The Ingenesist Project

The Next Economic Paradigm

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Printing Social Currency; Influence vs. Intentions

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On December 29, 2010

In General Information

What is more valuable, their Influence or their intentions?

The heat is on to discover a new currency

Obviously, money is supposed to represent productivity otherwise why would people work for it?  But, everyone is pretty much resigned to the fact that the dollar – and indeed most global currency – is irreversibly divorced from actual productivity.

No Alternative  Algorithm?

The reason why people must trade dollars is that there is no other alternative, and the computer algorithms that control the value of the currency have yet to tell us otherwise.  That’s it, really.  The questions remain, how, why, and when will people stop working for it and what will they work for which can replace it?

This will not be as simple as living in yurts, trading cheese cultures and tweeting about it. Complex infrastructure like a judicial system, transportation, medical care, clean water, energy and food production rely on a financial system that can capitalize and securitize whatever the replacement currency may be.

Influence vs. intention

The latest twist in the new currency movement is the idea that on-line influence can be used to support a currency.  There is no shortage of noble leaders aspiring to “define the standard” in their own image as a service to the lesser masses who seek their respective place in the great new economic void.  PeerIndex and Klout are the two main players that promote a social score based on influence, obstensibly to mimic the credit score upon which all currency depends.

Bad Influence is worse than no influence

Unfortunately, influence is a flawed measure.  Marketers are the target beneficiaries of such influence which is clearly defined as the ability to get other people to take action on a marketing message. My ability to influence others to buy Twinkies does not an economy make. In other words – influence is a consumption currency, not a production currency.

A far better marker is “intention”

For comparison; today, money is conjured into existance by banks based on the signature of a loan candidate who states in writing their intention to produce enough value by their future words and actions to exceed the value of the currency being borrowed (created from thin air) plus interest.  That’s how debt works.  That “intention” is then capitalized, combined with the intentions of others, and securitized into bonds that finance important social services and institutions that support those intensions.

Likewise, a social currency may be similarly conjured into existence – based on a person’s promise to increase human productivity in the future, not however, to increase human consumption in the future.  The social marker for the next currency must be an intension to produce something, not an intension to consume something.  The real danger, of course, is if we define the next currency as just another consumption currency or whether it can truly be married to productivity.

Obviously, it would be helpful to have an inventory of what value an individual is willing and able to produce in the future since this is the best marker of intensions.  It would be even more helpful if there were a public knowledge inventory of what value people in a community are able and willing to produce together.  I’ll stop here because a knowledge inventory for communities does not exist – and curiously, none of the great minds in Social Media are clamoring to define that standard.

Likewise, that is where the great opportunity for the future resides.

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The 3 Steps To Social Profits

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On November 29, 2010

In General Information

I have been approached by many brilliant social entrepreneurs in recent weeks.  They each have several things in common. Each has an incredibly creative idea and a strong passion linked to a deep seated observation that social currency has value.  As nebulous as that may sound, it is very real, specific, and clear in the minds of those who I’ll call, The New Entrepreneur.

Nothing Economic can happen until two or more people get together to build something.  Likewise, when two or more people get together to build something, economic things happen. The objective of this post is to demonstrate the 3 underlying actions of a new class of business plans that will become dominant in the next economic paradigm.

Our recipe is simple:

Step one: convert financial currency into social currency

Step two: Create value denominated in social currency

Step three: Convert new social currency back into financial currency – if needed

This simple recipe forms the basis of the business plans for several start-ups including Social Flights and The Social Value Network as well as numerous other projects that we consult to in the US, Greece, Brazil, Australia, China, and Mexico.

So here is how it works

The Old Business Model:  Suppose you buy a truck and you use it to haul stuff for your own personal and business interests. After 5 years, you can sell the truck for about 1/2 what you paid for it.

The New Business Model: Suppose that you buy a truck to hauls stuff for your own personal or business interests.  Suppose that you also let The Boy Scout troop leader borrow it to pick up christmas trees for sale.  Suppose you let the Kiwanis use it to pick up supplies for their annual salmon bake.  Suppose you let the YWCA haul donated furniture to their satellite facility.  Suppose you help your neighbor use it for a home improvement project.  After 5 years, you sell the truck for about 1/2 of what you paid for it.

The difference is that now your community is engaged with your personal interests.  You have converted financial capital into social capital and created new value denominated in social currency.  One notable example includes Neighborgoods, but there will undoubtedly be thousands of variations of this leveraging every conceivable physical asset.

Now, how do you transform this back social capital into financial capital?   Well, that’s what the emerging science of Social Capitalism is all about.  Social Profit is like a fungible option with a face value.  If structured correctly, an option can have a face value equal to the difference between discount and full price. That face value can be traded like money.  When you are engaged in a community, people know who you are, they trust you and they share with you.  People are trading options – the right without the obligation to exercise a financial position in the future.

