Attention Economy
Attention EconomyA visionary article by Michael Goldhaber published in FirstMonday April 1997.
"If the Web and the Net can be viewed as spaces in which we will increasingly live our lives, the economic laws we will live under have to be natural to this new space. These laws turn out to be quite different from what the old economics teaches, or what rubrics such as "the information age" suggest. What counts most is what is most scarce now, namely attention. The attention economy brings with it its own kind of wealth, its own class divisions - stars vs. fans - and its own forms of property, all of which make it incompatible with the industrial-money-market based economy it bids fair to replace. Success will come to those who best accommodate to this new reality." -- MichaelGoldhaber
If correct, the transition to an attention economy will be the most significant shift to occur in centuries. One of its consequences is that money will lose all value.There are familiar examples of - call 'em what? - "half and half" economic systems of attention. We know that an attention economy can be structured by subject to reflect, say, the physical classification or the cash value of things attended to, just like the economy of goods is structured by product. For example, a university has buildings and classrooms in order to increase the probability that a certain subject will get attention in a predictable way, but the wall designs are domain driven, always built in view of the classification of knowledge. Likewise, merchants gather together in markets and malls because their goods are more likely to be purchased; but the markets and malls, in usual cases, are built to sort the goods by variety. Both of these cases are half and half partly because both have to reflect the character of geography and architecture. A full-blown attention economy would be more flexible, capable of full functionality with a minimum of restrictions from hardware.
How soon will it happen? Does anyone have recent figures on the manufacturing sector as a proportion of the economy? about 20% On the growth of the internet in people's lives?
Women would win ...
Some examples of how the new economy might work to solve old problems:
To pay for goods and services, one would no longer pay money but attention. So if one went down to the grocery store to pick up some cereal, one would just pick up the box and go home. This would obviate the need to handle money thus eliminating its associated economic costs; store clerks, checkout machines, printing currency, and handling sales taxes. Instead, the payment would be to have a cereal box with advertising in one's home. This would not be advertising in the familiar sense however since it would not be commercial advertising aimed at selling goods and services (why bother?). It would be advertising particular people or ideas.
Sounds like the whole foundation of the InternetBubble. Websites and DotComs around the world got zillions of dollars in venture funding on the premise that they would peddle advertising. We know how that turned out.
I also find this to be dubious at best. Perhaps those markets which do well on the Intarweb might being to function like this moreso, but we're also seeing that plenty of people are disgruntled with endless advertising, and as a result certain sectors of the economy are shifting back into the pay-for-service model; or some hybrid where free accounts are funded by advertising, while providing the ability to pay money to remove the ads, which gives the impression that the lack of advertising has value and a certain level of demand. Also, no another note, I can never see essential goods/services operating on an "attention" model, e.g. lumber, oil, food, pressure washing my house. The day I HomeDepot? decides to give out as much free lumber as I want home, each with a row of dyed adverts, is most certainly the day they go out of business!
Instead of people working for money, they would work for attention. So if one worked 20 hours a week then one would receive a credit worth a certain amount of attention. Or rather, the opportunity to gather attention. This might come in the form of placement in the mass media. It can be quite natural too. Consider a cooperative that produces goods for distribution in the ThirdWorld?. They would likely receive quite a bit of attention from people interested in international justice.
So this credit that I've obtained that's worth a certain amount of attention, just how does that differ from money?
It's not worth attention. It's worth, at best, the opportunity to get attention. If you're the most boring guy on the planet, an infinite amount of credit wouldn't get you a second's worth of attention.
Then what good is it (to the boring person)? Why would the boring person produce anything if all he/she receives is "credit" which because he/she is boring, is worthless to him/her?
My two-year-old is an expert at getting my attention -- especially when he draws on the walls with his crayons. Does that make him (or me) rich?
And unlike money, it need not be at all transferable. With money you can buy material goods which you can always transfer to someone else. But if you can only ever buy attention, you can't just transfer that attention to someone else. It would be so unlike money that to equate the two is futile.
But this attention credit still seems to be a medium of exchange. After all, attention doesn't feed my stomach, put a shirt on my back, or a roof over my head -- unless I can somehow exchange the attention (or the "right to get attention") for one of the many physical needs that people have (not to mention other less immediate needs, such as entertainment, sex, etc.) Plus, many people prefer to live anonymously -- so attention would have no intrinsic value to them and would only have value as a medium of exchange.
Money will not lose all value. "Money" is not some paper thing that government tell you what is worth. Money is an abstract medium of exchange of products and services which is controlled by the government.
