The WIKiD Tool algorithm provides a mathematical framework for analyzing dynamic data related to social interactions in a network and memorialized on a Blockchain. This example uses an analogy to the position / velocity / acceleration equations that some people may remember from their school days.
These types of relationships are important for measuring things like innovation. Ask any VC for a definition of Innovation and they’ll probably say “I’ll know it when I see it” or “it’s a good idea with an economic outcome”. Neither of these things are measurable until long after the innovation occurs which is not practical. However, if we could measure something that is closely related (correlates) with innovation, perhaps we could use that to measure the thing we can’t see.
A similar thing happens on Wall street – how do you measure consumer confidence? Financial analysts noticed that the price of some commodities track closely with consumer confidence so they use that as a proxy for the thing they cannot measure directly. This is called a derivative – something whose value is derived from the value of something else. Suppose we use the same idea to measure things like Wisdom, Innovation, Knowledge, Information, and Data (WIKiD)?
As engineers interact with each other to form transaction records, the blockchain records the chronological order of every event, so we can now correlate all events with respect to time. The connections that are made may be analyzed for both quantity and quality (magnitude and direction). We can now use common mathematical tools from finance and physics.
We have established that the blockchain records the time function for
all events to an immutable ledger. In order to represent vector
magnitude we’ll follow a well known analogy to the
displacement-velocity-acceleration formulas from physics and associated
Calculus.
WIKiD stands for:
(W) = Wisdom (I) = Innovation (K) = Knowledge (i) = information (D) = Data
Data: In general, we can define data as points
placed on such a coordinate system. Each point defines a position in
space and the time where an event is recorded. The distance between data
points can be called “displacement”, because of the relative distance
between the points. In the simplest sense, we can see that Data (D1) and Displacement (D2) share an analogy.
Information: When you draw a line connecting two points, or you draw a line approximating a cluster of points, the slope of that line on a graph provided information about the phenomenon under observation. Is it getting larger slowly? Is it getting smaller rapidly? In essence, the slope of the line represents the rate of change in displacement with respect to time and gives the observation its “velocity”.
This may be represented by the relationship simply stated as:
i = dD/dt
Information is proportional to the rate of change in the data with respect to time
It should be clear that we are defining ‘information’ as a derivative
of ‘data’. a derivative in physics is the same as a derivative in
finance, that is “something whose value is derived from the value of
something else” That said, we now proceed down the latter of
derivatives.
Knowledge: The analogy between velocity and
knowledge is intuitive. Knowledge is a phenomenon that may be modeled as
the derivative of ‘information’. Strictly speaking, the value of
knowledge is derived from the value of the information from which
knowledge was created. It is intuitive that one accumulates knowledge
over a long period of absorbing information and integral data. Education
is the process of absorbing information from a printed page or screen,
and combining that with other previously accumulated information to form
knowledge.
Hence, the following relationship holds and is simply stated as follows:
K = di/dt =d2D1/dt2
Knowledge is proportional to the rate of change of information with respect to time
Innovation: The analogy between acceleration and innovation is also intuitive but a little more difficult to put to words (that is why we use equations). Consider an child who is knowledgeable in riding a bicycle on pavement. Suppose that the child, for the first time, encounters sand on the pavement while also executing a sharp turn. During the ensuing deceleration, the child experiences a very high increase in knowledge about their environment within an extremely short period of time. In any case, the child is forced to innovate a solution. Likewise, the motocross racer is constantly innovating to adapt to the conditions of the track. You can read a book about riding bicycles, but none can adequately describe the moment when the child must create the experience anew.
For the fact of innovation, we provide the following relationship simply stated as follows:
I = dk/dt = d2i/dt2 =d3D/dt3
Innovation is proportional to the rate of change of knowledge with respect to time
Innovation Example: One of the gross errors that we make in business is due to the inability to differentiate an economic event from it’s constituent physical parts. The classic example is innovation; Venture Capitalists often describe innovation as a new idea that has an economic outcome. This is problematic because innovation is defined with one equation having two unknowns. This is mathematically impossible to solve, except by laborious and expensive iterations.
The rational (mathematical) approach would be to test and observe
high rates of change of knowledge in a community and use that as a proxy
to identify the presence of innovation (as defined above). After that,
the community may be tested for economic outcomes. Unfortunately,
I=dk/dt is not normally possible to observe in a hierarchical business
structure. However, when formatted and validated correctly, and applied
to a network organizational structure, then I=dk/dt can be represented
graphically and accurately identified even by a child.
Wisdom: When we think of wisdom, our minds conjure
the image of an elderly person with a lifetime of experiences behind
them. Somehow, our elders seem to be able to predict the outcome of a
series of actions before those actions take place. This is why we seek
wisdom to lead our organizations and institutions.
Consider the manager of a factory floor who has 30 years experience.
During those 30 years, they have seen many things succeed and many
things fail. In fact, their experience represent a statistically
significant sample of representative events that they have experienced
in the past. The wise manager is able to process new information with
old information to predict the probability that the new idea will yield
the desired results. The propensity for wisdom may be modeled as a time
function in a similar manner.
W = dI/dt = dK2/dt2 = d3i/dt3 = d4D/dt4
Wisdom is proportional to the rate of change of innovation with respect to time
In general we could say that Wisdom is the second derivative of
Knowledge and the fourth derivative of Data. Similarly, Innovation is
the first derivative of Knowledge and the second derivative of
information, and so on. In order to identify innovation, we would
measure high rates of change of knowledge. Wisdom would be proportional
to high rates of innovation, etc. The utility of these functions
should be apparent.
Conclusion
The WIKiD tools algorithm provides a set of relationships for what are now considered intangible assets that are integrated by a time function. The Blockchain provides the master schedule for the time function to be recorded, leaving us with a somewhat routine task of identifying rates of change in observable events.
Over the last 20 years or so, I have spoken all over the United States and many parts of the world about the idea that there may be a single and relatively easy way to correct very evasive flaw in market capitalism.
Fixing this flaw could correct many of the biases and divisions that plague relationships and communities in an otherwise functional social organization system. The work of the Ingenesist project, of course, is precisely to correct the flaw.
From past experience, I always get one of three reactions to our work:
Some people get it immediately, and engage deeply.
Some people don’t get it and ignore completely,
Some people attack it, sometimes dangerously.
I learn a great deal from each type of response. In fact, the vast majority of ideas in the Ingenesist Project come from hundreds of brilliant people who have participated in one of these three ways. The first two types are self-explanatory. This post is about the third type – I call them “the antigens”. As the term implies, when an Antigen perceive a threat to the existing body they react strongly to neutralize it.
