De Long on network economy

Martin Schiller mart555 at inow.com
Thu Jul 22 18:21:26 PDT 1999


In a message of 7/22/99 4:39 PM from Brad De Long, <mailto:delong at econ.Berkeley.EDU>


>Yeah. But where are the profits going to come from? Profits from R&D
>arise only if the R&D allows you to set up some very strong barriers
>to entry behind which you can shelter. And I can't figure out what
>those are going to be...

Why does the profit or the value have to accrue to the original investor or developer (I mean for practical reasons, not just because they *want* it?) Knowledge is only valuable in relation to how widely it's broadcast. Widely broadcast, widely used and widely productive.

There are no secrets in Silicon Valley, but there is an economy of setting up "some very strong barriers". That's counterproductive activity.

Martin



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