Wealth Without Markets?

Innovation and Economic Growth, Intellectual Property, Networks, the Internet, and Cloud Computing and Internet

Article Snapshot


Lior Strahilevitz


Yale Law Journal, Vol. 116, No. 7, pp. 1472-1517, 2007


This article critiques Yochai Benkler’s book on how new communications technology can foster social production.

Policy Relevance

Benkler’s book recommends that regulators refrain from imposing unnecessary limitations on the potential for social production created by new communications technology. However, he fails to address other issues that could hinder growth and that may require regulation.

Main Points

  • In 2006, Yochai Benkler authored the book The Wealth of Networks: How Social Production Transforms Markets and Freedom. This book predicts the continued growth of social production through communications technology.
  • Benkler argues that if left to its own devices, this new form of social production will lessen the gap between the rich and the poor. Therefore, regulators should refrain from arterially constraining this new form of social productivity.
  • While Benkler has given an interesting and compelling argument for refraining from regulating, his book also failed to consider some of the non-regulatory pitfalls that are facing a new age of communications technology.
  • Among the primary threats facing future social production, three important issues are not addressed by Benkler’s book:
    • First, social production efforts often seem promising when they succeed in attracting sophisticated users, but often fall short of their potential when a broader demographic of users begin using the new system.
    • Secondly, companies competing with social production have shown an ability to adapt to the new social competition by successfully targeting the excess capacity that enabled the production.
    • Finally, companies have also shown an ability to appropriate the strategies of social procedures, with large new companies, such as eBay and MySpace, earning substantial profits from the social production of their users.
  • By ignoring these potential stumbling blocks for social production through new streams of mass communication, Benkler focused too closely on the possible harms that could be created by undue regulation. Instead, it appears that many issues challenge the possible advantages of new communication methods, and that a broader perspective needs to be taken.
  • Interestingly, recent studies have also suggested that efficient redistribution of wealth could be fostered by the encouragement of private wealth rather than a switch to public productivity. Studies indicate that charitable donations are much higher for individuals who have earned their wealth rather than inherited it; which may lead to the conclusion that private wealth creation may not necessarily run counter to wealth redistribution.


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