Re: (Non-)rivalrous, public/private goods/products (was: Re: [ox-en] Free market and the Internet)
- From: "Domi" <dorax club-internet.fr>
- Date: Fri, 14 Mar 2003 13:10:02 +0100
The discussion on "(Non-)rivalrous, public/private goods/products" is
interesting, among others, because it deals with the necessity of creating the
new concepts, words, necessary to understand the new reality created by the
development and generalisation of the ICT, and most specifically Free Software.
I fully agree with Stefan Merten's concern for that question when he writes
(18jan03): "And yes it *is* hard to fill meaning into a word, it *is* hard to
create a concept matching some reality. To me one of the more important tasks
of Oekonux is to do exactly that. (.) On the German list we have a lot of
discussion about certain concepts. To me these discussions are among the most
fruitful ones because in a sense they make clear where the limitations of the
old concepts are when looking at Free Software."
Before trying to contribute to the discussion, it may be useful to attempt to
summarize it, or rather describe some threads I saw in it.
The discussion started from Russells' idea to describe information as
"non-rivalrous", using a neo-classical economics concept: (31jan03)
"Information is naturally non-rivalrous. In order to make it into a 'good' or a
'product' there is a requirement for governments to make it artificially
rivalrous. These are artificial laws created by humans. Physical things such as
food, clothing, housing, etc. are all naturally rivalrous. We need to set up
some sort of laws to arbitrate this rivalry. Different political, economic and
even religious beliefs come into play when discussing the forms that this
arbitration can have, and we can all debate different ways to arbitrate things,
but the arbitration is a requirement based on the laws of nature."
Russell's positions raised many questions. Three were more specifically dealt
with.
1. Using "nonrvivalrous" as an important qualifier of information;
2. The idea that "physical things are naturally rivalrous";
3. The need "to set up some type, some sort of laws to arbitrate this rivalry".
Johan and Stefan Meretz began dealing with the second and third questions.
Johan (31jan03) wrote, answering to
Physical things such as food, clothing, housing, etc are all naturally
rivalrous.
We need to set up some sort of laws to arbitrate this rivalry.
"Yes and no. Not if we consider that 200-300 tons of foodstuffs is deliberately
destroyed annually in US and about the same quantities in EU, - while a quarter
of world population is starving (!!!). (.) Bookchin wrote in 1977 (not about
information) 'A century ago, scarcity had to be endured; today, it has to be
enforced - hence the importance of the state in the present era'. Thus, law is
not simply there to save us from rivalry, but equally to sustain it."
Russell answered (1feb03) : "I agree with your disagreement of what happens
with food security. (.) The fact is, however, that if I eat an apple, you can't
also eat that same apple. We need to arbitrate this rivalry -- sharing (or
simply not hoarding) is one method, and the method I believe in, but the fact I
believe in sharing doesn't change the rivalrous nature of physical things and
the non-rivalrous nature of information."
Stefan Meretz opposes (1feb03): "The apple is not found, it is produced. It is
not necessary to share if we can produce another one."
Ph (2feb03) says: "Our ability to produce apples is limited. While scarcity may
become less and less of a problem it won't cease
to exist. And the trend could reverse as well (oil/water etc.) And there are
other areas of scarcity besides food and information: medical attendance, front
row places at a soccer match, villas in south France, stuff like that."
Graham criticizes Stefan Meretz position (1feb03): "Stefan's answer conflates
scarcity and rivalry; I think the two ideas overlap but are not the same, and
the difference between rivalrous and nonrivalrous goods would continue even if
there were no scarcity. Stefan earlier made a distinction between (social)
scarcity and (natural) limitations. Natural limitations (eg. the amount of oil
in the earth) will continue whatever the social arrangements. Non-rivalrous
goods (ideas, software, etc) will never run into natural limitations of this
sort in any society; rivalrous goods may."
