Value-systems and the nature of goods

by Roberto Verzola

[This is the main text of a paper presented at the 11th Annual
Conference of the Philippine International Forum, held in Cebu City on
February 22-24, 1994.  PIF is an organization of expatriates, many of
them church-related, who work with Philippine non-government
organizations.  ]

As some of you may know, I am an electrical engineer by training and a
computer consultant by profession.  I was also a social activist in the
university, and I have remained so ever since.  In the past few years,
I've been involved in studying social issues relating to information
technology and exploring the possibility that information technologies
can be used for democratization and popular empowerment.

Over the past 12 years or so, I have been working with computers
practically on a daily basis.  And when one works with computers -
especially with computer software and data - one is working with
practically pure information.  It is in the course of my work with
computers that I've gained a few insights about the nature of
information.

We know, for instance, that information is not matter.  As the scientist
would say, it has no mass and it doesn't occupy physical space.  It is
intangible.  In the past decades, scientists have been able to precisely
define information.  I will not go into this precise definition now, but
let me just say that it is related to the concept of uncertainty:
information is that which resolves or reduces uncertainty.

What is very interesting to me is the fact that since information is
non-material, it is very easy to reproduce.  Sharing information with
somebody else already reproduces information.  Talking before you right
now reproduces information many-fold.  Broadcasting information over the
radio or television can reproduce information thousands - even
millions - of times over.  Every time I copy a diskette, this quality of
information reveals itself before me.  Whether it is a conversation, a
public performance, an electronic broadcast, or the copying of tapes and
diskettes, it is clear that once information is generated, the cost of
reproducing it eventually becomes negligible.

Let me present this nature of information in a different way.  When I
let a friend copy a computer program, I do not lose possession of the
program.  I still have my own copy.  Sharing one's worldly belongings is
difficult for many to do because to give away material goods is to lose
possession of these goods.  But sharing knowledge and information is the
most natural thing to do, because we don't lose them when we share them.

Thus, it is most natural that computer users share programs among
themselves.  Sharing information freely comes naturally.  How can one be
so selfish as to deny a copy of a computer program from a friend if one
won't lose the program by sharing it?

However, now comes the Business Software Association (BSA) and the
government of the United States, asserting that copying computer
programs is stealing, that for every copy we share, we are actually
"stealing" hundreds of dollars from American corporations.  This is
quite a clash of values, isn't it?

Before I jump ahead of my story, let me state at this time the first
major observation that came out of my twelve years of work with
computers and information technology: it takes very little to share
information, and people share information freely.

This is true of knowledge and information we hold in our minds.  It is
true of music, poems, and songs.  It is true of computer programs and
computer data.  It is also true of genetic information as contained in
seeds, plants and animals.

But this problem with the BSA and the U.S.  government remains: they
want to stop us from sharing freely.  Instead, they want us to
acknowledge the ownership claims that some have staked on information.
These ownership claims are in the form of exclusive usage and copying
rights, or intellectual property rights (IPR) -- their intellectual
property rights.

For those who might think the U.S.  value system is the more "natural"
system, let me tell you another story.  This one comes from the Bible:

When it was evening, his disciples came to him and said, "We are in a
lonely place and it is now late.  You should send these people away so
they can go to the villages and buy something for themselves to eat."

But Jesus replied, "They do not need to go away; you give them something
to eat." They answered, "We have nothing here but five loaves and two
fishes." Jesus said to them, "Bring them here to me."

Then he had everyone sit down on the grass.  He took the five loaves and
the two fishes, raised his eyes to heaven, pronounced the blessing,
broke the loaves and handed them to the disciples to distribute to the
people.  And they all ate, and everyone had enough; then the disciples
gathered up the leftovers, filling twelve baskets.  Every time I share
the contents of a diskette with a friend, I am always reminded of the
miracle of the loaves.  After all, knowledge is food for the mind.  With
it, we can feed thousands of families with knowledge, and we will
certainly be left with more than what we started with.  I have also
confirmed that our Muslim and Buddhist friends are familiar with
analogous stories in their own cultures.

The message behind the act of sharing miraculous loaves of bread must be
extremely important indeed, because the miracle occurs twice in Biblical
passages.  And how significant, too, that the world's greatest religions
would teach the same lesson through analogous parables.

