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The title of this post is intentionally misleading. We frequently discuss the traits that lead to value here in the Lifeboat Blog. But today, I was asked a more nuanced question: “What things will hold their value?”

And there is a ulterior motive in being a columnist for Lifeboat. Analyzing the dynamics of durable value leads to some surprising conclusions about the money supply and what a society chooses to use as money. We’ll get to this at end of this post.

We know that value comes from supply and demand. There are no exceptions. But, we have not addressed the properties that make an asset hold value over the long haul. Let’s consider some examples…

Cars

In an affluent, mobile society, most people desire personal, point-to-point transportation — and so there is clearly a demand for automobiles.

But style & technology change rapidly and automobiles deteriorate with use and weather. After 8 to 10 years, their cost and maintenance rise dramatically, and owners lust for a new model. So cars don’t get our award for assets that hold value.*

Popular Toys

In the 1970s, the Cabbage Patch doll from Calico Industries, and later, Tickle Me Elmo in the 1990s created a buyer frenzy that rivaled a lemonade stand in the desert. Shoppers fought each other to grab a limited supply. Clearly, demand was very high. The one shown below is listed at Ebay this week with a starting bid of $5,000. Other, less popular styles can be found for $4.99.

At first, this demand was driven by clever marketing and crying children in the week before Christmas. Demand was driven by a parent’s love. But at the peak of frenzy, demand shifted to buyers without children who felt certain that they could profit from selling the dolls that they snatched up first.

But the demand was not durable. Fads driven by frenzy don’t hold value for the long haul—especially when a manufacturer can simply turn the spigot back on.

Stocks & Bonds

A share of stock represents ownership in a corporation. A municipal bond represents a lien against a city—or the fees generated by an infrastructure project.

In both cases—especially bonds, which are a limited promise—no one expects value to last forever. It is a time-sensitive bet with the intention of expiration, redemption or exchange. So, these things also fail our criteria for durable value.

Houses & Real Estate

Like cars, homes require ongoing maintenance. But, most people weigh the maintenance cost against the benefit of having shelter, rather than comparing it to their gain or loss in value.

On the other hand, real estate value fluctuates in the long run due to things that are difficult to predict — population density, demographics, and quality-of-life issues related to infrastructure: weather, seismic events, politics, and access to health care and education.

Some real estate rises enormously in value over 50 or 100 years. Yet, we have seen boom-and-bust cycles that wipe out substantial wealth. So, real estate does not cut it in our contest for durable value.

Gold

The allure of gold and other precious metals is that their supply is capped — or limited by slow and predictable growth. The asset is difficult to find. It is acquired only from natural phenomena.

So, if we can also make it fungible, divisible, portable and difficult to counterfeit, then it meets most of Aristotle’s requirements for a functional currency. Theoretically, this can lead to widespread demand.

Gold certainly has exhibited its ability to hold value throughout thousands of years. But it is not so easily tested and divided in the field, and the impression that it has intrinsic value is an illusion. That’s because the fraction of gold acquired by investors dwarfs the amount actually needed for dentistry, electronics and even jewelry. In this modern era, even gold is becoming a house of cards, because its value is built upon speculation and emotion.

Oil (aka “black gold”)

With the rise of the automobile and power plants that burn fossil fuel, oil became a reserve currency of the 19th and 20th centuries. But there are two problems with it holding value over the long haul.

First, unlike gold, oil is a consumable in every market. Therefore it is difficult to think of it as an asset. Also, we now live in a century in which energy and transportation is rapidly switching away from oil, while at the same time, new technology is making it cheap to acquire new oil. This (along with a history of violent political theater) dramatically deteriorates its potential as a store of value in coming years.

Money

The supply-demand dynamics of money is widely misunderstood. More than 2,300 years ago, Aristotle defined the properties of a functional currency.

Earlier, we stated that all value comes from supply and demand. But, it is fair to ask “What creates the demand?” or “What backs the expectation of future demand?” Surprisingly, even if we limit our scope to just one country (USA), the value of government-issued currency has been tied to different things over time:

  • Gold
  • Promise of redemption
  • Legal tender (public must accept it for all debts)
  • Settlement of taxes
  • The “good faith and credit” of workers

Ultimately, demand is influenced by oversupply and by public perception more than government promises or laws. The perception that the US dollar has no cap and that its supply can be inflated whenever a body of transient politicians decides to raise the debt ceiling may eventually cause its value to collapse. Although it has not happened yet, at some point consumers (or those holding our debt), will begin to question if Americans have the capacity and will to produce and export the goods & services necessary to balance their mass consumption of the past half-century.

