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Free information based economy

What is information?

But let us first define information.
One of the best and most clear definitions i\'ve found is that information is \"knowledge acquired through study, experience or instruction\". So basically, information is knowledge. It is a \"know-what\", \"know-where\", \"know-when\", \"know-how\" and know-why. When the one knows something it has an information.

But today not only human beings are able to \"know\", computers are too. It is important to understand that software is a form of information as well, and not only the human readable source code, but also the human unreadable binary code. It is simply an information written in a language not understandable to human beings, but understandable to computers which use this information to operate just as your grandma uses cookie recipes in her native language to make those sweet cookies.

Other more standard examples of information can be engineering blueprints, chemical formulas, mathematical algorithms, stories, essays and articles just like this one. An information can also be as simplistic as \"yes\" or \"no\", but even this kind of information can sometimes produce a great value.

Value of information?

Does information have any value? Probably the best answer that can be given to this question is \"it depends\" (but not in a sense you think:). The value of information is not solid and self-contained, it is dependant. I would say that information in itself does not have any value because the value being attached to it does not comes from the information itself but from the possibilities of it\'s use and the other values that it\'s use can produce. It only appears to have value.

For example, you could have created a blueprints of a \"warp\" drive for a starship. These blueprints are an information on how, why and from what materials you can build a warp drive, but let\'s \"suppose\" that we currently don\'t have the skills, technology and maybe even materials to be able to build it. This is what makes such an information \"useless\" or \"valueless\". But what if the circumstances were different and that we actually have all that is needed to build that warp drive. We would automatically \"attach\" a great value to that information (blueprints).
Where is the role of information itself in setting it\'s own value? There is none, the value is being determined completely from the outside circumstances.

Economic value of information - non-existent

Economic value is what is needed for a product to be tradeable. A trade is an exchange of values. Many usually say that a trade is exchange of \"goods\", but that definition just hides the fact that it is the value of those goods being exchanged and their value is the exact reason for which those \"goods\" are being exchanged in the first place.
For a trade to be valid the seller has to give the same amount of value that he gets. This amount of value is again extracted from the possibility of use of the product that both got after the trade has been made.

There can be two kinds of values: let\'s call them a \"subjective value\" and an \"objective value\". Subjective is the value that a product represents to certain individual while the same product can have a different value for another individual.
Objective is the value that is dependant on the facts of product usability on a level of a whole society no matter if one might appreciate it more than another.

In the above example of warp engine, its blueprints might not have much of an objective value, but it still can have a subjective value for some people who might read and tinkle with it out of amusement and curiosity.

Which kind of value should be recognized as an economic one? Subjective values are \"unstable\" and very relative depending from a person to person which may allow for a great deal of unfairness and exploitation in trade based on such values. For example, the buyer might see a great value for himself in those warp engine blueprints he is interested to buy, but a seller has absolutely no use for it. However, in a trade based on subjective value the seller is likely to charge a great deal in exchange value to sell those blueprints which is clearly an abuse. In the end, the seller might know better than the buyer, that those blueprints are generally useless today, knowing it\'s objective value and still overcharging for it on a basis of the buyers subjective value. All that not to add that the seller might still restrict the buyer from sharing what he payed for.
Ultimately, the economic value should be based on objective values and all trades should be done according to the objective values of traded products. This is the most fair and ethical way of doing it.

Now, why all this talk about objective vs. subjective values? Because some might argue that selling information is OK basing their argument on what we here described as a subjective value. They are justifying the fact that the one who is \"selling\" an information doesn\'t *loose* it, with the fact that the buyer still gets the value he payed for. Such arguments use \"the theory\" of subjective value to render the fact that a seller actually doesn\'t loose any of the value he is selling as unimportant. They are looking at a trade as a one way business like all that actually matters is that the buyer gets the value he payed for not taking the setup of thing of another side of such trade, the seller, who actually looses no value at all and from which point the trade actually never happened, just the pure accumulation of extra goods.

This is however very important as letting this trade unbalance get away causes the obvious abuse of human rights and in essence the trade itself. Not only that they are \"selling\" information this way, but they are posing restrictions on it\'s use once it has been \"sold\" posing a monopoly.. After all, how else would it function? Selling information as such is actually impossible so they are trying to artificially create that possibility and there is no other way to do it but to pose restrictions on it\'s use. You see, even when we speak about \"selling\" information we can\'t even be sure if we could call it \"selling\" at all. Basically, it\'s just selling some rights to use it under the certain terms and conditions set by the \"seller\" or better yet, the \"eternal owner\". Can it be more one-sided than that?! We don\'t even have to mention that proprietary software is in it\'s essence a *monopoly*. And adding software patents to it just gets things alot worse.