Options have real value as an asset if you have them or as a liability if you don’t

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The Innovation Banker

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On September 22, 2010

In General Information

Future of Banking

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).

Ingenesist.com

Music by Phil Felicia

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Social Currency and Time

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On August 16, 2010

In General Information

I recently published a video suggesting that Social currency is backed by Time as part of my series on Social Capitalism.  I made the argument that time is the true scarce commodity because it is not easy to debase, counterfeit, or forge; it is therefore the perfect basis for a currency.

Still, a few people always come back with the idea that influence, reputation, game tokens, tweets and more recently “checking in” (a la Foursquare), are all social currencies – citing the experts, of course.

There are several problems with this.  First, none are really scarce – I can find an honest person anywhere.  None are actually commodities because nobody is deploying the identical influence as any another person.

The idea that “currency” as the storage and exchange of value is also insufficient – a glass of water stores value as does a digital camera or a even a goat.  Nobody in Silicon Valley is twittering feverishly about the latest surprise goat farm acquisition.

Indeed influence and reputation are valuable and may act like a financial Instrument but until the purveyors come out and actually describe it as such, I need to call them on their choice of words – and I have.  A typical response is, “Well, uh, you know what I mean”.  My response: “…And, uh, you DON’T know what you mean?”

Beanie babies, tulip bulbs, and CDOs were financial instruments too.  Seriously kids, clarification is extremely important because the consequences of misconception, especially in this important emerging subject area, are tangible. Real people trying to make the wrong ideas real actionable are wasting their real precious time.

Here is what they mean to say:

a Derivative is something whose value is derived from the value of something else.  So when we talk about influence, the value of a person’s influence can be derived from the value of many things.  If you are in a burning building, the influence of the firefighter is different than an endorsement from Shaq, yet both may be valuable at different times.

The premise of my argument is that the basis of all currency is in Time.  Time is limited for everyone.   A good reputation saves people time.  The right influence applied in the right places at the right time saves people time.  Passion, purpose, productivity and persistence are measures of how someone spends their time.  Checking in at the trendy hotspot on foursquare is an expression and commitment of time. Co-location is a function of place and time. Like love, the value of time is in the eyes of the beholder. Valuable yes, currency, no.

Talk about how your product lives in time and you’ll earn all the social currency that it’s worth – not the other way around.

 

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Social Currency = Time

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On August 3, 2010

In General Information

Thousands of social currencies are emerging as people lose confidence in the ability of the dollar to store value. At the end of the day, a currency is a social agreement. People need to agree that whatever they use for the storage and exchange of value accurately represents their productivity – otherwise they will not work for it. Social currency is a storage place for social value.

Of course this is much easier said than done. Alternate currency advocates continue to stumble across substantial structural issue is defining their currency; It must be scarce, it must be difficult to forge, debase, or counterfeit and it must be accepted by everyone.

The only thing that fits all of those criteria is ‘Time’

 

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Social Capitalism; The Scarce Resource is Time.

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On July 29, 2010

In General Information

The difference between market Capitalism and Social Capitalism is that factors of production are reversed.  In Social Capitalism, creative capital, intellectual capital, and social capital are the “tangibles” while land, labor, capital become the “intangibles”.

But the currency for social capitalism must still represent productivity – otherwise nobody would “work” for it.   Productivity is defined as “all the stuff we can make within a certain period of time“.  Market capitalism is built on “stuff” while Social Capital is built on “Time”.   Waste stuff and you’ll lose money.  Waste time and you’ll lose social currency.  Every living person is allocated a certain amount of time on Earth.  Time is impossible to forge, debase, or otherwise counterfeit – unless stolen from someone else – as such, Time makes an excellent currency.

What is the ROI on Land, Labor, and Capital in Social Capitalism?  ROI is wholly dependent on the knowledge assets deployed upon that Land, Labor, or Capital.

So what exactly is the underlying asset that supports Social Currency?

WIKiD Tools introduced the idea that everything we produce will ultimately come as a result of transforming data into information, or transforming information into knowledge, or transforming knowledge into innovation, or transforming innovation into wisdom.  We can articulate a very powerful Equation to model productivity in Social Capitalism.  This equation can be translated as follows:

Wisdom is proportional to the rate of change of innovation with respect to time.  Innovation is proportional to the rate of change of knowledge with respect to time.  Knowledge is proportional to the rate of change of information with respect to time.  And Information is proportional to the rate of change of data with respect to time.

Note that in each case, the “rate of change” (hence, time) is the underlying asset.

