Clay Shirky has made yet another interesting and hopeful TED talk. I’m not going to rehash the things he talks about, but instead jump straight to the niggling half-formed question that I can’t quite shake: what happens if the most beneficial and important things we will do are not things we’re financially compensated for?
Admittedly, that doesn’t immediately sound like a bad thing. People are doing important work for free, out of love for the work or out of concern for the consequences of that work, and we all benefit. However, I always thought that the purpose of our economic system was to support and reward useful contributions to society. There are certainly people out there who will claim that, for any useful endeavor, there must be a business model capable of supporting that endeavor. You’ll hear an argument like, “If there is enough demand that people are willing to pay the required price, then a business can flourish. If there is not enough demand for a product or service, then it must not be worth providing.” But that’s not true, is it?
With all the things the poor need, there’s plenty of demand; there just isn’t any money to meet the need. Further, there might be projects or even whole industries that are impossible to turn into conventional businesses that must be run at a profit (or even required to break even). Setting aside the example of open source software for a second, you have more conventional businesses like the record and movie industries, which cannot exist without government protection of copyright. Even more concrete, you have the building and maintenance of vital infrastructure, which must be run “at a loss” even though the benefits to society often outweigh the costs. There are, of course, many charitable organizations who solicit donations, and even software that’s funded through donation.
So if the purpose of our economic system was to support and reward useful contributions, what does it say about our economic system when so many useful contributions are not supported by it? There have always been great contributions to society that have gone unrewarded. That isn’t new. There have been influential artists and writers and scientists and great thinkers who have died in poverty. But I wonder, what if the balance shifts, and more of our contributions are collaborative and can’t be monetized? Would we then need to change the way we think about money?
Sometimes these thoughts seem like far-fetched naive idealism, but as Shirky points out, the realities of financial penalties and rewards don’t actually work the way we expect. His example of the day care instituting a fine is by no means the only example. Dan Pink gave another TED talk on the topic, explaining how incentives do not necessarily improve performance.
Anyway, I don’t have a solution to propose. These ideas puzzle me, and I’m not really even convinced that this is a new problem. The economics of online collaboration and open source software start to make the problem more obvious, since there arises a natural conflict between open source and closed source competitors. However, I wonder if it may be that our economic systems never worked as well as we imagined. Can we structure our economy so that we support all of the work that needs to be done?