‘Tis the season for “The Year In Pictures” – the annual new year pictorial accounting of the events of the outgoing year.  Any rational collection for 2011 would include three events; Arab Spring, The Earthquake / Tsunami in Japan, and Occupy Wall Street. These three events eclipsed the Royal Wedding, Steve Jobs, the tenth anniversary of 9/11, the space shuttle retirement and even the end of the war in Iraq.

These three events tell a very interesting story of who we are and where we are going as a civilization.  

Classical economists such as David Ricardo and Adam Smith brought us the idea that a merchant class allocates land, labor, and capital in various combinations as “the factors of production” that match supply and demand for all that societies need via the invisible hand of market capitalism.

Yet, in a single hour, land, labor, and billions of units of Capital were wiped off the surface of the Earth by in Japan.   While we see the images of total destruction, there are hundreds of square miles that were untouched and where all seems quite normal – except for that invisible hand of radioactive cesium.  Land, labor, and capital failed as a an economic cornerstone for all those who had once called this land home.

In the Middle East, with few jobs and even fewer opportunities for youth, the quaint notion of “land and labor allocations” crumbled under the forces of people with mobile access to dynamic data, free information, community knowledge, innovation, and wisdom. Governments, with no relative shortage of money, were unable to challenge the opposing factors.  Again, the idea of land, labor, and capital as the economic cornerstone had failed.

Quite appropriately, Occupy Wall Street was executed on borrowed land, with borrowed labor, and borrowed capital.   The operation was peaceful so nobody died. The stock market did not even crash.  Politicians went largely unscathed and the attorneys stayed in their collective offices. Nothing physical was actually created, and therefore, nothing physical was actually destroyed.  However, a great deal was produced.

All three of these events had something in common – they all produced something very tangible.  They all produced an idea in the minds of others.

As we review the year we review it is increasingly evident that land, labor, and capital are inadequate to articulate what people actually produce.  It will be through these shortcomings of classical economics that a new economy will form.  The degree to which society actually produces the things that society actually needs, this new economy should not look much different.  The degree to which society does not actually need the things that capitalism produces, great new ideas will emerge.

What was once the land of opportunity can now become a planet of opportunity.

Photo Credit: David Shankbone via Mashable 

Yesterday, I heard a report on NPR about the resource management department in North West Washington, in response to diminished funding – is certifying private boats for emergency duty in clean up, security, and rescue.  This is logical because nobody knows and understands the waters of Northern Puget Sound and The Strait of Juan De Fuca than the local tribes and others who ply those waters daily.

Today, I heard another report on NPR about how the City of Houston has gained far more from the demise of Enron than their existence.  Enron would recruit the top intellect in the country, move them to Houston and reward them for creativity and hard work.  The collapse of Enron released 4000 hugely talented people to the Houston Economy where many have started new businesses with remarkable success.

Vicious Circle or Virtuous circle:

I will not pass judgment beyond what these reports stated, except that there is something very valid about the “Knowledge Inventory” that exists in a community and their specific location.  The Jane Jacobs externality proposes that endowment of creative and educated people drives economic growth in a community by attracting investment and development, which attracts more smart people, etc.

Vicious Galaxies or Virtuous Galaxies

As the NPR reports suggest, the type of investment and development is dependent on the quality and quantity of knowledge assets that exist in a particular location.  Now, let’s extrapolate that to include all disciplines and talents of knowledge that exist in all communities and we encounter a stark reality that there is no knowledge inventory from which to build – except in the response to a failure such as the corrosion of government spending or in the wake of corruption and associated corporate collapse.

Yes, it is often said that adversity brings out the best in people, but is that really necessary?  Do we really need for the whole rig to collapse before we emerge from the ashes? 

We need to build the knowledge inventory today.  People need to know what people know – that is where the truth lives.   We need to know what can be built from the parts that we have in the bin.  We don’t want to try to build something from the wrong parts any more than we want to misallocate the right parts to build the wrong things.  In any industry in the world, none of these situations would pass the stink test, yet this is the state of our communities today.  We don’t even know that we don’t know what we know.  Seriously, is anyone else wondering about these things?

]]> http://www.ingenesist.com/general-info/do-we-really-need-to-fail.html/feed 0 http://www.ingenesist.com/general-info/it-is-time-to-evolve.html http://www.ingenesist.com/general-info/it-is-time-to-evolve.html#comments Tue, 04 Oct 2011 21:13:01 +0000 Dan Robles http://www.ingenesist.com/?p=6417

I saw a Fox News commentary on the Occupy Wall Street movement.  They interviewed a bunch of kids who were taking part in the parade and asked them a simple question: “So, what do you expect to replace Capitalism with?”

Then Fox, in their fair and balanced tradition, portrayed their subjects as the poster children of a failed education system (some children left behind after all) and further testimony to the failure of the Obama Administration. because obviously “These kids don’t know how the real world works”.

The Pundits can’t climb the tree any better.

Unfortunately, nobody else has an answer to that question either – none of the pundits or anchors produced anything except the tired argument that we tried Socialism and it failed so therefore more Capitalism is the only way to fix Capitalism.

It’s a Simple Problem

Market Capitalism only articulates value in the things that people make which can physically sit on a market shelf.  Market Capitalism does not articulate the value of individual people; those things that people make in society.

Of course, it is also a double edge sword since those that really don’t produce anything – like hedge fund managers, pundits, and politicians – will become impoverished. Meanwhile, those who really do produce things – like teachers, engineers, and firemen – will become wealthy.  So watch how the lines are redrawn in this debate.

How the world really works

The Internet and social media have shifted the factors of production away from land, labor, and capital to a higher order of human organization.  This is what we need to be talking about.  People today produce things with knowledge – social, creative, and intellectual knowledge.  These are the factors of production for that 99% of the value that exists on Earth.

A Simple Solution

After many a blue face, I’ll say it again; there is no way to build anything meaningful without an inventory of parts.  Car companies have inventories of parts, Banks have inventories of assets, even biology has an inventory of genomes – but there is no knowledge inventory for our communities.  We don’t know what we do or do not know.  We have absolutely no idea how valuable we are yet we complain that we’re impoverished.  Meanwhile corporation create technology to replace people when people could be just as easily be creating technology to replace corporations.

How on Earth can we determine supply and demand for knowledge assets without an inventory?  How can we expect to create any type of fair and rational economy from a bunch of invisible stuff milling around the parks?  There is no escape from Market Capitalism and no path to Social Capitalism without a Knowledge Inventory, period.

A Stunning Omission

This is a very easy problem to solve and we have all the cards waiting to be stacked in our favor using the tools that are right in front of our collective noses.  If we fail at something so simple, then we deserve to be enslaved.  After all, 100,000 years ago, such people would have been eaten by tigers.  It’s time to Evolve.

Wow what a week. I though that I heard it all until Mitt Romney said “Corporations Are people”. Actually, I admire Mr. Romney but I do struggle with this interpretation for his sake and those who he represents – and possibly an opportunity lost to rise above the noise.

