About Nick: i am an economist based in malaysia. I write about development economics, while sneaking in a pop culture reference or two.

The Changing Commons

Co-authored with Dr Nungsari Radhi

Published in The Edge Malaysia, 11-17 September 2012.

In this increasingly connected world that we live in, the nature of what is private and what is public has changed. Notions of secrecy and confidentiality have therefore changed, and the idea of property rights through proprietary ownership is a threatened concept, and business models and models of authority that are still predicated on such concepts are facing obsolescence.

Consider for example the recent crime statistics issue. When PEMANDU announced last July that the crime index in Malaysia had fallen by a substantial 10.1% from January to May in 2012 compared to the corresponding period in 2011, it was met with a sense of bafflement, if not ridicule. How do the daily news on thefts, assaults, kidnapping, snatch thieves and the like match the reduction in crime statistics? Those skeptical of the statistics call for the release of both the raw crime data as well as the methodology used in constructing the crime index - there is a lack of faith in official statistics. A question to ask is therefore what is really at stake from society's perspective when official statistics are believed to be fallacious?

When it comes to an emotionally charged issue such as crime, what is at stake is the collective feeling that, “We feel safe.” This feeling of safety can be considered a common good – a shared good for the benefit of all. In economic terms, feeling safe is non-excludable. What this means is that nobody is prevented from partaking in this feeling of being safe.

Therefore, when the raw data is not made public, the public cannot partake in upholding this common good. They are prevented from discovering for themselves exactly how well this common good is being protected. It is certainly plausible that by studying the raw data for themselves, they may convince themselves that crime is actually decreasing. However, when the data is kept exclusive, the public is therefore prevented from being participants in maximizing this common good. This is a form of the new age 'Tragedy of the Commons.'

The 'Tragedy of the Commons', first coined by ecologist Garrett Hardin, refers to a situation where an individual with access to a common good uses and abuses the common good to the detriment of society as a whole, in pursuit of her own self-interest. Consider the classic case of a common grassy field. Since an individual farmer has no ownership over the field, that farmer will have the self-interest incentive to allow her cows to graze on that land as much as possible. Since the commons is non-excludable, other farmers will do the same and thus, overgrazing will occur, leading to the Tragedy of the Commons.

The conventional solution to the 'Tragedy of the Commons' is privatization - to segment the field and award property rights to each farmer for a given segment. This way, since there is a notion of proprietary, the individual farmer will have to care about the sustainability of their land segment.

To be sure, the conventional 'commons' still exist – grazing lands, the oceans, public swimming pools and the like – but the nature of the „commons‟ has evolved, especially with the increasing interconnectedness of the world. Perhaps the most important of all these new 'commons' is information.

The advent of the internet has seen massive digital archiving of all kinds of information. Cisco Systems found that global internet traffic, defined as the flow of data, has increased from 75 million gigabytes of fixed internet traffic per month in 2000 to 2,055 million gigabytes in 2005 to 20,634 million gigabytes in 2011.

With all these data flows and information continuously being uploaded online, the access to information and to knowledge has grown wider. In 2002, the Massachusetts Institute of Technology (MIT) announced a project to place all its educational materials, what was considered proprietary, on the internet, free and available to anyone in the world with access to the internet. This project is called the MIT OpenCourseWare. This move was followed by other renowned universities such as Harvard, Yale and UC Berkeley.

This form of information and knowledge-sharing is gaining traction. Under the aptly named 'Creative Commons' license, which is one of several copyright licenses that allow for the distribution of copyrighted works, a website is allowed to distribute copyrighted work globally at no charge. Many software developers and scientists are even going so far as to upload their codes or theories on an open-source basis.

The key differentiating factor between the traditional 'commons' and the new 'commons' is that the new 'commons' is intangible and the consumption of the new 'commons' does not exhaust its supply. Thus, the conventional tragedy of exhausting supply does not hold in these new 'commons'. Consider the case of economics lecture notes on MIT's OpenCourseWare. It is available to be downloaded to anyone – it is inexhaustible. On the demand side, an individual who downloads the notes will not prevent another individual from downloading the notes – it is intangible.

The key traits of inexhaustibility and intangibility of the new commons matter because greater commons can be built on these traits. If the raw material of 'knowledge' - data and information - is available to everyone, then any individual has the opportunity to use the 'commons'. To be clear, we are not calling for the abolishment of IP rights - indeed, abolishing all IP rights will severely hinder the process of innovation. We are arguing that the raw materials – information – should be a common good but the methodology of utilizing the common good can be subject to proprietary laws. For example, an individual can learn how to program from MIT's OpenCourseWare but what the individual does with those skills belongs to that individual. If that individual creates the next Google, that individual should be allowed to hold an IP right on it. Yet, this does not change the fact that the raw material – information – should be made available. Data and information are the commons but what knowledge one derives from it can be proprietary.

Coming back to Malaysia‟s crime data, the raw data itself is the 'Commons'. It is up to the public to partake in and improve the understanding of the raw data. They can reach different conclusions but a market for the contest of methodology will uncover the best one to interpret the data. It does not detract from the supposition that the raw data should be made available to everybody in the first place. In the context of the new 'commons', the twist to the story is that the Tragedy of the Commons occurs when the conventional solution is used – holding property rights over the common good. It is only by opening the 'commons' to every individual that a Tragedy of the Commons may be averted.

On Moving Forward

To shape a Shaper: Reflections on the World Economic Forum on East Asia