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Money Ruins Everything

by
JOHN QUIGGIN AND DAN HUNTER*

I. Introduction ........................................................................................ 204

II. The Evolution of Innovation .............................................................. 206
A. Amateur Collaborative Innovation in Content Production .......... 215
1. The Internet ........................................................................... 216
2. Open-Source Software .......................................................... 218
3. Blogs ..................................................................................... 220
4. Citizen Journalism................................................................. 222
5. Other Amateur Content ......................................................... 224
III. Amateurs and the Modalities of Production....................................... 226
A. Characteristics of Amateur Production........................................ 226
1. Motivations ........................................................................... 227
2. Mixing Motives..................................................................... 229
4. Collaboration......................................................................... 235
5. Conclusions........................................................................... 237
IV. Amateur Production and Innovation Policy ....................................... 238
A. The Problem with Bureaucracies................................................. 240
B. Macro-Economics and Amateur Innovation Policy..................... 241
C. Intellectual Property .................................................................... 243
D. Cultural Policy............................................................................. 250
V. Amateur Hour .................................................................................... 254

*
John Quiggin is the Australian Research Council Federation Fellow, School of Economics and
School of Political Science and International Studies, University of Queensland. Email:
[email protected]. Dan Hunter is a Professor of Law, Melbourne Law School, University of
Melbourne, Australia, and an Adjunct Associate Professor of Legal Studies, Wharton School,
University of Pennsylvania. Email: [email protected]. Order of attribution was
randomly determined. This research was supported by an Australian Research Council Federation
Fellowship for Quiggin, and by a Research Fellowship from the American Council of Learned
Societies and a grant from the Wharton–Singapore Management University Research Center for
Hunter.

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I. Introduction
The statement, “it’s hard to compete with free,” encapsulates the most
important recent developments in intellectual property policy and some of
the most significant social trends of our time. The phrase was probably
first used to label music file-sharing; the apocryphal lament of an unnamed,
music-industry executive explaining why her company was doomed. The
spread of the general purpose computer and the internet removed the
barriers to easy and widespread reproduction and dissemination of music
files.1 Various pundits prophesied the death of an industry built on earlier
technological verities, that now had to compete with “free” distribution of
its own material.2 Of course, the effect of these technological changes was
not restricted to music. The concerns of the recording industry are now
mirrored in all creative industries that produce proprietary content capable
of being digitized, such as film, television, data, and text.3
Beyond this narrow interpretation, the statement also embodies a
fundamental change in the way innovation is occurring in our society. Due
to the same technological changes that are threatening the music business,
amateur production of information and innovation is on the rise. The most
obvious example is the weblog, where individuals produce vast amounts of
commentary, opinion, diary-notes, criticism, and observations, almost
always with no economic motivation.4 Other examples include citizen
journalists who produce significant newspaper reportage and opinion-
writing,5 the rise of Wikipedia6 as a meaningful alternative to commercially
produced encyclopedias, sites like Amazon,7 where consumers provide
extensive product reviews, and the free, or open source, software
movement that has produced everything from the most popular webserver

1. Doug Fine, Beyond Napster: Copyright, Fair Use and Intellectual Property Collide in
Cyberspace, STANFORD LAWYER, Summer 2001, http://www.law.stanford.edu/
publications/stanford_lawyer/issues/60/napster.html.
2. This idea is encapsulated in the catchphrase “information wants to be free,” generally
attributed to Stewart Brand. However, as Brand notes, “[o]n the one hand information wants to be
expensive, because it’s so valuable. The right information in the right place just changes your life.
On the other hand, information wants to be free, because the cost of getting it out is getting lower
and lower all the time. So you have these two fighting against each other.” STEWART BRAND,
THE MEDIA LAB: INVENTING THE FUTURE AT MIT, 202 (1987).
3. See, e.g., The Motion Picture Association of America, Anti-Piracy,
http://www.mpaa.org/piracy.asp (last visited Jan. 6, 2008).
4. USES OF BLOGS (DIGITAL FORMATIONS) (Axel Bruns and Joanne Jacobs eds., 2006).
5. See, e.g., OhmyNews, http://english.ohmynews.com/.
6. Wikipedia, Main Page, http://en.wikipedia.org/wiki/Main_Page/; Free Software
Foundation, http://www.fsf.org (last visited Jan. 25, 2008).
7. Amazon.com: Online Shopping for Electronics, Apparel, Computers, and more,
http://www.amazon.com/.
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2008] MONEY RUINS EVERYTHING 205

software8 to meaningful alternatives to commercially produced operating

systems, web browsers, database management systems and email clients.9
So the statement “you can’t compete with free” is not just about file-
sharing; it also describes the commercial realities facing businesses like
Microsoft, Encyclopedia Britannica, newspaper proprietors, and many
others. These providers of commercial content, whose business models are
based on commercial return on investment, now compete with amateurs
who give their time and content away for free.10 The commercial
proprietors do not compete with illicit versions of their own content;
instead they compete with material that has been collectively produced by
amateurs whose creative motivations are not primarily commercial.11
These amateur creators produce content for the love of it, for the joy of
expressing themselves, because it is fun, to demonstrate that they are better
at it than others, or for a host of other non-commercial motivations.12
Because these creators produce content for the love it and are prepared
to work for free—or even to lose money to feed their desire to create—their
existence threatens the economic assumptions of commercial providers of
content. As a result, the rise of amateurism calls into question some
fundamental assumptions we have about the public policy of innovation,
the way that innovation occurs within society, and the incentives necessary
to produce valuable innovations in our society. This article explores how
to understand the next stage in the development of innovation, intellectual
property, and cultural policy by explaining the rise, significance, and
difficulties with amateur production as modality of innovation and creative
production. It goes further to examine the legal issues that emerge as a
result of these changes.
Section I looks at the standard account of innovation and demonstrates
how amateurism diverges from assumptions about how to spur innovation.
It illustrates these points by considering recent developments in amateur
content, including blogs, wikis, and citizen journalism.
Section II examines the rise of amateurism and discusses the
motivations that lead individual users to contribute to the production of this
type of networked amateur production. Amateurs display all sorts of
possible motives including altruism, self-expression, advocacy of particular

8. See, e.g., Apache Software Foundation, http://www.apache.org/.

9. Examples include Linux (operating system), Firefox/Mozilla (web browser), Ingres
(Database Management System) and Thunderbird (email client).
10. See generally CHARLES LEADBEATER & PAUL MILLER, THE PRO-AM REVOLUTION:
HOW ENTHUSIASTS ARE CHANGING OUR ECONOMY AND SOCIETY (2004) (discussing the
economic influence of amateur works).
11. John Quiggin, Blogs, Wikis and Creative Innovation, 9 INT’L J. OF CULT. STUD, 481,
482 (2006).
12. See infra Section II.
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206 HASTINGS COMM/ENT L.J. [30:203

political or social views, the display of technical expertise, social

interaction, and so on. In general, these motives are complementary or at
least mutually consistent. However, motives like these do not coexist well
with a profit motive. Yochai Benkler notes the absence of monetary side
payments in the case of car-pooling, which is typical of co-operative
endeavors of various kinds.13 Many people have a strong desire to keep
money out of this kind of activity, except where interaction with the
monetary economy is necessary.14 Section II also explains why the
production of amateur collective innovation is difficult to reconcile with
market-based mechanisms of innovation. Finally, Section II examines
bureaucratic forms of innovative activity and demonstrates that
bureaucratic rationality is also incompatible with amateurism.
Section III develops the policy implications of the conclusion that the
amateur sphere is necessarily separate from the other modalities. Section
III specifically argues that a strong case to suggest that amateurism
deserves support from the state exists and provides specific public policy
and legal reforms that will be necessary to ensure the continued success of
amateur innovation.

II. The Evolution of Innovation

When thinking of the drivers of innovation, one tends to think of the
incentives the intellectual property system creates, and assumes that the
kinds of markets for patents and copyrights that dominate current thinking
about innovation policy drive innovation.15 But prior to the industrial
revolution, innovation was not seen in utilitarian terms and existed largely
independent of any market forces.16 Most innovations occurred on the farm
or perhaps within the confines of a village as a result of specific needs of
the individual and then those nearby, who happened to hear of the
innovation and saw that it might be useful to their lives, adopted them.17

13. YOCHAI BENKLER, THE WEALTH OF NETWORKS: HOW SOCIAL PRODUCTION

TRANSFORMS MARKETS AND FREEDOM (2006).
14. Id.
15. Kenneth J. Arrow, Economic Welfare and the Allocation of Resources to Invention, in
THE RATE AND DIRECTION OF INVENTIVE ACTIVITIES, (Richard R. Nelson ed., 1962).
16. See ADAM SMITH, AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF
NATIONS (1776).
17. Even as late as the Eighteenth Century, this was an important mode of innovation, as
may be seen from Adam Smith’s discussion of the topic:
“In the first fire-engines, a boy was constantly employed to open and shut alternately
the communication between the boiler and the cylinder, according as the piston either
ascended or descended. One of those boys, who loved to play with his companions,
observed that, by tying a string from the handle of the valve which opened this
communication to another part of the machine, the valve would open and shut without
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2008] MONEY RUINS EVERYTHING 207

Sometimes the innovation did come to resemble the modern concept

of property in an idea or process—for example, the idea might make its
way outward through trade routes, and then other people in different
locales commercialize the innovation, and sometimes the idea or process
became the centerpiece of a guild or trade association, which protects it as
a trade secret.18 But in the absence of a marketplace for ideas, localization
was the norm, and until the industrial era, there was little sense that an
innovative idea or concept or expression could be exchanged for anything.
Innovation was commoditized, and so there wasn’t even a conception that
one needed economic incentives to drive social progress: for example,
patents were monopoly rights granted as a reward for services to monarchs,
not to encourage invention.19
As the modern era approached, this changed. The Industrial
Revolution began in the Eighteenth Century, and, over the following
decades and centuries, drew people away from subsistence farming and the
home and placed them into factories.20 This transformation changed
society’s view of economic activity as a marketplace exchange: labor was
exchanged for money, rather than the pre-industrial conception of labor
being a necessary component of subsistence survival.21 In broad terms, the
economic structure of the resulting industrial economy may be described in
terms of three sectors: household, market, and government. In this model,
economically relevant activity takes place primarily in the market and
government sectors. Market sector final output is sold to households,
which supply labor and other inputs to market sector production and
receive flows of wages, rent, and dividends in return. This process
commonly referred to as the “circular flow.”22
The household sector, which was the main locus of economic activity
in the pre-industrial economy—and which has become significant with the
rise of amateurism—played a fairly minor, and primarily passive, role in

his assistance, and leave him at liberty to divert himself with his playfellows. One of
the greatest improvements that has been made upon this machine, since it was first
invented, was in this manner the discovery of a boy who wanted to save his own
labor.”
See SMITH, supra note 16.
18. Wikipedia, Guild, http://en.wikipedia.org/wiki/Guild (last visited Nov. 20, 2007).
19. WILLIAM HYDE PRICE, THE ENGLISH PATENTS OF MONOPOLY 5 (1913).
20. See generally KARL POLANYI, THE GREAT TRANSFORMATION 33-130 (1957)
(discussing the developing market economy of the Industrial Revolution).
21. Id.
22. BRAD DELONG, THE CIRCULAR FLOW OF ECONOMIC ACTIVITY (Apr. 9, 1998),
http://econ161.berkeley.edu/multimedia/circular.html.
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208 HASTINGS COMM/ENT L.J. [30:203

the economic analysis of the industrial economy.23 Economists such as

Becker attempted to apply a market-based analysis to the use and
distribution of resources within households, using such tools as shadow
prices and marginal rates of substitution,24 but with little lasting success.
Economists have made somewhat more progress using models of
bargaining,25 but the household remains, in large measure, outside the
sphere of economic activity as society normally understands it. Instead,
attention in economic policy analysis is focused almost exclusively on the
roles of the market sector and government sector.
This inevitably leads to certain emphases and biases, and it means that
some features are systematically overlooked in innovation policy. The
central feature of the market-based industrial economy is reliance on the
impersonal rationality of the price mechanism.26 Firms provide goods and
services, not out of goodwill to consumers or a desire to display
excellence,27 but because they can provide the goods and services at a price
acceptable to consumers and make a profit in the process.28
As industrial capitalism emerged from the feudal social order, people
grew comfortable with abstract property. Various instruments emerged that
had no physical form, but that were considered property or treated as
though they were.29 As the Industrial Revolution rolled on, society came to
view such imaginary creatures like mortgages, liens, choses in action,
usufructs, leasehold estates, and possessory interests in chattels in much the
same way as it viewed the clothes on people’s back, or the houses in which
they slept.30 As society became more sophisticated, even where the
property system failed to recognize property interests in certain abstract
concepts, markets nonetheless emerged in them. During the Twentieth
Century we subjected abstract entities like labor capacity, time, and ideas,

23. MARILYN WARING, COUNTING FOR NOTHING: WHAT MEN VALUE AND WHAT WOMEN
ARE WORTH (2d ed. 1999).
24. Gary Becker, THE ECONOMIC APPROACH TO HUMAN BEHAVIOR (1976).
25. See, e.g., Marilyn Manser & Murray Brown, Marriage and Household Decision-
Making: A Bargaining Analysis, 21 INT’L ECON. REV. 31 (1980).
26. KARL MARX & FRIEDRICH ENGELS, THE COMMUNIST MANIFESTO, CH 1, (Verso 2000)
(1848) (“[The bourgeoisie] has pitilessly torn asunder the motley feudal ties that bound man to his
“natural superiors”, and has left remaining no other nexus between man and man than naked self-
interest, than callous “cash payment.”).
27. Although such motives are frequently referred to in corporate public relations
publications.
28. See SMITH, supra note 16, Book I, Chapter II, I.2.2 (“It is not from the benevolence of
the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their
own interest.”).
29. See generally Dan Hunter, Cyberspace as Place and the Tragedy of the Digital
Anticommons, 91 CALIF. L. REV. 439 (2003).
30. Robert Ellickson, Property in Land, 102 Yale L.J. 1315, 1367-8 (1993).
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2008] MONEY RUINS EVERYTHING 209

to the exchange function of the market.31 Furthermore, since the beginning

of the Information Revolution, society has seen the emergence of markets
in increasingly abstract entities, in shares of companies, in derivatives
markets for contracts for the purchase or sale of shares or commodities at a
future date, in currency markets, in markets for the weather, or energy, and
so on.32
The intellectual property system expanded in line with the perceived
need for property interests to spur innovation.33 Initially, innovation was
protected as a byproduct of industrial processes, hence the predominance of
issues like trade secret protection and contract in intellectual property cases
during the Nineteenth and the early part of Twentieth Centuries.34 As the
modern era advanced, the importance of industrial production waned.35 No
longer was heavy machinery and physical plant the predominant means of
production, and so, in the latter part of the Twentieth Century, property
interests emerged in various intangibles because they were important for
industrial innovation and therefore became important in the political
agenda.36 We can see this in various industries which rely on intellectual
property—software, semiconductors, pharmaceuticals, genetic engineering,
media—who came to lobby governments and have a disproportionate
influence over the development of intellectual property policy.37

31. Derivative markets existed long before the pre-modern period, such as in derivatives
like grain contracts, but the range and scale of derivatives expanded during the modern era, and
especially during the Twentieth Century. See generally EDWARD SWAN, BUILDING THE GLOBAL
MARKET: A 4000 YEAR HISTORY OF DERIVATIVES (2000).
32. The development of markets arose from revolutions in communication. Prices can only
be transmitted through an effective communication mechanism, so new markets emerge when
communications allow price signals to be exchanged. Until the Industrial Revolution,
communication was extremely limited, but this didn’t matter because the scale of production was
very localized and messages could pass between the necessary actors in the innovative process.
As the scale of production expanded markets emerged when effective a mechanism of
coordination/communication emerged.
33. Dan Hunter, Culture War, 83 TEX. L.REV. 1105, 1112 (2005).
34. ROBERT P. MERGES, PETER S. MENELL, & MARK A. LEMLEY, INTELLECTUAL
PROPERTY IN THE NEW TECHNOLOGICAL AGE, 20-32 (2006).
35. See Hunter, supra note 33
36. See THOMAS P. HUGHERS, AMERICAN GENESIS: A CENTURY OF INVENTION AND
TECHNOLOGICAL ENTHUSIASM, 1870-1970 (1989). For an account of the social and business role
of intellectual property (especially patents) since 1970 see Wesley M. Cohen’s and Stephen A.
Merrill’s Introduction to the book Patents in the Knowledge-Based Economy. PATENTS IN THE
KNOWLEDGE-BASED ECONOMY 1, 1–2 (Wesley M. Cohen & Stephen A. Merrill eds., 2003).
37. The intellectual property protocol to the foundational international free trade agreement,
the General Agreement on Tariffs and Trade, is the most compelling example of Western
governments’ reliance on intellectual property, and their efforts to entrench the system in
international trade. See Agreement on Trade-Related Aspects of Intellectual Property Rights (Apr
15, 1994) (TRIPS), reprinted in THE LEGAL TEXTS: RESULTS OF THE URUGUAY ROUND OF
MULTILATERAL TRADE NEGOTIATIONS Annex 1C at 321-53 (Cambridge 1994). See generally
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210 HASTINGS COMM/ENT L.J. [30:203

