A new controversy has arisen about whether user-generated websites such as Digg should pay top contributors. You can read the on-the-one-hand, on-the-other-hand version in an article by Mark ( MediaShift) Glaser. But the answer is clear. Contributors should be compensated by any web site that seeks to make money. To do otherwise is to exploit their labor. Glaser offers this quote from Jason Calacanis, the web entrepreneur who started this dust-up by offering to pay top contributors to Digg and other group-effort websites $1,000 a month to jump over to his new Netscape.com :

“(Digg’s founders are) going to make millions of dollars (perhaps tens of millions) when (they) sell Digg to Yahoo (my best guess). When (they do) sell Digg — and trust me it will be sold before in the next 12 months — (they) will have done it on the backs of those top 50 members. Those top 50 members will get exactly — ummm — .. nothing.”

I have been a Calacanis fan since I started this blog though I have never met him. And if and when I do I’ll be on guard. One of my earliest posts makes reference to an anecdote describing how Calacanis — a practitioner of Tae Kwan Do — planned a pre-emptive strike to thwart two potential muggers. (When I first wrote that item it was linked to a first-person account by Calacanis, but that link now only refers back to his current blog. Hmnnn…) For more on Calacanis, read the profile in January’s Wired Magazine.

But let’s assume that Calacanis is no saint but manifests the traits of the successful entrepreneur — supreme self-confidence, shameless self-promotional instincts and a willingness to go for the throat. But at least he paid some pittance to the freelancers who contributed to his Weblogs, Inc. And as someone who has spent the last 18 months looking for insights into blog economics, I can say that Calacanis was rare among the A-list bloggers in that he occasionaly dispensed nuggets of useful information. When it came to discussing business models, most blog pioneers were like the mountain men who first crossed the Rockies and kept the best trails — and beaver-trapping sites — to themselves.

That being said I don’t particularly think the flat monthly payment Calacanis has proposed is the best option for rewarding contributors. I rather fancythe models being promoted by Lulu.tv (founded by early Linux entrepreneur Bob Young). Lulu.tv offers a traffic-sharing model that has the advantage of rewarding success proportionate to the quality of contribution, as measured by viewership.

But however the reward is made, it should be there out of fairness and business self-interest, because profit making sites should insure that frequent contributors are participating for economic reasons. Anything else is a faddish impulse, and there is no reason in human behavior nor economic theory to suggest that the sustainability of business models built on passing fancies.

All of this is not to suggest that social web entrepreneurs are evil, any more than Tom Sawyer deserves to be labeled a villain for smooth-talking his friends into whitewashing Aunt Polly’s fence. But web entrepreneurs are not pranksterish kids. They’re grownups playing for big stakes who should not treat their collaborators like children.