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Book Review: “The Wealth of Networks: How Social Production Transforms Markets and Freedom” by Yochai Benkler

Posted in review by filizefe on November 16, 2009

Benkler, Yochai. “The Wealth of Networks: How Social Production Transforms Markets and Freedom” Yale University Press, New Haven, 200.

In his book “The Wealth of Networks: How Social Production Transforms Markets and Freedom”, Yochai Benkler examines the emerging social production in the digitally networked environment and how it transformed our most fundamental understandings of our society, economy and democracy. These new ways in which we produce and share information in the digital network, not only changed all of our lives but also the way information is capitalized, emphasizing on the commons-based peer production, the collaborative efforts, such as Wikipedia, Creative Commons and open source software, which are based on sharing information. (The Wealth of Networks is itself published under a Creative Commons license)

There are three parts to the book. In the first part, Benkler explains the emerging patterns of nonmarket individual and cooperative social behavior, and how this affects the economics of information production and sharing. The second part delves into the political economy of property and analysis to claim that these emerging practices offer defined improvements in autonomy, democratic discourse, cultural creation, and justice. The third section addresses the policies and questions the future of the internet and opportunities for democratic participation, and the creation of culture.

In the industrial society, information economy has been simply described as the information and services, rather than physical goods and services, which are based on the exchange of knowledge (DFEEST, 2008). Industrial information economy is now being displaced by the networked information economy. As Chris Anderson also argues the post-industrial information economy in his book “Free: the Future of a Radical Price”, the marginal cost of every product on the digital platform approaches zero, because once it is digitized it costs almost nothing to reproduce and distribute information. Information as a good and information technologies have replaced the goods which are made of atoms, and made a radical change in the way information is capitalized.

Benkler brings forward the possibility that “a culture where information were shared freely could prove more economically efficient than one where innovation is frequently encumbered by patent or copyright law, since the marginal cost of re-producing most information is effectively nothing.” (Wikipedia, 2009) He examines this radical economic change and how social dynamics drives the information production and information sharing to a non-market and decentralized framework. Previous communication technologies centralized communication, but the Internet and the declining costs of computation, communication and storage capacity provide new ways of social sharing and exchange of information. Although social sharing and exchange of information, is not a new phenomena. It’s not the first time we do good things to each other as social beings, but It’s the first time it is having major economic impact.

Information economy is shifting from physical products to decentralized and non-market information goods. Networked information economy, is not dependant on the market strategies. The most important components of the information economy – computation, storage and communications capacity – are now in the hands of population at large.

As a modality of economic production, social sharing and exchange is decentralized authority in a non-market based production framework. Below chart shows the four transactional frameworks and where this emerging networked information economy takes its place.

Benkler's four transactional frameworks

Benkler's four transactional frameworks

Benkler brings four economic observations:

1- The proprietary strategies of information economy are not as dominant as it is perceived. Most of education, arts, and sciences are merit based or volunteer based. Most of information is derived from non-market based systems.

2- The proprietary strategies make access to information resources more expensive for all as ownership becomes more restrictive.

3- As the information production, storage and sharing systems become cheaper and accessible, non-proprietary peer-production and sharing models become more attractive than ever.

4- The rise of peer-production: We coproduce and exchange economic goods and services, but we do not count these in the economic census. “The pooling of human creativity and of computation, communication, and storage enables nonmarket motivations and relations to play a much larger role in the production of the information environment than it has been able to for at least decades, perhaps for as long as a century and a half.” (Benkler, 2006, pg. 464)

In conclusion, Benkler in his book, brings a solid analysis to the emerging networked information economy, a detailed explanation to the social production and sharing dynamics, and discusses the social and cultural possibilities in the future. The book covers many important issues, such as intellectual property, copyright laws, personal freedom, and democracy, and it might worth to read through the whole book for a deeper understanding of the nature of the networked information economy. However, the length of the book and his long labyrinthine sentences are intimidating. I strongly suggest readers to have a look at his interviews, talks and lectures online to get the gist of his argument and warm up, before reading the book.


Anderson, C. (2009). Free: The Future of a Radical Price. New York: Hyperion.

Benkler, Y. (2006). The Wealth of Networks: How Social Production Transforms Markets and Freedom. New Haven [Conn.]: Yale University Press.

DFEEST (2008). “What is the Information Economy?”. Creating Online Opportunity. Information Economy. Retrieved on Nov 15, 2009 from

Yochai Benkler. (Oct 13, 2009). In Wikipedia, The Free Encyclopedia. Retrieved Nov 16, 2009 from