As a result, the intellectual property system, which concerns itself

with innovation, expanded, and especially in the realms of copyright and
patent.38 Copyright, which initially covered maps, charts and books,39
broadened over time to encompass musical and dramatic works,
photographs, movies, sound recordings, software, and architectural
drawings.40 Its term was extended from a slim fourteen years, with the
chance of one extension of fourteen years,41 to increasingly extended
periods,42 eventually reaching a period of almost two human lifespans.43
Patents followed the same path—its scope widened to include new subject
matter like plants,44 surgical procedures,45 computer algorithms,46 business
methods,47 and life forms.48 This expansion has been the subject of an

SUSAN K. SELL, PRIVATE POWER, PUBLIC LAW: THE GLOBALIZATION OF INTELLECTUAL

PROPERTY (Cambridge 2003).
38. See generally WILLIAM W. FISHER, THE GROWTH OF INTELLECTUAL PROPERTY: A
HISTORY OF THE OWNERSHIP OF IDEAS IN THE UNITED STATES, available at
http://cyber.law.harvard.edu/people/tfisher/iphistory.pdf.
39. Copyright Act of 1790, ch. 15, 1, 1 Stat. 124 (repealed 1831). The Act provided
protection to the “author and authors of any map, chart, book or books,” if the writings were
printed in the United States and the authors were citizens or residents and had not transferred their
copyright.
40. 17 U.S.C. § 102(a) (2000). See also Robert P. Merges, One Hundred Years of
Solicitude: Intellectual Property Law, 1900- 2000, 88 Cal. L. Rev. 2187 (explaining the
connection between the expansion of intellectual property protection and the advent of new
technologies).
41. Copyright Act of 1790, 1 Stat. 124.
42. Extensions to copyright terms were granted by Pub. L. No. 87-668, 76 Stat. 555 (1962);
Pub. L. No. 89-142, 79 Stat. 581 (1965); Pub. L. No. 90-141, 81 Stat. 464 (1967); Pub. L. No. 90-
416, 82 Stat. 397 (1968); Pub. L. No. 91-147, 83 Stat. 360 (1969); Pub. L. No. 91-555, 84 Stat.
1441 (1970); Pub. L. No. 92-170, 85 Stat. 490 (1971); Pub. L. No. 92-566, 86 Stat. 1181 (1972);
Pub. L. No. 93-573, 88 Stat. 1873 (1974); Pub. L. No. 105-298, 112 Stat. 2827 (1998). See
generally LAWRENCE LESSIG, FUTURE OF IDEAS: THE FATE OF THE COMMONS IN A CONNECTED
WORLD, 107 (2001) (suggesting that it is not unreasonable to say that copyright was extended
each time that Mickey Mouse was due to fall into the public domain).
43. The latest extensions were introduced in the Sonny Bono Copyright Term Extension Act
of 1998, Pub. L. No. 105-298, 112 Stat. 2827 (1998). The copyright term has been increased
from life of the author plus 50 years to life plus 70 years, and for pseudonymous works and works
made for hire from 75 to 95 years from publication or from 100 years to 120 years from creation.
15 U.S.C. §§ 302(c), 303(a) (2000).
44. Plant Patent Act of 1930, codified in 35 U.S.C. §§ 161-164 (2000). See also Plant
Variety Protection Act, 7 U.S.C. §§ 2321-2582 (2000).
45. E.g., Ex parte Scherer, 103 U.S.P.Q. (BNA) 107 (Pat. Off. Bd. App. 1954) (approving
patent for method of injecting drugs by pressure jet).
46. E.g., Diamond v. Diehr, 450 U.S. 175 (1981) (approving patent for software that
monitored temperature inside a rubber mold).
47. E.g., State St. Bank & Trust Co. v. Signature Fin. Group, Inc., 149 F.3d 1368 (1998)
(approving patent for financial calculation business method).
48. E.g., Diamond v. Chakrabarty, 447 U.S. 303 (1980) (establishing patent protection for
commercially valuable organism). The expressed sequence tags of the human genome were the
subject of patent applications by Celera Genomics and Incyte Genomics, two companies engaged
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extended criticism, which well may be correct, but is not the focus of this
article. 49 For the purposes of this article, the expansion of intellectual
property is important only because it created the paradigm for innovation
policy in Western societies.
Capitalist societies see innovation as dependent on exclusive property
interests, and a marketplace where people can exchange these property
interests.50 We assume that it is necessary to propertize intellectual activity
if we wish to spur creativity or inventiveness. This assumption is based on
the fear that the benefits of intellectual activity will be under-produced if it
is inadequately commoditized because of public goods and free-rider
concerns. For the last two hundred years this model has produced great
social benefits51 and so we reasonably assume that new types of
innovations will conform to this model. This model of innovative activity,
however, has always under-produced innovations that have significant
value but which have not been commoditized within the intellectual
property system.52
This point has long been recognized in relation to fundamental or
“pure” research, where the link between discovery and any commercial
application is too indirect to allow propertization.53 Fundamental research
has been analyzed as a public good, that is, a good that is both non-rival
and non-excludable.54 In fact, information is the canonical example of a
non-rival good, since making information available to one person does not
reduce its availability to others. Rather, if anything, dissemination to one
person makes it more available to others. On the other hand, information in
general, is not excludable—it can be kept secret or patents and other forms
of propertization can restrict its use.55 The crucial feature of fundamental
research is that excludability is either unfeasible or undesirable.56

in mapping it. See Dennis Fernandez & Mary Chow, Intellectual Property Strategy in
Bioinformatics and Biochips, 85 J. PAT. & TRADEMARK OFF. SOC’Y 465, 467 (2003).
49. See generally LESSIG, supra note 42, at 107. By creating valuable, but time limited
property rights, and powerful interests centered on those rights, IP policy has generated a one-
way ratchet effect, reflected in widespread reference to various extensions of the term of
copyright as the “Mickey Mouse Protection Acts,” the point being that the need for an increased
term of protection is found to be most pressing whenever Mickey is nearly due to fall into the
public domain.
50. Sony Corp. of Am v. Universal City Studios, 464 U.S. 417, 429 (1984) (the Constitution
authorizes Congress to convey limited monopoly privileges “to motivate the creative activity of
authors and inventors by the provision of a special reward, and to allow the public access to the
products of their genius after the limited period of exclusive control has expired”).
51. See Arrow, supra note 15.
52. Id.
53. Id.
54. Id.
55. Id.
56. Id.
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212 HASTINGS COMM/ENT L.J. [30:203

In the industrial economy, these properties of information create a role

for government. Governments provide services that, for one reason or
another, the market cannot adequately deliver, at least in the judgment of
the society concerned.57 These typically include health, education, and a
range of “public goods.”58 While the category of ‘public good’ is rather
vague in practice, economists have modeled public goods in terms of two
crucial characteristics.59 The first is nonrivalry, meaning that use of a
public good by one person does not diminish its availability for others.60
The second is non-excludability, meaning that once the good is produced it
is impossible to prevent people from using it, and therefore impossible to
charge a market price for use.61
One of the paradigm cases of a pure public good is information.62 One
individual’s possession of information does not stop another from using it.
Moreover, once knowledge is public, it is difficult, if not impossible, to
prevent anyone from gaining access to it. It may, be possible, however, to
restrict or prohibit particular uses of information, for example, through
copyright and patent laws, or through contractual limits on the use of
information, such as those embodied in end-user license agreements for the
use of software.
The dichotomy between fundamental research, considered as pure
public good, requiring government provision or funding, and applied
development work producing patentable innovations, dominated
discussions of innovation policy in the Twentieth Century. These polar
alternatives, however, do not exhaust the set of possible modes of
innovation, or even define the ends of a spectrum within which other
modes can be organized. The Internet does not in fit either of these
categories neatly. Although its initial development was financed by
support from the U.S. Defense Department in its ARPANet project,63 and
some explicit public support was provided through the 1980s and early
1990s, most of the development occurred spontaneously, as a result of the
shared contributions of Internet users, most of whom, in this period, were

57. Paul A. Samuelson, The Pure Theory of Public Expenditure, 36 REV. OF ECON. & STAT.
387 (1954) (provides a classic statement of this principle).
58. Id.
59. Id.
60. Id.
61. Id.
62. The typical examples of public goods are lighthouses and defense, but increasingly
information is used as a clearer, more modern example. There is evidence that lighthouses may
not always be public goods. See Ronald Coase, The Lighthouse in Economics, 17 J.L. & ECON.
357 (1974).
63. See Wikipedia, ARPANet, http://en.wikipedia.org/wiki/ARPANET (last visited Jan. 6,
2008).
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2008] MONEY RUINS EVERYTHING 213

academics and students, as usage was effectively restricted to educational

institutions and military sites.64
The same can be said of many of the most interesting areas of
development in the Internet. Newsgroups, weblogs, and wikis provide a
large and growing proportion of current Internet content, and have
contributed to new technical innovations, sometimes in areas where
extensive commercial efforts have failed.65 All of these developments rely
on emergent collaboration among users, with commercial operations
playing a fairly minor supporting role. These examples illustrate a more
fundamental point: much innovation arises without either government
funding or the expectation of profit and is made by a third class the
industry describes as “amateur.” In the classification presented above,
amateur innovation takes place in the household sector.
As detailed above, in the pre-industrial period, the role of the amateur
in the production of innovation was obvious, even as commercialization of
intellectual property came to be important to industrialization.66 Adam
Smith noted in the Eighteenth Century that “a great part of the machines
[which emerged during industrialization to facilitate worker’s labor] . . .
were originally the invention of common workmen, who, being each of
them employed in some very simple operation, naturally turned their
thoughts towards finding out easier and readier methods of performing
it.”67 In the Nineteenth and Twentieth Centuries, amateur innovation was
displaced by professional research and development undertaken by
commercial enterprises, drawing on pure research developed in universities
and similar institutions.68 During the Twentieth Century, private-sector
research and development (“R&D”) was largely organized in a bureaucratic
fashion within large corporations.69 These corporate R&D labs largely
displaced the individual inventors who had produced most innovations in
the Nineteenth Century and earlier.70
Even during the golden years of the Industrial Revolution, however,
commercial innovation was not entirely driven by the desire to secure
returns from intellectual property. Sharing of valuable commercial

64. See Wikipedia, History of the Internet, http://en.wikipedia.org/wiki/

History_of_the_Internet (last visited Jan. 6, 2008).
65. See Infra Part II(A).
66. See SMITH, supra note 16.
67. Id. at Book I, Chapter 1.5.
68. DAVID C. MOWERY & NATHAN ROSENBERG, PATHS OF INNOVATION: TECHNOLOGICAL
CHANGE IN 20TH-CENTURY AMERICA (1998).
69. The decline of the individual inventor was one of the trends lamented by Whyte and
celebrated, somewhat ironically, by Galbraith. See WILLIAM WHYTE, THE ORGANISATION MAN,
(1956); JOHN KENNETH GALBRAITH, THE NEW INDUSTRIAL STATE, (1969).
70. See WHTYE, supra note 69; GALABRATH, supra note 69.
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214 HASTINGS COMM/ENT L.J. [30:203

information between producers and users, and even between competing

firms, was common.71 That is, many firms did not seek to protect valuable
trade secrets and innovations when they had the opportunity to do so.72
These innovations included extraordinarily valuable innovations to blast
furnace design73 and the design of water pumps for clearing water from
deep mines.74 More recent examples of free revealing of innovations can
be found in the design of electronic circuit boards,75 lithographic
equipment,76 and software. 77
The central argument of this paper is that, with the rise of the Internet
and related technologies, the mode of innovation based on free revealing
has become radically more important than it was in the past. It has also
shifted in location, taking place primarily in the household sector which,
for the purposes of this paper, is taken to include work literally undertaken
at home and unofficial work undertaken in the workplace. Within the
household sector then, the role of non-commercial motivations is extremely
important and under-theorized. Indeed, it is barely recognized. So to
understand how innovations occur and what our innovation policy should
be, it is necessary for policy makers to recognize that many innovations
occur outside of the intellectual property system. Thus, any account of
innovation policy needs to consider aspects unrelated to the simple
utilitarian incentive model of motivation for innovative production, and the
attendant property system that we have created to generate the incentive.
As the next section discusses, producing amateur content is an
extreme case of producing innovative material outside of a property-
owning system. At its simplest, producing amateur content fails to
conform to the propertization model because the motivations of the creators
are orthogonal to commercial interests. That is, amateur creators do not
have commercial interest as their primary motivating force, and so
propertization of their work is irrelevant to their production of innovative

71. ERIC VON HIPPEL, DEMOCRATIZING INNOVATION, 77-80 (2005).

72. Id.
73. R.C. Allen, Collective Invention, 4 J. ECON .BEHAV. & ORG. 1 (1983).
74. Alessandro Nuvolari Collective Invention During the British Industrial Revolution: The
Case of the Cornish Pumping Engine, 28 CAMBRIDGE J. OF ECON. 347, 352 (2004).
75. See, e.g., Kwanghui Lim, The Many Faces of Absorptive Capacity: Spillovers of Copper
Interconnect Technology for Semiconductor Chips, 14-30 (Nov. 16, 2006) (working Paper,
Melbourne Business School) (available at http://ssrn.com/ abstract_id=562862).
76. K. Mishina Essays on Technological Evolution (1989) (Unpublished PhD thesis,
Harvard University) (on file with Hunter).
77. Pamela D. Morrison, John H. Roberts, and Eric von Hippel, The Nature of Lead Users
and Measurement of Leading Edge Status, 33 RESEARCH POLICY 351 (2004).
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2008] MONEY RUINS EVERYTHING 215

material.78 But more than this, propertization may be inconsistent with

their continued creativity and so may not just be irrelevant but actively
inimical to the development of this modality of production.
The sections that follow, therefore, provide an overview of the
different types of amateur content production, and explain how and why
they differ from each other. Importantly, this entire article does not
consider non-commercial innovation in all arenas, but only in the area of
production of expressive content, like text, music, drawing, pictures,
audiovisual works, and so on. The following sections examine some
examples of producing this type of expressive content in the digital period
that we now inhabit. Section II further discusses the implications of
amateur production for this type of material and considers the difficulties in
reconciling amateur production with the established modalities for creative
production.

A. Amateur Collaborative Innovation in Content Production

A profound shift is occurring in assumptions about the production of
socially valuable expression. As a result of various forces—notably the
ascension of the general purpose computer, peer-to-peer technologies, and
the internet—all manner of established verities in the content industry are
falling.79 The pressures are most obvious when viewed through the lens of
copyright: cheap publication and transmission technologies lead to issues
over filesharing of music and movies,80 disputes over the scope of fair use
in reproducing a book via Google Book Search,81 and so on. All of these
concerns point to a fundamental change in the way that society produces
and disseminates expression. The most significant and largely
unrecognized aspect of this change is the way that readers have become
writers and how digital technologies remove the need for highly capitalized
intermediaries to guarantee the widespread dissemination of content. This

78. Posting entitled Field notes on the Hybrid Economy, to On the Waterfont,
http://www.americanacademy.de/home/program/on-theaterfront/blog/2007/05/07/
fieldnotes_on_the_hybrid_economy/98/detail/ (May 7, 2007).
79. See generally Dan Hunter & F. Gregory Lastowka, Amateur-to-Amateur, 46 WM. &
MARY L. REV. 951 (2004).
80. See, e.g., Matthew Sag, Piracy: Twelve Year-Olds, Grandmothers, and Other Good
Targets for the Recording Industry’s File Sharing Litigation, 4 NW. J. TECH. & INTELL. PROP.
133 (2006).
81. See, e.g., Adam Mathes, Associate Product Manager, Google Print Team, The Point of
Google Print (Oct. 19, 2005, 14:04 PST), http://googleblog.blogspot.com /2005/10/point-of-
google-print.html But see Thomas C. Rubin, Associate General Counsel for Copyright,
Trademark and Trade Secrets, Microsoft Corporation, Association of American Publishers
Annual Meeting: Searching for Principles: Online Services and Intellectual Property (March 6,
2007) (transcript available at http://www.microsoft.com/ presspass/exec/trubin/03-05-
07AmericanPublishers.mspx).
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216 HASTINGS COMM/ENT L.J. [30:203

is the “amateur collaborative content” movement, and it is the most

significant development in content since the development of the printing
press.
One must understand, however, that not all types of amateur content
are the same, both in terms of the degree of collaboration or in terms of the
effect that they have on the market-based alternatives. This section
outlines the main types of amateur content found on the network and
explains some of their characteristics. The main categories of amateur
innovation under consideration here include the internet itself and some of
the more obvious content creation categories which have emerged from it,
including open-source software, blogs, citizen journalism, wikis, fan
fiction, and modding.

