Stan Liebowitz, professor and keen economic analyst of technological developments, has written a significant paper on Parasite Technologies and Non-Creative Destruction, (Academic Advisory Council Bulletin 1.2). He points out that many important uses of new technologies are parasitic -- designed to "break the linkage between usage and payment," and allow the user to free ride on the payments of others

The term parasite is apt, because these uses, like all parasites, depend on keeping their hosts sufficiently healthy to support the parasite. Thus, if everyone uses a TiVo for the purposes of avoiding commercials, the TV broadcasting host would die, and TiVos would cease to be useful.

Similarly, illicit P2P file sharing depends on enough people not being in on the game to support a vibrant content industry so the sharers can continue to free ride. If the free riders convince everyone to join them, then the whole system collapses.

The ultimiate policy goal:

But we should all, at least, be able to agree that parasitic characteristics of these technologies exist and that such characteristics should be minimized if possible. We should not get caught up in the mistaken impression that fighting parasitic technology is the same as being against productive technology. To do otherwise would be to do ourselves a disservice, since clearly we are all better off if we don’t kill the goose laying the golden eggs.

posted by James DeLong @ 11:48 AM | General

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