The Flaw in Capitalism is well protected
The antigen is not just a person who disagrees with a fact or feature of our work. They hold a deep visceral objection that is personal, emotional, physical and always disproportionate to the level, scope, or even the topic of conversation.
Much to our astonishment, the antigen is always someone who would be expected to embrace our work and ideas.
The problem, I have come to realize, stems from the suggestion that the Zertify knowledge inventory strategy seeks to increase the efficiency of matching the supply and demand of knowledge assets in a community. The antigen has a vested interest in this same goal and does not believe that there could or should be a better broker than themselves.
If it’s not Broker, don’t fix it
Several examples of antigens that we have encountered:
One was the economic development agency for a less developed country. Our proposition was to present their engineers as world class quality. They saw this as an emigration threat more than an off-shoring draw, and shut the program down.
One was a celebrity author and lecturer that champions the cause of the common man against the oppression of corporate tyranny. This individual makes his living selling books, lectures, and endorsements. His scathing misinterpretation of our work hurt us badly.
Another recent antigen was a person who runs an “accelerator” for start-up companies whose passion is to identify promising start-ups and match entrepreneurs to funding in the spirit of high tech titans of the past. He saw us as a threat to his “God’s Eye” approach to the garden of money.
On the surface, it would seem that these people or entities would embrace a comprehensive knowledge inventory and machine enabled means of matching supply and demand for knowledge assets. Instead, they saw us as a threat to their vested interests.
It’s not about right and wrong
The point of this article is not to make the antigen wrong about their response – it is quite natural and we have all done it. The Flaw in Market Capitalism is the antigen behavior/reaction itself – not the person demonstrating it. Our challenge for the future will be to amplify mavens and community organizers to become better at connecting people in collaboration with each other while also identifying and redirecting the antigen response before it is activated. Because once it emerges, it cannot be put back in the bottle.
The corollary:
Those who would embrace this work likewise have little or no vested interest in “controlling” others and would therefore appear to be the least likely to accept our work. So by definition, those who accept the ideas that we present are those who would perform well in such an environment. This further demonstrates the counterintuitive nature of The Ingenesist Project.
The New Value Tool is a repetitive simulation of The Value Game (described here, here, and here) that may be used to determine in advance the true value that may be created when people interact with each other around a shared asset.
The Social Charter
This should not be too difficult to envision since The Value Game plays out daily in the modern corporation where workers acting in the best interest of the corporation (the shared asset) interact with each other in various departments to preserve the asset rather than consume the asset – this is how corporations create social value; through the employment of people and the social utility of their products.
Obviously, corporations that fail to fulfill their social charter likewise fail to sustain value creation in a community. Those that do, tend to thrive in the Internet Age. The objective of the New Value Platform is to enable communities to organize, as do corporations, except without the burden of corporate governance or the priorities of outside investors.
Drag, Drop, and Dream
The New Value Tool is simple to use; just drag and drop from the Zertify Personal Knowledge Inventory into The Value Game and see what the Exoquant dashboard tells you about your simulation. It may take some practice at first to see how to make the numbers move, but soon it will become intuitive which scenarios create lots of New Value – and will likely sustain themselves in practice. Scenarios that do not, will likely fail in a particular community and ought not be ventured to practice.
Community Algorithm
Exoquant provides a very simple algorithm relating the creation of data, information, knowledge, innovation and wisdom that govern the Value Game. However, the weighting of these elements is a component of the “fuzzy math” that entrepreneurs bring to the game. The empirical data resulting from the application becomes property of the players (community) as their “Secret Sauce” of value creation in their own uniquely optimum economic game.
On the path to a Social Currency
The New Value Tool May become an important system for analyzing existing ventures for optimum social value creation as well as predicting how collections of knowledge assets in a community can optimize their social value in collaboration with each other. Eventually, the predictability of the outcomes will improve while diversification of projects will eliminate risks such that a social currency can be capitalized and securitized.
The question that persist for many college and university administrators is what actions must they take to optimize all of their relationships in a manner that reinforces their own value to their community.
The Value Game is an ideal solution for this type of scenario (if you are unfamiliar with TVG, please visit this primer link). The first step is to identify the asset. The recent graduate is the university asset because they are the customer and the product being advanced. After all, the life worth of that graduate will reflect upon the institution that prepared them for professional service.
Next, we identify the players that will interact with that graduate over the course of their lives.
A* = The Graduate
The graduate will interact with their Alma Mater
The graduate will interact with their alumni association
The graduate will interact with Their broader community
The graduate will interact with corporations and entrepreneurs
Now, Let’s review each of the relationships and the economic incentives that drive them:
A-1: The graduate relies on the university reputation with players 1,2,3 as an extension of their own capabilities.
A-2: The graduate relies on the influence and success of prior graduates who hold an affinity towards each other in fraternal social networks.
A-3: The graduate will interact with their community for friendships, residency, recreation, and support.
A-4: The graduate will rely on strong and equitable employers / entrepreneur base where they may self-actualize as productive citizens.
Now, let’s review the relationships and incentives that each of the players has with each other:
1 – 2,3,4: The university has an interest in preserving the community because a motivated and educated workforce attracts opportunity far and wide in the form of business, travel, tourism and economic growth (Jacobs Externality).
2 – 1,3,4: Alumni seek to preserve the value of their alma mater because of the direct reflection upon their careers. It is in their best interest to support the university, it’s graduates, employers and the wider community.
3 – 1,2,4: The community relies on the university graduates and alumni to provide equitable and fair innovations that provide sustainable living standards.
4 – 1,2,3: Employers compete globally for talented, stable and engaged employees and service providers who are attracted foremost by a vibrant entrepreneurial economy and sustainable communities.
Data, information, knowledge, innovation, and wisdom
The Value Game is now played by university administrators who direct university facilities, influence, and resources to bringing at least 2 of these four groups together. Each time there is an interaction, the university will capture the data associated with the interaction. That data can be compiled to form information which gives the university administrator knowledge about what their next action must be. University feedback to the community will tell all of the players what interactions create the most social value upon which all players will innovate in their best interest.
As the game continues over time, the university gains the wisdom to understand the values of their assets and surrounding community. The community will act in the best interest of the other players as a means of acting in their own best interest (Social Capitalism).
Data is the ultimate shared asset
Over time, the University will become the physical “Search Engine” for data, information, knowledge, innovation, and wisdom in a community instead of just a vetting mechanism for book learned material. The University can now deploy this wisdom to their own internal programs and curricula as well as becoming an external reference source for government, industry, and economic development.