1. The Internet
The expansion of the internet has been one of the most spectacular
technological and cultural developments humanity has ever seen. Twenty
years ago the internet was an obscure network connecting a few thousand
academics and students.82 Today it is a major feature of the lives of around
a billion people, including the majority of the population in most developed
countries.83
Much discussion of the internet is still shaped by the “dotcom” boom
of the late 1990s, in which as much as a trillion dollars was spent in the
pursuit of largely spurious projects for commercial exploitation of the
internet.84 E-commerce and the dotcom boom were a diversion from what
should be seen as the central path of internet development, in which the
crucial feature is the free sharing of information. It was the free exchange
of information that made the Internet so attractive and that led to its success
in competition both with proprietary online services, such as Delphi and
AOL, and with more tightly controlled government initiatives, such as the
X.25 protocol.85 Freely sharing information was crucial to both the design
and construction of the Internet and to the provision of useful content.
The software underlying the Internet has always relied heavily on
voluntary effort.86 The development of virtually every fundamental feature
of the network, from the basic transmission control protocols or internet

82. See History of the Internet, supra note 64.

83. See World Internet Statistics News and Population Stats,
http://www.internetworldstats.com/stats.htm (last visited Jan. 6, 2008).
84. John Quiggin, Pop! There goes a trillion, AUSTRALIAN FINANCIAL REVIEW, Feb. 14,
2002, available at http://www.uq.edu.au/economics/johnquiggin/news/trillion0202.html.
85. See, e.g., LAWRENCE LESSIG, CODE 2.0 (2006).
86. Joseph Reagle Jr., Open Content Communities, M/C JOURNAL, July 2004,
http://journal.media-culture.org.au/0406/06_Reagle.rft.php.
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2008] MONEY RUINS EVERYTHING 217

protocols (TCP/IP protocols), through low level programs that route mail
and resolve domain names, to more recent applications-level in open-
source software, has drawn on voluntary effort.87 The non-commercial,
voluntary character of the network extends beyond the infrastructure and
beyond software, and the provision of content on the network has also often
been voluntary.
Before the rise of the web the most interesting internet content was
found in the UseNet systems of newsgroups, covering almost every
imaginable topic from atheism to zoology.88 Vigorous attempts to privatize
and commercialize content were made during the “dotcom” era, with only
modest success.89 Newspapers and other mass media built up substantial
websites, attracting much attention away from Usenet and personal
websites.90 However, attempts to charge for access to such sites have had
very little success, and even reliance on advertising has proved to be
problematic.91
Since the end of the “dotcom” boom, the development of the Internet
has relied increasingly on collaborative efforts based on free sharing of
information.92 UseNet is no longer a dominant forum for discussion and
the provision of content, but not because newspapers or other commercial
sources were able to provide a better market-based service. Instead, blogs
and other amateur, collaborative content have taken the place of both
UseNet and commercial commentary. Furthermore, the range and scope of
amateur content provided for free on the web knows almost no bounds.
From the reviews of users on all manner of sites—including Amazon,
epinions.com, and rottentomatoes.com—to homework support, legal
advice, and more, the internet, combined with user donations of time and
expertise generates an enormous corpus of knowledge. Much of this
content is produced by amateurs.

87. See, e.g., Eric S. Raymond, The Cathedral and the Bazaar, FIRST MONDAY (1998)
http://www.firstmonday.org/issues/issue3_3/raymond/.
88. See Wikipedia, Usenet, http://en.wikipedia.org/wiki/Usenet (last visited Jan. 25, 2008).
89. E.g. Shirky: Fame vs. Fortune: Micropayments and Free Content (Sept. 5, 2003),
http://www.shirky.com/writings/fame_vs_fortune.html.
90. The most successful, not surprisingly, has been The New York Times. See The New York
Times, http://www.nytimes.com.
91. A notable manifestation is the development of “pop-up blockers” designed to prevent
the appearance of the most intrusive forms of advertising. Such blockers are now included in
standard browsers and operating systems.
92. See generally Quiggin, supra note 11.
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218 HASTINGS COMM/ENT L.J. [30:203

2. Open-Source Software
The rise of the Linux93 operating system has focused attention on the
idea of open-source software. In addition to Linux—which runs much of
the internet backbone and servers—important examples include the Apache
web server,94 the mySQL and myPHP database systems,95 the sendmail mail
router,96 the BIND domain name server,97 and the Firefox web browser.98
The central idea of open-source is that software is distributed free of
charge, but this is only a necessary, and not a sufficient, condition for
software to qualify as open-source.99 Users can modify open source
software as they see fit, and can choose whether to make their
modifications publicly available, but cannot charge for the use of software
derived from an open source program.100
Open-source and the Internet have something of a symbiotic
relationship. On the one hand, as noted above, most of the software
fundamental to the operation of the Internet is developed using some
variation of the open-source model.101 Moreover, the Internet as a
communications system makes it feasible to co-ordinate the efforts of
hundreds or even thousands of programmers scattered around the world,
using source code repositories such as SourceForge and Savannah.102 As a
result, tens of thousands of open source applications are currently under
development.103
The open source movement is significant to understanding amateur
content production because it demonstrates some features of amateurism
that are significant. First, the label “amateur” refers to the creators and
authors of the material, and does not preclude commercialization that may

93. See Linux Online, About the Linux Operating System,

http://www.linux.org/info/index.html (last visited Nov. 20, 2007).
94. See The Apache Software Foundation, http://www.apache.org/.
95. See MySQL AB: The world’s most popular open source database,
http://www.mysql.com/.
96. See Sendmail.org, Sendmail Home, http://www.sendmail.org/.
97. See Internet System Consortium, Inc., http://www.isc.org/sw/bind/index.php.
98. See Firefox web browser, http://www.mozilla.com/en-US/firefox/.
99. See generally The Open Source Initiative, The Open Source Definition,
http://www.opensource.org/docs/osd (last visited Nov. 20, 2007).
100. Id.
101. See SourceForge.net: Welcome to SourceForge.net, http://sourceforge.net/.
102. See Savannah, Welcome, http://savannah.gnu.org/. Both Savannah and SourceForge
offer development and hosting services for open-source software. Savannah was developed in
response to concerns that SourceForge uses commercial software and placed some restrictions on
users. SourceForge Drifting, http://www.spain.fsfeurope.org/ news/article2001-10-20-01.en.html
(last visited Jan. 7, 2008).
103. On February 21, 2007, Sourceforge listed 89,418 projects. Sourceforge.net, supra note
101.
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2008] MONEY RUINS EVERYTHING 219

occur outside the production of the creative work.104 So in the open source
movement many companies adopt and support open source programmers
within their own company, and generate ordinary returns on investment
from the provision of goods and services that support or rely on the open
source programmers, as discussed below.
IBM is the most obvious example. At one point it attempted to
penetrate the market for personal computer operating systems—controlled
of course by Microsoft and its Windows operating system—and failed
miserably.105 It now spends its own resources supporting the open source
Linux operating system, and sells consulting services and hardware that
rely on Linux. It claims that it has spent U.S. $1 billion on supporting
Linux106, and estimates that it earned U.S. $2 billion in server sales revenue
from that investment in 2004 alone.107 Any discussion of amateur content
production should, therefore, not assume that amateur production
necessarily precludes commercial development around the production of
the content. It simply means that the content will be generated for non-
commercial reasons.
Studies of open source development also go a long way to articulate
the myriad motivations of amateur producers. Importantly, amateur
content producers are not necessarily altruists. One could easily dismiss
the significance of amateur content by suggesting that only so many people
in the world exist who put others before themselves. The impact of people
who donate to charity, volunteer at the soup kitchens, and drive electric
cars may well be outweighed by those who are out for number one, work in
investment banking, and drive SUVs. Amateur content producers, as
exemplified by open source programmers, do not create content just for
altruistic reasons.108 Some of the reasons they do so include: (1) because
they enjoy expressing themselves, and within modern Western societies
have the leisure time to devote to self improvement; 109 (2) because of the
hope of attracting a record deal, book contract, or advertising deal;110 (3) to

104. See generally Hunter & Lastowka, supra note 79.

105. Wikipedia provides a detailed history with supporting links. Wikipedia, OS/2,
http://en.wikipedia.org/wiki/OS/2_Warp (last visited Nov. 20, 2007).
106. John Geralds, IBM bets a billion on Linux, Dec. 13, 2000,
http://www.vnunet.com/vnunet/news/2114274/ibm-bets-billion-linux.
107. Stephen Shankland, IBM’s Linux revenue: Services to overtake servers, CNET NEWS,
Aug. 4, 2004, http://www.news.com/2100-7344_3-5297392.html.
108. Karim R. Lakhani & Eric von Hippel, How Open Source Software Works: Free User-to-
User Assistance, 32 RESEARCH POLICY 923-943 (2003).
109. See generally Quiggin, supra note 11.
110. A prominent example is the band Radiohead, who released their album
“In Rainbows” free on the Internet (inviting fans to pay whatever they chose) before signing a
record deal. Jonathan Cohen, Radiohead Sets U.S. Deal For New Album Release,
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220 HASTINGS COMM/ENT L.J. [30:203

prove that they are alpha computer programmers, and are more technically
savvy than the pitiful excuses for programmers who claim to be experts; 111
and (4) because they want their name to live on as a creator of their
work.112 The multiple motivations of amateur producers are significant,
because they do not fit neatly into the utilitarian calculus assumed by
economic theory. Amateur content producers are emphatically not just
utility maximizers who will start making widgets if the return on
investment for widgets is better than the return on investment for producing
content.

3. Blogs
A blog113 is a personal webpage in a journal format, with software that
automatically puts new entries (“posts”) at the top of the page, and shifts
old entries to archives after a specified period of time, or when the number
of posts becomes too large for convenient scrolling.114 Some other
elements, while not universal, are regarded by many as essential aspects of
blogging. The most important elements are facilities for readers to make
comments on individual posts and for other bloggers to link to posts with
criticism, praise, or merely to point to an interesting article. Most bloggers
also locate themselves within a larger community through the device of a
“blogroll,” that is, a sidebar with a list of permanent links to other blogs
likely to be of interest to readers.115
Although either individuals or groups can run blogs, individuals
typically provide the content.116 That is, single authors write each post and

BILLBOARD.COM, Nov. 12, 2007, http://www.billboard.com/bbcom/news/

article_display.jsp?vnu_content_id=1003671150.
111. Raymond, supra note 87.
112. Consider the significance of the credits in movies, where the dog handler and the person who
fetches coffee is given a credit for the successful completion of the movie. The significance of
attribution for creative activity is obvious in the rules for credit presided over by the Screenwriters
Guild’s and the Directors Guild. See, e.g., Wikipedia, WGA Screenwriting Credit System,
http://en.wikipedia.org/wiki/WGA_screenwriting_credit_system (last visited Nov. 20, 2007). It is an
issue that has only recently been recognized by law. See Greg Lastowka, The Trademark Function of
Authorship, 85 B.U.L. REV. 1171, 1172 (2005) (noting that a “good name is better than precious
ointment” and that attribution is an under-recognized function of intellectual property law); See also
Laura A. Heymann, The Birth of the Authornym: Authorship, Pseudonymity, and Trademark Law, 80
NOTRE DAME L. REV. 1377, 1378 (2005) (observing that trademark designations and authorial
attributions are related).
113. This unfortunate term arose as a contraction of “weblog” and has resisted periodic
attempts to find a more appealing alternative.
114. Wikipedia, Blog, http://en.wikipedia.org/wiki/Blog (last visited Nov. 20, 2007).
115. While the origins of the term itself are obscure, the feature was described as
“obligatory” as early as 2000 by Rebecca Blood. Weblogs: A History and Perspective,
http://www.rebeccablood.net/essays/weblog_history.html (Sept. 7, 2000).
116. Fedafi Wordpress Plugin Forum, FAQ, http://fedafi.com/forum/faq.php?sid=
bacf27b6fa5c7d09535ae387f1937626#15 (last visited Nov. 19, 2007).
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2008] MONEY RUINS EVERYTHING 221

each comment.117 There is of course, nothing to prevent joint composition

of either posts or comments, but standard blog software does nothing to
facilitate such collaboration, and in some ways actively discourages it.118
For example, the standard setup for a group blog requires a single author
for each post and does not allow members of the group to edit each others’
posts.119
Blogs serve many purposes, from online diaries (a market largely
served by LiveJournal)120 to corporate public relations (Microsoft in
particular has made extensive use of blogs). The bloggers who have
attracted the most public interest are those engaged in political and cultural
debates, such as Instapundit121 and Daily Kos.122
From tiny beginnings in the late 1990s, blogging has grown at an
exponential rate. The free service Technorati, which monitors links
between blogs, indicates this growth.123 In September 2003, Technorati
claimed to watch nearly 4 million weblogs, with more than half a billion
links.124 By October 2005, the number had risen to 20 million, and in
February 2006 the number was 27.5 million.125 Other estimates are as high
as 50 million, but these are inflated by various online communities that
automatically create blog-style diaries for new members and by the use of
spurious blogs to manipulate the rankings of search engines like Google.126
Blogs are significant to understanding the amateur content movement
because of their scale and numbers, their role in the development of the
“long tail” of content, and their effect on commercial providers of the same
content. Before the rise of blogs, few commentators would have thought
that there were so many potential authors on so many different topics. It
turns out that humans are inherently expressive animals, and the
development of an easy-to-use, internet-based authoring tool meant an
explosion in creative expression. More than this, the blogging revolution
has demonstrated some of the limitations on the mass-media model for the
production of content. Because of the expense and difficulty of production,

117. Id.
118. Id.
119. Id.
120. Live Journal.com – Start a Free Blog / Journal Today, http://www.livejournal.com.
121. Instapundit.com, http://www.instapundit.com.
122. Daily Kos: State of the Nation, http://www.dailykos.com.
123. Links, rather than monetary flows, are the main currency of the blog world.
124. Sifty’s Alerts: State of the Blogosphere, October 2005 Part 1: On Blogosphere Growth,
http://www.sifry.com/alerts/archives/000343.html (Oct. 17, 2005).
125. Id.
126. These blogs are a variant of “spam” that is sometimes referred to as a “splog.”
Wikipedia, Splog, http://en.wikipedia.org/wiki/Splog (last visited Jan. 25, 2008).
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222 HASTINGS COMM/ENT L.J. [30:203

content has been confined to a mass-media, mass-consumer model where

only content that appeals to a broad audience is economically viable.
With the rise of the amateur modality, content can be viably produced
for tiny audiences. Chris Anderson, the editor of Wired, has focused on
this development from the commercial perspective, and suggests that there
is a “long tail”127 of markets which are viable when one does away with
physical warehousing and distribution costs.128
The significance of the long tail is even greater when one considers
the amateur content producer, such as the blogger, because the ease and
low cost of producing amateur content generates huge opportunities in the
long tail of content. Moreover, as discussed above, the motivations of
amateurs play an important role here. Many blogs are written by passionate
hobbyists, who are completely absorbed by the material they are writing
about, and so will cheerfully lose money in pursuit of the community of
hobbyists and advancing the hobby that they care about so deeply.