If there was no free software movement and open source my friends, we would be held leashed by a bunch of powerful dictators who got all power of the world by \"owning\" the worlds knowledge. I see that picture as horrified. Proprietary software is clearly against everything so many nations have been fighting for, freedom, independence, human rights and equality. Actually, proprietary software and information is even *anti-capitalistic* if you view capitalism as a free-market driven system where all have the same chances to compete, or at least they say so (the reality is different). Proprietary information is nothing but equality, competition and human rights. It\'s an essential monopoly based on a corrupt excuse of a theory of trade which is not trade at all.

Free information economy:

Okay then, what does the economy based on free information look like? If you can\'t trade information than information economy basically cannot exist. However, information has to be somehow carried (distributed) from a person to person which usually requires material means of distribution which, unlike information, can be properly traded (as it has self-contained trade value). Therefore, while pure information economy cannot exist there can be a free information *based* economy.

In such economy, information as such is not being traded, but the distribution service by which it is provided is being traded (usually for money). For example, the person may have produced a software program and is willing to release it, but also wants to get compensated for the work that he put into creating this software program. Thus, he wont go about providing it through a free download distribution service, he will charge for providing such service. Note how the words have been picked here, i am not saying he will sell a *software program* but a *distribution service* through which that program is being provided. Thus, what he actually charges for is not the program itself, but the sole service through which the program has been provided. The program itself remains free to use, study, modify and share. This is the essence of distribution service model in free information based economy. The distribution service has it\'s trade value because it involves some self-contained value expressed through costs of (in this case download) bandwith, hosting space, server maintainance etc. If the program was provided through a CD or a DVD than the price of such distribution service would cover the expenses of that media and the effort being put to compile the CD/DVD.

Some may argue that the person who created the program has to be compensated for the *original* effort being put into program development, but that effort can very well be compensated by simply raising distribution prices a small bit above the \"basic\" distribution price. Actually, the producer has the freedom to set the distribution price as high as he sees fit. It is not a relevant variable in regard to both his and his program users freedom. If it\'s too much for them, they will either not get it at all or will try to find it for a lower price from someone that already payed the high price.

However, distribution model is not the only business model involved with free information, but none of such business models involves selling the information itself. One known example of other such business model is selling support services where again information itself (usually software in these cases) stays out of the trading business.

CONCLUSION:

Information is knowledge and as such it does not derive its value from within itself, but from the potential of its use. In its sole unusable existence, information is valueless. Information does not have an objective trade value because attempting to trade it inevitably results in value imbalance and unfair trade where the seller is ultimately in much greater gain than the buyer as he never actually deprives himself of the information he\'s \"selling\" and this deprivation is what is essential for a trade to be possible. As untradeable, pure information economy cannot exist, but the information *based* economy where the main object of trade is not information, but something else that is only involved with information such as it\'s distribution, usage support etc. This is clearly the only way our progressively information dependant society can properly function contrary to the monopoly driven and artificially created environment of \"proprietary\" information where the impossible tradeability is being forced upon us resulting in great disruption of trade value balance and human rights.

Discuss It Here

Comments

JTD

 

First it is a very interesting article.
A few incorrct assumptions:
1) Does information have value within itself? IMHO yes. All the material for constructing a super widget already exists in the form of atoms and energy. It is the information AND skill to put them together that dont. Go back in time say 20000 yrs. wheat, rice and all sorts of other low yield grain existed in the wild. It took a long process of creating and distributing the knowledge, information and skill to convert these into NEWer stable mass production goods. Without the knowledge the original grains would continue to exist. In case of the warp drive it is the non linear creation of knowledge that makes it less useful, since the other pieces of knowledge are not in existence as yet.
2) The value of a trade is not neccessarily an economic one. It can be several others too. Infact the metrics of value measurement in todays society are seriously flawed (and in many cases non existenet eg. the tribals knowledge of plant chemicals) as they tend to measure and account for value (and liablity) over a very short period. And in very many cases do not measure many valuable characteristics at all (eg environmental impact, social disruption). The resultant envionmental and social disaters are there for all to see.

Re: JTD

 

the original article is a sad testament to the fact people can go through our education system and have a total lack of understanding of basic economics.

value is a perception by a person. there is no inherent value to anything. fair trade is not predicated on a depletion of value for both parties, it is predecated on *receiving* equivalent perceived value. money is just a measure of subjective value.

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