Graham deals also with the first question, the meaning and pertinence of
nonrivalrous: (2feb03)
" In addition to it's general meaning (.) it is an economic term, used
especially in 'Welfare Economics', defined negatively: if something is
'non-rivalrous' the consumption/use of it by one person has no effect on the
consumption/use by other people. In many cases that means I can give you
something non-rivalrous, and still have it myself. Examples are ideas,
software, broadcast TV programs, etc."
I don't pretend to really summarize the discussion with the choice of extracts
I made. Other interesting questions are raised in this discussion. At least, it
explains the choice of the questions I deal with.
- - -
First, a precision about the meaning of the words "good" and "product".
Russells writes: "In order to make it [information] into a 'good' or a
'product' there is a requirement for governments to make it artificially
rivalrous". This is maybe only a question of definitions, as these words may
have different meanings, but this sentence makes sense only if good and product
are understood as commercial commodities. Or, a good or a product is not
necessarily an object of trade. As for Stefan Merten (8feb03), for me a good is
something "useful to a human" and a product something "produced by a human."
To start by the first question, about the concept of "nonrivalrous", I agree,
and probably most people in Oekonux, with Russell's concern to highlight the
difference between information and other kind of goods. Digitalized products
escape scarcity by being freely reproducible. Thus, they do not create a basis
for competition, rivalry for their possession. Not to be subject to scarcity is
a crucial new quality for a human product (with some exceptions as knowledge in
some cases). And there is a real need of a word to express this concept. But I
don't think that the neo-classical concept of "nonrivalrous" is the best. As
Graham explains it: "It is an economic term, used especially in 'Welfare
Economics'." Neo-classical economists use it to describe what they call "public
goods", (highways, schools, gardens, justice system. and even atmosphere
contamination or the means to fight against it). One of their aims is to be
able to deal with public, collectively used goods, regardless of their
ownership status (private or state owned). that may be useful in times of
"privatisation".
Graham seems to think that the term could be relevant, as he writes: "In many
cases that means I can give you something non-rivalrous and still have it
myself", which is a specific quality of software, digitalized goods. But, in
reality, most of what neo-classic economists call "nonrivalrous goods" do not
correspond really to that definition: highways, schools or juridical courts are
often saturated, and if I use them, it may be at expense of you.
If one sticks to the abstract and rigorous definition of nonrivalrous,
digitalized products are almost the only ones that strictly correspond to it.
But I am not sure it is really useful to borrow a concept that is commonly used
to describe goods that are qualitatively different from digitalized ones, as
they don't really escape scarcity.
Rivalry and scarcity deal with different dimensions of reality. Rivalry deals
with a situation and behaviour of humans; scarcity deals with a quality of
goods. One concept cannot replace the other. The relation between both is the
idea that scarcity of goods leads to competition for them.
Graham says (2feb03) that, in neo-classical economics, the concept of rivalry
"has no connection with the word 'competition'. A non-rivalrous good is one
which is not diminished in any way by sharing it". But, the word was not been
chosen by chance. It simply tells that, for other kind of goods, their scarcity
leads to rivalry, to competition for them.
This relation between scarcity and competition is generally true. Marxism sets
the possibility of a communist society, without economic rivalry, on the
conviction that capitalism creates, for the first time in history, the
conditions of a society of abundance, where scarcity is reduced to its last
limits.
But, in some circumstances scarcity may lead to cooperation and solidarity.
Marxism also believes that a class confronted to scarcity, and because it is
confronted to it, can develop an extraordinary solidarity to build this
society.
Using "nonrivalrous" to describe the fact that digitalized goods are not
subject to scarcity presupposes only one type of human beahaviour in front of
scarcity. This is why, like Stefan Merten (8feb03), I feel "uncomfortable with
the neo-classical approach".