4. Citizen Journalism
Citizen journalism, or “participatory journalism,” is where ordinary
people play “an active role in the process of collecting, reporting, analyzing
and disseminating news and information.”129 It is closely related to
blogging, inasmuch as the participants in the process are generally non-
professionals.130 But, unlike blogs, the emphasis in citizen journalism is on
collecting significant numbers of individuals reporting local news, rather
than on single individuals contributing opinion pieces or commentary.131

127. “The “long tail” is a term coined by Chris Anderson demonstrating a demand graph that
(broadly) follows a poisson distribution, with heavy consumer demand for a small number of
goods, and small demand for a huge number of goods. The significance of the internet is that it
allows for the provision of these poorly demanded goods in the long tail at a viable price because
there is little or no marginal difference in the cost of internet retailing for a small number of
goods as for a large number of goods. Unlike physical stores, internet stores do not have hard
limits on stocking poorly subscribed goods. Hence the internet opens up the long tail of the
poorly subscribed goods to sale and commercial usage. See Chris Anderson, The Long Tail,
WIRED, Issue 12.10, http://www.wired.com/wired/archive/12.10/tail.html.
128. CHRIS ANDERSON, THE LONG TAIL: WHY THE FUTURE OF BUSINESS IS SELLING LESS
OF MORE (2006).
129. SHAYNE BOWMAN & CHRIS WILLIS, WE MEDIA: HOW AUDIENCES ARE SHAPING THE
FUTURE OF NEWS AND INFORMATION (2003),
http://www.hypergene.net/wemedia/download/we_media.pdf.
130. AXEL BRUNS, GATEWATCHING: COLLABORATIVE ONLINE NEWS PRODUCTION (2005).
131. See Leander Kahney, Citizen Reporters Make the News, WIRED, May 17, 2003,
http://www.wired.com/news/culture/0,1284,58856,00.html; Daniel Terdiman, Open Arms for Open-Source
News, WIRED, July 22, 2004, http://www.wired.com/news/culture/0,1284,64285,00.html; Posting of Clive
Thomson to Collision Detection, http://www.collisiondetection.net/mt/ archives/000365.html#000365 (May
15, 2003, 11:55 EST).
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2008] MONEY RUINS EVERYTHING 223

The first and most prominent example of the movement is OhMyNews,132 a

South Korean citizen newspaper with the motto “Every Citizen is a
Reporter.”133 It was founded on February 22, 2000, and was influential in
affecting the outcome of the South Korean presidential elections in
December 2002.134 So significant was this new form, that the then-new
president, Roh Moo Hyun, granted his first interview to OhMyNews.135
Other incidents from the blogosphere are often used as examples of citizen
journalism: S Trent Lott lost his position as Speaker of the House of
Representatives in the U.S Congress as a result of blog coverage of the
news that he supported Strom Thurmond’s segregationist policies.136 On
the other side of the political fence, Dan Rather resigned as anchor of a
major television broadcast news program after conservative bloggers
exposed that documents used in a report aired by the program, which
purported to show that George Bush impermissibly ducked service in
Vietnam, were in fact forged.137
More recently, various bloggers and citizen journalists have begun to
use audio and video as part of their activities. Audio podcasting is
expanding quickly, both for entertainment, opinion posts, and news.138 The
rise of video was limited, until recently, by technical issues such as the
technical quality of amateur videos and the relative expense of video
streaming against other content types.139 However, since the diffusion of
broadband Internet connections, services such as YouTube have become
massively popular with numbers estimated in excess of 35 million users in
the U.S. and 100 million daily video views.140
Since the rise of OhMyNews and the successes of the blogosphere in
influencing media coverage, citizen journalism has been the subject of
numerous arguments. Bloggers and critics of mainstream media suggest
that it provides the antidote to corporate-owned media, removing the
problem of conflict of interest between media owners and the news that

132. The English version of Ohmynews is available at http://english.ohmynews.com/.

133. Wikpedia, OhmyNews, http://en.wikipedia.org/wiki/Ohmynews (last visited Jan. 7,
2008).
134. Id.
135. Id.
136. PressThink, The Legend of Trent Lott and the Weblogs, March 15, 2004,
http://journalism.nyu.edu/pubzone/weblogs/pressthink/2004/03/15/lott_case.html
137. Kevin Anderson, American Media vs the Blogs, BBC NEWS, Feb. 22, 2005,
http://news.bbc.co.uk/2/hi/americas/4279229.stm.
138 What’s New at Bridge Ratings, Bridge Ratings Industry Update – The Podcasting
Outlook, Nov. 12, 2005, http://www.bridgeratings.com/press_11.12.05.PodProj.htm.
139. Posting of Jackson West to NewTeeVee, http://newteevee.com/2007/08/26/online-
video-is-still-too-expensive (Aug. 26, 2007, 14:00 PST).
140. Groundswell (Incorporating Charlene Li’s Blog), Google + YouTube: What it means,
http://blogs.forrester.com/charleneli/2006/10/google_youtube_.html, (Oct. 6, 2006).
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224 HASTINGS COMM/ENT L.J. [30:203

they report.141 Others, like Dan Gillmor, argue in favor of citizen

journalism as a more responsive, ethical, and focused alternative to
commercial sources of mainstream news.142 On the other hand, some
critics argue that citizen journalism fails to present a meaningful alternative
to established media forms, usually on the grounds of ethics, or economics.
On the ethical side, critics argue that the ethical precepts taught to
journalists are absent from citizen journalism, leading to poor and unethical
reporting.143 On the economic side, critics suggest that citizen journalism
cannot be economically sustained because revenue must be driven by
advertising that, they claim, is unsustainable for the majority of citizen
journalism.144
It is almost certainly too early to make any informed predictions about
the eventual relationship between the professional press and citizen
journalists. It is likely that both will exist in some form or another, and
may play complementary roles. However, for the reasons discussed below,
it is possible not only to point to specific arenas where citizen journalism is
likely to replace its professional counterpart, but also, to explain the
reasons why this is so.

5. Other Amateur Content

The examples given above provide direction as to the most important
features of amateur collaborative content production. Open source
software, blogs, citizen media, and the development of the internet provide
an account of the “what,” “why,” and “how” of amateur production,
leading to an examination of whether this modality of innovation fits with
the received account of innovative activity. Noteworthy are some of the
ways in which the amateur modality has transformed various types of
content production. Wikipedia, the amateur-produced online encyclopedia,
is well-known, and demonstrates the ability of individuals to create a
repository of widely accepted knowledge.145 It continues to attract critics
in part because we have certain expectations about authority and control
over accounts of this sort: an encyclopedia is supposed to be authoritative
and the collaborative nature of Wikepedia subverts this assumption. The
Siegenthaler case, where damaging falsehoods were inserted in the

141. See generally Antje Gimmler, Deliberative Democracy, the Public Sphere and the
Internet. 27 PHILOSOPHY & SOCIAL CRITICISM 21 (2001).
142. See generally, DAN GILLMOR, WE THE MEDIA: GRASSROOTS JOURNALISM BY THE
PEOPLE, FOR THE PEOPLE (2004).
143. Gleenslade, http://blogs.guardian.co.uk/greenslade/2006/10/net_journalism_
rewrites_old_me.html (Oct. 16, 2006, 11:37 GMT).
144. Media in Transition, http://www.vincentmaher.com/mit/?p=4 (Feb. 2, 2006, 16:10).
145. Quiggin, supra note 11.
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2008] MONEY RUINS EVERYTHING 225

biography of an American journalist and not detected until a friend of the

subject discovered the entry, illustrates many of these concerns.146
Literature comparing Wikipedia and traditional encyclopedias shows
how close they are in terms of errors.147 And unlike traditional
encyclopedias, Wikipedia is capable of improvement through constant,
ongoing correction by other users. The most relevant lesson of Wikipedia is
not the debate over authority in content production, but rather, how it
demonstrates that highly granular content can be collaboratively produced
without high level direction.148 In this it is a demonstration that open
source methods from software can be used in other content production
arenas.
Open source programming has transformed software development, but
a sub-category of open source called “modding” is changing the way
programmers produce video games.149 Some game developers publicly
release the underlying code which drives the player-game interaction, and
allow players to modify (“mod”) the game by producing their own content
that relies on the underlying engine.150 These modded games can become
incredibly successful in their own right. Counterstrike is an amazingly
popular mod of the game Half-Life by two amateurs, Minh “gooseman” Le
and Jess Cliffe.151 Many programmers use the underlying physics and
interaction engine for the game Unreal Tournament in other games.152 The
rise of modding demonstrates that the right tools will generate enormous
attention from creative amateurs. Game designers currently see much of
their future revolving around player-created content,153 and virtual worlds
designers are much the same.154

146. The case is accurately documented in detail by Wikipedia itself. Wikipedia,

Seigentharler, http://en.wikipedia.org/wiki/John_Seigenthaler_Sr._Wikipedia_biography_
controversy (last visited Feb. 22, 2007).
147. .Jim Giles, Internet Encyclopaedias Go Head to Head, 438 NATURE 900–01 (2005),
available at http://sanatio.blogspot.com/2005/12/special-report-from-nature-internet.html.
148. Benkler, supra note 13.
149. John Borland, Tomorrow’s Games, Designed by Players as They Play, GAMESPOT
NEWS, Feb. 3, 2006, http://www.gamespot.com/news/6143653.html.
150. Wikipedia, Modding, http://en.wikipedia.org/wiki/Modding (last visited Jan. 25, 2008).
151. Wikipedia, Counter-Strike, http://en.wikipedia.org/wiki/Counter-Strike (last visited Jan.
7, 2008).
152. See, e.g., Planet Unreal – News, Screenshots, Previews, Reviews, Guides,
http://www.planetunreal.com/hosted/mods.shtml (last visited Nov. 19, 2007).
153. Ellie Gibson, J Allard joins Sims Creator in Praising Player-Created Content,
GAMESINDUSTRY.BIZ, Feb. 2, 2006, http://www.gamesindustry.biz/content_
page.php?aid=14512.
154. Second Life (http://secondlife.com) is a virtual world which has much of it physical
environment and interaction constructed by players. Cf. F. Gregory Lastowka & Dan Hunter, The
Laws of the Virtual Worlds, 92 CALIF. L. REV. 1 (2004) (a discussion of virtual worlds and their
legal significance).
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226 HASTINGS COMM/ENT L.J. [30:203

Finally, the rise of the audiovisual sharing site YouTube and its
competitors demonstrates how improved bandwidth and hard disk storage
generates new opportunities in amateur production. YouTube allows users
to post their audiovisual content, whether it be amusing videos of their life,
clever animation, stupid dog tricks, or alternative videos for their latest pop
musical favorite.155 It also allows, of course, for the reposting of material
which is copyrighted to another, usually commercial, owner. The two most
interesting things of note about YouTube usage are: first, that the low
production quality of the material is not a sufficient disincentive from
widespread adoption by internet users, and, second, the way in which
sharing of information is such a formidably interesting exercise for users
that it drives the adoption of this new form of amateur production and
dissemination.

III. Amateurs and the Modalities of Production

The previous Section outlined some examples of amateur
collaborative content and suggested that, empirically, it is becoming an
important modality of production for certain types of information goods.
This Section takes the descriptive observations about these information
goods, and develops a more general account of the important features of
this modality of production. It examines whether there is any fundamental
mismatch between the newly significant, amateur sphere of innovation and
the established, market-based and bureaucratic-based alternatives. It also
examines the general characteristics of amateur production, and focus on
the motivations for production by amateurs. Finally, this Section considers
the degree to which the rationality of the marketplace and bureaucracies are
inconsistent with these motivations and mechanisms.

A. Characteristics of Amateur Production

The term “amateur” is originally French, meaning “lover of.” Indeed,
a central characteristic of amateur activities is that they are performed, in
some sense “for love,” or, at least, not in expectation of a material
reward.156 On the other hand, and particularly in opposition to
“professional,” the term commonly has the connotation of “second-rate” or
“unskilled.” This negative usage came to dominate during the Twentieth
Century, as professionals displaced amateurs in a wide range of cultural,
scientific and sporting activities.157

155. YouTube – Broadcast Yourself, http://www.youtube.com/ (last visited Nov. 19 2007).

156. Wikipedia, Amateur, http://en.wikipedia.org/wiki/Amateur (last visited Jan. 7, 2008).
157. Id.
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2008] MONEY RUINS EVERYTHING 227

The negative connotations associated with amateurism reflect the

experience of the Twentieth Century and its associated modes of
production. In the Twentieth Century, producing high-quality work
required, in most cases, the full-time attention of trained professionals.158
This was reinforced by the disappearance of the leisured upper classes, who
provided much of the input to amateur activity in the Nineteenth Century.159
To consider why amateur production is now resurgent, one must
consider both the motives for amateurs to contribute to a range of activities,
and the technological changes that have facilitated this. This part argues
that technological change has reduced the obstacles to amateur
participation, while increasing the relative cost of securing the direct
material rewards required by professionals.

1. Motivations
A wide range of motives lead people to contribute to amateur
collaborative innovation. Possible motives include altruism, self-
expression, advocacy of particular political or social views, display of
technical expertise, and social interaction.160 Different motives will be
dominant in different situations. The first example of amateur
collaborative innovation to attract widespread attention was that of open
source software, where the “gift economy” analysis of Eric Raymond
attracted widespread attention.161 Raymond stressed the elements of
reciprocity and display of technical expertise, making the analogy of the
potlatch in which goods were ritually destroyed as a demonstration of
superabundant wealth and power.162 As will be discussed below, these
motivations are particularly relevant to software projects, but less so in
other cases.
The rise of blogs, beginning in the late 1990s, depended on a rather
different range of motivations. The originators of blogs were technically
sophisticated users similar to those involved in the open software
movement, who used blogs largely as collections of links to interesting

158. BILL IVEY and STEVEN J. TEPPER, Cultural Renaissance or Cultural Divide, The
Chronicle of Higher Education, May 19, 2006 (on file with author).
159. Morris Berman, Hegemony and the Amateur Tradition in British Science, 8 JOURNAL OF
SOCIAL HISTORY 30 (1975).
160. Lakhani & von Hippel, supra note 108.
161. Raymond, supra note 87. See also Yochai Benkler, Coase’s Penguin, or, Linux and the
Nature of the Firm, 112 YALE L.J. 369, 381-399 (2002) (examining the nature of peer production
of content in various copyright-based industries including, inter alia, software production, data
analysis, essay-writing, and commentary); Yochai Benkler, Sharing Nicely: On Shareable Goods
and the Emergence of Sharing as a Modality of Economic Production, 114 YALE L.J. 273, 325
(2004) (detailing the scale, economics, and some motivations for non-commercial production of
various types of goods).
162. Raymond, supra note 87.
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228 HASTINGS COMM/ENT L.J. [30:203

material, with brief comments.163 However, the development of easy-to-

use software, beginning with Blogger,164 opened blogging up to a much
wider range of users. These users’ primary concern was self-expression in
its various forms, and the associated possibilities of social interaction with
other bloggers through comments, linking, logrolling, and other forms of
mutual recognition and identification.165
As blogging spread beyond the initial group of technical users, its
potential for use as a medium of political expression became evident. The
terrorist attacks of September 11 generated a rapid upsurge in
“warblogging”—political commentary focused on the response that began
with the overthrow of the Taliban regime in Afghanistan.166 Although the
“warbloggers” were initially almost unanimous in their support for the
Bush Administration’s response to terrorism, and derisive of its critics,
deep divisions in the “blogosphere” emerged in the lead-up to the invasion
of Iraq.167 Political blogs are divided deeply on partisan and ideological
lines. The desire to express views on political and social issues remains an
important motivation for blogging.168
Over time, however, the predominance of issue-based blogging has
declined.169 Blogs are now provided routinely to participants in a wide
range of “social software” networks, such as Myspace.com.170 Blogs on
these networks, particularly those used mainly by teenagers, such as
LiveJournal, take the form of online diaries, and carry with them the wide
range of social motivations implied by such a use.171 Although the great
majority of these blogs are of interest only to those in the immediate social
circle of their writers, they nonetheless form an important part of the
background for the rise of amateur collaborative content.
The rise of wikis, and particularly Wikipedia, relied on very different
motivations. Wikipedia is a collective product, and most contributors are
pseudonymous.172 Thus, there is very little room for personal fame, or for
drawing attention to one’s technical expertise beyond a limited group of

