What is Value?

The idea of a “product” began to change its meaning when there started to be “knowledge” or “information” products. What is a knowledge or information product? The US economy is now 80% service sector jobs. This means that 8/10 jobs are involved in knowledge production. This means that these jobs are involved in the development of human relationships.

However, this knowledge production is still coordinated by a profit motive. This means that what coordinates knowledge production is still itself a kind of knowledge. Money currency is not a tangible, material item, it is a kind of knowledge, it is a meta-agreement about how to attribute value.

Knowledge or service oriented organizations are successful when they create value. And so what do we mean by value? Value comes from an interaction between individuals oriented towards some shared end. As a byproduct of this interaction, they create wealth. Organizations become valuable precisely if they facilitate coordinated human activity.

Coordinated human activity is when people feel safe enough to be open and vulnerable with one another. Transaction costs are low. There is a kind of permeable membrane, where ideas can flow between people.

Coordinated human activity is always based on a shared premise, a kind of shared secret, a foundational myth that orients the behavior of the community. This myth is not necessarily literally true, but it is useful if it saves everyone time.

This founding myth saves everyone time by helping people avoid errors. The founding myth is a concise record of practical trial and error. The human being confronts novelty and consequently makes mistakes and has successes, and through this trial and error, refines the original premise to a greater and greater degree.

If we take this to its logical conclusion, the optimal founding myth is the one that compresses the most practical information into the smallest space. This is essentially what organizations compete for. They compete to compress the most varied practical information into the most concise form, in order to save each other time. Value comes from saving each other time. But what is the culmination of people saving each other time?

When we save each other time, the most important things rise to the top. We are no longer as estranged from one another. We become familiar to one another. We build a layer of shared trust. This can only come about if we can properly avoid errors. So we need the most concise possible record of trial and error. We need to compress all of the information about trial and error into the most concise format.

Computers and technology can compress information in the form of storage. But it is also possible to compress information through narrative structures. The wisdom of the ages is distilled into a simple story. These narratives are not “literally” true, the stories told in religion or in science, are not literally true, but they are useful for survival and flourishing, for saving time. Re-telling and synthesizing narrative structures in the proper way, compresses them further and further, to make the most concise possible record of trial and error.

The founding myth evolves and takes on different aspects to successfully contain the environment. Taking bigger risks leads to bigger payoffs and losses, that means more reliable information about survival and flourishing. The more huge payoffs or huge losses one has experienced, the more critical and relevant information for recording trial and error concisely.

From this, we can derive what the optimal founding myth is. The optimal founding myth is that we already compress the most possible practical information into the smallest possible space. The optimal myth is that our own personal experience is essentially the whole of reality. Our personal experience is the entirety of existence. We know this cannot be literally true because our personal experience is partial, limited, and incomplete. But it is the optimal myth because it usefully makes the field of experience maximally meaningful and consequential. All of the layers of time and information get nested into the present moment. Every moment and every decision is absolutely critical.

This is not to say that our personal experience is maximally true, just that it is maximally significant. The way that we confront the problems is not by attributing them to some external cause, but to an internal responsibility to always see things in their most important light.

In this way, the estrangement of people from one another can be overcome through coordination of knowledge. The profit motive is a kind of knowledge, money currency is a kind of knowledge. The entrepreneur seeks to coordinate based on mutual trust, and maximal information liquidity, to create value for others.

The entrepreneur is no longer only competing against other businesses, he is competing against the entire institution of monetary coordination. He is competing against estrangement and alienation. Every new, successful venture is one that could run on money, but is actually more fundamental than money. It must coordinate people more meaningfully than money can, in order to have any monetary value.

The point of entrepreneurship is value creation, and the only sense of value that has any relevance anymore is building communities of total mutual trust, where money is a measure of positive sum games.

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Knowledge Production and the Coordination of Human Activity

There is a nascent economic revolution around “knowledge production.” Knowledge production now accounts for most of the production in developed economies. 80% of the jobs in the United States are service sector. This means that economic production is now mostly about how to manage and build relationships.

Almost every person on the internet produces some kind of art, music, video, photography, spoken or written words. More and more people are making a living in this through crowdfunding and through consulting. But what are the principles that coherently unify knowledge producers on the internet and in other fora? What does it mean to be a knowledge producer?

The industrial revolution was a way of harnessing the power of many individuals to focused ends. It was organized around the division of labor. Each individual had a specialized role, he did a very small, repetitive action that was a part of the whole process. But industrial production was primarily about producing material widgets.

Our era is a kind of inversion of the industrial revolution. Rather than having a specialized role, the knowledge producer attempts to represent the whole process. This does not means there is no specialization, it just means that knowledge producers are not coordinated by specialization, as they were in the industrial revolution. There is not so much of a division of labor, as division of interest.

Knowledge production is about particular interests, but it is about the way that those specific interests capture or relate all of the other nodes in the network to itself. It is about a way of seeing the world. A particular piece of knowledge must be so compelling that it can stand in for all of knowledge. We can suspend belief for a few moments and see the world entirely through this lens.

The technology of our time has revealed that knowledge is so extremely interdependent and interconnected that every action mutually affects every other. The only way to produce knowledge is for its expression to be the whole process, all at once.

What is the whole? This is the problem. The whole is mythical, it exists as an axiom, or a hypothesis. It is completion, finality, symmetry, in a world that is decidedly incomplete, evolving, and processual. We have an instinct for the whole because we are incomplete, just like we have an instinct to eat food when we are hungry.

We know that the knowledge producers cannot give us the whole picture, but we can momentarily buy into their picture of the whole. We are instinctively attracted to the completion and finality of the knowledge producer’s vision, the way it links together all aspects of life. Knowledge producers produce a kind of mythology. They present a way of seeing the world. And this background vision is what unifies knowledge producers.

Industrial production was coordinated around the incentives of monetary exchange. If you worked in your specialized role, you received a certain wage in exchange. By taking on more responsibility, you could move up the hierarchy. You could become a manager who organized the specialized wage-earners.

By contrast, knowledge production is coordinated around the incentives of completion and wholeness. It seems to be primarily individualistic because each person is incentivized to produce knowledge based on their own particular vision. Knowledge producers are not incentivized by monetary exchange alone. They contribute to the ecosystem of knowledge long before it is profitable, because it is for the mutual benefit of everyone. They are incentivized by the instinct for wholeness. The more that they embody the “true” whole, the more social activity is enduringly coordinated around their content. The mythology of the whole leads to coordinated activity which is value creation. Money is added as a side benefit of coordinated activity.

This is why the modern economy is so confused and unsure of where its value is coming from. The macro-level coordination of human activity is a role that is carried out by money currency. But knowledge production is now inherently competing with money currency for this role. Knowledge production is attempting to autonomously coordinate human activity on its own.

This is why valuations of technology companies are so confusing. Technology companies coordinate so much human activity, but it is not immediately obvious why they should be in the business of making money. It seems more like they perform a public service. But when they coordinate enough activity, money is basically added as a side benefit. Their primary role is to coordinate knowledge production.

Is it possible to shift from an macro-level equilibrium of monetary coordination to macro-level equilibrium of pure knowledge production? This would require a mythology and technology of the whole. It would require a mythical technology not instantiated on computers, but instantiated in the real world, in a real world application that guides human motivations.

 

 

Metagame and Adaptive Coordination

“The Game” is a mythical construct that human behavior is coordinated around an unconscious axiom. We are continuously confronted with the unknown, unconscious future. We try to make this unknown, unconscious future more certain or predictable. In making the future more certain, we “take responsibility” for what happens in the present. We take responsibility what comes into the field of experience. This means that we see the unexpected and novel things that happen as meaningful and relevant to our existing circumstance. We turn the unexpected and novel into significance, purpose, and meaning that is relevant to our desired state.

The most basic motivation is symmetry with the external environment. In this symmetric state, the external reality unfolds within our own internal domain of mastery. The internal reality is reflected in the external environment and vice versa, all of the unfulfilled needs and desires about the uncertain future are basically satisfied. In this state of completion, one feels as if his own experience is the whole of reality. We believe that our experience is final and complete and whole. This happens because our own first hand experience is the only thing that we ever know. We are tricked into thinking that our experience is the “whole of reality.” At certain times we actually believe that our own individual sensation is all that exists. This makes us better able to survive because we can convince ourselves that we are more important than we really are. We give ourselves the confidence to overcome incredible obstacles.

This “whole” is a useful fiction. We never actually obtain the state of pure symmetry, in which all of our needs and desires are fully satisfied, but we experience glimpses of it. This is the orientation of our biological machinery, it is what we are drawn toward. We are drawn towards finality, completion, toward understanding our own choices as responsible for the whole of existence. This is the mythical objective or the object of the Game. Behavior is coordinated around unconscious symmetry with the external environment. Each of us wants our experience to be the entire universe, yet at the same time we want to give this state to others. We want the feeling of wholeness for ourselves, yet we also want everyone else to experience that state. And we are sometimes willing to forego that state in ourselves in order to give it to someone else.

We are evolved to believe that our experience is the whole of reality, because our experience is the only thing that we ever know. We experience asymmetry in time, we feel that the future is unequal to the past. We feel that we are incomplete, partial, biased. We see the world in terms of our asymmetric plans, intentions, and goals. Having asymmetric (that is, unrealized) plans, intentions, and goals is advantageous because this gives us something to work towards that we do not presently have. But we are trying to make our goals symmetric, bring them from the external environment into our internal reality. Our ultimate, unconscious goal, the meta-goal, is perfect adaptation, perfect symmetry, perfect wholeness. All explicit goals are actually subgoals of this one meta-goal.

What we actually experience is a simplification or compression of the perfected adaptive state. Our first hand experience is a low resolution image of the perfected adaptive state. It is a compression of symmetry which lost some of the crucial aspects, and thus appears asymmetric. Our continuous confrontation with the unknown future is a Game of decompressing our experience. By preparing for the unknown future, we are trying to make ourselves more whole, more symmetric with the external environment. Decompressing our experience is recognition of novel occurrences as usefully significant and meaningful to the ultimate goal. It is experiencing the environment as useful and relevant.

Viewing the external environment as symmetric to the internal states is the optimal adaptive strategy, because it allows us to see our own blind spots. What comes up, what presents itself in experience is a reflection of some aspect of our internal state. We must adjust and adapt, take responsibility in ourselves for the problems that we perceive as external. The environment reflects some unconscious or subconscious aspect of our developmental process. Through the recognition of symmetry, we are able to recognize that we all mutually affect one another’s plans. All of our plans and goals are interconnected in a single substructure.

Our asymmetric experience is composed of an narrative. This narrative is seeking a culmination, an end. It finds its completion in other narratives. So my own incomplete narrative is completed by another individual’s narrative in the external environment, and his is completed by someone else’s, and so on. All of the individual narratives are in a mutual algorithmic chain of interaction. They affect one another in a continuous, tightly interwoven, interlinked substructure of awareness.

There is an affective economy of mutually interacting narratives. All of the individuals have internal narratives that are seeking the equilibrium state of symmetry with the external environment. By discovering other narratives, they discover more aspects of perfected adaptive symmetry. They decompress their experience to be able to handle more and more information, more layers of complexity. Yet each individual is attempting to simplify all of these embedded layers of complexity into a single narrative.

All of the individuals simultaneously attempting to simplify the complex interaction of narratives, means that each individual is simplifying each other’s simplifications. There is a virtuous feedback cycle of simplifying each other’s simplifications. Each successive simplification corrects for the errors in the others. The whole system of interactions is striving to compress all of the complexity of interacting narratives into a single, pristine metanarrative.

Adaptive mythology is discovering the symmetry or equilibrium in which all of the narratives spontaneously converge on a single, continuously updating metanarrative. Yet this final state of equilibrium is actually characterized by a continuously evolving asymmetric interaction of narratives. This is the mythology of the Game: there is a single substructure of awareness in which all of the individual narratives are participating. The individual actually only ever does one thing. Biologically, he strives for completion and finality, but he ultimately discovers this finality in the very process of striving.

jung red book 4

Carl Jung, Image from the Red Book

 

Metagame

The Meta-game can be described as the effective use of one’s skills across multiple domains. Society is a collection of different games, each of which have rules, purpose, and hierarchy. Money makes all of the games compatible with one another. However, the mythological construct of the Meta-game is also supposed to make all separate games compatible with one another.