Money is not necessarily controlled by the government. American (and most so-called "first-world" countries) have a fiat system which meets this criteria, but that is not a defining factor of money. Gold is money. Hell, sea shells can be money, provided the people in a culture agree to exchange in it.
I'll consider "attention" to be a subset of "services", and that's why it's worth something. Thus, attention is worth money, but the article didn't get even close to convincing me that attention will somehow replace money. As long as we need food and heating, our economy will stick to the abstract bartering type. -- PMBjornerud
The fact that attention is "worth money" doesn't prove that it's a good or service. Money is worth money, but it's not a good or service, it's a means of exchange.
Attention is a method of payment. And it will replace money. It is replacing money. It has already replaced money for half of all publishing over the PastTwentyYears.
WithinTwentyYears, all media creations (novels, music, movies, software, reviews, et cetera) will have become sucked into the attention economy, regulated wholly by exchanges of attention. Not credit. Not money. Attention. And nothing else.
WithinTwentyYears, neither agriculture, nor manufacturing, nor services will be viable sectors of the economy. They will be either dead or dying. And intellectual property will not replace them since it will be deader than dead.
WithinTwentyYears, GiantAlienSeaMonsters? will over-run the universe and this wiki and will eat all of our money (and attention).
As for food and heating, these are already marginal aspects of the economy. By the time the robotics revolution gets in full swing (it's barely begun its second phase) they'll become totally invisible economic factors, like oxygen and sunlight. -- RichardKulisz
I think this whole page suffers from two different mindsets agruing from completely different viewpoints. Maybe it would be better to have a thorough Explanation at one page, and keep the Discussion in another? Anyway, can someone tell me how I can trade all this attention for a nice and big house or car if I become successful in this Attention Economy thing? I feel most arguments are aimed about five meters to the right of me.
Ah, I found a very simple text (http://www.newmediastudies.com/economic.htm) that is a little bit more down to earth. I still think dear Goldhaber is raving through the clouds.
Would KarlMarx have the last laugh? All the socialist struggles of the past becoming comparatively irrelevant since they never achieved their goal of a post-capitalist economy? Would economic determinism rule economic matters to the last?
One of its consequences is that money will lose all value. -- Crank alert. Usually arguments are dismissed based on premises or logic, not conclusions.
"A crank, in [Martin] Gardner's definition, is someone who challenges scientific orthodoxy -- but not in a sensible, well-informed way. Instead, he is an outsider who fails to understand what the orthodoxy is about, and/or is determined to refute the current wisdom for personal or political rather than scientific reasons... Gardner identifies two defining features of a crank. 'He does not send his findings to the recognized journals... He speaks before organizations he himself has founded, contributes to journals he himself may edit...' The other characteristic of a crank... is the belief that failure of the establishment to accept his ideas necessarily represents stupidity, dishonesty or both." -- Paul Krugman, Peddling Prosperity
Ok. So how does Goldhaber coming up with a non-standard conclusion make him automatically satisfy the above criteria?
What's so profound about this article? Advertisers have known about the value of attention since at least the beginning of radio. And the assertion that money would lose value is ridiculous. Can I save attention and use it at a later date? Can I shift attention resources from my future self to my current self through a loan? How much attention would AOL's shareholders have had to pay to Time Warner's owners?
Attention will become currency the day the governement decrees that people must accept it for all public and private debts (in other words, declare it LegalTender?). Until then, money works great as a means of exchange and a temporary store of value.
Here's an example of the attention economy at work: your reputation (including everything you said in the last two paragraphs) has plunged through the floor because of the absurdity of your last sentence. Nothing can "work great" as both a means of exchange and a store of value since these two goals are contradictory and mutually exclusive. Money, at least the positive-interest kind we have, is horrible as a means of exchange. And it is also horrible as a store of value when compared to things of real value like trees, houses, food, et cetera. To the extent that money replaces these things, it reduces the wealth of the Earth. Our money is horrible all around. But it seems to work at least as well, if not better than the alternatives -- namely barter, precious metals as currency, etc.
How is something an effective means of exchange if it doesn't store value? Sorry but your statement that those two things are mutually exclusive is ridiculous, logically impossible, and factually incorrect.
Trees store some value, but I can't put trees in my wallet or give them to a bank teller.
The more effective money is as a store of value, the more people will want to retain it, at the expense of exchanging it for goods and services, thus the less useful it will be as a means of exchange. In a deflationary economy, that's exactly what occurs. In an inflationary economy, the opposite occurs.
Something can function perfectly as a means of exchange if people are eager to get rid of it because it depreciates in value. In fact, it works better that way because it flows around the economy faster. The only thing required is that people are forced to take it as LegalTender? in exchange for goods and services, as pointed out below.
