This is an off topic post. It has nothing to do with the ancient or modern history of China, or with the food of Yunnan province, and is only loosely connected to the topics of philanthropy and globalization that I usually discuss in this blog. But it is what I’ve been thinking about for the past day, so I’ve decided to share my thoughts with you. If you want to skip it and wait for my next post, which will tell the story of how Yunnan started to become more integrated into Imperial China after the conquest of the Kingdom of Dian, I promise not to be offended :-)
I read an article yesterday in the September edition of Wired magazine’s UK edition, entitled “Welcome to the New Reputation Economy”. In the article, author Rachel Botsman highlights the immense yet currently unmonetized value of reputation and trustworthiness data — the sort being collected by large e-commerce firms. Not only the juggernauts like eBay and Amazon, but also the successful niche players like Airbnb and Etsy.
Botsman then goes on to speculate on what would be possible if reputation and trustworthiness data were offered up and subscribed to in some manner of clearing house or information market — not dissimilar to FICO scores for credit ratings — and even gives a brief survey of some companies who are trying to do just that.
Finally, Botsman paints a picture of what it might be like when financial credibility and reputational credibility are mashed and used together to drive all kinds of decision making, from e-commerce to loan origination to employment. And let it be said that Botsman does not engage in idle speculation here; she supports her views with credible examples from outfits like Stack Overflow and Movenbank.
I have been reflecting on that article for a full day now, and find myself having all kinds of reactions to it…
The professional in me is energized. Social networking data, e-commerce data, and traditional credit scores are all available and actively used for statistical inference now. But the inferences that can be drawn by sophisticated analysis of that correlated data will go well beyond what is currently possible, and that analysis will be worth billions of dollars. I have always been strongly drawn by the challenge of figuring out the pragmatic details of how to take a grand vision and make it a practical reality, and it would be hard to think of a bigger vision or more challenging implementation than this.
On the other hand, the libertarian in me is horrified. The rules governing the usage of credit reporting data are more or less fully mature, and those governing e-commerce and social network data are starting to become more clearly defined. But by combining these data stores, everyone from marketers to intelligence agencies will be able to obtain a far more insightful look into my life, even by staying well within the well-established or currently-establishing rules for working with those data sets.
But looking beyond the immediate effects I see coming in the commercial or political spheres of the world, the philosopher in me is deeply intrigued. Money was invented four or five millenia ago to provide a common medium of exchange in order to make trade more practical and efficient. And since that invention, people have used money to try and put a value on human life: from the medieval Saxon weregild, to 19th century actuarial tables, to the predictive customer value analytics that shape the deal you get offered when you try to change your mobile phone to a different provider. But though we may realize the necessity, valuing lives in dollars is something we have never been comfortable with.
In 2007 and again in 2009, I spent a good deal of my spare time interacting with people in a virtual world called SecondLife. One of the things I learned from that experience was how desperately people are literally crying out to be more than the material confines of their lives allowed them to be. People were — and continue to be — willing to spend frighteningly large proportions of their disposable income for the opportunity to create and interact beyond those confines, even if those creations or relationships would never be more than virtual. This confounds rationalists, but the empirical evidence is overwhelming: people want to be measured by more than their wealth, and they are willing to sacrifice a good portion of their wealth to gain that recognition.
So let’s bring this back to Botsman’s vision of how the reputation economy will grow and evolve. What if, within a generation or two, there is an established medium of exchange for measuring people’s contributions and/or trustworthiness across e-commerce markets, global communities, educational fora, or worthy causes? A medium not measured in money, but in the coalesced opinion of people with similar interests?
Will it liberate people, allowing them to grow and flourish far beyond what their educational and socioeconomic realities might otherwise allow? If so, how do we ensure that participation in this global market for reputation is as widely accessible as possible? Or will it instead enslave people, binding them to the soul-crushing vagaries of a brand new rat race, as if the economic one weren’t bad enough?
And last of all, what other effects will it have on society? Consider how the availability of contraception has completely altered the role of women in societies where it is accessible. How will the commoditization of reputation and trustworthiness change our friendships, our business interactions, and our courtship rituals?
I would love to hear your thoughts…