[This is not meant to be an economics lesson, even though I read economics at university. I am keen on trying to explain my thoughts from a "first principles" basis, so that I can engender some real dialogue with readers rather than get bogged down in definitions and semantics. The objective of this post is to excite that dialogue, so that I can learn and refine my understanding. And perhaps help you refine yours in the process].

I’ve had an interest in The Maker Generation for some time now, as evinced by these posts over recent years: The Maker State (2007); Dersu Uzala (2008); Ragu and Bolognese and Cory Doctorow and Makers (2009); Better Mousetraps and the Maker Generation (2010); The Maker Generation in the Enterprise (2010);  and most recently 2012: The Year of Maker-Friendly (2011).

For many years now, I’ve been trying to document what it means to make something when you’re a “knowledge worker”. More recently, I’ve started writing a book on the subject (my fifth unfinished book; this Christmas I intend to finish one of them!). But that’s for another day.

Today’s post is about wealth, its creation and distribution. Over the years, besides Calcutta, besides the Jesuits, there have been a number of influences on me when it comes to this post. My father, my family and close friends are the obvious ones. But two other influences have material bearing on what I’m intending to write here, material enough for me to share them here. First off, this post by Paul Graham from May 2004 on How To Make Wealth. I was very taken with it when I read it, even if I didn’t make a song and dance about the post right then. For sure it influenced my thinking. And more recently, this very recent article by W Brian Arthur on The Second Economy. I would urge you to read both articles  slowly, take your time, it is well worth the investment.

So now you have an idea of the people and concepts that influenced what I’m trying to write here. It’s a classic provisional, partly formed Sunday post. I tend to write all my posts start-to-finish in one sitting, usually a couple of hours, usually no going back. Write, quick preview for any images or inserts, then publish. Here goes:

Doing anything at all requires an expending of energy, an effort. This effort gets called work. As you expend the energy, something around you changes. You can imagine this change to be an output, an output of the work you perform.

This output has value. The value can be positive or negative. That depends on whether someone else values the output you’ve created. If someone else values (and values positively) what you’ve created, then you’ve created wealth.

Value can be expressed in many ways; money is just one way, and it is a useful way. Because you can then convert that value you’ve created into something else you may want or need, by using the money you’ve received for the value you’ve created to “pay” for the value someone else has created, to pay for the something you want or need. This is why money works as a store of value and as a medium of exchange.

Everyone can create wealth as a result, just by expending effort to make something that someone else values; that wealth becomes “fungible” if you can exchange the value you create for the value someone else creates. If you exchange one thing for another then you’re bartering. Money, by being a medium of exchange, simplifies this process.

So all human beings can create (and destroy) wealth. This wealth that is created gets distributed in a number of ways, depending on how the wealth is created.

You make something and you sell that something for value; the terms differ but the principle is the same. You do a job and get a salary; you make a sale and get a commission; you invest and get a return; you advise and get fees. Most of the time it’s that simple.

If the value of what you create is greater than the value of the things you want, then you will start accumulating wealth.

There are some quirks. If the something that you make has physical form, then you can rent it out rather than sell it. So you can keep “creating wealth” as long as there’s a rental market for the something you make, a house, a car, a boat, whatever. We’re very clever, we human beings, so we come up with even more extreme ideas. The something you make does not have to have any physical form for it to be designated your property; the State is prepared to let you keep making money from something you did once, and call it “intellectual property”. And sometimes you can even get paid for destroying something: say for example you’re in the demolition business.

One way of looking at all this is that wealth gets created by people doing work, in a plethora of ways. And wealth gets distributed in a plethora of ways as well: through jobs, trading, investments, patents, copyright, and suchlike.

These ways of distributing wealth are usually directly connected to the ways of creating wealth. If there is inequality in the landscape of creating wealth, then there will be inequality in the landscape of distributing wealth.

When it comes to creating wealth, people have advantages (and disadvantages) all the way from birth: inherited wealth; the atmosphere at home, the stability and care from the family; health and nutrition; education; cultural nuances, and so on. We’ve come to recognise this inequality and we’ve tried to deal with this in a number of ways, usually by passing laws against discrimination, occasionally by putting in mechanisms to correct historical inequalities via positive discrimination for a period of time.

This attempt to reduce unequal wealth distribution has probably gathered pace over the last 50 years. It would appear to be true for most democracies; it is likely that steps to reduce inequality have existed longer in the developed world when compared to the developing world.

Fifty years. And I get the impression that wealth inequality has increased during that time. And increased at some pace, particularly in the west.

Hmmm.

There could be many reasons. Equality of opportunity does not guarantee equality of outcome. Some people don’t like hard work. Market mechanisms to value outputs aren’t necessarily fair. A free market can be gamed, sometimes despite regulation, sometimes because of regulation. Barriers to trade, particularly protectionist barriers, can be erected by the incumbents to try and prevent erosion of the power to create wealth, or for that matter erosion of the accreted wealth. Yes, there could be many reasons.

