Google vs Wikipedia, for-profit vs not-for-profit
When Wikipedia was new, there was much entusiasm over it’s not-for-profit model. Recent years have seen a steady decline in the number of users, though. Meanwhile, companies such as Google and Amazon grow ever larger and are, arguably, besides making huge profits contributing to the growth of human knowledge and prosperity on a massive scale.
An important question in this regard is to what extent information should be generated and controlled by not-for-profits such as Wikipedia (or even the government) or by for-profit entities. What are the advantages and disadvantages of these different systems? To some extent they are the same as for any other economic activity, but producing and organizing information are of course quite different from producing cars in ways that are relevant to this question.
Advantages for the for-profit system:
The main advantage of the for-profit system is that has a tendency to make for more efficiency. The cut-throat competition among IT companies forces them to become more efficient and innovative. Meanwhile Wikipedia does not seem to be either very innovative or efficient, since an oligarchy of old wikipedians block most new ideas (according to the article above).
Advantages for the not-for-profit system:
The idea underpinning market economics is the “invisible hand” which is supposed to aggregate everybody’s selfish behaviour into collective good (given a certain institutional set-up). When it works, it often does so brilliantly, but unfortunately companies often don’t have an incentive to behave in a way that is beneficial for the community. For instance, many social media make it hard to delete accounts, do but a bare minimum to combat criminal activities on their sites, etc. In short they don’t work in their users’ interests, and hence fails to maximize the collective good. Another problem is that the massive amount of information they acquire isn’t shared properly, as pointed out in an article in Science:
Google is a business, but it also holds in trust data on the desires, thoughts, and the connections of humanity. Making money “without doing evil” (paraphrasing Google’s motto) is not enough when it is feasible to do so much good. It is also incumbent upon academia to build institutional models to facilitate collaborations with such big data projects—something that is too often missing now in universities.
Within the open-source movement, people argue that information is fundamentally different from other sorts of goods. Since sharing information essentially involves no costs, we should produce and organize information in a fundamentally different way. Companies shouldn’t be able to monopolize information but to some extent be forced to share it, the argument would go.
Best of two worlds?
Could we somehow take the best out of both systems to create an optimal mix? One possibility would be to let for-profit-companies operate on a not-for-profit “platform”. For instance, say that Google had been a not-for-profit. It would have allowed different for-profit-companies to make use of data concerning Google users, to construct apps connected to the other Google services, etc. However, the behaviour of these companies would be heavily monitored by the not-for-profit host. Any signs that they didn’t serve their members interest would mean they were thrown out. They would be forced to share information deemed useful with scientists (if they requested that).
They would also have to pay hefty fees to the host, of course—possibly higher the greater they became, since low fees for startups would encourage innovation. In effect, such a system would amount to progressive taxation.
This system would thus make use of the power of greed, but harness it more efficiently than the present system. In order for selfishness to give rise to collectively good outcomes, we need to set up institutions accordingly. The invisible hand is no magic: if the regulations do not incentivize people to behave in a socially optimal way, they won’t.
Edit: One thing I had thought to comment on but which is important is this. Lots of internet markets naturally develop into monopolies. If you want to sell/buy something online, you want to be on the website where most buyers/sellers are. Hence more people flock to the leader of the pack, which thereby becomes even more dominant, etc. The same goes for dating sites, both general (e.g. Facebook) and niched (e.g. LinkedIn) social networks, etc. As a result, they can make enormous profits. For instance, the Swedish site Blocket, which is the market leader consumer-to-consumer site in Sweden, has had a profit margin of more than 50 % in some recent years. Sites like Uber and Taskrabbit charge users 20 % which seems quite a lot for the service they provide (especially in Uber’s case).
Markets for cars, clothes or what have you do not develop into monopolies as easily. Therefore it seems that this factor, too, speaks in favour of being a bit more suspicious of the notion that self-interested actions will give rise to collectively good outcomes within the present system when it comes to internet markets than when it comes to old-fashioned goods markets.
Sites like About.com are essentially for-profit wikipedias (and have often lifted content wholesale from Wikipedia), and they are considerably less popular than Wikipedia, and depend on the whims of Google Search for their revenue.