163. See generally REBECCA BLOOD, WE’VE GOT BLOG: HOW WEBLOGS ARE CHANGING
OUR CULTURE (2002).
164. Blogger was the first commercially available bloggin system. It was bought by Google
and is still available. Blogger, http://blogger.com (last visited Jan. 25, 2008).
165. Id.
166. Wikipedia, Warblog, http://en.wikipedia.org/wiki/Warblog (last visited Jan. 25, 2008).
167. Id.
168. Quiggin, supra note 11.
169. USES OF BLOGS , supra note 4.
170. MySpace, http://www.myspace.com (last visited Nov. 19, 2007).
171. See LiveJournal.com, supra note 120.
172. Wikipedia, Wikipedia: About, http://en.wikipedia.org/wiki/Wikipedia:About (last
visited Jan. 25, 2008).
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2008] MONEY RUINS EVERYTHING 229

fellow Wikipedians, most of whom are also pseudonymous. Moreover, the

fact that any contribution made by one editor can be, and commonly is
radically changed by others, makes Wikipedia unappealing as an outlet for
self-expression. Despite these seemingly unpromising characteristics,
Wikipedia is arguably the largest and most successful project of voluntary
collaboration ever seen, with over 6 million registered accounts, and over
175 million individual edits since July 2002.173
Whereas blogging is a highly self-reflexive activity characterized by
extensive “meta” discussion of individual involvement in blogging,
Wikipedia does not allow for individual expression. Despite the
anonymous and collective nature of the final product, however, the
Wikipedia community shares many characteristics with the blogosphere.
Wikipedia allows users to present user pages describing their views,
and also allows users to classify themselves in various ways, including by
lifestyle, location, philosophy, and politics.174 Perhaps the most interesting
classification for this purpose is classification by Wikipedia philosophy.
Subcategories include eventualists, who are focused on the long-term
possibilities for Wikipedia (and are opposed by immediatists), and
supporters and opponents of anonymity, and so on.175
Informal observation suggests two main motives for participation in
Wikipedia. The first is the appeal of the project itself, which has the
potential of realizing the goal of providing a comprehensive and easily
accessible guide to all human knowledge. The second is observance of the
norm of reciprocity. Wikipedia is a valuable tool, used by millions of
people. Users who spot an error or omission can easily correct it at very
low cost.176 It is unsurprising that many do so.177 Nov identifies two
dominant motives for contributing to Wikipedia. The first is because
contributing to Wikipedia is fun, and the second is that people support the
‘ideological’ concept Wikipedia as a project.178

2. Mixing Motives
There are many different motives behind amateur collaboration
contributions on the internet. In general, these motives are complementary,

173. Wikipedia, Statistics, http://en.wikipedia.org/wiki/Special:Statistics (last visited Jan. 25,

2008).
174. Id. See generally Wikipedia, supra note 6.
175. Wikipedia, Eventualism – Meta, http://meta.wikimedia.org/wiki/Eventualism; Id.,
Immediatism – Meta, http://meta.wikimedia.org/wiki/Immediatism (last visited Jan. 25, 2008).
176. Wikipedia, supra note 172.
177. The first of these motives is likely to be dominant for eventualists and the second for
immediatists.
178. O. Nov, What Motivates Wikipedians, 50 COMMUNICATIONS OF THE ACM 60 (2007).
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230 HASTINGS COMM/ENT L.J. [30:203

or, at least, consistent. For example, an altruistic desire to improve open

source software will be complemented by the amateur programmer’s
enjoyment of a technically challenging task, and by his or her desire for
admiration by a group of peers.
Motives like these, however, do not coexist well with profit motives.
Benkler notes the absence of monetary side payments in the case of car-
pooling, and this is typical of cooperative endeavors of various kinds.179
There is a strong desire to keep money out of this kind of activity except
when necessary (for example, car-poolers must contribute to tolls and
bloggers must share the cost of internet hosting services).
The observation that financial motives may conflict with other
motives has been discussed at length in the literature on motivational
crowding out.180 This literature, however, has focused on the conflict
between monetary payment and altruism, where the incompatibility
between motives is seen as being more or less self-evident.181 In view of
the variety of motives associated with contributions to amateur
collaborative content and innovation, it is necessary to consider when and
why these motives are complements that mutually reinforce one another, or
substitutes, which lead to crowding out.
One possible approach to this comparison is to consider the extent to
which particular combinations of motives, such as altruism and self-
expression, are psychologically consistent or inconsistent. As observed
above, evidence suggests that a wide variety of motives are potentially
compatible. Monetary motive, however, are hard to analyze in purely
psychological terms. Thus, it is necessary to consider the social context of
monetary interactions.
Monetary transactions naturally give rise to a rational calculus of
action based on a set of rules and on a fundamental principle, such as profit
maximization, which potentially govern all behavior in the relevant
domain.182 Rational systems of action may be contrasted with heuristic
guides to action that apply under particular (not necessarily well-defined)

179. BENKLER, supra note 13.

180. “Crowding out” is the economic/financial term for a situation where the use or provision
of a resource by one party (typically the government or the public sector) reduces the ability of
anyone else to provide or use the resource. The typical financial example is in borrowing, where
the government borrows capital and is capable of paying virtually any rate of interest, and in
doing so leaves no available credit for the private sector. The principle can be used in relation to
the motivations for production as well. See, e.g., Bruno S. Frey & Felix Oberholzer-Gee, The
Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out, 87 AM. ECON.
REV. 746 (1997).
181. Id.
182. The concept was first explored by Weber in relation to rational-legal authority. See
generally Max Weber, The Three Types of Legitimate Rule, in COMPLEX ORGANIZATIONS (A.
Etzioni ed., Hans Gerth trans., Holt, Rinehart & Winston 1961).
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2008] MONEY RUINS EVERYTHING 231

circumstances. In general, a range of heuristics, associated with different

kinds of motivation, can coexist. In contrast, a rational calculus naturally
tends to crowd out both heuristics and alternative rational systems.183
At a superficial level, it is apparent that people act differently, and are
expected to act differently in relationships mediated by money as opposed
to relationships in other social contexts. Behavior that would be regarded
favorably in a non-monetary context is regarded as foolish or even
reprehensible in a monetary context. One of the most important general
differences relates to rationality and calculated reciprocity. In a non-
market context, careful calculation of costs and benefits and an insistence
on exact reciprocity is generally deprecated. By contrast, in market
contexts, the first rule is never to give more than you get.184
Why is it more important to observe this rule in market contexts? One
reason is that markets create opportunities for systematic arbitrage that do
not apply in other contexts. In an environment where trust is taken for
granted, a trader who consistently skims a margin from each transaction
can amass substantial profits. If trading partners assume honorable
behavior, none will suffer enough to notice. This is much more difficult to
do in ordinary social contexts.
Similar points can be made about other motives. There are a whole
range of sales tricks designed to exploit, among other things, altruism,
friendship, and desire for self-expression. Hence, to prosper in a market
context, it is necessary to adopt a view that “business is business,” and to
(consciously or otherwise) adopt a role as a participant in the market
economy that is quite distinct from what one might be conceive his or her
“real self.”185

183. For example, consider federalism. In many federal systems, valid federal laws generally
‘crowd out’ state laws, not merely in cases where the two are directly inconsistent, but also, in
cases where federal law on a given topic preempts state law or “covers the field,” leaving no
room for the states to legislate. See, e.g., U.S. CONST., art. VI, cl 2 (“This Constitution, and the
Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or
which shall be made, under the Authority of the United States, shall be the supreme Law of the
Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or
Laws of any State to the Contrary notwithstanding.”).
184. As economists hasten to point out, the existence of gains from trade means that this does
not imply conflict between the parties to a market transaction: both can gain more than they get.
On the other hand, this doesn’t mean there isn’t conflict, for both could do better at the expense of
the other.
185. The thinking of sociologists, such as Weber, Goffman and Hirschman, can contribute a
lot to this argument. Most importantly, there is some potential for exploration of the
circumstances in which personality is role-specific in some fundamental sense, rather than in the
trivial sense where a role is defined by the performance of specific functions.
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232 HASTINGS COMM/ENT L.J. [30:203

3. Reconciling Modalities of Creative Production

As technology developed in the Nineteenth and most of the Twentieth
Century, amateurs and generalists were displaced in all kinds of creative
and productive activities by professional specialists. The division of labor
was seen by economists from Adam Smith onwards as an essential
contributor to economic growth.186 New kinds of organizations, such as
corporations and bureaucracies, developed to coordinate the efforts of large
numbers of specialized workers.187 Against this background, it is necessary
to explain the reemergence of amateurism and more specifically, the role of
amateur collaborative production.
It is useful to begin by considering the case of open source software.
The production of software requires specialized skills, and it is important
for different pieces of software to work well together. Hence, relatively
early in the development of the computer industry, individual authorship of
programs proved unsatisfactory for most purposes. The production model
was based on centralized planning of an entire project, with subprojects
being divided into tasks small enough to be assigned to individuals.188 This
team-based model worked well enough to displace individual authorship.
On the other hand, coordination of the work of teams of professional
software engineers in the context of a corporation producing a commercial
product has long been a challenging activity, the central problem being that
adding additional programmers did not enhance output correspondingly.189
In economic terms, transaction costs were a convex function of the size of
the project team. While the characteristics of the team-based model did not
prevent the development of large and complex software products, it
frequently resulted in failures to meet project objectives, cost over-runs,

186. Adam Smith’s The Wealth of Nations, Book I, Chapter I opens with the example of a
pin factory, in which the simple job of making a pin is divided into eighteen distinct operations,
each the task of a dedicated specialist. SMITH, supra note 16 at 12-13. Cf. CARL MARX, The
German Ideology, in MARX-ENGLES COLLECTED WORKS, VOLUME 5 (Maurice Cornforth, et al.
eds., W. Lough trans., Lawrence & Wishart) (1845) (holding that a division of labor would
disappear under socialism: “in communist society, where nobody has one exclusive sphere of
activity but each can become accomplished in any branch he wishes, society regulates the general
production and thus makes it possible for me to do one thing today and another tomorrow, to hunt
in the morning, fish in the afternoon, rear cattle in the evening, criticize after dinner, just as I have
a mind, without ever becoming hunter, fisherman, herdsman or critic.”)
187. Neither corporations nor bureaucracies were wholly new. The scale and sophistication
of the institutions that emerged in the Nineteenth Century, however, and the scope of the
activities they undertook, was unparalleled in previous history.
188. Wikipedia, History of Software Engineering, http://en.wikipedia.org/wiki/
History_of_software_engineering (last visited Jan. 8, 2008).
189. F.P. BROOKS, THE MYTHICAL MAN-MONTH: ESSAYS ON SOFTWARE ENGINEERING,
ANNIVERSARY EDITION (2d ed. 1995) (arguing that adding additional programmers to a project
can slow it down).
N_HUNTTERQUIGGIN_FINAL.DOC 2/1/2008 11:14:20 AM

2008] MONEY RUINS EVERYTHING 233

and software widely regarded as bloated and inefficient.190 At the same

time, the trade-off between the size of the project team and the transaction
costs of supervision and coordination meant that individuals faced heavy
workloads.191
The Internet made possible an entirely different mode of production,
involving much larger groups of contributors and forgoing hierarchical
systems of management. The crucial development was the reduction in
communications costs,192 which meant that a project with a physical
location in, say, Finland, could make use of the output of a few hours work
undertaken by a programmer in Atlanta. Before the development of the
Internet, the costs, in time and money, of establishing and maintaining
contact and of submitting contributions (say, by a floppy disk sent by mail)
would far exceed the benefits of a small contributions. The Internet also
facilitated communications in another direction. For the first time, it was
possible to communicate the results of software development
instantaneously around the world.
The decline in communications costs increased the relative importance
of other transactions costs, in particular the costs associated with monetary
payments. Any system of payment involves fixed costs of administration,
monitoring, verification, and compliance for each new participant. To
cover these costs, it is typically necessary to rely on full-time employees
for these tasks, and to employ the complex systems of supervision that
characterize corporations and bureaucracies. Thus, the reduction in
communications costs did not make it feasible for corporations based in
Finland to employ American programmers for a few hours at a time.193
The problem was recognized quite early in the development of the
Internet, and there were a variety of attempts to develop “microcash”
systems of payments, such as Beenz194 and Flooz,195 which would avoid the
costs associated with a system where all transactions involved transfers
between named parties. None of these systems, however, succeeded.196

190. F.P. Brooks, No Silver Bullet: Essence and Accidents of Software Engineering, 20
COMPUTER 10-19 (1987).
191. Id.
192. OFF. OF INT’L AFF.: NAT’L RES. COUNS., INTERNET COUNTS: MEASURING THE
IMPACTS OF THE INTERNET (1998).
193. Some tasks have been broken down to the point where they can be performed at low pay
rates on a piecework basis, as in the case of the Amazon Mechanical Turk system, where remote
workers classify photos for low rates of pay. After an initial popularity, interest in this system has
waned. Wikipedia, Amazon Mechanical Turk ,
http://en.wikipedia.org/wiki/Amazon_Mechanical_Turk (last visited Jan. 25, 2008).
194. Wikipedia, Beenz.com, http://en.wikipedia.org/wiki/Beanz.com (last visited Jan. 8,
2008).
195. Wikipedia, Flooz.com, http://en.wikipedia.org/wiki/Flooz (last visited Jan. 8, 2008).
196. Shirky, supra note 89.
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234 HASTINGS COMM/ENT L.J. [30:203

The only new system of payment to emerge, Paypal, has not succeeded in
displacing high-transaction cost options such as credit card payments.197
The disappearance of communication costs and the persistence of high
transaction costs associated with monetary payments the Internet has
therefore favored systems of cooperation based on voluntary, unmonitored
production over systems based on small monetary incentives.
While transaction costs failed to decrease, costs of strategic interaction
increased through large-scale commercial collaborations. The general
problem is that the value of a product is only realizable when a substantial
number of contributions are made to it, which creates a range of potential
conflicts, including hold-up problems.198 The hold-up problem arises when
a number of participants must make specific contributions to ensure that a
project succeeds. The last contributor can demand a disproportionate share
of the value of the project, with the threat of not contributing otherwise. On
the other hand, if contributions are not unique, first movers can establish
property rights and capture the entire value of the project.199 The creation
of license conditions that require free sharing, such as General Public
Licenses200 and Creative Commons Licenses, can avoid the potential for
such strategic behavior. While these licenses require that participants forgo
potential income from intellectual property in the creation of software, they
protect everyone from the risk of being required to pay for access to
projects to which they have contributed without reward.201

197. At the time of its takeover by eBay, Paypal had turnover of around $50 million per
quarter. Drew Cullen, eBay buys PayPal, THE REGISTER (July 8, 2002),
http://www.theregister.co.uk/2002/07/08/ebay_buys_paypal/.
198. See generally O.E. WILLIAMSON, MARKETS AND HIERARCHIES (1975).
199. B. Klein, R.G. Crawford, & A.A Alchian, Vertical Integration, Appropriable Rents, and
the Competitive Contracting Process, 21 J.L. & ECON. 297 (1978).
200. The GNU General Public License, http://www.gnu.org/copyleft/gpl.htmlCC licenses at
creativecommons.org (last visited Jan. 25, 2008).
201. See e.g. Creative Commons Share-Alike License 3.0:
3. License Grant. Subject to the terms and conditions of this License, Licensor hereby
grants You a worldwide, royalty-free, non-exclusive, perpetual (for the duration of the
applicable copyright) license to exercise the rights in the Work as stated below:

to Reproduce the Work, to incorporate the Work into one or more Collections, and to
Reproduce the Work as incorporated in the Collections;

to create and Reproduce Adaptations provided that any such Adaptation, including any
translation in any medium, takes reasonable steps to clearly label, demarcate or
otherwise identify that changes were made to the original Work. For example, a
translation could be marked “The original work was translated from English to
Spanish,” or a modification could indicate “The original work has been modified.”;

to Distribute and Publicly Perform the Work including as incorporated in Collections;

and,
N_HUNTTERQUIGGIN_FINAL.DOC 2/1/2008 11:14:20 AM

2008] MONEY RUINS EVERYTHING 235

Open source software was the first important example of the change in
the conditions of software production. While it facilitated the production
of software, the open source movement retained, largely intact, the
distinction between producers (in this case programmers) and consumers
(computer users). Compared to traditional methods of production, the open
source approach allows for contributions from a much larger class of
computer professionals, but these still account for only a small proportion
of users.202

4. Collaboration
In contrast to [the production of commercial software?], in social
software systems such as blogs, the distinction between producers and
consumers has largely broken down. While the production of blogging
software still requires high-level technical skills, the construction of the
blogosphere is as much a social as it is a technical task. The result is that
bloggers themselves play a central role in the development of the
interlinked set of technologies and institutions that constitute the
blogosphere.203
This is not a wholly new development. A number of analysts, notably
von Hippel, have explored the idea that, to a large extent, customers drive
innovation.204 Von Hippel, however, focuses primarily on large industrial
customers of companies supplying capital goods.205 The implications of
innovation undertaken by thousands of individual users of information-
based products are more far-reaching and profound.

to Distribute and Publicly Perform Adaptations.