If anti-discriminatory legislation and short-term positive discrimination have not succeeded, then perhaps we need to look at what we can do to change the way wealth is distributed rather than just the way it is created. This can happen in a number of ways; in fact this does happen in a number of ways:

People can amass wealth and give it away, distribute it to the masses, make donations to charities and nonprofits. People can pool their wealth in groups and communities, so that everyone in the community gets helped, as in Acts 2:42 or perhaps in some of the modern Kibbutzim.

Free markets alone don’t seem to work, if the last 50 years are anything to go by. [And non-free markets, if we look at communist examples, appear to fare at least as badly if not significantly worse.] Jobs as the basis for distribution don’t seem to work; for one thing, not everyone has a job; in future, with the current economic environment and demographic trends as the backdrop, full employment is not likely to be anything more than a theoretical economic model, much like the “rational actor” who preceded behavioural economics.

The recent book by Erik Brynjolfsson and Andrew McAfee, Race Against The Machine, is well worth a read in this context; it shares a relatively gloomy outlook on many types and styles of job, a view that is echoed in W Brian Arthur’s article on the Second Economy, which I referred to earlier, since it was the trigger to my writing this post.

So where do we go from here? One of the ideas I’ve been playing with is a simple one:

What if people got paid for their data?

We live in an age of lifestreaming. For decades customers “spoke” in the past tense, “I bought” or “I did”, because it was expensive to invest in the infrastructure to collect anything else. IT-intensive investments were made at the point of sale and in the back office, and so everything the customer did was viewed as a transaction in the past.

More recently, with the ubiquity of smart device and connectivity, customers began to speak in the present tense: “I am doing”. Even more recently, customers have begun to speak in the future tense “I will do” “I plan to” “I want”. Sometimes they even speak in groups “we intend to” “we are prepared to”.

The data in the lifestreams has value.

Soon everyone will be able to lifestream.

What if people got paid for their lifestreams?

Just wondering.

Views? Flame away, I do this to learn. And sometimes I learn best when someone tells me I am talking absolute balderdash and poppycock. As long as you take the time to explain to me why I am so wrong.

Jethro Tull, Wond’ring Aloud (Ian Anderson). From the album Aqualung

[Note: this is a continuation from my post a couple of days ago, linked to here. I began that post with the first line of the song, it is only fitting that I begin this one with the last. I've heard many theories as to what the song means, and whether I can even talk about the likely meaning before the watershed. I happen to like the song, the music, the melody, everything about it, rather than just concentrating on the debate about the meaning of the lyrics].

Before I launch into the post…. in the unlikely event you’re a Tull fan, go take a look at their official web site. Listen to their internet radio. Follow them on Twitter. And, if you’re like me, get tickets to see them on tour!

And now for something completely different. Oh yes, the post. Thinking about stacks and ecosystems and architectures and complexity. You’ve been a wonderful community, you’ve RTed the post, linked to it, commented on it, and the comments have given me some really rich material to digest and consider. I really appreciate it. It’s what blogging was invented for, the ability to share what Doc Searls called “provisional thoughts”, nascent, inchoate. To have those thoughts shared, commented on by peers and superiors, letting me learn. And letting me share that learning so that others may do the same. Thank you.

In like vein I want to take the debate further. Bring in two further streams of investigation, and broaden the discussion somewhat. Ambitious perhaps, but I have to try it.

Ever since I first heard John Hagel and John Seely Brown talk about it,  I’ve been thinking hard about the Big Shift, which they worked on in conjunction with Lang Davison. John H’s “succinct” post, which I link to, summarises the Big Shift as exhibiting the following characteristics:

• from knowledge stocks to knowledge flows
• from knowledge transfer to knowledge creation
• from explicit knowledge to tacit knowledge
• from transactions to relationships
• from zero sum to positive mindsets
• from institutions driven by scalable efficiency to institutions driven by scalable peer learning
• from stable environments to dynamic environments

When I first looked at it, I was tempted to add “from scarcity to abundance” and “from back office to front office” and “from hierarchy to network”; but then I decided I could fold any and all those additions into the original list without much effort. I’m still thinking through the implications of that list, “I haven’t finished reading it yet”.

[An aside, to explain that allusion. A few weeks ago, the Economist reminded me of Harold Pinter's delightful poetic tribute to cricketer Len Hutton "I saw Len Hutton in his prime/Another time/another time." In last week's issue, Kaushik Basu, the Chief Economic Adviser, Ministry of Finance, Delhi, wrote in to remind us of "Simon Gray's response, when, a few days after sending him the poem, Pinter phoned Gray to check if he had received it. He replied he had, but "I haven't finished reading it yet"." Thank you Mr Basu, thank you Economist!"]

Influenced by the research behind Big Shift, I began to see the possibility that we could start proving the value of collaboration in demonstrable ROI, something that hasn’t always been easy. Which took me down the route of trying to find sensible ways of valuing relationships and capabilities, the 21st century assets that underpin the core characteristics of the shift.

And while I was deep into this, I was given the opportunity to kibitz-without-saying-anything on a long online discussion, on Gordon Cook’s amazing list (you must subscribe to the Cook Report if you’re interested in internet economics)  on some of the assertions made by Geoffrey West over at Santa Fe. I had the opportunity to spend some time mano a mano with West at TED Global this year, and obviously heard him speak about what he’s been learning re “the surprising math of cities and corporations”.