Wikipedia succeeded as an online encyclopedia by any reasonable measure. That mission is a smaller one than the most ambitious things we can imagine for it, but that’s okay. Wikipedia makes a huge impact for its capital cost.
And yes, plenty of for-profits go bust. The fact that wikipedia is considerably more secure is very useful.
Google is great at being Google, and part of that is being for-profit. Wikipedia is great at being Wikipedia, if you accept that it’s current state is going to be roughly steady, and part of that involves being a non-profit.
What’s happened with Wikipedia probably can be characterized better as “saturation” than “decline”. If you satisfy your entire market, you stop growing.
http://stats.wikimedia.org/EN/ChartsWikipediaEN.htm
gwern’s argument for decline.
Interesting. However, one would also like to know the causes of why Wikipedia’s leadership started to behave in this way. One possible explanation is that they didn’t have enough monetary incentives. If they would have had stronger incentives to keep the number of revisions growing they would have implemented policies that made sure that happened. I think there could be something to that—that if Google’s Knobe had outcompeted Wikipedia, it wouldn’t have had the same problems, because it would have been more rationally governed.
If wikipedia were run on ads- that is, pageviews- then deleting a popular page because of a lack of ‘notability’ would result in a revenue loss, and so would be less likely that leaving it up. It’s harder to hijack a for-profit to optimize for status than to hijack a non-profit, but still possible for both.
However, it is not obvious to me that wikipedia would have had the contributor growth it did if it were a for-profit project.
Certain people just get a kick out of bossing other people around, because humans run on corrupted hardware.
Anothe explanation would be that they had too much monetary incentives. Jimmy makes money with Wikia and when the person who wants to write his article about his favorite Pokemon goes to Wikia because it’s not allowed on Wikipedia that’s in Jimmy’s financial interest.
Jimmy Wales has no editorial power now (if he says the sky is blue, 100 people will immediately compile a referenced list of all the times it’s green) and he didn’t then either. The people killing and merging Pokemon were pathological all by themselves. The media has a strange idea of how Wikipedia works, but it’s actually completely wrong.
Do you think that something like the naked short selling fiasco wouldn’t repeat today the same way?
I was in the thick of that one (blocking a pile of the Overstock.com sockpuppet army), and I think it wouldn’t because spammers and paid editors are much less accepted. It also has absolutely no link to your original assertion. Do you have anything that actually supports that?
It’s my understanding that Jimbo is not even allowed a corporate credit card from the Wikimedia Foundation these days. Editorial policy is created by editors, not by the Foundation, and not by Jimbo Wales.
What Jimbo does these days may bear little resemblance to what he was doing in those crucial years 2005-2009 where the die of WP editing culture was cast (in a different sense of ‘die’, if you follow).
“may bear” is literally meaningless. We have every edit of the megabytes of tedious and querulous on-wiki discussion about the content rules; if you’re trying to assert there’s evidence for Christian’s claims, then referencing to the diff is eminently possible. You were there and so was I, it’d be long-winded but shouldn’t be impossible.
I remember very well many of the discussions, yes. For example, I remember how Jimbo flagrantly lied about ever running a study on the effect of turning off anonymous page creation. I also remember the many questions about conflicts of interest dogging Wikia from the day it was created.
I do not expect true motives to be written down. If Jimbo tolerated and endorsed deletionist approaches, ramming through changes like disabling anon page creation, due to conscious or subconscious conflicts of interest—do you really think he and the other WMFers who were associated with Wikia would have written it down in public?
Could you give a few links?
No, not really. This is all stuff from years ago (8 years now, I think, in the case of anon page creation). I’m sure it can all be dug up, but it can be quite a challenge to figure out where in the archive pages or revision histories an exact statement was made. And all of this was well-known to us core Wikipedians from that era, so it’s not like I ever needed cites.
Augustus also billed himself as first among equals.
But Jimmy claims more power for himself. He’s the monarch of Wikipedia as of last year.
I found your summary a little misleading. When I followed your link, I found this:
It’s not intended to be a summary.
