When it comes to tangible stuff at least, abundance can turn to scarcity pretty quickly. For the past year or so, I’ve been hearing that the huge post-bubble glut in hosting space is history – that the supply of quality data-center space is tightening, and prices are rising. An article in today’s New York Times, by Kristina Shevory, provides some further evidence. After years of losses, the hosting industry is becoming profitable. Indeed Digital Realty Trust, an aggressive investor in hosting space, with 54 centers in its portfolio, “was the best-performing real estate investment trust in the country [last year], giving shareholders a 78 percent return … Now, the company is looking for one- and two-story office buildings that can be turned into Internet hubs or server farms.”

The big roadblock to expanding the supply? Electricity. Blade-stuffed centers suck up so much juice that some utilities just can’t handle the demand. “Power demands, which are now often the largest or second-largest expense for a data center, have helped lead to ballooning construction budgets,” writes Shevory. “It costs Equinix about $600 to $800 a square foot to build a data center, compared with $450 to $500 five years ago.”

It’s funny to think that real estate and electric power are what’s scarce in computing today. For the would-be utility computing giants, like Google and Microsoft, they’re particularly huge budget items. Call it the revenge of the old economy.

So there’s this new company named crayon (not Crayon, mind you, but crayon), and its claim to fame is that its offices are located on Crayonville Island in the imaginary world of Second Life. Ok, fine. You’ve got to have a shtick, and you can’t get much more shticky than that. But I’m asking myself: What does a company called crayon with an imaginary headquarters actually do? What business would such an enterprise be engaged in? Fortunately, one of the company’s founding employees has taken the time to describe “what crayon actually is” in a post on his blog. Here’s what he says:

We’re not an agency nor a consulting practice as is traditionally defined. What we are is whatever you want or need us to be.

I like to think of us as a true mash-up that combines the best in traditional and new thinking about marketing, advertising and PR.

We’re a solution provider. We’re an extension of your team. Consider us a new breed of partner – one that keeps everyone honest and on the right path. Our client is not the consumer: our client is the truth.

Now, come on. What we are is whatever you want or need us to be? Our client is the truth? This is a joke, right? I mean, it has to be a joke. If it’s not a joke, then we’ve definitely gone through the looking glass and are headed down the rabbit hole.

Our client is the truth? Hell, that doesn’t even pass the Turing Test.

In an important essay at First Monday, Paul Duguid takes a hard and rigorous look at whether, and to what extent, web-based peer production can produce quality work.

“Two ideas are often invoked,” he writes, “to defend the quality of peer production.” The first of these “laws of quality,” borrowed from open-source software development, is Linus’s Law: “Given enough eyeballs, all bugs are shallow.” Duguid points out, as others have before him, that applying this law outside the sphere of software production is problematic. The “stern gatekeeper” of software quality – the program has to run – is absent in the production of most cultural works. The second law of quality is what Duguid dubs “Graham’s Law,” after Paul Graham, who “claims that ‘The method of ensuring quality’ in peer production is ‘Darwinian … People just produce whatever they want; the good stuff spreads, and the bad gets ignored.'” This law, too, is problematic, argues Duguid. It reflects

an optimistic faith that the “truth will conquer.” While this optimism has roots in Milton’s Areopagitica, it is perhaps a particularly American, democratic belief, enshrined in the First Amendment. Such optimism no doubt makes good political principle, but it does not dictate political process. Freedom of speech is not the same as the freedom to replace other’s versions of the truth with your own. The authors of the U.S. Constitution and the Bill of Rights may have believed that open debate leads to political truth, [but] they did not believe that the Constitution would improve were it changed at the whim of each citizen’s changing view of truth. Consequently, the U.S. Constitution has significant built–in inertia … As this example may suggest, Graham’s implication that continuous tinkering only makes things better is highly suspect. It is hard to see why entropy would be indefinitely suspended by peer production. In areas of “cultural production,” in particular, progress is not necessarily linear, and neither the latest (nor the earliest) version of a work [is] always the best …

Rather than taking the laws on faith, we need to ask in which cases the laws work, in which they do not, and if they do not, why not. So we need to look at cases where the laws have failed to work and then to ask — in general, systemic rather than individual, particularistic terms — why.

