What It Means to Say Information Economy

Posted by mouthyb | Posted in , , | Posted on 4:02 PM

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Obviously, this won't be a complete list, but I think that the term and discussions around it are essential to understanding the fight over intellectual property rights (in addition to understanding the current engine of the economy.) In a general way, the phrase information economy refers to an economy which is increasingly based on information seeking, information industries and/or information transactions.

For the purposes of this, information can be defined as data of various kinds, with greater and lesser degrees of verification. To give a broad example, the stock market is based on speculation (betting, if you will). That speculation is based on a complex mix of independent, political and/or governmental and corporate investigations, summed up by speculators and agents in the stock market into a portfolio, which they use to place bets on the price, availability and value of various kinds of things: physical objects like crude oil or oranges (commodity markets), the value of companies (shares), or on derivatives (roughly a set of agreements which governs the exchange of stocks, goods, shares and/or properties between companies, also the future of the things exchanged.)

It's worth noting, as a side concern, that derivatives allow for both bets and for insurance on those bets (hedge funds). Derivatives are also immune to some of the regulatory laws which govern other transactions on the stock market.

Information gathered by those investigations directly effects the price and availability of goods and services, and as such becomes at least as valuable as the goods and services itself to the portions of the economy which dictate availability.

To understand the fight over intellectual property, you have to understand the transition between an industrial economy and an information economy; the transition between an economy which is greatly concerned with manufacturing and an economy which is greatly concerned with gathering information on the behavior of large businesses and governments. To some degree, the interwebs render physical possession, central to previous economies, moot or highly complicated; ideas and intellectual property tends to disperse without extraordinary efforts to prevent it from doing so.

A great example of this is the reproduction of movies and music. You do not need the physical presence of the musicians to be able to hear their work. If their work has been properly recorded and you have the equipment and knowledge, you can reproduce it as much as you please. Information economies are characterized, among other ways, by the ability to reproduce information and the fight to keep certain species of information exclusive.

Think of it as a carryover from when you had to physically possess something and/or possess legal documents to own it. Physical possession becomes considerably less important as the economy transitions to a information economy, making the role of institutions considerably more important and reducing the effect of individuals (barring the very rich and well connected).

An information economy also means that world events strongly effect local events, because information on these events is used in decision-making. Whether we like it or not, the shape of the economy means that we're increasingly connected to even distant events, and that traditional measures for possession no longer function as they had.

In the stats for this blog, I'm informed that I have visitors from outside the continental US. Welcome, US residents as persons who are not US residents, to this corner of the information economy.

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