Wikipedia helps show the economic value of social interaction

Yale law prof. Yochai Benkler has written a shitload of interesting econ papers about commons systems like wikipedia. There's a good interview with him in Businessweek, where he talks about "commons-based peer production".

...the economic role of social behavior is increasing. It used to be that if you said, "Here, this is interesting, why don't you read this?" it was primarily social. When you take the exact same behavior and plug it into Google's Page Rank algorithm, you actually get a discrete economic output that increases welfare in the economy overall -- even though you continue to have a certain social interaction there as well.

The net changes everything, and all that. But I think economists have historically underestimated the power of social behavior -- to put it another way, I'm not sure how useful it is to abstract "social" and "economic" into two separate boxes.

The difference between today and 10 years ago, of course, is measurability -- something quite clear (if known only to Google employees) happens when links are tallied into pagerank and used to sell ads; the economic benefit to mankind from a teacher helping underprivileged kids is linked to no such running tally (even though that teacher's thinking style is as amiable to distribution as any clever web system, persisting in those kids and going on to influence other people through them). We just never saw anything like this unfold on a screen before, so it was easier to economists to ignore it.

But come on. Most of our brains are devoted to social interaction, which is one of the reasons we're so much worse at readily-deconstructed reasoning (math, logic) than computers are. It's silly to have ever thought the straightforward rules of Adam Smith could be a complete description, as silly as thinking, in the '50s, that if a computer was ever capable of chess it would be capable of thought.

And of course, most of people's lives are spent interacting socially. I suppose the catch is that the most academically productive people spend the least time doing anything but writing papers -- perhaps that's why social interaction has been neglected in economics.