In a way, Mitt provides us with a looking glass into the fundamental differences between the rich and the poor. The rich see themselves as the proxy for the prosperity of the poor. Meanwhile, the poor see themselves as the proxy for the prosperity of the rich. Neither side admits that they need each other, but I won’t pretend that I can solve this argument any time soon.  However, allow me to suggest that the winner of the debate will be the one that can evolve above the paradox.

The following video discusses how many components of a corporation – and government – are being duplicated in Social Media. The beauty of is that this great social innovation is available to anyone including the rich, the poor, the corporations, and the government. Oh, but wait – if the UK shuts down social media, they will effectively shut themselves out of the paradox, not evolve from it…Ooops. Be careful, Mitt.

So here is a video I made last year which, in a way, validates much of what we see playing out before us in politics, business, and social media.

There is a persistent myth that a “financial deficit” is looming to destroy all that fall in it’s wrath.  The only deficit is the inability for Money – as we know it – to articulate the value that is created in and by communities.

Social Flights is a new venture that combines cutting edge social technology with the universal truth that collaborative consumption of even the most complex system increases the efficiency of that system.

Social Value as a financial instrument

Social Flights attempts to demonstrate the inevitable – social value can and will be convertible to financial value. Social value can and will enter the balance sheet.  Social Value will not only impact the bottom line – it will become the bottom line.

The Invisible Hand of Social Capitalism

Social media is emerging as a dominant force behind economics, global politics, innovation, and community organization. Meanwhile; it is the art and science of finance that has failed to keep pace with technology.  Social Flights introduces a new class of business methods that can close this gap.

Social Flights sorts people and airplanes with data, not financial infrastructure.  The Value Game provides incentives for communities to organize themselves around travel and transportation assets.  So instead of forest-to-dump consumerism, a shared asset is preserved by a community for the greatest service life possible.  Social Flights demonstrates this with an airplane; however, a hotel, car, tour package, or a trade show/convention are quickly pulled into their own value game cycle given the airplane game playing out in proximity to them.  In fact all “assets” – social, intellectual, creative, or financial – can be pulled into their own value games in response to those acting around them.

Travel: An Ideal Benchmark Industry

We are starting with travel. Specifically, air transportation because of it’s complexity, high profile, and significance to most people and industries. Furthermore, corporate jets are beautiful, awe inspiring, controversial, and conjure the image of power and grace.  Most importantly, travel is pivotal enterprise and the best system for the diverse high-value transfer of new ideas to occur.

Nothing economic can happen until people get together to build something

The value of most commercial activity may ultimately become dependent on the quantity and quality of the data emerging from the millions of Value Games playing out in communities across the globe. Any and all shared assets – from public infrastructure to money itself – can be shared collaboratively in hugely profitable Value games.

New to the Public Domain

Nothing like this has ever been put together before so there is certainly much to learn.  Many people will fail to recognize where we are going with this. However, the rewards will be high and the implications will be vast if we are successful. There will be an extraordinary amount of knowledge to be share to the public domain.

Collaborative consumption is here to stay because it represents a higher value economy than forest-to-dump consumerism.  The financial deficit is simply the inadequacy of Money to articulate Social Value – not the inadequacy of people to be happy, creative, and productive in their communities.

]]> http://www.ingenesist.com/general-info/collaborative-consumption-is-here-to-stay.html/feed 0 http://www.ingenesist.com/general-info/the-value-game-cracks-the-monetization-paradox.html http://www.ingenesist.com/general-info/the-value-game-cracks-the-monetization-paradox.html#comments Sun, 20 Feb 2011 09:00:20 +0000 Dan Robles http://www.ingenesist.com/?p=5406

The Value Game is becoming increasingly generalized as more entrepreneurs seek to learn how to apply it to new economic realities.  The first company to launch is Social Flights.  Quickly funded, in full operation, booking jets and signing contracts, the Social Flights success trajectory has been truly remarkable.

The Ingenesist Project is deploying several more applications of The Value Game.  Our next venture is to develop Reputation Management for High Net Worth Individuals (HNWI).  Here’s how it goes.

The Social Influence Game:

Player 1: At some point, the government is going to stop supporting many very important social programs such as schools, health care, child care, retirement benefits, and possibly even close the charitable tax deduction.  In order to survive, social causes will need to come up with new forms of support or fund themselves with a new form of currency.

Player 2: Many politically and financially influential people in communities are finding that their “Google Results” often tell a story that is less than flattering.  Some have old lawsuits, unpopular business associates, or just too much personal information that presents a skewed picture of how they actually feel toward their community.  It is risky, difficult, and expensive to change Search engine results and it is nearly impossible to “control” what other people say.

Player 3: Legions of Social Media Gurus have long learned to aggregate and influence markets using social media platforms.  They have learned to match knowledge surpluses to knowledge deficits as a means of building their own online reputation and influence.  Many Social Media Gurus have achieved a strong Social Media Presence, which supports book tours, lecture series, personal brand image, or corporate clients and sponsorships. They constantly seek new content.

Converting Political Currency to Social Currency

The Social Influence Game will match HNWI with Social Causes where the HNWI can exert their political and Corporate currency in exchange for Social Currency.  Many HNWI have a powerful lifelong network of other influential people from whom they can find advice, mentorship, assistance, or discover goods, services, or physical inventory that may become useful and available to a struggling social enterprise.

Social Media Gurus who make these connections will blog, comment, and promote their ability to match power surplus to power deficit.  Internet Search results will redraw the Social Graph.

Holiday Shopping For the New Millennium

In practice, HNWI can “Go Shopping” for social causes.  When they find one that suits their talents and passions, they will be able to see what that organization needs; beds, food, heating oil, legal advice, CEO mentor, someone to lean on the land lord or even exert a position with the local government, etc.  The HNWI then will pull out their lifelong Rolodex of powerful persons and exert their influence in favor of the social cause through the interpretation of the Social Media Guru.

Winning The Game:

After a short while, Google will start pushing the old search results of the HNWI farther and farther down the page as the tweets, comments, and blog posts accumulate.   The Social Media Guru will find gold in their own backyards instead of Corporate Astroturf.  Social Causes will achieve their mission while managing new resources and earning important new friends.

Perhaps most importantly, the HNWI community will collaborate in order to sustain their Social Currency in the community.  They will begin to bias their personal and professional actions in favor of social priorities over Wall Street priorities.

In Short, everyone acting in their own best interests benefits the interests of everyone.  This is Social Capitalism.  If it works well enough, maybe we can finally put those pesky social causes out of business.

I recently returned from a trip from Seattle to Nashville. I am involved in launching a new airline applying The Social Value Game to a legacy industry.  The objective of this venture is to match a fleet of 15,000 private jets to social media networks for efficient door-to-door travel. The start-up is largely founded on the premise that a dismal travel experience is a dismal social experience.

