The Wealth of Networks:
How Social Production Transforms Markets and Freedom
by Yochai Benkler, Yale University Press

© Copyright 2006, Yochai Benkler.

Chapter 9
Justice and Development

This online version has been created under a Creative Commons Attribution Noncommercial ShareAlike license - see - and has been reformatted and designated as recommended reading - with an accompanying Moodle course - for the NGO Committee on Education CONGO - the Conference Of Non-Governmental Organizations in Consultative Relationship with the United Nations - in conjunction with the Committee's commitment to the United Nations Decade of Education for Sustainable Development, the International Decade for a Culture of Peace and Non-violence for the Children of the World and related international Decades, agreements, conventions and treaties.


"Human nature is not a machine to be built after a model, and set to do exactly the work prescribed for it, but a tree, which requires to grow and develop itself on all sides, according to the tendency of the inward forces which make it a living thing."

"Such are the differences among human beings in their sources of pleasure, their susceptibilities of pain, and the operation on them of different physical and moral agencies, that unless there is a corresponding diversity in their modes of life, they neither obtain their fair share of happiness, nor grow up to the mental, moral, and aesthetic stature of which their nature is capable."

John Stuart Mill, On Liberty (1859)

Chapter 9 Justice and Development

How will the emergence of a substantial sector of nonmarket, commons-based production in the information economy affect questions of distribution and human well-being?

Despite the caution required in overstating the role that the networked information economy can play in solving issues of justice, it is important to recognize that information, knowledge, and culture are core inputs into human welfare.

We can analyze the implications of the emergence of the networked information economy for justice or equality within two quite different frames.

The opportunities that the network information economy offers, however, often run counter to the central policy drive of both the United States and the European Union in the international trade and intellectual property systems.

Liberal Theories of Justice and the Networked Information Economy

Liberal theories of justice can be categorized according to how they characterize the sources of inequality in terms of luck, responsibility, and structure.

We can think of John Rawls's Theory of Justice as based on a notion that the poorest people are the poorest because of dumb luck.

The basic observation that an individual's economic condition is a function of his or her own actions does not necessarily resolve into a blanket rejection of redistribution, as we see in the work of other liberals.

The networked information economy improves justice from the perspective of every single one of these theories of justice.

It is easy to see why a policy shift from A to B would be regressive from the perspective of theories like Rawls's or Ackerman's.

From the perspective of Ackerman's theory of justice, the advantages of the networked information economy are clearer yet.

From the perspective of liberal theories of justice, then, the emergence of the networked information economy is an unqualified improvement.

Commons-Based Strategies for Human Welfare and Development

There is a long social-democratic tradition of focusing not on theoretical conditions of equality in a liberal society, but on the actual well-being of human beings in a society.

The emerging salience of global development as the core concern of distributive justice is largely based on the sheer magnitude of the problems faced by much of the world's population./2

The Human Development Report was initiated in 1990 as an effort to measure a broad set of components of what makes a life livable, and, ultimately, attractive.

figure 9.1

Figure 9.1: HDI and Information

Information-Embedded Goods and Tools, Information, and Knowledge

One can usefully idealize three types of information-based advantages that developed economies have, and that would need to be available to developing and less-developed economies if one's goal were the improvement in conditions in those economies and the opportunities for innovation in them.

Industrial Organization of HDI-Related Information Industries

The production of information and knowledge is very different from the production of steel or automobiles.

Table 9.1: Map of Players and Roles in Major Relevant Sectors

Actor Sector Government Universities, Libraries, etc. IP-Based Industry Non-IP-Based Industry NGOs/ Nonprofits Individuals
Software Research funding, defense, procurement Basic research and design; components "incubate" much else Software publishing (1/3 annual revenue) Software services, customization (~2/3 annual revenue) FSF; Apache; W3C; IETF Free/ open-source software
Scientific publication Research funding University presses; salaries; promotion and tenure Elsevier Science; professional associations Biomed Central PLoS; ArXiv Working papers; Web-based self-publishing
Agricultural Biotech Grants and government labs; NARS Basic research; tech transfer (24% of patenting activity) Monsanto, DuPont, Syngenta (~74% of patents) No obvious equivalent CAMBIA BIOS CGIAR Farmers
Biomed/ Health Grants and government labs Basic research; tech transfer (~50%?) Big Pharma; Biotech (~50%?) Generics OneWorld Health None

Table 9.1 identifies the relative role of each of the types of main actors in information and knowledge production across the major sectors relevant to contemporary policy debates.

