Policy Implications of Non-Commercial Production

I observed the other day that even though US macroeconomic performance was poor in the 2000s, we did see the emergence of enterprises like Wikipedia that are useful to their users in a way that’s out of proportion to their market value. A lot of people in comments seemed to take that to be a “right wing” concept, as if I was saying that since we can listen to streaming music on Pandora it’s okay that we have ten percent unemployment or that your ability to listen to David Blight’s lectures on the civil war justify the Bush tax cuts.

That kind of thing is, of course, insane. But it’s also insane not to realize that non-commercial endeavors have real value that doesn’t show up in national account statistics. If anything, people on the left should be eager to embrace the point that the market value of an activity isn’t the correct measure of its social value (a cure for baldness, for example, would be much more lucrative than a cure for malaria).

Of course this has always been the case. But one important consequence of the rise of the digital era is that it’s now much, much, much easier for goods produced on a non-commercial basis to be distributed. Yale professors have always been giving lectures, but now the lectures can go online. People have always performed music for their own entertainment but now it’s fairly easy to record that music and ship it all around the world. People have always wanted to show off their knowledge and engage with communities of interest, but now they can write Wikipedia articles and post on blogs.

To an extent this kind of thing can reverse some traditional thinking about certain policy questions. Traditional analysis, for example, treats leisure as a kind of private consumption good. If you’re doing work for money, then by definition someone else thinks it would be useful to them for you to do the work. You, in addition, presumably want the money. Thus when people are inspired to go do paid work, rather than sit around the house enjoying themselves, they are creating social value. Internet distribution of non-commercial production changes that calculation. If people are using (some of) their leisure time to contribute to open source software projects, to write interesting blogs, to post videos on YouTube, to record music, to write Wikipedia articles, etc., then value is being created for others.