The creation of Social Currency:

Sounds complicated?  Well, it happens every day in every city where a person sees an important issue and convenes a conference where they invite relevant speakers and guests into the discussion.  It happens when a manager notices people talking about something important to them and incorporates it into their job description.  It happens when a teacher helps a student to the next level.  It happens when someone spends some of their time so that you can enjoy more of yours.  It happens with stay at home moms.  It happens with volunteerism.  It’s created by mentors, parents, neighbors, civil servants, and everyday citizens. It is created in Communities, not factories.  It is created by time.

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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

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Bizarro Capitalism

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On July 27, 2010

In General Information

In the 1960’s Superman comics, Bizarro World was a place where everything was the opposite as Normal World.  On the planet Htrae (Earth spelled backwards) lives Bizarro Jimmy Olsen, a Bizarro Lois Lane, Bizarro Superman, etc.  Of course, Normal World is the standard bearer for all that is great and good to the reader.

Normal Capitalism:

In the study of Normal Economics, currency always represent productivity – otherwise nobody would “work” for it.   Productivity is defined as: all the stuff we can make within a certain period of time. We measure it with expressions like “dollars per hour”, “miles per hour”, “5% compounded annually”, board-feet per minute, etc.

Abnormal Capitalism:

Suppose we were to describe a Bizarro currency as:  All the Time that can be produced within a certain amount of stuff.

After all, every living person is allocated a certain amount of time on Bizarro World.  Time is a scarce resource whose value is determined by supply and demand.  Time is not easily forged, debased, or counterfeited.  It makes for a perfect Bizarro currency.  Of Course the Bizarro Currency would be called the Rallod (Dollar spelled backwards).

Bizarro Capitalism:

In Normal Economics, land, labor, and financial capital are the factors of production called “Tangibles” while social capital, creative capital, and intellectual capital are called “Intangibles”.  By contrast, in Bizarro Economy, social capital, creative capital, and intellectual capital are Tangibles while land, labor, and financial capital are the Intangible factors of production.

Of course in Bizarro World, it takes rallods to make rallods.  So if you want to get rich, you need to invest your time in one of two things: Saving time for other people, or reducing the amount of stuff they need to consume on their time.

Likewise, in a Normal Banking, an entrepreneur assumes that they have the Knowledge to execute a business plan and they borrow the money. In Bizarro Bank, the Entrepreneur assumes that they have the money to execute a business plan and they borrow the knowledge.

In Normal World, money is backed by debt.  In Bizarro World, money is backed by innovation.

What if we got it backwards?

Probably the most immediate concern is whether the Rallod can hedge the Dollar, or will the two planets collide?

Material based on video series here

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Social Capitalism: Meet The New Intangibles

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On July 26, 2010

In General Information

Today, land, labor, and capital make up the “Tangible” assets allocated by entrepreneurs in the production of all products and service.   Meanwhile, Social Capital, Creative Capital, and Intellectual Capital of people and communities are called “Intangible Assets” on the corporate balance sheet.

As soon as you leave the Corporation, this condition reverses.  What if the new generation of corporations were built on this reversal?

Suppose it is already happening.

The next economic paradigm will be built on Social Media as soon as people start getting together to build things.  Social Capital, Creative Capital and intellectual capital will be allocated by entrepreneurs in the production of all products and services.  Meanwhile land, labor, and capital will be the intangible assets.

This may not be so far out.

LAND: with Social media, Mobile internet, geolocation applications, mobile applications, and speed blogging – most activity is independent of physical land.  Instead, Public “land” or private “land” behave as the intangible component where people assemble and produce things.

LABOR: no longer means that two physical parts are assembled into a machine.  Instead two ideas are assembled into a third idea and redeployed as data, information, knowledge, innovation or wisdom.

CAPITAL: Seriously; what exactly is Capital these days except the thing that banks play with and politicians argue about? Capital is created from debt.  The continuation of Capital Markets as we know them exists more as the absence of a reasonable alternative than an actual proxy for true value or productivity.

Instead; 500 Million people flock to Facebook, Twitter, Google, Linkedin, Foursquare, Gowalla, etc., to collect options and store social value.  Uhm…Why?

The next phase for social media will become user generated productivity.  That is when people get together outside the construct of government and corporations to build something.  If we are lucky, this transition will happen before we are forced to “rebuild” something.

***

The Ingenesist Project specifies an Innovation Economy built on a platform of social media as the next economic paradigm.  Material based on video series here

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War Is A Social Agreement

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On July 15, 2010

In General Information

I often make the point that a currency is simply a social agreement. People need to agree that a monetary unit represents their productivity so that they will use it to trade their productivity with the productivity of another person. The test question for any so-called currency (coined by Jay Deragon) is: “Yeah, but can you buy groceries with it?”

I am now seeing a SHARP increase in the social interest for an alternate currency to the dollar. The dollar does represent productivity – albeit future productivity in the form of debt – that’s why it is still exchanged for the work that we do. My suspicion however is that the social agreement regarding the dollar is, in fact, increasingly becoming a social disagreement.

