This question contains two parts. I shall answer the second first.

    It would be fallacious to assume that non-price and barter models could in general apply to the economy at large, rather than in a subset of an information economy. From "Cooking-pot markets" [3]:

    If it occurred in brickspace, my cooking-pot model would require fairly altruistic participants. A real tribal communal cooking-pot works on a pretty different model, of barter and division of labour (I provide the chicken, you the goat, she the berries, together we share the spiced stew). In our hypothetical tribe, however, people give what they have into the pot with no guarantee that they're getting a fair exchange, which smacks of altruism.
    But on the Net, a cooking-pot market is far from altruistic, or it wouldn't work. This is thanks to the major cause for the erosion of value on the Internet - the problem of infinity [15]. Because it takes as much effort to distribute one copy of an original creation as a million - and because the costs are distributed across millions of people - you never lose from letting your product free in the cooking-pot, as long as you are compensated for its creation. You are not giving away something for nothing. You are giving away a million copies of something, for at least one copy of at least one other thing. Since those millions cost you nothing you lose nothing. Nor need there be a notional loss of potential earnings, because those million copies are not inherently valuable - the very fact of them being a million, and theoretically a billion or more - makes them worthless. Your effort is limited to creating one - the original - copy of your product. You are happy to receive something of value in exchange for that one creation.
    What a miracle, then, that you receive not one thing of value in exchange - indeed there is no explicit act of exchange at all - but millions of unique goods made by others! Of course, you only receive "worthless" copies; but since you only need have one copy of each original product, every one of them can have value for you. It is this asymmetry unique to the infinitely reproducing Internet that makes the cooking-pot a viable economic model, which it would not be in the long run in any brickspace tribal commune.
    With a cooking-pot made of iron, what comes out is little more than what went in - albeit processed by fire - so a limited quantity must be shared by the entire community. This usually leads either to systems of private property and explicit barter exchanges, or to the much analysed "Tragedy of the Commons." [16]
    The Internet cooking-pots are quite different, naturally. They take in whatever is produced, and give out their entire contents to whoever wants to consume. The digital cooking-pot is obviously a vast cloning machine, dishing out not single morsels but clones of the entire pot. But seen one at a time, every potful of clones is valuable to the consumer as the original products that went in.
    The key here is the value placed on diversity [11], so that multiple copies of a single product add little value - marginal utility is near zero - but single copies of multiple products are, to a single user, of immense value. If a sufficient number of people put in free goods, the cooking pot clones them for everyone, so that everyone gets far more value than was put in.
    An explicit monetary transaction - a sale of a software product - is based on what is increasingly an economic fallacy that each single copy of a product has marginal value. In contrast, the cooking-pot market rightly allocates resources on the basis of where consumers see value to be, in each distinct product.
    Now to the first part of the question: how can people involved in these exchanges make a living? The answer to this lies in convertibility: the two-fold problem of what you get for participating in the cooking-pot economy; and whether that is convertible into euros and dollars at an exchange rate sufficient to sustain a reasonable standard of living.

    First, of course, is something that we tend to overlook. Participants in an information economy will typically draw much of their needs from the information economy itself. A knowledge economy will, at some level, require industry to support it; however, its autonomy is enough to sustain vastly different economic models. Only a small proportion of an industrial economy deals directly with agriculture; the majority works with its own economic models. Similarly, as most knowledge is traded for yet more knowledge, its actual application to the lower level of industry plays a lesser role.

    From "Is reputation a convertible currency?" [2]:

    On the Internet - indeed in any knowledge economy - it is not necessary for everything to be immediately traded into "real world" money. If a significant part of your needs are for information products themselves, you do not need to trade in your intangible earnings from the products you create for hard cash, because you can use those intangibles to "buy" the information you want. So you don't have to worry about converting the warm feelings you get from visits to your Web page into dollars, because for your information needs, and your activities on the Net, the "reputation capital" you make will probably do.
    Intangibles generated from the production and exchange of information goods and services in the cooking-pot market can be converted into products brickspace – the "real-world". At present, this convertibility typically exists in the form of preferential employment in areas related to a person’s cooking-pot contributions, or income from businesses or consultancies related to that area. This is a result of one of the benefits of contributing to the cooking-pot, reputation. From "Can you eat goodwill?" [4]:
    First, let's see what intangible "payment" Linux brought [initial creator Linus Torvalds]. In the circles that might matter to Torvalds's career, he's a sort of god. Most of the technology of the Internet, including tools such as Linux, HTML (the language of the Web) and the Web server Apache (with 45% of the total market, enough for Bill Gates to call it Microsoft's "biggest competitor" [14]) have been developed and distributed without payment. As government and academic participation declined as a proportion of the total Internet developer community, most recent "free" technology has not been subsidised, either. The main thing people like Torvalds get in exchange for their work is an enhanced reputation. So there are, in fact, lots of Net gods.
    Net gods get hungry, though, and reputation doesn't buy pizzas. So what does Torvalds do? As it turns out, both at the University of Helsinki (in October 1996, when I first interviewed [5] him) and at his current employer, US-based Transmeta, "Doing Linux hasn't officially been part of my job description, but that's what I've been doing," he says. His reputation helped - as Torvalds says, "in a sense I do get my pizzas paid for by Linux indirectly."
    The convertibility of reputation at the moment is proportional to the reputation itself. As measurement of reputation is not possible with current technology and economic models, only very high reputations get converted into euros. Availability and understanding of better methods of measurement of intangibles exchanged via the cooking-pot will widen the sustainability of informal barter exchanges as the basis of a livelihood.

