Christian+Fall+--+Research+Paper

**The issue of norms and perverse incentives in a public controlled by a private organization.** One area of great interest in Second Life is the translation of real life behaviors to the grid. How does one person act in the real world versus how they act via their avatar in Second Life? Our group research was aimed at investigating this idea through the idea of copyright and no-copy objects in Second Life. Through Lessig’s //Free Culture//, we have explored the idea of norms for copyrights, the shift from free Culture to permission culture, and perverse incentives. In real life, the growing private control of copyrighted materials has created piracy activity on the part of individuals and incentives to control rather than create for owners of copyright. The result of these incentives are things such as peer2peer (p2p) sharing software and copyright extensions. One of my aims for our group research was to see how this translated to behaviors in Second Life. Were there similar technologies and incentives in the grid? Are people who copy files via p2p software in real life more likely to behave similarly in Second Life?
 * The Public in Second Life:**

I believe this may be the result of some of the norms in Second Life regarding the values in the Grid. In the Shock Doctrine, we discussed the dangers regarding the erosion of the public and the control by private forces of public goods. But something to be considered is the fact that Second Life is a public sphere that is completely controlled by a private organization (Linden Labs). How will this affect the behaviors of the institutions? How will this affect the behaviors of individuals? Some of it can be traced to the copyright laws, as well as some of Linden Labs shift to trademark of certain phrases. Individuals seem less affected by these laws, until it comes to their buying and selling of no-copy objects. But what about the possibilities of what Linden can do with the information from their world? Every action on the part of individuals and every conversation are recorded somewhere. Yet as I spend time in Second Life, it seems to have no impact on individuals. Avatars participate in activities and say things in conversations regardless of what may happen with that information. What are the possibilities for this information? What happens if this privately held information becomes valuable and is made public? In discussion on American political thought, we have seen the need for a balance of public and private forces, and Dewey comments on the need for publics and privates to balance the technocratic approach to government. But it is essential to this discussion to keep in mind that this Second Life is a public that affects thousands of people, but it is subject to the norms, constraints, laws and architecture of a privately held company.


 * __The Issue of Public and Private__**

As John Dewey in //The Public and its Problems// says, “When indirect consequences are recognized and there are efforts to regulate them, something of a state comes into existence.”(Dewey 12) This is what is considered to be a public. When transactions affect more than the persons involved and, as Dewey contends, there are attempts to regulate the transactions. In contrast, Dewey says that a private transaction is confined mainly to the persons directly engaged in it. (Dewey 12) In theory, these ideas reflect discourse around the private interactions of the free market and liberalism, compared to government transactions.

In the //Shock Doctrine//, Naomi Klein has much to say about the proper position of the public and private spheres, as a result of seeing the extremes of private sphere control. By favoring private corporations through the funneling of public funds into private contracts the government participated in a “straight up transfer of hundred of billions of public dollars a year into private hands.” When the line between public and private gets blurry like this, and actually uses public finances to favor a few private individuals, there become great problems for the public. In fact, the entire interest of the public is ignored in these transactions. The private contracts are handed out, but with no competition. Incentives are given for private corporations to create public problems so that they can solve them with the help of government funding.

Lessig discusses this idea regarding copyright laws and finds almost the same resulting problems and behaviors. Copyright were laws designed to promote creativity among private individuals through patents, and over time these benefits would cross into the public sphere when the patents expire. As he describes from the constitution, “Congress has the power to promote the progress of science…by securing for limited times to authors…exclusive right to their…writings.”(Lessig 215) These laws were designed to balance the public and the private, and maximize the benefits of both. But Lessig also shows what wrong when these laws are shifted to favor the private over the public. By extending copyrights, and rewarding private individuals in lawsuits, the laws create a system that favors private control to the detriment of the public.


 * __Second Life as a Privately Owned Public__**



What is the case with Second Life, as pertains to the transactions both public and private and what are the laws and constraints that confine these two spheres? Consider that Second Life is a platform in which people can seemingly join up and participate in regular activities, just as in real life. As Wikipedia describes, [|“Residents (users) can explore, meet other Residents, socialize, participate in individual and group activities, have virtual sex, and create and trade items and services from one another.”] Almost 13 million accounts are registered in Second Life. Users can participate in chats, whether private and public, and visit countless sites throughout the grid. People can watch each other interact just as they can in real life.

