Yochai Benkler is giving a talk about his new and wonderful book, The Penguin and the Leviathan. (I interviewed him about it here.)

Yochai begins by pointing to Occupy Wall Street as teaching us much about cooperation and collaboration.

On Oct. 23, 2008, Alan Greenspan acknowledge to Rep. Henry Waxman that his model of the world was wrong. “I made a mistake in presuming that the self interest of organizations…was such that they were best capable of protecting their own shareholders.” We live in a world built around a mistaken model of human motivation, Yochai says. The basic error is not that we are sometimes self-interested, for we are. The mistake is thinking we could build our systems assuming that we are more or less uniformly self-interested. We’ve built systems that try to get incentives right, or that try to get punishment right. But now scientific selfishness has retreated, and we should model our systems on this new knowledge.

In 1968 Gary Becker said that we could model crime by thinking it of a pay-off model: the benefits of the crime vs. the cost of the penalty. So, we get Three Strikes laws. In another domain, the Jenson and Murphy paper on incentive pay for top management assumes that every level of the enterprise will try to shirk and put more in their pockets, so (the theory goes) you should increase the stock options at the top. But that hasn’t worked very well for companies in terms of return to stockholders; you get misalignment from this model. This model is like Becker’s: it’s about getting the incentives and penalties right. Yochai tells of a mother trying to get her three year old into a car by threatening to take five cents off the child’s allowance. “This model penetrates everywhere,” he says.

This intellectual arc is everywhere. Evolutionary biology has moved from group selection to selfish gene through kin altruism and direct reciprocity. Economics also: strong assumptions of self-interest. Political theory, from Downs, to Olson, to Hardin: all assume the inability to come together on a shared set of goals. Management science and organizational sociology: From Taylor to Weber to Schumpeter through Williamson. Although there are counter narratives in each of these fields, selfishness is the dominant model.

And yet on line we see how easily we cooperate. “Things that shouldn’t have worked, have worked.” He draws a 2×2: market based and non-market based vs. decentralized and centralized. In each, there have been huge successes of social production. This is in fact a new solution space.

In each of the aforementioned disciplines, there is now a development of more complex models that take account of cooperation. E.g., evolution: indirect reciprocity; cooperation emerges much more easily in the new models. Economics: shift to experimental and modeling away from self-interest, and the development of neuroeconomics. Political: Eleanor Ostrom on the commons. Management science: Work on team production and networks; high commitment, high-performance organizations.

The core insight of all of these fields is that the model of uniform self-interest is inadequate. Then there’s debate.

Yochai compares Dawkins in The Selfish Gene (1976) and Martin Nowak (2006). Dawkins says we are born selfish. Nowak says: “Perhaps the most remarkable aspect of evolution is its ability to generate cooperation in a competitive world.” It’s an old debate, Yochai says, citing Kropotkin vs. Spencer vs. Boaz vs. Margaret Mead. The debate is now swinging toward Kropotkin, e.g., neural research that shows empathy via brain scans: a partner’s brain lights up in the same way when s/he sees the other person undergoing pain. He points to the effect of oxytocin on trust, and for the first time in Berkman history makes a reference to monogamous voles.

Why does this matter, Yochai asks. He refers to an experiment by Lee Ross et al. Take a standard Prisoner’s dilemma. All predictions say that everyone should defect. Take the same game and give it to American students, Israeli fighter pilots, etc., and told them either “You’re going to play the Community Game” or “The Wall Street Game.” The former 70% opened cooperatively and kept cooperating through the 7 rounds. The latter opened at 30% cooperative. The 30% in the Community Game represent a significant segment that has to be dealt with in a cooperative system. But there’s a big middle that will one or the other depending on what they understand their context to be. So, concludes Yochai, it’s important to design systems that lets the middle understand the system as cooperative.

So, we move from tough on crime to community policing. That changes all sorts of systems, including technical, organizational, institutional, and social. Community policing has been widely adopted because it’s generally successful. We see that we have success with actual practices that depend not on reward and punishment and monitoring, but on coperation. We’re finding out about this online, but it’s not happening just online.

Yochai says that he’s just at the beginning of an investigation about this. There’s a limit to how much we can get out of evolution, he says. It’s hard to design systems on the basis of evolution. Instead, we see a lot of work across many different systems.

