Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production

Summary of: Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production

Author(s) / Editor(s)

Benkler defines a class of “shareable goods” whose use and distribution is more efficient under regimes that encourage sharing rather than through traditional markets.

Disciplines

Publication Reference

Published in/by
First published in The Yale Law Journal, Vol. 114, pp. 273-358
Date
2004

Findings

  • The use of “shareable goods” that systematically have excess capacity relative to the needs of their owners are more efficiently harnessed and allocated through sharing relationships rather than through market mechanisms.
  • The analysis of the economic efficiency and value of shareable (physical) goods has implications for legal and legislative policy in other areas such as intellectual property and wireless communication.
  • Current policy analysis, legal decisions, and legislation, often disregarding and/or ignorant of the economic and social value of shareable goods, has tended to defend existing market-based production and distribution regimes in support of increasingly outmoded centralized, capital intensive, industrial models of distribution (as opposed to production) of cultural media and communication systems. These limiting decisions incorrectly assume that the role of market production is fixed rather than technologically contingent.
  • How shareable goods are treated through legal, regulatory, and legislative policy has potentially crippling or encouraging impact on the architecture of multi-media devices, communication networks, power distribution systems and on the production of cultural goods.

There is a class of “shareable goods” that systematically have excess capacity relative to the needs of their owners. The use of these goods is more efficiently harnessed and allocated through sharing relationships rather than secondary markets. These rival material resources are beginning to be shared in the production of both rival and non-rival goods. Examples include car-pooling and the pooling of excess processing capacity of personal computers connected to the Internet for decomposed computations in a variety of domains.

Social sharing and exchange among individuals who are strangers or weakly related is an underappreciated modality of economic production that should exist alongside price-based and firm-based market production and state-based production. The sharing of physical goods is analogous to the sharing of labor in peer production (e.g., open source software).

The goods that are amenable to sharing are “lumpy.” They deliver utility in discrete packages rather than continuously. Thus an automobile used in carpooling is purchased with a fixed number of seats; a PC has certain processing power, memory and storage. They have enough capacity to satisfy their owners, but more than is often needed. Shareable goods are also of “medium granularity”: granularity is a measure of the cost relative to the demand for them in and the wealth of a society. A locomotive or passenger plane is large grained virtually everywhere. An automobile or PC is mid-grained in the United States, but large grained in Bangladesh. Thirty years ago, computers were large grained all over the world. These goods are thus are large enough to satisfy the needs of their owners and inexpensive enough that one person can justify putting a unit into service given his ability and willingness to pay for it. They have an overcapacity on a aggregate basis.

The motivations to share are often altruistic, but may also be financial or offer some other non-financial reward (e.g., access to high occupancy vehicle car pool lanes in the case of ad hoc ride sharing systems.)

The provision of services through sharing is more efficient than traditional markets because of negligible transaction costs and the benefits of more direct information exchange: the needs of the end consumers are communicated more directly than in traditional markets.

The analysis of the economic efficiency and value of shareable (physical) goods has implications for legal and legislative policy in other areas such as intellectual property and wireless communication.

Current policy analysis, legal decisions, and legislation often disregarding and/or ignorant of the economic and social value of shareable goods, has tended to defend existing market-based production and distribution in support of increasingly outmoded centralized, capital intensive, industrial models of distribution (as opposed to production) of cultural media. These limiting decisions incorrectly assume that the role of market production is fixed rather than technologically contingent.

How shareable goods are treated through legal, regulatory, and legislative policy has potentially crippling or conversely encouraging impact on the architecture of multi-media devices, communication networks, power distribution systems and on the production of cultural goods.