of little value if only one person knows it. And for that reason, unlike other bits of important information, it does not seem to occur to people to keep time to themselves. Perhaps that is why we so freely give the time when someone on the street asks us for it.
But this same story tells us that a lack of technology to enable sharing can impede it. The innovations at the turn of the twentieth century enabled sharing that allowed for worldwide coordination. Einstein may have demonstrated that, at some fundamental level, the technology would never get there, but for all practical, earthbound processes, shared time became a reality. [2]
All That Glitters
Fifty years earlier, a combination of distance and accuracy had plagued another geographic movement: the shift of people and equipment to California to participate in the Gold Rush in 1849. From the routes themselves to the ability to secure supplies to the speed of travel, forty-niners demanded information. Knowledge could and did make or break their ventures. And if they got to California, they required yet more information, from maps and local knowledge, to seal the deal.
So how was accurate and timely information distributed when there were no electronic means of communication? Richard Stillson, a George Mason University historian, has documented much of the Gold Rush information that survives and paints a portrait of an old-fashioned struggle to overcome communication constraints and a very modern struggle to sort the credible from the incredible. [3] Not surprisingly, guidebooks were essential for westbound travelers, and publishers seized on the new demand. One of the most popular early on was Edwin Bryant’s What I Saw in California. Bryant, a Kentucky newspaper editor, traveled to California in 1846 with a group that included the Donner Party. Bryant missed being trapped by snow in the Sierras and was able to return the next year to write of his experiences. When the demand for information soared in 1848, publisher D. Abraham and Co. realized the value of Bryant’s account and published several expanded editions with appendixes that included more from Bryant himself. The reputation of the author made the sale.
A flood of similar books followed, but their credibility waned. Moreover, the demand for more immediate news trumped older accounts; leading newspapers got into the act of hunting for information to report back East. This proved very difficult and the newspapers cribbed shamelessly from one another. The process was further compromised by trailhead towns, which, eager for business, planted copy that maximized their own attributes and decried competing towns. The result was chaos. Similarly, rumors of faster routes spread by word of mouth, generating still more hardship for emigrants.
Newspapers also published the letters of gold-rushers who had actually made it. These were often quite detailed, but above all they turned out to be a credible source of information. Letter writers, desperate to let their worried families know what was going on, were not typically prone to stretching the truth. The natural and personal desire to share experiences with loved ones proved to be a critical source of information to many others facing similar problems.
Technology proved a critical constraint on the flow of even this information. Letter writers relied on the post office, which was hardly equipped to deal with the new volume of post from California. Moreover, bureaucrats who exerted centralized control from Washington failed to appreciate the greater pay required for postmasters and postal workers in California, leading to a labor shortage. The forty-niners, concerned that their letters were stuck in a storage room in San Francisco, lamented simply not knowing where their letters were. Private options—the express companies—filled the void (and also, coincidentally, helped solve another sharing problem, the transfer of money). Technology was simply not up to the task of making it easy to share information from the West.
Outline of the Book
The premise of this book is that such sharing is not specific to information about the time (as it was for Einstein) or information about prospects (as it was for the forty-niners). Sharing is a general characteristic of information. If I were a philosopher, I might ponder whether information, kept solely to myself, is of any value. But I’m not. Instead, I am an economist, so that directs me to think about how the sharing of information alters its demand and supply. The answer turns out to be: a lot.
The changes in technology over the last few decades have laid bare some core economics that can be summarized by the notion that “information wants to be shared.” The reasons are twofold. First, in supplying information, the costs of its creation will be more easily covered if its use can be spread across more individuals, sharing those costs. Second, the demand for information, in general, will be higher when users know that others have access to it. This may be for utilitarian reasons, as in the case of time, or for social reasons, as I will argue describes much of the demand for news. [4]
The notion that information wants to be shared has a precursor in Stewart Brand’s idea, “Information wants to be free.” Inspired by the quote, many have advocated that information entrepreneurs—specifically, providers of content—consider business models that offer information at no charge. In chapter 2, I evaluate this contention by unpacking the various alternative interpretations of the notion of free information, including a consideration of a business model based on free information. That said, it is far from obvious that such business models are the right way to proceed.
The question of what information really wants is the subject of chapter 3. Information, I argue, apropos the title of this book, wants to be shared, and I show precisely what that might mean from an economics perspective. I start with the supply-side notion that sharing of information provides opportunities to divide up the costs of its creation. In so doing, sharing can facilitate “agreement” about the apportionment of those costs. On the demand side, in many cases information that is shared can generate network effects (making joint consumption more valuable than individual consumption), especially in environments where consumer attention is scarce. Providing information where sharing is easy can give entrepreneurs an important competitive advantage.
Having established the basic economics of shared information, I turn to two industries—books and newspapers. While “disruption” is certainly a good word to describe what each is going through, the new technology enables us to expose what is really the essence of value creation in each industry. Having a firm grasp on that essence allows us to see precisely which functions will likely continue to exist in the future.
In chapter 4, I examine book publishing and its history. Books went from being a shared good (with access provided by libraries) to an owned good (with consumers owning their own copy). Digitization, though, forces us to consider the essence of a book, not in its paperbound form but as an offer for a claim on people’s attention, an offer that relies upon the activities of individuals to filter for quality. Traditional publishers performed that function with the aid of costly binding; spending so much money to actually produce a book was a kind of signal of quality. But with digitization, many have entered the “publisher space” that was formerly locked up by just a few. Moreover, the virtual elimination of distribution costs for books has brought us back full circle to the idea, once embodied in libraries, of easy access rather than ownership. Indeed, that ownership model is currently what appears to be holding reading back.
Chapter 5 then turns to the plight—there really is no other word for it—of the newspapers. For sheer reasons of timeliness, news readership is moving online. But advertising revenue has not followed readers online, and newspapers are struggling. Their reaction has been to experiment with various models to get their readers to pay for the news. Such approaches, while they seem commonsensical, stand in opposition to the sharing of information. And yet the value of sharing news is very high. This is made all the more important when one considers that the likely