Given the issue of intellectual property rights, the first major
question crops up: why is it, that some societies extol information
sharing, while other societies stake monopolistic ownership claims on
information goods?  Why do rural folk exchange seeds freely, while
corporations want monopoly rights over seeds through patents?  Why does
BSA and the U.S.  government want to impose - as they've successfully
done through the General Agreement on Trade and Tariffs (GATT) -- their
value-systems concerning information over our own value-systems?

This takes us to a parallel research I did, this time, on the U.S.
economy.  I thought that there must be something in the U.S.  economy
which was propelling the extension of highly monopolistic private
property concepts to areas like information and life forms.  The most
important observation that emerged from my readings was this: the U.S.
economy had undergone a fundamental change in the nature of the goods
that it produces.  A few decades back, U.S.  products were industrial
goods of the tangible, material kind - cars, television sets, and
machineries, for example.  The principal U.S.  products today are
fundamentally different; they are intangible, non- material products -
books, software, video and audio tapes, databases, etc.  Some products -
like pharmaceuticals and biotechnology products - might be tangible, but
much of their prices reflect the intangible content, protected through
patents or copyrights.

One of the first to make this observation was the American sociologist
Daniel Bell, who, as early as the late 50's, raised observations about
the emerging "post-industrial" society in the U.S.  Alvin Toeffler later
popularized and expanded this concept through his works Future Shock,
Third Wave, and Powershift.  Marc Porat did a very detailed statistical
study confirming the emergence of what can now be called the information
economy in the United States.  Today, we can state with certainty that
the dominant sector in the U.S.  economy is the information sector.  It
is responsible for the biggest share in the GNP, in U.S.  exports, in
employment, and in just about every economic measure one can use.  It is
a sector whose voice in U.S.  government policies has become much
stronger recently.  Witness how the intellectual property rights issue
has become the number one rallying cry of U.S.  diplomacy all over the
world.

It is this fundamental shift in the nature of U.S.  products, which has
led to the emergence of a highly monopolistic ownership system over
information goods.  Let me go back to my first observation: it takes
very little to copy information.  We know, for example, how little it
costs to copy a diskette.  The corollary observation, however, is that
if one can prevent others from freely copying information, such as those
sold in diskettes or tapes, then they will have market value, and
because the reproduction cost is minimal, the margins of profit would be
extremely high indeed.  It is the high profit margins derived from the
sale of monopolistically- owned information products which led to the
rapid growth of the U.S.  information sector.  With the growth of this
sector, particularly because it controlled the media, came the
increasing dominance of the value-system that supports monopolistic
private ownership systems over information.

Let me now summarize the fundamental difference between an industrial
economy, as the U.S.  economy was several decades ago, and an
information economy, as the U.S.  economy is today: an industrial
economy produces tangible, material goods while an information economy
produces intangible, non-material goods.  Material goods require raw
materials which are then transformed into finished prooducts by human
labor.  Information goods are mostly the result of mental work and, once
created, may be reproduced at practically no cost.  They may also be
shared without loss.

Having done this comparative study of industrial and information
economies, I went further and did an analysis of an agricultural
economy, likewise from the viewpoint of the nature of the goods
produced.  Here, I came to a somewhat different observation from what
has traditionally been considered agricultural work.  Traditionally,
agricultural and industrial sectors were differentiated on the basis of
land.  Simplistically put, working the land was considered agricultural
work; working with machines was considered industrial work.

I realized that on the basis of the nature of the goods that they
products, there was a clearer and much more insightful dividing line
between the agriculture and the industrial sectors, just as clear and
insightful as the material/non-material divide between the industrial
and the information sectors.  What is this dividing line?  This is the
line between the living and the non-living.

In agriculture we find issues of birth, growth, reproduction and death.
Here we grapple with the relation of human beings with nature and the
rest of the living world.  While the industrial sector involves the
physical transformation of dead matter into finished products through
the application of human labor, the agriculture sector involves the
regeneration and the reproduction of life through the operation of
natural processes.  What a world of difference!  Consider driving a nail
into wood: to drive nail into the wood, one must hit it with a hammer.
One must apply human or machine power on dead matter to transform it
into a finished product.  Consider the typical industrial operations:
punching, drilling, boring, milling, grinding, melting, etc.  Imagine
the kind of value-system or - to use my preferred term - world-view,
that will emerge when this is one's activity eight or more hours a day,
most days of the week.

Consider, on the other hand, raising a crop.  You water the plants; you
give them tender loving care.  You cannot even speed up the process.  As
the song goes, there is a time for everything under heaven.  This is an
entirely different value-system we are talking about.  You can perhaps
understand why I myself prefer to call the agriculture sector the
ecology sector.