And so, government-issued Fiat does not pass our smell test for durable value. Sooner or later, all national currencies collapse. On a personal level, the only question that matters is if you will be caught by surprise—with a fraction of wealth tied to your favored currency.

What has the potential to meet all requirements for holding value?

Wouldn’t it be fascinating if we could find an asset that is a product of pure mathematics? A perfect asset would be fair, fungible, immutable, and capped. It could never be inflated or manipulated by politicians. It would decouple governments from monetary policy. It would be politically agnostic.

If correctly designed, it would be capable of absorbing and incorporating improvements developed by any copycat or pretender nipping at its heels. Most important, it would be open source, peer-to-peer, massively distributed, redundant, and completely permissionless.

This perfect asset would derive trust from mathematics and crowd-sourced consensus. It would not require that anyone believe in a government, a bank, a land mass, or the uncertain supply of precious objects. Authenticity could tested easily and its value transmitted instantly. The history of each unit would be completely transparent. With free tools, anyone, anywhere could trace its history of moving from one owner to the next.

Ten years ago, such an asset was unleashed into the wild by a person or team of developers under the pseudonym, Satoshi Nakamoto. It not only meets all of these requirements, it has built-in immunity from competition. It even resolves a technical problem that troubled Aristotle more than two millennia ago.

I won’t name this radical yet natural evolutionary development in this answer—but, I can confidently state that it passes our test for an asset that will hold value over time. Despite a wildly fluctuating exchange rate with Fiat currency, its inherent value has never dropped. Ultimately, you will no longer asses value based on the exchange rate of an anachronistic currency that fails all of the other smell tests. Instead, you will assess value on how many heads of lettuce you can buy or how much that new sailboat costs.

* A classic car avoids the problems associated with use & maintenance—and it can hold value over a long period. But like a Picasso painting, the market for classic cars has a limited audience, especially for the florescent green ’63 Mustang that I found in in my great uncle’s garage. Additionally, it is subject to the whims of popular perception. Styles go in and out of vogue and so we cannot predict how long that car will hold value. (Please call me if you value my uncle’s Mustang at more than $150,000).

Philip Raymond co-chairs CRYPSA, hosts the Bitcoin Event and is keynote speaker at Cryptocurrency Conferences. He is a top writer at Quora.

Oh, Cheez…We’re back to this question, again!

As a Bitcoin columnist, I get this question a lot. Today, an answer was requested at Quora.com, where I am the lead contributor on cryptocurrencies:

“Clearly, some people value Bitcoin. But How can
this be? There is nothing there to give it value!”

Many individuals, like the one who asked this question, suspect that Bitcoin was pulled out of thin air—and that it is not backed by gold, a government, or an authoritative redemption guaranty. After all, it is just open source code. What stops me from creating an ElleryCoin using the same code?!

Let’s start with the short answer:

  • Indeed, it was pulled out thin air
  • It isn’t backed by an asset, government or promise
  • You could easily clone Bitcoin (the entire mining ecosystem) and distribute it yourself. It would be exactly like Bitcoin. Yet, Bitcoin is clearly valued by everyone, and your new coin is unlikely to generate interest or adoption.

A More Complete Answer: What is value?

Bitcoin has more intrinsic value than a government printed paper bill. The value arises from a combiation of fundamental properties:

  • It has a capped supply
  • It is widely recognized, liquid, and resistant to legislation
  • It has attained the robust supply-demand of a growing, 2-sided network.
  • It is open and transparent. This elevates user trust
  • Unlike cash and credit, Bitcoin requires no back-end settlement. That’s because it is not a payment instrument. Rather it is money itself.
  • Finally, it’s value is likely to be durable, because it is not printed by a country that has racked up debt. In fact, it can never be inflated.

Downside and Risks

But wait! What about the long transaction delay and high cost? There are sharp disagreements anong miners, users and developers concerning block size, transaction malleability, and replay issues. Aren’t these a deal killers? And what about wild volatility in the exchange rate? Doesn’t this retard adoption as a functional currency?

