Social Sharecropping?

by on December 20, 2006 · 10 comments

You should check out Ed Felten’s excellent rebuttal of Nick Carr’s contention that sites like MySpace are “sharecropping” their users–enticing them to create valuable content which MySpace then profits from. Felten points out that users in fact get considerable value from their MySpace content. His conclusion:

The most interesting assumption Carr makes is that MySpace is capturing most of the value created by its users’ contributions. Isn’t it possible that MySpace’s profit is small, compared to the value that its users get from using the site?

Underlying all of this, perhaps, is a common but irrational discomfort with transactions where no cash changes hands. It’s the same discomfort we see in some weak critiques of open-source, which look at a free-market transaction involving copyright licenses and somehow see a telltale tinge of socialism, just because no cash changes hands in the transaction. MySpace makes a deal with its users. Based on the users’ behavior, they seem to like the deal.

As I’ve written before, markets don’t require money, and many non-market activities are perfectly compatible with a free, capitalistic society.

Mike at Techdirt has more.

  • http://weblog.ipcentral.info/ Noel Le

    Carr and Felten, while respected in their own fields, obviously come about this from different viewpoints. Folks like Carr, of which I consider myself, see value in terms of *commercial value.*

    I wouldn’t call Carr’s position as one reflecting discomfort b/c no cash exchanges hands. That might not even be the proper description of MySpace, as it leverages users as inputs, and excahnges cash with advertisers at the other end of the value chain. I would also see FOSS in this way; although may volunteer on projects, firms still turn around and charge users for services- again thats simply shifting the commercial exchange to a different part of the value chain.

    Tim, if markets don’t require money, then why don’t FOSS firms give away their services for free?

  • http://weblog.ipcentral.info/ Noel Le

    Carr and Felten, while respected in their own fields, obviously come about this from different viewpoints. Folks like Carr, of which I consider myself, see value in terms of *commercial value.*

    I wouldn’t call Carr’s position as one reflecting discomfort b/c no cash exchanges hands. That might not even be the proper description of MySpace, as it leverages users as inputs, and excahnges cash with advertisers at the other end of the value chain. I would also see FOSS in this way; although may volunteer on projects, firms still turn around and charge users for services- again thats simply shifting the commercial exchange to a different part of the value chain.

    Tim, if markets don’t require money, then why don’t FOSS firms give away their services for free?

  • http://www.freedom-to-tinker.com Ed Felten

    Noel,

    In case it wasn’t clear, I’m using the economists’ definition of value.

    Consider these two scenarios. (A) I will cook dinner and my wife washes the dishes; no money is exchanged. (B) My wife pays me $5 to cook dinner, then I pay her $5 to wash the dishes.

    The same value is created in both scenarios: the value of having dinner cooked, plus the value of having the dishes cleaned.

  • http://www.freedom-to-tinker.com Ed Felten

    Noel,

    In case it wasn’t clear, I’m using the economists’ definition of value.

    Consider these two scenarios. (A) I will cook dinner and my wife washes the dishes; no money is exchanged. (B) My wife pays me $5 to cook dinner, then I pay her $5 to wash the dishes.

    The same value is created in both scenarios: the value of having dinner cooked, plus the value of having the dishes cleaned.

  • http://weblog.ipcentral.info/ Noel Le

    Hi Professor Felten,

    I’m aware of the economic definition of value, which is why I differentiated your comments on MySpace sharecropping with those by Nick Carr. I don’t believe the two of you differ that much about MySpace if the definition of *value* is qualified and given context in your comments. Note that in the passage you cite from Carr, he writes:

    It’s a sharecropping system, but the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money…

    It seems that any disagreement between you and Nick Carr arises because you’re talking about two different kinds of value.

  • http://weblog.ipcentral.info/ Noel Le

    Hi Professor Felten,

    I’m aware of the economic definition of value, which is why I differentiated your comments on MySpace sharecropping with those by Nick Carr. I don’t believe the two of you differ that much about MySpace if the definition of *value* is qualified and given context in your comments. Note that in the passage you cite from Carr, he writes:

    It’s a sharecropping system, but the sharecroppers are generally happy because their interest lies in self-expression or socializing, not in making money…

    It seems that any disagreement between you and Nick Carr arises because you’re talking about two different kinds of value.

  • http://weblog.ipcentral.info/ Noel Le

    Sorry about the flimsy comment, I’m trying to finish a lot of stuff so I can actually vacation over Christmas break.

    Anyhow, Tim, your comment about “markets not requiring capital” might be qualified to say “some aspects of market activity do not directly require capital.” Do you disagree?

  • http://weblog.ipcentral.info/ Noel Le

    Sorry about the flimsy comment, I’m trying to finish a lot of stuff so I can actually vacation over Christmas break.

    Anyhow, Tim, your comment about “markets not requiring capital” might be qualified to say “some aspects of market activity do not directly require capital.” Do you disagree?

  • http://enigmafoundry.wordpress.com/ enigma_foundry

    You should check out Ed Felten’s excellent rebuttal of Nick Carr’s contention that sites like MySpace are “sharecropping” their users–enticing them to create valuable content which MySpace then profits from.

    Nick is just repeating a stupid meme started by the Microsoft propaganda machine, that made a similar point about open source software.

    Noel, as usual, is seeing only the side of the shrink wrap software producer and not the over-all effect on the economy.

    Taking Ed’s analogy a little further:

    Which economy would be more efficient:

    1. One with Microsoft, producing and charging companies for PC Operating Systems

    OR

    2. On without Microsoft, with OS produced by FOSS methods?

  • http://enigmafoundry.wordpress.com eee_eff

    You should check out Ed Felten’s excellent rebuttal of Nick Carr’s contention that sites like MySpace are “sharecropping” their users–enticing them to create valuable content which MySpace then profits from.

    Nick is just repeating a stupid meme started by the Microsoft propaganda machine, that made a similar point about open source software.

    Noel, as usual, is seeing only the side of the shrink wrap software producer and not the over-all effect on the economy.

    Taking Ed’s analogy a little further:

    Which economy would be more efficient:

    1. One with Microsoft, producing and charging companies for PC Operating Systems

    OR

    2. On without Microsoft, with OS produced by FOSS methods?

Previous post:

Next post: