We live within a culture where negative feedback is purposefully avoided. You can’t “dislike” on Facebook, you can only “+1″ on Google+. Yelp was rumored to have strong-armed companies into paying to get rid of bad reviews. Online sites like Consumerist are attacked by businesses who claim they’re unfair. Most companies purposefully hide their contact numbers on their sites so you can’t easily call them (because if you’re calling, you probably have a problem with them!), you can’t cancel service on a web site and usually have to call, people avoid conflict and argument, companies set up complex levels of firewalls to prevent angry customers from getting anywhere, etc.
It goes further. The world’s standard for measuring national improvement is Gross Domestic Product, which only tracks consumption in a very crude way. Simon Kuznets, one of the architects of the GNP metric, admitted, “The welfare of a nation can scarcely be inferred from a measurement of national income… Goals for “more” growth should specify of what and for what.” But this forewarning was ignored. If someone gets cancer and has to purchase a bunch of equipment and pills and spend money in the hospital, this is counted as a net positive for society because of the purchases, even if all these resources are being spent on one person who is unable to contribute to society while sick. The U.S. government (!) is protesting credit rating agencies’ assessment of its indebtedness, where both the U.S. government has been profligate and the agencies have been corrupt in currying favor with the U.S. one moment and then trashing it the next.
The stock market, currently in shambles within the last few weeks, has scared nations yet again after a shock only three years ago. Predictably, the Greek government, which has watched its economy grind to a halt and reach almost-default levels, has decided to ban short-selling of stocks for two months. This is essentially an ideological move. Short-selling, where you make money by betting on a stock going DOWN, not up, has always been seen by non-market people as, in varying degrees, dastardly, unpatriotic, illegal, and even dangerous. It’s that last point regulators focus on. They believe that short sales by people who hate a company can drive a stock to zero. Meanwhile, market folks know that short selling actually adds more transparency, information, and support to stock prices, because there will be pressures pushing the stocks both up AND down, and not just up. The problem in a market without short sellers is that without them, when buyers disappear, prices collapse completely. No short sellers would be covering their positions.
And this says something else about markets. Very few people actually understand how they work. Virtually all the mainstream articles being written about the latest downturn are just flat out WRONG. You’ll get guys like this, who tell you to stay in the market so you don’t risk the upside (again, it’s always about things going up). He goes on in another piece to say that Wall Street is irrelevant! The Daily Beast, usually a pretty savvy digest of the most important stories, has turned to mush when it comes to the markets. Otherwise very intelligent people I follow online also have very flawed notions of how the markets work. The lack of economic understanding is frightening when you consider that these people probably know a little bit more than the politicians elected to vote on policy for government role in the economy.
I’d prefer to read people like George Friedman, who emphasizes that it is not just economy, but political economy, that we must talk about. Politics and the relations between power groups affects most of the dynamics in our lives, and we cannot act like the economy is some neutral entity that is impervious to human mistakes and designs. The “economy” is intimately wrapped within the designs of men.
I had to quit watching the daytrading IRC channels because even those high-frequency traders had what was basically a cynical Ayn Rand-ish slash Gordon Gekko slash Snake Plissken view of the world where you’re only successful if you cut others’ throats to get to where you are. Their adaptability to changing market conditions was highly questionable. Basic economic principles were ignored. But hey, they made good money so I can’t complain too much.
I would agree with Richard Florida (PDF), Umair Haque, Tim O’Reilly, and some others that we are in the very early, ugly stages of a transition to an eudaimonia society, from a purely consumerist society. I believe that we need to be able to take an honest look at how our society is structured and allow for more negativity in our metrics. We need to develop the capacity to take criticism, to be voted down, to be shamed when we do things that are wrong (a concept crudely and devastatingly wielded mostly by religion), to take a more holistic look at everything impacting our lives. Pure revenue should mean less if it comes at the cost of environmental degradation, pollution, lack of time at home raising families, lack of sleep, abuse from employers or manipulation from unions, etc.
“I believe the quantum leap from opulence to eudaimonia is going to be the biggest, most significant economic shift of the next decade, and perhaps beyond: of our lifetimes. We’re not just on the cusp of, but smack in the middle of nothing less than a series of revolutions, aimed squarely at the trembling status quo (financial, political, social): new values, mindsets, and behaviors, fundamentally redesigned political, social, economic, and financial institutions; nothing less than reweaving the warp and weft of not just the way we live–but why we live, work, and play.”
The goal is for people to be able to pursue middle-class professions in fields that they are talented at, to unlock their creative potential, instead of shoe-horning people into certain professions if they want to live any kind of decent lives for themselves. The goal is for people to have a successful career but also a family to raise, a community to participate in, and a healthy life. The way society is constructed now, as I’ve said before, is a zero-sum kind of get-rich-or-die-tryin’ mentality where everyone is incentivized to fuck everyone else over, at least until one becomes wealthy enough to think about maybe working on philantropy for others.
Instead of just Gross Domestic Product, people like Mark Anielski (“The Economics of Happiness: Building Genuine Wealth”) recommend the Genuine Progress Index, or the GPIAtlantic. The GPIAtlantic was broken down into these indicators:
- Time Use
Value of Civic and Voluntary Work, Value of Unpaid Housework and Child Care, Value of Leisure Time, Paid Work Hours
- Living Standards
Income and its Distribution, Financial Security – Debt and Assets, Economic Security Index
- Natural Capital
Soils & Agriculture, Forests, Fisheries and Marine Resources, Energy, Air, Water
- Human Impact on the Environment
Solid Waste, Ecological Footprint, Greenhouse Gas Emissions, Transportation
- Human and Social Capital
Population Health, Costs of Crime, Educational Attainment
These indicators are far more in line with how we actually consider the world subjectively. They capture our concerns, worries, and understanding of how much we feel safe living in our communities. But all of the factors are ignored in the top-line metrics that we use.