*(The University of New Haven is in no way affiliated with this post except I (the author) am a graduate of the UNH Engineering school (go Chargers!) and needed a realistic example that probably would not sue me – thanks guys)
Information is proportional to the rate of change of data with respect to time
Knowledge is proportional to the rate of change of information with respect to time
Innovation is proportional to the rate of change of knowledge with respect to time
Wisdom is proportional to the rate of change of innovation with respect to time
In clinical terms, this is called a “Differential Equation”
I always get a lot of questions about these. Most people’s eyes glaze over as their expression goes blank with far off images of high school Calculus class. Few people realize that these relationships are so common and so intuitive that we are all performing “Calculus” in many of their thoughts, words, actions, opinions, observations, and conclusions about the world around us.
But, just in case there is any doubt about the pervasiveness of differential equations in our culture and thinking, listen to the experts:
The idea here is that it’s OK to fail because this is how learning happens (rate of change of knowledge) but make sure you do it fast (with respect to time) because the objective is to innovate, not to not make mistakes.
Here she is referring to the proportionality component of creativity. The magnitude of the inspiration (rate of change of one’s knowledge of a matter) is greater than all other thinking moments, but it is constrained in time (with respect to time).
Marissa is talking about Wisdom. While innovation is proportional to the rate of change of knowledge, wisdom is proportional to the rate of change of innovation. The speed at which Google can innovate is how Google creates wisdom of what to do next.
***
Here are a few more. See if you can spot the differential equation:
“As people innovate and learn faster, they help generate new ways of performance improvements for everyone while progressing toward their own higher goals” – John Hagel, The Big Shift
Differential Equations are used to describe a vast array of phenomena in our physical universe.
These include the the forces of particles in motion, diffusion of medicine through cell walls, the decay of radioactive substances, and effects of gravity on bodies, weather, energy, chemical reactions, even the creation of money itself. It should not be a shock then that bankers, CEOs, politicians, and all “investors” are not actually concerned with money, they are concerned with the rate of change of money with respect to time.
The question now becomes, why would their NOT be an algorithm for human values of knowledge, innovation, and wisdom when there is an algorithm for everything else with respect to time.
There is a tiny flaw in Market Capitalism that can be easily corrected
Technological change must always precede economic growth; we are going about the process of globalization as if economic growth can precede technological change. We got it upside down, that’s all.
Anything that can be made by allocating scarce land, labor, and financial capital can also be made by allocating abundant social, creative, and intellectual capital.
For every dollar of tangible value, there is at least 100 dollars worth of ‘intangible’ value that is really just ‘invisible’.
The global debt is trivial in comparison to the invisible value that exists with no accounting system to represent it.
There should be no economic incentive for anyone to make anything other than what they are most talented, interested, and passionate about.
Nobody knows everything.
Everybody knows something they can teach any other person.
Students, by definition, hold an equity position in their teachers.
Therefore, teachers should hold an equity position in their students – this will fix a lot of things.
Nothing economic happens until two or more people get together and build something.
Competition is over rated.
Collaboration is under rated.
All monetary things are valuable but not all valuable things are monetary.
There is a perfectly legitimate market for everyone.
A new currency will be the last thing that happens, not the first.
You can’t eat Gold
Information is proportional to the rate of change of data with respect to time.
Knowledge is proportional to the rate of change of information with respect to time.
Innovation is proportional to the rate of change of knowledge with respect to time.
Wisdom is proportional to the rate of change of innovation with respect to time.
If you want to create wisdom, go increase the rate of change of innovation. If you want to create innovation, go increase the rate of change of knowledge, etc. Now, flip over the series 15-18 above. See, you’ll do just fine.
Money represents past, present, or future productivity – otherwise nobody would work for it (think about that ).
Therefore, a currency backed by debt and a currency backed by innovation would become the mother of all hedge funds.
Securitization is a miracle of scale if done correctly, a disaster of scale if not
Time is the only valid basis of a currency.
My singular objective and greatest aspiration is to make “intangible” value tangible. I am confident that my children – and yours – will know what to do next.
Human civilization has progressed through many stages. Each stage arose from the “integration” of the tools developed in the prior stage. Believe it or not, the next economic paradigm will arise from the integration of the tools being developed in the current stage of human development. Let me explain:
Hunter -gatherer:
We started as hunter-gathers who traveled from place to place to follow animal migrations and seasonal flora. People would collect fallen branches and burn them for heat or cooking. Then people started to sharpen rocks that could be used to hunt food better than a dull rock. They sharpened rocks to chop down trees for warmth and shelter. Soon they sharpened rocks to till soil.
The agrarians
The arrival of the agrarian age came when the arrow, the axe, and the plow were integrated; that is, the output of one became the input of another – allowing people to conserve energy and increasing productivity. The emergence of communities led to the division of labor as people specialized their skills. People soon developed tools and techniques for forging metals, building structures, and harnessing of forces such as wind, sun, water, and domesticated animals.
City-states
The arrival of City-States arose when division of labor, harnessing forces, and transportation became integrated. Spare time became available to experiment in ideas such as governance, laws, civil services, and currency. Travel allowed for trade of goods, services, and the spread of knowledge across great distances.
Philosophers
The age of philosophy emerged as the leisure class, knowledge exchange, and civil law integrated such that people began to question existence, spirituality, and test theories about the observations that they constantly witnessed in the natural world.
Scientists
The scientific age emerged from the integration of tools developed during the philosophical age. Written language, mathematics, geometry, came together as alchemists attempting to turn lead into gold, instead created many other new and useful things from the elements. Astronomy, calculus, the scientific method, and modern finance were born.
Industrialists
The industrial age emerged as an integration of the tools developed by the scientific age. Eli Whitney demonstrated the “interchangeability of parts” paving the way for modern production. The printing press and cotton gin demonstrated the scalability of machinery while capitalization and securitization of value (finance) allowed a merchant class to allocate land, labor, and capital.
Information
The age of information formed from the integration of tools created by the industrial revolution. All that machinery created a tremendous amount of data. Computers were developed for processing data creating information that could be used to make productivity more efficient.
Knowledge
The Knowledge age emerged from the integration of tools developed during the information age. The Internet vastly accelerated the amount of information available from which knowledge could be applied as factors of production in physical systems from weather prediction, space travel, medicine, and new ways for people to organize their selves.
Innovation
The innovation age will emerge from the integration of tools developed by the knowledge age. So called “social media” is creating thousands of platforms upon which people reorganize themselves around interests, affinities, relationship, and commerce. As these tools integrate; that is, when the output of one tool becomes the input of another tool (and vice versa), a new economic paradigm will emerge.
