Wealth & Status in the Network Economy

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tl;dr: as we move from the Age of Scale to the Age of Networks, some of the social contracts will need to be rewritten.

I’d had Status, Wealth, & Power: Network Effects Demand A New Social Contract in my reading queue for a while, but had always demurred because it was over 20 pages long.

I finally got around to reading it and I’m glad I did.

What James Currier did in this article that I found particularly appealing was to first position the “Network Economy,” not the “digital economy” as the natural successor to the Age of Scale.

Then, he explained that, though everyone in a society becomes better off as a result of network businesses, the rich get proportionally richer than the poor do. It’s an uneven distribution and it’s going to get perceptibly worse because, in a network economy, everyone knows how everyone else is doing.

Before the arrival of the networked world, your basis of comparison for your wealth and status was comprised of those in your social circle. The “lifestyles of the rich and famous” was something that seemed really distant.

Now, however, with all of your friends promoting their wealth, status, and power in their network feeds, plus the transparency of knowing exactly how you rank (# of friends, google ranking, yelp ranking, amazon seller, etc.), it’s abundantly clear that, by definition, most of us are not the best at what we do.

We can’t be.

So, the combination of knowing and feeling mediocre along with the greater disparity between the haves and the have nots leads to a crisis of the social contract.

In the US, since the end of WWII, the contract was pretty clear…”if you want a solid middle class lifestyle, here’s what you do.”

Today, that contract is breaking (and for some, broken).

There was an article in the WSJ about A Generation of American Men Give Up on College because they don’t see the value in it anymore. Value, of course, being a combination of what you put in (time/money) and what you get out (education/marketable skills).

Meanwhile, White House More Than Doubles Its Inflation Forecast in New Update, reminds us that the value of saving is being eroded while those who earn the least are getting hurt the most. Of course, the inflation is a direct result of the vast money printing that happened 18 months ago, so it’s no surprise that Deals Spree Puts Banks on Track for Busiest-Ever Year.

Taking a step back and we’re seeing the gap between rich and poor growing in real-time.

The answer, from the government, I suspect will be “let’s spend more money to make up for it,” but I am skeptical that will work because it further devalues the money already in circulation.

A top-down currency system worked well when we had a top-down economy, as in industrial age/scale economy.

It’s a network economy now. We’re going to have a network currency.

And with it, somehow, we’re going to have to address network challenges with network solutions.

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