The same thing is happening to the digital world that happened to classical media.

People want cheap and/or free. It's also incredibly difficult to compete with cheap/free products. Mix this with the fact that information is "free" -- it costs almost nothing to copy -- and all information economies tend to become deflationary races to the bottom dominated by free and freemium stuff that is indirectly funded by other parties (like advertisers).

What's wrong with this? I mean, doesn't this mean the information economy is some kind of wonderful post-scarcity utopia?

The problem is that information isn't actually free.

Let's say you have two files. One is 100k and contains a copy of a novel. The other is 100k and contains the results if dd if=/dev/urandom. Both files take up the same amount of space and both are virtually free to copy and distribute. But the novel took years and years of someone's hard work to create, while the random numbers took no effort at all outside of a tiny bit of electricity.

All information is not created equal. Information that requires effort to produce is not the same as information that doesn't.

This creates a market paradox. The market wants free (or at least cheap), and free is incredibly tempting to marketers because free undercuts the competition and goes viral. With free (or freemium) you can get a kind of exponential growth curve that is incredibly hard to achieve with a paid product. Yet at the same time you are a liar. The information you're releasing for free is not free. It cost you something to produce. Like all lies, at some point you have to answer for this one. How will you keep the ball rolling?

In a networked world, the obvious and convenient answer is to sell your users to someone else.

In cases where your product has a service component with a non-trivial cost (e.g. Facebook), free is a particularly pernicious lie. Not only does it cost money to keep producing the product, but it also costs hard capital to operate the infrastructure. If there's no subscription based revenue model, you must sell out your users. Either that or you shut down.

This happened in traditional media of course, and it gave us ad-or-propaganda-fueled television and radio. Outside of a few pay channels, virtually all broadcast media is financed by advertisers or is operated at a loss by governments to serve as a propaganda outlet (the same thing really).

This means that -- big surprise -- those financiers have tremendous pull over what is broadcast. There's a reason you never see genuine challenges to the conventional corporatist/state-capitalist political system on TV. It's because the beneficiaries of that system pay for all your TV.

There are exceptions in the software world, like Linux, that have managed to discover a niche where they can be the permanent beneficiaries of philanthropy. These exist in the broadcast world too. But they're unicorns. These niches are rare, hard to construct, and possibly unstable. Ultimately every business and most other efforts that require constant financing must serve some master. If free rules the day, they must serve advertisers and other interests that want to buy you.

It's no coincidence that Apple is trying to take the high road. They're doing it because they can. Apple is insanely profitable off their own physical products and their own vertically integrated services, and they have a measure of lock-in that ensures long term customer loyalty (meaning high lifetime customer value). They can afford to forego advertising revenue in favor of customer goodwill, especially since this further cements their lock-in over those customers in the long term via platform integration.

When I saw that Windows 10 was going to be free, I knew it would be spyware. Microsoft also has the option of taking the high road, but they've chosen not to. Instead they've decided to try to become Google or Facebook and "invert their model," making their products free and therefore making their users into products.

The free ad-supported model was tolerable for TV and radio because these are unidirectional. The TV does not watch you. But free ad-supported models in the Internet age lead to horrific dystopias. If we don't want something worse than Orwell's worst nightmares, I really think the only solution is to reject free.

Rejecting free alone is not enough -- obviously there are paid products that are user-hostile. But I think it's at least a necessary if not sufficient condition. We also have to embrace and reward players that make an effort to protect their customers' privacy and security -- in other words to treat their paying customer like customers.

I'm looking forward to the day when customers see "free" and actively reject the product, assuming that its business model will be user-hostile. I already see a little bit of this in the web. When free services with absolutely no revenue model get introduced, I often see skeptical questions about where the money's going to come from. If the company has no obvious answer, the default is 'by selling you out.'

> I believe that all generally useful information should be free. By "free" I am not referring to price, but rather to the freedom to copy the information and to adapt it to one's own uses ... When information is generally useful, redistributing it makes humanity wealthier no matter who is distributing and no matter who is receiving.

Converting the free information into property is the problem. It's not harvesting the forest or the underground rocks into property, it's collecting the output of people and making it not their own.

The cost to reproduce an existing piece of information is very low (not zero; you still need computing technology).

But the cost to produce an original piece of information is often still quite high. Look at how much it cost to make Star Trek Into Darkness, or for George RR Martin to write his next "Game of Thrones" novel, or Apple to produce iOS 7. These take huge investments in time and technology.