Wisdom
Keep in mind that the agrarian economy and all previous stages are still with us today. Keep in mind that elements of future economies also exist today. Keep in mind that the US dollar has not always been the currency of trade nor should we expect that it will always be with us in the future. We can assume that the productivity inherent in people and communities is not dependent on the currency, rather, currency is dependent on it. Time is the only scarce resource and everyone has an equal amount of it. As such, time is the only true currency.
Social media is progressing in a direction where the SM application controls your information – not you. This is a game that you cannot win unless they let you win. Social Flights changes the rules by letting you control your own information. As such, we are growing in popularity among entrepreneurs who are looking for a game they can win playing by a new set of rules.
Social Flights is comprised of 2 components; Social Flights Corporate and Social Flights Travel Tribes. The corporate application provides vertical integration while the Travel Tribes provide horizontal integration. Each is hugely dependent on the other, but the travel tribe is where the value is.
Vertical Integration involves information technology; the collection and formation of system data. This is the information that helps groups stay in contact with each other giving the origin community a portal into the destination community (and vice versa) for a given flight. This helps airplane operators schedule flights, and it helps communities become attractive to entrepreneurs and other communities.
The horizontal integration is where information originates and terminates. The Travel Tribe disseminates information on the ground at both the origin and destination. What happens in a Travel Tribe, stays in a Travel tribe.
The most important aspect of data and information control is the ability to restrict it from communities who are not part of the transaction. Nobody else can know where you are going except you and the airplane operator – that’s what makes the game private. Nobody needs to know how much you are paying for a hotel room or travel service except you and the service provider – that’s what makes the game valuable. Nobody needs to know what you are doing on the ground except you and your friends – that’s what makes the game social.
A Value Game depends on the control of information. If someone else controls the information – they control the Value and there can be no game. They also control the use of information and the information technology. Don’t take this point likely; whoever controls the use of the information also controls the technology (vertical integration), not the other way around. Technology is deployed to the game – the game is not deployed to the technology. So, if you control the game, then you control the usage and the deployment of the technology; i.e., you control the value.
(Diagram credit and reference: Seven Faces of Information Literacy in Higher Education by Christine Bruce)
At the end of the day, any ad campaign needs to get real people to take real and tangible action. Ideally, the advertiser wants to see the real effectiveness of a campaign in real numbers.
The Value Game is applied to a new jet charter start-up called Social Flights and offers an opportunity for advertisers to become part of the experience of the traveller, rather than a distraction to everybody. Instead of paying a website for click throughs, the vendor can pay the traveler directly to “click through” a catalog of products. As long as your product is relevant to the travel experience, the traveller will be interested and engaged.
The Game is to be relevant and this is where Social Flights helps create the playing field.
Social Flights will collect data about a travelers intentions in a fully open agreement. Travelers submit this data to the game with the explicit understanding that vendors will compensate them with relevant discount coupons. Data are normalized so that the traveller is anonymous in every respect while still providing very rich intentions to the vendor. Vendors can now target their value proposition with great precision.
What’s a Travel Trader Game?
This sets up a game where the traveler, when presented with many options, will plan their trip and influence their friends based on the perceived value of the options presented to them – it’s like holding properties on a Monopoly(TM) Board. As the travelers play the game, the vendor is being discussed, researched, and propagated all across the web in real time and in real context with a tangible experience as the travelers decide what activities to pursue.
Win twice: Let People Game the Game
When someone “clicks” on the vendor proposition from their “experience environment” of travel, their intention to be interested, informed, entertained, and fulfilled by your product is much higher than in a off-experience “forced” impression. When they compare, and even trade, coupons with their friends, a negotiation happens which influences a group of people. These negotiations lead to discussions all across the Internet. These discussions mean different things to different people so a fresh pool of customers is always on tap for the next round of play.
Why let Facebook own YOUR game when you can own it yourself?
Social Flights allows travelers to sell their data to vendors who, in effect, compensate the traveler with discount “option” that can only be exercised if the traveller (and their friends) makes a purchase. Advertising is essentially FREE until the traveler exercises their discount option. Even then, the advertiser has all the information that they need to determine the quality of the effectiveness their campaign and the effectiveness of a competitor’s campaign. No matter whether you are the traveler or the vendor, how you play the game becomes YOUR intellectual property. Patent that Facebook!
Social media used to be so cool – a way to bypass the mediated reality of editorialized content. Real people coming back with real ideas and real opportunities from the crystal clear waters of cooperative community. Then legacy media and their ad-rev departments started to wonder “Hey, where did everyone go?” Marketer started saying, “Hey, these CPM numbers are F***ed – something is cutting into our pie ?!?!?”
Then came the Social Media Gurus
like the tattle-tale kid brother intent on spoiling a perfectly good game of hide and seek, screeching: “There they are, there they are!!!….Can you see ’em?…see, see, your customers are hiding in the shadows… there, in the shadows….quick!!! Can you see ’em now?. By the way, pay my fee, buy my book, and did I mention my latest ‘keynote’ yet?”
Next, the Gurus went mainstream as legacy media analysts!! Legacy media picked up the ball on the run-away ad spend. They glossed poetic on the “effects” but not the “causes” of social media. And, OH Gawd, what a nuisance all those pesky bloggers are to the dignified art and science of professional journalism.
A Monster was Born
Facebook declared that people really want to share their personal details with the world, and a monster was born. So now we are stuck with Corporate Media on steroids. Your data are scraped so they can find you. Images are reproduced infinitely. Lies and deception grow legs half way around the world before the truth can even be awakened from it’s slumber. Say one thing wrong and it haunts you forever.
Casualty or Causality
Social Media has become another casualty of the broken financial system where people fight for artificial scarcity. It is no longer a means to empower and enlighten, it is becoming another means to exploit and oppress. Special recognition goes out to all the so-called social media gurus. I can’t blame them though, everyone has the right to make an honest living.
The US Senate recently blocked a measure designed to reduce the outsourcing of US jobs that many corporations pursue in the relentless drive to reduce costs.
Modern Globalization is a system
Globalization must be analyzed like a system. Data, Information, knowledge, Innovation, and wisdom are profoundly related in a system. If you take away one of the components, the others become worthless. If you destroy one component, the entire structure could fail.
Everyone knows that data, information, knowledge, innovation, and wisdom are related. If I corrupt the data, then the associated information, knowledge, innovation, and wisdom are also corrupted. Likewise, if I eliminate any of these elements, the system fails.
Focus on Core competency – what core?
The standard argument for outsourcing is that knowledge workers are better allocated in innovation jobs so “we can better focus on our core – and heck, we can all save a little dough in the process”. But when we outsource our knowledge economy, the innovation economy is choked off. The knowledge economy is the source of the Innovation Economy. The Knowledge economy is also the recipient of the information economy which transforms data and information into useful tools, ideas, and products.
