no. 02–42, table 1, Cambridge, MA, 2002). The figure is computed
out of the data reported in this paper for the number of free software development
projects that Lerner and Tirole identify as having “restrictive” or “very restrictive”
4. Netcraft, April 2004 Web Server Survey,
5. Clickworkers Results: Crater Marking Activity, July 3, 2001, http://clickworkers.arc
6. B. Kanefsky, N. G. Barlow, and V. C. Gulick, Can Distributed Volunteers Accom
plish Massive Data Analysis Tasks?
7. J. Giles, “Special Report: Internet Encyclopedias Go Head to Head,” Nature, Decem
ber 14, 2005, available at
9. Yochai Benkler, “Coase’s Penguin, or Linux and the Nature of the Firm,” Yale Law
Journal 112 (2001): 369.
10. IBM Collaborative User Experience Research Group, History Flows: Results (2003),
11. For the full argument, see Yochai Benkler, “Some Economics of Wireless Commu
nications,” Harvard Journal of Law and Technology 16 (2002): 25; and Yochai Benkler, ?1
“Overcoming Agoraphobia: Building the Commons of the Digitally Networked En 0
vironment,” Harvard Journal of Law and Technology 11 (1998): 287. For an excellent ?1
478 Notes to Pages 88–93
overview of the intellectual history of this debate and a contribution to the institu
tional design necessary to make space for this change, see Kevin Werbach, “Super
commons: Towards a Unified Theory of Wireless Communication,” Texas Law Review
82 (2004): 863. The policy implications of computationally intensive radios using wide
bands were first raised by George Gilder in “The New Rule of the Wireless,” Forbes
ASAP, March 29, 1993, and Paul Baran, “Visions of the 21st Century Communica
tions: Is the Shortage of Radio Spectrum for Broadband Networks of the Future a
Self Made Problem?” (keynote talk transcript, 8th Annual Conference on Next Gen
eration Networks, Washington, DC, November 9, 1994). Both statements focused on
the potential abundance of spectrum, and how it renders “spectrum management”
obsolete. Eli Noam was the first to point out that, even if one did not buy the idea
that computationally intensive radios eliminated scarcity, they still rendered spectrum
property rights obsolete, and enabled instead a fluid, dynamic, real-time market in
spectrum clearance rights. See Eli Noam, “Taking the Next Step Beyond Spectrum
Auctions: Open Spectrum Access,” Institute of Electrical and Electronics Engineers Com
munications Magazine 33, no. 12 (1995): 66–73; later elaborated in Eli Noam, “Spec
trum Auction: Yesterday’s Heresy, Today’s Orthodoxy, Tomorrow’s Anachronism.
Taking the Next Step to Open Spectrum Access,” Journal of Law and Economics 41
(1998): 765, 778–780. The argument that equipment markets based on a spectrum
commons, or free access to frequencies, could replace the role planned for markets
in spectrum property rights with computationally intensive equipment and sophisti
cated network sharing protocols, and would likely be more efficient even assuming
that scarcity persists, was made in Benkler, “Overcoming Agoraphobia.” Lawrence
Lessig, Code and Other Laws of Cyberspace (New York: Basic Books, 1999) and
Lawrence Lessig, The Future of Ideas: The Fate of the Commons in a Connected World
(New York: Random House, 2001) developed a rationale based on the innovation
dynamic in support of the economic value of open wireless networks. David Reed,
“Comments for FCC Spectrum Task Force on Spectrum Policy,” filed with the Fed
eral Communications Commission July 10, 2002, crystallized the technical underpin
nings and limitations of the idea that spectrum can be regarded as property.
11. See Benkler, “Some Economics,” 44–47. The term “cooperation gain” was developed
by Reed to describe a somewhat broader concept than “diversity gain” is in multiuser
information theory.
12. Spectrum Policy Task Force Report to the Commission (Federal Communications Com
mission, Washington, DC, 2002); Michael K. Powell, “Broadband Migration III: New
Directions in Wireless Policy” (Remarks at the Silicon Flatiron Telecommunications
Program, University of Colorado at Boulder, October 30, 2002).
CHAPTER 4. The Economics of Social Production
1. Richard M. Titmuss, The Gift Relationship: From Human Blood to Social Policy (New
York: Vintage Books, 1971), 94. ?1
2. Kenneth J. Arrow, “Gifts and Exchanges,” Philosophy & Public Affairs 1 (1972): 343. 0
Notes to Pages 94–116 479
3. Bruno S. Frey, Not Just for Money: An Economic Theory of Personal Motivation (Brook
field, VT: Edward Elgar, 1997); Bruno S. Frey, Inspiring Economics: Human Motivation
in Political Economy (Northampton, MA: Edward Elgar, 2001), 52–72. An excellent
survey of this literature is Bruno S. Frey and Reto Jegen, “Motivation Crowding
Theory,” Journal of Economic Surveys 15, no. 5 (2001): 589. For a crystallization of the
underlying psychological theory, see Edward L. Deci and Richard M. Ryan, Intrinsic
Motivation and Self-Determination in Human Behavior (New York: Plenum, 1985).
