With the advent of Web 2.0 technologies, libraries began not only developing an innovative technology, but have also started developing new economic paradigms for library services. In an economy where success and influence are based on the ability to attract attention rather than on scarcity of resources librarians have a unique opportunity to develop new models for library services that can greatly raise the public perception of librarians as professionals.
The Basic of Classical Economics
To understand this we need first review some basics of economic theory. A fundamental tenet of classical economic theory is the idea of scarcity. In a given area a limited amount of a good is produced say, grain. In any given year there is a fixed amount of grain available in the market for sale--due to a variety of factors including weather, the decisions of farmers to plant, yields, and the flow of the finished product to other areas e.g. if the farmer can get a higher price in the next county he will withhold his crop from the local market thus raising prices. In classical terms, economics is based on the idea that there is a limited amount of any given produced good. (1)
In the information economy this becomes a different situation where scarcity is less a product of limits on production e.g. the amount of grain that can be grown in a given area than artificial limits such as copyright protection. There is a form of scarcity in that there are limited inputs available for the initial production of a product, but after it is produced the marginal cost of reproduction approaches zero.
A readily understandable example relevant to librarians is that of recorded music. There are limits on the amount of recorded music that can produced--related largely to the initial costs involved in producing the music--building a recording studio, hiring studio engineers, finding musicians talented enough to create music that people will want to buy--However, once the music is produced and available in a digital form the cost to the consumer becomes extremely low--exactly zero in the case of illegal music sharing systems such as Napster--ignoring, for purposes of argument, that the user has costs of buying a computer, an Internet connection, electricity, their time, etc.
Where does this lead? In classical economics items have some kind of intrinsic value based their perceived worth in the market place. In the case of land, for example, there is a limited amount, that damned scarcity again, upon which is imposed a commonly accepted system of valuation. Everyone can agree that a certain piece of property has value always. There may be disagreement over this value, but, again, we have a system of appraisers who can be used to determine an agreed upon value for people involved in a transaction. In the electronic environment we do not.
This, I would submit, is the fundamental difference between producers and consumers in a digital environment. Producers of digital content assert that their product has a marginal utility greater than zero while consumers assert that the value of the product is zero. Consumers of digital content, unlike, say, consumers of physical products such as pears, don't see any monetary worth to a digital product beyond the initial sale. We will ignore, for sake of argument, the minority viewpoint that all information should be free and assume that users, as a group, generally accept the idea of some form of capitalist marketplace.
Users of P2P systems are not thieves, in the sense of thinking they shouldn't pay for product, but have developed an economic argument that value ceases upon first sale and for producers to attempt to gain compensation beyond that is wrong. In some sense the modern teenager crouching in his bedroom with Napster or Kazaa has reestablished and extended the medieval concept of a "just price". As Thomas Aquinas stated:
If someone would be greatly helped by something belonging to someone else, and the seller not similarly harmed by losing it, the seller must not sell for a higher price: because the usefulness that goes to the buyer comes not from the seller, but from the buyer's needy condition: no one ought to sell something that doesn't belong to him. (2)
The fundamental argument that is routinely made is that consumers who download digital files without paying for them are guilty of theft. In a legal sense this is true. However, it assumes that both the producers and the consumers share the same ethical system that they agree on what constitutes an "unethical" act. The truth is that...