People have a deep seated unease with what the dollar is and what the dollar represents. To escape the dollar is to escape a tangle of influence that impacts everything we say, do, and think about ourselves and about each other. It almost seems that to escape the dollar is to escape ourselves.

That’s just the idea that came to me after watching this video about a soldier questioning the occupations. He is saying something very interesting:

War is simply the soldier’s willingness to fight it. It is a social agreement.

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Stock Harmony; Exchange of Social Value

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On July 14, 2010

In General Information

I came across an interesting business model for the deployment of a social currency. Stock Harmony, quite simply, sells itself to interesting people. Those people then interact with each other adding social value to Stock Harmony. The more social value is created, the more the original shares are worth. The more the shares are worth, the more interesting people will join further increasing the value of the shares. From that position to deploy social value, Stock Harmony can amplify the voice for social priorities over Wall Street priorities, effectively re-allocating factors of production.

Actually, the same thing happens all the time in typical social circles, networks, affinity groups, and political action committees. However, I am not certain that anyone has yet been successful (ethically) in using social circles as a way to store and exchange value. That is why Stock Harmony is interesting.

It sounds so simple, right? Well, … not really….

It’s all about structure. The way that a process or system is structured determines how people interact with it. Structure also determines how governments, markets, laws, politics, and even public opinion interact with the process or system as well. Interestingly, the structure of facts often keeps secrets tight. In short, structure shapes human behavior and human behavior shapes structure.

Companies sell shares to raise money. Per SEC regulations, the “sale of shares” must comply with certain disclosure and accounting standards. The SEC regulates companies in the sale of shares as a means to safeguard investors.  In other words, it is illegal to sell shares without government oversight.

Raising Money

The possibility that anyone can sell shares in themselves or their private enterprise as a means of raising money is, by default, relegated to the banking system. A person essentially sells shares on their productive time on Earth to buy a house, a car, or a business, etc. The structure begins to crumble when the employment contracts begin to crumble. As people leave the old system, they take their value with them and tend to create new ones. This is where Stock Harmony treads.

What if the shares are issued in non-dollar denominations?

Today we see many non-dollar denominated structures arising apparently at the same rate that the financial system is failing. Google secretly invests 100M in Zynga – a gaming company with a common gaming currency. Facebook established a system of currency-like Credits. Groupons deploy social currency to incite monetary discounts, etc, and PayPal stands ready for the next killer currency app. Any of these transaction systems are poised to hold a black market currency if fiat currencies fail. If the fiat currencies fail to recover, the black market becomes a gray market and ultimately a legitimate market. So, there is a lot at stake.

Currency must act as a proxy for human productivity;

So this is what makes Stock Harmony interesting. The successful “next currency” will be the one which best represents human productivity. Only then will someone be willing to trade their productivity for that of another person using a currency note as an exchange mechanism. This is where other alternate currencies fall apart and where Stock Harmony shows greater strength. After all – what would you rather accept in exchange for your services – Farmville gaming currency or a currency backed by the harmony and productivity of real people in real community?

It will all come down to structure.

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Social Currency and Anonymity

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On April 24, 2010

In General Information

The subject of privacy and anonymity are again rising up with the latest move by Facebook to integrate updates across the Internet onto the Facebook platform.

Conspiracy theories about Facebook and the CIA continue to flourish.  Meanwhile, the marketing and advertising industry seems poised to reboot their dwindling influence under a new cloak and dagger of social media data hustling and predictive demographics rather than playing by new rules of engagement.

Money is one thing and value is another.

I am astonished that people willingly and freely give up huge volumes of information about themselves when they really don’t have to.  In earlier times, marketers and advertisers would pay a great deal of money for far less information that people give them for free.  People do not understand the value that is stored between their ears or how easy it would be to set up an alternate economy that trades in social currencies.

If advertisers can pay someone to cold call me, to graph my data across the web, or sneak around my social networks, then they can certainly pay me to answer the phone.

The Ingenesist Project specifies an Innovation Economy built on the platform of social media.  While that thesis is extensive, let me summarize that the primordial soup of the Innovation Economy is called the Knowledge Asset Inventory.

Anonymous assets

One essential element of the new economic paradigm is the ability to combine knowledge assets so that innovation becomes predictable and therefore capitalized. However, a side effect is that such code makes the individual containers anonymous.  Marketers will have to pay you to find you.  here is why:

Now think about it this way – if you remove 20-dollar bill from your wallet to buy a Latte, you do not know (nor do you care) whether the last transaction performed by that 20-dollar bill was a donation to a charitable cause or a drug deal.  The dollar bill is anonymous – but you, as an asset, are not.

Social Currency is a Social Imperative

Dollar denominated money is a system to control social currency at a leverage factor of 1000:1.  Take away the dollar currency, and the leverage disappears.  Add a social currency and the national debt disappears.

