13 ms·

Wealth Inequality Is Even Worse in Reputation Economies

334 points by Uhhrrr 11y ago

electic 11y ago
Please make the font smaller. It is way to big!
dnautics 11y ago
"If this sounds familiar, it’s because that’s how money works." Whuffies sound a whole lot more like politics than money. As a medium of exchange, usually to get something of value you must give up or at least risk some money. Yes, there will be a power kaw distribution (as with any network phenomenon) but it will be tempered by self-redistributive, non-zero-sum property of exchange. Whuffies don't have that, so obviously the inequalities will be greater.
- msellout 11y ago
  The non-zero-sum aspect you describe is commonly described as return-on-investment in a capitalist society. The redistribution is taxes and government spending. The power law is created by the preferential attachment of capital to existing capital. Even a weak preference creates an extreme inequality. I'm not sure if it'll help you to think about it this way, but you can always model the system as zero-sum if you normalize the total amount of wealth in the system to 1 after every transaction. Or track participants' share of total wealth instead of absolute wealth.
  - dnautics 11y ago
    Honestly it's the self-redistributiveness that's more important than the non-zero-sumness but being non-zero-sum in utility will taper the steepness of the power law
    - msellout 11y ago
      I'm not sure what you mean by "self-redistribution". I at first assumed you meant economic "market forces" as opposed to government intervention. If that's true, then those market forces are almost entirely rich-get-richer. Sure, there's the "creative destruction" as some fortunes are lost, but that's actually part of the driving force for inequality -- that's what forces capital-owners to seek growth as opposed to allowing them to stay static.
  - mseebach 11y ago
    > but you can always model the system as zero-sum if you normalize the total amount of wealth in the system to 1 after every transaction Yes, if you "normalize" the world to fit your conclusion, you'll generally find that your conclusion is true. If we just normalize everybody's wealth to 1, then all wealth inequality disappears. Problem solved. The fact that you need to normalize the total amount of wealth suggests that you recognize that the total amount of wealth changes, which means the system isn't zero sum. > The power law is created by the preferential attachment of capital to existing capital. Even a weak preference creates an extreme inequality. The evidence doesn't really bear this one out. https://www.gsb.stanford.edu/faculty-research/publications/family-education-sources-wealth-among-richest-americans-1982-2012 https://www.gsb.stanford.edu/faculty-research/publications/f...
    - msellout 11y ago
      > If we just normalize everybody's wealth to 1, then all wealth inequality disappears. Problem solved. You misunderstood the use of the word "normalize". The point of normalization is to change the absolute magnitude but keep the relative magnitudes the same. Perhaps I should be more specific: if you have two values, 6 and 4, which sum to 10, and you'd like to normalize the total to 1, then you multiply each by 1/10 so that you end up with 0.6 and 0.4. > The evidence doesn't really bear this one out. Write some code to simulate this. I think you'll find that preferential attachment does in fact create a rich-get-richer phenomenon. For example, take a look at this simulation coded in NetLogo (http://ccl.northwestern.edu/netlogo/models/PreferentialAttachment http://ccl.northwestern.edu/netlogo/models/PreferentialAttac...).
jamespitts 11y ago
Excellent perspective, particularly so because it comes from someone who did so much to describe where a reputation economy could go. Science fiction writing is amazing in how it gets us to imagine, be bewildered, or be alarmed by things that have not happened yet, or could never happen. It is a starting point, giving us the confidence to keep building -- but also the foresight to be ready for the ills that our creations will no doubt introduce.
- nickff 11y ago
  Your post reminded me of a quote from Hayek: >"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." I think you bring up an interesting parallel between Hayek's conception of the purpose of economics and the common view of science fiction. Being an avid reader of both, this seems to be a great synergy!
  - HillaryBriss 11y ago
    Then I wish economists would pay more attention to economics because they've designed our economy right down a hole in the ground.
    - HillaryBriss 11y ago
      Oy, now they're voting my karma right down a hole in the ground! Peace out bros.
