From ownership to use*

* This dichotomy, or a ‘transition’ if you will, is part of the Adam Greenfield’s listthat I came across over at his blog. It reminded me of something I was thinking about a while ago, and that’s Marx’s theory (yea, I know, whatever). At the time, for whatever reason, I got reminded of Marx’s analysis of use value and exchange value. For Marx, exchange valueis the basis of capitalistic production, and indirectly the reason of all inequality in relations of production. Use value refers to the literal utilityof a commodity. Exchange value is its price that can, but not necessarily does, reflect its use value. So now if I rewind to the digital world, and its economy, it turns out that this Marx model gets turned on its head.

What people deem valuable online is stuff that has immediate practical value for them (is this worth my time & attention? does it help me do something? does it help me do something better than before?). There’s no value before use. And, there’s no value if it’s not delivered right there and then when someone needs it (maybe this is why advertising does not work — it promises some value (“buy product, be happy”), but delivers none at the spot).

Then, what’s deemed as valuable online is stuff used by the most people. The thing here is that different people value different things, and since there is ton of stuff on the web, what’s most valued by most people can mean that: a) those things are indeed superior in delivering value in their category of goods/services (Google, Dopplr Netflix, etc.) and/or b) those things exhibit network effects, so the more people use them, they become more useful to everyone involved (Facebook, Twitter). Neither of these two scenarios has any exchange value. No wonder it’s hard to make money on the web ☺

Since utility seems to be one of the core values of the web economy (and not necessarily “sharing” and “collaboration” which are great concepts in itself but don’t really explain the value of digital stuff unrelated to content — e.g. applications, tools, services, and social networks), I’m wondering why marketing people don’t kick in and start making their campaigns accordingly. Ultimately, I think they would make much more money with their products/services in the offline world if they reverse the economic rationale of their campaigns in the online world.

But I may be totally wrong.

First published on June 22, 2009