All they're doing is holding off on purchasing final goods. Maybe they would rather store value in money (or bonds or equities or whatever) because what they want isn't available, or because they'll have less income at some point in the future. Of course some other people transfer money from the future to the present via loans, because they expect their future self to be richer and would like to even out their personal lifetime wealth distribution.
You could accomplish the same thing with gold or salt, but you need some sort of common medium of exchange. A common medium of exchange has been independently invented in many societies, and the value of having it is unquestioned (vs barter). You want your medium of exchange to be lightweight, durable, divisible, and consistent in quality and value - paper works great for this and databases are even better.
In any case, except for the cash in your wallet, your money is efficiently and regularly turned into investment dollars through loans, which grow businesses, result in the further production of final goods, etc. However money would still keep all of its advantages if everyone started stuffing their mattresses with it instead of depositing it in the bank.
Perhaps a little bit of economics 101 and a little bit of reading on why we have money instead of barter is in order. People don't trade in pieces of paper because of mass delusion.
Perhaps some economics beyond 101 is in order. Fiat currency is a consensual hallucination. When paper money was tied to precious metal standards it was a promise to pay in precious metals. You could walk into a treasury office and demand $20 worth of gold for a $20 bill. Most (all?) western economies dropped precious metal standards in the last century. A $20 bill is a promise to pay other bills "worth" $20.
$20 is worth $20 because the government has bigger guns than you and says it's worth $20, and for anything priced $20 you HAVE to accept $20 in US currency. I.e. fiat money. Now that takes a little more of a mental leap to understand than gold-backed currency, but there's nothing wrong or sinister about it. This is an arrangement that's worked since the romans distributed copper coins that people had to use to pay their taxes (and consequentially because the means of exchange for everyday trade as well).
Perhaps some review of econ 101 where fiat money is addressed is in order.
I didn't say there was anything wrong or sinister about it. I said it was a consensual hallucination. We all agree to pretend that a $20 bill has value because it's an efficient way to interact, not because a $20 bill stores value. And not because the government will kill us if we don't. You're free to refuse a $20 bill without threat of force by the US government (unless refusing it shows a pattern of discrimination, but that's a separate issue.)
You're only free to refuse it if you'd rather not get paid at all. It's is against the law to say ("demand"), no I won't take that $20 bill, but I will accept $20 worth of chickens. Therein lies the difference between a functional fiat money system and barter chaos. It's not a delusion that a bank or individual would be prosecuted, fined, and possibly imprisoned if they didn't allow debts to be satisfied with legal currency.
It's simpler than that really -- if you refuse to accept FiatMoney?, the debt is simply cancelled.
--
If correct, the transition to an attention economy will be the most significant shift to occur in centuries. One of its consequences is that money will lose all value.
Money has no value. You can't eat it, you can't be clothed with it, the pictures of dead presidents provide no real aesthetic feedback. I suppose you could burn it if you were cold, but I suspect there are far more efficient fuel sources much more readily available. Money's only value is as a proxy for things of real economic value such as food, cloth, art, etc. For more, see HumanAction by LudwigVonMises.
"This is pedantic, the same thing can be said of contracts. Money and contracts are given value by law. To say they're just paper is obvious and uninteresting."
Somehow, I imagine the author of the article was aware of this, and refers to proxy value rather than intrinsic value. Especially since he talks about the end of the historical land-dominated economy, and land still has intrinsic value today. Reading the article might help.
Money is a contract, isn't it?
IntrinsicValue, whether referring to money or anything else, is an oxymoron.
Um... I don't see a mechanism by which attention would replace money. Attention is valuable, because if you have someone's attention, you can then sell them stuff for money. If you didn't need the money, or you couldn't get the money, you wouldn't be interested in getting the attention.
The level of people wanting attention for the sake of attention, rather than for the sake of the money they can make out of it, does not seem to me to be on the increase. There has always been "vanity publishing"
Am I totally missing the point?
The last two decades of human history, which were marked by the growth of the usenet, the web, email and cellphones?
Besides, the point isn't that attention would replace money in its current function, but that money would become obsolete and only attention would be left. And where did you get this ridiculous idea that attention is only valuable because you can get money from it?
I merely observe that most of the people who are trying to get my attention want my money, whether they're a beggar sitting on the steps of the railway station, or a multinational company painting a billboard outside my window. A tiny minority want my attention for its own sake.
In any case, I've skimmed the article now, and it's not making as strong (and as ludicrous) a claim as I imagined. What it says boils down to the fact that what makes a product valuable is much less its internal quality, and much more how well it is advertised. A brand name is worth more than a factory. So I was right, but the author is right too.