These are transient issues associated with a new technology. Although Bitcoin is weathering growth pains that arise from a new and distributed governance technology (democracy can be messy!), all of these issues have sound solutions. We have already witnessed and tested the solyutions with various forked coins. Think of them as beta tests. Even if current problems delay the day when you can spend bitcoin at every retail establishment—it is already sucking liquidity from national currencies and becoming the world’s de facto reserve currency.

Many individuals find all of this hard to accept. That is because we have been conditioned to think that ‘value’ arises from assets with ‘intrinsic’ value, the promise of redemption, or by edict. This is not true. In all things, (including gold, a Picasso painting, or your labor) value arises from simple supply and demand.

Some individuals claim that all other factors are secondary. But, even this statement is false. All other factors are irrelevant. They may be related, but they are not the source of value.

I recognize that this answer may seem smug or definitive. So, allow me to suggest related questions with answers that are a bit more interesting, because they are subtle. Unlike the question of value, these two questions are open to analysis and opinion: (1) “Will people continue to value bitcoin in the future?” — And (2) “When will Bitcoin stop swinging wildly in value?” (measured by its exchange rate with other currencies).

This is fun! Let’s explore…

Philip Raymond co-chairs CRYPSA, publishes A Wild Duck and hosts the New York Bitcoin Event. Last month, he kicked off the Cryptocurrency Expo in Dubai. Click Here to inquire about a live presentation or consulting engagement.

For most of us, figuring out the value of something that we want, comes from research. If you want a new set of wine glasses, you check the price online. Perhaps you consult a catalog. If the set of 8 stemware goblets that you like are a current model from a major company, there are probably many places to buy them. If there are multiple Ebay sellers and many recently completed sales, then you can establish the value with precision.

I’ve written a lot of Bitcoin articles on this Lifeboat Blog and elsewhere, so, let’s dig a bit deeper this time. Let’s talk about from where value really comes.

Supply and Demand

In the end, an item’s value is a direct result of supply and demand. It’s no different with a currency. And let’s be clear: Despite a raging debate, Bitcoin is a currency and not just a payment instrument. How can I be certain? Try this mental exercise—

Amazon_Gift_CardWestern Union money orders and Amazon Gift cards are each trusted monetary instruments. They facilitate cash transactions. But are they currencies with inherent value? If so, there would be no need to denominate them in units of fiat currency.

A money order is only worth something before it is redeemed. The gift card is only worth $500 when it is purchased or received as a gift. As the $500 is depleted, it becomes worthless. Eventually, it is just a piece of plastic. But like a dollar bill, a bitcoin can be circulated over and over. You may believe that its value comes from the government, but more realistically, its value arises from brand recognition and from pure supply and demand—not from a trusted redemption authority.

Bitcoin isn’t the first ethereal stash of bits with value. But it is more durable than others. The latest Pixar film on DVD or On Demand from your cable service provider has value. But piracy reduces the value dramatically. The supply is no longer scarce (no matter the demand) because of the ease and willingness to replicate digital files in any quantity. A Picasso painting is very rare, but it is so scarce, that we cannot gather enough data points to establish a stable value. Even worse, it’s not portable, divisible or fungible and it is nearly impossible to validate in the hands of the average person.

But, commodities like iPhones, Doritos tortilla chips—or even non-branded things, like Idaho potatoes, have a large and fluid market. These things have very measurable value and we can track the change in value over time.

People like to think that money is different than other commodities. In practice, it differs only by its handling characteristics: Compared to a Bitcoin-08Picaso painting or a new iPhone 6, currency has these properties. It is:

  • portable
  • fungible
  • divisible
  • widely recognized
  • resistant to forgery
  • backed by something tangible

Bitcoin has all of these characteristics. In fact, it surpasses your national currency in every way. But many people are confused about that last niggling detail… Aristotle called it “intrinsic value”. They worry that there is no gold—or at least the promise of a stable government—to establish and stand behind the value of a bitcoin unit (BTC). The concern is understandable, but it is wrong.

Recall that value arises through supply and demand and not simply because of authority or promises. The real question is “Can we trust that the supply is limited and that the demand is durable?”. That is, will my coin be recognized, coveted and honored in the future?

The Case Against Bitcoin as a Currency

Here are some frightening facts (frightening for some cryptocurrency enthusiasts and early adopters): Bitcoin is manufactured out of thin air. It lacks the underpinnings of a traditional currency. Referring to that last item on Arisotle’s list above, Bitcoin seems to fail the test of intrinsic value, because it lacks at least one of these properties:

  • A fractional reserve requirement
  • An edict to remit taxes in Bitcoin
  • A promise of a trusted authority
  • Any claim of pegging it to the value to some essential commodity (intrinsic value)
  • Bitcoin doesn’t even offer a perception of uniqueness. The formula is open for anyone to copy. You could create a competing ‘Bob-coin’ tomorrow.