4. Restrictions. The license granted in Section 3 above is expressly made subject to

and limited by the following restrictions:

You may Distribute or Publicly Perform the Work only under the terms of this
License. You must include a copy of, or the Uniform Resource Identifier (URI) for,
this License with every copy of the Work You Distribute or Publicly Perform. You
may not offer or impose any terms on the Work that restrict the terms of this License
or the ability of the recipient of the Work to exercise the rights granted to that recipient
under the terms of the License.
Creative Commons Legal Code, http://creativecommons.org/licenses/by-sa/3.0/legalcode (last
visited Jan. 8, 2008).
202. For example, Firefox has hundreds of millions of users but has, at most, a few thousand
developers. See Browser Statistics, http://www.w3schools.com/browsers/browsers_stats.asp (last visited
Jan. 8, 2008); Wikipedia, Mozilla Firefox, http://en.wikipedia.org/wiki/Firefox (last visited Jan. 8, 2008);
Wikipedia, Market Adoption of Mozilla Firefox, http://en.wikipedia.org/
wiki/Market_adoption_of_Mozilla_Firefox (last visited Jan. 8, 2008).
203. Quiggin, supra note 11.
204. ERIC VON HIPPEL, THE SOURCES OF INNOVATION (1988).
205. Id.
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236 HASTINGS COMM/ENT L.J. [30:203

Blogs provide one of the most important focal points for innovation on
the Internet. A clearer example of technological innovation driven by
blogs is that of the various versions of RSS/RDF.206 RSS is an effective
implementation of what used to be called “push technology.”207 So that
users do not need to visit their favorite sites on a bookmark list to find new
content, the sites themselves generate a short report for users that notes
recent posts and comments. A client program called an aggregator, such as
NetNewsWire, collects these reports for all the sites one may wish to
visit.208 In order for this technology to succeed, it requires a workable
underlying RSS/RDF specification, user-friendly aggregator software, and
a large enough number of sites generating RSS feeds to sustain user
interest. As a result of the time-consuming nature of blogging, blog readers
welcomed the RSS innovation, even with the rough edges that
characterized its early stages. This in turn produced pressure on bloggers
to implement RSS, and therefore, on developers of blog software to make
this as easy as possible. Once the groundwork had been laid in the
blogosphere, RSS spread rapidly. Most major news sites now offer RSS
feeds, as do web browsers like Safari and email readers like the Mac Mail
client.
RSS/RDF is also the most prominent single example of the benefits of
XML/XHTML209 over the simpler HTML, which served the World Wide
Web for its first decade.210 Progress in Web and internet technology is
driven by the most demanding users, and, increasingly, these are the
members of creative communities such as the blogosphere.211
The link between social and technological innovation in social
software systems, of which blogging is the prime example, has been so
close that it is, in many cases, impossible to assign a direction of causality.
If the blogosphere blurs the distinction between producers and
consumers, this distinction is nonexistent in Wikipedia. Apart from a

206. RSS stands for “Really Simple Syndication” or some variant of this. See Wikipedia,
RSS, http://en.wikipedia.org/wiki/RSS_(file_format) (last visited Jan. 25, 2008). RDF stands for
“Resource Description Framework.” See, Resource Description Framework (RDF)/W3C
Semantic Web Activity, http://www.w3.org/RDF/ (last visited Jan. 25, 2008). RSS and RDF are
both mechanisms for simply subscribing to internet sites which are updated over time.
Wikipedia, RSS, http://en.wikipedia.org/wiki/Rss (last visited Jan. 25, 2008).
207. Wikipedia, Push Technology, http://en.wikipedia.org/wiki/Push_technology (last visited
Jan. 25, 2008).
208. Wikipedia, NetNewsWire, http://en.wikipedia.org/wiki/Netnewswire (last visited Jan.
25, 2008).
209. XML is a more general form of a markup language that allows for the inclusion of
semantic content rather than simple display markup (although it can do that as well).
210. Wikipedia, XML, http://en.wikipedia.org/wiki/Xml (last visited Jan. 25, 2008).
211. Quiggin, supra note 11.
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2008] MONEY RUINS EVERYTHING 237

handful of paid staff, the project is entirely driven and designed by users.212
Among the two million registered editors, a thousand or so are
distinguished as administrators with additional powers to make structural
changes, block vandals and so on, but these are merely enthusiastic and
well-regarded users who have been nominated and approved by others. 213
Admittedly, the basic operation of Wikipedia relies on expert-written
software, most crucially on MediaWiki, a collaboratively developed214
piece of open-source software, which manages the database operations
required to manage user-generated content and make it readable.215
MediaWiki, however, merely provides a framework for a software and data
structure based on categories, templates, userboxes, and other features
which users generate without any central organization.216 More important
than any of the specific software features of either MediaWiki or its user-
generated extensions are the array of social institutions variously titled
collaborations, cabals and so on, that manage various subprojects and
determine the directions in which the project as a whole evolves. The
structure of Wikipedia emerges from the operations of these groups rather
than from any central design.

5. Conclusions
The model of productivity growth associated with the Internet is
radically different from the Twentieth Century industrial model described
above. Society’s reliance on Internet innovation and its unique
collaborative processes has reversed the flow of innovation. Instead of
being a passive recipient of innovations developed elsewhere, the
household sector, broadly defined to include all the activities undertaken by
individuals other than for pay or to produce items that can be sold or
licensed, is now the focus of some of the most significant innovations that
are taking place in society. Amateurs, rather than professionals, drive
innovation.
The crucial reason for this reversal is the reduction in communication
costs made possible by the Internet. Internet technology has reduced the
cost of freely sharing information to a level close to zero. Indeed, it is
often easier to make contributions using web-based applications, where
output is freely available by default, than to produce the same information
with a desktop application.

212. Wikipedia: About, supra note 172.

213. Id.
214. MediaWiki is run by 5 admins and about 70 developers. Id.
215. Id.
216. Id.
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238 HASTINGS COMM/ENT L.J. [30:203

IV. Amateur Production and Innovation Policy

The previous Sections of this article described the features, scope, and
nature of the movement towards amateur content production. Section I
demonstrated that amateur content is a large and growing modality for the
production of creativity. Section II showed that this modality has
characteristics that do not match the (historically contingent) expectations
about the way that innovation operates.
With this descriptive work done, the question then arises what, if any,
normative implications stem from these observations? If amateur content
production were just like commercial production, then few, if any changes
to laws or public policy would be necessary, because amateur innovation
would fit into the standard model for the policy of innovation. Amateur
created content, however, is different, and so public policy responses need
to be different also to encourage this form of innovation. The fundamental
issue for this Section is, therefore, should society, as a matter of public
policy, encourage the development of the amateur modality of production?
We suggest that there are strong reasons it should. First, amateur
production of content, like the more familiar commercial production
modality, generates significant external benefits that are shared by society
in general. Blogs, Wikipedia, citizen journalism, and other types of
amateur content all have audiences that value their existence. Just as there
is a policy of encouraging, through commercial incentives, the production
of socially valuable inventions, such as books, music, ideas, and software,
there should be a policy of encouraging the amateur production of socially
valuable software, commentary, news, and text. Indeed, viewed from this
perspective, the amateur production of various types of content is probably
more socially beneficial than work the commercial modality produces,
since it is usually not subject to financial controls on access. In other
words, it is often given away for free.217 Using the same sort of social
utilitarian calculus as that is used for intellectual property policy218—that is,
creating a public subsidy in the form of a monopoly grant in order to
encourage the production of socially beneficial content—amateur content
deserves some form of public subsidy because it provides a public good.

217. The philosophical basis for this argument is probably best articulated by the open source
and free software movement, as exemplified by the Free Software Foundation’s explanation of
that they mean by “free”: “free software is a matter of liberty, not price. To understand the
concept, you should think of free as in free speech, not as in free beer.” GNU Project, The Free
Software Definition, http://www.gnu.org/philosophy/free-sw.html (last visited Nov. 24, 2007).
218. See William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law,
18 J. LEGAL STUD. 325 (1989); Joseph P. Liu, Copyright Law’s Theory of the Consumer, 44 B.C.
L. Rev. 397 (2003) (stating that the animating theory of copyright is that “the author of a
copyrighted work is an individual who is motivated to create primarily by the hope or anticipation
of economic gain”).
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2008] MONEY RUINS EVERYTHING 239

Other public policy considerations also justify special treatment of this

new modality of content creation. Liberal democracies place high value on
the ability of individuals to express themselves. The typical example given
of the value in fostering individual expressive autonomy is usually framed
in terms of people’s ability to render controversial speech, and the principle
reaches its highpoint in First Amendment jurisprudence. Beyond the
narrow issue of political speech lies the more general observation that it is
an altogether good thing for people to be able to express themselves in a
range of ways.219 This includes artistic expression in the form of writing,
drawing, painting, music composing, movie-making, and so on. The
amateur content modality allows people to express themselves creatively in
a way that has not easily been possible before, and, moreover, it allows
individuals to communicate their expression to a wide audience in a way
that absolutely has been unavailable before. The individual and social
benefits of this type of activity therefore justify all manner of public policy
responses to the opportunity now present.220
Opponents of this argument may argue that, in many cases, the
benefits of amateur content creation are confined to relatively small
subgroups of civil society that can organize themselves without
government assistance. One way of viewing blogs, for example, is as a
conversation, and, despite the obvious social desirability of conversation, it
is not generally an object of government policy. This objection can be
overcome relatively easily. The reach of the Internet is such that the group
that benefits from Internet-based amateur innovation is much larger, more
geographically disparate, and more inchoate than in the past. As a result,
even on a utilitarian calculus that focuses on society as a whole, rather than
as an aggregate of individual happiness, public subsidies are easy to justify.
A second objection consistent with the analysis presented above is that the
standard forms of public policy, including public provision and public
subsidy, are either inapplicable to amateur production, or potentially
inimical to the motivations that drive amateur content provision and
innovation. In effect, a publicly subsidized amateur becomes, at least in
part, a professional. This is a more difficult objection than the first. If

219. This issue is perhaps most obvious in the laws relating to information and in the tension
between copyright and the First Amendment, where the property interests inherent in copyright
intersects with the speech interests under the Constitution. See, e.g., Paul Goldstein, Copyright
and the First Amendment, 70 COLUM. L. REV. 983, 988-90 (1970). But see Eldred v. Ashcroft,
537 U.S. 186, 219 (2003) (“The Copyright Clause and First Amendment were adopted close in
time. This proximity indicates that, in the Framers’ view, copyright’s limited monopolies are
compatible with free speech principles. Indeed, copyright’s purpose is to promote the creation
and publication of free expression.”).
220. BENKLER, supra note 13.
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240 HASTINGS COMM/ENT L.J. [30:203

public policy is to help rather than hinder, it must be designed to take into
account the particular nature of the amateur modality.
The Sections below go on to tease-out the appropriate policy
prescriptions that emerge as a result of the unusual nature of amateur
content production. These policy prescriptions include legal regulatory
provisions, as well as a number of policies about public provision of inputs
that are necessary for the flourishing of the amateur sphere.

A. The Problem with Bureaucracies

This Section begins by showing why traditional public policy
responses to market failure are not appropriate in this context. The main
alternative to market provision of goods and services has been public
provision and the concomitant reliance on bureaucracy. When governments
provide goods and services, such as health, education, and housing, they
rely primarily on bureaucratic organizations. As commentators from Weber
onwards have noted, bureaucracy is characterized by a mode of rationality
quite distinct from the egoistic individual rationality of the market.221
Bureaucratic rationality is characterized by adherence to rules
designed to promote the objectives of the organization. Reliance on
established procedures is necessary in bureaucracies for a number of
reasons. One of them is the principle, crucial if a bureaucracy is to work
effectively, that bureaucratic officers are responsible for the actions of their
subordinates. This principle in turn requires the kind of predictability
feasible only with well-established procedures. Rules designed as far as
possible to anticipate contingencies and to prescribe appropriate responses
limit individual discretion. Even where individual bureaucrats exercise
discretion, general requirements constrain them to act in the interests of the
organization and its clients, rather than on the basis of personal preferences.
222

Thus, just as with market rationality, bureaucratic rationality crowds

out a wide range of personal motivations. Bureaucrats, when acting
properly, cannot allow private motivations such as personal friendship or
mutual obligation, to influence their actions. Actions with such
motivations are stigmatized as nepotism, cronyism, or conflict of
interest.223 Generalized altruism is more acceptable and, in public service,
positively desirable, but only to the extent that the individual’s notion of
the general good does not conflict with that embodied in the objectives of

221. M. WEBER, ECONOMY AND SOCIETY: AN OUTLINE OF INTERPRETIVE SOCIOLOGY (2

VOLUME SET) (1978).
222. Weber, supra note 182.
223. See generally PETER M. BLAU, THE DYNAMICS OF BUREAUCRACY: A STUDY OF
INTERPERSONAL RELATIONS IN TWO GOVERNMENT AGENCIES (1973).
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2008] MONEY RUINS EVERYTHING 241

the organization. Similarly, a bureaucracy allows only limited scope for the
operation of such motives as desire for self-expression. A position in a
bureaucracy is a classic example of a role where the performance is
dictated by the position rather than by the player.224
Bureaucracies can be innovative, but the mode of innovation is quite
different from that of the amateur. An idealized case of a bureaucratic
innovation might begin at the bottom of the bureaucratic hierarchy, with
the observation of problems or opportunities by workers engaged in the
delivery of services. The results of these observations are then transmitted
up the hierarchy to a point where an executive decision can be made to
adopt an innovation or to engage in a research program. The outcomes of
this decision are then transmitted down the hierarchy for implementation.
Many of the major innovations of the Twentieth Century arose in this
fashion. The classic example is the Manhattan Project, which produced the
atom bomb and laid the basis for the development of nuclear power.225
More generally, a wide range of publicly funded research operates in this
fashion, with large teams of researchers operating on projects funded by
granting bodies such as the National Science Foundation.226
As Coase, Williamson, and others have pointed out, private
corporations also operate as bureaucracies.227 Within the private sector, the
decision to undertake activity within a firm, such as the production of an
input, is an alternative to market transactions or contracts with outside
parties.