I spoke more about symbols than actual power. Whether or not Jimmy is “allowed” a corporate credit card from the Wikimedia Foundation is symbolic. It doesn’t tell us how much power he has to shape Wikipedia policy in the direction of his own interests.
Furthermore I think that Jimmy is not the only person on the paycheck of Wikia who has an influence on Wikipedia policy. Jimmy probably recruited some of the 200 employees of Wikia out of high level Wikipedians.
Without being an Insider it’s hard to estimate the extend of his political power inside Wikileaks, but I wouldn’t estimate it to be low.
You mean, he might have this power there’s no evidence for him wielding, therefore he does have the power?
This is not a good standard of evidence.
Having power and wielding it are two separate shoes. In the article he writes that he does have certain powers that he’s seldomly using.
Secondly I have not argued that I’m certain that he has the power. I’m not a person who thinks in of binary categories of 0% and 100%. Don’t project that into my writing.
The German Wikipedia is notorius for deleting articles because of “lack of encyclopedic relevance”.
In English Wikipedia this is called “deletionism”. Although I’m not a huge fan of it, deletionism has had its successes, when seen in a wider context — namely the creation of many, many more wikis on the Web than existed when Wikipedia was new.
For instance, there were once Wikipedia articles for each creature in the Pokémon games. This was a source of some mockery. Today, those articles have been deleted from Wikipedia, and replaced with short summaries in list articles. instead today there is a whole dedicated Pokémon fan-wiki, “Bulbapedia”, with a lot more information relevant to game players than would ever make sense in a general encyclopedia.
At the same time a lot of for-profit companies died away instead of growing. Just because Google and Amazon grow doesn’t mean that Friendster does as well.
Treating Wikipedia and the government the same fundamental mistakes how Wikipedia works. Governments are bureaucratic Wikipedia wasn’t in the days when it was growing. Non-profit and for-profit are not good categories. Tribes, Institutions, Markets and Networks is much better.
The present system has both Wikipedia and Google. It has plurality. It’s good to have different organisation with different incentive system in the same society.
Google has very public API that allow people to construct apps that connect to various Google services. The idea, that Google doesn’t, mistakes a lot of what Google is about.
Google also produces the Android operating system for smart phones. Open source.
An organisation that has to protect privacy of it’s users should not simply hand out all information that an outside party, that calls themselves a scientist, requests. Google is right for encryting data that travels between their data centers to prevent the NSA from scooping. It should not simply hand out all data.
Google is slowly moving as much code as possible from the open source android to the closed source Google Play Services api. They also have agreements with manufacturers that make it very hard to produce non-google androids. The kindle and nook still manage to exist, though.
What are you talking about exactly? The latest deal with Samsung to put less of their own bloatware into android? I think it’s still pretty straightforward to install CyanogenMod if you want to do so.
But to come back to the topic at hand, Google is a company who wants to make money. When releasing something as open source interferes with that mission they won’t release something as open source. On the other hand there are plenty of cases where Google supports Open Source.
For the for-profit vs. non-profit discussion even RedHat is a for-profit company.
Device manufacturers that ship certain google apps and code are not generally allowed to ship competitor apps.
This article goes into some detail, the bit about the OHA is on page 3, if I recall correctly.
I think this is one of the concerns that the author of the original post is referring to.
No, the orginal post pretends that for profit company don’t release stuff into the public domain.
The idea that nonprofits simply give all there resources into the public domain is without basis. The Americal Chemical Association which happens to be a non-for-profit sued Wikipedia for violating it’s intellectual property by integrating CAS numbers information about chemicals into Wikipedia.
http://arstechnica.com/gadgets/2013/10/googles-iron-grip-on-android-controlling-open-source-by-any-means-necessary/ http://arstechnica.com/information-technology/2014/02/neither-microsoft-nokia-nor-anyone-else-should-fork-android-its-unforkable/
One example that the second article makes is that features like in app purchases are bad to be behind closed source.
In-app purchases inherently need specific architecture and trust in an institution that facilitates payment. With Android you are free to switch over to another system that facillitates payment.
A company like Ripple is free to compete with Google’s solution and provide developers an alternative. The same is not true with the iPhone where third party payment processors are outlawed.