But we still want to know: Won’t money help? The answer is what’s called “crowding out.” We care about material interests, but we also care about fairness. We have emotional needs. We have social motivations. What if these interests don’t align? The Titmuss-Arrow debate 1970/1 about the motivations for donating blood. A 2008 study (Mellstrom and Johannsesson) paid people money to give blood. When you allow them to give the money away, it increased the number of people who gave blood. Adding money can suppress an activity more than it increases it. That’s crowding out. It’s not uniform in the population. Designing systems is much harder than coming up with a material reward that appeals to people’s self-interest. We do not have full answers here

Think of cooperative human systems in three vectors. 1. Conceptual: from rationality as univeral self-interest to diversity of motivations. 2. Design: Cooperative human systems designed on behaviorally realistic, evidence-based design. Politics: We cannot separate out incentives from fairness, ethics, empathy, solidarity.

Yochai points to a number of factors, but focuses on fairness: of outcomes, of intentions, and of processes.

Outcomes: What counts as fair is different in different cultures, especially when you move outside of market economies. In market societies, 50:50 is the norm for fairness. Once it gets to 30:70, people will walk away. But you can change that if you change the framing, e.g., “You got lucky.” But there is no single theory of justice. Yochai looks at a study of the cement trucking industry. It turns out that there are large pay disparities. They also differ in what they say they pay for: performance, or equally time. They don’t always do what they say, though. But when you look at real performance measures, you have fewer accident and out of service events if the company is accurate in what it says, no matter what it says.

We don’t have an agreed upon theory of justice, he says. This explains the 99% vs. 53% debate around the Occupy Wall Street. This is a debate over basic moral commitments without which a system cannot function. There is no way to resolve it either through neutral principles or by efficiency arguments.

Intentions also matter to fairness. When you Where bad intentions excluded (e.g., it was just a roll of the dice), then there’s much less negative reciprocity.

Processes: Tyler (2003) showed that procedural justice correlated with internalized compliance. Yochai points to the militarization of the police as they deal with the OWS. The image projected to the crowd is one of lack of regard for process. He compares this to a massive demonstration of Israel in which the police stood a good distance away, and a different relationship was fostered.

We can see a revival of the “sharing nicely” idea we teach our children. In science. In business. Science is beginning to push back against the assumption of selfishness. It turns out that we aren’t universally self-interested. Different people respond differently, and each person responds differently in different contexts.

We need a new field of cooperative human systems design that accounts for the diversity of motivation, and that takes seriously the issue of “crowding out”: adding incentives can result in worse outcomes.

And, Yochai concludes, we need a renewed view of our shared humanity.

Q: Fascinating. But: The passage from evolution to the social sciences has long been discredited. Also, it’s too simple to say that the solution to the banking problem is that we need more cooperation. The banks are supported by a set of interests bigger than that.
A: You say sociobiology has been discredited. That’s true of the early to mid 1980s but is no longer a good description. The social sciences and anthro have been moving to evolutionary models. Economics too. What was in the 1980s was resolved, now, especially in the social sciences, is unresolved. Second, sure, bankers self-select and control the system. The real answer is that it’s a lot of work. When you have a system optimized for money, and money is the social signal, it self-selects for people driven by that. We need long-term interventions to increase cooperation. E.g., the person who can work with Open Source at, say, IBM, is different than the person who can work her/his way up a hierarchy; the company therefore has to train itself to value those who cooperate.

Q: I just went through MIT’s tutorial that instructed me how my ideas would be licensed. I said that maybe there should information in your office about how to contribute more openly. How do systematize open, collaborative forms across the entire educational system?
A: Lots of people in this room are working on this problem in different ways. We fight, we argue, we persuade. Look at university open access publication. We use our power within the hierarchy of universities to raise a flag and to say we can do it a new way. That allows the next person to use us as an example. After I released Wealth of Networks for free on the Web, I got emails from all sorts of people wanting to know how to negotiate that deal for themselves. Universities should be easy.

Q: What are the burning policy implications of this shift in the way we rule the world? What would you change first?
A: I should note that I don’t address that in the book. We need an assessment of community policing and the big board [?] approach. The basic question is whether we continue to build a society based on maximizing total group, or one that trades off some growth for a more equitable distribution of outcomes. The point is much broader than open access, patent, copyright, etc. The deregulatory governance model is based on an erroneous model of interests. But all of my work is done on the micro level, not the level of organizations. But we know that the idea that musicians need the payoffs afforded by infinite copyright is false; we have empirically data about that. So there are places where the relation between the micro interests and institutional interventions is tight. But I don’t talk about that much in the book.