But, aside from the question of human behaviour in front of scarcity, there is
the need of a word to describe this new specific quality of digitalized goods:
to escape scarcity. Stefan Merten asks: ".why not saying information goods?" I
don't think it is enough. The word information has commonly a restricted
meaning. Digitalized goods have common qualities with information or knowledge,
but they also have other powerful capacities like being direct means of
production, (driving assembly lines, etc.) or means of consumption (games,
films.). And every day, new products or parts of products are digitalized. The
specific quality of digitalized goods, in itself, needs to be named.
It should be a word meaning precisely: "non-subject to scarcity, once
produced".
The second question posed by Russell is the idea that "physical things, as
food, clothing, housing, etc. are naturally rivalrous". Russell says: "The fact
is, however, that if I eat an apple, you can't also eat it the same apple." I
agree with Stefan Meretz answer: "The apple is not found, it is produced. It is
not necessary to share if we can produce another one."
The problem of competition for a good depends essentially on its scarcity and
not on its physical nature. Competition can develop for services (as medical
attendance, to take the example given by Ph.). Russell's answer to Stefan
Meretz consists in creating a situation of scarcity: "Just because something is
renewable, does not mean than in 'this time' and 'this place' it is not
rivalrous." If, in 'this time' and 'this place', I have a million of apples for
two people, there will be no competition between them for apples.
Ph. says: "Our ability to produce apples is limited". May be, in the future,
but modern agriculture can be made without land, for example, and before we
reach an hypothetic limit, we can make of apples, for a long time, an abundant,
not scarce good.
If we want to imagine a society based on "taking instead of buying", the
question of scarcity is crucial. From that point of view, three kind of goods
can be identified:
1. The digitalized products. By nature, they escape scarcity, as they may
become abundant almost immediately, as soon as they are produced.
2. The socially renewable goods. If humans decide it, they can be produced in
sufficient quantity to make them abundant, non-scarce in relation to human
needs.
3. Goods or products that are not renewable and will remain scarce. Ph. talks
of "front places at a soccer match, villas in South of France.". One could add
Van Gogh paintings or feudal castles.
For this last category of goods, but also, at the beginning of the building of
such a new society, for some (always fewer) renewable goods, there will be the
necessity of managing scarcity.
And this leads us to the third problem posed by Russell: the need "to set up
some type, some sort of laws to arbitrate this rivalry".
Humans have always had rules to distribute scarce goods. Advanced social
animals, like the chimpanzees or bonobos, too. This is necessary to prevent
competition or rivalry to destroy the group. For humans, the forms of rivalry
and the rules to manage scarcity have been different through history. For
example, things were completely different before and after the division of the
original community, where global solidarity was a condition of survival, into
economically antagonistic classes. The evolution between feudalism and
capitalism was also crucial. It opened the door to the expansion of the most
inhuman way to deal with the problem of scarcity, submitting any human
consideration to the production of profit and capital accumulation, which
become the only goal of production, transforming the work force into a
commodity condemned to misery if it does not find a profit-maker buyer.
Advanced capitalism has reached an unthinkable degree of absurdity in managing
scarcity. Johan is right to recall that "200-300 tons of foodstuffs is
deliberately destroyed annually in US and about the same quantities in EU, -
while a quarter of world population is starving (!!!)." And I agree with him
when he says that in capitalism "law is not simply there to save us from
rivalry, but equally to sustain it."
It is a fact that in a post-capitalist (GPL?) society, specially at the
beginning of it, there will be the need of social rules to manage the
distribution of scarce goods. There is not very much written on that problem.
Marx wrote very little on this subject and so the non-Stalinist Marxists of the
20th century. (I am keen to know what Oekonux has worked about it). But, even
if the theory is still to be developed, even if we are far from knowing all the
new possibilities that will bring in this domain the expansion of Internet and
the digilitalization of products, the only thing we can be sure of is that
these social rules can not be the capitalists ones.
---
I am sorry for the length of this mail. But I could not manage to split it into
smaller ones.
Raoul
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http://www.oekonux.org/