What particularly intrigued me was West’s introduction of the superlinear/sublinear construct into his ideas, empirically proven. As a long-term devotee of Jane Jacobs, Christopher Alexander and Stewart Brand from a buildings and cities perspective, and influenced heavily by Howard Rheingold in how I viewed all this in digital space, it was not hard to convince me that cities were living breathing spaces, complex organisms well worth studying. I was also comfortable with seeing companies in similar vein, now moving into Tainter territory again, looking at the collapse of complex societies, something I referred to in my previous post.

So what’s been going through my mind is this: when you look at large organisations, what superlinear phenomena do they exhibit? What sublinear phenomena? Can the superlinear/sublinear argument help us understand what Hagel and Seely Brown and Davison found about Return On Assets in USA Inc over half a century of published data?

As a result, soon after TED, I’ve been trying to formulate a similar argument about superlinearity and sublinearity from a systems perspective: which costs scale up faster than the rate at which a system “grows”, and which costs scale down faster? How do we measure system “growth”? Like West and his team found in the relationships between city populations and many other city measures, is there an equivalent for complex systems?

Most importantly, what is the role of collaboration in all this? How does all this tie up with the Jane Jacobs view of neighbourhoods and sidewalks and boulevards and parks? What does that mean for our understanding of stacks and ecosystems? Of course I have anchors and frames, I know what I want these answers to be, but I want to be able to prove them. Scientifically. Because the data in the research by people like Hagel, Seely Brown and West has some fascinating pointers.

The links and references that you provided me in the comments on my previous post will go a long way towards helping me figure that out. And if one or more of you figure it out first, then that’s wonderful…..as long as you share it back with all of us, in whatever way you choose.

[And now, after reading a post like this one, you know why this blog is called Confused of Calcutta. You must remember I’m a big fan of Francis Bacon, who said:

If a man will begin with certainties, he shall end in doubts; but if he will be content to begin with doubts he shall end in certainties. 

First, a quick recap.

Machines can filter. Only humans can curate.

When a human curates, she does three things. She selects something (or things) from a larger group. She organises those selections cohesively. And she arranges to present those things in such a way that people find it easy to engage with those things.

What I thought I’d do in this post is to look at all this a little more closely, all in the context of the social enterprise.

First, let’s look at selection.

The simplest and commonest form of selection in social networks is the asymmetric follow (a phrase I first heard used by James Governor). You follow someone or something, you subscribe to that someone or something. Elect to receive updates, alerts, reports. That doesn’t mean they follow you.

This can be permanent or temporary, you can undo this relationship at will. Unfollow the person or thing. Even block the person or thing. Stop receiving updates.

The social enterprise comes into its own because you’re not restricted to subscribing to alerts and messages from people alone, you can also follow things. Projects (you receive a status update whenever there’s a change, perhaps even at data element level) bills (you get told when it’s paid) complaints (you’re informed as to where it is in the process) orders (has that order closed yet?), companies (you receive news about competitor product releases, market activity, stock price movements, the lot).

If you find that someone or something is too noisy, just turn it off. Your call.

This is social 101, since you’re able to communicate with a real community, consisting of your staff, your partners, your customers, your products and services. But that’s only the beginning.

Once you’ve selected the publisher nodes you want to subscribe to, you start getting into second gear. Of course you receive direct messages from your network, but you could argue that it’s just email fit for purpose, made to work a little more sensibly. From people you trust, from people you’d like to hear from.

But that’s only the start. You have many more powerful selection tools, based on the network, its participants and the tools and techniques available to assess the information. You can check on what’s popular…. What are your customers talking to you about? What about your partners? Your staff? Separate views, yet compressed into a single whole if you want.

An order, a blog post, a presentation, a complaint, a bill, a sales success story, a promotion, a really clever way to solve a problem, a thank you note…. Each of these in turn becomes a social object, gathering the moss of comments from all and sundry. The rich interaction is captured in one place and congregated around the object in question, simply and conveniently. Threaded mail solved some of this, but only for the contents of the mail itself. In the social enterprise, you don’t have to worry about versioning either (which presentation are you looking at? That’s not what I have on slide 3?) since the “attachment” is always the same one, held centrally.

Selection is not a one-time administrative process redolent of the desktop productivity tools of the ’80s and ’90s. Instead, it is dynamic and responsive, driven by you and your network of choice.

The social enterprise is able to vote up the importance of a topic in a number of ways: direct messages, “hotline alerts”; “re-tweeting” the update, link or post so that more people see it and can engage with it, rather than the linear paths of the past; voting or just “liking” or “thumbs-upping” something; rating it; reviewing it; just by talking about it, making the topic “trend” so that it rises to the top of the pile; raising the frequency of the words used so that they appear in relevant tag clouds; driving engagement through the use of collaborative filtering techniques (people who read this link also read…. People who tracked this complaint also did… And so on).

So the linearity of past communications styles is no longer there; non-linear, non-hierarchical, pattern-based rather than process-based communications take place instead. The likelihood that you see what is important is increased in quantum leaps because people you trust have true 21st century tools.