Rate Of Change is Innovation
The rate of change of the innovation economy is directly proportional to the INCREASE not the OUTSOURCING of the knowledge economy. This is the calculus of outsourcing. If, on the other hand, it is in you best interest to keep a population poor, weak, and unable to organize into powerful collectives, then yes, outsourcing is an effective method.
When I use the term “Innovation Bank”, people conjure up the image of a cheery place where anticipation reigns as starry eyed depositors arrange their intellectual property in neat cubby boxes, Patents fly like cash register receipts and companies troll the halls looking for a cure for their bottom line blues.
This is not exactly what we have in mind, nor is it too far off either. An innovation Bank is simply a knowledge inventory that contains knowledge assets that exists in the format of a financial instrument and can be deployed for the purposes of increasing productivity. In the process, it makes 10X more of itself every time it is deployed. It mints its own money.
The Innovation Banker
This is not much different than a financial bank. In fact, in the financial bank, everyone assumes the borrower has the knowledge to execute the business plan and the bank lends the money. Oh, by the way, the money makes more of itself 10X over (fractional reserve system) every time it is deployed.
With the innovation bank, everyone assumes the entrepreneur has the money to execute the plan, and the seek to borrow the knowledge. Other than that, they can be considered identical. The key is in the scope, depth, and format in which the knowledge assets live in a community as well as the ability to track and preserve the creation of new knowledge in a community. An innovation banker is a knowledge banker
A Virtuous Circle
Together with the financial banking, these two system engage in the dance of the virtuous circle of innovation enterprise. Apart, they collapse into the swirling cesspool of eternal debt and infinite interest (pun intended).
Marketers need to recognize the order and permanence of human evolution. Once our species started to walk upright on two legs, we never permanently returned to walking on all fours. Such is also the case between the lower social order of communication called “Information” and the higher social order of communication called “Knowledge”. I will explain the difference now.
Social Value written or spoken to a medium is defined as Information.
Social Value which exists only between human ears is defined as Knowledge.
Likewise,
Social Value is created by transforming Information into Knowledge.
Social Value is reduced by transforming Knowledge into Information.
Once humans learn to create, store, exchange, and trade knowledge among each other, they will never return to the utterly primitive practice of mining and exploiting information.
If you agree with me then I congratulate you for your advanced state of evolution. If you do not agree with me, then I apologize for the inconvenience.
Living in the Past
Advertisers have an especially hard time with this because it is their core competence to devolve human knowledge into information through data mining, social media espionage, and machine gun marketing – all without necessarily elevating anyone to a higher state of social order. This is, by definition, a reduction of social value.
Consumers now walk on two feet in forming a strategic networks of knowledge assets in social media. Meanwhile advertisers still slither around on all fours pimping info biscuits. Consumers can easily see when Value is being stolen from them so they simply ignore the screeches and clamoring of the devolved creature. Or worse, a counter attack is a very simple – and often quite entertaining – using an evolved tool set.
Holy shit, I need a Guru:
So, the advertisers go off and hire a Social Media Guru to make the old evolutionary order all better again. The Social Media Guru does all sorts of things that look civilized to a four-legged creature, but appear increasingly ridiculous to the evolved being.
Lo and behold, the advertiser is hugely successful in attracting lots of other four-leggers and believes this to be progress!! This makes the Guru into a Celebrity. But still, the advertiser simply cannot get any attention from the two-leggers, who now control all the Value. So, the advertiser goes back to the Social Media Guru who responds by joining forces with yet another Social Media Guru….
Surely two gurus are better than one, especially to those who still believe that four legs are better than two.
In an interview with the Wall Street Journal, Google CEO Eric Schmidt warns of the future consequences of social media and networks, and the vast amount of personal data that users put out there on the Web.
The article goes on to describe how Google is looking for what is next – that is, a world where the Google Icon no longer dominates the center of our lives. He warns future societies about creating a “future” by documenting the past. A future president, CEO, or just a job hunter can be haunted forever by the words and images that are becoming indelible in social media today. Mr. Schmidt insists that information is social currency.
Actually, I do not believe this to be true. I believe that is more likely than not a severe disruption is on the horizon which will deeply impact social media, Google, and Facebook, etc. This disruption will alter the course of the future that Google predicts.
All it would take is for humans to step up one more rung on the evolution ladder.
Think of it like this: a dollar is used to store and exchange value yet it is completely anonymous – you don’t know very much about it’s past or future – you do not need to know much about the exchange device in order to carry out the transaction.
Google is an information company, not a knowledge company. The next economic paradigm will be based on the creation, storage , and exchange of knowledge – not necessarily information. Knowledge exists only between the ears and once it is made tangible, I will not need to know where in the past that knowledge was excecuted – college keg parties included.
Neither Google or Facebook have indicated that they realize how value can be created, stored, and exchanged while maintaining anonymity if the public knowledge inventory were properly coded. Likewise, billions of people who use Social Media are dismally unaware that nobody else needs to posess any of their personal information to execute a knowledge transaction – seriously, noone. In fact, not only is relative anonymity a possibility, it is an imperative to market efficiency in Social Capitalism.
The “next Google” will, in fact, filter out irrelevant “information” as a means of creating time. Time is the real currency. For more on this please see http://ingenesist.com/introduction.
Google needs to figure out how to get the most worthy knowledge surplus connected to the most worthy knowledge deficit in the shortest amount of time. Information brokering alone can’t do this, so it’s Armageddon for whom?
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Please Vote for The Ingenesist Project to present at SXSW 2011
The Ingenesist Project specifies an Innovation Economy built on a platform of social media as the next economic paradigm. 60 minute solo presentation in the advanced technical track. Your help is deeply appreciated. All comments welcome. Material based on video series here
Data are the raw material of the next economic paradigm. Data, information, knowledge, innovation, and wisdom are all related; but it all starts with data.
In order to produce anything valuable in the domain of social capitalism, the creation and formation of data is hypercritical. The better the data, the better the information, knowledge, innovation, wisdom and culture that will follow. Each stage of transformation along the chain reaction from “data” to “culture” is an opportunity for both great value creation AND astonishing corruption.
Data is King:
Yet data are often collected and processed with very little vetting. We all know that information is most easily spun from the data collection process. We know that bad knowledge comes from bad information, and we know that unsuccessful innovation comes from inappropriate knowledge. Obviously, to be an unwise leader is to be unimaginative leader. A failed culture creates failed data…and the circle completes itself.