Duguid goes on to examine the products of two well-established and seemingly fairly simple peer-production processes on the Internet: Gracenote (for compiling information about the contents of compact disks) and Project Gutenberg (for publishing online versions of out-of-copyright texts). While finding the products of both these projects “immensely useful,” he also documents, painstakingly, that they have deep and persistent flaws: “both suffer from problems of quality that are not addressed by what I have called the laws of quality – the general faith that popular sites that are open to improvement [will] iron out problems and continuously improve.”

He then examines Wikipedia, a more complex project in peer production. He documents the many flaws that bedevil the online encyclopedia, from plagiarism to the use of unreliable sources to sloppy writing, and shows how Wikipedia, “despite its creed of continuous improvement, can defy Graham’s Law” and evolve toward lower rather than higher quality as edits pile up. Duguid focuses his analysis on two entries, for the early English novelists Laurence Sterne and Daniel Defoe, and he admits that these entries “do appear to fall into a backwater of Wikipedia. Thus it may seem unfair to choose these as examples to illustrate aspects of the whole.” But he then makes a crucial point about assessing an encyclopedia’s quality:

I suggested earlier, however, that judging overall quality from the less– rather than the more–frequented parts, the weak rather than the strong links, is not a bad idea. After all, how is the ordinary user to know when he or she has landed in a backwater? With Linus’s Law in mind, we should acknowledge that the eyeballs that consult encyclopedia entries are, in the default case, quite unlike those beta testing or developing code and quite unsuited to recognizing or characterizing any but the most obvious errors. To use an Open Source program is in itself often an acknowledgment of a certain level of skill. To turn to the encyclopedia is, by contrast, more likely a confession of ignorance. If I want or need to find out about Defoe, then I’m not likely to be in a position to critique an entry on him.

“Editing,” Duguid writes, “is a hard task and needs to attract people prepared to think through the salient issues. Wikipedia is very sensitive to malice. It needs to be as sensitive to ineptitude.”

In the end, Duguid concludes that the two “laws of quality” underpinning today’s peer-production projects are insufficient. “If we are to rely on peer production in multiple different spheres of information production,” he says, “we need to look for other ways to assure quality.” But one comes away from this excellent paper wondering whether, once these “other ways” of quality assurance are imposed on a process, it would still qualify as “peer production.” As Duguid eloquently demonstrates, quality doesn’t just happen; it’s not an emergent phenomenon. It’s imposed on a work by people who know what they’re doing. Quality – true quality – may thus be incompatible with the democratic ideal that lies at the heart of what we call peer production.

Jaron Lanier recently called the Web 2.0 movement “digital maoism.” Now, as if on cue, the Cultural Revolution has begun.

Lawrence Lessig, in a post titled “The Ethics of Web 2.0,” suggests that some Web 2.0 companies are not fit to wear the Web 2.0 label. There are real Web 2.0 companies, and there are sham Web 2.0 companies. There are those that maintain their ethical purity, that obey the Code, and there are the transgressors, the ones that have fallen from the shining path. As in kindergarden, it all comes down to the way you share:

A “true sharing” site doesn’t try to exercise ultimate control over the content it serves. It permits, in other words, content to move as users choose. A “fake sharing” site, by contrast, gives you tools to make [it] seem as if there’s sharing, but in fact, all the tools drive traffic and control back to a single site.

YouTube is Lessig’s villain, the counterrevolutionary force that threatens the web’s emergent communalist state. “YouTube,” he writes, “gives users very cool code to either ’embed’ content on other sites, or to effectively send links of content to other sites. But never does the system give users an easy way to actually get the content someone else has uploaded … this functionality – critical to true sharing – is not built into the YouTube system.” It may hide its true nature behind a seductive mask of coolness, but make no mistake: YouTube is an imposter. It has failed “to respect the ethics of the web.”

