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We need a Karl Marx for the 21st century information political economy. Not the revolutionary Karl Marx of The Communist Manifesto, whose influence was more successful as a pretext for anti-colonial wars than for manifesting a “dictatorship of the proletariat,” but the Karl Marx who wrote Capital: A Critique of Political Economy.
Marx analyzed capitalism by dissecting labor, modes of production and some very basic economics to reveal the processes by which value is created in an industrialized market society. Whether you agree with his analysis is not the subject of this post. In the public domain, we do not have a comprehensive treatise that rises above the occasional economics paper or law review article touching on various aspects of the question of how value is created in an information market economy. To address foundational matters of public policy such as economic fairness and the distribution of wealth, we need this kind of research. Without it, robust debate is hobbled by the failure to understand all of the underlying issues at stake.
Thomas Piketty, the French economist, has gotten the party started with his book Capital in the Twenty-First Century. Certainly the comparisons to Marx were a staple of reviews. But Marx covered a lot of theoretical ground and the part to which Piketty is compared is more the class formation aspect than foundational economics. Here is where we still have a dearth.
The economist Hal Varian, once renown as an academic, now works for Google. His analysis, even if set to the profit motive of his employer, would make a fantastic contribution to this quest. Unfortunately precisely for that reason, his work is under non-disclosure and his employment contract. An educated guess suggests that this situation is not unique. Virtually all of the major Internet companies must have similar talent on staff. Not business analysis or finance, but scholars of economy, law and political science who critically inquire about the underlying components and processes that make their companies tick … and by implication how the global economy works.
Some scholars are investing time and energy on such projects. For example, my former colleague at Cornell University and friend, Aija E. Leiponen, of the Charles H. Dyson School of Applied Economics and Management, is collaborating with numerous scholars on how information is traded, and therefore valued. Her work joins probably many other scholars, who, if they read this blog, are encouraged to share their research with us in the comments.
Lay people can take educated guesses guided by the black market. Leave it to the criminals to give us a start. For example, take a look at this chart, which is courtesy of the Office of the National Counterintelligence Executive:
Black Market Price List
Name and Password for your online bank account: $1000
Mag-stripe data from a "secure" premium-level credit card: $80
Your Mother's Maiden Name: $6
Your Social Security Number: $3
And then there is all of that data that two billion users of the Internet voluntary offer up to sites. Facebook, Hacker News, VICE, Google, and put your favorite journal for comments [here]. (Mine is the New York Times.) For those companies whose service is free due to advertising the connection between proffered content and profitability is clear. A rough, facile estimate of the value of consumer information might be found in quarterly reports. But we need much more properly detailed and academic researched understanding to appreciate the public policy aspects of this market.