In the absence of at least one of these things, detractors claim that Bitcoin lacks a foundation—and so it is effectively worthless. But value does not come only from authority. It comes from trust and is goverend by supply and demand.

snoop-03
The dollar is backed by trust — Not gold, math, nor even history

In fact, math may be a more trusted ‘authority’ than the directors of your national treasury and reserve board. Supply and demand leads to more tangible value than bankers, especially if the math leads you to believe that the demand will continue to outpace the supply. In fact, this is the primary reason that you are comfortable with a $20 bill in your pocket. You have a pretty good idea, that next week, it will still buy 2 movie tickets or 2 pizzas.

Bitcoin has achieved a “two-sided network effect” (Google the term and the economist “Marshall Van Alstyne”). It has captured the public imagination more than Picasso. It cannot be manufactured. With a reasonable understanding of wallets, it cannot be seized, stolen or lost.

The ability to mine new bitcoins is capped with a total supply of 21 million units, and so there is no opportunity for governments to inflate it through mismanagement of taxation or spending. They cannot even inflate it with good intent (for example, when they need to repair a bridge or provide for the poor). Instead, the ability to pay for these services (and all other government functions) forces them to live within a balanced budget. Spending cannot outpace the revenue generated by taxes and bonds. In a Bitcoin economy, the bonds will more likely be paid back by user fees rather than the future debt of unborn generations.* You get the point: Because governments no longer control the printing press, they cannot make hollow promises and then kick the problem into the next administration. With a limited money supply that everyone recognizes as money, governments are forced to live within their means.

What About Uniqueness?

The last item in the list above decries Bitcoin’s lack of uniqueness. You cannot mint your own bitcoins of course—but you can create an equivalent bitcoin ecosystem yourself. If your name is Bob, you can call it Bobcoin. Many countries and organizations are already doing this.

This is really no different than the US Dollar or your own national currency. The government note is difficult to counterfeit, but so is your own signature when placed on a fancy printed currency (Let’s call it a Bob-Buck). The problem is that the dollar is widely recognized, trusted and accepted, but few people other than your kids are collecting Bob Bucks.

You would face the challenge of spurring adoption. Whether it’s Bob Bucks (paper) or Bobcoin (cryptocurrency), how will you get the world to covet, mine and trade your new currency? That’s the point of a two-sided network. It becomes increasingly more difficult after one method rises to the top—especially if that method is open, transparent and extensible. Bitcoin is open. It is subject to worldwide scrutiny. But this works both ways. Bitcoin can also add incremental improvements that are part of any pretender to the throne.

Bitcoin is not just a transient coin-du-jour. It evolves and so it will not die.

How Can the Value be Measured?

I get this question a lot, and so I am adding the answer here. There is no need to measure the value of Bitcoin or define debt. Its value floats with supply and demand like a true world currency. Because the supply growth is capped and well understood, it is resistant to manipulation. As time goes by, it becomes far less likely to exhibit wild swings in value.

A few years from now, if Bitcoin spikes or tanks by 10% in a short time, you will be more likely to wonder “What is affecting the dollar?” (or Euro), rather than “What is affecting Bitcoin”. Consumers will budget for the cost of a new car or refrigerator in BTC rather than dollars or Euros. You will even see catalogs that print prices in BTC and honor them for the life of the catalog or online sale. After all, in an international market, it makes sense to quote a price in units with no geopolitical boundaries, just as we quote time in UTC (formerly called GMT).

Are these predictions crazy? They are not even bold. For us, here at Lifeboat Foundation, they are rather obvious. If we can be accused of dreaming, it is because we are ahead of the game. Look ahead, yourself. The signs are clear…

If Bitcoin has Value, What is the Value?

As Bitcoin adoption moves past enthusiasts and early adopters, the capped supply of coins (21 million, max) will be spread thinner and thinner. This doesn’t play out like a classic shortage, because unlike a supply squeeze on food or medicine, you can work with a smaller piece of the pie each year. The piece needed to pay for a car or an iPhone simply gets smaller as the unit price floats higher and higher.