- notahacker 11y ago
  I thought it interesting because despite the idea of reputation-based currency being by far the most convincing and fully-realised part of Doctorow's Down and Out in the Magic Kingdom, it wasn't until reading this essay I realised how much contempt he had for the concept. (without giving too much of the plotline away, the main distinguishing factor of the reputation-based currency is that people lose it very quickly when they upset people, and in the book people are usually upset for perfectly understandable reasons. Otherwise, people achieve high reputations with the same blend of shrewdness, endeavour and inheritance as required to get rich in today's economy).
api 11y ago
That's rather obvious. Due to Dunbar's number (the rough maximum number of human relationships you can maintain), reputation is a very scarce resource. To the extent that corporations and brands are virtual individuals, I think this explains why so many Internet markets are winner take all. There is only one Facebook because Facebook occupies a "Dunbar slot" in the minds of its users and those slots are scarce. Also means that more B2B or behind the scenes Internet companies may not be as winner-take-all as B2C Internet fronts and gateways. To an extent the 'portal' hype from the original dot.com boom was correct-- portals are super-valuable and tend to be winner-take-all or at least a few winners take most.
randyrand 11y ago
is economy the new word for market?
michaelchisari 11y ago
If you watch Community, there's a whole episode about this. Except instead of "whuffie", it's "meow meow beenz". (This came out the year before Peeple launched, I just noticed). https://www.youtube.com/watch?v=CI4kiPaKfAE https://www.youtube.com/watch?v=CI4kiPaKfAE Spoilers: The result is a Communist revolution against meow meow beenz.
Animats 11y ago
"But reputation is useless as a hedge against the real nightmare of a setup like Ebay: the long con. It doesn’t cost much, nor does it take much work, to build up sleeper identities on Ebay, fake storefronts that sell unremarkable goods at reasonable prices, earning A+++ GREAT SELLER tickmarks, even for years, until one day, that account lists a bunch of high-value items on the service, pockets the buyers’ funds, and walks off." That was the business plan of at least half the Bitcoin exchanges.
- tcopeland 11y ago
  The funny thing is that that is as old as the hills - that's practically the plot of the first couple chapters of Gogol's "Dead Souls".
  - goldenkey 11y ago
    Part of me wishes it was turned into a Trigun like anime. Would do it poetic justicr
- makomk 11y ago
  Also partly how pirateat40's big Ponzi scheme worked. He built up a strong reputation on the Bitcoin trading community's web of trust-based feedback system and enlisted a bunch of other highly-rated people from there to resell his "investment" program. The people who accurately pointed out that it had all the markings a ponzi naturally had much lower reputations on there, especially after they'd done so.
  - XorNot 11y ago
    What's really funny is EVE online has proven this exact phenomenon dozens of times and is essentially an accurate model of what 'anonymous digital currency' leads to.
- roymurdock 11y ago
  Or a ponzi scheme. The initial investors get paid out which builds up the schemer's reputation, then when the pot is big enough (or new investments slow down) the schemer walks away with the pot.
bobajeff 11y ago
Where Whuffies meet the real world is in reputation systems being used in society today: Amazon and eBay seller reviews, Uber and lyft driver reviews, Facebook and LinkedIn profiles.
- dnautics 11y ago
  The analogies is weak: a power law doesn't exist in those reputation systems since the value is constrained to [0..5]
- yarrel 11y ago
  Doctorow mentions eBay in the article.
ktRolster 11y ago
From the article: >[money] ends up pooling up around sociopathic jerks who >know how to flatter, cajole, or terrorize their way to the top It's actually kind of hard for me to care about the inequality of people who vote for Donald Trump
- Nutmog 11y ago
  Does that mean you only care about the inequality of people who vote for politicians who promise open boarders? Not having open boarders is also reinforcing inequality globally, which is even bigger (hence worse) than just in America. If you don't try to reason out your political opinions objectively, they're no better than the opinion of a screaming mob.
