Knowledge is power. Information isn’t.
Have you ever paid good money to watch a bad film? Me too. But it was the only film showing at the time, it was raining outside, and the kids were bored. Still, I wonder to this day if we could know if films are worth watching before we watch them, whether books are worth reading before we read them, whether courses are worth studying before we study them.
This is the information goods problem. We don’t know what we’ll get out of consuming the information until after we’ve done it. So how can we know if it’s worth doing? How much time and money could we save if we could know what we need to know when we need to know it?
It’s different for physical goods. Before you eat an apple you can see if it’s rotten, estimate how much it’ll fill you up, know how much you like apples, and be able to weigh up those benefits against how much you pay for the apple. Information goods aren’t like that.
In economics, information goods are “commodities that provide value to consumers as a result of the information it contains and refers to any good or service that can be digitalized.” Information goods, like movies, ebooks, software, elearning courses, all have similar characteristics. They are durable, which means the movie isn’t destroyed when someone watches it, whereas when someone eats an apple, no more apple. They are non-rivalrous, which means one person watching a movie doesn’t stop another person from doing so, unlike apples which can only be consumed by one person. They are cheap to reproduce, which means once the movie is made it can be sent to as many cinemas (or straight to DVD if you’re old enough to get the reference) as the producer wants, but apples take a long time and a lot of effort to turn into more apples. So, information goods are very different from physical goods. Sellers have problems with information goods. If you’re an author trying to sell your book, how do you convince someone it’s worth reading without giving it away for free? If you’re a college lecturer, how do convince students to learn what you teach? If you’re a software salesperson, how do you convince a customer of the value that software will provide over it’s lifespan?
Creators have problems too. In the modern information economy, workers do two things; create new information and collate & curate existing information. For that information to be sellable it has to be packaged into digital files that show films or reproduce books, but for that information to be valuable it has to become knowledge.
Maybe the reason the information goods problem hasn’t been solved is because it’s really a knowledge problem.
And information and knowledge are two very different things. We talk about them as the same, but they are different. Information is what’s in the digital file that the film projector uses to show the film, knowledge is your experience and understanding of what makes a good film. Information is durable, non-rivalrous, and reproduceable. Knowledge is non-transmittable, can be explicit or tacit, and changes over time.
Knowledge can’t be transferred from one person to another, but it can be converted into information and that communicated to others. When delivering a lecture, the lecturer doesn’t share their knowledge with the students. They package their knowledge into information and the students can take in the information, learn from it and turn it into their own knowledge, but it’s different knowledge, it’s theirs, not the lecturer’s. Knowledge can be explicit, like instructions for how to fix a bike. And it can be tacit, like knowing how to ride a bike, something you can do but can’t explain how you do it. Knowledge changes as we learn new things, challenge assumptions and consider new information.
So, with increasing amounts of information available to us, our challenge is turning information into knowledge.
Maybe better knowledge gives us better judgement. If more lecturers knew that just providing information doesn’t mean they are passing on knowledge, they might focus more on how students interpret information to create their own knowledge. If authors knew what value people get out of reading their books, they might help readers make informed choices about buying books. And if I’d have known that independently produced, computer-animated musical comedy mystery films that mix folklore with crime drama are likely to be bad, I might not have gone to the cinema that day.
Your knowledge is unique to you. Treasure it, develop it, use it. You are the only one that understands what you know in the way that you know it. No one else can have your knowledge.
It’s the uniqueness of your knowledge that gives it power.