The economy of free

(Yeah, I know – way too long between posts – sorry…)

“Free! Why $0.00 Is the Future of Business” – an article from Wired that’s interesting from a number of perspectives: business, futures, society, and my own rather odd concern with post-possession economies.

A couple of quotes that are worth repeating. First is from the description of the ‘gift economy’:

From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn’t the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact. In a sense, zero-cost distribution has turned sharing into an industry. In the monetary economy it all looks free — indeed, in the monetary economy it looks like unfair competition — but that says more about our shortsighted ways of measuring value than it does about the worth of what’s created.

When a true gift is classed as ‘unfair competition’, too right that it “says more about our ways of measuring value that it does about the worth of what’s valued”… – the classic monetarist delusion that leads to “the fool who knows the price of everything and value of nothing’. And gift-economies are not based solely on altruism – which seems for some unfathomable reason to be utter anathema to American ‘libertarians’ – but much more on a solid grasp of longer-term feedback-loops in the dynamics of functional societies as large-scale ‘systems’ (in system-theory terms) – which again seems to be beyond the understanding of most classic economics, which for the most part seems incapable of comprehending any time-scale longer than a few months, or years at most, not the decades or centuries or millennia needed for real sustainable economics. A bit bizarre, really – and scary.

The other comment was a riposte to economics ‘guru’ Milton Friedman. In Friedman’s monetarism. money is the only possible measure of value. But as the article says:

money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we’ve always known about but have only recently been able to measure properly. The “attention economy” and “reputation economy” are too fuzzy to merit an academic department, but there’s something real at the heart of both.

There are quite a few others, too, the relationship economy being one of them. But a key point here, perhaps, is the dysfunctionality of scarcity-economics, the idea that value is based on scarcity – or more to the point, that value is based only on scarcity, which leads to frequent attempts to create artificial scarcities or delusions of scarcity where none exists. Functional societies and economies don’t make that mistake: they create real gift-economies that do function sustainably. More on that some other time, perhaps – but that error is right at the core of why our culture and its economics simply do not and cannot work.

Worthwhile article, though. Recommended.