  - ktRolster 11y ago
    Well, it's really conflating reality with the a hypothetical situation. The hypothetical is, money pools around sociopathic jerks who know how to flatter, cajole, or terrorize their way to the top, and if that hypothesis turns out to be true, then I don't feel sorry for those people who caused their own problems by supporting jerks.
siosonel 11y ago
"... Citizen Scores are a near-perfect expression of reputation economics: like most other forms of currency, they are issued by a central bank that uses them to try and influence social outcomes." It seems to me, and I could have misread, that the biggest problem with the examples of currency systems in the article is that the 'pooled' currencies are unquestionably accepted by participants. Take that guarantee away, and someone could design a reputation currency where participants could reject payments from disreputable participants. In which case accumulation of units does not imply the long-term ability to use them; instead, there will be a long-term incentive for participants to maintain a good reputation. See this overview of a counter-example to the article's point, a reputation currency system without a central issuer: https://tatag.cc/ui/home-about https://tatag.cc/ui/home-about. (Disclaimer: I'm the developer of the linked site.)
- deleted 11y ago
  [deleted]
- seiji 11y ago
  In which case accumulation of units does not imply the long-term ability to use them; instead, there will be a long-term incentive for participants to maintain a good reputation. There's an important distinction here: the score of your peers versus the score of your government/authority. It's possible your peers love you while your government hates you. Maybe you do great work, but are a pain to the power structure. In that case, you end up with high peer ratings, low "political office" ratings. If the goal is "orderly citizens," then the political ratings become more viral (as in, the people you associate with get boosted or discounted based on your Official Political Office Rating) and try to reinforce people conform to how The Political Office wishes people would behave. We can even make this local to HN. HN has secret "political rankings" on accounts to restrict the reach of people the "HN establishment" doesn't like (HI DANG), but the public vote counts are more peer-oriented rankings (which still aren't perfect because HN has 3 to 5 distinct sub-cultures fighting against each other, so a +100 from the "VCs are evil bastards" subculture in the morning gets canceled out in the afternoon once SF wakes up and you get -200 from the "VCs are genius darlings and we should all kiss their feet" subculture).
Uhhrrr 11y ago
It's interesting to see some of the problems mentioned play out in the article posted today about Arduino's origins: https://news.ycombinator.com/item?id=11212021 https://news.ycombinator.com/item?id=11212021 Especially since Doctorow flogs Arduino endlessly on BoingBoing.
haberman 11y ago
Did I miss something or does the article start by making an argument about what works or doesn't work in the real world by invoking a fictional novel that he himself wrote?
- breadbox 11y ago
  Not really. The fictional world is used only to contrast it with how badly it mirrors the reality. It's invoked merely for the author to have a chance to say "mea culpa" (and maybe to help illustrate that these wrong ideas are seductive).
- EC1 11y ago
  Ah the ole self citation. Always a classic.
- joveian 11y ago
  And ends with imagining how a proposed but yet to exist system will function... while ignoring historical examples of many societies that did organize themselves by reputation that worked out quite well without seeing anywhere near the type of inequality that currently exists. And, of course, some that organized themselves that way and didn't work out that well, although still not with the current level of inequality. For that matter, he doesn't actually show that even his imaginary reputation system is worse than our current monetary system, just that some of the same types of issues can happen.
dnautics 11y ago
I don't think his analogy to reputation economies is quite right: having been a Lyft driver, I did observe that it was difficult to get out of ruts when you have a low score (a passenger entering a car with a low score is going to be more vigilant and critical). Yet, scores are constrained to being between 1 and 5 so it's relatively easy, with the right strategy, to create upward momentum and bring oneself back into a high range. There is no power law distribution in the scores because they are constrained to a small range. I don't think the "inequalities" really generally apply to constrained reputation economies.
