A closed mind about an open world

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Over the past 15 years, a group of scholars has finally persuaded economists to believe something non-economists find obvious: “behavioural economics” shows that people do not act as economic theory predicts.

However, this is not a vindication of folk wisdom over the pointy-heads. The deviations from “rational behaviour” were not the wonderful cornucopia of humanist motivations you might imagine. There were patterns. We were risk-averse when it came to losses – likely to overestimate chances of loss and underestimate chances of gain, for example. We rely on heuristics to frame problems but cling to them even when they are contradicted by the facts. Some of these patterns are endearing; the supposedly “irrational” concerns for equality that persist in all but Republicans and the economically trained, for example. But most were simply the mapping of cognitive bias. We can take advantage of those biases, as those who sell us expensive and irrational warranties on consumer goods do. Or we can correct for them, like a pilot who is trained to rely on his instruments rather than his faulty perceptions when flying in heavy cloud.

Studying intellectual property and the internet has convinced me that we have another cognitive bias. Call it the openness aversion. We are likely to undervalue the importance, viability and productive power of open systems, open networks and non-proprietary production. Test yourself on the following questions. In each case, it is 1991 and I have removed from you all knowledge of the past 15 years.

You have to design a global computer network. One group of scientists describes a system that is fundamentally open – open protocols and systems so anyone could connect to it and offer information or products to the world. Another group – scholars, businessmen, bureaucrats – points out the problems. Anyone could connect to it. They could do anything. There would be porn, piracy, viruses and spam. Terrorists could put up videos glorifying themselves. Your activist neighbour could compete with The New York Times in documenting the Iraq war. Better to have a well-managed system, in which official approval is required to put up a site; where only a few actions are permitted; where most of us are merely recipients of information; where spam, viruses, piracy (and innovation and anonymous speech) are impossible. Which would you have picked?

Imagine a form of software that anyone could copy and change, created under a licence that required subsequent programmers to offer their software under the same terms. Imagine legions of programmers worldwide contributing their creations back into a “commons”. Is this anarchic-sounding method of production economically viable? Could it successfully compete with the hierarchically organised companies producing proprietary, closed code, controlled by both law and technology?

Set yourself the task of producing the greatest reference work the world has ever seen. It must cover everything from the best Thai food in Raleigh to the annual rice production of Thailand, the best places to see blue whales to the history of the Blue Dog Coalition. Would you create a massive organisation of paid experts with layers of editors producing tomes that are controlled by copyright and trademark? Or would you wait for hobbyists, scientists and volunteer encyclopedists to produce, and search engines to organise, a cornucopia of information? I know which way I would have bet in 1991. But I also know that the last time I consulted an encyclopedia was in 1998.

It is not that openness is always right. Rather, it is that we need a balance between open and closed, owned and free, and we are systematically likely to get the balance wrong. Partly this is because we still do not understand the kind of property that exists on networks. Most of our experience is with tangible property; fields that can be overgrazed if outsiders cannot be excluded. For that kind of property, control makes more sense. We still do not intuitively grasp the kind of property that cannot be exhausted by overuse (think of a piece of software) and that can become more valuable to us the more it is used by others (think of a communications standard). There the threats are different, but so are the opportunities for productive sharing. Our intuitions, policies and business models misidentify both. Like astronauts brought up in gravity, our reflexes are poorly suited for free fall.

The questions I asked are related to the world wide web – which celebrated its 15th birthday last year. Would we create it today? In 1991, you would have scoffed at the web, at open-source software and at getting your information from Google. Control and ownership seem intuitively the right way to go. How do you feel about today’s debates? Should we preserve “net neutrality” and openness or give network owners greater control? Should we create new rights for broadcasters and database owners? The next project of the behavioural economists should be to study our cognitive frameworks about property, control and networks. Like the pilot in the cloud looking at his instruments, we might learn that we are upside down.

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The writer is professor of law at Duke Law School, a co-founder of the Center for the Study of the Public Domain and a board member of Creative Commons