Last year, I set up an equation to predict how high Bitcoin will float in 5 or 10 years. It involved a lot of WAGs (wild *ss guesses). Although I am a pundit, I am not a mathematician, and so the attempt was incomplete. No need to rehash that exercise.

Passport-s-TAs Hysteria Withers, Bold Becomes Mundane

Eventually consumers, banks, brokers, and governments will recognize that Bitcoin is a far greater opportunity than it is a threat. It pulls the world together by decoupling currency controls from national agenda, inflation, manipulation and loss (You can back up your Bitcoin. Try doing that with your paper money or a defunct bank).

Philip Raymond is CEO and Co-Chair of CRYPSA,
The Cryptocurrency Standards Association.

_____________
* This is just one reason why an eventual transition to Bitcoin (as currency, and not just as a payment instrument) is in the national interest. It demonstrates to citizens that monetary policy is backed by more than growing debt, inflation or the promises of transient officials. It returns any government or economic entity to a non-inflationary, limited-supply pie. The pieces of pie can grow in value, but the pie cannot be watered down by printing more ingredients, counterfeit or even by enemy action.

Further Reading

topimg_27817_giorgos_600x400

The traditional framing of the issue is a choice between accepting the power of markets and ‘playing their game’ to win environmental concessions vs. the purist perspective of saying No to any hint of money or markets in environmental policy.
In this article we will describe the positions of two relatively new fields of study—Ecological Economics and Political Ecology—in an effort to redefine the terms of the choice and chart a path for a pragmatic approach.

Read more

originally posted @Ntegrationalism

This past week I was at the Canadian Consulate General in New York for their Celebration of Innovation in Financial Technology, which featured 10 start-ups or early stage companies from the most robust nation in financial terms, according the IMF & World Bank stress tests. I’ve been thinking about fintech and the use of technology to better distribute wealth via identifying the value that individuals possess for some time. The meeting hosted by @miriam_leia CanadaNY’s chief innovation officer compelled me to start piecing some of the writing that I’ve done on the topic of value. I’m unsure how to summarize things enough for a quick read, hopefully this isn’t too choppy.

Great Automation

We find ourselves at the beginning of a somewhat great automation. While formidable arguments exist from every political faction on the potential for job creation and depletion, forecasters can confirm that the growth trends of technology show no signs of slowing; continued automation of tasks in business services for enterprise are on the horizon.

·Demand side: Restore public-sector jobs and invest in infrastructure for immediate jobs and long-term growth.

·Supply side: Extend Bush-era tax cuts to spur economy. Cut spending to curb growth-crushing debt and deficit.

·Another way: Invest in community-based, member-owned cooperatives and reduce the workweek.

Even as the world economy reacts to the automation of the its most affluent and technologically advanced nations, we find ourselves unable to distribute vales well for physical laborers.

At McKiney & Company, David Fine quotes: Africa’s workforce, young and growing quickly, will be the world’s largest by 2035. Unemployment stands at just 9 percent, but two-thirds of the labor force are in vulnerable, non-wage-paying jobs.

I wrote to the IEET a few years ago to provoke some discussion on the ethics of automation from an information technology standpoint, as the ethnography behind automation has been a large focus of mine over the past decade with corporations as a consultant. According to ContactHMRC.com, “Even as resistance was futile the protests continue at each firm I visited. It seems that the exponential growth of technology, not only from a hardware standpoint (via Moore’s Law), but also from a methodological and software standpoint, requires a new method of distributing values.” Jobs are difficult to generate in this great automation. Further, if our labor culture is changing for goods and services, I’m not aligned with the idea that we can restore historical methods. We must innovate out of joblessness.

Our inability to quantify the toiling of the individual and even the institution has hampered our ability to sustain gainful employment (jobs) during the accelerating changes. Note: I am not referring to sustainability, as it is illogical to seek, but to state that we are not agile. In the modern world individuals and institutions are participating more than ever in the process of development of goods/services through passive means. They are influencers. Specifically I mean: we are performing the act of development of goods and services without being compensated for it or even realizing our participation. Consider a long being in empty space, worthless. While human-kind can’t have inherent value, community can. We all generate values at the point we can interact with another.

