Networks and the Nature of the Firm
Tim O'Reilly
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Excellent piece, Tim. Congrats.
However, we should not forget that for every economic transaction there is a corresponding social transaction (that most of the times precedes it and is the reason it exists at all). When you call an Uber instead of calling a taxi, you are making a different economic choice to enact the same social transaction, in this case, the transportation arrangement.
Of course the decrease of the transaction costs involved, as made possible by the distributed digital information technologies that are used, alters the correlative forces at work and favor the companies that operate those technologies (the “platforms”) against the companies whose operational model depends on profiting exactly on the transaction costs that are reduced.
But for me the real interesting part, which Robin Chase and Esko Kilpi also underline in the comments, is how those technologies seem to point at a shared common pool of (social) resources as opposed to a corresponding economic commercial exploitation, whatever the form it may come to have. Yochai Benkler has been writing and lecturing about it for a long time. In this sense Uber could be a prefigurative model (or a transition stage) to what Waze’s RideWith is trying to be: pure social transaction between private individuals without direct economic transaction involved.
I know in the US this concept may be a bit “heretic”, but in Europe the term “postcapitalism” is very much on the table when debating these issues (see here and here). My thesis is that the digital technologies that induce a reduction of the economic value of information are the same that imply an increase in its social value (you can read about it here and, in more depth, here). I don’t know if the “sharing economy” is really the path to “post-capitalism”. But it sure looks like a serious threat to the nature of the firm and the economic model on which it has been operating for the last decades. By the way, Benkler, a champion of the commons, is himself very worried about the demise of the firm as an economic unit and what may take its place (see his short talk at Davos this year).
Either way, this discussion is of course very interesting and very much in the center of economy, technology and society in the digital age.

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