So Google Inc. now is pushing further into the business of content. Founders Sergey Brin and Larry Page confront the universal question of the information business: How do you add value?
The proximate example is Wikipedia, which adds value by collating facts. Wikipedia bends over to be objective and to reject elitism. Its hallmark is that anyone may contribute, or edit anyone else. As a result, Wikipedia’s pages are fact-rich.
Hard facts: James Petroba
When it comes to ideas, though, Wikipedia sometimes falls short, featuring a duel instead of a conversation. The rest of the Web, too, seems less about uncovering truths than about cornering an opponent in a “gotcha” moment.
Other, less obvious, models of value creation exist. One is a private non-profit office with an old-fashioned name: the National Bureau of Economic Research (NBER). NBER officers don’t talk about NBER in these terms, but the Massachusetts, US-based organization is, in its way, an anti-Wikipedia.
The story of NBER starts during World War I when the US was just becoming a national economy. Or at least thought it was, because in those days there were few official numbers.
Enter two men. The first, Malcolm Rorty, was a statistician at American Telephone and Telegraph. The second was Nahum Stone, a government tariff expert and labour arbitrator. The men shared a goal: better standards and numbers. They decided to create an office that would generate the missing data. An old timer’s description of their purpose sounds similar to Wikipedia’s: “The crucial question was how to obtain objective knowledge and—also essential—how to assure the public would accept it as objective.” Universities supported them, and in 1920 NBER was born.
From its start NBER did two things. The first was to tap experts to do number-crunching. The mysterious business cycle got attention from scholars. NBER’s director of research, Wesley Mitchell, led a study of national income, generating early versions of the US’ gross domestic product.
NBER researchers thought of work in years, not days, or page views. Even today, NBER scholars are rigorous—their papers stick to the topic. Google’s very formula rewards popular sites by moving them up in the queue. NBER papers aren’t afraid to take unpopular views; if they’re interesting, NBER promotes them.
The second thing that NBER did was provide a culture of collegiality. Scholars came to NBER to try out ideas.
Martin Feldstein, NBER president until June, widened its net to include more scholars from different universities. Disagreement under Feldstein got encouragement. His successor, James Poterba, now also plays such a host role.
The result has been splendid success. NBER’s method created value appreciated even by anti-elitists. Across the nation, NBER papers are viewed as among the most authoritative by economists.
NBER helped Washington officials learn how to keep the books on the national economy—not always perfectly, of course, but still with more science than when lawmakers operated in the dark. And NBER has become the umpire of the business cycle.
The No. 1 domestic economic question today is whether the US is in recession. It is NBER that will make that call. Many thousands of policy words are being spent analyzing whether NBER’s definition of recession—“a significant decline in economic activity spread across the economy, lasting more than a few months”—is right. But few question the umpires’ authority. Financial market television hosts, the Drudge Report, the US treasury—all hang on NBER’s word.
The NBER sanctuary has become important because of a general impoverishment of the policy debate.
As Adam Bellow, a publisher at HarperCollins, wrote recently of the post-Cold War decline in discourse, conservatives once talked about principles such as communism and free markets. But now, “metaphorically speaking, the Berlin Wall had been replaced by the Jersey Turnpike”—topics such as John Edwards’s infidelity dominate.
Any hunt for a philosophy of content ought to include a range of sources. Some of the answers that the new media world seeks lie in cyberspace. Others can be found in the old Bureau.