Almost as a bonus, it is an absolute impossibility for marketers and advertisers to store and exchange value denominated in a social currency without extraordinary changes to the way they engage their clients….like, uhm, …don’t waste our time.

If we are smart, we can shut down the privacy issue in a hurry – anonymity of knowledge assets is the key.

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Conversational Cannibalism

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On April 16, 2010

In General Information

I don’t often run a full repost from other people on this blog, but this post by Seth Godin was just too rich to leave alone.

I have been posting a lot lately on the irony of social media devolving to spammers spamming spammers, especially the recent Twitter plan to charge advertisers for jumping to the front of the line by exploiting data provided voluntarily by the users (Twitter Me Elmo).

All of this tells us that Social Media is up against the ropes on the monetization plan. As a result it is starting to consume itself. This may be the first indication that the Dollar is NOT the currency of trade in the social media space, it’s a yet unnamed Social Currency. This definitely tells us that something new must happen soon.

Of course, The Ingenesist Project specifies an alternate financial system that can accommodate a social currency, but the lure of the almighty dollar remains strong enough to blind the choir itself and out-pitch the humble whisper new economic paradigm evangelists.

Anyway, here is Seth’s post in it’s entirety. Buy his books and read his blog, get his feed for daily email enlightenment. Seth, I apologize in advance for posting without your explicit permission…etc…just trying to “keep the convo rolling….”

*****

Cannibalism and spam

By Seth Godin:

So, these two cannibals are eating a clown, and one says to the other, “does this taste funny to you?”

We don’t often have conversations about cannibalism. We don’t trade recipes or talk about health issues. That’s because it’s off the table, not permitted, inconceivable.

Marketers should feel the same way about spamming people. Spamming them by email, by text or yes, by calling their cell phones with a robot, repeatedly, just because it’s cheap and because they can.

If anyone should know better, it’s the Word of Mouth Marketing Association. And yet, not only did they spam thousands of people by phone, they want us to “keep the convo rolling”. And when I spoke to their Executive Director, she had a hard time understanding that what they were doing was spam.

Spam is unanticipated, impersonal, irrelevant junk I don’t want to get. Not only that, it costs them less to send it than it takes me to figure out what it is and deal with it. That doesn’t scale. In fact, it destroys the medium.

Why would anyone join, pay their dues, go to their meetings or want to engage with an organization that’s willing to cross a line like this? Even once? (and then brag about it!) Maybe I’m getting cranky, but the relentless march of marketers into our lives is really getting to me.

In case you missed the first part of our show, the future of marketing is based on permission. It’s based on sending messages to people who want to get them, who choose to get them, who would miss you if you didn’t send them. It’s not easy and it’s not cheap to earn permission, but so what? This is my attention, not yours, and if you want to use it for a while, please earn the privilege.

PS If I ran Twitter, I’d build my new ad service about a socially acceptable way for corporate users to build large lists of followers, people who would give permission to get news and discounts and insights from advertisers. Twitter knows who likes what and they have permission from users to be a bridge between the user and those that might want to talk to them. That’s a powerful place to be.

Using cheap technology to spam people is not.

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Innovation Suicide

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On April 9, 2010

In General Information

The following question appeared on a Linkedin Forum that I follow:

Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

I have said this in a few blog posts and I’ll say it again here: The current definition for “innovation” may be the single most disastrous eliminator of innovation.

Innovation Suicide:

Yeah, it kills itself. Really, look it up – it’s a horrible cacophony of buzz bits and weasel speak that amount to nothing more than “Ya know it when ya see it”.

Any definition is supposed to give the reader enough information to duplicate, recognize, and identify instances of the subject – Preferably before the event has ended. Think about it – if the definition for Innovation were clear, nobody would be asking this question.

I am always amazed at how simple the answers to complex questions – and how complex the answer to simple questions – can often be.

Question: THE ONE: Complete this sentence: The ONE factor that is MOST important to innovation is… and here’s why…

My Answer: The Definition of Innovation

Here is why:

Information, knowledge, and innovation are obviously related to each other.

1. You can’t have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system becomes efficient.

Yet, the definitions of each term do not include the other two. Therefore, the current definition of innovation is insufficient to describe the condition. That is why this is the ONE most important factor.

Let me prescribe the following analogy; distance, velocity, and acceleration are obviously related.

1. You cannot have one without the other two.
2. If you cannot measure one, you cannot measure the other two.
3. where all three are integrated, the system is efficient.

This is because distance is the point between two facts, velocity is the rate at which the distance between two points changes. Acceleration is the rate at which the velocity of travel between two points changes.

Therefore let’s re-define innovation as follows:

Information are facts and data. Knowledge is defined by rate of change of information. Finally, innovation is defined by the rate of change of knowledge in a community.

