Money Can Get In The Way Sometimes But It Doesn't 'Ruin Everything'

from the peer-production dept

Tue, May 20th 2008 8:55am — Timothy Lee

Matthew Yglesias points to a paper by John Quiggin (of Crooked Timber fame) and Dan Hunter that looks at the growing importance of non-financial incentives for the production of information goods. They point out that efforts like Wikipedia, free software, and the blogosphere are organized in a way that's fundamentally different from traditional for-profit enterprises. Many contributors participate for reasons other than financial gain, and the overall project doesn't have a centralized decision-maker the way Microsoft and the Encyclopedia Britannica do. The authors advocate the reform of legal institutions, such as overly restrictive copyright laws, that implicitly assume that creative works are always produced for financial gain.

This all seems right to me, and indeed, Hunter wrote a Policy Analysis for the Cato Institute (for whom I'm an adjunct scholar) that made some of the same points. However, I think the authors overstate their case, as suggested by the title of their paper, "Money Ruins Everything." I assume they intended this to be somewhat tongue-in-cheek, but they nevertheless do seem overly hostile toward commercial efforts. It certainly is true that in many cases, adding money to a volunteer effort will create more problems than it solves. For example, I've argued in the past that Wikipedia should resist the temptation to accept advertising because arguing about what to do with the money could begin to overshadow Wikipedia's organic editing process. However, I think they go overboard when they denigrate the value of venture-backed startups. They suggest that the investments of the dot-com bubble "may have rewarded their promoters, but they produced little of lasting social value, at least by comparison to the vast sums that were invested." But I think that if anything, the exact opposite is true. As we've pointed out before, the dot-com bubble was great for the economy at large, because it allowed people to experiment with a lot of new technologies and business models on venture capitalists' dime. Investing in a bubble may be a bad investment strategy, but the results are often good for the broader society. So of course we shouldn't adopt policies that hinder the success of non-commercial projects like Linux and Wikipedia, but we should also ensure that the legal system remains hospitable to commercial development.

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Filed Under: commercial production, dan hunter, john quiggin, money, user generated content, web 2.0

16 Comments

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Crosbie Fitch (profile), 20 May 2008 @ 9:12am

Accepting bribes to plug
Speaking with someone else's voice ruins your own.

One of the few times money doesn't corrupt an artist is if it is from their audience in support of the artist to continue speaking with their own, authentic voice.

So, there are still ways artists can make money selling themselves and their digital art on the Internet without the money getting in the way.
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Martin Edic, 20 May 2008 @ 9:34am

I suppose paying authors to write books 'ruins' everything?
What about salaries for researchers like the writers you mention- are they working for free? Humans work for incentives: money, fame, love, food and shelter come to mind. The flow of information in a capitalist society is far more open and extensive than that of other political system precisely because there are incentives to provide the best information 'products'.
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Jackie Danicki, 20 May 2008 @ 9:34am

Socialists hate money. Who knew?
Consider the source of this title. From what I have read of them in the past, they think capitalism is bad and are hostile to free markets. To them, it really is as simple as "money ruins everything".
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Smart Ass, 20 May 2008 @ 9:40am

I hate money
I hate money!! Dont punish me by giving me more money.

My account number is:7833488442 and Routing Number:284727871
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Jake, 20 May 2008 @ 9:52am

Software and the Death of Craftsmanship
I can't help thinking they might kind of have a point. The software industry has grown big and profitable enough to suffer the same problems as a great many other industries; office politics, vital decisions being taken by remote middle management without an adequate understanding of the logistics and a gradual cultural shift towards marketing over substance. That kind of working environment has entirely predictable effects on morale, and the higher-ups reap what they've sown; a fancy UI and a lot of bells and whistles on top of buggy and bloated code written and tested by employees who are tolerated only because they can't be replaced by robots, and know it. I'd like to think this isn't universal, but it's not uncommon either. There's a lot of open source software out there that's absolute crap as well, of course, but at least you can be reasonably sure it was put together by someone with a bit of pride in their work.
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Joseph B, 20 May 2008 @ 10:32am

eBay vs Craigslist
An example of money ruining everything is the comparison of eBay and Craigslist. Both are sites where people can sell things.

Money has ruined eBay. The required pursuit of ever-higher revenues and profits has driven decision-making at eBay. The result is decisions to change the site that are good for the short-term bottom line but are bad for the users of the site.

Craigslist on the other hand is able to leave the site as-is, without letting the never-ending pursuit of the bottom line change the functionality of the site from something that works very well to something that brings in more cash.
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wasnt me, 20 May 2008 @ 10:47am

Re: Socialists hate money. Who knew?
as far as i know socialists DO NOT hate money, in fact they do appreciate it what they hate is greed.

socialism is more about common wealth than it is about anything else.
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Jackie Danicki, 20 May 2008 @ 11:27am

Re: Re: Socialists hate money. Who knew?
If by "common wealth" you mean stealing.

Socialists do indeed hate money, which is why "commercial" is a dirty word to them. They take it as axiomatic that money is bad and thus "ruins everything". Unless, of course, they're helping themselves to some of *yours* in order to finance their totalitarian projects.
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Tony, 20 May 2008 @ 11:46am

Pride vs. money
#5: "There's a lot of open source software out there that's absolute crap as well, of course, but at least you can be reasonably sure it was put together by someone with a bit of pride in their work."

Are you actually suggesting that people who get paid for their work don't take pride in their work?

I suppose we should all stop doing anything for money, and just contribute to the "greater good".
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Kiba, 20 May 2008 @ 3:34pm

Re: Pride vs. money
Hey, some people who write GPL stuff also get paid for doing it too!
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Anonymous Coward, 21 May 2008 @ 5:34am

Re: Re: Socialists hate money. Who knew?
Socialism is about common wealth; sharing all things in common as one needs and as one can supply. In the socialist ideal, there would be no need for money (since it just serves as a stand-in for very complex bartering, and there's no need to barter when all things are common). Thus, socialists do hate money as it stands as a measure of how far they still are from their ideal.
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Anonymous Coward, 21 May 2008 @ 5:36am

Re: Software and the Death of Craftsmanship
I don't think any of that has to do with money, per se. Replace it with any other incentive and you'll get the same result.
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Greg, 21 May 2008 @ 11:31am

I think the Method Man said it best:

Cash Rules Everything Around Me. Cream, get the money. Dollar, dollar bill, y'all.
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Jake, 21 May 2008 @ 1:17pm

Re: Re: Pride vs. money
Far from it, Tony; I was merely pointing out that when a company's primary objective becomes making money instead of making a really good product that people want to buy, the resulting workplace culture makes it very hard to do so.
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Ian Ward-Bolton, 21 May 2008 @ 1:35pm

Money Makes The World Go Wrong
I've downloaded the paper, but haven't read it yet, but a quick scan shows me that it looks like good reference material for my forthcoming book (Time Makes The World Go Round), which I was working on today for the first time in several months.

The main problem with money is that it is used a lot as an extrinsic reward, which acts against any intrinsic motivation you may have, taking enjoyment away from activity and also causing goal displacement.

It also encourages people to be greedy rather than generous, which leads to everyone being unhappier.
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rendom, 27 Dec 2008 @ 2:17pm

megaupoad downloading
All new music mp3 and clips are available for downloading at http://megaupload.name/
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