An economy of abundance

The key question: how can we better conceptualize the switch from an economy of scarcity to an economy of abundance?

Last night, Leah and I had the fantastic opportunity to fly down to San Francisco to hear Tim O’Reilly speak about the birth of the global mind. As a long time listener of the podcast, it’s always been my dream to attend a Seminar About Long-Term Thinking. The essence of Tim’s talk is well-encapsulated in an essay of the same title. One idea posed in Stewart Brand’s interview at the end touches in the nature of economy in the information age.

Economy, in my perspective, is our way of understanding how we work together. We take many things about it for granted — GDP as a measurement of growth, monetary instruments as our tools for transaction — that aren’t actually hard truths. They exist because at some point along the way we invented them to make our society more prosperous with less effort.

A peculiar situation has manifested itself. Most recently with the web, we’re inventing newer, better ways to function together that are essentially “extra-economy,” or outside how we normally measure economic activity. In these systems, far more value is being created than being captured; and for many, the generated value and associated recognition is more important than financial gain because they lead to influence.

For instance, in what I do with Automattic’s WordPress.com VIP team, a not-insignificant amount of my time each day is spent contributing to open source projects. We don’t directly monetize this work but it generates value that trickles back to us. Releasing our liveblogging plugin has already resulted in several useful contributions from the community. Making money from open source is a hack though, as our currencies are based in scarcity and our peer economies are based in abundance. In the latter, the more people participating means the more everyone benefits.

Our bootstrapping of a new mode of economy is happening hand in hand with another trend: increased productivity making certain types of jobs obsolete. A hundred years ago, the number of people involved in food production was X while today it has dropped to Y, a ten-fold decrease. While we don’t yet have the nutrition we need, we’ve certainly been able to meet our caloric numbers. Douglas Rushkoff observes “we’re living in an economy where productivity is no longer the goal, employment is.” For our government, the focus is to keep the populace in jobs, because unemployment breeds discontent and has a perceived negative impact on our traditional perspective of economy.

I have no idea what comes next. I see an economy of abundance as generative, whose engine is creativity in the very literal sense of the word. And it’s additive too; what’s mine can be yours and vice versa. Don’t ask me “how do I make money?” because I don’t know. That’s the old way of measuring economy and we haven’t invented the new one.

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While it is conceivable that PayPal could become a ‘financial API’, capitalizing all of the pieces of a production value chain, PayPal, like eBay, is an artifact of the transition to hyperconnectivity, an arbitrageur exploiting imperfections in hyperconnectivity. Once everyone is directly connected, it is possible to transfer capital between peers, without any mediating exchange service.

Given the capital flow restrictions of central banks, fiat currencies can not be employed in transactions crossing international boundaries. Instead, individuals and organizations will begin to develop their own exchange mechanisms, perhaps based on precious metals (a de facto return to the gold standard), but more likely employing virtual currencies: perhaps kilowatt-hours, abstract ‘labour units’, or other measures of value.

[…]

As capital migrates from friction-filled national and international finance markets into hypereconomic frameworks, institutions dependent upon those frictions will be threatened. Banks will not be able to collect interest. Governments will not be able to tax – customs duties and user fees look to be the only ways governments can generate revenue. Courts will not be able to seize assets. The peculiar arrangement of laws and regulations which keep our economic system stable will grow increasingly meaningless. Governments and courts will try to follow capital flows into hypereconomic zones, only to learn that their mechanisms of control and enforcement are poorly matched to such a fluid environment.

Mark Pesce — Hypereconomics

Hyperconnected education

Thirty-seven percent of children between Kindergarten and Year 2 have their own mobile (of some sort), with one fifth having access to a smartphone. By Year 8, that figure has risen to eighty-five percent, with fully one-third using smartphones.

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The next years are an interregnum, the few heartbeats between the ‘before time’ – when none of us were connected – and a thoroughly hyperconnected afterward. This is the moment when we must make the necessary pedagogical and institutional adjustments to a pervasively connected culture. That survey from last year found that even at Kindergarten level, two-thirds of parents were willing to buy a mobile for their children – if schools integrated the device into their pedagogy. But the survey also pointed to opposition within the schools themselves:

“When we asked administrators about the likelihood of them allowing their students to use their own mobile devices for instructional purposes at school this year, a resounding 65% of principals said “no way!”

Mark Pesce — Hyperconnected education