Toward Adopting Commons-Based Strategies for Development

The mainstream understanding of intellectual property by its dominant policy-making institutions - the Patent Office and U.S. trade representative in the United States, the Commission in the European Union, and the World Intellectual Property Organization (WIPO) and Trade-Related Aspects of Intellectual Property (TRIPS) systems internationally - is that strong protection is good, and stronger protection is better.

Intellectual property is particularly harmful to net information importers.

The practical politics of the international intellectual property and trade regime make it very difficult to reverse the trend toward ever-increasing exclusive property protections.

The political landscape is, however, gradually beginning to change.

The promise of the commons-based strategies explored in the remainder of this chapter is that they can be implemented without changes in law - either national or international.


The software industry offers a baseline case because of the proven large scope for peer production in free software.

In the context of development, free software has the potential to play two distinct and significant roles.

The last and quite distinct potential gain is the possibility of creating a context and an anchor for a free software development sector based on service.

Scientific Publication

Scientific publication is a second sector where a nonproprietary strategy can be implemented readily and is already developing to supplant the proprietary model.

The first cluster is closer to the traditional peer-review publication model.

The second approach to scientific publication parallels more closely free software development and peer production.

While ArXiv offers a single repository, a much broader approach has been the developing practice of self-archiving.

Other types of documents, for example, primary- and secondary-education textbooks, are in a much more rudimentary stage of the development of peer-production models.

Software and academic publication, then, offer the two most advanced examples of commons-based strategies employed in a sector whose outputs are important to development, in ways that improve access to basic information, knowledge, and information-embedded tools.

Commons-Based Research for Food and Medicines

While computation and access to existing scientific research are important in the development of any nation, they still operate at a remove from the most basic needs of the world poor.

Food Security: Commons-Based Agricultural Innovation

Agricultural innovation over the past century has led to a vast increase in crop yields.

Scientific plant improvement in the United States dates back to the establishment of the U.S. Department of Agriculture, the land-grant universities, and later the state agricultural experiment stations during the Civil War and in the decades that followed.

The "Green Revolution," as the introduction of these new, scientific-research-based varieties has been called, indeed resulted in substantial increases in yields, initially in rice and wheat, in Asia and Latin America.

The agricultural research that went into much of the Green Revolution did not involve biotechnology - that is, manipulation of plant varieties at the genetic level through recombinant DNA techniques.

This largely benign story of increasing yields, resistance, and quality has not been without critics, to put it mildly.

Perhaps the oldest component of the critique is the social-economic critique.

The social-economic critique has been enmeshed, as a political matter, with environmental, health, and consumer-oriented critiques as well.

This combination of social-economic and postcolonial critique, environmentalism, public-health concerns, consumer advocacy, and farm-sector protectionism against the relatively industrialized American agricultural sector reached a height of success in the 1999 five-year ban imposed by the European Union on all GM food sales.

Private-sector investment, in turn, operates within a system of patents and other breeders' exclusive rights, whose general theoretical limitations are discussed in chapter 2.

The central question raised by the increasing privatization of agricultural biotechnology over the past twenty years is: What can be done to employ commons-based strategies to provide a foundation for research that will be focused on the food security of developing world populations?

First, some of the largest and most rapidly developing nations that still have large poor populations - most prominently, China, India, and Brazil - can achieve significant advances through their own national agricultural research systems.

Alongside the national efforts in developing nations, there are two major paths for commons-based research and development in agriculture that could serve the developing world more generally.

PIPRA is a collaboration effort among public-sector universities and agricultural research institutes in the United States, aimed at managing their rights portfolio in a way that will give their own and other researchers freedom to operate in an institutional ecology increasingly populated by patents and other rights that make work difficult.

The basic insight of PIPRA, which can serve as a model for university alliances in the context of the development of medicines as well as agriculture, is that universities are not profit-seeking enterprises, and university scientists are not primarily driven by a profit motive.

