Tag Archives: economics

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LoveMachine Inc: Second Life founder’s reputation-as-currency start-up?

Love, Second Life styleOh, to be a CEO of a tech start-up… they can get bored of their projects even faster than the public can, y’know. Actually, that’s a little unfair – Philip Rosedale, the man behind Linden Lab, hasn’t lost interest in Second life so much as he’s looking for a new fish to fry with his new company, LoveMachine Inc. [image by Mrs. Bones]

What does LoveMachine do? Apparently it’s developing a system of the same name that was used by Linden Lab as a points-based incentive tool:

Linden employees gave and received “love” for a job well done. If an employee was well-received amongst his or her peers, their accumulated love currency was redeemable for a cash bonus at the end of the month. Similar to social capital systems like Whuffie Bank, it appears that LoveMachine may become a reputation currency system for businesses.

Interesting to see another outfit chasing after reputation economies as a potential business model… and restricting such a system to the limited and manageable confines of discreet organisations makes sense, as closed economies are inherently easier to manage. I expect they’ve heeded Bruce Schneier’s advice on reputation economies, too:

You’ve all experienced a reputation economy: restaurants. Some restaurants have a good reputation, and are filled with regulars. When restaurants get a bad reputation, people stop coming and they close. Tourist restaurants – whose main attraction is their location, and whose customers frequently don’t know anything about their reputation – can thrive even if they aren’t any good. And sometimes a restaurant can keep its reputation – an award in a magazine, a special occasion restaurant that “everyone knows” is the place to go – long after its food and service have declined.

Details of the LoveMachine plans are understandably sketchy at the moment. However, Rosedale and company have got a public worklist of jobs that they need a contractor to take on, and – if you live in the San Francisco area – they’re looking to hire. [hat tip to Fabio Fernandes]

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White faces in the day labour queue

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I clearly remember my first day travelling in Mexico, walking out from my hostel to check out the zocalo at the centre of El D.F. and catching sight of long rows of men stood by their open toolboxes, with little signs explaining what sort of work they’d do, and for how much money. I’d never seen people queuing for day labour before; I don’t know if it’s ever happened in the UK during my lifetime.

It’s a more common sight in the US, apparently, especially in cities with high densities of immigrants, legal or otherwise. And now in Las Vegas (and elsewhere) the immigrants are being joined by US-born citizens as the economy continues its slow grind through the low times [via GlobalGuerrillas]:

In the latest sign of the Las Vegas Valley’s economic free fall, U.S. citizens are starting to show up in the early mornings outside home improvement stores and plant nurseries across the Las Vegas Valley, jostling with illegal immigrants for a shot at a few hours of work.

Experts say the slow-starting but seemingly inexorable trend is occurring nationwide.

“It’s the equivalent of selling apples in the Great Depression,” said Harley Shaiken, chairman of the Center for Latin American studies at the University of California, Berkeley.

It’s grim news from an economic perspective… but there may be a positive outcome, depending on your attitude. While there’s every chance that competing with illegal immigrants for low-dollar work may exacerbate the resentment and racial tensions that certain talk-show hosts love to exploit, in some cases the reverse may occur – citizens brought low by the financial crisis coming to realise that immigrants are people just like them, in other words.

Bernabe said organizers came across one case where a local sheriff had been sending officers to answer complaints about day laborers and then found one day that the sheriff’s neighbor, a citizen, was among them. Police in that area have been less likely to harass laborers since then, he said. These events will occur more, changing people’s attitudes in the process, he said.

“For a long time, people have looked at day laborers and said, ‘The problem is the immigrants.’ Now the economy is changing. Now people may see it’s a problem of the labor market, of the rights of workers,” Bernabe said.

Buchanan, meanwhile, looks forward to a future that includes a steady job and an apartment. “I’m trying to dig my way out of this,” he said. When he does, however, he sees himself as a changed man.

“Before, I was part of the majority. Now I’m part of the minority … I’m not going to forget this. I’m not going to forget any of this.”

It’d be ironic if the recession helped people to realise that the divide that really matters isn’t the border lines drawn on a map, but the invisible one drawn between the poor and the rich – the one that cuts across nationality and ethnicity in every country on the planet. It’d be ironic, but it’d also be the best thing that the recession achieved. What social changes might we see in a country where the poor refuse to be divided and conquered by the rhetoric of the rich? Would the atmosphere of brotherhood last, or would the first signs of recovery herald a return to the status quo?

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The other sort of hacking: Baltimore’s ghost taxis

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Baltimore taxisDovetailing neatly with yesterday’s article about innovative low-budget urban living in Detroit comes a piece on Baltimore’s “hacks”- illegal and unlicensed taxi services provided by anyone with a car to anyone in need of a budget ride across town [via MetaFilter; image by Marcin Wichary].

… a booming economy built around people in Baltimore’s African-American community who prefer to call or flag down drivers like Doug to taking public transportation or licensed taxicabs. There are no statistics on hacking, no academic studies. Yet, as anyone who travels city streets and encounters the finger-wagging hack hail knows, it is a pervasive part of life here.