If we can accept this definition, everything changes. Seriously, everything changes.

Now, that’s Innovation!!!

* note: If you are familiar with differential Calculus you may see how a new economic paradigm may arise from this algorithm.

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Does School Interfere With Education?

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On April 2, 2010

In General Information

I guess that is could be considered sacrilege for a college professor to suggest that higher education is inadequate in some way.  My position is that the college degree must go away in favor of strategic combinations of high resolution knowledge assets.  The irony is that those who really “get it” understand “school” better than the schools.

The price of college education compared to the value of college education in society is skewing toward obsolescence. The news reports are filled with stories of unemployed MBAs and Engineers.  Over qualified, out of date, over generalized, specialized into obsolescence are all risk conditions that can make college a liability, not an asset.

There are many articles in these archives that outline my opinions on the subject. So here is what the kids say….

*************

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Criminals Steal Social Agreements

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On April 1, 2010

In General Information

At the end of the day, everyone is arguing over money. How are we going to heal the poor? How are we going to police the world? How are we going to bail everyone out? How are we going to preserve the environment? The answer is always the same…it takes money to solve all of these problems.

What people do not realize is that currency is a social agreement, not a disagreement. Money is whatever people agree to use as a storage container for the value of their time, labor, intellect, or other resources. A criminal can steal your time, labor, intellect and possessions, or they can just steal your social agreements and replace them with a social disagreements.

It is easier to steal from the poor than the rich

Stealing money is not as difficult as some may think. Whenever people are held below a certain economic level, they fail to organize in communities that would otherwise protect them from outside influences. These people are often too busy holding a job, paying off debt, or traveling in search of work, or worse, a place to live – they become easy targets.

Blind leading the blind

Currency, by fiat or black market, is just a way that everyone agrees to store and exchange value. So, when people are at each other’s throats over a system of beliefs, they are effectively blinded to their true opponent – their inability to make a social agreement regarding the storage and exchange of value.

The current political strains pulling at this country are dangerous. The real problem is not your colleague or neighbor who is in favor of universal healthcare. The problem is not your old classmate on facebook calling Obama a liar. It’s OK to oppose the government – it’s our right. It’s OK to oppose bankers, they are accountable to a social charter.

The problem is that people are opposing each other.

There is no way to pay off a 50 Trillion dollar debt. All politicians know this. You would need to harvest every fish in the ocean, pump every remaining barrel of oil, and cut down every tree to extract this amount of “value” from what is left of the Earth. To whom exactly would this value be delivered and how? It simply cannot and it simply will not be repaid without some magnificent productivity gains on the order of nuclear fusion or superconductivity.

I will not speculate exactly how the currency fails. There are plenty of examples in history. Instead, I will speculate on what will replace the failed currency in the age of social media.

Social media is taking on some very fortunate characteristics, especially in the area of organizing people and communities around a common goal. Too often that common goal is to oppose another force of social media. This will change, it must change. When the dollar fails, people are going walk out their front door, look at their neighbors, and introduce themselves.

So, There you have it – that’s where all the money went. It is stored and exchanged in our social agreements.

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Culture: When Engagement Is Not Optional

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On March 26, 2010

In General Information

Today we see Social Media duplicating many of the functions of earlier society by storing community wisdom, applying social vetting, and deploying social currencies.

It takes a Community

Here is an article is about a a person who learned through social media profiling that her fiance was active in hobbies that conflicted with her moral constitution – before the wedding instead of after.  In the old days, the community would also profile each individual based on the social record of their behavior.

Social Capitalism

Here is a video article that discusses how social media is  duplicating many functions of the corporation outside the construct of the corporation. Factors of production increasingly enter the org chart as a social media application.  We now question whether the corporation itself is the sole vehicle of wealth creation.

Social Currency

We see social media duplicating many of the functions of the financial system where currency, credit scores, banks, land, labor, and capital are being replaced by social currency, social vetting, social capital, creative capital, and social entrepreneurs.

Macro vs. Micro

We see divisions of scale from the long-winded one-sided content of the static web presence to the micro blogging applications that more closely resemble a conversation.  Time factors are accelerated to the point where real-time is not fast enough.

Local vs. Global

We see an emerging segmentation between Local Social and Global Social. At first global leverage was the awarded the small entrepreneur with something to offer to the world.  Now ‘Local Social’ enjoys substantial leverage over global corporations by reorganizing the way people prioritize and experience each other and their community.

Everyone is a node

Taking an analogy from the physics of electricity, the term “potential” means the difference in energy between two nodes.  The greater the difference, the bigger the spark and the greater the impact.   The local energy at each node influences the direction and size of sparks between nodes.  As people accumulate ‘Social Current’, their position relative to those around them changes. Likewise, their potential also changes relative to the ‘Social Current’ of others. Everyone has some potential relative to every other node.

