If our property can be infinitely reproduced and instantaneously distributed all over the planet without cost, without our knowledge, without its even leaving our possession, how can we protect it? How are we going to get paid for the work we do with our minds? And, if we can’t get paid, what will assure the continued creation and distribution of such work?
What John Perry Barlow recognized is that when essays and other idea-based commodities migrate to the Internet, they are no longer rivalrous or excludable. You can read this essay online without interfering with anyone else’s ability to read it. In contrast with a print magazine, in which the default state is excludability (you cannot read it without paying for it), on the Internet the default state is non-excludability
In terms of traditional economics, the offerings that are available via the Internet, because they are not rivalrous or excludable, are public goods. Yet for the most part they are being provided by private companies.
To answer the question posed by John Perry Barlow — how are we going to get paid? — 21st-century firms have had to develop and implement various strategies, often along the lines suggested in response to Barlow by Carl Shapiro and Hal Varian in their book Information Rules.
Our outdated economic textbooks still treat business strategy as nothing more than deciding the mix of capital and labor along with the quantity of output
. 21st-century economists should instead be aware of the way that the Internet has made business strategy much more complex and important. For example, John Van Reenen and colleagues have found that differences in management techniques account for large differences across firms and regions in their effectiveness