In business CRM (customer relations management) and UX (user experience) are examples of how we leverage a consumer to be their own discoverer, developer, and deploy-er of solutions to problems. Via a conduit (profit seeking institution) as a platform, we interact. Sure there may be a single or group of experts monitoring the feedback, but the fact that feedback exists warrants some nominal indemnification other than the creation of new products for consumers, no? Figure 1. Represents a crude the CRM input process.

crm input

While the system is still new, culturally, functionally, and technologically – we’ve managed to build and identify better sensors for data points on participants in the crowd. Our ability to evaluate systemic risks and opportunities is actually an older statistical science that mathematicians and economists have been tinkering for decades. The fact that entrepreneurs who develop software solely based on customer reviews in the Salesforce.com AppExchange to then distribute as an added service is justification enough to consider how we indemnify a society for its knowledge and experience as a user. Is it valuable to seek more useful or even intuitive experiences? Companies have dedicated efforts to understanding sentiment on news by consumers and reactors to information regarding their enterprise. Firms like, Finmaven: Tool for publicly traded companies to monitor, publish and analyze social media…or, Market IQ: Analysis of unstructured data such as social media to provide real time insights to traders.. Automation is much broader than marketing and customer relations; however, the processes around relations are at the core of automation.

Too Connected To Fail

Our relations in our close and extended networks are what provide the tangible value that other individuals and institutions derive from us. As social beings we are somewhat obligated to interact well. While this sheds no light on egalitarian ideals, it does provide an opportunity for less-introverted individuals and institutions to be indemnified for participation. For example, at HBS participation often accounts for 50% of the total course grade. That method is good enough to start with, no? Lowering our degrees-of-separation from our peers and attracting new connections is what elects the people at the top of the classes at Harvard Business School. People learn how to communicate more effectively through the rigor of participation, and their value sky rockets relative to the rest of the business community.

In the past decade the global “great recession” exposed our systemic vulnerability and ties to each other at the micro and macro scale. Financial innovations have enabled risk transfers that were not fully recognized by financial regulators or by institutions themselves, complicating the assessment of a “too-connected–to-fail” problem. Companies in FinTech are closing the communication gap like Quantify Labs: CRM and Content Platform for Institutional Finance. In plain English they show all communication between bank’s customers and vendors. Scenarios like, who checked which communications and the supply-chain of communication. Anyone who has ever watched a movie about finance and trading of equities knows that traders and brokers mostly talk to each other to buy and sell stakes in equities for mutual benefit. Expanding communications or even knowledge of existing communications on creates more threads to an ever-expanding web of connectivity. As an evolving species, we need our web to continue to grow in order to support our initiative for growth, or creating technologies on a more grand scale.

The mentioned initiative can be found in every facet of our lives. Form the International Monetary Fund (IMF) Figure 2. A diagrammatic depiction of co-risk feedbacks, presents the conditional co-risk estimated between pairs of selected financial institutions. In plain English, the numbers on the diagram are communication linkages between people/assets at these banks.

imf

While there is some debate on exactly what the framework should be to quantify co-dependence or co-risk, the best solution should be a growing group of qualified rating methods and agencies evaluating data differently as it changes and expands, as it does. Similar to this type of co-dependence our civilization’s most important institutions, our most important individuals are also co-dependent on a group of near and distant peers. We are all dependent on other to discover, develop, and deploy solutions to problems of a more personal kind.

Software services like Klout, Kred, Peer Index, and at least a dozen more are making efforts to mine through the data that we communicate to influence, in order to deliver a score with regards to our varied value (depending on their methodology and focus). Similar to the IMF individuals need to evaluate co-dependence and influence on their peers but also on institutions. Applying Klout-like methods to measure our value will enable us to make formidable legal and political arguments for out just due. And perhaps a more manageable transition through structural unemployment and globalization is possible via what’s due. Note: I am using influence and co-dependence to reference social value on entities. We all play a role in the negotiation that is life’s happenings but those of us who aren’t entrepreneurs rarely know that we’re a part of the conversations affecting decisions.

Connectivity is starting to span beyond social connections and socialization in general. It is starting to be quantified in new ways, as there are no shortages in places to install sensors and things to understand. Physical sensors that help us recognize, colors, odors, heat, distance, sounds, etc are all being created as devices that empower an application programming interface (API), which is another way to allow information technology to quantify how we engage sensors. The appification of sensors like Node or Canary or Leap Motion are the next generation of sensors that we’ve used on watches and cameras. Looking forward to days where nanorobotics can monitor mitochondrial stability to forecast and avoid apoptosis to help cells cheat death, of course, we still have a long way to go. Today, the case can be made to spread some of the abundant wealth by validating the abundant value each individual creates through info tech.