Just over a decade ago, I had to ensure that the bank I worked for was prepared for the euro. We’d made all the changes, tested them, run them ad nauseum. Soon we were in dress rehearsals, simulating the triple-witch of month-end, quarter-end and year-end as part of going live with the euro. [I wonder which genius chose to make the go-live at such a time...] as the cutover drew near, one of the year-end reporting suites blew up. To cut a long story short, the program causing the problem was reporting on client turnover for a company that had been shut down seven years earlier. But the reports chugged on.

Getting information in an enterprise has never been a problem. More reports than you can shake a stick at, more enquiries than the average sports ticket desk. At least nowadays the outputs are emailed rather than printed, but the emails carry the same curse. Too many of them, with haystacks of information rather than needles.

So the first job of curation is selection, and you should (by now) have some idea as to how that is made more effective.

Let’s move on to the “organisation” aspect of curation in the social enterprise. I’ve already spent a little time talking about the value of tag clouds, of collaborative filtering, of social objects gathering moss via comments and observations, about voting processes, like buttons, thumbs up and down, rating mechanisms…. All these are ways to make the selection process easier, to make the curated information more valuable, more timely, more relevant. So we need mechanisms and conventions to assist us. Not everyone likes hashtags, but some more generally accessible equivalent is likely to be needed. Simple ways of getting collaboratively filtered information have to be built in, still bearing in mind that the filter may be automated, but not the curation.

When it comes to presentation, the world of the social enterprise is replete with mobile devices, multiple devices, mobile apps and native HTML5. So the minimum requirement is that the curated information is made available to the device of choice, and in the form requested. SMS alerts where required, email alerts only when absolutely necessary (why add to the waking nightmare of too much email?) Where and when the information is persisted, archived, retrievable and searchable matters.

I’m still on vacation, sharing these “provisional” thoughts as the rest of the family sleeps. Your comments are welcome, they help me figure out whether I’m making sense or not.

My next post is going to concentrate more on the topic of how to make the curated information actionable, how to learn from what people like Esther Dyson have been saying about search.

I’ve never been worried about information overload, tending to treat it as a problem of consumption rather than one of production or availability: you don’t have to listen to everything, read everything, watch everything. As a result, when, some years ago, I heard Clay Shirky describe it as “filter failure”, I found myself nodding vigorously (as us Indians are wont to do, occasionally sending confusing signals to onlookers and observers).

Filtering at the point of consumption rather than production. Photo courtesy The National Archives UK.

Ever since then, I’ve been spending time thinking about the hows and whys of filtering information, and have arrived “provisionally” at the following conclusions, my three laws of information filtering:

1. Where possible, avoid filtering “on the way in”; let the brain work out what is valuable and what is not.

2. Always filter “on the way out”: think hard about what you say or write for public consumption: why you share what you share.

3. If you must filter “on the way in”, then make sure the filter is at the edge, the consumer, the receiver, the subscriber, and not at the source or publisher.

What am I basing all this on? Let’s take each point in turn:

a. Not filtering at all on inputs

One of the primary justifications for even thinking about this came from my childhood and youth in India, surrounded by mothers and children and crowds and noise. Lots of mothers and children. Lots and lots of mothers and children, amidst lots and lots of crowds. And some serious noise as well. Which is why I was fascinated by the way mothers somehow managed to recognise the cry of their own children, and could remain singularly unperturbed, going placidly about their business amidst the noise and haste. This ability to ignore the cries of all the other babies while being watchful and responsive to one particular cry fascinated me. Years later, I experienced it as a parent, nowhere near as good at is as my wife was, but the capacity was there. And it made me marvel at how the brain evolves to do this.

Photo courtesy BBC

There are many other justifications. Over the years I’ve spent quite a lot of time reading Michael Polanyi, who originally introduced the “Rumsfeld” “unknown unknowns” concept to us (the things we know we know; the things we know we don’t know and the things we don’t know we don’t know). I was left with the view that I should absorb everything like a new sponge, letting my brain work out what is worth responding to, what should be stored for later action, what should be discarded. And, largely, it’s worked for me. Okay, so what? Why should my personal experience have any bearing on this? I agree. Which is why I would encourage you to read The Aha! Moment: The Cognitive Neuroscience of Insight, by Kounlos and Beeman. Or, if you prefer your reading a little bit less academic, try The Unleashed Mind: Why Creative People are Eccentric. In fact, as shown below, the cover of the latest issue of Scientific American MIND actually uses the phrase “An Unfiltered Mind” when promoting that particular article.

b. Filtering outputs

We live in a world where more and more people have the ability to publish what they think, feel or learn about, via web sites, blogs, microblogs and social networks. We live in a world where this “democratised” publishing has the ability to reach millions, perhaps billions. These are powerful abilities. And with those powerful abilities comes powerful responsibilities. Responsibilities related to truth and accuracy, responsibilities related to wisdom and sensitivity. Responsibilities related to curation and verification. None of this is new. Every day we fill forms in with caveats that state that what we say is true to the best of our knowledge and ability; every day, as decent human beings, we take care not to offend or handicap people because of their caste, creed, race, gender, age. Every day we take care to protect minors, to uphold the confidentiality of our families and friends and colleagues and employers and trading partners and customers. Sometimes, some of these things are enforced within contracts of employment. All of them, however, should come under the umbrella term “common decency”.

