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President's Page: The Hidden Costs of Free

Several weeks ago, an article in The New York Times caught my attention. It was ostensibly a real-estate piece; an only-in-hipster-Brooklyn story of a young man who, having grabbed some measure of success with a hit Internet TV show, was looking to move from an absurdly small studio apartment to one that at least had space for his bicycle.

What caught my eye, though, and has been disconcerting to me since the mid-1990s, is the assumption built into this young man’s résumé—that digital content in the 21st century, like his online show, comes for free. Because he, like so many Barnard graduates and bright young graduates across the city and the world, had thrown his talents and energy into a venture that essentially had no prospect of ever turning a profit. He was posting his show, for all to enjoy, with no expectation of any kind of financial return. Just as an entire generation of his peers is sharing videos on YouTube, expressing political opinions on Twitter, and displaying photos on Instagram.
This unleashing of creative energy is extraordinary, akin perhaps to the mechanical tinkering that stoked the Industrial Revolution of the 19th century, with one major difference. The innovators of the Industrial Age strove to sell their products. The creative geniuses of the Digital Age simply give it away.

Of course, vast fortunes are being made by some members of this movement. David Karp, founder of Tumblr, sold his firm to Yahoo!, for $1.1 billion. Facebook raised $16 billion in a 2012 IPO. Silicon Valley is generating millionaires and billionaires like so many tater tots. But the underlying philosophy of the Digital Age, forged in the earliest days of shareware and Wikipedia, is that information should be, must be, free. All of which is fabulous until you’re 27 and smart and desperate to move up from your 6- by 8-foot closet in Bushwick.

The underlying problem here is that the very folks who are scrambling to find a creative outlet that might pay the bills are the same ones who, as a generation, have no experience actually paying for content. Instead it is a generation raised on digital downloads and seamlessly shared musical files; on Web TV, and Hulu, and newsfeeds displayed in the palms of their hands. It is not their fault of course. Because it was us, their parents and teachers and policymakers, who neglected to create rules or property rights for the evolving Internet. It was us who, in the race to embrace and develop digital content, rejected any governmental intrusion into this new space, disdaining even the most basic regulatory structures—things like trademarks and copyrights—that prevail in the ancient world of analog.

The result is an energized but deeply asymmetrical economy. Some young people (and even a handful of older ones) are building firms, and raising funds, and generating legendary amounts of wealth. Some work for the emerging titans of the digital sphere: Google, Facebook, and the like. But many are also hovering around the creative fringes of this space, writing blogs and curating articles and producing online videos, very little of which are ever likely to generate income.

For individuals, the free flow of information and creative content is a godsend, putting worlds of data and music and personal connections literally at our fingertips. For society, however, free content actually comes at a cost. This cost may be worth paying. But for the moment at least it is also driving a seismic shift in employment patterns, redefining what a new generation of workers gets paid to do, and what they do for free.