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Coase's Penguin

Coase's Penguin, or Linux and the Nature of the Firm is an essay by Yochai Benkler, Professor of Law at the New York University School of Law. Written for those "who study organizations or make intellectual property policy", it is a first attempt to explore how intellectual property law might be reconsidered in light of the emergence of "commons-based peer-production", a new model of economic production.

"Commons-based peer-production" is meant to describe a new model of economic production, different from both markets and firms, in which the creative energy of large numbers of people gets coordinated into large, meaningful projects, largely without financial compensation. All the examples mentioned are coordinated via the Internet; examples include Linux and this encyclopedia.

Benkler's ultimate thesis is that some of the restrictions that copyright and patent law place on the free flow of information are preventing commons-based peer-production from reaching its full potential. Since this is such an effective form of knowledge production, Benkler argues, it may well be worthwhile reconsidering whether these costs are really worth the benefits.

As it is written largely for the public policy community, Benkler's analysis proceeds in frameworks currently fashionable in that community, especially that of Transaction Cost Economics. He suggests that other, perhaps more sociological, analyses may also be insightful, though he does not pursue them himself.

In his discussion of this encyclopedia, Benkler makes particular note of the neutral point of view ethic: "Perhaps the most interesting characteristic about Wikipedia is the self-conscious social-norm-based dedication to objective writing." Note that several peer-production projects he mentions have more formal accreditation processes than Wikipedia; Linux has a relatively formal hierarchy to review new submissions to the kernel, for example, and NASA Clickworkers has participants do redundant work, so that careless or malicious work can be eliminated through statistical averaging.

The work is named for Ronald Coase who wrote a seminal work contrasting production via firms with production via markets, and the penguin mascot of the Linux operating system, the most famous example of commons-based peer-production to date.

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