We are just at the beginning of a major transition in the way things will be created and distributed. We call this new form of creation “non-rivalrous economics”.
Historically economics has been mostly about “rivalrous” goods; that is, goods that either I can obtain and use, or you can, but not both of us. A common example is a ham sandwich. Either you can eat the whole thing, or I can but we both can’t eat it all.
Goods are considered “non-rivalrous” when incremental manufacturing or copying is very inexpensive relative to the “one time” cost of designing and creating the initial product. A good example is music: while it can take a lot of work and investment to create a musical recording, it costs very little to download a copy of that recording to a playback device.
This certainly applies today to music, but also to things like video (movies, TV shows), software, and many books. In principle, virtually anyone who wants a copy can get one in electronic form. The fact that I have a copy doesn’t keep you from having one as well. There is no rivalry over who gets to eat the ham sandwich.
Currently the concept of “intellectual property rights” limits the distribution, and hence the potential value available to society as a whole, from what would otherwise be freely available “non-rivalrous goods”.
If goods that are by their nature “non-rivalrous” were available for the minimal costs of duplication, more people could benefit from them. The total value of those goods would increase compared to today’s restricted world of intellectual property rights, where goods that are inherently non-rivalrous are wrapped with a rivalrous container such as a recording or publishing contract.
The argument for maintaining or increasing prices long after developmental investments have been recovered has been that: “the lure of potential gain from intellectual property creation is NECESSARY to incent people to create things of value.” That argument posits that if you eliminated intellectual property rights which facilitate return on investment upon universal distribution, you would kill the incentive for people to create and build new works of value.
We believe we have a solution to this dilemma: leave intellectual property rights in place for those who prefer to create on the historical “intellectual property rights” model. Markets will decide if that is the best choice for creators who chose it. We envision adding a new road for creation of “non-rivalrous” goods that allows for universal copying and distribution.
We call this new road “Open Creation”. What is Open Creation? It is the creation of “open source” non-rivalrous goods funded by “Open Creation Money”.
As part of their monthly “Free Money” allocation as described in the monetary reforms deriving from the “Jubilee”, each Citizen would receive $10/month of Open Creation Money. It would be regulated the same way as the “Political Money” described above in our “Citizenship Wage” reform in that it could ONLY be spent on “Open Creation” initiatives.
Just as Political Money gets converted to Free Money by Legal Political Entities and then spent for political purposes (campaigns and/or lobbying); Open Creation Money would also have its own special Legal Entities. For now let’s call them “Open Starter Platforms”.
The “Open Starter Platform” would operate much like “Kickstarter.com” process operates today: Creators would propose projects with pro forma budgets. People could donate Open Creation money (and/or Free Money) to projects that they think are worthy of support. If the budgeted amount is reached, the funds would go to the creators to do the project.
The big difference between the traditional and the “open Starter” processes is that all projects funded by an Open Starter Platform are required to be Open Source, which means that once something is created, anyone would have the right to use or duplicate it for their own use.
Truly digital goods like music and video would be obvious things to be created with funding from Open Starter Platforms. With the emergence of “custom manufacturing” as evidenced by the emergence of 3D printers and very short-run manufacturing technologies, artifacts could be Open Started as well. For instance, someone could make costume jewelry, sculpture, and even clothing by creating the design documents (for instance in an AutoCAD file) and then making all the goods they could sell as a one-off or in larger volumes.
Manufacture wouldn’t be limited to one-at-a-time methods either. Wal-Mart could take designs they select and send them off to China and have them manufactured at large industrial volumes. K-Mart could tweak a design (but in line with Open Source traditions would be required to give the revised design back to the Open Starter community) and make a bazillion more. Maybe, through Open Starter, a nice simple alarm clock or home brewing machine could finally be born!
Even drugs could be Open Started. There would probably have to be a series of “funding rounds” corresponding to the FDA approval steps, but once approved, they could be picked up by any licensed “generic manufacturer”. This could be a tremendous new way to decentralize the attack on disease.
Anyone could open up an Open Starter Platform, which would be subject to some modest regulation, on the order of that required to qualify as a 501 C 3 tax deductible charity. Open Starter Platforms could and probably would specialize, such as Open Starter Platforms for movies, and others for music, and still others that specialized in sculpture or clothing.
One could be compensated for operating a successful Open Starter Platform. Optionally a fee of up to 5% of the funds raised by all projects on the Open Starter Platform could be assessed by the Open Starter Platform operators to both cover their costs and to make a profit. This way a person or a group with wonderful curatorial skills who nurtured a great Open Starter Platform culture could potentially make a satisfactory and motivational return on their investment of time and money. At 5% of the creation budget, this should only be a more fair-minded fraction of the extractions by the “arts industry” intermediaries of today, like music companies, movie studios and art galleries.