It is also a somewhat controversial part. Hacking is illegal, a misdemeanor punishable by a fine of up to $500 and up to six months in jail. And it has a reputation as a dangerous practice, for both riders and drivers. Although Baltimore Police Department spokesman Officer Troy Harris says that police records “don’t have a category for occupations of homicide victims,” accounts published in The Sun indicate that over the past decade as many as 13 Baltimoreans have been killed while driving hacks. And since hacking itself is illegal, many lesser crimes that might occur in the process–carjackings, robberies, assaults–likely go unreported.

Why has this dangerous and illegal activity become such a part of Baltimore culture? Most reasons given by those contacted for this story can be summed up in three words–convenience, money, and race.

It’s a long article, but worth the read – y’know, the sort of journalism they keep telling us that the internet will kill off. Hacking sounds a lot like the ‘van’ system found in Latin American cities, a grey market that grows around the demand for public transport infrastructure among those living on the margins of society, whether geographically or politically. From the sound of it, hacking in Baltimore is too ubiquitous to be effectively shut down by the authorities without a vast expense of time and money, and its close connection to the African-American demographic means that to do so would probably amplify the problems of discrimination that hacking circumvents. The article points out that the city authorities have too much on their plates with other more serious crimes to spend time on a hacker crack-down (arf!), but one can’t help but wonder if there’s an element of turning the blind eye in that attitude – after all, any street-level economic activity that’s been running for a few decades is evidently driven by genuine need, and producing an official fix for the problem is going to be much harder work than trying quietly to contain it.

What fascinates me about stories like this are the way they tear off the veneer of “respectable”corporate capitalist economics to reveal illicit person-to-person transactions running in much the same way as they must have done since the dawn of commerce itself. I know it’s not fashionable to talk positively about the power of the marketplace right now, but you can’t deny the tenacity with which people will find a way to make a fast buck from the absence of a certain service or product. The question is, how much of the crime associated with hacking would be prevented if the authorities took a more laissez faire attitude and deregulated the business, allowing hacks to compete directly on price and safety with ‘legitimate’ taxis? This strikes me as the sort of small economic ecosystem that could thrive with the introduction of a reputation currency.

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Underground economics

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Gaza Strip smuggling tunnelHere’s some fresh food for thought via the perpetually reliable BLDGBLOG, in the form of a report (and photoessay) on the black economy of the Gaza strip, which hinges on the many tunnels that run beneath the border:

If Gaza runs off a tunnel economy, Rafah is its tunnel town. In Najma Square, in the center of Rafah, the fruits of tunnel labor meet their first customers. Encircling the square are tables of TV sets, fans, blenders and generators; stalls packed with refrigerators, washing machines and ovens — and this is just the electrical side of town. Moving west toward the border, you see more goods: boxes of cigarettes, giant sacks of potato chips and sacks of cement. Then you pass the warehouses that sell the tools used to physically shape the tunnel industry: shovels, rope, pulleys and electrical cords, plus pickaxes, hammers, nuts, bolts and screws in all sizes. The industry of making the tunnels is a booming business on its own.

It’s not an especially science fictional story, at least at first glance – what could be less futuristic than hand-dug tunnels in the desert soil, and their freight of minor luxuries? [Image by Richard Mosse, from Time magazine; all rights reserved]

But think again: the tunnels are a result of a community placed under extreme economic isolation, a combination of the entrepreneurial spirit and the drive for survival. The risks, as documented in the article, are great – the tunnels are not only illegal, but dangerous – but the presence of the border makes them essential, inevitable. Ingenuity and desperation can defeat a physical border; history makes that very plain.

But this is all taking place in a world where goods are physically instantiated before being transported to the end user. Flash forward a decade or two (maybe less) to a world where fabrication and rapid prototyping technologies are as widespread as computers are now. How will nation-states contain the flow of goods across borders when the goods are no longer physical, when complete designs for contraband items can be emailed into a restricted zone, encoded by steganography into some innocuous image macro or spam leaflet?

Networks nullify geography… OK, so you won’t be able to fabricate food, but you’ll be able to fabricate weapons to attack those who prevent food from getting to you, and once you’re hungry enough that’ll seem like the best idea you ever had. End result? Physical blockades of other nation-states will become self-defeating; the very technologies that have enabled your initial superiority will oblige you to concede certain freedoms to those you have suppressed, because it will be easier and safer (and, hopefully, more politically acceptable) than the alternative. You can’t pull the ladder of technology up behind you as you climb.

Today's Tomorrows

Space Jockeys

I was interviewed twice last week, and both times the topic of space flight came up.  One of the questions one of the interviewers, Annie Tupek, asked me was, “You write about mankind’s future in space.  What do you think is the largest obstacle opposing space colonization today?”

Here’s the short form of my answer to that question:  “…it’s expensive and difficult to get heavy stuff from here out into space. The distances are long and the travel hard. …  We tend to think it’s taking a long time to explore space.  The Wright Brother’s first flight was in 1903.  So in a little over a hundred years we’ve gone from being stuck fact to the surface of the planet to flying all over it all the time with hardly a worry except the TSA search indignities.  We’ve flown past almost every planet and moon in the solar system, landed rovers on Mars, and men on the moon.”

So I decided I’d write this month’s column about what’s happening as private companies compete to get to space. In fact, there’s so much happening, I could write a book about it.  Instead, I’m going to survey the news from LEO, give a little futuristic spin, and discuss one book. Continue reading Space Jockeys →