Brin, Transaction costs and Do Not Track

by on May 10, 2011 · 4 comments

I’m reading David Brin’s 1998 classic [The Transparent Society](http://www.amazon.com/gp/product/0738201448/ref=as_li_ss_tl?ie=UTF8&tag=jerrybritocom&linkCode=as2&camp=217145&creative=399349&creativeASIN=0738201448) and I’d like to share a passage that I found especially interesting in light of the [recent Do-Not-Track bill](http://thehill.com/blogs/hillicon-valley/technology/160035-rockefeller-unveils-do-not-track-bill) introduced by Sen. Rockefeller.

On this blog, Adam Thierer has often written about the [implicit quid pro quo](http://www.google.com/search?q=site:techliberation.com+quid+pro+quo) between tracking and free online services. It seems to me that many folks find this an abstract concept. Here is Brinn writing in the late 90s about the possibility of an explicit quid pro quo:

>An Economy of Micropayments? I cannot predict whether such an experiment would succeed, though using a “carrot”—or what chaos theorists call an “attractor state”—offers better prospects than the [IP owner's] coalition’s present strategy of saber rattling and making hollow legal threats. In fact, the same approach might be used to deal with other aspects of “information ownership,” even down to the change of address you file with the post office. Perhaps someday advertisers and mail-order corporations will pay fair market value for each small use, either directly to each person listed or through royalty pools that assess users each time they access data on a given person. Or we might apply the concept of “trading-out”: getting free time at some favorite per-use site in exchange for letting the owners act as agents for our database records. It could be beneficial to have database companies competing with each other, bidding for the right to handle our credit dossiers, perhaps by offering us a little cash, or else by letting us trade our data for a little fun. Proponents of such a “micropayment economy” contend that the process will eventually become so automatic and computerized that it effectively fades into the background. People would hardly notice the dribble of royalties slipping into their accounts when others use “their” facts—any more than they would note the outflowing stream of cents they pay while skimming on the Web.

That is essentially what happened, except without all the transactions costs. It seems to me that all Do Not Track will do is introduce the transactions costs that we have so far avoided to the benefit of innovation. Who will this change benefit? The few people who are not willing to make the trade and who today have [options to opt out](http://adblockplus.org/). This leaves the majority of us who are willing to make the bargain in a very un-Coasean world.

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