And by what metric do you measure that "most of" the people who want your attention want your money? Such absurdities do not advance your cause.
Here's a metric: count the number of times someone directly or indirectly attempts to get your attention. Count how many of them are trying to sell goods or services for money. I confess I haven't actually done this, and my impression, that the second figure would be a large fraction of the first figure, might be incorrect, but it certainly isn't absurd.
Advertising in order to sell goods and services is predicated on those goods and services. If the goods and services economy stagnates or depreciates, advertising cannot grow. The article points out that the goods and services economy will depreciate in importance just as surely as the land-based feudal economy. Advertising will depreciate right along with it. The idea that advertising can continue indefinitely and even grow to compensate for the depreciation of the g & s economy is an absurd delusion.
The land-based feudal economy did not shrink or depreciate in absolute terms. We are producing and consuming more agricultural product than ever before. It declined in relative terms because other goods and services came about which take up a larger proportion of our economic effort. Similarly, we are not likely to absolutely reduce our consumption of modern goods and services. They can decline only if other fields of economic activity arise and come to dominate in the future.
If I bought a running shoe in the early 1970s, most of the money I spent would have gone on aquiring and transporting raw materials, assembling the finished product, transporting the finished product and retailing it. If I buy one today, a large chunk of the cost goes on advertising. I interpreted the article (which, it is worth emphasising, was written in the heart of the dot-com stock market bubble) as projecting that this trend will continue to the extent that most economic activity will be marketing, with a relatively small proportion actually producing the goods being marketed. Such a state of affairs is plausible, but in my opinion unlikely. It is also horrifying; the suggestion is that future economic growth will result in no net improvement of our lives, but merely in a self-destructive competition for consumers' attention. If it took place, I could see myself ending up a communist.
First of all, who buys one running shoe? Secondly, I tend to buy shoes of brands I'd never heard of before I walked into the shoe shop. That way I get perfectly good shoes cheaply because I'm not paying for advertising.
So, if conventional goods and services are to decline, and they are not to be replaced merely with more marketing, what activity will supplant them; what will people actually do instead of supplying them?
The feudal land economy declined in labour hours, which are the only real terms I can think of, "money" being a consensual hallucination. The goods and services economy is likewise imploding in the USA though because of exporting of jobs to third-world countries, I'm no longer certain there's any absolute decline.
Agreed that money-value figures aren't meaningful as comparison, but how about "tons of meat and tons of vegetables" as a non-hallucinatory measure of agricultural production. In those terms it has gone up, not down, even per capita.
Secondly, the goods and services economy in the US is simply not imploding, in labour hours or in dollars. Imported goods and services are bought with exported goods and services. (True, the US is currently running a trade deficit, but that is not a large percentage of the total imported or exported -- 3.1% according to this week's Economist).
What will people actually do? Things that require attention for its own sake. And that's the point of the article which attempts to convey an infinitely more insidious idea than that marketing will rule everything. The article does claim that marketing will rule the entire goods and services sector of the economy, just as surely as capital now rules the entire agricultural sector, but all of those will depreciate relative to the main attention economy. That attention economy being concerned with the acquisition and circulation of attention for its own sake. This will function until we have ArtificialIntelligence when we'll be able to manufacture attention, at which point we'll be kicked into PostScarcity or pseudo-scarcity (an entirely destructive economy).
This (by which I really mean the article) has struck a chord with me. Moneterily, I'm not doing all that great. I'm paid on average around 2 to 3 dollars an hour canadian, taking into account my 'job', and my unpaid activities at the job site. However, I'm never lacking a meal, nor a place to sleep, to a car to drive, etc..., despite not directly paying for most of these. The $3 dollars an hour is more than enough to cover my direct costs, I'm literally eating through attention directed towards me. Really, I'm thinking the trick is going to be investing it in cash and paying it out in higher attention with different circles of people.
'Customer Service'. 'Personal Attention'. Used as marketing slogans, they never gain anybody much. But truthfully applied, it can do amazing things. The company I work for doesn't make spectacular products. But they support them well, truly on a personal level. And so a couple high-school droppouts that I know personally are millionairs, and dozens more make over $50 grand a year. Not that it's the money that's important, but it is nearly a direct (if unconcious) conversion on their part.
While BrainsAsaCheapCommodity drips over our society (UsCulturalAssumption?), "personal customer service" is still hard to come by.
See TransformationEconomy (which probably has something to do with this page, despite I read it not.)
Actually has nothing to do with this page despite dealing with superficially the same topic.
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