- badsock 11y ago
  That's kind of like Nigel from Spinal Tap's argument that his amp goes to 11. I doubt that internally Lyft stores your score on a scale of 1 to 5. It's almost certainly derived from a bunch of other data, or at the very least stored as a floating point number. You can approximate whatever curve you like with either, and then just round. I'd believe that Lyft doesn't currently have a power law curve, but the 1-5 system isn't what's stopping them.
  - dnautics 11y ago
    I know Uber stores as a float. Lyft probably does not since it's averaged over 100 rides. Integer math is easy! Also you can't mathematically have a power law over (1..5)
    - klodolph 11y ago
      You can't have a power law over 1..5? Yes you can. Power law works perfectly fine with finite ranges. It works perfectly fine with discrete values as well. The only question is how accurate a power law model would be in this case.
    - SixSigma 11y ago
      How about : 100-90% you get a 5 90-75% you get a 4 75-40% you get a 3 40-5% you get a 2 5% and under a 1
Animats 11y ago
If you want to see a reputation currency treated seriously in SF, read "Daemon" and "Freedom™" by Daniel Suarez. Augmented reality meets level grinding.
- jrnichols 11y ago
  Two of my all time favorite books, and I love how he nailed that part.
- caseysoftware 11y ago
  I caught a panel this past summer where Suarez, Doctorow, and Hugh Howey (Wool) talked about their approaches to writing, taking ideas into the "what's next" stage, and their inspirations. It was fascinating.. unfortunately, recordings were not allowed. (possibly part of the reason it was fascinating)
  - rosser 11y ago
    Please tell me that's recorded and on the web somewhere. EDIT: A cursory first pass at googling it doesn't yield anything. Can you provide any details on where/when or whatever, to help narrow the search?
deleted 11y ago
[deleted]
lisper 11y ago
This will come as no surprise to anyone who has studied game theory. The rational move in a prisoner's dilemma if you know (or control) when the game will end is to defect. This is also why term limits don't work.
- dragonwriter 11y ago
  > This is also why term limits don't work. Its a limit on the utility of term limits where the term limited officer is unlikely to seek another elective office when termed out, but that concern does not apply to most holders of term-limited positions (it does apply to the US President, which tends to be someone's last elected position, but state legislators, for instance, often seek other, usually higher, offices with constituencies overlapping those of their prior office when termed-out, and so the concern doesn't really apply to them.)
  - lisper 11y ago
    Actually, it does apply because there are vastly fewer higher positions than lower ones. Most politicians who term-out go into private industry, and they know it.
- dllthomas 11y ago
  > The rational move in a prisoner's dilemma if you know (or control) when the game will end is to defect. Can't they always control when they stop running for office?
  - lisper 11y ago
    Yes, of course. The implication here is that someone would stop running in order to enable a defection, but that's a fallacy. People can (and do) defect for reasons other than knowing when the game will end. The problem is not the defections per se (those happen all the time), it's the fact that if the end of your term is known then not only does that force you to defect (if you are rational), it also forces everyone else to defect if they are rational.
patio11 11y ago
I wonder what the Gini coefficient of karma scores is. (In the sense of "legitimately curious" rather than "attempting to make a joke which will further concentrate karma in the hands of the 0.001%.")
- minimaxir 11y ago
  Karma is not a zero-sum game, though. There is such a thing as a free upvote.
  - patio11 11y ago
    The same is true of wealth generally. (c.f. my favorite PG essay: http://paulgraham.com/wealth.htm http://paulgraham.com/wealth.htm ) Just like "Post a comment; people shower it with karma" is positive-sum activity, many efforts in the wider economy are positive-sum. That's why we don't eat grubs and use leeches for treatment.
chadk 11y ago
There is a chapter in Tom Slee's (excellent) book "What's Yours is Mine: Against the Sharing Economy" which goes into depth about rep systems and product ratings, why they are different, and why rep systems are a bad way to measure things. There are a bunch of footnotes. I recommend it if you are looking for an even more critical take.