These principles have always been at the forefront of cyberspace, and were memorably and succintly put for WELL members as YOYOW, You Own Your Own Words. Every one of us does own our own words. Whatever the law says. It’s not about the law, it’s about human decency. We owe it to our fellow humans.

When we share, it’s worth thinking about why we share, something I wrote about here and here.

c. Filtering by subscriber, not by publisher

Most readers of this blog are used to having a relatively free press around them, despite superinjunctions and despite the actions taken to suppress Wikileaks. A relatively free press, with intrinsic weaknesses. Weaknesses brought about by largely narrow ownership of media properties, weaknesses exacerbated by proprietary anchors and frames, the biases that can corrupt publication, weaknesses underpinned by the inbuilt corruptibility of broadcast models. Nevertheless, a relatively free press.

The augmentation of mainstream media by the web in general, and by “social media” in particular, is often seen as the cause of information overload. With the predictable consequence that the world looks to the big web players to solve the problem.

Which they are keen to do.

Google, Facebook, Microsoft et al are all out there, trying to figure out the best way of giving you what you want. And implementing the filtering mechanisms to do this. Filtering mechanisms that operate at source.

There is a growing risk that you will only be presented with information that someone else thinks is what you want to see, read or hear. Accentuating your biases and prejudices. Increasing groupthink. Narrowing your frame of reference. If you want to know more about this, it is worth reading Eli Pariser’s book on The Filter Bubble. Not much of a reader? Then try this TED talk instead. Jonathan Zittrain, in The Future Of The Internet and How to Stop it, has already been warning us of this for a while.

Now Google, Microsoft, Facebook, all mean well. They want to help us. The filters-at-source are there to personalise service to us, to make things simple and convenient for us. The risks that Pariser and Zittrain speak of are, to an extent, unintended consequences of well-meaning design.

But there’s a darker side to it. Once you concentrate solely on the design of filterability at source, it is there to be used. By agencies and bodies of all sorts and descriptions, ranging from less-than-trustworthy companies to out-and-out malevolent governments. And everything in between.

We need to be very careful. Very very careful. Which is why I want to concentrate on subscriber-filters, not publisher-filters.

Otherwise, while we’re all so busy trying to prevent Orwell’s Nineteen Eighty-Four, we’re going to find ourselves bringing about Huxley’s Brave New World. And, as Huxley predicted, perhaps actually feeling good about it.

More to follow. Views in the meantime?

If a man will begin in certainties he shall end in doubts; but if he will be content to begin in doubts he shall end in certainties.

I am content to begin in doubts. With your help I shall end in certainties. This is that kind of post.

Marshall McLuhan is meant to have said something along the lines of:

“I don’t know who discovered water, but it certainly wasn’t a fish.”

Fish have no understanding of water. Fish have no understanding of fire either.

Every one of us has a problem recognising what we’re immersed in; sometimes, because we’re so immersed in something, we also have a problem recognising things beyond that which we’re immersed in.

Take “abundance economics”. We don’t understand it. Why? Because we’ve all been brought up to understand and respect “scarcity economics”. Which seems to go something like this:

1. It’s all about supply and demand.
2. Uh, wait a minute. Isn’t it all about supply, provided you can corner the market?
3. So, if you could somehow continue to stoke up demand while controlling supply….
4. …Yes, it’s all about supply and demand. Provided you control the supply and excite demand.

Everyone understood it. And everyone played the game. And scarcity economics was seen to thrive. God was in His Heaven, and all was Right with the World. Just as long as you were a Seller and not a Buyer.

We have all been brought up in such a world. Become the seller in a seller’s market. Or be a wimp, a wuss, a loser. Caveat emptor. Morituri te salutamus. Monopoly is a game played by lawyers and regulators, and the customers always lose. Antitrust is just a US variation of the same game: same players, same losers.

Sellers traditionally look to create scarcity. When the goods for sale are physical in nature, this is not hard to do. All you had to do was to corner the market and hoard the goods. This happens all the time. Diamonds and oil. Gun mountains and butter mountains.

That’s the way it’s been. A seller’s market. Scarcity rules OK.

In a world based around scarcity economics, with everything under seller control, things are made to slow down. There’s a QWERTYing of the seller-buyer interaction, a direct consequence of disproportionate seller power. Which is what leads to nonsensical constructs along the lines of Assembly Line. Any color you like. As long as it’s Black. Warehousing and inventory management are nothing more than “legitimate” hoarding. Hoarding by sellers.

So, particularly in the West, we were brought up in a world where sellers were encouraged to hoard and buyers were encouraged to borrow. After all, what does a buyer hoard? Money. Time. Attention. Intention. And most of the time, sellers work hard to make the buyer stop hoarding. (Make a sentence with “fool”, “money”, “soon” and “parted”). At university, it seemed to me that one of the key differences between the East and the West was that people continued to save in the East. The savings rates I was used to in India were phenomenal, and there was no credit to speak of. People spent a part of what they’d saved.

