Commercial interests see the Internet as a hi-tech market-place, but the agora or market-place of Ancient Greece is a better model as it was an arena not just for financial transactions but also for the free exchange of information. The gift-exchange or Potlatch model of scientific and academic communication is still more appropriate for much of the activity on the Internet than the free market model.
This essay was written in January 1995. A shorter version was published in the inaugural issue of the British edition of Wired vol. 1 no.1 1995, p. 61, under the title Money doesn't matter.
Nearly five years ago my life was saved by a blood transfusion after my left leg was shattered by a fall while hiking alone in the Canadian Rockies: two days before writing this I ordered a copy of a journal article over the Internet and paid by credit card. Both procedures carried risks [ordering goods via the Internet was a novel experience in 1995]. I hope that nobody intercepted my unencrypted message. More importantly I trust that the blood donors were healthy and the testing procedures thorough. My trust would be less if the operation had been performed in a country where blood donors were attracted mainly by money - a tempting prospect for penniless junkies - but in countries like Canada and Britain donors are unpaid and motivated by altruism, possibly tinged with self interest. They know that should they themselves ever need blood, supplies will be available thanks to the actions of other, like-minded individuals. [1]
Similarly much of the information interchange on the Internet takes place on a voluntary basis. Contributors get personal satisfaction and possibly prestige. They also know that they will be able to obtain information in the same way when they need it. The golden rule works and what is good for others turns out to be good for the individual.
The reverse can also be true. As Adam Smith, the father of economics observed, "it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest." [2]
For keeping our noses to the grindstone day after day, money is a powerful motivator and the collapse of communism has demonstrated the superiority of the (reasonably) free market in allocating resources. However markets do not always work to everyone's benefit. Booms followed by slumps have been caused by speculation in everything from tulips to shares. A market-oriented Internet would require accounting, banking and legal services all of which would have to be paid for. And whose laws would apply in cyberspace? Markets cannot operate efficiently unless prospective buyers have information about the goods on offer, but what if the product itself is information? You can inspect a printed book before purchase. You may buy a single issue of Wired before deciding to place a subscription. But how can you inspect one-off packages of information on the Internet when to inspect is to copy and thus to acquire?
The implications of problems in judging goods attracted the attention of Charles Babbage who, when not preoccupied with trying to complete his analytical engine or campaigning against street organ-grinders, devoted much of his time to studying economics. He pointed out that there is often a cost, in time or money, associated with verification of quality. [3]
That is why people are often prepared to pay extra for reputable brands. Flour was cheap but could easily be adulterated and therefore the government of Babbage's day went to the expense of building its own flour mills, e.g. for supplying the armed forces, to avoid having to inspect all supplies. Similarly if there is a charge for information which cannot be inspected before purchase, then instead of availing themselves of existing solutions to problems people will spend their time needlessly reinventing the wheel.
Is money really necessary to motivate information providers? Gift exchange systems, of which the voluntary, unpaid blood donation services of countries such as Britain and Canada are examples, have a long history going back to forms of barter used before the development of money. As Glyn Davies has pointed out, there was often a competitive element present as in the encounter between Solomon and the Queen of Sheba when each monarch tried to outdo the other in generosity. In the equally competitive potlatch ceremonies of certain north American native peoples whole communities participated in exchanges spread over several days involving everything from blankets to twentieth century luxuries such as motor boats. [4]
Cultural activities such as dancing, public speaking and initiation into secret societies also took place during the potlatch and the festivities were accompanied by a certain amount of drunkenness and by what appeared to the authorities to be wanton acts of destruction. Social standing depended on the munificence of the individual's gifts and chiefs would sometimes destroy some of their possessions to demonstrate that they already had more than they needed and could easily afford to be generous. When the disapproving Canadian government outlawed the potlatch in 1927 the loss of this traditional incentive to work led to severe and unanticipated social problems. The Act was repealed in 1951 but by then the influence of modern money and European culture had become firmly established and by the late 1960s, the potlatch had practically ceased to exist. Gift exchange systems have their roots in the culture from which they spring and their survival depends on the health of those roots.
Scientific research is a fiercely competitive and public process of information exchange but scientists do not normally get paid for academic papers nor do they pay directly for using information provided by others. The only direct rewards are citations and recognition by one's peers. Where commercial applications are foreseeable there is a separate system of publishing and licensing - the patent system. Recent attempts by drug companies involved in the human genome project to patent genes - yours and mine - have imperilled the free exchange of information and threaten to retard research. [5]
To extend the sphere of the market beyond its legitimate limits at the expense of the gift exchange system is to undermine science itself.