akkartik 11y ago
There's been a couple of really deep articles recently on reputation economies and how they interact with conventional economies: http://www.ribbonfarm.com/2016/02/11/minimum-viable-superorganism http://www.ribbonfarm.com/2016/02/11/minimum-viable-superorg... http://www.ribbonfarm.com/2016/03/03/inequalities http://www.ribbonfarm.com/2016/03/03/inequalities
- Tossrock 11y ago
  Thank you for sharing these, I enjoyed them.
seeing 11y ago
There’s no objective measure of ‘‘merit’’ so there’s no way to know whether your society is meritocratic or not. Is this true?
nickysielicki 11y ago
> There’s no objective measure of ‘‘merit’’ so there’s no way to know whether your society is meritocratic or not. Does he really believe that you can't quantify ability in any way? I don't buy that.
- dsernst 11y ago
  so.... how do you do it?
- saintgimp 11y ago
  No, he's saying that "merit" is an incredibly easily-gamed metric. We can measure results all right, and we can measure ability rather less so, but "merit" implies a casual link between ability and results that is very hard to unambiguously prove and shockingly easy to fake (even if just by disregarding beneficial external factors).
  - rlucas 11y ago
    More importantly: creating a scalar metric of "merit" is always an exercise in power, because it simplifies a hugely multidimensional space to a scale, and in collapsing all those dimensions expresses in a hidden way the preferences of the definer of that metric. This happens even in notionally quantifiable domains like finance. What asset gives the best return? Should be easy, right? Well, what about volatility? Oops, turns out the naive rank ordering of assets by expected return contains an implicit value judgment about volatility. See upthread for a mention of eBay seller scores being unadjusted for transaction size for another example.
    - nickysielicki 11y ago
      Good comment. Thanks. I just wanted to reply and say that you and saintgimp have changed my opinion.
- cauterized 11y ago
  Do you really think that ability is the only component of merit?
MarkPNeyer 11y ago
" it’s a score that a never-explained set of network services calculate by directly polling the minds of the people who know about you and your works, reducing their private views to a number. The number itself is idiosyncratic, though: for me, your Whuffie reflects how respected you are by the people I respect. Someone else would get a different Whuffie score when contemplating you and your worthiness. " This is exactly what i'e designed with github.com/neyer/respect It's basically the same as pagerank, but it has an important feature that the author doesn't seem to have considered. Look at the notion of 'soundness of respect' in my code, and see how different it is from anything out there. It provides multiple parties who aren't directly part of a conflict with an incentive to find a resolution. > Gamergate could use to destroy your’s employment and personal life, possibly permanently, just by mass-one-starring you. This is specially what the respect matrix works against; people who one starred someone else for spurious reasons end up dinging _themselves_ if they are at all connected, which the social graph says we all are. You'll lower your soundness score if you give someone else a shitty rating, and yet you have an implied positive rating through other links.
daodedickinson 11y ago
"Whuffie has all the problems of money, and then a bunch more that are unique to it. In Down and Out in the Magic Kingdom, we see how Whuffie – despite its claims to being ‘‘meritocratic’’ – ends up pooling up around sociopathic jerks who know how to flatter, cajole, or terrorize their way to the top. Once you have a lot of Whuffie – once a lot of people hold you to be reputable – other people bend over backwards to give you opportunities to do things that make you even more reputable, putting you in a position where you can speechify, lead, drive the golden spike, and generally take credit for everything that goes well, while blaming all the screw-ups on lesser mortals. If this sounds familiar, it’s because that’s how money works." No, that's how democracy "works".