Here is how my trip from Seattle to Nashville went using Commercial Airlines:

11:00 I get in my car and leave home for a 1:00 Boarding
11:45 Drive 25 miles through heavy traffic and bad weather, arrive at self-park car lot near Airport.  I get into a cold shuttle bus.
12:00 Arrive at Airport Security and strip down to last layers of clothing
12:15 leave airport security after long line after harassment over 3 oz of toothpaste remaining in a 6 oz tube and a telephoto lens that obviously resembled a printer cartridge.
12:30 Arrive at gate. Airline took my baggage away because it did not fit in the “Impossible box” and charged $25.00 baggage fee. (95% of all carry on bags would never fit in the “Impossible Box” so why me?)
1:00 Flight was full.  Poked, bumped, cramped, body complies to shape of existing space
1:30 departure was late. Connection in Salt Lake City was tight
3:30 Lands in Salt Lake city, late. No attempt to release tight connections first
3:50 Exit aircraft with 10 minutes to use restroom, grab sandwich, and run 1/2 mile to the next gate
4:20 Board flight to Nashville. Crowded. Window seat. Poked, bumped, cramped, body complies to shape of existing space
4:30 Flight leaves. 30 minutes into flight, I drop my Ipod under seats. Absolutely impossible to recover until airplane lands. No music, sucks.
8:00 Airplane arrives at Nashville (10:00pm Local time). Baggage claim took forever
9:00 (11:00 local): Finally get into rental car
10:40 arrive at hotel near location
11:00 (1:00 local) set alarm for 7 am local (5:00 am Seattle time) head hits pillow
5:00 am wake up sore, tired, and feeling oppressed.

Total Travel Time 12 hours one way and 24 hours RT door to door.

One complete day of productivity wasted. One day of life squandered. Zero time spent with my family or friends. Zero personal time to enjoy or reflect. Zero moments feeling secure, healthy, or self-worthy. 24 hours of confrontation with my surroundings. Zero moments of inspiration. Zero opportunities to be exposed to new ideas. Zero interesting people to learn from. Zero trees, flowers, sunshine, or fresh air. Zero fresh food; no fruit, vegetables, or raw nuts. Zero memories – except bad. No laughter, no friendship, no community. No exercise except running in fear.

The opportunity of the next economic paradigm is the ability to articulate the social value on all of these things – the ability to predict into the future the True Value of all the things that are squandered by an anti-social experience.  That is the essence of The Ingenesist Project.

Who Needs Anti-Social Travel?

With a private airplane, I could leave my home at 11:00 for a 11:30 departure at a small local airfield 6 miles from my house. The flight would have been about 4 hours long and I would arrive at my destination for dinner reservations with my colleagues. The flight would cost less than 1400 dollars round trip and I could return a full day earlier (eliminating 2 nights) than the the commercial flight for the same set of meeting objectives.

If a person’s time is worth 50 dollars per hour, the difference between 10 hours of flight time is 500 dollars off of a 1000 dollar ticket. The commercial flight costs ($300), including parking ($100), airport taxes($50), extra airline fees (50 dollars), car rental ($300), 2 extra hotel night ($400) for a total of 1200 dollars (I have the receipts to prove it).

So if 10 hours of your life is less than 200 dollars, then fly commercial. If your time, family, community – your life – is worth more than 20 dollars per hour, then you should consider taking America’s newest airline.

There are two sets of values in an economy. Financial value and social value. The value that is required to make something is financial value. The value that a product provides to a community of people is called social value.

Financial Currency

In order to make something, money is used to purchase raw materials and labor. After these ingredients are integrated, the product is then marketed, transported and sold for more money that the input costs. This is called financial profit in a system called market capitalism. The degree to which financial profits are gained or lost is the degree to which a financial value system is functional or dysfunctional.

Social Currency

When the product enters a community, it helps people to occupy their limited time on Earth in a more peaceful and productive manner. The product unites families and communities around human attributes such as happiness, joy, comfort, security, and wellbeing. This is called social profit in a system of social capitalism. The degree to which social profits are gained or lost is the degree to which the social value system is functional or dysfunctional.

Domination

In market capitalism, no enterprise is allowed to make less money than they consume for very long without being punished. Yet, in social capitalism there is no common means to even account for social profits or losses. There are no formal inventory of raw social materials, social value added labor, social marketing, transport, storage or exchange of social capital – the social value system is largely irrational.  The profit accounting and structural mechanisms are what make market capitalism dominant over social capitalism.

Bankers should be studied

For better or worse, the financial system works exactly as it is supposed to. Bankers do exactly what they were designed to do. They will do the same thing tomorrow as they did yesterday. Bankers are extremely predictable.  The problem lies in our irresponsible design for social capitalism and our dependency on anything but ourselves for economic outcomes.  All of the means and methods that we call an “unfair advantage” are available to each and every one of us if we simply copy bankers.

Look beyond the symptoms and you’ll find the cure

By virtue of the range, complexity, and scope of problems that surround our species it should be somewhat obvious that social capitalism is poorly executed. It does not represent a system of human attributes and values. Social Capitalism is unorganized, unaccounted, and unworthy to act in the interest of the participants. That is where the problem lies and that is where the solutions need to be applied.

Must admit that WE have a problem

Anyone can point their finger at the bankers and blame them for all the bad things in the world.  It is a completely different matter to exert the mental discipline to fully understand what makes a banker rational and what makes a banking system accountable, then to generalize this genius for applicability to ALL forms of Value, including but not limited to social value.  If the bankers accept or reject any value system, they will do it rationally.

Be a Banker

Social media provides an extraordinary set of tools for social capitalists.  Specifications that mimic the banking system in social media are readily available.  Important awakening projects are arising that take responsibility for the future rather than lay blame on the past.  It’s time that we all become bankers.

"Silence" by Horst Schmier

Coupon Madness

The business concept of rewards coupons is not new. S&H Green Stamps were among the original applications of the concepts. The fact that coupon cutting is now going on-line is not surprising to anyone. A second major trend is in the area of data collection. Supermarkets have learned that it is valuable for them to “pay” the customer in exchange for data that makes stocking and distribution more efficient. When combined, coupon + data is a tremendously valuable marketing and logistics tool.

The next development of coupon + data model is the notion that if a person likes a product, so too will their friends. This is the coupon + data + association model. Not surprisingly, the marketing value of the combination of these linked data increases almost exponentially.

To Pay Dearly

Brands are now willing to pay dearly for information about the transaction as well as the social networks associated with a transaction. With the ability to track several layers of transaction and association, vendors can paint an extraordinarily accurate predictive model that can be used in their favor – and in competition against market challengers.

The half-life of noise

The hype is brisk and often short lived as most companies eventually run up against the proverbial viral backlash. Someone somewhere can just as easily elevate their own influence by challenging a big influencer. Privacy issues, fair trade issues, corporate responsibility issues are all fair game. Social media forces transparency in an organization too as controlled data can quickly become uncontrollable data.

