Public versus Private Domain : Knowledge and Information in the Global Communications Network

László Fekete


It goes without saying that knowledge and information are the most valuable com-modities in the new economy. Though knowledge and information as private goods could provide great business opportunities for rights holders in the global communications network, they exhibit the distinctive characteristics of public goods (Samuelson 1954, 387-389; Stiglitz 1999, 308-325). Therefore, the commodification of knowledge and information requires a strict proprietary regime which restrains free access to them and enforces effective legal pro-tection over their production, use, and dissemination. If the accessing and using rights of the individual users were free and unlimited the legal entitlements of rights holders would be worthless.

The pervasiveness of the new information and communications technologies as power-ful learning and knowledge sharing systems and the digitalization of knowledge and informa-tion goods facilitate their production, use, and dissemination, and at the same time make diffi-cult and expensive to enforce effective proprietary regulation and control over them. In addi-tion to the difficulty and the high transaction costs of the legal enforcement of proprietary rights, the social climate does not seem to be particularly supportive to the propertization of knowledge and information in the global communications network. In spite of the current trends of restrictive legislation and jurisdiction as well as of expansive and unprecedented private legislation of the rights holders, society persistently tends to believe that knowledge and information mainly belong to public goods and resists accepting their growing private appropriation and effective proprietary control over their production, use, and dissemination. Briefly, knowledge and information are usually conceived as a common pool of symbolic resources for the cultural reproduction of society. So, people are not willing to pay for knowl-edge and information goods to regain what they believe to be rightfully entitled to know, use, and contribute to. Without the empowerment of the possession and exercise of these individ-ual rights and freedoms, people merely are kept aloof from becoming the autonomous mem-bers of political-cultural community.

The rights holders also endeavor to control the flows of all forms of computer-mediated contents by means of the private ordering of accessing and using rights of users in combination with copy-protection technologies, digital rights management systems, platform dependent applications, micropayment system, zoning, and so forth (Benkler 2006, 397-459). They go well beyond the initial rights and legal entitlements originally assigned to them by the law and habitually infringe the basic constitutional rights of the users, like freedom of expression, the right to privacy, and the right to fair trial by taking advantage of the opportu-nity of forum shopping (Balkin 2004, 19-22; Boyle 2000, 345-350; Netanel 2000, 1879-1886; Walker 2003, 24pp). These private encroachments on the users’ individual rights and liberties further incite discontent and resistance. It is not surprising that hackers, cyberpunks, outlaws, and code breakers are usually regarded as public heroes and heroines in urban folklore who fight the enclosure of the public domain and the infringement of constitutional rights and lib-erties of the users. They are rarely stigmatized as villains therein.

The Tragedy of the Commons or the Anticommons?

Besides this common belief, many legal scholars, philosophers, scientists, and social scientists also emphasize that knowledge and information are social and cultural products made, shared, settled, and revised in democratic discourses, open scientific debates, and the pragmatic self-understanding of society. Therefore, the basic notions of mainstream economic paradigm about scarcity, exhaustibility, rivalry, and excludability, which are the distinctive characteristic of tangible goods, can be hardly applicable to the production, use, and distribution of knowledge and information (Kaul et al. 1999). In some respects, knowledge and information are not fit into the framework of neoclassical economics. Each individual can maximize the use of knowledge and information goods without exhausting the original re-sources, passing an excessive cost burden onto others, leaving anybody worse off than before, or excluding anybody from parallel exploitation and enjoyment. The overexploitation of knowledge and information does not bring about economic shortage and social threat; mean-while, their underexploitation could lead to economic backwardness and social degradation (Vanneste et al. 2004, 13-14). An open-access regime does not have inevitably harmful effect on social welfare, artistic, cultural, and scientific advancements as some law and economics scholars endeavor to argue against the public domain referring to Demsetz’s theory on the impact of externalities in the development of property right system and Hardin’s popular metaphor about the tragedy of the commons (Demsetz 1967, 347-359; Epstein 1989, 1488-1489; Hardin 1968, 1243-1248; Landes and Posner 2003, 471, 487-488). As a consequence of positive externalities and network effects, knowledge and information will never be exhausted under an open-access regime. In lack of rivalry, an open-access regime does not cause con-gestion or overcrowding in the use of knowledge and information, either. The opposite is the case: hedonistic and flamboyant behaviors in the consumption of knowledge and information goods are quite desirable. Therefore, converting Adam Smith’s frequently quoted proposition, every prodigal man appears to be a public benefactor, and every frugal a public enemy in the production, use, and dissemination of knowledge and information goods. Under an open-access regime, knowledge and information will be continuously proliferated. Meanwhile, un-der a proprietary regime, the strict private control of the production, use, and dissemination of knowledge and the flows of information can cause scarcity, underprovision, inefficient re-source allocation, endowment effect, holdup problems as well as deadweight social losses and cultural entropy (Heald 2007, 35-41; Gordon 1992, 153-163, 177-180; Netanel 1996, 306-336; Posner 1992, 277-278; Schultz 2002).