Which sort of leads me on to the real reason for this post. [And no, it's not an attempt to link all this up to the credit crunch. Though there is a link.]

I think scarcity economics goes with selling, and abundance economics goes with buying. I think selling goes with things static, and buying goes with things dynamic. I think selling can be plastic and artificial, while buying tends to be real and authentic.

And I think Web 1.0 was all about the seller, while Web 2.0 should be all about the buyer. A static web enables artificial scarcities, while a live, participative web, like nature, abhors the vacuums so created. As a result, equal and opposite artificial abundances emerge.

Esther Dyson called it “the customer’s in control”. Before that, the Cluetrain had come to town, and people were beginning to understand the importance of authenticity. Since then, Hugh Macleod, Kathy Sierra, Tara Hunt, Seth Godin, Doc Searls, they’ve all preached elements of this in different languages. Languages like Creating Passionate Users. Languages like Social Objects. Languages like VRM.

Buying is participative; it’s about relationships and conversations, not transactions. Unlike selling, which is all about transactions.

For many years I’ve wanted to publish RFPs and RFQs and RFIs on the web, because it seems a sensible thing to do. Tell the world what you’re looking for, and help them come and find you. No lies and no cheating, just the facts.

But people railed against me when I said things like that. “You don’t understand procurement, that’s for sure. Don’t ever play poker, because you’d lose a lot of money. Transparency is for losers. There’s no point negotiating unless you’re prepared to walk away. You’re an idiot”.

I guess I am an idiot. Because I still think that way.

You see, scarcity economics is about hiding needles in haystacks; abundance economics is about making haystacks out of needles. What would you prefer?

The worlds of advertising and search are deeply intertwined right now. Not surprising, because they’re all immersed in scarcity economics and staticness and Web 1.0.

Search means something else altogether when it becomes about intention and not inventory. So does advertising, when it becomes about recommendation rather than rationing.

Every day, more and more people are becoming connected. Affordably, sustainably, ubiquitously connected. The move from sellers and inventory to buyers and intention is already happening. Social media in all its forms (blogs and wikis, IM, e-mail and Twitter, electronic social networks) help make this possible. Tools continue to emerge and improve.

In many firms, in many markets, in many societies, we’ve had a number of Emperor’s-New-Clothes words and phrases, words like “transparency” and “collaboration”. Words that were smoothly wheeled out to mean the opposite, and everyone went along with it. Why? Because we were immersed in Scarcity Economics.

Scarcity economics was all about making the customer pay for what you had to sell; if you had to drum up demand first, that was fine. It was called advertising. If the customer didn’t need it that was also fine, you weren’t running a charity.

Abundance economics is all about giving the customer what she wants and then letting her pay for it herself. The only thing you have to do is make it easy for her to tell you what she wants, and, when she does tell you, to listen.

Of course customers don’t always know what they want. Of course there will always be customers who want what they had yesterday, only faster cheaper better. Of course there will always be customers who want “faster horses“. Of course there will always be an Innovator’s Dilemma. Always?

Always is a big word. Maybe it gets smaller as we move from a seller’s world to a buyer’s world.

It’s all about choices. It’s all about choice. Customer choice. Choice based on recommendation, choice signalled as intention, choice executed in abundance.

To paraphrase Michael Schrage, innovation is what the customer buys, not what the producer sells. As we move into the new world, the very concept of the Innovator’s Dilemma begins to change. All this is happening, happening now. The future’s already here, it’s just unevenly distributed. But you know what? I think the credit crunch is accelerating the change.

I’m done for today. Flame away. And I will learn. This one has been a Long Time Coming, it’s going to be a Long Time Gone.

[An aside. Even if you hated this post, even if you disagreed with every word of it, go on, do yourself a favour, listen to the song I've linked to in the paragraph above. Superb stuff].

[Another aside, for the more literary-minded amongst you. I've linked to the Wikipedia entry for Browning's Pippa Passes earlier in this post. Go read it. I knew the poem well, yet learnt something today.]

I like thinking about things in themes. What do I mean? Let’s take an example. A recent Harvard Business Review article asked if we should Invest in the Long Tail. Apparently, research had shown that even in a long-tail world, blockbusters continued to exist and were of significance. Chris Anderson wrote a response pointing out the importance of getting the definitions right, and showed how, in his opinion, the research was consistent with the theory. And a whole conversation started.

Reading all that set me thinking. It made me go back to the oft-quoted Clay Shirky article on Power Laws, Weblogs and Inequality, serendipitously referred to a couple of days ago, in a post by Hugh Macleod on, of all things, cloud computing.

And this is what I’m thinking about:

1. In a broadcast age where the power of distribution lay in the hands of a select few, there were blockbusters.

2. In the internet age, where the power of distribution is less narrowly held, there continue to be blockbusters.

3. The blockbusters are different. They come from different motives, give rise to different opportunities, form part of different business models. Let’s call the broadcast blockbusters Type A blockbusters, and the internet blockbusters Type B blockbusters.