Q: I’ve looked at pay inequality in Japan and the US. The last thing that matters to the level of compliance with regulations is the gap between CEO and workers. The deterrents are very effective in the US, explaining [couldn’t hear it]. Compliance is much better in the US because the penalties are effective deterrents.
A: First, once you’re talking about the behavior of an organization, we don’t have the same kind of data on what happens within a corporate decision. When people see themselves as agents, there can be conflicts between the individual and the organization. For that you need external enforcement.
Q: Jail time makes a huge difference.
A: Then how do you explain the findings that amount of tax options predicts probability of tax fraud. Same baseline enforcement, but whether you had stock options predicts tax fraud. Adding money and punishment certainly has an effect on behavior. But it depends on whether that intervention has better effects than other interventions. But we only have a little bit of data.

Q: If a high school principal came to you who serves many interests and types of people, how could your ideas influence her or him?
A: My mother founded two schools and a volunteer organization. The lessons are relatively straightforward: Higher degrees of authority and trust, structure with clearly set goals, teamwork, less hierarchical distance between students and teachers, less high-stress testing.

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At the final panel of the conference. Judith Donath is moderating.

Charlie Nesson asks: “When we talk about our space, who are we?” In Jeff Huang‘s presentation, it seemed like he was given the perfect hypothetical — a desert — to build a public and private place. “In cyber terms, we are people of the Net. What then is our domain? It’s the public domain. And if you are to build the public domain, then I believe the wisdom to follow from a lawyer’s point of view is the same wisdom that has more or less informed the world of real property. If you want an orderly world of real property, you build a registry. If you want an orderly world of bits, you build a registry.” This is Charlie’s new project: a registry of the public domain. They’re starting with IMSLP.org: a musical score library. It has 93,000 musical scores in the public domain., exquisitely put together.

The Net divides into two domains, says Charlie, one that is free and one that is not. Free means free of copyright and other encumbrances. Charlie wants to build our domain on a foundation solid in law. The registry he’s building identifies works as public domain, with links to the registrars attesting to this. He wants it to be populated by librarians with public domain collections. But, the problem with registries is litigation risk, i.e., the threat of lawsuit. “So the essence of this idea is to couple the registrar with a pro bono commitment of legal service from a law firm of repute to defend litigation based on infringement.”

Where do you find the institutions that want to protect privacy, asks Charlie. How about libraries, he suggests?

“I’m tough on privacy, Judith,” says Charlie, in response to a question. “I’ve never liked it.” He explains it’s so often based on fear and looks backwards.

Martin Nowak looks at cooperation evolutionary term in which a donor pays a cost and a recipient gets a benefit. He explains game theory’s Prisoner’s Dilemma. Why do people cooperate? “Natural selection chooses defection,” rather than cooperation. In a mixed population, defection becomes increasingly more popular. So, natural selection needs help to favor co-operation. Martin categorizes the factors into five mechanisms: kin selection, direct reciprocity, indirect reciprocity spatial selection and group selection.

Direct reciprocity (I help you, you help me). If you play the Prisoner’s Dilemma several times, the economics changes, as The Folk Theorem shows them. Martin quickly summarizes Axelrod and Rapaport. [Too hard to live blog. Read Ethanz. Really. Now.] Errors turn out to ruin cooperation, so you need a process that allows for forgiveness. Martin’s doctoral dissertation showed that if everyone plays randomly, the right tactic is to always defect. A tit for tat strategy corrects that, and generous tit-for-tat (I may still cooperate even if you defect) provides a math model for the evolution of forgiveness and cooperation. There are always oscillations; cooperations are never stable. We need structures that rebuild cooperation quickly after it is destroyed because it always will be destroyed.

Direct reciprocity allows allow for the evolution of cooperation if there’s a prospect of another round. Indirect reciprocity (I help you, someone helps me) leads to cooperation if reputation matters. You need natural selection to care about reputation, so to speak. “What you need for indirect reciprocity is gossip” to spread reputation. For that you need language. “You could argue this is the selection process that led to language.” “For direct reciprocity you need a face. For indirect reciprocity you need a name.” (David Haig) Our brain has both capabilities. If interactions are completely anonymous you run into problems. Also, you need gossip to be relatively honest.

Spatial selection = neighbors help each other. Martin flips through some graphs that shows that it selects for coop if you have a few close friends. Likewise, evolutionary set theory says that people wanting to join particular groups can also lead to coop.

Judith: What about strong vs. weak ties?
Martin: We assume equal ties. There’s a trade-off between wealth and vulnerability.

Nicholas Negroponte asks himself a question every morning: Is he doing something that normal market forces would do anyway? If so, he stops. He wants to do that which market forces will not do.