“By contrast,” writes Lessig, “every other major Web 2.0 company does expressly enable true sharing.” The companies that Lessig uses to support this incredible statement are Flickr, blip.tv, EyeSpot, Revver, and “even Google.” Blip.tv? EyeSpot? Revver? These are “major Web 2.0 companies”? What about MySpace? What about Facebook? What about Digg? What about Craigslist? What about Google’s vast search business? Do any of these “expressly enable true sharing” of their core content? No, Lessig’s audacious attempt at revisionism just doesn’t fly.

But Lessig isn’t really interested in describing the world as it is. His eyes are on a further goal. He wants to redefine “Web 2.0” in order to promote a particular ideology, the ideology of digital communalism in which private property becomes common property and the individual interest is subsumed into the public interest – in which we become the web and the web becomes us.

The process of social enlightenment always begins with the reshaping of language. According to Lessig, Web 2.0 is not, as you might have assumed, a technological or a business term. It’s an ethical term, a moral term. Differences “in business models,” he writes, “should be a focus of those keen to push the values of Web 2.0.” In a gloss on Lessig’s post, Joi Ito writes that “we can’t really expect users to initially understand the distinction [between real sharing and fake sharing].” But “in the long run, users will understand that stand-alone or closed services do not allow them the freedoms that are becoming exceedingly more common in the Web 2.0 area.” It is hard not to hear the echo of Mao patiently explaining how the masses will make the transition from China 1.0 to China 2.0:

Because of their lack of political and social experience, quite a number of young people are unable to see the contrast between the old China and the new, and it is not easy for them thoroughly to comprehend … the long period of arduous work needed before a happy socialist society can be established. That is why we must constantly carry on lively and effective political education among the masses and should always tell them the truth about the difficulties that crop up and discuss with them how to surmount these difficulties.

But what’s the point, really? Does Lessig genuinely think that entrepreneurs and their backers are going to line up to take some True Sharer Pledge, to choose to pursue an abstract ideal of ethical purity rather than profit? To propose a moral test for membership in the Web 2.0 club seems, at this late date, like an exercise in reality avoidance. The wheels of commerce are turning, and they’re grinding all these grand intellectual distinctions into dust. Like Mao, Lessig and his comrades are not only on the wrong side of human nature and the wrong side of culture; they’re also on the wrong side of history. They fooled themselves into believing that Web 2.0 was introducing a new economic system – a system of “social production” – that would serve as the foundation of a democratic, utopian model of culture creation. They were wrong. Web 2.0’s economic system has turned out to be, in effect if not intent, a system of exploitation rather than a system of emancipation. By putting the means of production into the hands of the masses but withholding from those same masses any ownership over the product of their work, Web 2.0 provides an incredibly efficient mechanism to harvest the economic value of the free labor provided by the very, very many and concentrate it into the hands of the very, very few.

The Cultural Revolution is over. It ended before it even began, The victors are the counterrevolutionaries. And they have $1.65 billion to prove it.

John Hagel has written a thought-provoking post about the boundaries of offshoring. We now know that, thanks to the Internet, knowledge work is as susceptible to being moved overseas as factory work. But, it’s commonly assumed, there are some hard limits to the offshoring trend. Hagel quotes the economist Alan Blinder, who, earlier this year, wrote that we can at least take comfort that personal services will continue to be delivered locally: “Services that cannot be delivered electronically or that are notably inferior when so delivered, have one essential characteristic: personal, face-to-face contact is either imperative or highly desirable. Think of the waiter who serves you dinner, the doctor who gives you your annual physical, or the cop on the beat. Now think of any of those tasks being performed by robots controlled from India – not quite the same.”