4. When the power of distribution is narrowly held, someone else chooses the blockbuster, then uses advertising, availability and proximity to try and self-fulfil the prophecy. Sometimes that succeeds, sometimes not. We all have our Waterworlds to bear.

5. When the power of distribution is democratised, everything changes. Now the blockbuster is about power laws rather than self-fulfilling prophecies.

The moral of the story is this: You could game a Type A blockbuster. You can’t game the Type B blockbuster. [This is what I'm thinking about; this post is as provisional as any other post I write].

When I was reading that in 2005, I’d already become obsessed by the Clay Shirky mantra about damage and repair: if you can keep the cost of repair at least as low as the cost of damage, then things that are “in the commons” are less likely to have tragic (as in Garrett Hardin) consequences. Well that’s my wording and interpretation anyway, apologies if I’ve got anything wrong.

What it did was make me think slightly differently about design. I started considering opportunities to reduce the cost of repair by minimising the need for repair. From a design perspective, what could we do to reduce the likelihood of damage and thereby reduce the cost of repair?

As serendipity would have it, I was thinking about these things while waiting for the flight back from Copenhagen, and found this in the men’s washroom at the lounge:

So it wasn’t just Schiphol airport where you could go up and see someone’s etchings in the washroom. Anyway, seeing it made me think about other places where the design of something reduces wastage and obviates the need for repair. And that made me think of this:

Now that’s a photograph of a room in the Wine Residence in Shanghai, a wonderful place where you can acquire wine, store it, taste it, learn about it and even trade it. I was taken around it by a close friend, and I loved the built-in spittoons. What did I like about it? Well, I’d seen spittoons being used in places where you learn about wine before, but they were usually set apart from where you were. You had to go to the spittoon. I come from India, where a lot of people chew betel leaf and betel nut.

And while spittoons can be found occasionally, what you tend to see is dried-blood scars on walls and floors in public places, as people aimed for the spittoons and missed. Here’s a sample (actually taken from the Solomon Islands, not India, but the point remains. My thanks to Everything Everywhere, Flickr and Creative Commons):

Where is all this taking me? It’s Sunday and I’m thinking lazily, provisionally. I started wondering whether Mac desktops used to be “dirtier” before someone thought of putting the Trash can there. Whether personal information would be more accurate if we presented the tools for repairing the information more usefully. That kind of thing.

If we take design seriously, we need to work harder at reducing the cost of repair. Sometimes that means doing what we can in design to reduce the need for repair.

Today, reading newspaper reports about Tiger Woods and the US Open, I decided I wanted to know more about it, and quite naturally I went to Wikipedia. I found it intriguing that I did not go first to Google, and thought about why. I decided that there was a class of information where I considered Wikipedia to be my first stop; that this class was characterised by something I could not find anywhere else.

What was this unique thing? A notice that said “The neutrality of this article is disputed“. Sure, I’ve known about Wikipedia’s NPOV principles, and about the use of such notices. What I hadn’t appreciated was how important that notice was. What I hadn’t appreciated was that, for some classes of information, I would go to Wikipedia in preference to other places because of the willingness of Wikipedia to point out its own provisionality.

Anyway. I found the article on Wounded Knee fascinating, and spent some time wandering around related articles.

Talking about wounded knees, apparently Tiger Woods has never failed to win a major after ending the third round with a share of the lead. He’s meant to be recovering from knee surgery; watching him play yesterday, one begins to wonder what it would really take to defeat him when he decides he wants to win. Amazing player.

Some weeks ago I let you know that I’m a big fan of Camilo Villegas. Good to see him performing well (he’s lying 6th), this is the best I’ve seen him do at a major, and I’m going to be rooting for him tonight. Defeating Tiger in this mood is going to take something special from someone, and Camilo has the capacity. Every time he stands at the tee he’s thinking birdie or eagle. All he has to do is improve his driving accuracy, and he could be a contender.

• directories and address books (you need to find the person or group you’re looking for)
• profiles and CVs and suchlike (there has to be some way of describing the person or group)
• communications infrastructure (you need ways to talk and listen and exchange messages)
• scheduling infrastructure (you need ways to agree times and places to meet)
• event notifiers (you need ways to spread news and gossip)

All these then get wrapped into a larger infrastructure, which covers four other things:

1. an ability to identify oneself
2. an ability to personalise the experience
3. an ability to have Four Pillars support (search, syndication, fulfilment; we already have conversation)
4. an ability for developers to add applications

In a way that’s what Office and Exchange and Outlook was about. In a way that’s what Bloomberg was about. And in a way that’s what Facebook and even Twitter are about.

This is an emergent and evolving space, but only in a narrow respect: communities have been around a very very long time; communications processes have also been around for a very long time. What has changed is the following:

• communications tools are becoming ubiquitous, especially with the web and mobile devices
• communications themselves now persisted digitally (allowing efficient archival, retrieval, search and syndication)
• the tools and the modes of communication have become more affordable

As a result, there’s a lot of learning to be had. Some people are concentrating on the interactions within the communities, the social graph as it were. Some are concentrating on movements: take a look at this article, published in the latest issue of Nature, and building on a theme established by a number of essays written by Barabasi and Gonzalez et al over the last couple of years); some continue to focus on the ownership, privacy and portability of the information. Yes, there’s a lot of learning to be had.

