Growth Part 3: The New Economies

This post is heavily indebted to the work of Gregory Rader who created the chart that first sparked my realisation of a realistic lookout for alternative economic models. 

Rader's chart take's a little bit of explaining to fully understand. The x axis shows the relatedness of participants in an exchange and the variable thereof. So, more related parties will have a greater amount of trust born of contextual knowledge of each other. Transactions at this end have more of a chance to be slower, being paid back over a long time and be more qualitatively related, intuitive and holistic.

The y axis shows refinement, which is a slightly more complex variable. It refers to the product being exchanged. At the refined end, the most effort is being put in by the producer to ensure utility of the product. Therefore its value is readily apparent and easily consumed with little effort. At the other end, the product might be more abstract, taking a lot of effort from the consumer to make use of in order to extract utility and its value might be uncertain.

I would invite thought about a third axis - time. Transactions happen at different speeds and over different periods of time and these can be key values. A future's contract might not mature for ten years but might be traded hundreds of times a second. A debt to a friend might not be paid back for weeks while buying something from a shop is near instantaneous. However, this might complicate thing too much.


So let's begin to plot some things on here. I've put them in groups for ease of understanding. Again. I have to emphasise that this is my reading of Rader's chart and my application of it.

Firstly the Apple MacBook Pro and the Arduino. Both are in the transaction quarter, in that they are both made by unrelated parties for a demographic they are not personally familiar with but both have different degrees of refinement. The Apple is almost entirely complete, requiring little input from the user, while the Arduino needs some input from a user who understands how it functions and how best to utilise it. However, the Arduino is not so abstract as to be in the realm of the attention economy in that it is still a tangible product with intended application.

Secondly, the Twitter accounts. One of a friend would have a high degree of relatedness. You would hold conversations and the relationship would be reciprocated but the product is mostly unrefined, non-specific and requires effort on the consumer part to utilise. The celebrity account requires less, in that there is familiarity and an acceptance that it fulfills a semi-marketing role and it is not as related in that there is no consistent responsiveness.  As it gets more popular, it may in fact move into the attention economy, where it has enough 'clout' to sway attention.

Thirdly, the gift and collaboration.  A gift for/from a friend is given with the understanding of an intangible reciprocation, now or at a later date. No quantitative agreement is necessary and there is an intuitive understanding of it's significance although it's utility may be very obvious (i.e. a bottle of wine etc.) Collaboration on the other hand is more abstract, being a sharing of ideas it requires a certain agreement to the nature of the relationship and effort on the part of all parties to ensure that proper utilisation is achieved of any ideas that are born of the collaboration.

Fourthly are the attention products. As there is no social or cultural paradigm for the attention economy, most of the products here work to push the consumer into one of the neighbouring quarters. For instance, advertising which is as unrelated as any product takes effort for the user to move up into the transaction quarter for the end product while a service liked LinkedIn aims to draw people who share similar intangible ideas or understandings into tighter relationships so they can form collaborations or friendships.

But this map could be further distorted. Recent shifts through technology and wealth distribution mean a skew on this chart. Again, this is something Rader touches on but I think is vital if we're to think about new models of growth in order to understand the relative value of each economy and the amount of activity within them.


So, we have these shifts in the way we interact in that more and more of our exchanges are taking place outside of a monetary mode of exchange. I.e, to refer back to Part 1, the transaction cost for all the economies except for the transaction quarter are minimal - in most cases, only the cost of an Internet connection. I've put a few more examples on here, but note how with the growing power of the attention economy the Celebrity Twitter account has moved into the attention economy since it now holds clout over how we move into the other quarters. 


Placing my own work within this framework provides an outline of where the area of interest lies. 88.7 situates itself on top of the 1%. The product is highly refined, very specific, so refined in fact it requires almost no input from the user - becoming an abstract source of growth. At the same time the process is so rapid as to be entirely anonymous. It also serves to concentrate monetary wealth more and more and ensure the shrinking of the transactional quarter. New Mumbai on the other hand presents a world of trust and proximate gifting, the type of economy we could expect more of as disparity grows with the shrinking transactional quarter. The community involved find themselves in a shared circumstance that re-enforces familiarity and trust. This results in a variety of goods being traded, some more refined than others such as the mushrooms, some less such as the expertise to use them. All this is done on the basis of reciprocation and understanding granted by close relationships. 

Where we look to now is the opposite quarter, the one of interest to economists and techies alike. The intangible unrelated content, the swirling of ideas and irrelationships between anonymous, distant parties. What does this look like and how might it manifest itself? At the moment, activities in this quarter try and push us out into one of the other economies that we are much more familiar with, how might the Attention Economy function on its own?