Don’t forget that for-profit companies tend to actually generate profit which means that the largest ones can do R&D for the ratchet of Science, as we are seeing with Google.
True. I think that Wikipedia should generate more revenue via ads, in order to be able to do more stuff.
Unfortunately, the set up for it to work involves a massive use of product-specific tariffs and subsidies, to account for negative and positive externalities respectively. Otherwise the “invisible hand” would function inefficiently, over-promoting things with negative externalities like pollution, and under-promoting things with positive externalities like education.
Nope. For it to work requires nothing but the usual prerequisites for markets (property rights, sufficient freedom, etc.). You are talking about producing optimal results which, as far as I know, no human economic system is capable of.
I wonder whether christopherj & you might be using “to work” in different senses here. A market might be able “to work” in the sense of being operational (where sellers successfully sell things to buyers) while failing “to work” in the sense of generating benefits greater than the side effects of externalities (the invisible foot’s kick overriding the more benign gestures of the invisible hand).
I use “work” here not in the sense that the markets are operational. I use it in the sense that societies with working markets (and without “massive … product-specific tariffs and subsidies”) develop and grow much faster than societies without working markets. That is an empirical observation.
I never said that the “invisible hand” would fail to function, I said that it would function inefficiently. Since efficiency is the major factor in deciding whether an economic strategy “works”, I noted that it would be out-performed by a system that can account for externalities. The free market could be patched to optimize things that contain externalities by applying tariffs and subsidies.
Given that I know of no system to properly account for externalities, I noted that as a failing of the free market but did not suggest any alternative—especially since my country already has this patch applied to some of the biggest and most obvious externalities, yet also shows signs of promoting the wrong things (eg corn based ethanol).
Note that this isn’t always a binary choice. There is a range of motivations for individual and group behaviors, almost always including money and ideology to various degrees. There are tons of (typically smaller) for-profit companies that take on non-financial goals as part of their identity, and there are plenty of not-for-profit organizations who are captive to their finances/endowments.
Why don’t you make the obvious next step and just say that the society/state/government should control such things?
Good question. It is true that not-for-profits and the government have a lot in common. Most importantly, they’re both supposed to work directly for the public good (rather than for their own profits). There are some important differences, though:
1) Not-for-profits do not have monopoly on violence. (Most of the below follow from that.) 2) People do not have the same sense of entitlement visavi not-for-profits 3) You normally can create more of a “community spirit” within a not-for-profit. In governmental organizations, users have more of a tendency to view the leadership as “parents” to whom one goes to request more stuff. People take more responsibility in not-for-profits, especially small ones (this is closely related to 2)). 4) We might want to have a dispersed distribution of power in society. If so, we should not give too much power to the government, but would be better off giving power to other entities, such as not-for-profits.
Not-for-profit organizations working either for the public good or for some interest group such as workers, farmers, etc, have always had lots of influence in democratic societies. Often they’ve taken or been assigned tasks that the government could have done, such as health care, education (e.g. in the case of churches), unemployment insurance (unions), etc. They have of course always been legally regulated, and some of them have been closely related to political parties (e.g. churches—Christian democrats, unions—social democrats). However, the distinction between non-governmental organizations and governmental organizations has, by and large, been upheld in democratic countries (though it wasn’t in, e.g. Sovjet Union).
That wasn’t really the point. The point was that all the arguments for having non-profits control access and use by for-profit companies work as well or better for having the government control that access and use.
This post reminds me a lot about the different models in the Video Game industry; One-time purchase, Periodic subscription payments, and Free-to-play. I think the “Free-to-play” model would work in a sense for your idea of combining the best of both worlds. Say for instance, as you did, that Google worked on a not-for-profit platform. And let’s say that to keep down on any monopolization, they released all of their data to the public. Just as the “Free-to-play” games offer cosmetic items and such for monetary purchases, perhaps this not-for-profit Google could offer analysis on the data for a cost. Since the analysis could be shared to as many companies as request it, it could be done much more cost-effectively than each company hiring their own analyst, and as such, could be offered at a price which could draw companies in.