There are now 3M One Laptop Per Child laptops in the hands of kids. This isn’t huge since OLPC would like to get laptops into the hands of about 500M kids. Before that, people assumed computers teach by imparting content. Instead, you want to see children teaching. 20-30% of the million Peruvian kids with OLPC machines are using them to teach their parents how to read.

Nicholas goes through some points he made in a talk at the UN recently. Among the points: Measurement is overrated. You only measure when the changes are so small that you can only see them by measurement.

Judith: When we see well-off kids sitting side by side looking into screens, we think it’s a nightmare of anti-sociality, but when we see your adorable photos of third world kids in the same position, it looks desirable?
Nicholas: I don’t see the well-off kids that way. And why don’t we make OLPC’s available in the US? Because the issues are deeper than that.

A: Talk about anonymity…?
Jeff Jarvis: It’s foundational to democracy. It’s getting a bad name because of trolls. But it must be protected.

Q: This discussion is soaked in privilege. There’s much inscribed in the language that affects how people act. When you idolize the public space as a place where all can share their ideas safely, it feels really far away for me.

Q: (Charlie) Nicholas, you’ve said that Uruguay has given all 500,000 of its kids OLPCs. Given your position on measurement, what change will we see?
Nicholas: Their curiosity, the way they approach problems, the way they look at things…I think you’re going to see a nation that is far more creative than many other nations. Nicholas tells a story of kid whose homework got 100K hits.
Martin: Who teaches them how to use it?
Nicholas: It’s genetic :) We’re going to do a scientific experiment in which we drop OLPC laptops out of helicopters onto remote villages and come back in a year and see how many have learned how to read.

Q: (urs gasser) One vision says build a great tool and see what happens. The other is to study human behavior scientifically. (Nicholas vs. Martin). How difficult is the translation from findings from science about human behavior to adapting them to technology?
Martin: I’m fascinated by mathematics, but we do apply it to practical issues. In the field of cooperation, we’d like to bring the models closer to human observations. For example, many cultures like punishment, but I think it doesn’t work well to create cooperation because it creates complications. Reward seems better. So, we study that. We do the same experiment in multiple cultures. In Romania, for example, people differentiated between public and private outcomes, because they lacked faith that public engagement had positive outcomes.

Q: (zeynep) The Net has let the cooperative side of human nature be more manifest. Does your work in evolutionary biology take account of this?
A: The coop we see in the animal world must rely on direct observation. Humans can communicate. We don’t have to rely on our personal experience with another to decide whether to coop. The Net can help us to evaluate others quickly.

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From Michael Quinion’s World Wide Words:

An automated spelling checker attached to a word-processing program is one of the curses of our age. In the hands of an inexperienced, over-hasty or ignorant user it readily perpetrates dreadful errors in the name of correctness. One example appeared in a piece in the New York Times in October 2005 about Stephen Colbert’s neologism “truthiness”: throughout it instead referred to “trustiness”, the first suggestion from the paper’s automated checking software. In September 2006 an issue of the Arlington Advocate included the sentence, “Police denitrified the youths and seized the paintball guns.” The writer left the first letter off “identified” and the spelling checker corrected what remained.

In 2000 the second issue of Language Matters, a magazine by the European Commission’s English-language translators, included an article by Elizabeth Muller on the problem with the title Cupertino and After.

Cupertino, the city in California, is best known for hosting the headquarters of Apple Computers. But the term doesn’t come from the firm. The real source is spelling checkers that helpfully include the names of places as well as lists of words. In a notorious case documented by Ms Muller, European writers who omitted the hyphen from “co-operation” (the standard form in British English) found that their automated checkers were turning it into “Cupertino”. Being way behind the computing curve, I’m writing this text using Microsoft Word 97, which seems to be the offending software (more recent editions have corrected the error); in that, if you set the language to British English, “cooperation” does get automatically changed to “Cupertino”, the first spelling suggestion in the list. For reasons known only to God and Word’s programmers, the obvious “co-operation” comes second.

Hence “Cupertino effect” for the phenomenon and “Cupertino” for a word or phrase that has been involuntarily transmogrified through ill-programmed computer software unmediated by common sense or timely proofreading.

A search through the Web pages of international organisations such as the UN and NATO (and, of course, the EU) finds lots of examples of the canonical form of the error. A 1999 NATO report mentions the “Organization for Security and Cupertino in Europe”; an EU paper of 2003 talks of “the scope for Cupertino and joint development of programmes”; a UN report dated January 2005 argues for “improving the efficiency of international Cupertino”. And so on.