The battlefield is strewn with the corpses of marketing campaigns gone horribly wrong. Even Groupon, once touted as the champion of mom and pop shops across the land is now accused of dumping economic “sugar calories” into a zero sum game where size does matter – a lot. Groupon is now used by competitors against each other thereby wrecking havoc on Mom and Pop Shops across the land.

Help, I need a Guru

Social Media Gurus continuously pound home the message that they must find their customers grazing in their own pasture and engage them in order to be truly accepted into the herd.  Now the Gurus have all the vendors looking like wolves in sheep’s clothing – nothing could be more obvious or look more ridiculous.

The inherent flaw is that companies are designing and delivering products predicted to interact with people in their own setting. Instead, they must develop a set of products and services that are designed to facilitate human interaction with each other in their own setting – and as a consequence, filter out all the noise that wastes valuable social time.

Coupon + knowledge inventory + anonymity

Learning what people know does not mean that they need to give up their identity.   Joining people who have complimentary knowledge is a superior value creation mechanism than harvesting relationships already played out. The ability to protect and empower the customer in their home setting is the greatest branding opportunity on Earth. The ability to filter out the noise is the single greatest competitive advantage that any marketing campaign can ever enjoy. The ability to bring communities of people together to solve the problems of their own choosing is far more powerful than trying to convince people that they have a problem for which only you have the solution.

This is the capitalization of silence

Image by Horst Schmier

Editorialized Economics

Social media used to be so cool – a way to bypass the mediated reality of editorialized content. Real people coming back with real ideas and real opportunities from the crystal clear waters of cooperative community. Then legacy media and their ad-rev departments started to wonder “Hey, where did everyone go?” Marketer started saying, “Hey, these CPM numbers are F***ed – something is cutting into our pie ?!?!?”

Then came the Social Media Gurus

like the tattle-tale kid brother intent on spoiling a perfectly good game of hide and seek, screeching: “There they are, there they are!!!….Can you see ‘em?…see, see, your customers are hiding in the shadows… there, in the shadows….quick!!! Can you see ‘em now?.  By the way, pay my fee, buy my book, and did I mention my latest ‘keynote’ yet?”

Next, the Gurus went mainstream as legacy media analysts!! Legacy media picked up the ball on the run-away ad spend. They glossed poetic on the “effects” but not the “causes” of social media. And, OH Gawd, what a nuisance all those pesky bloggers are to the dignified art and science of professional journalism.

A Monster was Born

Facebook declared that people really want to share their personal details with the world, and a monster was born. So now we are stuck with Corporate Media on steroids.  Your data are scraped so they can find you. Images are reproduced infinitely. Lies and deception grow legs half way around the world before the truth can even be awakened from it’s slumber. Say one thing wrong and it haunts you forever.

Casualty or Causality

Social Media has become another casualty of the broken financial system where people fight for artificial scarcity.  It is no longer a means to empower and enlighten, it is becoming another means to exploit and oppress.   Special recognition goes out to all the so-called social media gurus. I can’t blame them though, everyone has the right to make an honest living.

Call it tattle-tale economics

Gambling with Jobs

The US Senate recently blocked a measure designed to reduce the outsourcing of US jobs that many corporations pursue in the relentless drive to reduce costs.

Modern Globalization is a system

Globalization must be analyzed like a system. Data, Information, knowledge, Innovation, and wisdom are profoundly related in a system. If you take away one of the components, the others become worthless.  If you destroy one component, the entire structure could fail.

Everyone knows that data, information, knowledge, innovation, and wisdom are related.  If I corrupt the data, then the associated information, knowledge, innovation, and wisdom are also corrupted.  Likewise, if I eliminate any of these elements, the system fails.

Focus on Core competency – what core?

The standard argument for outsourcing is that knowledge workers are better allocated in innovation jobs so “we can better focus on our core – and heck, we can all save a little dough in the process”.  But when we outsource our knowledge economy, the innovation economy is choked off.    The knowledge economy is the source of the Innovation Economy.  The Knowledge economy is also the recipient of the information economy which transforms data and information into useful tools, ideas, and products.

Rate Of Change is Innovation

The rate of change of the innovation economy is directly proportional to the INCREASE not the OUTSOURCING of the knowledge economy.  This is the calculus of outsourcing.  If, on the other hand, it is in you best interest to keep a population poor, weak, and unable to organize into powerful collectives, then yes, outsourcing is an effective method.

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 are peddled like newspapers, and flush pocket companies troll the halls looking for a cure for their bottom line reflux disease.

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 between people’s ears and can be deployed for the purposes of increasing productivity. Oh, by the way, knowledge makes more of itself every time it is deployed …. Interesting?

The Assumptions

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 (interest rate) 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.

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).

image source

Ingenesist.com

Music by Phil Felicia

Marketers need to recognize the order and permanence of human evolution. Once our species started to walk upright on two legs, we never permanently returned to walking on all fours.   Such is also the case between the lower social order of communication called “Information” and the higher social order of communication called “Knowledge”.  I will explain the difference now.

Social Value written or spoken to a medium is defined as Information.

Social Value which exists only between human ears is defined as Knowledge.

Likewise,

Social Value is created by transforming Information into Knowledge.

Social Value is reduced by transforming Knowledge into Information.

Once humans learn to create, store, exchange, and trade knowledge among each other, they will never return to the utterly primitive practice of mining and exploiting information.

If you agree with me then I congratulate you for your advanced state of evolution.  If you do not agree with me, then I apologize for the inconvenience.

Living in the Past

Advertisers have an especially hard time with this because it is their core competence to devolve human knowledge into information through data mining, social media espionage, and machine gun marketing – all without necessarily elevating anyone to a higher state of social order.   This is, by definition, a reduction of social value.

Consumers now walk on two feet in forming a strategic networks of knowledge assets in social media. Meanwhile advertisers still slither around on all fours pimping info biscuits.  Consumers can easily see when Value is being stolen from them so they simply ignore the screeches and clamoring of the devolved creature.  Or worse, a counter attack is a very simple – and often quite entertaining – using an evolved tool set.

Holy shit, I need a Guru:

So, the advertisers go off and hire a Social Media Guru to make the old evolutionary order all better again.  The Social Media Guru does all sorts of things that look civilized to a four-legged creature, but appear increasingly ridiculous to the evolved being.

Lo and behold, the advertiser is hugely successful in attracting lots of other four-leggers and believes this to be progress!! This makes the Guru into a Celebrity.  But still, the advertiser simply cannot get any attention from the two-leggers, who now control all the Value.  So, the advertiser goes back to the Social Media Guru who responds by joining forces with yet another Social Media Guru….

Surely two gurus are better than one, especially to those who still believe that four legs are better than two.

Social Capitalism can be summed up as Classical Capitalism except with the factors of production swapped from “Land, Labor, Financial Capital” to “Social Capital, Creative Capital, and Intellectual Capital”.

This video introduces a new way of looking at social media valuation. It should be obvious by now that people create value in social media – otherwise they would not do it. The monetization paradox is stuck on “how can this value expressed as a financial instrument”?