From an enterprise context, the learning takes on one further dimension. Enterprises have always been about walls and perimeters; now, as the walls become more and more porous, as the enterprises extend beyond their traditional boundaries to their customers and supply chains, communities become alliances, they become ecosystems, they become groupings of what Venkat calls “network-based competition”.

Yes, there’s a lot of learning to be hard.

Me, I’m utterly fascinated by one small piece of this overall puzzle. Alerts, event notifications, status messages, whatever you want to call them. Maybe it’s the old journalist in me. That’s why I loved the mini feed in Facebook. That’s why I loved Twitter.

And now, as I see more and more tools that help scrape information to do with events, I find myself going off at a tangent. Realising that we’re going to get overloaded by such messages (remember what happened when people started connecting Twitter to their Facebook status messages?); realising that current tools are already being stretched; and realising that the historical response (aggregation and summarising) is inappropriate.

I think we’re going to see an explosion of activity in the status message related tool space, with two different sets of tools. One to do with personal “manual” input, one to do with automated input. In both cases, I think we’re going to see this explosion connect with a similar set of explosions in the visualisation space, so that we see more colour, more heatmaps, more timelines, more fractal representations, more radar diagrams, more tag-cloud-like diagrams …… but all to do with status messages.

Status messages with a difference. Not aggregated, not summarised, but built around a capillary-action publish-subscribe model. Truly personalised.

That’s provisional enough. Now I wait for the comments so that I can learn more about this.

Three questions seem to repeat themselves:

How often should I tweet?
What should I tweet about?
When should I take the conversation offline?

These are not simple questions, and we will throw away a lot of value by trying to answer them prescriptively. Let me try and answer them “provisionally”, let me share where my thoughts currently are. On the question of tweet frequency, I think that it’s a subtle negotiation between each person and their followers. One tends to get some sort of feel, a sense, of what the right level is. I tend to go up every time I learn to do something within Twitter, and then, once I have learnt enough, I revert to some prior base level. At least that’s how it feels to me.

Tweet frequency by itself can become an irritant to others. I have had at least one Facebook friend, someone I’ve known for 20 years (but not particularly well, we were nodding acquaintances who met maybe a dozen times over the two decades) comment that he couldn’t handle the level of updates he was getting in his Facebook mini-feed when I started tweeting my status. So far I haven’t had to unfollow anyone; I have blocked a few auto spammers, and I have gone for turning Notifications off for many people; it was part of learning how to use the tool.

For some people, tweet frequency is inextricably linked with tweet topic; this can have positive and negative effects. So I’ve had some people tell me I was tweeting too often about what I was listening to, while others have engaged with me more often as a result of the music tweets. Some are interested in discussions about restaurants or meals, some not. Some are relaxed about sharing domestic details, some less so. What should I do?

The answer, for me, lies in the third question. When should I take the conversation offline? If I turn that question around on its head, and ask When should I share something? When should I use twitter public rather than a DM. Now I get a clearer answer. I should only share something when I think it will be of value to the group. This is even true of @person tweets…. they should be DMs unless there is some benefit for the group in seeing the @person tweet.

So far so good, but all this is theory. I spent some time looking at what I did, and what I saw other people doing, in Twitter. And I began to realise that there are maybe three legitimate uses:

1. For the benefit of the group, the followers.
2. For the benefit of the tweeter, as in a hoosgot or similar question.
3. For the benefit of both, as in when a new feature or function is being trialled.

Now all this has been stated from the perspective of the person doing the tweeting; there is a lot we can learn from the alternate view, that of the follower, the watcher, the listener. And here the only analogy that comes to mind is a mixing desk or a graphic equaliser. For each person I follow, I’m going to need one of these, so that I can “turn up the volume” for the things I am interested in, and reduce volume for the things I am not interested in.

I have seen people make the mistake of thinking this is about topics of interest and preferences, I wish it was that simple. You see, I may be interested in person A’s book taste but not his music taste, and in person B’s music taste but not her book taste. Which means that I can’t just have a topic-driven set of preferences. They have to be by topic by person.

At least that’s how I’m thinking about all this right now. The tweeter has a duty of care, a duty to his community of followers, to adjust the tone, the frequency and the topics in response to community feedback. But that’s at community level. In addition, the tweetee needs some slider controls per tweeter, set a bit like the privacy controls in Facebook, indicating what kind of information is wanted and what is not wanted.

We are going to make mistakes as we play with these tools. We are going to see a lot of value generated from these tools. But much of that value will go to the early adopters; not because there’s a secret sauce, but because the early adopters will have one advantage the rest won’t have…… they’ll be able to attract the cream of the crop of the new generation entering the marketplace. [I thought of saying the workplace, but changed my mind and went for marketplace].

In the end it’s all going to boil down to choice. Choice made by the follower, the tweetee. Choice made both physically as well as logically; as the tools get better, capillary conversations will become more and more sophisticated.