Data is an asset:
On the other hand, the ability to collect data is often the most tangible intellectual property that an organization can hold. It is easy to copy a patent but difficult to recreate the system that generates patents. Excellent data results in excellent technology from the moon landings to the Internet. The trick is that all assets must contain two components; a quantity and a quality. This means that some rigor is needed in the data collection process. When data are produced, the quantity is the “measurement” but the quality is the certainty or uncertainty that what is being measured is actually what is being observed.
Data Relationships
Phenomena such as art, politics, emotions, capital markets, and spirituality are difficult to measure because the item being observed exists as a function of the observer’s interaction with it. Still, the quality of the data includes the certainty that all data were measured the same way AND some disclosure of the uncertainty that remains. This is an area of great omission and where severe problems arise especially where the most people rely on the data to make decisions. The term “comparing apples to oranges” is a real problem and it is particularly elusive at very early and highly incremental stages of ideation.
Mouse goes squeak:
Often the people involved with the intensely small or incremental portion of the data design and collection process are the least powerful people in the supply chain. Often they have the least say in how the data is analyzed and certainly have no visibility of what happens upstream. It is tragically amusing that the dominant characteristic of most hierarchies is that each level of management “filters” the data from lower levels and delivers it to the next level where actions are authorized.
The Culture of Data
Social media is entering the human culture at an incredible rate. Social media has also shown us what happens when the good data becomes the important information, which increases knowledge among the most people leading to increasingly effective innovation and changing the conventional wisdom about an increasing diversity of subjects. Social Capitalism will replace Market Capitalism simply because the culture is superior.
This video describes a set of predictions for 2020 based on an entirely new form of capitalism whose velocity and voracity will take the world completely by surprise. Nothing is sacred and nobody is immune, not Facebook, not Google, not Wall Street, not even Governance itself….
The top ten reasons for business failure are due to a lack of knowledge, not a lack of money. In fact, the lack of money is itself a failure of knowledge.
4. Inadequate capital, misuse of capital and poor cost control
5. Poor management skills: lack of delegation, leadership and/or control
6. Lack of experience and knowledge
7. Lack of managerial focus/commitment
8. Poor customer service
9. Inadequate human resource management
10. Failure to properly use professional advice: i.e. accounting, legal, financial, etc.
No excuses:
Lack of a viable business plan is an act of negligence where research, scenarios, and assumptions have not been tested. Market ignorance is not an excuse nor is the failure to know one’s customer. Death by poor marketing plan is knowledge deficiency related to product appeal, customer identification, pricing structure, and lackluster promotion. Obviously, one needs to know how to manage a company in order to be focused, let alone correctly estimate capital needs. Lack of customer service knowledge is deadly in the age of social media. Inadequate HR is an oxymoron – if it’s inadequate, it’s not a resource – human or otherwise. Finally, failure to listen to knowledgeable people is ego driven irrationality.
The financial system is not the only problem;
The innovation system (or lack of) is a crucial element. Information, knowledge and innovation, by any definition, are profoundly and inseparably connected. A failure in one kills the other two. So, just because an entrepreneur does not have the knowledge, does not mean the ‘knowledge’ fails to exist – it simply means that entrepreneur failed to find it.
So where is the knowledge?
Unfortunately, there is no public knowledge inventory – people do not know what each other knows. With social media raging all around us, there still is no way that anyone can assemble the knowledge needed to execute a business plan with a known probability of success given the information available. As such, there is no way to finance public innovation.
The emergence of Social Media technology presents an extraordinary opportunity to organize a knowledge inventory outside the construct of a corporation and marry it to the financial system, much like a corporation.
Tangibility of Knowledge
Knowledge tangibility must be the most important “innovation” in the pipeline today if we expect to meet the crushing challenges that await us. Just because we cannot predict innovation does not mean it cannot be predicted – it just means that we do not know how… yet.
In an earlier article (Cluster Funk) I argued that Industrial clusters can lead to stagnation, vulnerability to external shocks, and the erosion of social capital. Since I’m not one to complain without also providing an alternative, this article argues that the future will favor technology clusters rather than industrial clusters.
Make it up as you go along
Technology clusters serve what we call the tangential innovation market – or diversity innovation dynamics. Don’t worry if you have not heard of these things, I’m making this up as I go along.
For example; composite materials technology is very useful in many applications like aircraft, medical devices, transportation, recreation, and even musical instruments. The airplane company has no intention of building cellos and the automobile company has no intention of building snow boards.
Why compete when you can collude?
As non-competing industries, they can readily share technology and people. The system is naturally diversified and inoculated against stagnation, shocks and silos; if one industry encounters hardship, people and capacity can shift easily to another industry preserving knowledge and expanding social networking benefit while the damaged industry heals or dies off. Corporations may not like this idea, but social networks should.
The Ingenesist Project goes a step further by modeling the business structure of tangential innovation markets as an integrated financial system. Suppose and Originator Company has a promising new composite technology idea but is unable to meet the ROI requirements of their stockholders? Today, such innovation would be shelved. In an innovation economy, tangential markets are factored into the business case.
New applications of social media will identify other industries that would be most worthy borrowers of your technology, if developed. The Innovation Bank can estimate the return on investment that can be expected through the tangential market as if it were another customer. The additional revenue projection would allow the originator to meet the ROI requirement prior to committing development funds.
Intellectual Property can be managed with contracts enforced through social network vetting. The originator can hold an option to see further development conducted by tangential users effectively multiplying their R&D reach and further adding to the expected return.
Then something magical will happen. At some point, the value of the tangential innovation market would exceed the value of the origination market. The originator will begin to specialize in pure innovation as a primary product and airplane applications as the secondary product. As all industries in the technology cluster begin sharing technology among each other, R&D costs and risks are effectively spread across industries. As risk is diversified away, the cost of venture capital approaches single digit rates.
Then, another magical thing will happen. As the mixing of people and ideas accelerates, the definition of corporate boundaries will become more fluid. Ownership will exist in the form of contracts among entrepreneurs now defined by social networks, options, and derivatives in a diverse innovation enterprise.
While the boom bust cycle of Industrial Clusters has brought us a great distance in economic development, technology clusters in an Innovation Economy supported by social networks may turn out to be vastly more efficient at economic growth without the perils of Cluster Funk.
The forecasting methods that we are developing at the Ingenesist Project have become sufficiently vetted and organized that I have decided to formalize them for review by others. The “WIKiD Tools” method is fairly simple to describe and demonstrate, but be assured, it is a powerful method for predicting futures outcomes.
WIKiD stands for:
Wisdom > Innovation > Knowledge > Information > Data
All five of these elements are related to each other – in fact, each is derived from the prior element by integrating the tools of that medium. For example information is derived from data by integrating the tools of the data medium. Knowledge is derived from information by integrating the tools of information medium, innovation is derived from knowledge by integrating the tools of the knowledge medium, etc.