B. Macro-Economics and Amateur Innovation Policy

To the extent that innovation and productive growth arise from
activities that are pursued primarily on the basis non-economic motives, the
link between incentives and outcomes is weakened. This in turn
undermines the rationale for policies aimed at sharpening incentives and
ensuring that everyone engaged in the production of goods and services is
exposed to the incentives generated by a competitive market. Such policies
represent the core program of neoliberalism, the set of ideas that has
dominated Western public policy since the 1980s and 1990s.228

224. ERVING GOFFMAN, THE PRESENTATION OF SELF IN EVERYDAY LIFE (1959).

225. JEFF HUGHES, THE MANHATTAN PROJECT: BIG SCIENCE AND THE ATOM BOMB
(REVOLUTIONS IN SCIENCE) (2003).
226. National Science Foundation, http://www.nsf.gov/ (last visited Jan. 19, 2008).
227. See generally OLIVER WILLIAMSON, THE ECONOMIC INSTITUTIONS OF CAPITALISM
(1985); Ronald Coase, The Nature of the Firm, 4 ECONOMICA, 368 (1937).
228. See generally John Williamson, What Washington Means by Policy Reform, in LATIN
AMERICAN READJUSTMENT: HOW MUCH HAS HAPPENED (John Williamson ed., 1989); DANIEL
YERGIN & JOSEPH STANISLAV, THE COMMANDING HEIGHTS: THE BATTLE FOR CONTROL OF THE
WORLD ECONOMY (2002).
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242 HASTINGS COMM/ENT L.J. [30:203

The rise of the Internet, however, had nothing to do with neoliberal

policies and the rationality of the marketplace. The Internet was developed
within the university sector with a combination of small amounts of
funding for national network bodies and large inputs of unpaid labor.
These labor inputs arose either by way of academics’ spare time, or by a
diversion of effort from their official tasks, depending on how you look at
it.229 When universities finally got into commercialization of the Internet,
the result was an unedifying boondoggle, with little or no net contribution
to the public good.230
Similar points may be made in relation to another core belief
underlying the reforms of the 1980s and 1990s—the idea that the “cold
shower” of competition drives productive innovation.231 Again, nothing in
the rise of the Internet supports this idea. Indeed, it is hard to imagine that,
in the university sectors of the late 1990s where all actors are operating
within a framework of fiscal and economic constraint, anyone would have
had time for something as apparently frivolous as an all-purpose electronic
communications network. Then, as now, the struggle for survival focused
attention on the short term.
The point may be made more broadly in terms of a distinction
between rationality and creativity. Rationality dominates the Twentieth
Century model of innovation, in that there is an assumption that the
marketplace will allocate resources rationally once there is a innovative
product produced. Creativity is needed for the initial generation of ideas
for pure research, but plays little role thereafter, since the assignment of
property rights under copyright and patent means that the rational market
will allocate interests. In the Twenty-first Century model, the roles are, if
anything, reversed. Rational design is still fundamental in keeping the
whole system of the internet going, but creative discovery and exploitation
of the possibilities of the new medium drives the day-to-day process of
innovation.
This distinction points up a potential role for public policy. One of the
difficulties in a system of innovation based on spontaneous contributions is
that the allocation of effort to tasks will mainly reflect characteristics other
than the benefits flowing from its completion. In open-source software for
example, programmers may be keen to work on tasks that are technically

229. The Role of NSF’s Support of Engineering in Enabling Technological Innovation: IV.
The Internet, http://www.sri.com/policy/csted/reports/techin/inter2.html (last visited Jan. 8,
2008).
230. For example, during the dotcom bubble Melbourne University gained $130 million from
the public offering of “Melbourne IT,” a spinoff of the university’s network and domain name
administration function. See Wikipedia, Melbourne IT,
http://en.wikipedia.org/wiki/Melbourne_IT (last visited Jan. 25, 2008).
231. Williamson, supra note 228.
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2008] MONEY RUINS EVERYTHING 243

challenging, that will bring them fame, or that will solve a significant
problem for some particular group of people they want to help. They will
be less likely to work on boring tasks that improve the functioning of the
system but that do not have a big impact on anyone in particular.
Similarly, in examining a collectively produced product like
Wikipedia, poorly written passages and whole pages in need of editing are
prevalent.232 Contributors, however, mostly find line editing an
unrewarding task compared to writing new pages, adding new facts, or
correcting factual errors.233 Quite possibly the only person who will
actually notice such a contribution is the original author and they may not
be grateful. The benefit to readers from a better article may not provide
sufficient motivation. Public policy could assist in filling this gap, either
through direct provision of undersupplied Internet services, or through the
provision of funding to groups undertaking such provision, such as the
Wikimedia foundation.234
On the other hand, the analysis presented here casts doubt on the
currently popular policy of encouraging and subsidizing venture capital
enterprises. The investments encouraged by venture capitalists in the
“dotcom” era may have rewarded their promoters, but they produced little
of lasting social value, at least by comparison with the vast sums that were
invested.235
In summary, rather than seeking to drive people harder in the search
for increased productivity, government macro-economic policy should be
oriented towards making room for creativity and facilitating its expression.
Similarly, while competition has its place, public policy should be at least
as much concerned with promoting cooperation. Assumptions about the
competitive nature of innovation are, therefore, under-supported in the new
environment of today. If governments want to encourage the maximum
amount of innovation in light of amateur production then they need to de-
emphasize competition and emphasize cooperation.

C. Intellectual Property
Intellectual property law is our society’s primary legal and public
policy framework for innovation. Multiple forces—including the
expectation that commercial innovation is the only innovation that matters,
the rhetoric of property ownership, and the value of commercial content

232. See generally Wikipedia, supra note 6.

233. Wikipedia: About, supra note 172.
234. Id.
235. This can be seen in the large number of failed “dotcom” companies which generated a
net capital loss for their investors. Few of these companies exist today.
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244 HASTINGS COMM/ENT L.J. [30:203

forms—have shaped intellectual property law and policy.236 Any

understanding that amateur innovation is the norm, because of course
amateur innovation falls within the household economy and is not tracked,
measured, or valued, has not influenced intellectual property law and
policy. Intellectual property laws definitely do not consider the rising
significance of amateur innovation in areas like content production. The
sections that follow outline the implications of amateur innovation to
intellectual property law, focusing on copyright since it provides the basis
for protecting creative expression rather than ideas.237
Copyright matters because it provides an economic incentive for
authors to create socially valuable content in circumstances where, if they
weren’t given this incentive, they would do something else. The copyright
system is necessary to encourage the creation and use of socially valuable
content, or so goes the standard utilitarian justification for copyright (and
indeed patent).238 In fact, the copyright system does not provide incentives
to authors to create valuable content so much as it provides incentives to
the intermediaries who guarantee the circulation of this content in
society.239 Copyright thus provides incentives to the intermediaries of the
content industries—publishers, agents, movie studios, retail stores, etc.—
where the processes of moving content from creator to user are expensive
or capital-intensive.240 These “content processes” include the creation of
the content, the selection of the content for commercial publication, its
production and dissemination, its marketing, and its eventual use. Until
recently each of these processes has been too expensive, too difficult, or

236. See generally Hunter, supra note 33 (analyzing the intellectual property culture war
“through a Marxist lens”).
237. The role of the patent system in relation to amateur innovation and open source
production is explored generally by von Hippel. See von Hippel, supra note 71. See also Amy
Kapczynski, Samantha Chaifetz, Zachary Katz & Yochai Benkler, Addressing Global Health
Inequities: An Open Licensing Approach for University Innovations, 20 BERKELEY TECH. L.J.
1031 (2005)(a discussion of amateur innovation and pharmaceutical development).
238. The U.S. Constitution says that Congress may protect patents and copyright “[t]o
promote the Progress of Science and useful Arts,” which relies on the standard utilitarian, felicific
calculus. Standard accounts of intellectual property rely on this justification, and it has to be
conceded that this is the dominant basis for the analysis of copyright these days. See e.g. William
Fisher, Theories of Intellectual Property, in NEW ESSAYS IN THE LEGAL AND POLITICAL THEORY
OF PROPERTY 168 (Stephen R. Munzer ed. 2001); Landes, supra note 218; Liu, supra note 218 at
397 (noting that the animating theory of copyright is that “The author of a copyrighted work is an
individual who is motivated to create primarily by the hope or anticipation of economic gain.”).
Other justifications for copyright and patent exist, most notable Lockean labor-desert theory and
Hegelian personality theory, see e.g. Justin Hughes, The Philosophy of Intellectual Property, 77
GEO. L.J. 287 (1988). Neither of these appear likely to supplant utilitarianism as the primary
motivation for the grant of intellectual property rights in modern societies.
239. Hunter & Lastowka, supra note 79.
240. Id.
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2008] MONEY RUINS EVERYTHING 245

too specialized for amateurs to undertake.241 So until now, highly

capitalized intermediaries were necessary to ensure that content moved into
society.242
Each of these the content processes, however, have moved into the
hands of amateurs.243 With the advent of the general purpose computer—
together with content-creation software for desktop publishing, music
creation, film editing, and so forth—the cost of creation and production has
fallen.244 One can see this in the rise of YouTube, Wikipedia, or
OhMyNews.245 The content found in those products was effectively
impossible to present prior to the widespread use of the general purpose
computer. Beyond creation and production, the Internet means that
distribution is effectively costless for digital content.246
What remains are the selection and promotion processes, which have
traditionally involved expensive advertisements, and specialized marketing
expertise. But recently the development of various types of technology has
emerged, which leads users to content they will like, without the
intervention of marketers. An example of this is the Amazon.com feature
that suggests other purchases based on the metric “People who bought this
book also bought . . . .”247 Another example is Pandora,248 a service that
plays music that is structurally and sonically similar to a musician or song
that the user specifies.249 This means that the amateur content-producer is
no longer dependent on the well-capitalized publisher, record label, or
movie studio for selection and promotion of content.
As a consequence of the developments discussed above, highly
capitalized intermediaries are no longer necessary for the creation,
production, dissemination, and use of culturally significant content, and
copyright is no longer the only mechanism for ensuring that content moves
from the author into society. This central point generates some serious
implications for copyright policy.

241. Id.
242. Id.
243. Id.
244. Id.
245. YouTube, supra note 155; Wikipedia, supra note 6; OhMyNews, supra note 5.
246. Hunter & Lastowka, supra note 79.
247. This type of algorithm can suggest all manner of content that users might be interested
in, based on their previously expressed preferences, and is often called collaborative filtering. See
Dan Hunter, Philippic.com, 90 CALIF. L. REV. 611, 630 (2002); Hunter & Lastowka, supra note
79.
248. See Pandora, http://pandora.com.
249. See Jeff Leeds, “The New Tastemakers,” N.Y. TIMES, Sept 3, 2006,
http://www.nytimes.com/2006/09/03 /arts/music/03leed.html?th&emc=th.
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246 HASTINGS COMM/ENT L.J. [30:203

The greatest implication of this shift is a need to abandon unseemly

solicitude towards to copyright industries like the music and movie
industry. It is important to remember that the content industries do not
much matter in and of themselves—what matters is the social benefit in
having creative content circulating within our society. If copyright
industries were, as once was the case, the only path for content to move
from the author to the public, then it would be a terrible thing if these
industries died. The amateur content processes described above, however,
provides individuals with the opportunity to produce content, and to move
that content into the wider world. Thus, the copyright industries, while
relevant to some types of creative activity, are no longer the only game in
town. The ever-insistent calls to criminalize copyright infringement or to
impose greater controls on content, must therefore be assessed against the
effect on the amateur sphere, which is emerging as a relevant alternative to
the commercial sphere.
There exist some obvious ways in which solicitude for commercial
copyright industries can have a detrimental effect on the amateur sphere.
Bloggers, for instance, often link to, quote from, and comment upon other
written works posted online by newspapers and other bloggers. Sometimes
the extent of such blog “sampling” triggers lawsuits.250 In the Free
Republic case, for instance, members of a political bulletin board posted the
full texts of various newspaper articles, a clear cut instance of copyright
infringement.251 The articles were reproduced for purposes of comment,
and the subsequent discussion focused on the factual news, not on the
creative arrangement and selection of particular journalistic adjectives.252
Nonetheless the Los Angeles Times and a number of other newspaper
proprietors brought suit, and the court had no hesitation in rejecting the
defendant’s arguments that this could be a fair use of the news stories.253
The court stressed that the articles were copied in their entirety, which in its
opinion was not necessary for the purposes of commentary.254 Free
Republic argued that the plaintiffs were not deprived of advertising
revenue, because Free Republic referrals generated hundreds of thousands
of additional hits per month.255 The court thought this irrelevant: the
newspapers themselves were attempting to exploit online markets, and the

250. See, e.g., Los Angeles Times v. Free Republic, 2000 U.S. Dist. LEXIS 5669 (C.D. Cal.
March 31, 2000).
251. Id. at *6.
252. Id. at *29.
253. Id. at *80.
254. Id. at *30.
255. Id. at *12.
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2008] MONEY RUINS EVERYTHING 247

Free Republic site had the potential to interfere with these markets.256
Emboldened by this sort of approach, other news services have recently
warned blog proprietors that they will scan for copyright infringement, and
some websites of old media moguls warn bloggers against providing
hyperlinks to their story pages.257
Free Republic highlights a problem with the cultural practice of some
types of amateur content: the blogosphere could not exist in its current,
vibrant form if copyright owners actually enforced copyright in relation to
all the millions of infringements that take place on it each day. It is not an
answer to say that copyright owners do not usually bother to sue, since this
just leads to selective enforcement and an uncertainty in the scope of
appropriate use. It would be better to establish a principle that, for
example, non-commercial use of copyright material (as on a blog or in
other amateur content forms) is not copyright infringement, in much the
same way that it is not trademark infringement to make non-commercial
use of a trademark.258
This appears to be a simple prescription, but it is likely to be
controversial.259 Amateur content is already crowding out established
copyright industries in certain content areas. Commercial newspapers, for
example, are struggling to remain relevant in an era of free news, opinion,
and comment.260 Clashes are expected, and more in the future, where the
crowding out becomes more significant.261 Until now, the Internet and

256. Id. at *29.

257. See Tech Law Advisor, Reuters Defines Fair Use For Bloggers,
http://techlawadvisor.com/2004/03/reuters-defines-fair-use-for-bloggers.html (last visited Jan. 25,
2008).
258. See, e.g., Rescuecom Corp. v. Google, Inc, 456 F. Supp. 2d 393 (N.D.N.Y. 2006)
(holding that the use in commerce requirement of 15 U.S.C. § 1114 and 15 U.S.C. § 1125 is not
present in sale of keywords).
259. This type of exemption would also be difficult to administer because the different forms
of amateur content all have different norms and expectations about the use of copyright material.
For example, the re-use of an entire newspaper story on a blog is acceptable, whereas the same
use in the Wikipedia is not acceptable. It’s impossible to specify a one-size-fits-all rule here, but
we need to identify that non-commerciality is at the core of any defense that favors the amateur
sphere.
260. Helen Coonan, Australian Communications, Information Technology, and the Arts
Minister, at the 2004 Andrew Olle Media Lecture, Sydney (November 17, 2006) (transcript
available at http://www.abc.net.au/sydney/stories/s1791046.htm).
261. One potential policy prescription is to mandate that newspapers and other commercial
content owners provide their content to bloggers. We do not advocate this, since we think that
the market will be able to deal with the problem. We see this already with the rise of the New
York Times as the newspaper of choice for the blogerati, as opposed to the Wall Street Journal
(WSJ). The Gray Lady allows linking, whereas the WSJ is locked behind a wall and only
subscribers may read, link, or use the online content. This consigns the WSJ to irrelevance within
the blogosphere. In time the market may force the WSJ to change this policy, or it may be that
the particular community which reads the WSJ will forever remain separate from the
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248 HASTINGS COMM/ENT L.J. [30:203

commercial world have never had to recognize the importance of the

amateur sphere. Society needs to start introducing laws that protect this
important modality.262
A recognition of the amateur sphere also sheds light on some other
aspects of the copyright system, rendering seemingly objectionable laws
much less troubling than they might seem. For example, numerous authors
decry the introduction of criminal sanctions for cracking Digital Rights
Management (DRM)263 systems. DRM allows content proprietors to lock
their content into digitally encrypted files, allowing use only by those
authorized.264 The Copyright Acts of many countries changed in the late
1990s to forbid any investigation or cracking of the technological
protection measures at the heart of DRM.265 One of the concerns on the
part of critics is that content will be pay-for-use forever, and so socially
valuable content will never fall into the public domain and be reused by
others in the time-honored way.266 The concern is that DRM will lock
away the expression that is necessary for our society to continue to
innovate and grow.267
DRM as applied to content created in the amateur sphere casts a
different light on this fear. Amateurs tend to have little need for DRM to
“protect their investment” and so amateur content is likely to be released
without DRM. Indeed, it is hard to think of one amateur content provider
which uses any type of access control on its content. This means that, as
more and more commercial content is released with DRM, we will see non-
DRM alternatives produced by amateurs. As numerous reports have
stressed, consumers distrust and dislike DRM.268 The increasing reliance
of commercial providers on DRM is likely, therefore, to push users towards
amateur substitutes for commercial content.

blogosphere. Whatever the outcome, it is not necessary to force material to the blogosphere,
since it already has sufficient material for a vibrant use and reuse of content.
262. As an aside, it is important to note that “fair use” defenses are not going to suffice here.
The Free Republic case squarely addressed the fair use defense and got it wrong. The widespread
re-use of entire swathes of copyright material in the blogosphere is very likely to strike a judge as
objectionable, since the concept of amateur production is not within the copyright system. Indeed,
this type of use is inimical to the copyright system.
263. See Free Software Foundation, supra note 6.
264. Dan Hunter, Digital Rights Management and Mass Amateurization, INDICARE
MONITER, May 30, 2005, at 15, available at http://www.indicare.org/tiki-
read_article.php?articleId=106.
265. See, e.g., U.S.-Australia Free Trade Agreement, U.S.-Austl., art. 17, § 9, March 3, 2004,
available at http://www.ustr.gov/Trade_Agreements/Bilateral/Australia_FTA/
Final_Text/Section_Index.html (last visited Jan. 25, 2008).
266. LAWRENCE LESSIG, FREE CULTURE (2004).
267. See generally Lawrence Lessig, Free Culture (2004).
268. Knud Böhle, Editorial, INDICARE MONITOR, May 30, 2005, at 2.
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2008] MONEY RUINS EVERYTHING 249