Technoprogressivism

From a political standpoint a new debate needs to be had around how we react to the types of joblessness that results from rapidly changing technology, as the rate of changing is seemingly increasing. In regards to technoprogressivism and structural unemployment via automation and other methods; it is ideal to embrace the end of work: meaning that there should be some equitable distribution of the leisure created by automation.

While ideas on the end of work have been around for centuries, the distribution of leisure within or succeeding a capitalistic system is quite new. The innovation in distribution of social values that needs to occur is separate from welfare. It is understandably just to enforce a pervasive welfare state for our inability to distribute value; however, it is not an adequate remedy to the wealth gap and technologies effort to quantify all things. The root of our problem is our inability to distribute values among those who actually participate in creating it, while managing risk (or insurances). A guaranteed basic income and/or a shorter work week are not elaborate enough to compel an agile system of developments in compensation, even while they are necessary.

Information technology and the manipulation of BigData, are enabling us to understand who is influencing which changes, even at a nominal rate. Incentivizing individuals and institutions to interact in a more transparent way is important in evaluating new ways to indemnify them for their participation in society. It helps them learn and others to learn about them. This may read invasive and unethical from a privacy stand-point. While that debate should be had, my stance in short: is that human-kind cannot achieve the interconnectedness it requires for distributing our relatively abundant resources through complete privacy or conservatism. Going forward, the next wave of value to exploit it not material but portable. Figure 3. Shows my Klout rating of 60/100 for influencing my social network. The question should be asked: who have I influenced? What decisions have they made based on my influence? Have they contributed to any gross domestic product (GDP)? Is that value portable?

klout

kred

Portable Value

In a short essay I wrote called “Portable Value”, influenced by Hernando de Soto I channeled his ideas that “adequate participation in an information framework that records ownership”, can spur economic growth. History shows that coinage in the exchange of good in local/international trade made portable wealth possible. The more transparent information-collection of purchase, stake holdings, and ownership of goods from legal-documentation to land to human-slaves made our modern economies grow. While I don’t agree with de Soto’s position on land titling and side with a more communal and democratic systems of collective land tenure because this offers protection to the poorest and prevents ‘downward raiding’ in which richer people displace squatters once their neighborhoods are formalized, I am aligned with the idea of an individual titling.

Neither de Soto nor his opponents wrote about individual titling specifically, and I’m not very fond of the phrase, but it’s fitting nomenclature assuming that they would have called the distributing of ownerships outside of land specifically some version of “individual titling” considering their democratic capitalism alignment. The significance here rest with ownership and the individual. The phenomenon of private ownership has pervaded and propelled the growth of humans and our technological extensions which make life more livable. Capitalism is the term of choice for the private ownership and trade of things. Per my views (@Ntegrationalism), Capitalism is merely an economic manifestation of human-kind’s technological evolution. While I’m aware of the rigid opposition to my last sentence, I’ve written it under the assumptions that

  • All things in existence are physiologically connected.
  • Humans cannot have nature.
  • Technology is deterministic when applied to the human condition.
  • Individualism spawns competition resulting in arbitrage.

Regarding information on ownership, economic growth requires a growth in participation of owners to in-turn expand the amount of wealth or wealth opportunities in the collective (system). Nostalgic and conservative ideas of constricting the potential growth of human-kind and the institutions that we’ve built is futile and unwise, as we live in a dynamic realm (world, galaxy, universe, multiverse) which renders life as we know it, unsustainable by definition. Even the home planet (Earth) warmed by the nearest star (Sun) will be an unsustainable body in due time. We need to be more agile in how we adapt to change.

As a species or parent of species, human-kind should be encouraged to compel as many participating owners of physical-properties (land) and nonphysical-properties (intellectual property, digital, and other) as possible to create a web of interconnected and integrated interest, per our vigilant growth. While land is scarce and in de Soto’s day, it was the end of the titling arguments, our ability to create valuable information and intellectual property has surpassed that of land property. The individual must be able to own the information that they distribute and monetize it. There is a firm called 4pay in Canada that aims to create the beginnings of a “data locker” by creating mobile applications that allow consumers to control transactions without giving personal or financial data to creditors or retailers. Knowing that this will be a heavy blow to the advertising industry and could hinder individuals from accessing valuable information on goods/services that they actually want and need, the delivery model may be flawed. While innovations away from the existing supply chain may prove formidable, I think that some legal and financial incentives to provide individuals with their own information footprint have to be implemented at the local and international scale not to protect the individual, but to empower them. Individuals have to know when they are being used as insights to make decisions about their peers lives.

technop

I’ve spent some time thinking about what the #Occupy movement is really representing. I’ve tried to attend the camps as I’ve traveled and interview the people in the camps; as well as, their formidable opponents in the ownership positions of the respective societies that Occupiers exist.