Integration has arrived

Much like the knowledge economy integrated, but did not replace, the agrarian economy, Social Media will not replace the corporation, the financial system, dissertation, conversations, localization or globalization.  Rather, everyone becomes a corporation, everyone prints their own social currency, everyone publishes their intentions, everyone has local and global leverage.  That’s what Integration is all about.

A ‘culture of one’ is moot.

It is not surprising then that our culture itself is now being defined in terms of social media with effective aggregation of  social norms, storage of social wisdom, and medium of exchange for community ideals.  The true test of “culture status” is when engagement is no longer an optional.  Without engagement, there is no culture.


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Everyone, Inc.

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On March 11, 2010

In General Information

In the state of Washington, it costs 200 dollars to establish a Limited Liability Corporation. All the documents are online and there is no shortage of tutorials on the process. It’s a whole lot easier to get a job because it’s real easy for one corporation to hire (and fire) another corporation. Taxes are simple.

Everyone’s liability is limited and transactions are conducted under a uniform commercial code. And there are no incentives for people doing what they are not good at and every incentive for people to do what they enjoy most.

A corporation is fictitious.

A corporation exists in the form of a bits and bytes simulating a folder of papers in a virtual file cabinet. A corporation gets to deduct all of their expenses from their taxes. A corporation has a credit score, it can borrow money, and even have a bankruptcy just like a person. A corporation can donate unlimited amounts of money to a political candidate. Corporation garner social respect. Laws favor corporation. In fact, the cards are stacked in favor of the corporation over the employee; unless, of course, you are both.

It’s all in the Management….of knowledge assets.

All of the business theories are written to apply within the construct of the corporation. Corporate accounting provides a host of clever ways to manage assets. You can depreciate assets, you can inflate or deflate “intangibles” as needed for whatever valuation purpose. You don’t need to show anyone your accounting either (unless you are a public corporation). American corporations don’t even need to hire American employees, or any employees for that matter. Outsourcing goes to other corporations.

Land, Labor, and Capital

Corporations allocate Land Labor and Capital – well, that’s the theory anyway. Land is underwater in a real estate bubble. Labor is tragically unemployable or under employed or outsourced to the political slave markets. Capital is being consumed by the “interest” monster conjured into existence from the debt. Uuhhmmm….So how’s that workin’ for ya’ll??

So why not become a corporation??

Social Media is able to perform almost all of the functions that a corporation would normally do internally. The “Last Mile of Social Media” is when local communities organize themselves on, say, Facebook. High integrity is rewarded and low integrity is punished. Now you can reliably find other corporations to do your accounting, Human Resources, Marketing, and content design and distribution.

If you need to actually produce something “solid”, well there will always be a corporation willing to do that too. All of these things are only a keystroke away. So why isn’t everyone a corporation?

No, seriously……

We teach our kids to be good employees, not to become good corporations.  How do we expect social priorities to compete with Wall Street Priorities?

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Should Educators Command an Equity Position in Students?

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On February 19, 2010

In General Information

The idea that a mentor may take an equity position in a protege is not new – it happens in families and extended families as elders are fully aware that the children will provide for the family in the future. The connection is not to hard to grasp that it’s in everyone’s best interest to help the kids – all of the kids. This is the social contract.

Somehow that connection gets lost when everyone is competing for the same set of limited jobs and everyone is responding to the pressures of insurmountable debt to banking institutions.

As Social currencies begin to replace the decaying monetary currency, a new set of social instruments will arise. The scope and range of new social contracts is unlimited and should be expected to increase substantially. These social contracts will become tangible in a communities and may he used in a system of trade that stores and transfers knowledge efficiently in a community.

If a father can teach a son how to become successful in the family business, why can’t a community of fathers teach a community of sons to be successful in a community of businesses? This may need to happen whether we like it or not.

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Social Currency And The Innovation Bank

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On February 13, 2010

In General Information

The real estate market is trashed, money markets are unstable, commodities are in the tank, the banking system is corrupted to the core, inflation is looming around every corner, and the politicians are engorging themselves in a game of Cerebral Gridlock.

Literally, there is no safe place to put your money. Instead, people are investing their productivity in social media – social media is simply a storage device for knowledge assets. Soon it will become a stock exchange for knowledge assets. Investors should not take this lightly – the best place to store your money is in the real productivity of real people.

People are trading knowledge assets in social media. This exchange is denominated by a conversational currency. If we consider the structure of conversations and compare that to both the structure of social networks AND the structure of our financial system, we see a huge opportunity to develop an alternate financial system that can capitalize and securitize knowledge assets in social media.

Ingenesist.com

Music by Phil Felicia

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A Community of Knowledge Assets

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On February 11, 2010

In General Information

Our culture organizes itself around winners and losers. Corporations reflect this competitive nature to the core of their Capitalist doctrine. Sports analogies abound across the enterprise straight through to the HR department always on the lookout for the most amount of superstar for the least amount of money.

