Freedom Lunches

Another excellent post from Tim Lee (two of many, just subscribe to TLF):

The oft-repeated (especially by libertarians) view that there’s no such thing as a free lunch is actually nonsense. Civilization abounds in free lunches. Social cooperation produces immense surpluses that have allowed us to become as wealthy as we are. Craigslist is just an extreme example of this phenomenon, because it allows social cooperation on a much greater scale at radically reduced cost. Craigslist creates an enormous amount of surplus value (that is, the benefits to users vastly exceed the infrastructure costs of providing the service). For whatever reason, Craigslist itself has chosen to appropriate only a small portion of that value, leaving the vast majority to its users.

As a political slogan I think of as applying only to transfers though perhaps others apply it overbroadly. Regardless the free lunches of which Lee writes are vastly underappreciated.

The strategy has another advantage too: charging people money for things is expensive. A significant fraction of the cost of a classified ad is the labor required to sell the ads. Even if you could automate that process, it’s still relatively expensive to process a credit card transaction. The same is true of ads. Which means that not only is Craigslist letting its users keep more of the surplus, but its surplus is actually bigger, too!

Charging money also enables taxation and encourages regulation. Replacement of financial transaction mediated production with peer production is a libertarian (of any stripe — substitute exploitation for taxation and regulation if desired) dream come true.

Put another way, that which does not require money is hard to control. I see advocacy of free software, free culture and similar as flowing directly from my desire for free speech and freedom and individual autonomy in general.

In the long run, then, I think sites that pursue a Craigslist-like strategy will come to dominate their categories, because they simply undercut their competition. That sucks if you’re the competitor, but it’s great for the rest of us!

Amen, though Craigslist, Wikipedia and similar do far more than merely undercut their competition.

9 Responses

  1. […] Consider all of this ignorant speculation. Yes, I’m just angling for more freedom lunches. […]

  2. Anton says:

    “TANSTAFFL”? …No Such Thing As F— Free Lunches?

  3. Anton, I wish. Corrected!

  4. Thank you for this good link to the Tech Liberation blog.

    I didn’t know this blog. I will maybe put it in my blogroll.

    Great week-end,

  5. Mike Lorrey says:

    On the contrary, when you get a free lunch from someone else, they are paying for it. It may be free to you, but someone always pays, even if in the form of opportunity costs. Your example of Craigslist is a perfect example of this. Craigslist sees tremendous opportunity costs by extracting only a small amount of the value of their services.

    True free lunches pop out of the nothingness of the zero point field: i.e. a statistical impossibility, unless, as Stephen Hawking claims, you happen to be near a black hole’s event horizon….

  6. Mike Lorrey, sorry I missed your comment until now.

    Sure, you can define away the existence of free lunches, but that insn’t very interesting.

    At the extreme (but not uncommon) case, creation itself is the creator’s highest preference — people enjoy creating. In the case of nonrival goods, not only does the creator minimized opportunity cost and maximized private benefit, everyone else gets to use the creation at no cost. No free lunch?

    Static analysis says Craigslist is forgoing huge profits, but it may not be in the long run. There are many ad laden community sites out there. If CL had started out as one nobody would have ever heard of it. If it converts to one it risks losing its cachet, community and eventually the traffic that would drive huge profits.

  7. […] There’s much to debate concerning the speed, scope, and desirability of political and social change led by peer production. However, I find observations like the above rather satisfying and I believe deeply underappreciated. Peer production will not lead to absolute equality, but it does increase the scope for equality, freedom, autonomy, and decrease the need for violence or threats thereof. In other words, liberal ends achieved through liberal means, for a very broad range of meanings of “liberal.” […]

  8. […] Consider all of this ignorant speculation. Yes, I’m just angling for more freedom lunches. […]

  9. […] mentioned before that free software and its ilk decreases opportunity for taxation and regulation. Tim Lee wrote on the same topic a couple months ago. So I’m slightly pleased to see the […]

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