Other notorious examples of the Cupertino effect include an article in the Denver Post that turned the Harry Potter villain Voldemort into Voltmeter, one in The New York Times that gave the first name of American footballer DeMeco Ryans as Demerol, and a Reuters story which changed the name of the Muttahida Quami movement of Pakistan into the Muttonhead Quail movement.

It could be worse. Leave out one of the “o”s from the beginning of “co-operation” as well as the hyphen and you might be offered not “Cupertino” but “copulation”. Now that would be an error to write home about. Or perhaps not.

Everyone loves these spellchecker prejudices, but I didn’t know they had a name. (Thanks to my brother Andy for the link.) [Tags: cupertino cooperation world_wide_words michael_quinion language spellcheckers ]

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Yochai says he wants to leave the question: Can free culture survive systematization? [Trying to keep up with Yochai. Failing. Posting without proofreading or spell checking. Caveat lector.]

In 1835, it cost $10K (modern dollars) to start a daily newspaper. Now it costs millions. The startup cost causes a bifurcation between passive audiences and professional, commercial producers. The industrial structure of mass media characterizes the modern age. But, consider that SET@Home dwarfs the computing power of the supercomputers created in industrial ways. This is a radical decentralization of inputs and processes: material, processing, storage, communication, creativity, wisdom. For the first time, the most important inputs are broadly distributed in the population.

This takes social action that’s always been there, and moves it from being important socially and peripheral to the economy, to being at the core.

In Wikipedia vs. Britannica, the core issue isn’t price. It’s authority. The most important part of the Nature comparative study of the two was the editorial that urged scientists to update Wikipedia, sharing traditional authority with the new medium.

Yochai shows a 2×2: centralize or decentraliced vs market-based and non-market. Now we have a four-way interaction among all the old players, from traditional to social-sharing non-profits.

This engages distributed sensing of opportunities for action, solutions, experimentatino, adaptation. You get new and exciting possibilities. The increasing complexity and speed of change has been pushing businesses to go beyond the old technique of hiring what they need. “We can learn faster by loosening the structure of who gets to be effectively active in the world.”

But Yochai wants to focus on participatory culture and democracy. “Critical to the success and power of social production … is the decentralization of practical capacity to act…but also locating authority to act where the capacity to act resides.” This is where commons-based resources are important: We can act on them without permission. This is also where peer production systems (people cooperating without firms) matter because it allows people to work together without permission. “Ownership no longer equals or entails authority.” We get a more diverse , more transparent, and maybe a more critical self-reflective culture (although here he leaves a question mark).

Yochai shows a kickass video of a guy in a suit figuring out how to play the drums, followed by another guy in a split screen plahing piano. By someone named Lasse something? If you have the url, could you post it in the comments? He tells the story of the Daily Prophet, a 14 yr old who poste Harry Potter stories, and seven years later has started a distributed projeto t scan in fantasy illustrations from old books. Also, the site Learning To Love You More’s project of collecting photos of bed underneaths. Also, wikileaks.org. Also, Porkbusters.org. And Sunlightfoundation.com And distributed reportage (“Bomb bomb bomb, Iran”). “Yes We Can.”

YouTube lets individuals create and post. Revver and Metacafe tries to find ways to get artists paid. But, “once they introduced money, they introduced distrust.” Kaltura enables editing and has worked on engendering trust via open sourcing. Everything will be kept free. It binds its organization to a set of institutions that are free and open.

Politics isn’t just about politicians. It’s also about meaning. What things mean and how they mean.

So, human creativity decentralized can create a more democratic system, but it threatens the industrial model. For the past decade there’s been a rough stalemate over IP. But the most important actions have been social/cultural: Sharing practices. Increasingly institutionalized, e.g., Free Software Foundation, Creative Commons.

We’re seeing new models of market-cultural society relations: Credible commitment mechanisms, self-binding licenses, transparency, participation, styles of leadership. Authenticity and conversation become central. New ways to build trust, fairness, reciprocity.

He ends by taking Jonathan Coulton as an example. [What about Brad Sucks? :) ] He shows the Code Monkey videos.

“This is invoking a fundamentally different normative framework than ‘This is mine and you can’t have it.'”

The basic question: Can we create new social cultural spaces in the overlap of market and social relations, sustainable and not based on control and authority but on social and cooperative models? [Tags: yochai_benkler cooperation sharing peer_production economics open_source copyright ae08 ars_electronica ]

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