Even the premier product of free culture, the Linux kernel, receives millions of dollars of investment every year in salaries and supporting technologies.

The point is that information per se is non-rival and non-scarce, so the normal drivers of market exchange don't apply to it. Since we want to incentivize the creation of information, we have created positive law that generates artificial scarcity, and allows market forces to work mostly as they would for physical goods, but this is just a stopgap solution due to the difficulty of commoditizing the downstream uses of information.

To echo another commenter in this thread, if we were better at commoditizing and marketing the uses of information directly, rather than the information itself, we wouldn't need to use artificial scarcity as a proxy to generate that incentive.

> all these things require effort to produce, maintain, curate, distribute.

But these inputs are not the determinant of the value of the end product. They only describe the process of creating it, but value is determined by the subjective utility enjoyed by the end consumer.

If you view time and effort necessary to create and distribute information as a capital expenditure on par with the time and effort necessary to design and manufacture any physical good, perhaps things come into clearer relief. Is anyone entitled to a guaranteed return on capital investments, or are they bearing risk in making them in pursuit of a potential, but uncertain, return? I think most people would hold the latter view.

> Leaving the practical constraints behind, I also struggle to see moral or ethical reasons for information to be free.

I'm not sure I see where moral or ethical considerations even come into the discussion. The closest moral consideration that applies to the question is the way it affects property rights, but in that regard, it seems that it's the artificial scarcity in information that seems to lack sufficient moral justification.

There are no natural property rights in information itself, due to its conceptual and non-rival nature, and the attempt to take the norms of ownership associated with natural property and apply them to information actually constitutes an abridgment of natural property rights: functionally, 'intellectual property' amounts to a restriction on what patterns other people may arrange their own physical materials into, based on fallaciously reifying the pattern itself into a putative concrete thing to which rivalry applies.

Another poster identified the issue: decentralized distribution, not low cost of copy, is the sea change. In past times governments responded to low cost of copy by legislating copyright. Now there's no practical way to centralize distribution of convenient copies of data.

Honestly, nerds fantasize about a world where all data is free, but information creators just respond by making their data inconvenient to obtain. Institutions of content creation have a high demand product; economically there's no reason to expect them to roll over and give up on making money.

I think the way the "free information" people see things is that a free and easy, attractive accessibility of knowledge (or more generally, information) is needed for anyone to truly prosper in their life, and for humanity to progress further as a whole. A physical good (like food) is not reproducible at an effective zero marginal cost -- digital data is. So, when you in fact can provide everyone this resource, and work to achieve a world with true equal opportunity at least in this one aspect (of knowledge) at a practically zero or near-zero cost, you are indeed morally obliged to distribute this good to everyone who will prosper from it. As it stands, culture is no longer free -- to be able to participate you must pay. The more you are able to pay, the more cultured you can be. Books, movies, music -- you can have only as much culture, knowledge as you can pay. Why... when it's finally gotten so much easier to afford everyone culture and information for free, or near-free costs.

The idea that information wants to be free stems from the market principles of supply and demand. Price is determined by supply and demand. Digital information can be duplicated at almost zero cost, so there is a pressure on it to become cheaper and cheaper until free.

The idea that information wants to be free is also contradicted by the idea that "Information is power" etc. The less people you can restrict information to the more it is worth. Also, timely information can be very valuable (like in insider trading) that information can have value (i.e. no free as in beer).

But just because information can be duplicated infinitely, it doesn't mean that it will be duplicated infinitely, meaning that the value of the information will be determined by the costs of production and demand. Will this value of the information be enough to cover the costs? This will be the determining factor as to whether people can continue to make a living from producing information. On the flipside, the costs of making quality information are rapidly decreasing, so it should be getting easier and easier to make a living from information.

In the end, I think that information will always have value. The key will be for the producers of that information to find a way to connect with people willing to pay for it.

"Intellectual Property" is one possible way to try to answer all these points, a hack to try to couple market allocation to the information generation issue while also recognizing that it's not real property and is funded by and for the public. It offers a chance, not a certainty, to make money off an investment on information generation through convincing other parts of society to pay for it piecemeal during a limited pseudo-physical-property replication stage. In exchange, it shouldn't be secret, shouldn't cover basic facts of the world or certain other areas where additional generation incentives are unnecessary, and should have limited times taking into account the ongoing and ever increasing societal cost.