Finally, in a roundabout way, I have come to the gist of my
presentation.

Based on the nature of the goods and services they produce, economies
have three major sectors: the agriculture sector, the industrial sector
and the information sector.  In countries like the Philippines, the
agriculture sector remains the dominant sector.  In the NICs, the
industrial sector has become dominant.  In the U.S.  and to a lesser
extent Europe, it is the information sector which is now dominant.

For each sector can be identified sets of value-systems or world-views.

The agriculture or ecology sector promotes a world-view that reflects
our relationship with nature and the processes of regeneration and
reproduction of life.  Whether one is living off nature as a
hunter/gatherer, planting food crops, domesticating animals for their
milk and meat, or raising a family, we have to come to terms with the
great laws of nature; we have to fit ourselves into the pace and tempo
of nature's own processes.  We must learn to adapt, to live in harmony
with our surroundings.  It is in agricultural activities where we are
the in best position to appreciate that we are part of nature, nurtured
by it, and with an obligation to nurture it in turn.

My wife comes from a farming family.  Her first instinctive action,
after eating a delicious fruit, is to save the seeds.  My grandmother
used to save everything she could, pieces of thread, pieces of paper,
pieces of wood, pieces of metal.  She knew they would be of use
someday.  She was expressing an ecological principle: in nature, nothing
is wasted.  In most rural communities, frugality remains a virtue - a
lesson picked up from centuries of indigenous ecological learning.

It is in the ecology sector where spirituality easily takes root,
because there is so much in nature and life processes that proceed
without human intervention and are beyond our means to control and even,
perhaps, to understand.

The industrial sector, on the other hand, expresses a world- view that
reflects the central role of human labor power in transforming dead
matter into a finished product.  In nature, living things grow even
without human intervention.  But dead matter cannot transform itself
into a finished product.  Human labor power, frequently magnified by
machines and technology, must be applied on the raw material, to mould
and transform it into a product.  We can see here the central role of
power in material transformation.  The history of technology might be
seen as the development of various ways by which power can be brought to
bear upon dead matter to transform it into a useful product.  In our
local language, to be compared to a nail means to move only after a
shove.  The shepherd and the crop grower, who have no choice but to bide
their time and keep in step with nature's own tempo, must appear
slothful indeed to workers and industrialists who transform raw
materials by their own labor or by the power of machines.

I have referred earlier to the difference between material and
non-material goods.  Put five pieces of bread (of the non-miraculous
variety) on the table and tell ten hungry men to get one piece each and
one can expect keen competition for possesion of the pieces.  They have
a term for this in mathematics: zero-sum games.  These are situations
where the gain of one means somebody else's loss.  In order to win, you
must defeat somebody else.  A piece of bread in their hands means one
less for me.  So, I must fight for my piece.  International trade is
another example of a zero-sum game.  For a country to attain a positive
balance of trade, some of its partners must show a negative balance of
trade, because by definition, the sum total of all exports and imports
of all countries is zero.  This is the case with material goods which
are in scarcity, which is almost always the case because we can never
have an infinite supply of material goods.  Zero-sum games are, by
nature, highly competitive games.  The pitfall of many socialist
economies was that they underestimated this aspect of competition for
material goods, which emanates from the very nature of material goods.

On the other hand, the acquisition of information is not a zero-sum
game.  If I put a diskette on the table and told everybody to make a
copy for themselves, I will still have a copy afterwards.  Your gain is
not my loss.  If everybody put their diskettes on the table for copying
by others, we will all have gained in the process.  This is what
mathematicians call a positive-sum game.  Positive-sum games are highly
cooperative.  If socialist advocates erred in thinking they could
abolish competition for material goods, they stand on much more solid
ground in advocating socialist principles for information.

By their very nature, information goods are public goods and the urge to
share is completely in harmony with the nature of information.

However, work in the information sector can also develop a sense of
omnipotence and absolute power that can distort the sense of the
information creator.  Those who have done some computer programming, or
even played a simple video game, will know exactly what I mean.  Because
information is non-material and intangible, it does not need the kind of
raw materials and energy supply that naturally puts a "limit to growth"
on material goods production.  The concept of the infinite (both in
growth and in power) becomes a reality in the information sector.  One
can create something out of nothing, create virtual worlds where one can
become a virtual god.  One can wield limitless power and be in total
control of "reality".  Because the information sector has only recently
become a major sector, it is difficult to comprehend the implications of
such illusions of absolute power and total control.  These concepts of
power and control emerged strongly in industrial economies, but they may
reach their full expression in information economies.

