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If you have to pay each time you retweet someone else, won’t we all retweet less, undermining the power of social networks? And just who should pay who for a retweet? In many cases I’m the one who benefits if you retweet me, so maybe I should pay you. Perhaps it’s Lanier’s “central regulator” who will make this determination on a per-tweet basis while it’s setting prices.
And how does Lanier know that the economy he’s creating will be big enough to support a middle class? There’s no evidence presented that his system would make the pie bigger, although he asserts that it would. Yet even if Instagram’s users got all of the money from the company’s sale to Facebook, they would only have received $28 apiece. There’s not much “economic dignity” in that, so I imagine the “central regulator” would have to set much higher prices, which would drive down consumption.
It’s also not clear how a price-setting “central regulator” would be better in this system than previous central planners, whose efforts Lanier admits don’t work. Nor is it clear how such power to set prices or to issue IDs and track people won’t be subject to abuse and corruption. Lanier’s plan does not “specify the proper limits of government in an advanced economy,” he writes. “These and many other huge questions cannot be addressed yet.”
Most important, Lanier ignores the fact that we are already compensated for the value we create online. Sure, we don’t get paid to put our cat videos on YouTube or to edit Wikipedia articles, but the fact that we do so “for free” signals that we feel we’re getting something in return. We don’t get paid to have our habits watched by Facebook and Google, but we allow it in exchange for access to their services. If we didn’t feel we were getting a benefit for our little actions, we wouldn’t be doing them “for free.” Amazon’s Mechanical Turk, which pays individuals small amounts to complete tiny, discrete tasks, is a perfect example of how Lanier’s scheme already exists when it’s more efficient to have an explicit payment.
Lanier’s concern for the middle class is noble, but his economic illiteracy is unforgivable in a book that is ultimately a prescription for economic policy. Even if his system succeeded in creating a large middle class, we’d all be the poorer for it.
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