I am not strong on economics. It isn’t a subject I have had cause to study formally or on which I’ve found the wherewithal to read and self study. Meeting and chatting with Patrick E. McLean last year, a fine gentleman and helluva story teller who I imagine as having been raised by feral economists, brought my ignorance on the subject into sharp focus.
I was thrilled, then, to spend some time reading through a superb and lengthy guest post on Charlie Stross’ blog written by Mili Popova who has studied economics though she rarely admits it. The first third is a whirlwind tour of the differences between private and public goods and the increments in between. Her first conclusion arising from this simple explanations is why the market and existing business models are failing to grapple with digital works which she contends are pure public goods–i.e. non-rival and non-excludable. She further speculates on why some of the experiments with new models may be working despite the received wisdom about markets.
If, like me, you are soft on the economic fundamentals underlying much of the change wrought by digital and network technologies, this post is required reading. She neatly ties together much of what we understand intuitively about digital works and provides a useful framework for thinking about the changes through which business are currently struggling.