Table 9.2: Selected University Gross Revenues and Patent Licensing Revenues

Total Revenues Licensing and Royalties Government Grants & Contracts

(millions $)  (millions $)  % of total  (millions $) ) % of total
All universities $227,000 $1,270 0.56%  $31,430 13.85%
University of California $14,166 $81.3
$55 (net)/b
$2,372 16.74%
Stanford University $3,475 $43.3
$860 24.75%
Florida State $2,646 $35.6 1.35% $238 8.99%
Harvard $2,473 $47.9 1.94% $416
Columbia University $2,074 $178.4
$532 25.65%
University of Wisconsin-Madison $1,696 $32 1.89% $417.4 24.61%
University of Minnesota $1,237 $38.7 3.12% $323.5 26.15%
Cal Tech $531 $26.7/e
$268 50.47%
Sources: Aggregate revenues: U.S. Dept. of Education, National Center for Education Statistics, Enrollment in Postsecondary Institutions, Fall 2001, and Financial Statistics, Fiscal Year 2001 (2003), Table F; Association of University Technology Management, Annual Survey Summary FY 2002 (AUTM 2003), Table S-12. Individual institutions: publicly available annual reports of each university and/or its technology transfer office for FY 2003.


  1. Large ambiguity results because technology transfer office reports increased revenues for year-end 2003 as $178M without reporting expenses; University Annual Report reports licensing revenue with all "revenue from other educational and research activities," and reports a 10 percent decline in this category, "reflecting an anticipated decline in royalty and license income" from the $133M for the previous year-end, 2002.

    The table reflects an assumed net contribution to university revenues between $100-120M (the entire decline in the category due to royalty/royalties decreased proportionately with the category).

  2. University of California Annual Report of the Office of Technology Transfer is more transparent than most in providing expenses - both net legal expenses and tech transfer direct operating expenses, which allows a clear separation of net revenues from technology transfer activities.
  3. Minus direct expenses, not including expenses for unlicensed inventions.
  4. Federal- and nonfederal-sponsored research.
  5. Almost half of this amount is in income from a single Initial Public Offering, and therefore does not represent a recurring source of licensing revenue.
  6. Technology transfer gross revenue minus the one-time event of an initial public offering of LiquidMetal Technologies.

As table 9.2 shows, except for one or two outliers, patent revenues have been all but negligible in university budgets./19

While PIPRA shows an avenue for collaboration among universities in the public interest, it is an avenue that does not specifically rely on, or benefit in great measure from, the information networks or the networked information economy.

The most ambitious effort to create a commons-based framework for biological innovation in this field is BIOS.

The licensing or pooling component is more proactive, and is likely the most significant of the project.

PIPRA and the BIOS initiative are the most salient examples of, and the most significant first steps in the development of commons-based strategies to achieve food security.

Access to Medicines: Commons-Based Strategies for Biomedical Research

Nothing has played a more important role in exposing the systematic problems that the international trade and patent system presents for human development than access to medicines for HIV/AIDS.

To the extent that the United States and Europe are creating a global innovation system that relies on patents and market incentives as its primary driver of research and innovation, these wealthy democracies are, of necessity, choosing to neglect diseases that disproportionately affect the poor.

The industrial structure of biomedical research and pharmaceutical development is different from that of agricultural science in ways that still leave a substantial potential role for commons-based strategies.

Universities and scientists have two complementary paths open to them to pursue commons-based strategies to provide improved research on the relatively neglected diseases of the poor and improved access to existing drugs that are available in the developed world but unaffordable in the developing.

Leveraging University Patents.

We have already seen in table 9.2 that while universities own a substantial and increasing number of patents, they do not fiscally depend in any significant way on patent revenue.

Universities are internally conflicted about their public and market goals.

If universities do make the change, then the more complex problem will remain: designing an institutional interface between universities and the pharmaceutical industry that will provide sustainable significant benefits for developing-world distribution of drugs and for research opportunities into developing-world diseases.

Universities working together can cooperate to include in their licenses provisions that would secure freedom to operate for anyone conducting research into developing-world diseases or production for distribution in poorer nations.

Nonprofit Research

Peer Production of Drug Research and Development

First, anything that can be done through computer modeling or data analysis can, in principle, be done on a peer-production basis.

Second, and more complex, is the problem of building wet-lab science on a peer-production basis.

This proposal about medicine is, at this stage, the most imaginary among the commons-based strategies for development suggested here.

Commons-Based Strategies for Development: Conclusion

Welfare, development, and growth outside of the core economies heavily depend on the transfer of information-embedded goods and tools, information, and knowledge from the technologically advanced economies to the developing and less-developed economies and societies around the globe.