Second Life also possesses its own means of regulation, making it by Dewey’s definition a public. While users are being ushered through the Information Island before entering the grid, the rules of Second Life are clearly explained. They mostly focus on respecting other Residents in the grid. Second Life and Second Life generated material are also regulated by the [|Digital Millennium Copyright Act]. This act will be discussed in more detail as a system of incentives, but it is important to note as a form of regulation of the users and the material they generate while in Second Life.

Second Life qualifies as a public sphere according to Dewey’s definition by involving interactions that have consequences for more than just the parties involved and by having a system of regulation. If the laws of Second Life change, they affect the almost 13 million users involved. If a user chooses to disrupt social activity in Second Life then it affects a general public. In this sense, Second Life can be viewed as a public just as Dewey defined. But it must also be considered that Second Life is not just a public that is operated, regulated and dependent on the users that occupy it. Rather, Second Life is a public that is operated by the private organization, Linden Labs, Incorporated. The rules, regulations, constraints and architecture of all of Second Life come down to what Linden Labs has envisioned for this world. If Linden Labs chooses to change something about the construct of Second Life, for example shutting down parts of the grid, it affects more than just Linden Labs. If Linden Labs chooses to change the laws of Second Life interactions, such as the protections for created material, it affects countless users that had no say in the manner.

Rather than eroding the public as Klein examined, or creating a system that favored private control discussed by Lessig, I contend that Second Life is a world created under private control-a privately owned public. In this sense, it is almost as if the thousands of users are entering into a social contract with a private organization. Rather than the traditional notion of social contract with a government, which is somewhat subject to the voice of the people, Residents of Second Life enter into a social contract with Linden Labs that is subject to the voices of Linden Labs. Observations from Klein and Lessig show the behaviors and perverse incentives that are created by the erosion of the public sphere in favor of the private.

Rather than create and promote the general welfare, this system favors control and funneling of public means into private hands. This also produces in individuals anti-social behaviors, such as piracy of files and rebellion against the government. But with a new idea for the public in Second Life, the resulting behavior should also be different. Behaviors and Perverse Incentives in Second Life__**
 * __

Lessig discusses in //Free Culture// the idea of perverse incentives and how they relate to the laws and constraints surrounding copyright. The initial idea for copyright laws was to promote creativity through private ownership and eventually benefit the public by releasing works into the public. But the system has morphed through private means so that the owners of copyright have more incentive to maintain ownership of their material. Rather than release their works to the public and promote more creativity among the public.

“The technology that preserved the balance of our history-between uses of our culture that were free and uses of our culture that were only upon permission has been undone. The consequence is that we are less and less a free culture, more and more a permission culture.” (Lessig pg. 8)

Smiley Clawtooth has done more extensive insight on the ideas of permission and free culture, and this also gets into ideas about cultural transmission and the incentives to control property. In real life, we see this played out through copyright laws and the piracy of copyrighted material. More and more, the laws of the United States are favoring ownership and copyright as a means to control material.

These are the types of behaviors that result in the invasion of the public sphere into the private sphere in real life. This can be used to gauge what happens in Second Life. Depending upon the laws and constraints of the society of Second Life, a better insight is given as to how much of real life translates into Second Life.

Second Life is a private organization, and the user generated content is protected under the Digital Millennium Copyright Act. Thus it seems fit that there is a private slant to the content of Second Life. While the incentive in real life is to construct laws that favor a private sector, Second Life is created under a private platform. It seems that there are not incentives but requirements already in place that protect the content in Second Life. In a world where the value is placed on what a person can create, it seems necessary that those creations be protected for individuals to be successful in their Second Life transactions. But for those who cannot create, what is there incentive? And what of the cultural transmission and sharing of objects if everyone who can create has incentive to protect those creations?

In Second Life observations, the incentive for individuals who cannot create is even stronger to commit illegal activity in Second Life. Whereas in real life, there are other ways of transmitting culture, Second Life has two options-create or copy. To counter this problem for individuals who cannot create, Second Life users have created copy bots.



Copy bots are similar to DRM decoders in real life. DRM decoders strip the DRM from CDs and DVDs, allowing the protected material to be copied and used however a person wishes. In Second Life, objects can be designated as no-copy objects and are not able to be copied or used without the owner’s permission.





But with the copy bot, these things can be copied and used however the copier wishes. Technically, under the copyright laws of Second Life, this action is not illegal. But copy bots have created a scare among creators who wish to control their property for profits rather than share it throughout the grid. In numerous cases, which can be found here, lawsuits have been brought against users of copy bots, specifically for copying materials and using them to make a profit. In one case, a man who makes Second Life sex toys was having a sex bed copied and sold at a cheaper price than he was selling it for. Other cases are similar and show the notion that Second Life, while set up as a place to create and share, is actually an extremely privatized realm where creators are assertively controlling their material.