If you engage your clients in the same currency that they are trading among themselves, the greater the likelihood you will realize the value of the new media phenomenon.

People accumulate a wealth of knowledge in their lives as they pass from project to project and industry to industry.  Each of our social, creative, and intellectual pursuits and exposures combines to form the person who we are and the contribution to society that we represent.

Your knowledge and experience also helps others predict what preferences you may have and what decisions you may make. Corporations, advertisers, banks, insurance companies, and politicians all want to know this and they will go to extreme and expensive measures to get it – why not just sell it to them?

Peace sells, but who’s buying?

Management of companies, little league teams, Rotary Clubs, even raising a family, is extremely valuable knowledge to a wide variety of situations. Civic service, spirituality, military service, and philanthropy provide a basis for a host of knowledge attributes.  Academic accomplishment, physical achievement, artistic expression, manual dexterity, and whole body coordination provides great insight to the application of all knowledge.  Physical challenges, grief, personal struggles, and the experience of injustice further add to the wealth of knowledge one accumulates in a lifetime.

Every person is unique with a different set of knowledge than any other; therefore, everyone has something to offer to someone else.   Each person’s combination of formal and informal education is valuable in it’s uniqueness.  With the proper system and incentives in place, trillions of dollars are on the table to bid for access to your knowledge.

The Den of Thieves:

The resumes that we post on Monster.com are woefully inadequate and so heavily gamed that predictive utility related to your future decisions and innovative capacity is severely compromised.

The credit score also measures past behavior by tracking negative events; many of which are outside the control of the subject such as a layoff, fraud, medical emergencies, etc.  Again, the credit score is quite useless as a predictor of future decisions and innovative capacity.

Now we have Social Media and the mad scramble to be visible in social media space.  The scourge of marketers, spammers, and fraudsters are close behind chasing your information that they are all too happy to sell to the aforementioned “clients”.

Take a Step Back … and get a grip

We are talking about your information that describes your knowledge attributes which predicts your preferences, your future decisions, and your innovation.  Yet complete industries exist to collect it from you for free, organize it, and sell it to others for a great deal of money.  There are 5000 job boards collecting resumes, 300 Million credit scores being securitized by Wall Street, and 12,000 social media sites aggregating your creative content, relationships, and knowledge attributes.

Join The Ingenesist Project:

The Ingenesist Project specifies a system where your knowledge attributes are expressed in a packet of code that you control, distribute, regulate, withhold and track as you wish.

The result is that you will be paid to learn, to know, to practice, and to participate in life as you wish.  It becomes in your best economic interest to produce exactly what you are best at, and have a talent for producing.  It will be in the best interest of corporations, marketers, Wall Street, insurance companies, and Politicians to support you in these pursuits so they can “farm” the knowledge today that will buy their products tomorrow.

Sure Bro…Facebook, Twitter, and Linkedin are great for broadcasting across the Ocean, but how good are they for meeting your neighbors? As wonderful as all this global chatter appears, nothing tangible happens until the rubber meets the road.

Don’t Worry, Be Neighborly…

Nothing “Economic” can happen is Social Media until real people get together to build things. Sure, Marketers are trying their hardest to penetrate the last mile, but communities are trying to defend it too. This is the final battleground of Social Media. The end game must be as follows: Social priorities must ultimately drive Wall Street priorities – not the other way around. That is the only sustainable thesis for the next millennium.

The following video describes how the components of the next economic paradigm must act locally, but share globally. For anyone wondering what to do next or where the great opportunities are, think about building out the Last mile of Social Media.

The Value Game introduces a new class of business plans that will define Social Capitalism as a distinction from Market Capitalism rather than simply an extension of Market Capitalism (as most definitions currently hold).

This video begins with something called The Airplane Game – a project currently underway among a group of dedicated partners. Some of this material is found in other videos on our blog but the listener is encouraged review the ideas since this example forms the backbone of business methods which we will return to in later chapters.

This Video stands alone but is actually the 3rd in a series specifying Modern Social Capitalism. See Part 1: Introduction, and Part 2: Predictions.

All comments welcome.  Material based on video series here

In earlier articles, I described Social Media evolving into user-generated productivity in the new science called Social Capitalism.  A social currency will be required to represent ONLY real productivity, not simulated productivity.

Monetization means that social currency must be convertible with financial currency or accepted widely enough to stand alone across all phases of production.

What exactly will people produce in Social Capitalism and from what raw materials?

We know that buying a can of Tuna Fish at the grocery store is a very simple transaction.  This is because the institutions that support that transaction are incredibly complex;  there are catchers, processors,  banks, transportation, inventory, outlets, etc. – all are very complex pieces that need to integrated in order for that final transaction to be very simple.   |

Those same complex institutions must exists in Social Capitalism in order to ultimately make transactions in a social currency very simple and widely accepted so that one may eventually be able to buy groceries with it.

In classical economics, entrepreneurs deploy land.labor, and financial capital in various combination in order to produce stuff.

In social economics, entrepreneurs deploy social capital, creative capital and intellectual capital in various combination to produce stuff.

Now, what is the stuff of Social Capitalism?

WIKiD stands for Wisdom, Innovation, Knowledge, information, and Data.  Value in Social Capitalism is created by transforming one of these elements into another one of these elements.

For example: Transforming data into information creates value.  Transforming information into knowledge creates value.  Transforming knowledge into innovation creates value, and transforming innovation into wisdom created value.

We see this today

In social media bloggers transform data into information, people take that information and combine it with their own to create knowledge.  They get together with friends and share it creating new ideas that transforms their businesses.   This makes everyone wiser as they see the success or failure of their own or another enterprise.

All this value is being created there just is no way to express it in an economic paradigm except through some increasingly irrelevant association with Land Labor and financial Capital.

In WIKiD Tools, the word “Tools” refers to how each of the WIKID elements is related to each other.  You can’t have knowledge without information and you can’t have information without data, nor can you have wisdom without innovation.  If you take away one element you lose the others.  So these are all related.

On the other hand, you cannot create one without the others.

We can now say that wisdom is derived from trail and error, that’s innovation.  Innovation is derived from knowledge. Knowledge is derived from information, and information is derived from data, etc. These are the production “tooling”

Productivity:

The word productivity means all the stuff we can produce within a certain period of time.

So now we can say that:

• The value of wisdom is related to the rate at which innovation can be produced.
• The value of innovation is related to the rate at which knowledge can be produced
• The value of knowledge is related to the rate at which information can be produced
• The value of information is related to the rate at which data are produced.

On the flip-side:

Suppose a social entrepreneur wants to create value. They would simply look for high rates of change of information in a community.  That tells them value is being created and all they need to do is transform that information into knowledge and they will enjoy a profit.

If the social entrepreneur sees a diverse group of people getting together to share their knowledge about something, this is a big red flag that value is being created and all they need to do is transform that information into knowledge and they will enjoy a profit.

…Etc.