This will lead to a somewhat counter-intuitive result: it will positively

encourage commercial content providers to use DRM access controls to
lock up their content as tightly as they can, under the most restrictive terms
imaginable, for as long as they want. If there were no competition to this
type of locked content then we justifiably should be concerned about rent-
seeking by monopoly holders, and we would see a reduction in creative
activity, and a stifling of cultural expression. But as the amateur content
movement progresses, competition in the marketplace for content will
affect the degree to which professional providers want to offer this sort of
locked content. If a record label wants to digitally lock their content, for
example, Christina Aguilera’s latest album, and make it unplayable for a
large number of consumers, then they should be free to do so. A range of
amateur content can be expected to enter the market to compete on value,
quality, and degree of access prohibition. Two themes are likely to emerge
from this. First, DRM in commercial content will encourage amateur
content production; and this is altogether a good thing. Second, amateur
content production will act as a natural brake on the imposition of over-
broad DRM by commercial content providers. This is also a good thing.
The amateur content movement demonstrates that culturally oriented
and consumer-based concerns about DRM are probably less troubling than
first imagined. However, two concerns remain even if amateur content
production provides some basis for hope. First, like many parts of our
cultural experience, amateur content relies on the ability to reuse and remix
existing material. Access controls using DRM have the potential to affect
the ability of individuals to engage in this type of creative
reinterpretation.269 This point has been made before and there is no use in
belabouring the point again. But one should note that amateur content
production cannot occur without the ability to use, to some extent, material
which is part of our cultural heritage. In order to prevent this from
happening, we need to place limits on the ability of commercial content
owners to stop amateur content reuse.
Secondly, the above comments about access control do not extend to
its bad big brother, trusted systems computing. In trusted systems, only
content signed by certain providers can be used by the computer system.270
This type of DRM is an actively bad thing for amateur content, since
amateurs are unlikely to be able or unwilling to obtain the appropriate
license for their content to be used by the trusted system machine. To the
extent that one thinks that amateur content is a good thing—and we think it

269. See generally LESSIG, supra note 266.

270. See Wikipedia, Trusted Computing, http://en.wikipedia.org/wiki/Trusted_Computing (last
visited Jan. 25, 2008).
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250 HASTINGS COMM/ENT L.J. [30:203

is a very good thing indeed—trusted systems must be resisted. The market

acceptance of trusted computing has been low to date, but future
generations may have wider uptake. This is likely to reduce the
opportunities for amateurs to reuse content and create material based on it,
and we should think seriously about changing copyright laws and using
antitrust actions to ensure that amateurs retain the same access as
multinational media companies.271

D. Cultural Policy
Innovation policy is the responsibility of national sovereigns, but
increasingly it is subject to “international pressures.” The significance of
innovation and intellectual property policy to the economic strength of the
one remaining superpower means that U.S. innovation policy is
increasingly reflected in the intellectual property systems of sovereign
domestic powers. This comes about through numerous means. Perhaps the
most important is through the connection to international trade.
During the 1990s, the United States led a fundamental change in
international intellectual property policy-making—Uruguay Round of the
General Agreement on Tariffs and Trade included the agreement on Trade-
Related Aspects of Intellectual Property that tied domestic intellectual
property protection to international trade.272 This meant that the U.S. Trade
Representative gained the ability to strong-arm countries whose intellectual
property systems were not aligned with U.S. interests: if a country wanted
access to U.S. (and Western European) markets, then it had to toe the line
by protecting American intellectual property interests.273
This move led to the flourishing of new intellectual property
legislation and enforcement around the world, including in countries such
as China which hitherto had been unmoved by arguments that it should
protect intellectual property as a matter of its domestic interest.274
The United States also works outside of multinational agreements and
actively pursues bilateral treaties that tie even greater access to U.S.
markets with even stronger intellectual property protection.275 In a series of

271. As an aside, it is worth noting that DRM has the potential of being a notable benefit to
amateur content by providing a simple and effective way of denoting attribution interests for the
long term. We should be careful, therefore, to assume that DRM is always bad, and that
commercial use of DRM will always trend towards over-control of the content. Hunter, supra
note 264.
272. JOHN BRAITHWAITE & PETER DRAHOS, GLOBAL BUSINESS REGULATION (2000).
273. Id.
274. Peter K. Yu, From Pirates to Partners: Protecting Intellectual Property in China in the
Twenty-First Century, 50 Am. U.L.Rev 131, 133-54 (2000).
275. The problem with multilateral agreements is the difficulty in gaining support among
many nations with divergent interests, and so the provisions tend to be watered down to a level
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bilateral Free Trade Agreements, the U.S. struck deals with a number of
countries.276 These agreements provide more open access to U.S. trade
markets in exchange, in part, for intellectual property protection that ties
the interests to U.S. innovation policy.
When selling these deals to foreign lawmakers, the U.S. intellectual
property interests—and the U.S. Trade Representative who acts as their
muscle—cannot rely on the same arguments as they might exercise back
home. Neither Singaporeans nor Australians nor even Canadians care
much about the workers in intellectual property-related jobs in Hollywood,
California, Redmond, Washington, or Blue Bell, Pennsylvania. So the
rhetoric used relies on a combination of consumer economics (“The Free
Trade Agreement means cheaper drug prices and access to new movies”) or
simplified Hegelian property theory (“This is our property and we should
be allowed to stop others from using it without reimbursement.”).277 These
arguments are hard to resist, and coupled with the threat of U.S. trade
sanctions, regularly prevail. 278
Except in one area: culture. National governments have been
successful in applying the rhetoric of cultural protection against the rhetoric
of property and commercial innovation. The best example of this is, of
course, the French. For years the French have imposed strong protection for
cultural content industries such as music, film and books.279 Complaints by
the United States over “unlevel playing fields” have fallen on deaf Gallic
ears.280
The reference to the protection of indigenous cultural industries and
local content is one of the few ways in which countries can justify

that is acceptable to all. The benefit of bilateral agreements is that regulations can be tailored to
the needs of only two parties; which in this context means that intellectual property protection
may be tailored to US needs in return for trade benefits to the other party.
276. See, e.g., U.S.-Austrailia Free Trade Agreement, U.S.-Austl., art. 17, § 9, March 3, 2004, available
at http://www.ustr.gov/Trade_Agreements/Bilateral/Australia_FTA/Final_Text/ Section_Index.html. See also
INDUSTRY FUNCTIONAL ADVISORY COMMITTEE ON INTELL. PROP. RIGHTS FOR TRADE POL’Y MATTERS,
THE U.S.-AUSTRALIA FREE TRADE AGREEMENT (FTA): THE INTELLECTUAL PROPERTY PROVISIONS (Mar.
12 2004), available at www.ustr.gov
/assets/Trade_Agreements/Bilateral/Australia_FTA/Reports/asset_upload_file813_3398.pdf;
United States-Morocco Free Trade Agreement, U.S.-Morocco, art. 15.9, § 4, June 14, 204,
available at www.ustr.gov/assets/Trade_Agreements /Bilateral/Morocco_
FTA/Flnal_Text/asset_upload_file118_3819.pdf; United States-Singapore Free Trade Agreement,
U.S.-Sing., art. 16.7, § 2, May 6, 2003, available at www.ustr.gov/assets/Trade_
Agreements/Bilateral/Singapore_FTA /Final_Texts/asset_upload_file708_4036.pdf.
277. For an analysis of the different justifications for intellectual property protection see
Hughes, supra note 238.
278. SELL, supra note 37.
279. Alan Riding, French Film Industry Circles the Wagons, N.Y. TIMES, Sept 18, 1993,
http://query.nytimes.com/gst/fullpage.html?res=9F0CE7D61139F93BA2575AC0A965958260.
280. Id.
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252 HASTINGS COMM/ENT L.J. [30:203

protectionism, and can resist the imposition of U.S.-led free trade in

intellectual property laws. For example, in the recent negotiations of the
USA-Australia Free Trade Agreement, one of the few areas where U.S.
intellectual property interests did not triumph entirely was in local content
controls for broadcast television. Australian lawmakers were able to claim
that free trade in content product would close local film industries, and
deprive Australia of audiovisual stories about itself.281 Nevertheless,
standstill provisions in the Agreement prohibited the introduction of any
new protections for Australian content.282
The intersection of cultural policy and innovation policy is extremely
important in the era of amateur content production. Poorly capitalized
creators create amateur content for motives that are generally not
commercial. So they have little desire and no incentive to create mass-
media content that appeals to a broad audience. This is the source of a
great deal of misunderstanding on the part of the mainstream media, which
assumes that the numbers of readers or the number of links for a given blog
are the only significant metrics of success. Thus, the fact that the most
widely trafficked blogs now include some professionally produced blogs
from the mainstream media283—where once the most popular blogs were
almost wholly amateur284—can be misread as in indication that the
significant blogs will become professional in time. But this metric ignores
the scope of the so-called “long tail” of the readership distribution, that is
the 27.5 million blogs which cater to specialized interests ranging from
high-energy physics, through advertising, the relationship crises of Judy
from Oklahoma City, Oklahoma, and every topic in between.285 And as the
latest Technorati report shows, there is a huge audience for amateur
content, especially very localized content.286
Why is this important for cultural policy? Amateur content is
typically very localized and often small-scale: for example, blogs address
issues of niche and geographic interest, and by definition are not
mainstream media sources. Amateur content is about having a local voice,
reflecting the needs and interests of a local audience. The local scale of

281. UNITED STATES INT’L TRADE COMMISSION, U.S.-AUSTRALIA FREE TRADE

AGREEMENT: POTENTIAL ECONOMYWIDE AND SELECTED SECTORAL EFFECTS 86 (2004),
available at http://hotdocs.usitc.gov/docs/pubs/2104f/pub3697.pdf.
282. Parliament of Australia: Senate: Inquiry into the freetrade agreement between Australia
and the United States – Report, http://www.aph.gov.au/senate_freetrade/ report/final/ch06.htm
(last visited Jan. 8, 2008).
283. Sifry’s Alerts, supra note 124.
284. Shirky, supra note 89.
285. ANDERSON, supra note 128.
286. Posting of Dave Sifry to Technorati, http://technorati.com/weblog/2007/04/ 328.html
(April 5, 2007).
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2008] MONEY RUINS EVERYTHING 253

amateur content is, or should be, extremely important to the large range of
counties (and smaller geographic entities like states and provinces) that are
not commercial exporters of content.
Places like Canada, Singapore and Australia will never be able to
compete with the mass media content produced by Hollywood and Britain
for English language content: the barriers to entry in broadcasting and mass
media are too high, the expertise and cost for the production are too
expensive and/or difficult to acquire, and the local markets which would
consume this content are too small to make it a commercial viable
proposition.287 The same is true for place like Quebec and Côte d’Ivoire
for francophone content; or Timor Leste for Portuguese language content,
and so on. The large and well-established content industries in these
countries have almost-unassailable leads in the creation, production and
distribution of content of mass-media products in these languages.
Little opportunity is available for smaller or less-developed countries
to develop mass-media industries that can compete in markets controlled
by these bigger players. But amateur content is produced for little cost, and
for non-commercial reasons. It does not have the same economic structure
as that which drives the mass media industry. So if these minor places
want alternatives to mass media content—and if they want alternatives
which speak to their specific interests and needs, and not the needs of
Parisiens or Los Angelenos—then they should encourage amateur content
production as a matter of local cultural policy.
Encouraging an amateur content movement therefore has important
implications for the cultural policy of numerous countries. First, it
provides opportunities for self-expression and creative self-development
for the citizens of those countries and those populations. Leaving aside
those communities which impose strong censorship obligations on their
citizens, nations have an interest in producing creative individuals who feel
empowered to express their creativity. Not only do these people produce
creative works that are socially meaningful, their presence is correlated
with improved economic activity even in non-creative arenas.288 Then
there is the issue of the audience for this creativity: nations-states clearly
have a benefit in having material which reflects the interests and needs of
its people. Obviously, in a competition over who is more likely to produce
material that reflects the national culture, and appeals to the people of, say,
Malta, Hollywood executives are going to be less interested than Maltese
amateur content producers. Therefore national regulators, who want to

287. See, e.g., ANDERSON, supra note 128.

288. RICHARD FLORIDA, THE RISE OF THE CREATIVE CLASS: AND HOW IT’S
TRANSFORMING WORK, LEISURE, COMMUNITY AND EVERYDAY LIFE (2002).
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254 HASTINGS COMM/ENT L.J. [30:203

produce a vibrant corpus of material that is directed to the ethnic and

cultural needs of their people, are much better off encouraging the amateur
content producers within their country by intelligent use of their cultural
policy.
The forms that this encouragement might take are the ones that we are
generally familiar with in dealing with policy. Public subsidy and legal
controls are the most obvious candidates. As to the former, the most
significant public subsidies should be reserved for the public provision of
Internet access, on the basis that it has the biggest multiplier effect on the
ability of local content to be disseminated. In some countries and locales
this will involve the creation of municipal wifi networks, in other cases it
will involve building out net infrastructure in other ways.289
As to the latter, taking cultural policy seriously means resisting the
“level-playing field” argument which is advanced for the uptake of U.S.
intellectual property policy in non-U.S. countries, and recognizing that
local bloggers, wikipedians, citizen journalists, open source programmers,
amateur musicians, and so on, are generators of significant cultural content.
Where intellectual property laws constrain their ability to express their
local view these laws should be changed.

V. Amateur Hour
The observation that we are living through an “information
revolution” has become a cliché, yet most discussion of this revolution
takes for granted that economic activity will go on much the same as
before, only at a more frenetic pace. The archetypal metaphor is that of
“turbocapitalism.”290 However the speed and scope of innovation being
observed now suggests that the future will reveal, not merely a quantitative
change in pace but a qualitative transformation of social and economic
institutions. The nature of such transformations prevents their
consequences from being foreseen with any accuracy, so the projections to
be considered are necessarily speculative. Nevertheless speculating about
the future, inevitably making errors, is better than moving forward into the
unknown while directing our attention backwards at the economic and
social institutions of the past.
Discussion of the Internet, and particularly the rise of amateurism, is
often Utopian. Indeed, the Internet is rather like Harry Potter’s Mirror of

289. Mark Rockwell, Muni Wi-Fi Gets Warmer, WIRELESS WEEK, April 13, 2006,
http://www.wirelessweek.com/muni-wi-fi-gets-warmer.aspx.
290. E. LUTTWAK, TURBO CAPITALISM: WINNERS AND LOSERS IN THE GLOBAL ECONOMY
(1999).
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2008] MONEY RUINS EVERYTHING 255

Erised, which shows the viewer whatever they most want to see.291 Among
the academics who built the Internet this was a co-operative world in which
sharing based on mutual esteem would displace the profit motive and
render large corporations obsolete. When the emergence of the World
Wide Web coincided with the 1990s stock market boom, the mirror showed
a route to instant riches, and produced the “dotcom” mania.
Now something more akin to the older vision of collaborative creation
is re-emerging. Ideas of this kind range from the relatively sober292 to the
kind of utopianism that sees its apogee in speculation about a “singularity”
that will fundamentally transform human existence.293
Focusing on the realistic end of the spectrum, the steady growth in the
volume and sophistication of highly hypertextual components of the Web,
such as blogs and wikis, is giving rise to a steady flow of innovations that
are fundamentally transforming the way in which people interact with
information. As yet, the impact of these developments is confined
primarily to early adopters in the household sector, though these already
number in the tens of millions. However, where the early adopters have
led, the mass of household users will eventually follow.
Given this broad base, predicting that the Internet will drive
productivity innovations in the business and government sector for some
years to come is safe. The crucial question is whether this kind of model
can be extended to broader ranges of social and economic activity,
particularly those involving interaction with physical goods. The ways in
which this might happen remain unclear. One possibility is through the
extension of open and programmable intelligence to household goods and
perhaps to the way in which houses themselves work. An early example is
the TiVo programmable service, the capacities of which have been
extended by “hackers” apparently with the tacit compliance of the supply
company.294
Whatever the outcome in these areas, one thing is completely clear.
Amateur production is here to stay. The significance of this has been
utterly lost on almost all areas of policy development. It is time to change
this, to respond to the enormous opportunity that amateur innovation offers.

291. J.K. ROWLING, HARRY POTTER AND THE SORCERER’S STONE 213 (paperback ed. 1999).
292. LESSIG, supra note 42.
293. RAY KURZWEIL, THE SINGULARITY IS NEAR: WHEN HUMANS TRANSCEND BIOLOGY
(2005).
294. See, e.g., Jack Keegan, “Hacking TiVo,”
http://www.keegan.org/jeff/tivo/hackingtivo.html (last visited Jan. 25, 2008) (“First of all, there
are a few definitive links that must be stated up-front. First is the TiVo Hack FAQ. Second is the
TiVo Underground forum, where all the TiVo hackers post about hacks, new releases, etc (I'm
jkeegan there). TiVo employees monitor this forum and post from time to time.”).
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