I think it's very foolish to mistake implementation issues with fundamental ones and throw out the baby with the bath water unless you've got something better to fund information generation equally effective. And I have yet to hear any proposed scheme by total-anti-IP folks to take its place, merely complaints about the current implementation. I think it'd be far more productive to first direct efforts towards fixing mismatches in historical IP in each of the 3 areas above vs modern times. On the secrecy issue for example, encrypted source code escrow should be a requirement for having copyright protection for everything that isn't open or available source already, and have-your-cake-and-eat-it Trade Secret laws should be eliminated. Patent protection for mathematics (all software patents) should be completely eliminated, copyright is more then enough already for software and better aligns incentives. And new, better ways to reflect ongoing and increasing societal costs, and the divergence in areas of generation, should be added rather than mere fixed times. Ongoing yearly renewal beyond an initial short period at non-linearly increasing cost (either fixed or an increasing percentage of revenue) would be one possible approach.

But all this seems far more useful than anything else I've seen. Total command and control at all levels of the economic stack hasn't proved any more effective for information generation than it has anywhere else in economics. IP has overall worked fairly effective, and it seems to me that the problems it has caused are more down to warts and rust that could be fixed.

And one day we will be asked to answer for this barbarism. How could we allow so many of us to go without when they could have it all for free? How could we deny all to billions just to create an artificial marketplace for a few million? How could we possibly stand at beginnings of a profound shared global consciousness with all the tools and technology required to summit the mountain and breath in the glorious horizon and choose to instead stubbornly burrow our heads in the sand. History will ask us these questions and we will be found wanting.

The problem is that this "scarcity" (to produce information) wants to be compensated too. And it's not only "scarcity", it's also costly to produce information. The fact that you can make 1 billion copies of Adobe Photoshop for free, for example, does not mean Adobe Photoshop itself costs nothing. It costs something like several tens of millions to make in programmer's salaries. Those paying those millions should get to dictate how you pay for it, like the guy that makes a chair gets to dictate how you pay for his chair.

You seem to think that the scarcity of infomation production means nothing at all, when you say e.g.:

Paying people for work done to create makes sense. It makes an 'economic' structure that mirrors the basic physical constraints. And it is justified according to its 'economic' effects. You give something up, you get something in return.

When you buy Photoshop, it's not just bytes downloaded to your PC you get, which cost nearly nothing (= your ISP bill), you ALSO get a slice of the paid, hard, work of hundreds of people in return.

Why are we confusing technological feasibility (free copies are feasible) what what ought to be done (compensate the creator or not)?

A crazy idea to directly make the software sale more akin to a specific item sale (a chair):

The software maker sets an arbitrary total aggregate expected sale price P and a selling goal (say, X units). Anyone buying before X units are sold pays P/X. For anyone buying after it, the price falls P/X+ (and the first buyers are also given their difference back, either directly or in "store credit"). In the end, if they sell a billion copies, people get the program for say a dollar, but it's OK, because the company is compensated. Actually, this makes popular items essentially free or dirt cheap in the end. For this to work, we need a marketplace like the Mac App Store, so those transactions and record-keeping can be automated.

This restricts the artificially huge profits made by controlling the price, and puts a set price to a free copyable item, like a tangible item has, that reflects the work that went into it. It also keeps the risk of the original sale, i.e if the sell < X, they have a loss.

None of that much holds for paying for copies. The transaction is not fair and square, it is an unwarranted and unjust restriction of personal freedom of those using the information. And as for the global gain, it seems rather lacking grounds of actual evidence.

Well, the global IP industry, sales of software, music, books, magazines, etc, is on the level of trillions of dollars. It would be almost zero with totally free copying. So, at the economic level, there is some support for "global gain". And it's not like the culture would be poorer if less Metallica and Lady Gaga albums where freely torrented (yes, I'm a snob like that ;-).

The problem is that data is never a scarce resource. It's, for all practical purposes, inexhaustible. So trying to put a price on a collection of bits is virtually impossible using classical models.

So what you end up with is companies trying to recreate this 'scarcity' with encryption schemes and lockins and all manner of other protective measures. Which all inevitably fail, rendering the production cost of this new item extremely close to zero.

Now, some people argue that you must take development costs into account, lost sales, etcetera and then you end up straying into wild, untamed territory. After all, you don't see car companies suing the manufacturers of bicycles for taking away sales, or anything like that. But yet, when it comes to digital information, this seems to be par for the course.