Which is sad because we live in an era now of big data. The top quants in the nation are working in finance, insurance, computer science, crypto. Yet the metrics we use for our own well-being and happiness are crude “neutral” measurements from another century.
The above chart shows the disparity between how the U.S. economy is measured through GDP versus how it is in actuality. In short, we have hit a plateau in our quality of life for almost 60 years, while our GDP measurement seems to indicate we’re much “richer” per capita. It coincides with increasing income inequality, measured through the Gini coefficient:
They show that our society as a whole probably peaked in overall access to happiness somewhere in 1968.
In short, we have insulated ourselves from seeing the negative aspects of our society. Amartya Sen calls this phenomenon “hedonic opulence”, Anielski calls it “chrematistics”, Clive Hamilton calls it “affluenza”. We believe that we can grow our way out of poverty, that if we have enough positives in a society, that we can just overwhelm the negatives. But the truth is that the negatives impact the bottom line of growth and positivity. A community full of pollution and crime will stop creative processes from flourishing there. A sick populace will be less productive at work, impacting overall economic success.
“Too much and too long, we seemed to have surrendered personal excellence and community values in the mere accumulation of material things. Our Gross National Product [GNP]… – if we should judge America by that – …counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities…. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.”
This is why I want to work on Galapag.us as my life project. It is an ecosystem for reputation. All the things you’ve worked on in your life are aggregated into metrics of your own design. The most popular metrics (say, success at being a contributor to your community, looking at data such as your volunteer work, church life, money donated, time spent tutoring other people or children, household income, trustworthiness, crime record, etc.) would be voted up to the top. We would not be constrained to just GDP. We could build our own metrics. Then those local, individual metrics could be aggregated for county level, state level, all the way up to national level. The data is anonymized as it is grouped, or, if you choose, fully identifiable and open if you are an open person.
The imperative, though, must be on more transparency and accountability. If we as individuals can’t handle being criticized publicly, then we can’t expect things to improve at higher levels of organization. Being criticized is not always a bad thing. If the criticism is fair, you should improve yourself with it. If it is unfair, your detractor should be penalized for making false statements. We do not have this kind of global feedback system in place. We are victim to flash mobs, anonymous attackers, stalkers, people who suffer no negative feedback from their actions. Galapag.us would fill this hole in the internet’s identity layer while still providing degrees of anonymity, pseudonymity, and identity.
Daniel Suarez’s seminal but overlooked books, Daemon and Freedom (TM), suggest deprogramming the “Non-Player Character”/NPC dynamic of being trapped within a world of simplistic metrics (the quotes below are from Freedom (TM):
“What do we look like to a computer algorithm, Sergeant? Because it will be computer algorithms that make life-changing decisions about these people based on this data. How about credit worthiness—as decided by some arbitrary algorithm no one has a right to question?”
“Imagine how easily you could change the course of someone’s life by changing this data? But that’s control, isn’t it? In fact, you don’t even need to be human to exert power over these people. That’s why the Daemon spread so fast.”
Suarez’s books propose that darknet hacker communities will spring up in the rural areas, away from legal restraints and the encroachment of lawyers, corporations, and other barriers to entry, creating more balanced, sustainable, networked communities for people to be rewarded at their individual trades by leveling up in the darknet world and then using darknet credits to earn a reputation and a living.
“Holons are the geographic structure of the darknet. Any darknet community lies at the center of an economic radius of one hundred miles for its key inputs and outputs—food, energy, health care, and building materials. Balancing inputs and outputs within that circle is the goal. A local economy that’s as self-sufficient as possible while still being part of a cultural whole—a holon—thus creating a resilient civilization that has no central points of failure. And which through its very structure promotes democracy. That’s what we’re doing here, Sergeant.”
“The Daemon financed this.” Sebeck turned to her. “Didn’t it?” “The Daemon’s economy is powered by darknet credits, Sergeant. Imaginary credits are all that money is.” “But there’s a theft at the heart of it.” She thought about it and nodded slightly. “Yes, the darknet economy was seeded by real world wealth. Wealth that was questionable in origin to begin with. Here, it’s being invested in people and projects that have begun to return value—not in dollars, but in things of intrinsic human worth. Energy, information, food, shelter.”
There are ways out of the messes we’re in, but most people see them as unconnected issues. But personally I see it as symptomatic of an entire society’s failure to examine itself. Gnowthi seauton. Jared Diamond-type stuff. Granted, it would be a LOT to expect humankind to be able to look at itself honestly, for humans always hope to avoid the negative and only see the good in the things they believe in, but this would be one of those points where one would hope that our civic leaders and politicians would be required to study — and therefore detect — such policy/societal failures and properly diagnose them.
Unfortunately, that is not the ruling class that we have, and we are not likely to correct these systems until an alternative system is built. Those who make money under the current system will resist, but even politicians go along with something when it’s shown to be successful. Hopefully for me it would be something like Galapag.us, but I would accept any attempts.
The only way to change our systematic problems is to build our own alternative.