Money is hard, too, but you knew that

I received a number of comments regarding my recent posts (1,2) about how abstraction/quantification of trust leads to negative consequences such as competition, social judgment, and “gaming the system”. This does not surprise me, because my model for quantifying trust is money. And it is hard to find a technology more profoundly impactful and more deeply flawed than money.

This video segment from a Coursera class I’ve been taking does a good job of explaining the invention of money as a way of abstracting trust. From the transcript:

Why are people willing to work, for entire month, doing, many times, things they don’t really like, just in order to get the end of the month, a few colorful pieces of paper? People are willing to do such things when they trust the figments of the collective imagination. These, these cowry shells or these colorful pieces of paper. Trust is the real raw material from which all types of money in history have been minted. When a wealthy farmer, say in ancient China, sold all his possessions in exchange for a sack of cowrie shells. And then travelled with them to another province, he trusted this ancient Chinese farmer, he trusted that when he reached his destination, other people, complete stranger, who he never met before would be willing to sell him rice, to sell him a house, to sell him fields in exchange for his cowry shells. Money is accordingly a system of mutual trust. And not just any system of mutual trust. Money is the most universal and most efficient system of mutual trust ever devised by human beings.

Money is an abstraction that allows us to trust that we will get our physical needs met without having to do the work ourselves of building our own houses, growing our own food, making our own medicines. With money, we were able to expand our resource networks to vast numbers of strangers.  What I’m imagining is something similar, but in the realm of information.  With so many facts, claims, data points, anecdotes, and opinions constantly surrounding us, we end up making sense of things through something very primitive: gossip from our friends, and faith in people who look like us and talk like us.  I don’t think we’re wrong to do so.  But it’s not a very efficient system.

What if we could create a system, an abstraction, that allows us to trust that the knowledge and statements that are proposed to us are true, with a specific and transparent level of confidence?

Of course, we already have this in some respects. Most notably, we have a large and quite profitable academic and industrial system whose sole purpose is to create, collect and verify knowledge. But this system functions largely based on implicit rather than explicit trust. You trust the judgment of editors and peer reviewers of journals, of grant-makers and tenure-granters, and you trust these judgments because they belong to institutions with good reputations, or because their own work is frequently cited, or because you’ve read their work before and haven’t found any flaws. Some of these reasons are flimsier than others, but all are understandable, because verification is hard, trust is also hard, and there’s no other game going.

Which brings us around to the criticisms.  Let’s say we could make a much more efficient system, the equivalent of money but for knowledge.  Should we?

After all, money is the cause of so many problems in our society.  It causes corruption in our political systems, resentment and conflict in our personal lives, and suffering and death for many who do not have a lot of it.  Why on earth would we want to make anything more like money?

I don’t have a pat answer to that, but I do have two responses that I think are worth exploring.

First: for all the awful downsides to money, one can argue that we owe the last several thousand years of social and technical advancements to money.  Could we live the life we do now, with our cell phones and low infant mortality and space missions and chemotherapy treatments and takeout dinners and musicals, without money? This is a pretty epic counterfactual, so I’m not expecting immediate agreement, but I tend to believe that money has done more good than harm.

And second: money is very simple.  It was invented five millennia ago, and that shows.  Sure, Wall Street sharks and shysters like to create complex financial instruments but they certainly aren’t doing so to benefit society.  But we have computers now - most of us carry them around in our pockets, and sleep with them by our bedsides - and they keep way better track of value than cuneiform tablets.  For some ideas about how we could improve money, I recommend reading Charles Eisenstein’s Sacred Economics, especially the chapters Currencies of the Commons and Negative Interested Economics.  Bitcoin, of course, is an attempt at improving money through technology as well.  Unfortunately, money’s got a lot of baggage.  A trust abstraction system for information, if devised, could be structured to mitigate harms from the beginning.

That sounds great in theory, but what might it look like in practice?  I’ll sketch out some ideas in future blog posts.