Rheingold is worried that established companies could quash such nascent innovations as file-sharing -- and potentially put the U.S. at risk of falling behind the rest of the world. He recently spoke with Robert D. Hof, BusinessWeek's Silicon Valley bureau chief. Here are excerpts from their conversation:and the interview moves on from there.
Q: Where do you see the social revolution you've been talking about going next?
A: It's too early to say. The question is: What does it point toward? Some kind of collective action...in which the individuals aren't consciously cooperating. A market is a great example as a mechanism for determining price based on demand. People aren't saying, "I'm contributing to the market," [they say they're] just selling something. But it adds up.
Q: Can you give me some specific examples of what you mean, beyond the market?
A: Google is based on the emergent choices of people who link. Nobody is really thinking, "I'm now contributing to Google's page rank." What they're thinking is, "This link is something my readers would really be interested in." They're making an individual judgment that, in the aggregate, turns out to be a pretty good indicator of what's the best source.
Then there's open source [software]. Steve Weber, a political economist at UC Berkeley, sees open source as an economic means of production that turns the free-rider problem to its advantage. All the people who use the resource but don't contribute to it just build up a larger user base. And if a very tiny percentage of them do anything at all -- like report a bug -- then those free riders suddenly become an asset.
And maybe this isn't just in software production. There's [the idea of] "open spectrum," coined by [Yale law professor] Yochai Benkler. The dogma is that the two major means of organizing for economic production are the market and the firm. But Benkler uses open source as an example of peer-to-peer production, which he thinks may be pointing toward a third means of organizing for production.
Then you look at Amazon (AMZN) and its recommendation system, getting users to provide free reviews, users sharing choices with their friends, users who make lists of products. They get a lot of free advice that turns out to be very useful in the aggregate. There's also Wikipedia [the online encyclopedia written by volunteers]. It has 500,000 articles in 50 languages at virtually no cost, vs. Encyclopedia Britannica spending millions of dollars and they have 50,000 articles.