The Monetization of Social Currency:

This value can be measured sincee Internet analytics record all the required data and their time functions.  Analytics can tell the entrepreneur what information is aggregating and where. Entrepreneurs can determine  that diverse groups people are getting together at Conferences, Meet-ups, and Social Media Clubs.

Now, Geolocation will accelerate innovation as people populate the last mile of social media.  Deep web search engines are mining data at an unprecedented degree of relevance and inter-connectivity – all of it is measured with respect to time.

Done.

With WIKiD Tools, we have an extraordinarily powerful algorithm for creating,  measuring, storing, and exchanging value that we can represent with a social currency.  Since social currency represents real productivity (as opposed to Simulated Productivity) it can therefore be fully convertible to financial currency.

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

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.

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’

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

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.

***

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

Independence is a state of mind. Americans have always chosen independence – and they will continue to do so. It is often convenient to let ourselves trust elected leaders and the esteemed business titans to do what is in our best interest. Don’t be fooled, this is “trust”, not dependence.

It is likewise unwise to underestimate the independence movement – independence from corrupt currency, independence from fossil fuel, independence from corporate greed, independence from divisive politics, independence from endless war. Just when everyone thinks that Americans are up against the ropes, they come up with an idea so radical, so creative, and so astonishingly consciousness-altering, the rest of the world just shakes their heads in collective disbelief.

That is where we are today. Something extraordinary is about to happen in the way Americans organize themselves. Nothing is sacred, no one is immune. The next economic paradigm will alter the course of civilization.

All stages of human development were derived from the prior stage of human development by integrating the tools of that prior stage. For example, the agrarians integrated the tools of the hunter-gather such as using the chopping rock to till a field for planting – and so forth. Likewise, the industrial revolution integrated the tools of the scientific revolution; mathematics, chemistry, and engineering. Earlier this century, the computer age integrated the tools of the industrial revolution, etc.

The next economic paradigm will be derived from the Knowledge economy by integrating the tools of the knowledge economy; these are The Internet, Social Media, mobile communications technology, etc…

Americans will chose Independence every time.

The top ten reasons for business failure are due to a lack of knowledge, not a lack of money. In fact, the lack of money is itself a failure of knowledge.

Top 10 reasons why businesses fail

1. Lack of an adequate, viable business plan
.

2. Insufficient sales to sustain business

3. Poor marketing plan: unappealing product, poor customer identification, incorrect pricing and lackluster promotion

4. Inadequate capital, misuse of capital and poor cost control

5. Poor management skills: lack of delegation, leadership and/or control

6. Lack of experience and knowledge

7. Lack of managerial focus/commitment

8. Poor customer service

9. Inadequate human resource management

10. Failure to properly use professional advice: i.e. accounting, legal, financial, etc.

No excuses:

Lack of a viable business plan is an act of negligence where research, scenarios, and assumptions have not been tested. Market ignorance is not an excuse nor is the failure to know one’s customer. Death by poor marketing plan is knowledge deficiency related to product appeal, customer identification, pricing structure, and lackluster promotion. Obviously, one needs to know how to manage a company in order to be focused, let alone correctly estimate capital needs. Lack of customer service knowledge is deadly in the age of social media. Inadequate HR is an oxymoron – if it’s inadequate, it’s not a resource – human or otherwise. Finally, failure to listen to knowledgeable people is ego driven irrationality.

The financial system is not the only problem;

The innovation system (or lack of) is a crucial element. Information, knowledge and innovation, by any definition, are profoundly and inseparably connected. A failure in one kills the other two. So, just because an entrepreneur does not have the knowledge, does not mean the ‘knowledge’ fails to exist – it simply means that entrepreneur failed to find it.

So where is the knowledge?

Unfortunately, there is no public knowledge inventory – people do not know what each other knows. With social media raging all around us, there still is no way that anyone can assemble the knowledge needed to execute a business plan with a known probability of success given the information available. As such, there is no way to finance public innovation.

The emergence of Social Media technology presents an extraordinary opportunity to organize a knowledge inventory outside the construct of a corporation and marry it to the financial system, much like a corporation.

Tangibility of Knowledge

Knowledge tangibility must be the most important “innovation” in the pipeline today if we expect to meet the crushing challenges that await us. Just because we cannot predict innovation does not mean it cannot be predicted – it just means that we do not know how… yet.

The forecasting methods that we are developing at the Ingenesist Project have become sufficiently vetted and organized that I have decided to formalize them for review by others. The “WIKiD Tools” method is fairly simple to describe and demonstrate, but be assured, it is a powerful method for predicting futures outcomes.

WIKiD stands for:

Wisdom > Innovation > Knowledge > Information > Data

All five of these elements are related to each other – in fact, each is derived from the prior element by integrating the tools of that medium.  For example information is derived from data by integrating the tools of the data medium. Knowledge is derived from information by integrating the tools of information medium, innovation is derived from knowledge by integrating the tools of the knowledge medium, etc.

Likewise, if I want to predict innovation, I look for high rates of change of knowledge in it’s medium….and so on for all five elements as needed.

The chart below helps demonstrate the WIKiD Tools methodology.

The Hunter-Gatherer

About 50,000 years ago humans sustained themselves in a hunter gather economy. They would wander for food to eat and fuel to stay warm. Eventually they invented tools to trap their game and chop down trees so they no longer needed to expend as much energy and could remain relatively stationary.

The Agrarian

This led to the agrarian economy, the formation of towns, and the division of labor. A leisure class emerged to engage in philosophy and explore nature. New ideas were explored and the “scientific method” of observation and experimentation was invented

The Data Economy

With the invention of interchangeable parts in manufacturing, the industrial revolution became the dominant era of economic activity. The idea of industrialization separated production from assembly of parts. This allowed for greater efficiency and precision.

The Information Economy

The Industrial revolution generated a lot of Data and the invention of the integrated circuit turned these data into information – we now look back at the 60’s and 70s as the information age.

The Knowledge Economy

Widespread use of computers allowed humans to process the information in creative and unique ways – we now call this the knowledge economy.

Since there were many eras prior to this, we can expect that there shall be many eras following this – so we ask the question “what comes after the knowledge economy?

When we apply the WIKiD Tools Methodology:

We can say that each new era was derived from the prior era by integrating the tools developed during the prior era. We have seen the data economy in the industrial revolution, we have seen the information economy with Invention of the Integrated Circuit, We are in the midst of the knowledge economy with the advent of the Internet.

The next economic paradigm:

Now the tools of the Computer, software, and Internet connectivity are integrating around social media. From this we predict that an innovation economy will emerge by integrating the tools of the knowledge economy, specifically social media, mobile devices, software, hardware, and the internet.

The Wisdom Economy

Looking far far into the future, we can predict that the wisdom economy will emerge from an integration of tools developed in the innovation economy. The wisdom economy – with or without the current financial system – will have the greatest likelihood of achieving a sustainable human presence on Earth. Consequently, failure to achieve the wisdom economy presents an equally predictable outcome.

