Participatory Free Market

This post marks a departure from the “creative” direction taken by this blog until now, into the uncharted territory of “new economy”. Life follows art and art is taking this author on a trip beyond the boundaries of what most creative professionals tend to concentrate their efforts on. Hang on tight, this is likely to be a bumpy ride.

The text below is based on a PechaKucha talk I gave last week, two weeks after the idea of “participatory free markets” first crystallised in my head. If you don’t know PechaKucha, it’s an evening of lightning fast presentations by members of “the creative professions.” Mine was something of a departure from the norm on the night :) The slides (an abridged version from the mandatory 20 on the night) are embedded below. If for some reason you can’t see the embed, they are on SlideShare.

My entire professional life has been spent, some would say mis-spent, on photography and publishing. I’ve done a bunch of books, taken one or two decent pictures and worked with some cool people, so naturally tonight I’d like to talk about … the fundamentals of economics.

This is not as stupid as it sounds since the ideas are actually very much related to my current project, This is an internet startup, a media community for travellers which we are building according to the ideas I’ll be talking about.

Capitalism in the modern form has been with us since the time of the Renaissance and its basic principles have been around since the 18th century when Adam Smith wrote his “Wealth of Nations”, but we could say, it’s been a work in progress all along. Marx, the bearded guy on the left, thought he could improve it and we know how that ended up. The next guy along, Rockefeller, perfected it and was the richest man on Earth for a while. The lady here, Carly Fiorina (an accomplished business leader – check out her career if you don’t know who she is) is one of many women who’ve shown that girls can play too, and win. As for the guy on the right, (Madoff) well he just made off with a lot of peoples’ money and is now behind bars.

So you could say we are now at a cross-roads as to how capitalism can develop next. In fact we are living at an evolutionary moment or at least a moment which could have a chance to be evolutionary, given enough persistent work by visionary individuals, not unlike Brother Martin here, (Luther) who nailed 95 theses to a famous cathedral door, starting a process of change. Well, ten years ago four people wrote another 95 theses, accelerating a process of change which was already underway (“Cluetrain Manifesto”.) The key here is thesis #2 : “markets consist of human beings”. What McLuhan foresaw (“The Medium is the Message”, “Understanding Media”) has now come to pass, of course, and over the last ten or fifteen years a number of bright people have looked into the subject of technology freeing up economic potential, starting with Yochai Benkler – we’ll meet him again in a moment. (“Wikinomics”, “Remix”, “Tribes”, “The Long Tail”, We Think”, “Free”, Here Comes Everybody”, “New Rules for the New Economy”.)

Well thanks Mr McLuhan. We now not only can but often have to do jobs which were generally not just unavailable to us – we may not have known they existed. We are competing against everybody else in this global village and everyone now has the potential to become a publisher. But at least we now have the tools, and of course I don’t mean e-commerce, which in itself is somewhat old now.

We are witnessing the birth pangs of an altogether new e-conomy, enabled by technology and populated by visionary companies such as these (Fon, Threadless, SNDA, eBay, Second Life). These are not commerce websites, these are enablers of parallel economic systems. How big is this creation of parallel economic systems? It’s big already but it’s actually still just the beginning. If eBay were a country it would be in the top ten economies of the world, and we have barely begun.

Yochai Benkler puts it very elegantly – this is in fact my email signature now (“Technology creates feasibility spaces for social practice.”) Instead of the social fabric being torn apart by progress, we can actually coalesce around common interests and ideas, thanks to the available technology. This is as much an economic process as a social one. In fact this other bearded guy (Marx) had some of the words almost right but it is only now that we are at the dawn of an era of great individual opportunity – combined with equally great individual responsibility. So we’re talking libertarianism rather than communism.

It’s already been amply demonstrated that everyone can be a producer of goods or services as well as a consumer within the context of the network but we do have to deal with the 80/20 rule, the Pareto distribution (another bearded guy.) A minority of people will always contribute the most, own the most and earn the most but it also means that a lot of people CAN participate down here, along the long tail, and this area right here, at the curve, is where the participatory free market will work.

People are people and Pareto is not going to change his ideas any time soon but with the emerging opportunities we can try to at least flatten the curve here. And this is the new idea. I think we’re actually headed for the emergence of something best described as participatory free market or markets, plural. These are plateaux of aggregated, vertical market-specific economic activity by individuals, enabled by technology and run in ways that are just beginning to be invented.

I googled this term when it first occurred to me. Imagine my astonishment at the google whack – which actually had nothing to do with the phrase I was looking for. The other column is from a week later when I’d tweeted the question of what people thought the term might mean and began to get replies.

So we can see that we are in fact drawing new maps of the world which are actually maps of our social and economic interactions and not maps of topography. We can change the status quo, and I don’t mean the 70’s rock band. In fact these maps are numerous, they overlap and many of the places they represent have the potential to become discrete but related participatory free markets which are not based around geography but around ideas and social interactions. Of course, there are going to be bumps in the road ahead but these are pretty much all related to human nature rather than technology. Technology is easy by comparison. Not least of these is EBI: extreme bureaucratic idiocy – also enabled by technology, which is actually neutral.

This is a work in progress and I look forward to your comments. I’m not an economist and I certainly don’t play one on the wireless so, I’d really like your thoughts on where capitalism is going next and how we can create new spaces for economic and social interaction. Here are some of the conditions that need to be satisfied (“privately owned, technology enabled, individual opportunity, individual responsibility, fair and simple rules, long tail”.) I’m sure there are more, we need visionaries and explorers in this new space, and I look forward to your comments. Thanks and have a great day.

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