The Ingenesist Project » blogger

Pirates, Anarchy, and the Monetization of Social Media

Dan Robles — Fri, 11 Dec 2009 09:00:56 +0000

(Editor’s note: some ideas adapted from writings of Peter T. Leeson and introduces the idea of IOUs trading as a proxy for production. The monetization of social media will likely evolve from such an idea)

No sane blogger would post an article suggesting that anarchy is superior to government as a means of producing widespread cooperation…or would they?

As Milton Friedman put it, “government is essential both as a forum for determining the ‘rules of the game’ and as an umpire to interpret and enforce the rules decided upon.” Most great anarchist theories are duly faulted for significant problems coping with cheating and violence.

Nonetheless, large swaths or anarchy exist today. For example, there is no World Court to enforce World Law, if such laws existed. Nor is there a Global commercial law to enforce contracts between Global traders. Even at a local level there is no guarantee that the government will protect your property or enforce your contracts.

A common objection to anarchy is that without government the strong will plunder the weak because the weak have an inherent inability to protect themselves. How can self-governance alone protect the weak?

Social Piracy?

Pirates, for example, tended to be substantially stronger than producers and could steal from them by force. So the producers devised an institutional solution to the problem that allowed them to trade with bandits – they devised a system of credits (IOUs). In essence, one cannot steal goods that aren’t yet produced, but one can trade a representation of such productivity.

After getting plundered a few times, producers would not produce anything but would instead wait for pirates to arrive looking for goods to plunder. With nothing available to steal, the pirates had two options: return to the coast empty-handed after having made a long and expensive trip, or make an agreement with producers to supply the goods they required on the basis of an IOU. Given the cost of the trip, pirates often negotiated for IOUs. They could then trade the IOUs as money backed by future productivity.

First, this enabled the weak to avoid being plundered, (which would have been the same as not producing anything at all). Second, it transformed producers in the eyes of pirates from targets into valuable assets they had an interest in protecting. If pirates wanted to be repaid, they needed to ensure that their debtors remained alive and well enough to produce. This meant abstaining from violence against producers and protecting producers against the predation of others.

Anarchy, like all political-economic organizations, is riddled with problems. The question is whether these problems are more severe than those that plague governments. Where the government cannot provide law, order, or the institutions required to produce goods and services, private institutions emerge to perform these roles instead.

Today, social media is lawless. There is no ’social media government’. As with the example of the pillaging pirates, it is in everyone’s best interest to help others in the hope that they will be successful in the future and pay back an IOU. It is in the best interest of others to accept an IOU because the alternative is to be plundered and lose any incentive to produce anything in a fundamentally anarchistic environment. Since social media is a closed loop, it is in everyone’s best interest to protect each other against the predation of others. Suppose now that people were to “trade” IOUs as money in social media?

It’s not difficult to see how trade can in many cases prevent cheating even where government enforcement is not an option. So far, the result has been phenomenally successful in social media and therefore demonstrates that anarchy may in fact work better than government.

Counting Eyeballs

Dan Robles — Mon, 26 Oct 2009 18:15:43 +0000

The Advertising Industry has some serious problems. Ad agencies are having a difficult time understanding the modern advertising space with the limited, if not worthless, paradigm carried over from the days of radio; the CPM.

CPM stands for Cost Per Mille

CPM means: how much does it cost to penetrate 1000 heads?… or 2000 eyeballs, I suppose. They count the penetrated heads, like an act of war – the body count, the bullet shells, the napalm canisters…and that is the basis of their decisions. As Dr. Phil would say “How’s that workin’ for ya?”

The CPM is however, a great way to kill off creativity, highlighting the flashy crap while burying the good stuff. Maybe it works well in the counter insurgency of Afghanistan, but it does not work in social media space. What happens after the mommy blogger gets a look at that Spiderman drinking cup that melts in the dishwasher? Imagine the blog post about that cool new GM retro rod that smells like formaldehyde to the undertaker enduring their midlife crisis.

What’s the CPM for the blogger?: zero. Can advertisers compete?: no. Should they stop?: yes.

People are not stupid and they do not work for free. Yet, the entire web advertising model tries to get them to walk through a rat maze of links and pages just to hit more banner ads (impressions). Advertisers keep doing it, ad after ad, page after page, year after year. They wonder why the rat don’t hunt. The most important thing to a rat is food, family, and friends. There must be a tangible economic incentive for people to do what you want them to do. Even after that, not all impressions are equal, or favorable, or lead to sales – but every one is valuable to your product and your brand if you know who I am.

Foresight is 20/20

It is always very expensive to change people’s behavior and the best management policy is to accommodate what people are going to do anyway. If I want to drive a retro rod, help me do enjoy my friends with it – don’t pull the emergency brake. If I want to spend time with my family, don’t interrupt me. If I want to walk in the park, don’t whack me on the head with a billboard. That’s not a great way to start a conversation.

Open letter to Pitchmeisters

Dear CPM mongers, I have learned to ignore you. Like the paint blots on a Monet, I have learned to see the image despite your distortions. Your “fear” pitch is comical to me. The buy-me-love pitch is goofy. The lifestyle-threat angle sounds as ridiculous as an old like Archie Bunker re-run. The most fun I can have is using my ability to walk away leaving you talking to yourself like a deranged chimpanzee at the zoo.

Measure what I measure

Help me do what I’m going to do anyway even if I still ignore you – all data is data. If you want to understand me, measure what I measure; health, happiness, productivity, laughter, family, friends, hope, vision, safety, music art, quality of life. Help me make friends, empower my community, and care for my family. Don’t try to take these away from me – you will lose.

YOU are MONEY

Dan Robles — Fri, 18 Sep 2009 17:41:21 +0000

Some bloggers are calling for a new profession called social media administrator. While there are many opinions and wide agreement about the roles and responsibilities – most of which I fully agree with – I would like to add the following considerations:

The corporate social media administrator should have a direct connection, responsibility and accountability with other social media administrators external to the corporation. Not unlike a board of directors having diverse membership. The membership and reputation of member of a Social Media BOD is also on the line.

Social media is just that, social. It cannot be sequestered fully behind corporate walls and must be open and transparent in it’s message. The Social Media administrator must protect the voices of those who speak. While there is a constitutional amendment for freedom of speech in our government and the basis of democracy, none exists for corporations who use the information or the social media enterprise that hold “possession” of the information for eternity.

A market can only be efficient with adequate vetting mechanisms; the SEC vets Wall Street, The FAA vets Airlines, and the system of Checks and Balances vets government. When the vetting mechanism fails, so too does the market.

Few people can see why this is important largely because the reasoning lies in economics and market theory. Simply put, we are entering a new economic paradigm unlike anything we have ever seen or could imagine. The idea that each and every iota of knowledge, experience, and opinion that exists between your ears behaves like a financial instrument has not fully been explained. YOU are MONEY in every definition of the word. Your productivity supports the value of the dollar. You own your knowledge, it is your property – you can waste it, you can mint more of it, you can borrow it, and you can lend it – and you should be able to capitalize in any currency of your choosing.

The only thing missing is a financial system for your knowledge. If we are smart – and ONLY if we are smart, this system will arise with the continued convergence of social media. Among the KEY elements that MUST be in place is a public accounting system for Social Media Administration.