In the gift economy, who gets the biggest gifts?

Posted on July 30, 2006 by Ian Betteridge

Digg poster “Mike” popped up in the comments to “Kevin Rose: Get a grip” with this, which I thought was worth replying to in a post as it encapsulates a lot of the issues that I have with the whole “free” Web 2.0. First of all, Mike’s post.

“You dont get it do you? I dont go to digg because I make money off of it. I go there because it has good news and ideas. I don’t contribute because I get paid to I share because I have an idea or story that might be interesting to someone else. You fail to understand that the social web creates a gift economy, where I share whats cool to me because I like the things that others share. If the founders make money off of ads good for them, they have bills to pay.

I guess what I’m saying is digg is about the comunity, without the community digg isn’t digg, and the community isn’t about money, its about sharing ideas because you make the community better. Therefore digg the concept isn’t about money.

Ads and such arent part of the digg community, they might be on the site, but someone has to pay the hosting bills and im glad it isnt me.”

This perspective treats sites like Digg as if they were part of the commons. Digg, the theory goes, is nothing without its users – and the users communally benefit. Therefore, as the community itself isn’t about the money, therefore Digg isn’t about the money either.

There’s many problems with this, but the key one is simply that, while it’s communally made, Digg isn’t communally owned. It is, in fact, a classic capitalist model: the owners of the means of production (the site) take the profits, while the workers (those who contribute) take their “wages” – although in this case, the “wages” aren’t cash, but the enjoyment of contributing to the site.

The clever trick that the proponents of Web 2.0 sites like Digg is to convince people that somehow because they’re NOT getting paid, it’s “open, free, and democratic”, when in fact it’s no more “open, free and democratic” than Ford, Coca-Cola or AOL. The owners of the means of production take the profits, while the people who create the value get nothing. Saying that “without the community digg isn’t digg” is exactly equivalent to saying “without the people who assemble cars, Ford isn’t Ford”.

On one level, I have a sneaking admiration for this: it must rank as one of the greatest con-jobs in business history, and it certainly demonstrates the old PT Barnum dictum of “never give a sucker an even break” still works, even in the information age.

However, the funny thing is that I have a sneaking suspicion that, with a few exceptions, some of the owners of the means of production really believe the hype themselves. Which is why I suspect they usually end up selling to someone larger – because growing the business themselves and raising an IPO would force them to confront the fact that they’re in the same old business of exploiting cheap labour as most of the rest of the capitalist world.

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  • http://profile.typekey.com/yoz/ Yoz

    You’re conflating two different arguments here. Mike is not arguing anything about ownership, purely about the factors that drive him to contribute. As Stewart said, you have to leave behind the fact that Kevin Rose was basically talking drivel. People contribute to Digg without any expectations of love, ownership or democracy. It’s about the various kinds of satisfaction gained from taking part. Ownership doesn’t have to be a factor here; sure, it can help, but I’m pretty sure that the Digg userbase is under no illusions about who owns what, irrelevant of Rose’s wistful hyperbole. Despite this, they are still there.

    While I’m definitely in favour of people being owners of the work they contribute, I don’t think it puts Digg in a position of being exploitative capitalists. Spending half an hour on Digg every day to post links and spout opinions is not comparable to an eight-hour shift at the plant to feed your family; for one thing, it’s risk-free and almost frictionless to pick up and move to a different site. Link aggregation is not exactly a rare commodity. If anything, the site owners are more in need of their community than the other way around – this is why Calacanis made his pitch in the first place. It’s not about a just reward, it’s about desperation.

  • http://profile.typekey.com/ianbetteridge/ Ian Betteridge

    The problem is that what Kevin said is not an opinion that’s Kevin’s alone: you and I have both seen pretty much the same techno-utopianism from others in the Web 2.0 community. Check out the comments on Digg and Slashdot whenever anyone “betrays” the “open, democratic” values of Web 2.0 for examples. I’m sure Stewart remembers the (largely baseless) flaming he got in the recent spat over working with Zoomr, and witness too the virtual lynching of Tim O’Reilly. The fact that Mike could talk about “the gift economy” indicates that he, in part, has swallowed the rhetoric that goes along with the sites.

    I know that you’re going to respond by saying that the Zoomr and O’Reilly cases aren’t connected, but they are, by one important point. There is an underlying ideology (although I’d prefer to call it a mythology) about Web 2.0 that contrasts it with “regular” business. There’s a lot of emphasis on “openess” and sharing, on democracy, on (ugh) “the wisdom of crowds” and so on. There’s a lot of rhetoric about “get out of the way, old guys, we’re the future!!!” (usually from 40-somethings who are bitter that they missed out on the last bubble). All of which I’ve continually referred to by the shorthand “hippy-dippy bullshit”, but you get the idea.

    But underlying this ideology, the fundamental business model is identical to all traditional capitalist models. The “gift economy” is simply placing a zero price on both the labour and the product, while deriving profit from advertising non-zero-priced goods and services. The owners of the means of production still get the profits, the workers still get their wages. It’s the old commercial television model, with a twist: you know longer have to pay anyone to produce things because the viewers are producers.

    My argument, as a good old-fashioned former Marxist, is that in the end all enterprises built on this model will behave in the same way. While they use the rhetoric of freedom, openness and democracy to attract users, ultimately because they are organised on traditional capitalist lines they will be pushed by the markets to act in the same ways capitalists always act: with the interests of their shareholders at heart. Just as all roads lead to China, all roads in business lead to becoming Microsoft (or Ford, or Coca-Cola).

  • chrislunch

    All this was discussed endlessly back in the early 90′s in relation to the ‘Circle of Gifts’ model for academic publishing – Ann Okerson and others discussed this in the dusty realms of librarianship journals back in ’92.

    If a true gift economy was possible because of technology alone, then it would have happened in academic publishing by now. But a true gift economy has to happen because the social factors graft easily onto the technology that enables it.

    Ultimately this is what has failed so far.

    And, as in every vaguely Marxist/Socialist attempt at subverting capitalist systems before it, as Web 2.0 starts to divide between an elite of producers who sell out/cash in and an embittered bunch of staunch lefties who stuck to principles/missed the payout, we will yet again find it easier to blame large corporations, or the technology, rather than admit that actually only a very small subset of people involved in any of these movements are actually prepared to live up to their utopian principles.

    Plus ca change.

  • http://profile.typekey.com/fabius/ Phil Gyford

    One difference between these sites and conventional companies is that it might not be clear how the site owner will act in the future.

    As an example, I don’t make any money from pepysdiary.com at the moment, and people contribute their discussion and find information to help others freely. I plan to keep the site free, and live, for at least the duration of the project (9.5 years) and longer if possible.

    But if someone came along and offered me gazillions of dollars for the site, or I realised I could make a tidy living from advertising, there’s a chance I’d succumb and I’d be making money from the freely-contributed efforts of others.

    Which is as if Henry Ford got his workers to work, for free, on a vast fleet of community-owned cars and, a year later, flicked a switch that meant people using them had to pay him (or something like that; I hear the sound of an analogy creaking).

    My point is that until a site owner decides to start making money from it, there’s no way of telling whether a site will, ulimately, be Good or Bad (to simplify the spectrum).

  • http://twopointouch.com Ian

    Hi Ian. Sound comment. Is the bluff about to be pulled on 2.0? In some ways, yes.

    While I don’t doubt that mainstream media companies can quickly generate a lot of page-views with their “new products”, the tide has already turned against free content submission.