is he talking about appliances like the Flip, Peek, BodyBugg, etc.?

Or is he talking about the “closed” X86 boxes (e.g. Barracuda Filtering, Google Appliance Search, Crossbeam UTM etc.) – these are “closed” systems that are intended to simplify sales and installation. They possibly enhance “systemwide generativity” by allowing more and more elements to enter the enterprise stack without having to fight through qualification, testing, and other hassles.

Point #2 seems rather tricky. I’ll need to think about it.

Point #3… enforcement through beta. Yes, I found that idea in the book possibly the most valuable one. I liked your thought about “Essentially, law is relying on the markets to “price” the costs of delivering justice.” …it seems like a legal/economic version of the procrastination principle too.

Venkat

1) In appliances, what is happening right now is intensely generative. The iPhone is not the right case example (it is actually highly closed, though it relies on the same ecosystem as a vast array of other “unifunction” appliances). Much better examples are the Flip (pocket-size $150ish HD camcorder), the Peek ($20/mo subscription, $60 up front, eMail ONLY client, with bberry like interface, sold at TGT, and connected via wholesale backbone wireless leased from Sprint) or the Kindle (which is also a piece of custom hardware made with commodity components, and piggybacked on a wholesale wireless network, whose lifetime costs are bundled into the hardware and subsidised by the book sales). The vast overcapacity of ODM capability in China (much of which is actually a network of smaller suppliers) allows for so much diversity. Most of the diversity rides on “customizable” ASICs and the ARM core and you can expect to see even more customizable semico work as more and more “hardware configuration” moves into embedded software, to leverage the Indian engineer labor arbitrage opportunity (as Intel is doing with its smaller embedded processor development, seeding an ecosystem of ASIC designers who will become “semico-focused” software entrepreneurs when they leave Intel, helping customize ASIC code for startups in the US eyeing new appliance opportunities based on these cores). The last piece fuelling it (at least in the US) is wireless carrier capacity, the ones that have stepped forward into 3G are hungry to find ways to fill up their pipes (and apparently iPhone already drives 60+% of data usage on ATT wireless per Mary Meeker). So you have various unifunction devices (appliances) that are cheaply manufactured, by very small companies that own IP/design, and outsource everything else to focus on marketing. The appliance revolution is thus fuelled by standarddized “horizontal” component layers, and not comparable to Bloomberg’s proprietary terminals, or the early computers that had “closed’ stacks.

2) SaaS in that sense also has the “horizontal layer separation” that fuelled the PC revolution (and is affecting appliance proliferation as above). If you look closer at SaaS, you find that there are infrastructure-as-a-service vendors (e.g., Amzn), platform-as-a-service vendors (e.g. SF.com’s “force”) and true “packaged SaaS” players. As long as there is ample access to low cost pay-as-you-go access to “components” of SaaS, there will be a continuing explosion of entrepreneurs engaged in creating yet-another-webservice. That is plenty generative. However, these entrepreneurs are likely to move away over time from “aggressively capital wasteful” models like “freemium”, because the costs of search will fall further (with networking, and serendipitous service discovery), allowing them to move (on average) to more “fee/event-based’ monetization, and get ever smaller startups to be more profitable. That is the dream of the long-tail in SaaS.

3) I really found this “enforcement via beta testing” analogy very eye opening. I sometimes go to a movie archival facility in SF, called Oddball Cinema, to watch “curated screenings” of old film on a narrow topic (e.g., a Friday evening 3 hour curation of shorts from the 60′s on the dangers of drug use, or a Saturday evening 2 hour compilation of VW ads over the ages). Oddball Cinema buys a lot of old film from various parts of the world, and stores them in a large warehouse. When producers (like those of the movie on Harvey Milk) want some footage, they come to Oddball, search for that footage, have it digitized and restored, and pay Oddball for access to the clip. However, in many such cases, the IP actually still rests with the studio, or (as in the case of advertisements) some corporation, and the user has to separately get covered on these rights to reuse a clip. Most intellectual property is licensed in such a way as to keep the costs of enforcement very low, and just warn the user to behave, with enforcement kicking in only AFTER some user decides to violate the policy and abuses the IP for commercial gain. Essentially, law is relying on the markets to “price” the costs of delivering justice. If I notice a patent of mine being infringed, the propensity of the IP owner to make the effort (and bear the costs) of suing the infringer, is proportional to the “lawsuit-worthy value” of the infringer, and the “practicality of recovering lost revenues” from the current state of provable abuse. If the abuse is small, or the infringer poor (or remote), then a cease-desist notice is probably all that is “affordable” and sufficient. In general, Law is in a state of beta because abuses are also “generative”, and it takes time for the “governance” to catch up, and money as well. Perhaps America’s highly litigous society is the first one in the world where rights infringements can be challenged “with leverage”, by borrowing against the future “potential value” of success in the lawsuit (since there are many hungry lawyers waiting to take those chances and take on such cases). An vast supply of lawyers, and a huge database of precedent on every possible infringement (that may be applied against “generative” creative abuse) may well be America’s secret sauce in rendering legal recourse “accessible” to most, hence giving its laws more claws

Nice post, I really enjoyed it, and learned a bit.

I do think copyright and patent law at least are outdated, but something creative needs to fill the gap to create an incentive structure for, well, creative people to create. I wouldn’t look for innovation from legal scholars though. The great lawgivers of history have typically been politicians, not lawyers.

I like to think of cash and cash equivalents – anonymous negotiable instruments which transfer a clean title to the recipient – as performing a similar function, by allowing the existence of a mechanism to quietly protest “unfair” taxes or other state-imposed economic burdens. This is something which the rather naive chaps at Arthakranti don’t seem to get.

The intersection of the global Internet, the multinational corporation and the nation state seem to me a fertile and worthy prospecting ground for the futurist with a fine legal mind. Indeed, it may even provide some of the antidotes to Zittrain’s fears. As long as we have a world with competing nations with contrasting legal systems, competing companies, yet needing the existence of one Internet to bind them all, we should be OK.

Witness the death-and-rebirth of The Pirate Bay. Their legal page makes for very entertaining reading. Most of their correspondence is from big American companies giving the Swedes DMCA takedown notices, to which they respond with gleeful taunts and insults.

The litmus test of the Internet is this (and it really works for everybody): imagine the people whom you hate or dislike the most – can they access the internet and spread their vile and poisonous lies? Can you see it? Can you do likewise? Can they see it? As long as the answers are yes, we’re good.