I think that I’m comfortable echoing the analysis in that Occupiers have done a good initial job in comparison to similar movements around the world and in the United States in particular. They’ve caught the attention of the masses, in that everyone knows what #Occupy means. Of course the problems of any fledgling movement are that its priorities aren’t hashed (#) out. While everyone knows what #Occupy is; no one has any idea of what it wants, or rather, needs.

Every movement-struggle-jihad, has is a battle of philosophy on how a society should exist versus how it does. Based on the consistent and more frequent collapse in the economic system, it is evident that we are due for some structural change in the modern world. When I listen to the rhetoric of this movement and the defense of its identified opponents, I think the following apply. There is a clash of ideals on whose altruism is not only virtuous but most beneficial. On the one hand we have that of the individuals, formally represented by the #Occupiers. On the other we have that of the institutions, formally represented by their owners/stakeholders. While individuals (humans in this case) can allocate a moral regard to their fellow man/woman based on their acknowledgment of his/her intrinsic or extrinsic value, institutions do not. Yet some individuals can advocate the virtues of an institution because for their holding that the institution’s incentives to take action better the society as a whole.

Institutions were created by individuals to protect the discovery, development, and deployment of technologies (methodologies, hardware, & software) that help individuals control what would otherwise be a chaotic environment. Who wants to live in 3000 B.C.E.? I’d doubt any of us could enjoy limiting our communication to a distances less than 20 feet. While institutions have served individuals well over the millennia their control mechanisms have the potential to run-a-muck. Their primary control mechanisms are related to their extrinsic value, or ability to generate revenues above the costs to exists. Controls validate the existence of each institution (for-profit & not-for-profit alike), but individuals don’t regard themselves as having extrinsic value alone (at least not all of them), per this on-going survey that I’ve been taking with some backlash about the use of language on “value”. Problem comes into play when those who are still benefiting from the existing operations of institutions clashes with those who are no longer benefiting. As institutions trying to sustain existence, they actually have incentives to suppress markets to indemnify stakeholders, per their understanding of who is most valuable.

Regarding the Occupy movement and its potential participants, the progress will occur when and if the most radical of the bunch agree that the contrast of values between individuals and institutions is infringing on their civil or even human rights and is in fact stifling their ability to live productive lives. Regardless of how they derive their understanding of the modern economic situation, they’ll have to hold it as dear and urgent as their more radical predecessors of the last past successful liberal movements. I’m not referring to MLK’s boycotts or the freedom riders, or the Jewish resistance in Europe, or the Mandela’s political activism. I’m referring to the immediate threat that militant groups like the Black Panthers, or the onslaught of the Allied Forces, or the provocative military growth of Umkhonto we Sizwe and the many like groups respectively per each struggle. The laws of arbitrage are clear and animalistic. Incumbent leadership, ideals, and conservatism can only respect some formidable opposition.

The incumbent power in 1950’s United States and 1980’s South Africa only yielded because they perceived an inevitable destructive threat; any rhetoric that suggests otherwise is misleading. It would take years to list all the martyrs from every movement who gave their lives to inspire the few, and were willing to take other’s lives for their cause. The pathology of pacifism is a failed effort when it does not inspire an aggressive colleague. Occupiers are going to have to figure out what in the world they can do to change the way institutions and individuals agree on human value. Although they were arguing slightly different causes, the incumbent powers decided to oblige Lyndon B Johnson immortalizing Martin Luther King in order to nullify the slogan “black power” and its author Kwame Ture (Stokely Carmichael). It seems as though it takes a guilty old man faced with the passions of an aggressive young man, to make any incremental change..

- Originally at Integrationalism

In chatting with people online about the enduring Jobs crisis in the USA and distribution of wealth (value), I regularly received responses that people (Americans in this case) care less about others who have (per the responders) intrinsic value. And so, I’m compelled to ask the question: If something has an intrinsic value, how can it’s care be avoided or go uncompensated? Please take a quick moment to give me your thoughts on THIS SURVEY.