Larry Lessig has a blog in which he says there are two economies, a commercial economy and a second sharing economy, the "economy of Wikipedia, most FLOSS development, the work of amateur astronomers, etc. It has a different, more complicated logic to it than the commercial economy." [NB: FLOSS means "Free/Libre and Open Source Software," an evolution of FOSS]

He says that each deserves its due:

[A] second and also extremely difficult problem is how, or whether, the economies can be linked. Is there a way to cross over from the commercial to second economy? Is there a way to manage a hybrid economy — one that tries to manage this link.

The challenge of the hybrid economy is what Mozilla, RedHat, Second Life, MySpace are struggling with all the time. How can you continue to inspire the creative work of the second economy, while also expanding the value of the commercial economy? This is, in my view, a different challenge from the challenge of how you call this second economy into being, but obviously, they are related. But this challenge too is one I don’t think anyone yet understands fully.

As I watch Creative Commons develop, I’ve been encouraged by the experiments that try to find a way to preserve this second economy, while enabling links to the first.

And:

But the important point to recognize is that this effort to preserve the separation is fundamentally different from the effort of many in the “free software” or “free content” movement who want all “free” licenses to permit any sort of use, commercial or not. Imho, they are simply ignoring an important reality about the difference between these two economies. Indeed, they’re making the opposite mistake that many in the commercial world make: Just as many commercial rights holders believe every single use of creative work ought to be regulated by copyright (see, e.g., the push to force what are plainly “fair uses” of copyrighted work on YouTube to pay the copyright owners), so too these advocates of “free content” would push everyone to treat everything as if it is free of copyright regulation (effectively, if not technically). Second economy sorts believe differently — that some uses should be free, and others should be with permission.

It is because I have enormous respect for those who make the latter mistake (and believe their motives are more likely pure) that I urge them to consider the radical simplification of social life they insist we push on the world. I like the dynamics of the second economy. Benkler has given it a theory. I think we should be working to support it, not pretending that it is not there.

The obvious reply (and the real puzzle for me) is FLOSS. I said at the start it effectively operated in the second economy. But the “free content” movement that I’m skeptical of is simply trying to push the norms of FLOSS into the content space. How could it then be any different?

In my view, the difference comes from the difference in nature of the stuff. Some cultural production can be collaborative in exactly the way FLOSS is — Wikipedia. But you need an argument to get from some to all. No doubt, I too need an argument that some is different from some. I don’t have that yet. But it is here that I think the really important discussion needs to happen.

There is much here to endorse, but I also think that he needs to re-examine some of his premises. Specifically:

1) The institution of the voluntary economy is hardly novel with the Internet. American society has always been characterized by high levels of cooperation and spontaneous organization. The difference is that the Internet allows for communities that span space, so the old ancillary social controls inherent in a geographically concentrated community effort do not apply. This creates issues.

2) There are not two economies -- there are three. The commercial marketplace is one. Voluntary communal activity is another. And there is a third, which is the massive academic and foundation economy (and perhaps government should be included). People in this sector are certainly paid, and often very well indeed. A law professor making $150,000/year is in the top 5% of household income, and a two-prof family, a common pattern, is right up there in the top 1%.

People in this third sector are, it is assumed, producing public goods. But increasingly they get to define for themselves what this means, and some of the definitions are downright peculiar. To use a common (on this blog) example, writing free software code so IBM and Sun can commoditize the operating system and sell more hardware and services is an odd concept of pro bono publico. So, in my never-humble opinion, is the dedication of the Electronic Frontier Foundation to the destruction of intellectual property.

The current state of this third economy deserves some extended attention. It is to a large extent hostile to the commercial economy, for complex psychological and economic motives, and these need exploration. Lessig's assumption about "pure" motives is risible. For example:

+ Cutting the legs out from under the intellectual property system is a way for academicians to suppress competition. Outside of hard science, where there are some objective metrics, professores have climbed a slippery bureaucratic pole to get tenure, and the gulf between them and the non-tenured peons is very great. Why give these people an alternative source of support; they might show you up.

+ Intellectuals love power, at least when wielded by them, and tend to love a government command economy. In a commercial economy. power is widely dispersed and subject to market discipline.

+ Academia cultivates an aura of moral superiority over the commercial economy. But why is it better to write tomes that few read than to invent a product or create a movie that millions love? The answer to that is actually pretty simple -- by and large, the commercial economy, where people produce for pay as directed by the market-expressed approval of their fellows, is morally superior.

Schumpeter's prediction of half a century ago that capitalism would produce wealth that would then enable and cause the progeny of its producers to turn around and undermine the basic processes of wealth production is looking prescient. So the third economy needs to look in the mirror, closely.