Likewise, if I want to predict innovation, I look for high rates of change of knowledge in it’s medium….and so on for all five elements as needed.
The chart below helps demonstrate the WIKiD Tools methodology.
The Hunter-Gatherer
About 50,000 years ago humans sustained themselves in a hunter gather economy. They would wander for food to eat and fuel to stay warm. Eventually they invented tools to trap their game and chop down trees so they no longer needed to expend as much energy and could remain relatively stationary.
The Agrarian
This led to the agrarian economy, the formation of towns, and the division of labor. A leisure class emerged to engage in philosophy and explore nature. New ideas were explored and the “scientific method” of observation and experimentation was invented
The Data Economy
With the invention of interchangeable parts in manufacturing, the industrial revolution became the dominant era of economic activity. The idea of industrialization separated production from assembly of parts. This allowed for greater efficiency and precision.
The Information Economy
The Industrial revolution generated a lot of Data and the invention of the integrated circuit turned these data into information – we now look back at the 60’s and 70s as the information age.
The Knowledge Economy
Widespread use of computers allowed humans to process the information in creative and unique ways – we now call this the knowledge economy.
Since there were many eras prior to this, we can expect that there shall be many eras following this – so we ask the question “what comes after the knowledge economy?
When we apply the WIKiD Tools Methodology:
We can say that each new era was derived from the prior era by integrating the tools developed during the prior era. We have seen the data economy in the industrial revolution, we have seen the information economy with Invention of the Integrated Circuit, We are in the midst of the knowledge economy with the advent of the Internet.
The next economic paradigm:
Now the tools of the Computer, software, and Internet connectivity are integrating around social media. From this we predict that an innovation economy will emerge by integrating the tools of the knowledge economy, specifically social media, mobile devices, software, hardware, and the internet.
The Wisdom Economy
Looking far far into the future, we can predict that the wisdom economy will emerge from an integration of tools developed in the innovation economy. The wisdom economy – with or without the current financial system – will have the greatest likelihood of achieving a sustainable human presence on Earth. Consequently, failure to achieve the wisdom economy presents an equally predictable outcome.
Activist, Science fiction writer, and blogger Cory Doctorow spoke at in Seattle to a full house at the Sunset Tavern in Ballard. He performed a reading from his latest book, “For The Win”. Cory has an interesting sense of abstraction. He’ll spot a trend – or collection of trends – and extrapolates them into the future dutifully revealing all the complexities of the human condition.
For The Win
His reading centered on the “exploitation” of young adults who are hired to play online games where they work to achieve levels, rewards, virtual currency, and game status which is then sold to rich Western players. Some players become highly valued for their knowledge inventory of game world monsters, strategies, power points, and the uncanny ability to assess the knowledge inventory of their opponents who’ll get suckered into a virtual dual with predictable consequences. The kids literally “mine gold”. As always, gold corrupts the most innocent hearts resulting in situations and behaviors at least as strange as the game itself.
The Activist
Cory has long been an activist for digital publication rights and rules. Not surprisingly, the Q&A was dominated by privacy, security, and exploitation of information issues. Cory recently closed his Facebook Account which caused quite a stir in the blogsphere. Ironically, every big name in world-class privacy violation had recently been in the news for Mr. Doctorow to eloquently spit roast on an open flame. It was quite entertaining.
There is a reason that it’s called Monetization
While Mr. Doctorow did not specifically mention this, what struck me most was hearing him talk around this emerging battle for control of people’s information. While this idea is not new, the reasons behind it may be new. As Money is losing it’s capacity to store and control value, human knowledge is increasing it’s capacity to store and control value – this is hugely accelerated by social media. The desperate attempt to control people’s information is really a proxy for the desperate attempt to control knowledge, therefore to re-control the value that money once represented.
Unfortunately, controlling information also destroys value.
People actively participate and share on social media to achieve levels, rewards, and status which is then sold to corporations in the form of predictive marketing by third party aggregators like Facebook. Some people become highly valued for their knowledge inventory of real-world game perils, influencers, and social mavens and become celebrities of the craft. Many develop the uncanny ability to assess the knowledge inventory of their opponents who get suckered into a virtual dual with predictable results.
Suddenly the News started sounding like one of Cory’s Science Fiction Novels…
(Editor: I’ll be speaking at the following event on June 4th. If you are in the area or blogging issues in this genre of ideas, let me know and drop by. Look up the other speakers and you’ll find an extraordinary group of visionaries preparing to make this PM Cluster Summit a truly enlightening event.)
Enterprise Prediction Markets Summit: Leading Enterprise Prediction Markets
Friday, June 4 2010 8:00am – 5:00pm
EVENT LOCATION:The Boeing Company: Integrated Aircraft Systems Lab Building 2-122, Conference Room #102L2 (Conference Center) 7701-14th Avenue South Seattle, Washington 98108 USA
EVENT REGION: US –Pacific Northwest
EVENT PURPOSE: This summit is for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and enterprise prediction market mechanisms to advance business outcomes through mastery of collective wisdom.
EVENT SPEAKERS: Dennis P. O’Donoghue (Boeing), Sharon Chiarella (Amazon.com), Arik Johnson (Aurora WDC), Dan Robles (The Ingenesist Project), Dr. Richard O. Zerbe, Jr. (Evans School of Public Affairs), Christel Alvarez, ConsensusPoint, George Neumann, George Daly Research Professor of Economics, (Iowa), Olav Opedal (Microsoft, Internet Security)
EVENT NOTES: The conference sessions are focused, practical and conversational. They are for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and market mechanisms to advance business outcomes through mastery of collective wisdom.
ORGANIZATION NOTES: The Prediction Market Clusters, founded in 2004, are the global industry commons and open community for prediction markets and collective intelligence networks worldwide. The open, agnostic network is a focused collaboration of vendors, academia, traders, users, developers, markets, regulators and stakeholders. The goal is to provide awareness, diffusion, adoption and pull-through for enterprise and consumer prediction markets. The Prediction Markets Cluster is the worldwide Next Practices network for collective intelligence networks practices, tools and theories.
Money is a convenient way to store and exchange value. Unless the world enters into a free trade agreement with Martians, Earth is the physical boundary of all existing value.
No matter what a monetary currency is called or how it behaves in the financial system, by definition, it can never represent any more than the value that exists on Earth.