And of course, the counter-argument to it is thus: If I make say, 1,000 copies of a game and keep all these copies on my hard drive, does that cost the company more? No.

But if I give these new copies that I made at my own expense (as little as that is) to my friends, this is somehow a transformative process and is treated as costing the IP owner profit (or increasing effective cost or somesuch).

It would probably serve better to just give up on this and focus on creating product in a way that follows traditional markets. Give away the music for free, it's only data. But make your revenue from shirts, concerts, etcetera.

It seems that the author, Paul Mason, has recently published a book: Postcapitalism: A Guide to our Future. Here's a blurb from a review on Goodreads [1]:

Probably the most critical observation to this theory is that information now forms a huge and growing proportion of the goods and services that make up GDP. Yet it is cannot be priced using standard economic theory, which states that a market is in equilibrium when marginal cost equals marginal benefit. Information has zero marginal cost, as it can be copied infinitely, the only cost involved being the electricity this requires. Moreover, the category of information keeps expanding, to include music, books, films, TV shows, patterns and designs to make or do just about any other thing. Whilst there is obviously a cost to producing this information, that is generally also falling. Only legal structures prevent everyone with an internet connection being able to listen to practically every song, watch practically every film, and read practically every book ever created. Realistically, everyone willing to pirate already does. Business models based on defending copyright are fighting a losing battle, as internet connections get faster, storage cheaper, and files quality better. I have long blamed my comfort with media piracy on A-level economics, which helpfully taught me that a good with zero marginal cost should also be priced at zero. Mason notes that the so-called ‘Internet of Things’ (a concept I am admittedly somewhat dubious of) will expand both the volume and proportion of information in our goods and services. At the moment, the information that we passively create by browsing the web (which certainly feels like a passive activity much of the time) is controlled by state and private monopolies; google and the NSA, broadly. The argument here is all such information should be made more public, in order that it can be used to drive innovation.

Apparently the open sourcing of brewery recipes plays into his thesis and gives him another chance to push a short piece on postcapitalism and the opening up of all data/information as an equal means of production for everyone in the world.

What is not mentioned is the human/physical capital required to produce and distribute something of value with this free information, which will still be just as expensive (if not more expensive) in the future.

[1] https://www.goodreads.com/book/show/24878857-postcapitalism

Information is not rivalrous in that way: an additional person having it doesn't take it away from anyone else. Many people can read the same (e-)book.

There are other reasons why societies originally granted a completely artificial temporary monopoly on information: the theory that it'll incentivize the creation of more works, which is a thing the society might want more than they want the ability to copy and modify and remix it on day one.

Emphasis on "might" want: it's not obvious that that's the correct tradeoff today, in a world in which we have not merely the printing press but digital information that can be trivially copied and modified, and a society of people who all have the tools at their fingertips to use that information to create and remix and do wondrous creative things with all of culture.

This disconnect between business model and products leads to a lot of unaligned incentives between makers and users of product. That's the innocent looking root of evilness - no bad people required.

One of the problems is fairly well understood: the tendency for marginal costs to approach zero, or at least a small fraction of the fixed costs of production (look at the story over how Boeing accounts for the R&D of its 787 Dreamliner).

Another is more insidious: information isn't readily assimilarted. If you look at the advertiser's toolkit for message dissemination, what you see are all kinds of ways to drape the intended message over an assimilable one: sex, youth, beauty, fame, fear, greed, jealousy, envy, loss. Or repetition, music, disorientation, flashy elements.

Junk food (of the dietary or infotainment variety) has cognizability, a word I first ran across in William Stanley Jevons description of characteristics of money. You instantly recognise what these are. Complex truths are, well, more complicated. The geniuses who discover or explain them come up with useful metaphors or analogies: Newton, Darwin, Einstein, Feynman. Much of that is mapping a novel thought onto a familiar one.

We're not going to take that out of information, it's part and parcel of the bargain (a metaphor, incidentally, arguably a cliche). But we can try engineering systems for compensating and promoting information which don't flagrantly flog and feed junk. That's the feedback and control loops Williams talks of.

One approach is to treat information as a public good. It's what the UK does with the BBC, and it's the philosophy of a number of institutions, including CUNY's Graduate Center (who've adopted this as their motto), and Robert McChesney and John Nichols:

http://www.thenation.com/article/how-save-journalism-0/