4. Roland Be´nabou and Jean Tirole, “Self-Confidence and Social Interactions” (working
paper no. 7585, National Bureau of Economic Research, Cambridge, MA, March
5. Truman F. Bewley, “A Depressed Labor Market as Explained by Participants,” Amer
ican Economic Review (Papers and Proceedings) 85 (1995): 250, provides survey data
about managers’ beliefs about the effects of incentive contracts; Margit Osterloh and
Bruno S. Frey, “Motivation, Knowledge Transfer, and Organizational Form,” Orga
nization Science 11 (2000): 538, provides evidence that employees with tacit knowledge
communicate it to coworkers more efficiently without extrinsic motivations, with the
appropriate social motivations, than when money is offered for “teaching” their
knowledge; Bruno S. Frey and Felix Oberholzer-Gee, “The Cost of Price Incentives:
An Empirical Analysis of Motivation Crowding-Out,” American Economic Review 87
(1997): 746; and Howard Kunreuther and Douslar Easterling, “Are Risk-Benefit
Tradeoffs Possible in Siting Hazardous Facilities?” American Economic Review (Papers
and Proceedings) 80 (1990): 252–286, describe empirical studies where communities
became less willing to accept undesirable public facilities (Not in My Back Yard or
NIMBY) when offered compensation, relative to when the arguments made were
policy based on the common weal; Uri Gneezy and Aldo Rustichini, “A Fine Is a
Price,” Journal of Legal Studies 29 (2000): 1, found that introducing a fine for tardy
pickup of kindergarten kids increased, rather than decreased, the tardiness of parents,
and once the sense of social obligation was lost to the sense that it was “merely” a
transaction, the parents continued to be late at pickup, even after the fine was re
6. James S. Coleman, “Social Capital in the Creation of Human Capital,” American
Journal of Sociology 94, supplement (1988): S95, S108. For important early contribu
tions to this literature, see Mark Granovetter, “The Strength of Weak Ties,” American
Journal of Sociology 78 (1973): 1360; Mark Granovetter, Getting a Job: A Study of
Contacts and Careers (Cambridge, MA: Harvard University Press, 1974); Yoram Ben-
Porath, “The F-Connection: Families, Friends and Firms and the Organization of
Exchange,” Population and Development Review 6 (1980): 1.
7. Nan Lin, Social Capital: A Theory of Social Structure and Action (New York: Cam
bridge University Press, 2001), 150–151.
8. Steve Weber, The Success of Open Source (Cambridge, MA: Harvard University Press,
9. Maurice Godelier, The Enigma of the Gift, trans. Nora Scott (Chicago: University of
Chicago Press, 1999), 5. ?1
10. Godelier, The Enigma, 106. 0
480 Notes to Pages 117–153
11. In the legal literature, Robert Ellickson, Order Without Law: How Neighbors Settle
Disputes (Cambridge, MA: Harvard University Press, 1991), is the locus classicus for
showing how social norms can substitute for law. For a bibliography of the social
norms literature outside of law, see Richard H. McAdams, “The Origin, Develop
ment, and Regulation of Norms,” Michigan Law Review 96 (1997): 338n1, 339n2. Early
contributions were: Edna Ullman-Margalit, The Emergence of Norms (Oxford: Clar
endon Press, 1977); James Coleman, “Norms as Social Capital,” in Economic Impe
rialism: The Economic Approach Applied Outside the Field of Economics, ed. Peter Bern
holz and Gerard Radnitsky (New York: Paragon House Publishers, 1987), 133–155;
Sally E. Merry, “Rethinking Gossip and Scandal,” in Toward a Theory of Social Con
trol, Fundamentals, ed. Donald Black (New York: Academic Press, 1984).
12. On policing, see Robert C. Ellickson, “Controlling Chronic Misconduct in City
Spaces: Of Panhandlers, Skid Rows, and Public-Space Zoning,” Yale Law Journal 105
(1996): 1165, 1194–1202; and Dan M. Kahan, “Between Economics and Sociology: The
New Path of Deterrence,” Michigan Law Review 95 (1997): 2477.
13. An early and broad claim in the name of commons in resources for communication
and transportation, as well as human community building—like roads, canals, or
social-gathering places—is Carol Rose, “The Comedy of the Commons: Custom,
Commerce, and Inherently Public Property,” University Chicago Law Review 53 (1986):
711. Condensing around the work of Elinor Ostrom, a more narrowly defined liter
ature developed over the course of the 1990s: Elinor Ostrom, Governing the Commons:
The Evolution of Institutions for Collective Action (New York: Cambridge University
Press, 1990). Another seminal study was James M. Acheson, The Lobster Gangs of
Maine (New Hampshire: University Press of New England, 1988). A brief intellectual
history of the study of common resource pools and common property regimes can
be found in Charlotte Hess and Elinor Ostrom, “Ideas, Artifacts, Facilities, and Con
tent: Information as a Common-Pool Resource,” Law & Contemporary Problems 66
(2003): 111.
CHAPTER 5. Individual Freedom: Autonomy, Information, and Law
1. Robert Post, “Meiklejohn’s Mistake: Individual Autonomy and the Reform of Public
Discourse,” University of Colorado Law Review 64 (1993): 1109, 1130–1132.
2. This conception of property was first introduced and developed systematically by Rob
ert Lee Hale in the 1920s and 1930s, and was more recently integrated with contem
porary postmodern critiques of power by Duncan Kennedy, Sexy Dressing Etc.: Essays
on the Power and Politics of Cultural Identity (Cambridge, MA: Harvard University
Press, 1993).
3. White Paper, “Controlling Your Network, A Must for Cable Operators” (1999), http://
4. Data are all based on FCC Report on High Speed Services, Appendix to Fourth 706
Report NOI (Washington, DC: Federal Communications Commission, December ?1