The rise of the networked information economy provides a new framework for thinking about how to work around the barriers that the international intellectual property regime places on development.

Ideally, perhaps, the most direct way to arrive at a better system for harnessing innovation to development would pass through a new international politics of development, which would result in a better-designed international system of trade and innovation policy.

The practical freedom of individuals to act and associate freely - free from the constraints of proprietary endowment, free from the constraints of formal relations of contract or stable organizations - allows individual action in ad hoc, informal association to emerge as a new global mover.


1. Anne Alstott and Bruce Ackerman, The Stakeholder Society (New Haven, CT: Yale University Press, 1999).

2. Numbers are all taken from the 2004 Human Development Report (New York: UN Development Programme, 2004).

3. Amartya Sen, Development as Freedom (New York: Knopf, 1999), 46-47.

4. Carol Tenopir and Donald W. King, Towards Electronic Journals: Realities for Scientists, Librarians, and Publishers (Washington, DC: Special Libraries Association, 2000), 273.

5. Harold Varmus, E-Biomed: A Proposal for Electronic Publications in the Biomedical Sciences (Bethesda, MD: National Institutes of Health, 1999).

6. C. K. Prahald, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Upper Saddle River, NJ: Wharton School of Publishing, 2005), 319-357, Section 4, "The ITC e-Choupal Story."

7. For the sources of numbers for the software industry, see chapter 2 in this volume. IBM numbers, in particular, are identified in figure 2.1.

8. These arguments were set out most clearly and early in a public exchange of letters between Representative Villanueva Nunez in Peru and Microsoft's representatives in that country.

9. A good regional study of the extent and details of educational deprivation is Mahbub ul Haq and Khadija ul Haq, Human Development in South Asia 1998: The Education Challenge (Islamabad, Pakistan: Human Development Center).

10. Robert Evenson and D. Gollin, eds., Crop Variety Improvement and Its Effect on Productivity: The Impact of International Agricultural Research (New York: CABI Pub., 2002); results summarized in Robert Evenson and D. Gollin, "Assessing the Impact of the Green Revolution, 1960-2000," Science 300 (May 2003): 758-762.

11. Jack R. Kloppenburg, Jr., First the Seed: The Political Economy of Plant Biotechnology 1492-2000 (Cambridge and New York: Cambridge University Press, 1988), table 2.2.

12. USDA National Agriculture Statistics Survey (2004),

13. First Report of the GM Science Review Panel, An Open Review of the Science Relevant to GM Crops and Food Based on the Interests and Concerns of the Public, United Kingdom, July 2003.

14. Robert E. Evenson, "GMOs: Prospects for Productivity Increases in Developing Countries," Journal of Agricultural and Food Industrial Organization 2 (2004): article 2.

15. Elliot Marshall, "A Deal for the Rice Genome," Science 296 (April 2002): 34.

16. Jikun Huang et al., "Plant Biotechnology in China," Science 295 (2002): 674.

17. Huang et al., "Plant Biotechnology."

18. Richard Atkinson et al., "Public Sector Collaboration for Agricultural IP Management," Science 301 (2003): 174.

19. This table is a slightly expanded version of one originally published in Yochai Benkler, "Commons Based Strategies and the Problems of Patents," Science 305 (2004): 1110.

20. Wim Broothaertz et al., "Gene Transfer to Plants by Diverse Species of Bacteria," Nature 433 (2005): 629.

21. These numbers and others in this paragraph are taken from the 2004 WHO World Health Report, Annex Table 2.

22. National Science Foundation, Division of Science Resource Statistics, Special Report: National Patterns of Research and Development Resources: 2003 NSF 05-308 (Arlington, VA: NSF, 2005), table 1.

23. The detailed analysis can be found in Amy Kapzcynzki et al., "Addressing Global Health Inequities: An Open Licensing Paradigm for Public Sector Inventions," Berkeley Journal of Law and Technology (Spring 2005).

24. See Jean Lanjouw, "A New Global Patent Regime for Diseases: U.S. and International Legal Issues," Harvard Journal of Law & Technology 16 (2002).

25. S. Maurer, A. Sali, and A. Rai, "Finding Cures for Tropical Disease: Is Open Source the Answer?" Public Library of Science: Medicine 1, no. 3 (December 2004): e56.