Network economy

The network economy is an idea presented by Yochai Benkler in his book The Wealth of Networks. He defines the term as a "new and important cooperative and coordinate action carried out through radically distributed, non-market mechanisms that do not depend on proprietary strategies." This emerging networked information economy reverse the control of what Benkler terms as the industrial information economy. The industrial information economy is based on capital intensive production and mass distribution techniques. However in the networked information economy, the basic output has become human meaning and communication, and the basic capital required to express this output is a connected personal computer. Benkler explains that "radical decentralization of intelligence in our communications network and the centrality of information, knowledge, culture and ideas to advanced economic activity are to a new stage of information economy--the networked information economy."

For most of the first two chapters of this book, Benkler argues that this new Network Economy undermines some of our basic assumptions about economics and human interaction because people collaborate in Network Economies and act altruistically. Furthermore, his new Network Economy is changing the power structure of our society (to some degree) along with Web 2.0 and other developments. The Network Economy is fundamental for the development of Wikis, open source software and other collaborative phenomena.

References

Benkler, Yochai. The Wealth of Networks. New Haven: Yale University Press: 2006.