Henry George was discredited for many ideas which are now emerging in with the increased economic influence of Social Media, social capitalism, trade of limited natural resources, and the trade of social currencies in reaction to the demise of financial currency.

The new film “The End of Poverty?” begins with the same question which Henry George asked in P&P:

Why does poverty become a deeper problem as a society becomes more prosperous?

While times and technology are far different than 110 years ago, early ideas are sometimes essential to peel back the complexity and look for the “truisms” that drive the Human Condition. Only then can we find both our common ground and our common direction.

From WikiPedia: Henry George (September 2, 1839 – October 29, 1897) was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the “single tax” on land. He inspired the philosophy and economic ideology known as Georgism, which is that everyone owns what he or she creates, but that everything found in nature, most importantly land, belongs equally to all humanity.

[The following is a lose adaption from a 1993 article by Robert V. Andelson which can be found here with links dutifully provided by Stephen Nacci, 2010]:

…The method of discrediting Henry George is described in “The Corruption of Economics“

The book describes basically taking Classical Econonomics and distorting it by
artifically merging land into capital, and distorting Classical economic thought
with NEO- Economic thought, and pushing this agenda through media and
institutions… over the last 100 years…

Henry George’s first book, Progress and Poverty: An inquiry into the cause of
industrial depressions and of increase of want with increase of wealth… The
Remedy was self-published in 1879. It went on to become the best-selling book ever on
political economy,* and in the 1880s and 1890s was said to be outsold only by
the Bible.

*Political economy is the science which deals with the natural laws governing the production and distribution of wealth and services.

He went on to write several other important books including Social Problems, The Land Question, The Condition of Labor, A Perplexed Philosopher, The Science of Political Economy, and (published posthumously) Protection or Free Trade, and a number of articles and speeches, including The Crime of Poverty, Ode to Liberty, Thou Shalt Not Steal, Thy Kingdom Come, Causes of Business Depression, and Justice the Object, Taxation the Means.

In 2006, Bob Drake* did a thought-by-thought updating into contemporary language of Progress and Poverty, which was published with the subtitle “Why there are recessions and poverty amid plenty — and what to do about it. Or, download and listen to Bob’s MP3 here

We hope you’ll explore Henry George’s answers — and his remedy. We are persuaded that the problem of poverty can only be solved through recognizing what George taught.

Cory Doctorow in Seattle sponsored by The Stranger (Newspaper)

Activist, Science fiction writer, and blogger Cory Doctorow spoke at in Seattle to a full house at the Sunset Tavern in Ballard. He performed a reading from his latest book, “For The Win”. Cory has an interesting sense of abstraction. He’ll spot a trend – or collection of trends – and extrapolates them into the future dutifully revealing all the complexities of the human condition.

For The Win

His reading centered on the “exploitation” of young adults who are hired to play online games where they work to achieve levels, rewards, virtual currency, and game status which is then sold to rich Western players. Some players become highly valued for their knowledge inventory of game world monsters, strategies, power points, and the uncanny ability to assess the knowledge inventory of their opponents who’ll get suckered into a virtual dual with predictable consequences. The kids literally “mine gold”. As always, gold corrupts the most innocent hearts resulting in situations and behaviors at least as strange as the game itself.

The Activist

Cory has long been an activist for digital publication rights and rules. Not surprisingly, the Q&A was dominated by privacy, security, and exploitation of information issues. Cory recently closed his Facebook Account which caused quite a stir in the blogsphere. Ironically, every big name in world-class privacy violation had recently been in the news for Mr. Doctorow to eloquently spit roast on an open flame. It was quite entertaining.

There is a reason that it’s called Monetization

While Mr. Doctorow did not specifically mention this, what struck me most was hearing him talk around this emerging battle for control of people’s information. While this idea is not new, the reasons behind it may be new. As Money is losing it’s capacity to store and control value, human knowledge is increasing it’s capacity to store and control value – this is hugely accelerated by social media. The desperate attempt to control people’s information is really a proxy for the desperate attempt to control knowledge, therefore to re-control the value that money once represented.

Unfortunately, controlling information also destroys value.

People actively participate and share on social media to achieve levels, rewards, and status which is then sold to corporations in the form of predictive marketing by third party aggregators like Facebook. Some people become highly valued for their knowledge inventory of real-world game perils, influencers, and social mavens and become celebrities of the craft. Many develop the uncanny ability to assess the knowledge inventory of their opponents who get suckered into a virtual dual with predictable results.

Suddenly the News started sounding like one of Cory’s Science Fiction Novels…

Event Sponsored by: The Stranger

(Editor: I’ll be speaking at the following event on June 4th. If you are in the area or blogging issues in this genre of ideas, let me know and drop by. Look up the other speakers and you’ll find an extraordinary group of visionaries preparing to make this PM Cluster Summit a truly enlightening event.)

Enterprise Prediction Markets Summit:
Leading Enterprise Prediction Markets

Friday, June 4 2010 8:00am – 5:00pm

EVENT LOCATION: The Boeing Company: Integrated Aircraft Systems Lab Building 2-122, Conference Room #102L2 (Conference Center) 7701-14th Avenue South Seattle, Washington 98108 USA

EVENT REGION: US –Pacific Northwest

EVENT PURPOSE: This summit is for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and enterprise prediction market mechanisms to advance business outcomes through mastery of collective wisdom.

EVENT SPEAKERS: Dennis P. O’Donoghue (Boeing), Sharon Chiarella (Amazon.com), Arik Johnson (Aurora WDC), Dan Robles (The Ingenesist Project), Dr. Richard O. Zerbe, Jr. (Evans School of Public Affairs), Christel Alvarez, ConsensusPoint, George Neumann, George Daly Research Professor of Economics, (Iowa), Olav Opedal (Microsoft, Internet Security)

EVENT COST: $99

EVENT WEBSITE: http://pmclusters.com/Prediction%20Markets/SEA10.htm

EVENT CONTACT NAME: Jennifer Hulett

EVENT CONTACT PHONE: 714-784-0754

CONTACT EMAIL: Jennifer.Hulett@pmclusters.com

MUST ONE RSVP: Yes! No on-site registration

ATTIRE: Business Casual

BUSINESS CARDS: YES – Bring Business Cards

EVENT NOTES: The conference sessions are focused, practical and conversational. They are for executives, directors, mangers, users and practitioners having immediate needs to apply collective intelligence networks and market mechanisms to advance business outcomes through mastery of collective wisdom.

ORGANIZATION NOTES: The Prediction Market Clusters, founded in 2004, are the global industry commons and open community for prediction markets and collective intelligence networks worldwide. The open, agnostic network is a focused collaboration of vendors, academia, traders, users, developers, markets, regulators and stakeholders. The goal is to provide awareness, diffusion, adoption and pull-through for enterprise and consumer prediction markets. The Prediction Markets Cluster is the worldwide Next Practices network for collective intelligence networks practices, tools and theories.