Value is reflected by “Market Capitalization” of corporation, Roads, Bridges, infrastructure, armies, education, food, real estate, and all so-called tangible things. Intangibles such as human resources, public assets, and shared natural resources are only valuable to the extent that people depend on those resources for survival. Not surprisingly, “tangible” means all things that can be controlled and “intangible” means everything else.
However, if you look at how all value is created, it all eventually boils down to human knowledge. All control and influence over human knowledge boils down to the individual. All Value on Earth is stored between our collective ears. In order to fully assess the global financial system, there must be a corresponding global inventory of human knowledge. There is no body of any influence in the world proposing this as a means of defining solvency.
Meanwhile, the social media revolution is slowly introducing a global knowledge inventory to financial markets with effects that are becoming increasingly profound. In case you have not noticed, money no longer represents value, it represents the control of value. Social media is disrupting who, what, when, where, and how all the value can or cannot be controlled.
With every new exotic financial maneuver, the monetary currency becomes increasingly divorced from the value of human productivity. With every new advancement in social media applications, human productivity is becoming less controlled by money. Watch the news – the battle fields are all about who what when where and how someone can control what is between your ears.
Not surprisingly, governments, marketers, advertisers and even academia are the first and most public victims of losing control of their message. Their message is being re-written by forces outside their control.
This is serious – Don’t let anyone try to convince you that the value of social currency is not hedging the value of financial currency.
Today, we are on the cusp of the greatest revolution that the world has ever known. The control of money may go to the banks but the control of value will not. It will happen when people decide it will happen. Perhaps they already have…2012 anyone?
When I moved to LA out of college (many years ago), I would always pick up a magazine called The Recycler. The Recycler was a used-stuff magazine localized by proximity in a vast and complicated City of Los Angeles. I bought my motorcycle, skies, concert tickets, furniture, and tools – all at incredible savings.
After a while, I began to notice that most of my friends – the people who I rode with, skied with, went to concerts with, and shared hobbies with – were in some indirect way connected through The Recycler. I soon began to strategically use The Recycler to buy, sell and trade stuff for the sole purpose of meeting interesting people. I was finding parties, events, and communities that I would never have been exposed to otherwise. When the Aerospace industry crashed, I turned to my community for employment. It flat out worked and I experienced a remarkable transition into … etc.
Good Neighborhoods start with good interaction
My new favorite social networking concept is from Micki Krimmel, CEO of NeighborGoods, LLC. I had the pleasure of meeting Micki at the Future of Money and Technology Summit in San Francisco. NeighborGoods is a brilliantly simple concept where people in a neighborhood can list items that they are willing to lend or rent to others. This application is scaled to a highly localized community in our social landscape otherwise scaled to the automobile, commercial centers, and the Global Internet itself.
The Social Media Imperative
It has long been my contention of Social Media that nothing happens until the rubber meets the road; where people get together to actually produce something. In fact, the ‘corporation’ is an example of a hyper-local environment. It is also my prediction that as financial constraints sever the ties of traditional corporate structures, many of the functions of corporations and government are shifting to social media.
For this reason, applications such as NeighbborGoods will serve – no, they must serve – a greater role in unifying communities. I know this sounds really clinical, but Micki’s work is supported by urban theory luminaries such as Jane Jacobs, Richard Florida, and Robert Putnam.
The problem is that outside the construct of a corporation, there is no accounting system for the social value that strong neighborhoods produce. There is no measure in America’s gross domestic product for the value generated by unified communities. There is no line item on the balance sheet of industrial and corporate concerns for active, diverse, and well-balanced communities.
Yet, tangential evidence abounds.
There are plenty of data that suggest that vibrant and unified communities attract active and productive people. Companies locate jobs to productive communities. Home prices are more stable in these communities. Crime and delinquency is reduced. Silicon Valley itself is cited as a perfect mixture of social capital, creative capital, and intellectual capital in it’s communities. The best way to decrease the size of government, create jobs and create wealth is to unify neighborhoods.
Use it or lose it
While the dollar-denominated monetization of NeighborGoods may appear modest, however, the true social value that NeighborGoods brings into a community is off the charts.
Every municipality, chamber of commerce, economic development agency or anyone claiming to politically liberate or conserve anything in America should be looking at solutions designed and developed by visionary social entrepreneurs and community leaders like Micki Krimmel and NeighborGoods.
There are two sides to the Social Value Equation – the creation of social value and the destruction of social value. There are countless examples where innovation destroys the value of prior technologies. There are also many instances where “progress”, perhaps in the form of a freeway or public structure, divides a community where strong social bonds once acted.
In the presentations that I give, I often cite the value of a bridge over a waterway. The bridge may cost 50 million dollars to build and maintain, but it increases human productivity by 50 billion in the life span of the bridge. We often cite a factor of 1:1000 for the valuation of the dollar to social currency.
Contrary to that, Jane Jacobs (renowned urban theorist and community activist) may argue, the bridge (and roadway) may divide a community or neighborhood. Where the community may once have been scaled for foot traffic, the new boundary may require a car to circumvent. The new road may divert old commercial traffic in many ways that are bad for a community. In such a case, the social capital destroyed by the bridge is in fact the dominant financial outcome.
So here I am, I just destroyed my own best analogy to demonstrate a point. Without vetting the complete transaction in the form of social currency, net “progress” of any kind is as easy to leverage backwards as well as forward at a rate of 1000:1.
Communities that seek to stop a disruptive development program will often organize to protest urban development decisions. Unfortunately, they are usually up against a calculation of economic impact that is dominated by dollar denominated currency. Without a “Social Currency” of their own, quantified and convertible to dollars, communities are doomed. Law suits will play out in the same manner where damages are non-quantifiable, and therefore non-existent.
Jane Jacobs also writes that a community that can place a value on their social currency – although I do not think she explicitly called it that – and can act to preserve value or increase value by their actions. Many communities from Greenwich Village to Boston have thrived under a social currency diverting projects away from sensitive communities. The Big Dig went underground in Boston much like the The viaduct replacement project will do the same Seattle. Granted, the Seattle project mainly preserves water and mountain views for million dollar condos, this concept, in fact, would be more critical to poorer communities than wealthy ones.
Obviously there is no way to impede progress. All innovations destroy prior value in the creation of greater value. The danger is when Wall Street priorities can dominate Social Priorities. Capitalism, for all the greatness it creates, is amoral. Capitalism is committed to dollar currency, and devoid of social obligation except to the degree that obligation is profitable – that is where social currency converts to capital currency.
Through the magic of the fractional reserve system, Banks create money backed by debt vs. deposits at a factor of 1:1000. Therefore, the convertibility of social currency with a capital currency at a similar factor of 1000:1 is essentially the only effective way to convert Social Priorities into Wall Street Priorities.