The creators themselves could also be well compensated. Open Starter projects would have published business plans (Real Transparency of course applies, including total visibility of project checkbooks) and these business plans *could* call for MAJOR compensation to a creator. For instance, suppose Steven Spielberg decides to fund his next movie via an Open Starter project. He *could* put in his business plan: “of the total budget of $75 million, my fee as director and creator is $15 million”. Whether people *would* fund that is an open question. If they do, so be it.
Certainly earnings at the level of “making a living” would be expected to emerge and to be acceptable in many communities. But it is up to a community of creators, Open Starter Platform operators, and their supporters to develop their own norms of what is an acceptable level of return and what isn’t, in the context of Real Transparency.
What about the potential for fraud and rip-offs? We should expect in any human enterprise there would be some. To keep fraud to a minimum and to more generally provide useful information to funders, a key part of the ecosystem would be a robust reputation system.
Identity in the system would be clear as it would require the posting of a person’s “Free Money ID”. An Open Starter project would have to identify, by Free Money ID, the Project Team that is proposing the project. By clearly identifying themselves, the Project Team would be putting their reputations on the line and validating that the proposed project is legitimate and worthy.
The overall Open Starter ecosystem would have an associated “reputation system”. All Project Team members would be linked All Open Starter projects. All projects be linked to a public record of feedback and ratings from consumers or users of the projects and their products. After a first project, Project Team members records of success or failure on their Open Starter projects would be available as part of the decision by people to fund a project.
The track record of Project Teams would be a key factor in recruiting investors or participants for a project. People with a history of uncompleted projects, or low quality results would presumably have an increasingly difficult time getting funding for new projects. On the other hand, a track-record of success on small projects would enhance support for creating larger ones. Indeed, that is probably how most Open Creation careers would work; a person starts with a tiny project, probably funded by friends and family. If it is successful, they may try another, more ambitious project with funds from the neighborhood or community or audience the product serves, and onward and upward until there is a track-record.
Open Starter Platform operators would also be identified and linked into the reputation system. The track-record of the Open Starter Platform and all of the Open Starter projects they have previously been affiliated with would be browse-able. Again, like Project Teams, one would expect Open Starter Platform operators to start small; maybe rounding up funds from friends in high school and those with some talent for the job. They could then move on to larger and larger Open Starter Platforms (assuming they could continue to attract funders) until they were happy or until they reached their maximum level of competence.
As another tool against fraud and rip-offs, Open Starter Platforms could specify that for all of their projects, the actual funds would be kept in custody of a ‘trusted third party” such as an accounting firm, [or the EP Credit Union, also a transparent entity] and only available to be spent according to the published business plan. It might turn out that the extra red-tape and cost of such custodial disbursement arrangements would make it much easier to raise money and inspire trust in the system. Or it might not. Or it might become a cultural norm to do it for projects “over $x” or for “all projects by people under 25” … Let the market sort it out…
So, let’s assume that we start the “Open Creation” process with $10 per Citizen (including the kids) per month. That doesn’t sound like a lot, but in America today it would total $36 BILLION a year. To put that in perspective, the total movie box office in the USA is on the order of $10 billion a year, and certainly only a fraction of that goes to “the talent and crews” that create the movies.
Indeed one of the truly wonderful things about this scheme is that the “Talent” (and their supporting crews) can free themselves from the finaglers and financiers and sales types that eat up so much of the cultural dollar today. And even better, creators would no longer be dependent on the “suits” that act as “cultural gate-keepers” in regard to what can and cannot be created. Under Open Creation, distribution could take care of itself, though clever memetic marketing, which will be a skill in high demand. The creation of demand will no doubt remain valuable, if only to help build the reputation of the creators.
Even better, if the citizens of our “Clean Democracy” believe that we as a society are getting a great value for our expenditure, we can increase the Open Creation funding. With the “Money in Politics” link broken, the Intellectual Property community will find it more difficult to head for Washington, throw a few dinners, schmooze a few Pols and maintain their domination. In this new creative environment one can imagine a fairly rapid invasion of our economy by truly non-rivalrous goods that anybody and everybody can have at the marginal cost of duplication (often near zero).
It seems reasonable to expect that early in their careers most Creators would prefer the Open Creation system, and most would probably stay there. However, some may prefer to trade the ability to make a decent living, for the “lottery ticket” of a contract with a manufacturer or publisher; and thereby, to either starve or make millions. As our Open Creation budget increases over time, there may be no need to maintain Intellectual Property Laws. Perhaps everything interesting will go to Open Creation …and traditional IP will slowly fade away. The market will decide.
And finally, we could specify that Federal “project grant” agencies, such as the National Science Foundation, National Institutes of Health, and Department of Energy would be required to allocate initially 5% of their grants to Open Starter projects. If they provide better return on investment than traditional directed grants, then over time the percentage could be increased, perhaps eventually to 100%.
For the National Endowment for the Arts the required minimum could be 50%, and only for very good reason should it not quickly go to 100%. Why shouldn’t The People’s money go for creation in the Public Domain?