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    2 Rishab Aiyer Ghosh, 1996, "Is reputation a convertible currency?", published as part of "Cooking pot markets: an economic model for the trade in free goods and services on the Internet", First Monday, March 1998, http://www.firstmonday.dk/issues/issue3_3/ghosh/
    3 Rishab Aiyer Ghosh, 1996, "Cooking-pot markets", published as part of "Cooking pot markets: an economic model for the trade in free goods and services on the Internet", First Monday, March 1998, http://www.firstmonday.dk/issues/issue3_3/ghosh/
    4 Rishab Aiyer Ghosh, 1996, "Can you eat goodwill?", published as part of "Cooking pot markets: an economic model for the trade in free goods and services on the Internet", First Monday, March 1998, http://www.firstmonday.dk/issues/issue3_3/ghosh/
    5 Rishab Aiyer Ghosh, 1998, "Interview with Linus Torvalds", First Monday, March 1998, http://www.firstmonday.dk/issues/issue3_3/ghosh/
    11 Rishab Aiyer Ghosh, 1995. "Trade reborn through diversity", Electric Dreams, #65 (10 July), at http://dxm.org/dreams/dreams65.html
      14 Tim Clark, 1996. "Gates: Explorer will be huge", C-NET News (August 1), at http://www.news.com/News/Ite m/0,4,2009,00.html
    15 Rishab Aiyer Ghosh, 1995. "The problem with infinity", Electric Dreams, #63 (19 June), at http://dxm.org/dreams/dreams63.html
    16 Garrett Hardin, 1968. "The Tragedy of the Commons," Science, Volume 162, pp. 1243-1248, and at http://dieoff.org/page95.htm


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    From Luc Soete's abstract:

    There is indeed general agreement that the emergence of an "information society" has led to an explosion of new activities involving the search for information and ease of communication. Of information in the form of data, facts, news items in all forms, available at ones fingertips and stored in millions of books, articles, databases, libraries, websites, etc. Such new possibilities for data-mining and more information are not just leading to better informed judgements in commercial buying and selling but in all kind of activities. Some of these are essential for ones work, others are purely of the hobby type, and still others simply contribute to one’s personal general knowledge, or interest in democratic control and so on. On the other hand, the new opportunities for communication are not just limited to business or private family communication as in one-to-one ‘commercial’ telephone conversations, but in all kind of forms of one-to-many communications such as virtual video conferences, debating clubs, chat rooms, and so on, identifying people somewhere on the globe with similar work, leisure, hobby, personal and political convictions. Such forms of exchange do not appear to have any more commercial ‘value’ than is being paid for in terms of Internet access charge and telephone costs. Nevertheless, it is obvious that such electronic communication activities represent a large part of the increased welfare associated with information highways and that they indirectly contribute to economic performance and feelings of wellbeing.


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    From John Browning:

    Market and non-market and not mutually exclusive. As Rishab and Luc have noted, non-commercial stuff arose because people get value out of it. There's no reason to assume that they will stop getting value out of it, so there's no reason to see why it should stop -- any more than there is any reason to assume that people will stop going to parties because they don't get paid to do so.

    What will be interesting is to see how technology changes the way in which market and non-market interact. The industrial revolution saw an increasing share of needs satisfied by the market. When an American pioneer family bought clothes from Sears Roebuck instead of making them at home, they were not necessarily better or worse off; they just spent cash instead of time. It may be that the information age tips the scale back the other way.

    This is *not* to say that stuff not done for cash is not economically motivated though. Some won't be, but some will be driven by marketing or a search for reputation or whatever, and much will be mixed up somewhere in between.

    Two interesting examples to try to untangle commercial and non-commercial are Carling's football Web site and George Lucas's StarBright Foundation to provide computers for bed-bound kids. Both provide services to their communities. Both have elements of altruism -- although clearly, helping sick kids is a lot more altruistic than providing football results. Both also provide commercial benefits to the sponsors.


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