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Is the Internet Destroying Our Economy?

Internet and U.S. EconomyFree news, free reference material, free software, free porn, with all that free stuff, how in the world did the Internet ever come into being in America, the shining bastion of capitalism, home of the almighty dollar? Is that what "land of the free" was supposed to mean?

Not only that, but the online world is about as close to a "social collective" as you can get. After all, Web 2.0, open source, and social media are all ways of describing a new kind of collectivism or virtual collaboration. Strange that it should happen in America, the entrepreneurial center of the world.

Sure, this is a democracy, which means all of us are created equal. But in practical terms, that's historically meant that everyone has the same opportunity to become president, to be a CEO, to get rich.

So what's up with this Internet? Where did we go so terribly wrong? More importantly:

  1. Is the Web destroying our economy because everything's free?
  2. Is it stifling innovation because "innovation by committee" doesn't work?
  3. And is it undercutting our intellectual capital because everything's collaborative and nobody gets paid?
I never would have thought of it in those terms if I hadn't read World Wide Mush, a synopsis of the book "You Are Not A Gadget," where Internet and virtual reality pioneer Jaron Lanier scared the crap out of me by explaining how the Web has gone drastically off course. Here are some thought provoking excerpts:
The idea of a world where everybody has a say and nobody goes unheard is deeply appealing. In the 1980s and 1990s [I was] part of a circle of friends who tried to imagine how computers would fit into the peoples' lives, including how people might make a living in the future.

Our dream came true, in part. [Millions] of people are ready to contribute instead of sitting passively on the couch watching television. On the other hand, we made a huge mistake in making those contributions unpaid, and often anonymous -- I am appalled that our old fantasies have become so entrenched that it's hard to get anyone to remember that there are alternatives to a framework that isn't working.

Here's one problem with digital collectivism: When you have everyone collaborate on everything, you generate a dull, average outcome in all things. You don't get innovation.

If you want to foster creativity and excellence, you have to introduce some boundaries.

There's a dominant dogma in the online culture of the moment that collectives make the best stuff, but it hasn't proven to be true. The most sophisticated, influential and lucrative examples of computer code -- always turn out to be the results of proprietary development. Indeed, the adored iPhone came out of what many regard as the most closed, tyrannically managed software-development shop on Earth.

Actually, Silicon Valley is remarkably good at not making collectivization mistakes when our own fortunes are at stake. If you suggested that, say, Google, Apple and Microsoft should be merged so that all their engineers would be aggregated into a giant wiki-like project--well you'd be laughed out of Silicon Valley so fast you wouldn't have time to tweet about it.

But this is exactly the kind of mistake that's happening with some of the most influential projects in our culture, and ultimately in our economy.

Digital collectivism might seem participatory and democratic, but it's painting us into a corner from which we will have to concoct an awkward escape. It is strange to me that this isn't more obvious to many of my Silicon Valley colleagues.

On the one hand we want to avoid physical work and instead benefit from intellectual property. On the other hand, we're undermining intellectual property so that information can roam around for nothing, or more precisely as bait for advertisements. That's a formula that leaves no way for our nation to earn a living in the long term.

The "open" paradigm rests on the assumption that the way to get ahead is to give away your brain's work -- and earn kudos instead of money. You are then supposedly compensated because your occasional dollop of online recognition will help you get some kind of less cerebral work that can earn money.

We're well over a decade into this utopia of demonetized sharing and almost everyone who does the kind of work that has been collectivized online is getting poorer. And it's going to get worse.

This isn't how things should be. Some kind of intellectual-property system is the only way Americans, or people anywhere, can earn money in the long term --

I don't want our young people aggregated, even by a benevolent social-networking site. I want them to develop as fierce individuals, and to earn their living doing exactly that. When they work together, I hope they'll do so in competitive, genuinely distinct teams so that they can get honest feedback and create big-time innovations that earn royalties, instead of spending all their time on crowd-pleasing gambits to seek kudos. This is not just so that they and their children will thrive, but so that they won't become a mob, which, as history has shown us again and again, is a vulnerability of human nature.

You've got to admit, Lanier makes some good arguments. But what do you think? Is the Internet destroying our economy?

Image CC 2.0 via Flickr user Bull3t