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| 17 2 Sharing Nicely On Shareable Goods and the Emergence of Sharing as a Modality of Economic Production Yochai Benkler The world’s fastest supercomputer and the second-largest commuter transportation system in the United States function on a resource-management model that is not well specified in contemporary economics. Both SETI@home, a distributed computing platform involving the computers of over four million volunteers, and carpooling, which accounts for roughly one-sixth of commuting trips in the United States, rely on social relations and an ethic of sharing, rather than on a price system, to mobilize and allocate resources. Yet they coexist with, and outperform, price-based and government -funded systems that offer substitutable functionality. Neither practice involves public goods, network goods, or any other currently defined category of economically “quirky” goods as either inputs or outputs. PCs and automobiles are privately owned, rival goods, with no obvious demand-side positive returns to scale when used for distributed computing or carpooling .1 The sharing practices that have evolved around them are not limited to tightly knit communities of repeat players who know each other well and interact across many contexts. They represent instances when social sharing2 is either utterly impersonal or occurs among loosely affiliated individuals who engage in social practices that involve contributions of the capacity of their private goods in patterns that combine to form large-scale and effective systems for provisioning goods, services, and resources. This chapter in its original form serves as the introduction to a longer essay that seeks to do two things. The first three parts of the full essay are dedicated to defining a particular class of physical goods as “shareable goods” that systematically have excess capacity and to combining comparative transaction costs and motivation analysis to suggest that this excess capacity may better be harnessed through sharing relations than through secondary markets . These first three parts extend the analysis I have performed elsewhere 18 | Yochai Benkler regarding sharing of creative labor, like free software and other peer production ,3 to the domain of sharing rival material resources in the production of both rival and nonrival goods and services. The characteristics I use to define shareable goods are sufficient to make social sharing and exchange of material goods feasible as a sustainable social practice. But these characteristics are neither absolutely necessary nor sufficient for sharing to occur. Instead, they define conditions under which, when goods with these characteristics are prevalent in the physical-capital base of an economy, it becomes feasible for social sharing and exchange to become more salient in the overall mix of relations of production in that economy. The fourth part of the full essay is then dedicated to explaining how my observation about shareable goods in the domain of physical goods meshes with the literature on social norms, social capital, and common property regimes, as well as with my own work on peer production. I suggest that social sharing and exchange is an underappreciated modality of economic production, alongside price-based and firmbased market production and state-based production,4 whose salience in the economy is sensitive to technological conditions. The last part explores how the recognition of shareable goods and sharing as a modality of economic production can inform policy. Shareable goods are goods that are (1) technically “lumpy” and (2) of “midgrained” granularity. By “lumpy” I mean that they provision functionality in discrete packages rather than in a smooth flow. A PC is “lumpy” in that you cannot buy less than some threshold computation capacity, but once you have provisioned it, you have at a minimum a certain amount of computation , whether you need all of it or not. By “granularity” I seek to capture (1) technical characteristics of the functionality-producing goods, (2) the shape of demand for the functionality in a given society, and (3) the amount and distribution of wealth in that society. A particular alignment of these characteristics will make some goods or resources “midgrained,” by which I mean that there will be relatively widespread private ownership of these goods and that these privately owned goods will systematically exhibit slack capacity relative to the demand of their owners. A steam engine is large grained and lumpy. An automobile or PC is midgrained in the United States, Europe, and Japan but large grained in Bangladesh. Reallocating the slack capacity of midgrained goods—say, excess computer cycles or car seats going from A to B—becomes the problem whose solution can be provided by...

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