I had the privilege to introduce Larry Lessig at a Kellogg Distinguished Leader talk.  He is famous as an exponent of “open source” software and websites, like Mozilla Firefox, UNIX, Wikipedia etc.  These institutions work a bit like academia.  Many things we do as academics, and even academic economists(!), involve free labor.  Refereeing comes to mind first of course but editorial work is hugely onerous and often unpaid.  People who do all this work for free seem to contradict the basic rational selfish actor model of economics.  The rational actor is flexible enough that it can be “jazzed up” to make these facts consistent with selfishness.  Maybe your papers get better refereeing if you referee well, publishing your papers in good journals leads to outside offers which leads to higher pay etc. etc.

But why employ a convoluted explanation when the obvious one is available?  People do all this stuff for free because of the prestige, the power and the fulfillment from affecting the direction of research of entire fields of research. In our case, Jeff and I are doing this because we’re vain enough to think our random musing are interesting and useful.  I’d be at the New York Times website as usual right now if I weren’t doing this so why not?

Similar motives underlie the development of open source software and websites.   It’s got to be pretty cool to have been behind UNIX, LATEX etc.  And the stuff that has huge positive impact on welfare in much the same way as academic science has had huge impact on knowledge.  Both systems use a confusing mix of monetary and non-monetary incentives.

Larry Lessig made his mark initially by advocating looser copyright laws to facilitate this kind of free exchange of ideas.  He helped to set up the Creative Commons project at Stanford.  He worked on various cases to reduce extension of copyright laws.  But he hit a roadblock.  Special interests with an interest in protecting their monopoly power lobbied Congress, funded political campaigns and prevented his ideas being put into action.  Even commonsensical ideas (e.g. promoting reduced sugar intake) were killed off.  Larry realized the fault lay with our political system and has set out to reform it.   He and Joe Trippi have joined up to advocate for campaigns being citizen-funded rather than funded by corporations – see Change Congress.

This was the content of his talk.  I do not know if this scheme will work.  First, it’s going to depend on how much money politicians raise from regular people versus special interests.  Obama was very successful at energizing donations but other politicians are not.  If they do rely on individual donations, then there is some leverage.  But why do people may donations?  There is a huge free-rider problem in voluntary donations so the be must be some non-economic factors at work.  In my case, the one and only time I contributed, I felt as if I was paying to support my favorite sports’ team.  Just like I might buy Bulls’ T-shirts, stickers and memorabilia, I bought Obama stuff even though I knew my contribution was minor and I could buy wine with it instead!   I don’t think people like that are going to be dissuaded by Change Congress.  But perhaps some people are driven by political philosophy when thye donate.  If this is correlated with wanting to change congress this might Lessig-Trippi proposal might work.  I hope so.  Because Lessig’s main point is basic but fundamentally true.

Finally, I must turn to style.  Larry’s talk is by far the best talk I have ever attended.  I was blown away by Gore’s Inconvenient Truth presentation.  As a B school prof I’m always impressed by Powerpoint slides!  I never saw Gore’s talk live.  Lessig I saw live and this is the best talk I have ever witnessed in person.  To get a flavor, see here.  I must sign off and work on my slides for next 1/4.

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