Jack William Bell's Journal: Reputation Systems as Economies

Notes Toward a Moderation Economy is a fascinating Kuro5hin article that takes an economic view of moderation/reputation systems like /. and Kuro5hin.

This is something I have spent a lot of time thinking about myself, albeit in a somewhat larger context. As far back as 1997 the examples of /. and Epinions.com had me wondering if a computer moderated reputation system could be used as a kind of currency. This became my answer to a common question in SF circles: Given that one effect of nanotechnology and robotics is an end to scarcity and given that the money economic systems we have now are built on scarcity -- what happens to money economies in a post-scarcity world?

In these discussions the usual answer given is that human creativity will retain value and that people would still buy and sell hand-made items, artwork, books and songs. But this rings false to me on a number of levels, not the least of which is the fact that not everyone is talented enough to participate in such an ecomomy. A more important problem with this answer is the fact that, with the exception of hand-made items and original artwork, this actually relies on the continuation of false scarcity by requiring intellectual property limits which could not be maintained in a digitally networked world. (All this was before I ever heard of DRM of course.)

Reputation ecomonies, however, could be based on anything people valued in other people -- not just their personal creativity. And such a currency would bring value to the creator of a song even if the song was freely traded without intellectual property limits. So, should money ecomonies collapse, you could still have a valuation system built on how others percieved you.

Of course I was not entirely certain how something like this would work, but I also wasn't the only one thinking about it. In 1998 Bruce Sterling published 'Distractions', which I reviewed on Epinions.com. 'Distractions' is set at the earliest cycle of a post-scarcity future and includes, almost as a throwaway subplot, a culture of ex blue-collar workers who were entirely marginalized because they had no skills of any value. However groups of them did have machinery which could turn any vegetation into edible food so they didn't have to starve. Also they could make things, provide entertainment or could do manual labor in exchange for anything else they needed. These groups travelled about, living in tents and other temporary housing, existing entirely outside the 'real' economy. In fact they had their own economy, built using a computer mediated status system, which determined each individual's worth and clout.

I remember talking about this kind of thing at SF conventions back then; using /. and 'Distractions' as examples. But I didn't make much headway; even on panel discussions about the future of money people often had a difficult time accepting something so far outside their normal experience. They often insisted that you could not have an economic system built on reputation, even when I could get them to agree that reputation is limited and can be measured. Meaning that reputation meets the requirements of establishing a thing's value.

Since then things have changed. For one thing more people have personally experienced reputation systems like /. and Kuro5hin. For another Corey Doctorow published 'Down and Out in the Magic Kingdom', an SF novel about a post-scarcity future with a working reputation economy where reputation is measured in 'Whuffie'. Now, suddenly, everyone is talking about it. The Kuro5hin article linked to at the beginning of this rant is another brick in this structure of thought and it brings up many interesting points. Before long I expect to see articles in Newsweek and Money magazine about such alternative economic systems. Followed by schools teaching this new theory of economic valuation...

But then again, maybe not. After all the basic idea is damn subversive at its core since, in a reputation economy, you would see major shifts in the kinds of people who become 'rich'. Certainly 'stars' of every kind would still be on top, but could today's 'captains of industry' retain their position? I doubt it, and quite likely therein lies one reason we have such a strong push for DRM and other artificial barriers to the free-flow of ideas and creativity in which reputation systems work best.

Your thoughts?

Artifice

[gmhowell]

First, let me just say odd coincidence. When I went to the movies today, they had a trailer for 'The Haunted Mansion', which happens to be my favorite ride at Disney World. And it reminded me of 'Down and Out...' which I read a few months back. And now you write this JE.

My biggest concern is one you alluded to: 'stars' would be even wealthier than today. Gates, love him or hate him, has brought much of the modern computer to market. Couldn't do that with whuffie. Would Michael Dell or Steve Jobs be doing a

Re:Artifice

[Jack William Bell]

My biggest concern is one you alluded to: 'stars' would be even wealthier than today. Gates, love him or hate him, has brought much of the modern computer to market. Couldn't do that with whuffie. Would Michael Dell or Steve Jobs be doing anything? Probably not.

I believe Steve Jobs would be even more successful in a reputation economy than he is today. Michael Dell might not. OTOH, in a post-scarcity world v Jobs would be more beneficial than Dell, so in a way that reinforces my point.

Would we have bui

Down and out...

[LadyGuardian]

I loved that book. Whuffie rocked. I made sure some friends of mine read it and the first thing they said to me was how they desperately wanted Whuffie. I realize this is an unproductive comment, but I thought I'd share ^_^

Re:Down and out...

[Jack William Bell]

My review of Down and Out is here [slashdot.org] (scroll down).

I found it interesting that Whuffie and an end to scarcity didn't make everyone's problems go away in Doctorow's future, rather it changed motivation and methods. In the end people were still people, trying to do things for their own aggrandizment and justifying their actions to themselves as having a higher purpose.

But yeah, it would be interesting to have something like Whuffie for real. In some respects we have that now with /. and Technorati [technorati.com].

Reputation is not transferrable

[Sloppy]

So, should money ecomonies collapse, you could still have a valuation system built on how others percieved you.

Ah.. but who are the "others"? It turns out, it's not everybody. Each person perceives you differently. Reputation is subjective and there's no universal agreement on the exchange rates between the "karma points" of two different people's reputations.

For example, people on your friends list assign a higher value to JWB-flavored-karma than people on your freaks list. Could I make a profit by

Re:Reputation is not transferrable

[Jack William Bell]

That was the point of reputation 'equity' -- in that form reputation is transerrable because it costs you equity to boost someone else.

You do make some good points. And you have also touched on some other ideas I have had. For example reputation 'futures'.