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“The Wealth of Networks: How Social Production Transforms Markets and Freedom”, Yochai Benkler

August 16th, 2010 · No Comments · Economics, ICT, Policy


Synopsis: By lowering the transaction costs of group action, the Internet has made possible a new model of production – commons based peer production. Not market driven, not government directed and not organisationally controlled, peer production within online communities of interest represents a qualitatively new form of production. Benkler was the first to identify it.

My Take:

Yochai Benkler, a Law Professor at Yale University, is the grand-daddy of the theoretical analysis of online peer production. While Richard Stallman and Eric Raymond preceded him in making the philosophical/political case that underpinned the F/LOSS movement, Benkler was the first to engage in serious theoretical analysis of internet enabled peer production using established economic approaches.  While others had previously written about the unique economic characteristics of information economics (ie high fixed costs, low marginal costs, non-exhaustion and difficulty of exclusion), Benkler was the first serious academic to identify and describe the way that falling transaction costs of collaborative group action facilitated this kind of peer production. In fact, Benkler’s 2002 article, “Coase’s Penguin, or Linux and the Nature of the Firm” is probably the seminal article on peer-to-peer production in the networked information economy. Benkler’s early work underpinned a slew of more recent and highly influential publications (Clay Shirky’s “Here Comes Everyone”, James Surowiecki’s “Wisdom of Crowds” and Don Tapscott’s “Wikinomics”).

Benkler’s great insight was that the series of internet enabled phenomena like the Open Source Software movement, Wikipedia and a multitude of communities of expertise centred around blogs represented a genuinely new model of information/cultural production; a model he described as Peer Production. Benkler recognised that internet enabled social tools such as email, blogs and social networking sites have dramatically reduced the transaction costs of finding and maintaining contact with likeminded individuals. As a result, communities of interest allowing large scale collaboration outside traditional organisational or market relationships have only proliferated in recent times.

Within the blogosphere (a key example of this phenomenon at the time of the writing of “The Wealth of Networks”, communities of interest form around and between topic oriented blogs. Individuals with an interest in the topic of the blog converge around the site and interact with the blogger and each other through the comments section and other social media tools (eg email, social networking sites). Other interested bloggers also interact with the blog through almost ubiquitous comment ‘trackback’ functions that aggregate incoming links and comments for the blog. As a result, each blog acts as both a platform for, and a participant in, collaboration within communities of interest.

According to Benkler, each blog constitutes a node in the networked public sphere around which a community of interest may form. The contributions of participants in each community of interest are aggregated at the intra-blog level through the comments section and via direct communication with the blogger. The blogger then performs an initial filtering function, exercising discretion as to which contributions are then integrated into the body text of the blog in subsequent posts. The body text of each blog is then subject to filtering at the inter-blog level through a process of peer review within the broader community of bloggers writing on the relevant topic. Benkler theorises that this process of decentralised peer review will result in attention in the blogosphere being distributed according to the quality of each contribution, regardless of its source.

Benkler theorises that this will occur because high quality, salient contributions within the networked public sphere are likely to attract increased attention in the form of favourable coverage at other blogs and resulting links back to the original post. Low attention nodes have an incentive to try to draw attention to their higher quality posts by alerting more prominent bloggers in their immediate communities of interest to their posts via email, comments or trackbacks. These more prominent bloggers will filter these submissions and link back to high quality posts. As a result, high quality content that emerges from a low visibility node will diffuse through the community by moving up the attention distribution to be incorporated in high attention blogs. This attention distribution process is further accelerated by Google’s link-reliant, PageRank search algorithm that provides increased prominence to posts on blogs with more links.

In contrast, according to Benkler, a low quality contribution from a low attention node is likely to be ignored, or at most criticised by other bloggers within the community and is unlikely to attract further attention from within the community of interest. A high attention node that produces a low quality post is likely to attract criticism the community in the comments of the post in the short term and if the node continues to produce low quality information in the longer term, is likely to lose attention within the community. While inaccuracies are not prevented from being published, they are unlikely to be systemic and accuracy is likely to increase in the long term.

Benkler theorises that while not perfect, over time this process will generally result in higher quality, more salient information attracting more attention and low quality, low salience information being rejected or ignored. The implication of this community judged, meritocratic attention distribution process is that the reliability of information aggregated at any node within the networked public sphere will increase with the prominence of that node within a community of interest. In this way, Benkler essentially uses attention within the blogosphere as a proxy for quality and uses the skewed distribution of attention within communities of interest as a heuristic for judging the quality of blog content.

On top of this attention distribution filtering mechanism, the reliability of the content incorporated into the ‘A-list’ blogs within a community is further reinforced by the complimentary effect of “Linus’ Law” of Peer Production on the attention distribution process. Linus’ law provides that “Given enough eyeballs, all bugs are shallow”, that is that the participatory nature of the blogosphere will ensure that if enough people are viewing a piece of information someone will highlight any inaccuracies in this information, allowing it to be corrected. As such, the more people that are reading a blog, the more likely it is that someone will highlight an error in a post. In this way, filtering within the blogosphere occurs post-publication rather than prepublication. Benkler shows that while there are generally no formal editors vetting the content of an individual blogger pre-publication, the skewed distribution of attention within the blogosphere creates points at which an editorial filtering process can occur post-publication.

Sadly, Benkler isn’t the most accessible writer. A lot of the time he can get himself needlessly lost in esoterica and jargon. Further, when he strays from economics and moves into political economy and media studies  in Parts 2 and 3 of “The Wealth of Networks” both his persuasiveness and credibility suffer (in particular, Benkler seems to unquestioningly swallow a lot of the assertions of the Frankfurt School about the nature of traditional mass media and it’s normative inferiority to what he describes as the emergent online ‘networked public sphere’).


“Sometimes, under conditions I specify in some detail, these nonmarket collaborations can be better at motivating effort and can allow creative people to work on information projects more efficiently than would traditional market mechanisms and corporations. The result is a flourishing nonmarket sector of information, knowledge, and cultural production, based in the networked environment, and applied to anything that the many individuals connected to it can imagine.”

Tags: Yochai Benkler