Social media has every industry trying to understand the concept of community. Among the most difficult ideas to grasp is that knowledge assets in a community live on a bell curve, not in winner and loser columns. Everyone is an expert at something and nobody is an expert at everything. Someone who is not performing adequately is simply a misallocated asset, not flotsam subject to jettison at the next layoff or outsource “opportunity”.

A Community of Knowledge Assets

Like most assets, there is a perfectly legitimate market for everyone in a community – nobody need be excluded, marginalized or laid off. Social Media is turning the tables on the hierarchy and old winners who don’t play by the new rules quickly become the new losers. Maybe we ought to run our economy like a community instead of losing so badly at trying to be a winner.

A Community of Knowledge Assets

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Breaking The Monopoly on Money

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On February 10, 2010

In General Information

Hundreds of community currencies are forming across the globe. Gaming currencies are jumping back into reality. Europeans communities are calling for the authority to print their own money arguing that the fractional reserve system is like trying to recover from a war by waging more war (a novel thought).

Many people doubt that the dollar has more than a decade or so of steam left as the interest on debts mythically exceeds the total amount of money on Earth (at least in my world). Yet banks march on, heading straight for the cliff.

Governments are polarized against themselves (and in cooperation with other governments) to solve the problem – except by reducing services to the people. But isn’t this why Governments exists in the first place? Are they suggesting their own elimination? Of course not, so they issue press releases worth about as much as the photons they are printed with.

Meanwhile, corporate media is trying to dominate (and subdue) social media….ultimately, the end game will be the other way around. This short video invites the status quo to look at what people are “doing and saying with their productivity”

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Video; Will Social Capitalism Replace the Corporation?

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On February 6, 2010

In General Information

Meet the new Org Chart

A corporation is simply a legal entity – otherwise, it is fictitious. A corporation is made up of people who have a social agreement among themselves to do what is in the best interest of the legal entity.

There is very little about a corporation that cannot be duplicated in social media. This calls into question the nature of social media vs. the nature of corporations.  Here we uncover a third pillar to the US economic recovery; Social Capitalism.

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Video: America; A Next Developed Country

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On February 5, 2010

In General Information

America is stuck in the Industrial Revolution. A loose paraphrase from Seth Godin points out “our entire education system is designed to prepare people to work in factories, consume stuff, and believe this makes us happy”

Now that the factories are gone and the rest of the World has copied all of our tricks (while not copying our mistakes) it is time to move on. What is that next watershed economic paradigm? Who is going to figure this one out? The one who does will define the new meaning of “A Most Developed Country”

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Dollar vs Rallod-A Mirror Image Economy

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On February 4, 2010

In General Information

The problem with the American Dollar is that it is backed by future productivity in the form of debt – that is, our “promise” to pay off the debt. We know this because if America signaled that it was not willing or able to pay it’s debt, the dollar would cease to be used as a trading mechanism.

Innovation is also a promise backed by future productivity. By innovating in a new processes, method, system, or product today you are making a promise to increase productivity tomorrow.

Therefore, debt and innovation are blood brothers or mirror images of the other – they are both “currencies” (means of storing value) backed by future productivity. We can build a new economy around this concept which effectively weeds out the bad parts and keeps the good parts of the institutions and infrastructure that are already in place.  After all, two currencies backed by the same underlying asset  would be fully convertable

After all, the definition of a crook is someone who steals someone else’s productivity. May the best currency win.

Dollar vs Rallod-A Mirror Image Economy

Update: 03/2015  I recently stumbled upon this definition in a Gamification Wiki concerning the Rallod.  Thanks for the shout out!!

Rallod (Dollar spelt backwards) is concept developed by Dan Robles as a social capital currency which is based on the future productivity of innovation. He uses the Bizarro world featured in DC superman comics to provide an explanation of how his concept works. He distinguishes between normal economics revolving around Land, Labour and Capital and social capital which revolves around intellectual, social and creative capital. What is tangible in the normal world is intangible in the Bizarro world and vice versa. Robles believs the two worlds are mirror images of each other.

Visit www.badgeville.com to learn about the global gamification leader

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Video: Intellectual Property in the Social Media Cloud

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On February 3, 2010

In General Information

The Patent system is slow, static, and expensive. Sure it’s great for corporations and wealthy institutions, but what about the rest of us? How do we get paid for our intellectual property? We make rapid fire decisions every day that can make or break markets – who’s got time to patent?

Or maybe the last thing that Wall Street wants is for Engineers, Architects, designers, and creative people to get “royalties” on their work. That is What Wall Street does, they collect the royalties of the creative people in America….until now. Social media is a social contract, IP is our currency.

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