Other behaviors in Second Life must be considered as well. Through much of my journal, I wondered what kinds of behaviors translated into Second Life. Would people act as they would in real life, or given the chance to disregard their inhibitions and act any way they want? More often than not, I found people disregarded most social norms in Second Life. People have sex in public; they don grotesque avatars and converse about anything, regardless of who is listening.



But with private ownership of this society, users should realize this material is recorded somewhere and owned by someone. In the same respect, users can be prosecuted for violating rules in Second Life. For example, Second Life has changed their copyright laws to include their logos and terms associated with the grid (citation). Now, when using certain terms, you are allowed one use and must include the proper trademark or copyright notice. It is important to remember that a privately owned society can regulate itself very strictly if it wants to do so. __
 * Possibilities for Second Life via the Privately Controlled Public**__

What are the possibilities in this society regarding the information and user created material? In a society where the only thing of value is what Lessig calls “intellectual property”, with the battle over control of this material continue to built momentum? Can Second Life realize the proper boundaries for the balance of a private interest and a public interest? The idea behind Second Life is an entire world of private transactions that only affect the individuals involved. But the truth is that this society is a public as well that affects not just the two individuals involved. By creating a privately owned world, the actions of a small few people could affect any number of users. While copy bots and those that use them are certainly not freedom fighters, the incentives are in place for these types of behaviors to occur in Second Life. Linden Labs should consider this in re-thinking the constraints in this world.



What of the balance of the real public and the private of Second Life? As indicated in my research, many behaviors in Second Life do not reflect those of real life. Users dance in public, wear funky outfits and kiss fellow classmates, all without worrying about who knows and who sees it. But what happens when users begin to participate in even more illicit activities via Second Life? What happens when terrorist or subversive organizations begin meeting in world? What happens when users admit to criminal action while chatting in public? This information could be very valuable and can be found via Linden Labs technology. In a world controlled by a private organization, will the public seek to invade it? Imagine when government agencies begin to participate in Second Life or when intelligence agencies bargain with Second Life for information. This transaction of private and public could have huge implications that affect the millions of users in the grid.



__ By comparing real life norms to Second Life norms, some interesting observations can be made regarding copy and no-copy objects. Our research hoped to show some of these correlations between real life and Second Life. This turned out to be true. There seems to be high correlations between users of p2p sharing software and individuals who were more likely to copy the no-copy objects in Second Life. They were also less-likely to report illegal activity involving the copy of no-copy objects. There is also a strong correlation between users in the United States, with more strict copyright laws, and users in Second Life who would report illegal copying of no-copy objects. Some of these behaviors do seem to translate into Second Life.
 * Conclusion**__

But Second Life is also a new platform with new rules regarding copying. As a private organization, Linden Labs controls what rules are made about the grid, and what is done with the information and material created in Second Life. As such, they had translated this control to their users via the ability to create objects that cannot be copied by other users. It is not as easy to say that every behavior that happens in real life will happen in Second Life.

What we can see are some of the same laws and behaviors from real life taken to the extreme in Second Life. By creating more laws to protect from copying, there is more incentive to sue over copying in Second Life. By creating a system that highly values no-copy objects, there is more incentive to find a way to copy these objects. Consider that these two instances have sprung up at such an early stage in Second Life, and it took the better part of American history to see these behaviors in the United States. I consider this to be a direct result of the laws regarding Second Life and the extension of certain behaviors in real life into the grid.

What is more important is to consider the repercussions of these laws and how they affect the users in the grid. Will lawsuits continue to be the answer for user generated content or will Second Life come up with a better way to regulate the private and public interests? What will become of a public society where users interact daily that is controlled by a private organization that has a lot of information about those users?

There are a lot of possibilities to consider, but it seems for now that many of our real life behaviors do translate into Second Life. But what is scary to consider is that generally they come out even stronger in the grid. If a user has wild sexual fantasies, they can act them out in Second Life. If a user has strong incentives in real life to sue to protect copyrights, they will have much stronger incentive to protect them in the grid. Instead of asking do behaviors translate or how do they translate into Second Life, I think the better questions to ask are what behaviors should translate and which ones should not. As far as these laws are concerned, with the resulting behaviors and the incentives, I think they should be re-written to draw us away from this entirely permission society and move us more toward a free culture. Second Life has the potential to be a great research tool, but without the means to transmit those ideas via the grid, the public would be at a great detriment.