Humans coordinate large-scale social interaction by the incentives of monetary exchange. Everyone agrees to agree that money expresses value. But it is clear that money is not the ultimate signifier of value. It is clear that there are more important senses of value. The pursuit of truth is expressed in large scale social coordinators such as religion and science. The pursuit of truth in religion and science is often opposed to the pursuit of money. Money and the Meta-game compete and cooperate with one another.

The love, care, and sympathy that underlies mutually beneficial exchange and selfless acts of giving, are considered more important and more fundamental than the actual architecture of monetary exchange itself. Most of the incentive to accumulate wealth is actually a derivative of the more fundamental desire to coordinate human action more effectively. This explains why people contribute to a distributed knowledge ecosystem like the internet with no expectation of monetary reward, often at significant monetary costs. They are simply improving the system because it is mutually beneficial for everyone.

The entrepreneur generates a new game, he generates a new hierarchy, in order to inject new value into the system. By creating a new game, the entrepreneur is really trying to generate a new form of coordination, that is nevertheless compatible with monetary exchange. But the contemporary entrepreneur is not just competing with other businesses, he is competing with the institution of monetary exchange itself. He has to create more effective modes of coordination than monetary exchange. This is essentially what the nation state government has done. This is why the government is the largest corporation. The nation state is at least as effective at coordinating people as capital.

The contemporary entrepreneur must generate a game that is so fundamental to people’s sense of value that it can actually compete with the institutions of monetary exchange for the role of coordinating human action. This is a business that speaks to the core of human attention and motivation.

At the core of human attention and motivation is a desire for completion, fulfillment, wholeness. This desire is satisfied in everyday life by habits and routines, which simplify the complexity of life. And building on those habits, we create narratives of our situation, which radically simplify all of the internal and external complexity. So our psyche is trying to solve the problem of how to optimally simplify all of the complexity in such a way that we are continuously fulfilled.

Each of our successive decisions or choices is an attempt to take every one of our previous decisions and choices that we have made and bring it into a finality, bring it into one single culmination. We are constantly striving to compress all of our previous decisions into the one, single, best decision.

The entrepreneur who produces this sense of wholeness and finality will add value with his venture. However, this wholeness and finality is ultimately not a “product,” it is not something which one actually attains. It is more like a useful fiction, it is something that is strived for, reached for, and ultimately never attained. It is a mythical construct. It is the object of the Meta-game. And this is why the most successful entrepreneur is competing (and cooperating) with the social architecture of monetary exchange. He is trying to find more fundamental ways to coordinate than monetary exchange. He is trying to coordinate around pursuit of truth, and this is ultimately compatible with the pursuit of money.

The progressive evolution of capitalism is at an impasse. Capitalism is undoubtedly the most productive and effective form of social organization for giving people a better standard of living. Yet at the same time is alienates people from one another, it makes people lonely, it breaks down social forms, it degrades the family. The contemporary entrepreneur is trying to create or discover an equilibrium of mutual care. Anyone who creates this kind of value, money is added to that endeavor as a side product, as a derivative. But ultimately the complex social interaction of humans is striving to overcome the estrangement of monetary exchange and enter into a more fundamental interactive relationship of mutual trust.

This is a sociobiological phenomenon. We saw the first gasps of it in the sixties hippie revolution. But the sixties movement gave into hedonism and immediate gratification. We need a sociobiological movement of enduring fulfillment. Today’s entrepreneur is trying to compete and cooperate with monetary exchange itself. He is trying to re-humanize the human being, who has been estranged and alienated for so long that he no longer knows what social interaction is about. His interactions are about care, the system of mutual care and respect, the system of mutually corrective fulfillment. We need a social movement that is about responsibility, entrepreneurship, and using capitalism itself to overcome capitalism.

There are more effective ways to coordinate people’s interactions than capitalism. The modern system of capitalism is predicated on trust. The more people trust strangers in their community, the more effective economic development is. Is it possible that we could build up to an exponential culmination of trust? That we could trust one another so much that we overcome estrangement and alienation and find a more efficient way of coordinating than monetary exchange? This would be characterized by something like the social exchange of truth, the exchange of information in the pursuit of truth. It would be like a collective, socially inclusive quest for truth in which every stranger is a piece of the puzzle, and all of the pieces are interacting in precisely the right way to complete the puzzle.