Positive Externalities

Some of the primary goods of society are positive externalities; that is, the value we bring to other lives through things we do for other, perhaps selfish, reasons. When we map our city to make it easier to get around and share the map, the city is easier to navigate for everyone. When we discover a new way to fix something and then tell others, value is passed along with no special effort. When we improve upon most aspects of our lives, other people get spillover, even if it’s just better interactions with us.

Cory Doctorow recently had an article published in The Guardian under the awkward title “Just because something has value doesn’t mean it has a price” in which he pointed out how trying to minimize positive externalities is a big problem for businesses. DRM, post-sale restrictions, withholding users’ own data, and trying to receive payment for unanticipated benefits are terrible wastes of resources and reduce the value of goods and services. Putting effort into making what you do less valuable is a very harmful approach, but countless businesses behave in this way.

Positive externalities — virtuous cycles — are all around us. Your kid learns to speak because of all the people around her who carry on conversations and because of the TV shows and radio programmes where speaking occurs (as do immigrants like my grandmother, whose English fluency owes much to daytime TV after she came to Canada from Russia).

That’s the crux of this irrational fear of positive externalities: “If something I do has value, I deserve a cut.” It’s one thing to say that someone who hires you to do a job, or purchases your product, should pay you money. But positive externalities are the waste-product of something we were already going to do. They’re things that you have thrown away, that you have thrown off, that you have generated in the process of enjoying yourself and living your life.

The mania to internalise your positive externalities is the essence of cutting off your nose to spite your face. I walk down the street whistling a jaunty tune because I’m in a good mood — but stop as soon as I see someone smiling and enjoying the music. I keep my porchlight on to read by on a warm night, but if I catch you using the light to read your map, I switch it off, because those are my photons — I paid for ’em!

Worse still: the infectious idea of internalising externalities turns its victims into grasping, would-be rentiers. You translate a document because you need it in two languages. I come along and use those translations to teach a computer something about context. You tell me I owe you a slice of all the revenue my software generates. That’s just crazy. It’s like saying that someone who figures out how to recycle the rubbish you set out at the kerb should give you a piece of their earnings. Harvesting positive externalities involves collecting billions of minute shreds of residual value – snippets of discarded string –and balling them up into something big and useful.

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