This is the common wisdom, but, as Hagel points out, it has one big flaw: It assumes that the customer will stay put. In fact, globalization not only dramatically reduces the cost of transporting physical goods and electronic services to distant customers; it also reduces the cost of transporting customers to distant service providers. This fact is already beginning to disrupt the health care business. Many people in the United States are traveling to countries in eastern Europe and Asia to have major medical procedures performed. They not only save a lot of money but, in some cases, says Hagel, they actually receive better care. He points to “the emergence of highly specialized hospitals in offshore locations that offer state of the art equipment and highly trained physicians that can equal or better the quality record of US physicians. The surgeries being performed include very challenging cardiac, spinal and ophthalmologic procedures.” From what I hear, this phenomenon is even bigger in western Europe than in the United States. The proliferation of low-fare airlines throughout the continent has reduced travel costs to the point that it can make economic sense to travel hundreds or even thousands of miles for even fairly routine dental work.

Production, in other words, is not the only thing that can be offshored. Consumption can be offshored, too.

Hagel thinks that health care is only one of many personal services that may be vulnerable: “We need to broaden our horizons on offshoring. This is not just about service providers moving offshore. In a growing number of cases, it is also about service customers heading offshore in the quest for higher quality experiences at lower cost.” If the person can move, then the personal service can move as well.

The Washington Post today has an expose on the restrooms in Google’s headquarters: “Every bathroom stall on the company campus holds a Japanese high-tech commode with a heated seat. If a flush is not enough, a wireless button on the door activates a bidet and drying.” Tacked up beside that button on the stall door is a piece of paper that “features a geek quiz that changes every few weeks and asks technical questions about testing programming code for bugs.”

I’m reminded, for some reason, of what Danny Hillis, the parallel-processing pioneer whose work paved the way for Google’s computer system, said about mankind: “We’re the metabolic thing, which is the monkey that walks around, and we’re the intelligent thing, which is a set of ideas and culture. And those two things have coevolved together, because they helped each other. But they’re fundamentally different things. What’s valuable about us, what’s good about humans, is the idea thing. It’s not the animal thing.”

A few years back, when Google’s founders still felt free to express their true ambitions, Sergey Brin said to Newsweek, “Certainly if you had all the world’s information directly attached to your brain, or an artificial brain that was smarter than your brain, you’d be better off. Between that and today, there’s plenty of space to cover.” And, certainly, if you had an artificial brain that was smarter than your brain, you’d no longer need the monkey that walks around.

Those Japanese commodes are nice, but it’s important to remember that they’re merely transitional devices. We’ll know that Google has truly fulfilled its vision when the Googleplex no longer needs toilets at all.

Here, courtesy of Wikimedia, is a list of the 30 most visited pages in Wikipedia in August:

1. Home page

2. Wikipedia

3. United States

4. List of big-bust models and performers

5. JonBenet Ramsey

6. List of sex positions

7. Wiki

8. Hurricane Katrina

9. Pluto

10. List of female porn stars

11. Irukandji jellyfish

12. Pornography

13. Wii

14. World Wrestling Entertainment roster

15. Jeff Hardy [professional wrestler]

16. Pokemon

17. September 11, 2001 attacks

18. Celebrity sex tape

19. Neighbours [Australian soap opera]

20. Warren Jeffs [polygamist cult leader]

21. C programming language

22. Sasuke Uchiha [fictional anime character]

23. Volkswagen Type 2

24. Priyanka Chopra [Miss World 2000]

25. Morocco

26. Nicole Scherzinger [lead singer of the Pussycat Dolls]

27. United States Air Force

28. Batman

29. List of gay porn stars [a model of wikipedian comprehensiveness]

30. Tupac Shakur

I wonder if “list of big-bust models and performers” and “list of gay porn stars” will be included in the version of Wikipedia that’s being loaded onto those $100 MIT laptops being sent to Third World schoolkids. Oh well, as Kevin Kelly said about the Web, “I doubt angels have a better view of humanity.”