Traditionally markets had social as well as economic functions. The Greek word for market-place, agora, originally meant a meeting place. The Athenian agora was where Socrates felt most at home. It was an arena for gossip, political haranguing, philosophical inquiry and hard bargaining. Everything from apples to water-clocks was for sale, but talk, or information, was always free and when Socrates was the speaker, sometimes priceless. [6] No citizens were excluded from the agora except those awaiting trial on serious charges such as murder.
In 1886 W.T. Stead writing in the Contemporary Review claimed "the telegraph and the printing press have converted Britain into a vast agora or assembly of the whole community...". [7]
Even in that hey-day of laissez faire, action was taken to ensure that access to information was not limited to those with the ability to pay and Samuel Smiles, the apostle of self-help, criticised those who thought it right to spend tax payers money on prisons but not on libraries. [8]
The Internet surely has the potential to transform the whole world into an agora in which, as in ancient Athens, commerce and all sorts of free social interaction would flourish side by side. If that is to happen we must heed the warning given by the history of the potlatch which demonstrates that it a system of exchange that depends partly on altruism rather than naked self-interest is very difficult to revive once the culture that gave birth to it has been seriously weakened. Will we prove less enlightened than the ancient Greeks and the Victorians? Will the Net culture go the way of the potlatch? It is part of the environment of cyberspace which, like our physical environment, deserves protection. This culture insists that "free" is not synonymous with "worthless" nor "value" with "price". Let us learn this lesson before it is too late.
For detailed arguments about the superiority of unpaid voluntary blood donation systems see: Titmuss, R.M. The gift relationship: from human blood to social policy. London: Allen & Unwin, 1970.
A more recent publication which comes to the same conclusion is: Beal, R.W. and van Aken, W.G. Gift or good? A contemporary examination of the voluntary and commercial aspects of blood donation. Vox Sang 63 (1), 1992 p. 1-5
(Vox Sang is the official journal of the International Society of Blood Transfusion).
Adam Smith. The wealth of nations (5th ed. Published 1789)
The quotation comes from vol. 1, book 1, chapter 2, page 16 of the Cannan edition (Oxford 1896) or pages 26-27 of the edition edited by R.H. Campbell, A.S. Skinner and W.B. Todd. Oxford: Clarendon Press, 1976.
Babbage's most detailed work on economics was: Babbage, Charles. On the economy of machinery and manufactures 4th ed. New York: Kelley, 1963. (Facsimile reprint of the edition published in London by Knight, 1835). The whole of chapter 15 "On the influence of Verification of Price" pages 134-146, discusses the implications of problems in ascertaining the quality of goods.
See also:
Hyman, Anthony. Charles Babbage: pioneer of the computer. Oxford: Oxford University Press, 1982.
Chapter8 discusses Babbage's work on economics and pages 114 and 115 deal with the cost of determining the correct price.
For general information on this topic, including the potlatch, see:
Mauss, Marcel. The gift: forms and functions of exchange in archaic societies. London: Routledge, 1990
For information about gift exchange in relation to barter, the potlatch in particular, and a detailed account of the history of money from primitive forms such as cowrie shells up to electronic funds transfer, stressing the wider, social aspects rather than the purely economic aspects, see:
Davies, Glyn. A history of money from ancient times to the present day, 3rd ed. Cardiff: University of Wales Press, 2002. 720 pages. Paperback: ISBN 0 7083 1717 0. Hardback: ISBN 0 7083 1773 1.
The potlatch is discussed in the section on Money in North American History.
For information on the controversy over patenting human genes see:
Marshal, Eliot. The company that genome researchers love to hate. Science vol. 266, no. 5192, 16 December 1994 page 1800-1802.
Kleiner, Kurt. Squabbling all the way to the genebank. New Scientist. 26 November 1994 pages 14-15.
For information on the Greek agora see:
The Athenian agora: an ancient shopping center Princeton: American School of Classical Studies at Athens, 1971
Socrates in the agora. Princeton: American School of Classical Studies at Athens, 1978
Life, death and litigation in the Athenian agora. Princeton: American School of classical Studies at Athens, 1994
The quotation about the telegraph and printing press turning Britain into an agora comes from:
Stead, W.T. Government by journalism. Contemporary Review, May 1886 pages 653-657. ( The actual quotation is on page 654).
Samuel Smiles was the author of "Self help", a best seller in Victorian times. Its message would strike a sympathetic chord with right-wingers who believe in individual initiative rather than collective action. However, for evidence of Smiles' views on the importance of public libraries see:
Mackay, Thomas (editor). The autobiography of Samuel Smiles. London: John Murray, 1905 pages 155-157.
Hiking the Inca Trail to Machu Picchu
Fortunately I made a good recovery from my injuries in the Rockies and so was able to go hiking again, in new areas and in places where I had been before like Peru. I also helped to write a guide book to the Inca Trail. Ironically the Inca civilisation was one in which money really did not matter. They never developed it!