Massively Networked

Social media in a world of massive connectivity

Social media is nothing new. Social commentator and sci-fi author Bruce "global microbrand"* Sterling noted in his talk this afternoon at SXSW that in the early 20th century H.P. Lovecraft, the writer of odd sci-fi and horror, set up an amateur author network of what might now be analogous to a blogger network. In addition to his sci-fi writing, Lovecraft cultivated a network of devoted followers who often relied on him for life advice. Lovecraft was perhaps an influencer of his time.

The difference now, of course, is the massive connectivity enabled by technology. This is a fact that Sterling partially laments for ushering in an era where he's speaking to "the people formerly known as the audience" as 100s of attendees twitter away while he talks. He partially sees it as beneficial as well - by opening channels of communication that can perhaps be credited for the relative political stablility in these environmentally and economically unstable times. From the laughter among audience members at unfunny moments, I wonder whether they thought he was being serious or just hyperbolic about what are likely to be near-future challenges such as increased violence, repeated unstable weather patterns, and shortages of necessities like shelter. Maybe it was just nervous laughter, I don't know. In any case, I share Sterling's ambivalence about the broken attention span massive connectivity enables, as well as its capacity to draw together the raw materials of human innovation to solve some of the critical challenges the current environment is beginning to generate. 

Ambiguities, of course, are resolved in actions, and we have a lot of raw materials to work with. Among Sterling's suggestions are to engage the elderly who are "going to be the backbone of the social web," given their free time and the limited effort it takes to "hit the return button." He also suggested frequent mini-SXSW-style BarCamps potentially generating ideas, local micro payment systems, health festivals to take care of the sick who can no longer afford to care for themselves, young people squatting in abandoned buildings to create a space of their own, energy "barn raisings," and better refugee zones than the local stadium for when environmental disasters hit.

Social media in a world of massive connectivity used to coordinate meaningful action, in the end, might be what knits together broken attention spans. As familiar structures begin to dissemble, I hope many will be motivated to step up instead of dribble away their attention until it's too late (publishing industry, case in point). I'm rooting for us.

*Sterling noted that he used to call himself a journalist and author. That has now been supplanted by his niche celebrity as a "global microbrand" as the publishing industry loses its hold on the distribution channels and patriarchical structure.

Technology is the game-changer

Nobel laureate economist James Tobin (quoted in this week's Economist) predicted the current financial trajectory in a 1984 lecture, tying it to the adoption of computers to facilitate transactions: "[W]e are throwing more and more of our resources, including the cream of our youth, into financial activities remote from the production of goods and services, into activities that generate high private rewards disproportionate to their social productivity.  I suspect that the immense power of the computer is being harnessed to this 'paper economy', not to do the same transactions more economically but to balloon the quantity and variety of financial exchanges...I fear that, as Keynes saw even in his day, the advantages of the liquidity and negotiability of financial instruments come at the cost of facilitating nth-degree speculation which is short-sighted and inefficient."

The Economist article goes on to consider that financial services need to adapt to the economy of which they are part. I.e., we have to take into consideration the kind of innovation enabled by new technologies and adapt, in this case financial services, accordingly.

If you read this blog, you know I believe the current economic system is fundamentally broken and making adjustments to how financial services are or are not regulated isn't going to be a long-term solution. I don't believe that because I hold some ideological point of view that makes a certain system right or wrong. I believe that because we're embedded in a world that's informed by our technology (as Tobin eluded to) and that technology has reached the point where it's a game-changer.

The ordering strategies and rules of engagement that facilitated life in the relatively slow-moving paper economy won't work in a massively networked world. A successful future economy will be based on an ethos entirely different from one that relies on regulation to monitor the acquisition and distribution of assets. This ethos will be informed by technology that allows transfer of information approaching the speed of thought, rapid prototyping, low- or no-cost creation and distribution of many goods and services, time shifting, social networks, the "wiring" of the physical world, and virtual worlds that are independent of physical location. How this plays out depends on if we have indeed reached a critical mass of folks who are tuned in enough to this reality to know how best to engage the new game.

Positives of punctuated change

Stephen Jay Gould described biological systems experiencing long periods of stability marked by a rare event that alters the biological landscape as "punctuated equilibrium." (Some creatures survive this jump, and alas, some do not). On a similar note regarding human history, Nassim Nicholas Taleb in The Black Swan proposes that  “almost all consequential events in history come from the unexpected."  London School economist Willem Buiter echos this in his Financial Times blog post about the current economy, “Too often for comfort I hear variations on the following statements: 'The long run is just a sequence of short runs, so if we make sure things always make sense in the short run, the long run will take care of itself.'" Buiter sees looking to past precedent a flawed strategy for determining current fiscal policy. (He gives the US dollar, BTW, 2-5 years).

Economic analyst Anita McGahan in a recent interview notes that during periods of punctuated change like the period we see ourselves in now, there is a time of uncertainty - similar to a river kayak that is momentarily stalled in the eddy just before it goes over a waterfall. Based on her historical analysis, she says this period of uncertainty is frequently followed by turbulance and a breakthrough from an unexpected source. A real innovative game-changer.

Transitions are always disconcerting and we’re experiencing transitions on a massive scale – economic, environmental, political and personal – all at once. Nobody knows for sure exactly where we’ll end up, but right now we have a window of opportunity to focus on creating alternative economic and business models that work better. The time to start creating viable economic alternatives is now, before the foundation crumbles completely.

The good news is with smart organization of grassroots efforts – gathering community members who can mutually benefit from each other’s products and services, or figure out how to solve for any gaps – the transition will be less painful. Moreover, we’ll have a base from which to create something new.

Thoughts on the practical applicability of "freeconomics"

Stephen Colbert was dryly amusing as usual lampooning Lawrence Lessing on the Colbert Report the other night. If you're not familiar with Lessing, he is the leading advocate of abolishing outdated aspects of current copyright laws in favor of Creative Commons licensing in light of the detachable, portable and remixable reality of the online world and people's creative motivation to participate in it. Colbert's rapid-debate schtick gets Lessing to explain that the economics of the creative commons are people want to contribute to sites like Flickr for free and Flickr makes money by selling ads to them. Lessing calls this an aspect of the "hybrid economy."

What Lessing gets right with his "hybrid economy" notion is that there is an intrinsic motivation for creativity and generating something new among people. There is a satisfaction contributors to open-source software get when they figure out a bug fix and share it with others. The endless YouTube video creations wouldn't exist if their filmers didn't get pleasure from creating and posting for everyone to see. The twin joys of creative expression and popular recognition are part of the power that is effectively harnessed online.

It is too much of a leap, however, to call providing a platform for creative expression and recognition and then selling advertising or service upgrades a "hybrid economy." The notion Lessing describes creates a non-necessary dependence between two economies running in parallel. Strictly speaking, Lessing's freeconomy needs the traditional economy to survive, whereas the traditional economy has no need of the freeconomy. Rather than a hybrid, it's more of a parasitic relationship. To create a truly hybrid economy, there has to be more of an interdependence between the freeconomy and the traditional economy.

So, how do we harness the economic power of the decentralized, emergent networks  the web has now enabled - while acknowledging that most of us will have to engage the established economy for some period of time in order to live?

We need a true hybrid economic model to get the ball rolling. An economic model that is parasitic on the established economy will lose its base when the old economy finally decomposes. If you have thoughts or questions of your own, I invite you to post them in the comments section.