A very common problem with value-systems is the widespread
misapplication of value-systems (or world-views) which might be
appropriate for one sector of the economy but not for another sector.
This has happened most often with the industrial sector's value systems,
and this may be called industrialism.  Industrial thinking puts the
power of human actions (amplified by machines) at the center of the
universe.  Nothing will get done if you don't roll up your sleeves to do
it.  Put in more inputs and more power and you get more outputs.  Put in
more workers and money and you'll get it done faster.  This attitude
becomes the dominant attitude not only in the production of material
goods but also in social relations and in politics.

Married with profit-motivated commodity production, this view has led to
a concept of growth without limit, of production for the market, of
market expansion.  True, it has led to the availability of a vast
variety of goods for popular convenience and comfort.  But it has also
led to the profligate use of raw materials and energy sources from
nature.  It has led to social monstrosities, both of the capitalist and
the socialist kind, and to environmental disasters, some of which
threaten the very existence of life on earth.  It has led to the
meaningless production of commodities whose main purpose is not to
satisfy genuine human needs but to generate profits.  It has led to the
emergence of junk culture, whose main purpose is to generate for demand
for commodities and raise profit levels which will in turn pay for the
creation of more junk culture - a cancerous growth of decadence,
commodity production and profit accumulation.

The concept of private property, while it emerges naturally for the
zero-sum nature of material goods acquisition, has expanded way beyond
the range of dead matter and material goods.  It has grown more
absolute.  A very monopolistic expression may be found in the concept of
intellectual property rights, another misapplication of the private
property concepts of industrialism.  Under this concept, information may
not only be privatized but also opened for monopoly claims of
ownership.  This concept was first innocuously applied to literary works
and inventions, but has since expanded to cover a vast range of
knowledge and information goods.  Now it even includes genetic
information and processes in microorganisms, plants, animals, and, yes,
human beings.  It is curious to note that the claimant to intellectual
property rights thinks the same of information as a landlord thinks of
land: once you successfully stake a claim of ownership over a piece of
it, you can sit down and charge the rest of society rents for the use of
your property.

I would like to pause here and review very briefly - perhaps,
simplistically - the three sectors and the different value-systems that
emerge from them:

1.  The ecology sector teaches us respect for life and the need for
harmony with nature and its processes.  On the other hand, it develops a
somewhat passive attitude towards life and the environment.

2.  The industrial sector teaches us the value of work and the capacity
of people to transform their surroundings.  On the other hand, this can
result in overaggressiveness and excessive competition.

3.  The information sector teaches us the value of cooperation and of
sharing knowledge freely.  On the other hand, because it gives a feeling
of total control and absolute power by the intellectual creator, can
lead to a very distorted sense of reality.

Which value-system should we adopt?  Should we, as the Philippines 2000
program intends to do, try to catch up with the rest of the NICs and
make the industrial sector and its value-systems the dominant sector of
our economy?  Or should we follow the footsteps of the United States and
go beyond the industrial stage?  Should we, in fact, leapfrog
industrializaton, transform our economy into an information economy, and
adopt in full the concepts of intellectual property rights?  Or should
we remain a predominantly agricultural economy as we had been in the
past, living in blissful harmony with nature?

To me, the answer is, none of the above.  Rather, it is to attain a
balanced and harmonious development of the three sectors, all of which
are important to us.  We must also learn to be proficient in each of the
value-systems that emerge from them, selecting what appears to be good
and rejecting what appears to be bad.

Is it possible to adopt three conflicting world-views?  I would compare
this to speaking three different languages.  We must become fluent in
speaking English, Tagalog, and Cebuano.  Fluency comes from a mastery of
each of the languages, and internalizing their structure, grammar,
vocabulary, and idioms.  To speak a mish-mash of English, Tagalog, and
Cebuano words is not fluency in the three languages; it shows a lack of
mastery in any of the three.  We must be able to shift effortlessly from
one language to another, depending on the situation, the location, and
the people.  Perhaps, by personal preference, or by accident of birth or
family, we are more fluent in one than in another, but we must know
enough to become accepted by native speakers of the three.

The ideal person, and by extension, the ideal society, for me, is one
that speaks these three languages fluently and knows when to use one
language and value-system, and when to use the other.  And this can
happen on a wide-scale only if our economy itself reflected the balanced
and harmonious development of the agriculture, industrial and
information sectors.