PM Clusters

Prediction Market Clusters
http://www.pmclusters.com

Money is a convenient way to store and exchange value. Unless the world enters into a free trade agreement with Martians, Earth is the physical boundary of all existing value.

No matter what a monetary currency is called or how it behaves in the financial system, by definition, it can never represent any more than the value that exists on Earth.

Value is reflected by  ”Market Capitalization” of corporation, Roads, Bridges, infrastructure, armies, education, food, real estate, and all so-called tangible things. Intangibles such as human resources, public assets, and shared natural resources are only valuable to the extent that people depend on those resources for survival. Not surprisingly, “tangible” means all things that can be controlled and “intangible” means everything else.

However, if you look at how all value is created, it all eventually boils down to human knowledge.  All control and influence over human knowledge boils down to the individual. All Value on Earth is stored between our collective ears.  In order to fully assess the global financial system, there must be a corresponding global inventory of human knowledge.  There is no body of any influence in the world proposing this as a means of defining solvency.

Meanwhile, the social media revolution is slowly introducing a global knowledge inventory to financial markets with effects that are becoming increasingly profound. In case you have not noticed, money no longer represents value, it represents the control of value.  Social media is disrupting who, what, when, where, and how all the value can or cannot be controlled.

With every new exotic financial maneuver, the monetary currency becomes increasingly divorced from the value of human productivity.  With every new advancement in social media applications, human productivity is becoming less controlled by money.  Watch the news – the battle fields are all about who what when where and how someone can control what is between your ears.

Not surprisingly, governments, marketers, advertisers and even academia are the first and most public victims of losing control of their message.  Their message is being re-written by forces outside their control.

This is serious – Don’t let anyone try to convince you that the value of social currency is not hedging the value of financial currency.

Today, we are on the cusp of the greatest revolution that the world has ever known. The control of money may go to the banks but the control of value will not.  It will happen when people decide it will happen.  Perhaps they already have…2012 anyone?

There are two sides to the Social Value Equation – the creation of social value and the destruction of social value. There are countless examples where innovation destroys the value of prior technologies. There are also many instances where “progress”, perhaps in the form of a freeway or public structure, divides a community where strong social bonds once acted.

In the presentations that I give, I often cite the value of a bridge over a waterway. The bridge may cost 50 million dollars to build and maintain, but it increases human productivity by 50 billion in the life span of the bridge. We often cite a factor of 1:1000 for the valuation of the dollar to social currency.

Contrary to that, Jane Jacobs (renowned urban theorist and community activist) may argue, the bridge (and roadway) may divide a community or neighborhood. Where the community may once have been scaled for foot traffic, the new boundary may require a car to circumvent. The new road may divert old commercial traffic in many ways that are bad for a community. In such a case, the social capital destroyed by the bridge is in fact the dominant financial outcome.

So here I am, I just destroyed my own best analogy to demonstrate a point. Without vetting the complete transaction in the form of social currency, net “progress” of any kind is as easy to leverage backwards as well as forward at a rate of 1000:1.

Communities that seek to stop a disruptive development program will often organize to protest urban development decisions. Unfortunately, they are usually up against a calculation of economic impact that is dominated by dollar denominated currency. Without a “Social Currency” of their own, quantified and convertible to dollars, communities are doomed. Law suits will play out in the same manner where damages are non-quantifiable, and therefore non-existent.

Jane Jacobs also writes that a community that can place a value on their social currency – although I do not think she explicitly called it that – and can act to preserve value or increase value by their actions. Many communities from Greenwich Village to Boston have thrived under a social currency diverting projects away from sensitive communities. The Big Dig went underground in Boston much like the The viaduct replacement project will do the same Seattle. Granted, the Seattle project mainly preserves water and mountain views for million dollar condos, this concept, in fact, would be more critical to poorer communities than wealthy ones.

Obviously there is no way to impede progress. All innovations destroy prior value in the creation of greater value. The danger is when Wall Street priorities can dominate Social Priorities. Capitalism, for all the greatness it creates, is amoral. Capitalism is committed to dollar currency, and devoid of social obligation except to the degree that obligation is profitable – that is where social currency converts to capital currency.

Through the magic of the fractional reserve system, Banks create money backed by debt vs. deposits at a factor of 1:1000. Therefore, the convertibility of social currency with a capital currency at a similar factor of 1000:1 is essentially the only effective way to convert Social Priorities into Wall Street Priorities.

It seems ironic that people are using Facebook to urge others to quit Facebook. If they take their own advice, they would no longer be able to give their golden advice to others. If we took their advice, we would not be able to heed the advice of others in this matter.

Is Facebook too big to fail?

The human race is becoming a super-organism of connectivity. Companies like Facebook are duplicating the functions that governments have performed – by various methods with diverse consequences – since the dawn of civilization. There is nothing new about Government organizing society and pandering to corporations. There is nothing new with people protesting governance. There is also nothing new with forms of governance being replaced by an evolution of human consciousness.

The Next Wave of Innovation in Social Media?

First; Facebook itself has no value other than the value of the people and their networks. As such, Facebook behaves like a financial derivative – it is not the actual item of value, it is simply a utility contract representing value.

Second; Facebook can only deal in information – it cannot deal in “knowledge”. Your information is a derivative of your “knowledge”, not the knowledge itself. The real value of a social network is in what lies between the ears of the members. Therefore, one way to encrypt the information is to encrypt the knowledge.

Third; Suppose that your “resume” were coded as a list of numbers and operations representing the quality and quantity of the things you know. Suppose the people in your network were also coded in a similar fashion. As such, your network, would be a combination of these codes. If you really “know” someone, it would be easy to find them. If you don’t know someone, it would be impossible to find them.

Fourth: The game changes because the incentive now is to “Mind Meld” with real people. Marketers can only then profit by telling the absolute truth about what the product is and the affinity that the product serves – anything else defaults to a “no-sale”. The person can then set filters to be notified of products and services that can make them more productive in pursuing the things that they love and care about – their community.

An Emerging Evolution

Many People cite Cluetrain Manifesto (1999) as the start of this higher consciousness. Cory Doctorow introduced a concept currency called the Whuffie (2003). Tara Hunt, Chris Brogan, Brian Solis, Seth Godin, Clay Shirky, Jay Deragon, and many others expanded the idea of trust and reputation in the formation of social capital and associated social reorganization. As these ideas are reconstructed, especially in a form that is independent of the construct of the Corporation, Social Capital is emerging as a highly complex instrument – not unlike a derivative.

If not human knowledge, then what?

Now we notice that Facebook, Whuffie, and Wall Street Dollars are all built on derivatives where the underlying value is human knowledge. That is where all the man-made value on Earth is stored, period. The value stored by Human Knowledge hedges all bets. Nobody has a monopoly on it, but everyone is trying to figure out how. To do so would be to destroy it.

Code knowledge to set it free.

Despite all of the grumbling about Facebook, Wall Street, and all issues Political, there is a clear path toward a higher purpose in all of this. We should ponder this and be quite grateful.