According to the mainstream economic paradigm, non-rivalry and non-excludability of knowledge and information goods are especially serious impediment which could frustrate the rights holders to recover production costs and to earn return on investments even if de-mands are sufficient and society attributes high cultural and economic values to innovative knowledge and novel information goods. For the reason that each additional user can con-sume knowledge and information goods, whether it is on-line newspaper article, scientific paper, symphony, or software once have been produced, at almost zero marginal costs, market itself is not a proper mechanism to set price above them. Knowledge and information as pub-lic, non-rival, and non-exhaustible goods are truly idiosyncratic to the established system of the market economy and the basic tenets of neoclassical economics. Therefore, knowledge and information as proprietary goods entirely rely on the existence of intellectual property laws and the effective legal enforcement of rights holders’ proprietary claims. Indeed, the law itself transforms knowledge and information into commodities. By marking out the boundary corners of knowledge and information goods in the elusive fields of culture and staking out the legitimate claims of rights holders in terms of the scope and length of protection, govern-ance, excludability, and exclusivity, the law makes knowledge and information scarce, rival, exhaustible, and excludable economic resources in order to recover the production and devel-opment costs and to ensure the economic gains and further commercial opportunities of pri-vate beneficiaries. The imposition of legal, judicial, and technological constraints on the pro-duction, use, and dissemination of knowledge and information goods serves the aims of the refutation of the basic feature of culture, science, and communication as collaborative enter-prise and the reinforcement of the well-established division between producers and consumers (Barthes 1974, 4-5). If the law provides individuals and business entities with proprietary rights and legal entitlements over the production, use, and dissemination of knowledge and information goods, non-owners’ rights and freedoms will be inevitably circumscribed.

The rise of the global communications network as a new public forum for collabora-tive enterprises, creative endeavors, and information exchange is juxtaposed with the private appropriation of knowledge and information goods from the outset. The enormous success of the global communications network demonstrates that it can very efficiently fulfill the func-tions of production, use, and dissemination of knowledge and information. Since the global communications network has become a cornucopia of knowledge and information in the last fifteen years, it proves that the digital amplification and global accessibility of the public do-main do not fade the spirit of innovation away. The exponential increase of cultural and tech-nological innovation renders the well-established economic argument inapplicable, that is to say, exclusive proprietary rights over knowledge and information goods are necessary to cre-ate suitable incentives for owners to produce them and efficiently exploit their inherent eco-nomic values. Economic data do not support the fear of underproduction of knowledge and information goods owing to the liberal or relaxed intellectual property rights regime as the advocates of strict and extended regime complain. And what is more, its smooth and evolving operation is also feasible from the economic point of view. However, it still needs to be proven that the expanding propertization of knowledge and information goods – ranging from gene sequences and mathematical theorems to scientific databases, software algorithms, and cartoon figures – and the complete internalization of the benefits of their inventions and uses will enhance social welfare in general; their private appropriation and the creation and enlargement of exclusionary anticommons will further stimulate the amplification of their production, use, and dissemination (Balkin 2004, 26-31; O’Rourke 2000, 1178-79).