elihu 11y ago
In "Liars and Outliers", Bruce Schneier talks about reputation as a tool that society uses to force its members to behave well. In small societies, reputation by itself is usually enough, but the problem is that it doesn't scale because people can ordinarily only keep track of about a hundred to a hundred and fifty people (Dunbar's number). I'm of the opinion that, since Dunbar's number is a purely biological limitation, there's no reason to think that computer-assisted reputation can't scale to much larger groups of people. I think Cory Doctorow is right to be worried that an authoritarian government could use reputation as a tool of coercion (and this is why we should worry about things like government collection of phone metadata). However, I think it's also worth considering that reputation could be used as a tool by the people to obtain some accountability from the rich and powerful, and to help distinguish grass-roots support from astroturf. (I went so far as to create a site, http://polink.org http://polink.org, as a sort of collaborative graph database of how powerful people and organizations are connected to each other. It's one of those side projects I feel like I should get back to and work on one of these days.) One of the reasons I think computer-assisted reputation hasn't taken off is that it's actually kind of hard to implement a good reputation engine, or even agree on what sort of properties a good reputation system ought to have. A lot of awful reputation systems have taught the technology industry to have very low expectations, which is a shame because I think they can be very powerful if implemented well and used correctly.
- cam_l 11y ago
  Interesting ideas.. ..tangentially, why even bother with reputations? The big issue with money based economy is that money is all cleansing. All the shitty things you did to get your money can be forgotten and your money used to buy yourself into a position of power, prestige, or even good standing. If we could tag money's history of exchange we could maybe avoid the both the issues of reputations (big if obviously). Individual transactions could be judged by the prior history of exchanges. Though this could be used as a proxy for reputation or to construct a reputation, the reputation is not required to complete the transaction as a seller. The seller only needs judge the transaction on the history of the money offered itself. Ideally this would create a situation where 'clean' currency would progressively become more valuable than 'dirty' currency, encouraging clean wealth creation.
musesum 11y ago
Perhaps reputation should behave like neural nets and have a tanh(x) activation function.
cousin_it 11y ago
> attempt to establish a basis for strangers to trust one another That's a perfect problem description for a new business. Existing reputation systems don't do it well, but then again, search engines before Google didn't do search well.
bb101 11y ago
Interesting application of reputation to market-based economies. Doctorow's article won't be a surprise to anyone who lived behind the Iron Curtain during socialism. The State held information on every citizen, and all official transactions resulted in stamps and signatures in little booklets. The stamps and signatures were a proxy to reputation. Don't have the 40 years worth of stamps in your employment booklet? That's a problem for your retirement. Know the right people with the right connections? You get a better apartment than everyone else. Plus ça change...
vixen99 11y ago
" As anyone who’s ever tried to figure out the he said/she said campaigns run by the US climate denial lobby can attest, doubt is much more powerful than outright suppression.". I don't know about the campaigns but the point about doubt is as it should be because if you put forward a hypothesis it's vital (a la Popper) to subject it to tests to see how well it matches reality. The CO2 versus global temperature relationship is anything but simple. Between 1998 and 2013, the Earth’s surface temperature rose at a rate of 0.04°C a decade, far slower than the 0.18°C increase in the 1990s. At the same time, CO2 levels rose uninterruptedly as they did earlier. Someone should compute the enforced degree of depression of industrial activity across the world which would according to the theory, have reduced global temperatures to be consistent with those figures. What a pointless and tragic exercise that would have been. http://www.nature.com/nclimate/journal/v6/n3/pdf/nclimate2938.pdf http://www.nature.com/nclimate/journal/v6/n3/pdf/nclimate293... Of course CO2 is implicated in the energy balance on Earth but to claim a direct strong causal relationship is simply in denial of the facts.
yason 11y ago
Reputation only works if you effectively can't disappear. One reason why good reputation can be trusted somewhat is that you can guess how likely the person enjoying it will go protect it for the future.

334 points by Uhhrrr 11y ago

Please make the font smaller. It is way to big!

"If this sounds familiar, it’s because that’s how money works." Whuffies sound a whole lot more like politics than money. As a medium of exchange, usually to get something of value you must give up or at least risk some money. Yes, there will be a power kaw distribution (as with any network phenomenon) but it will be tempered by self-redistributive, non-zero-sum property of exchange. Whuffies don't have that, so obviously the inequalities will be greater.

msellout 11y ago
The non-zero-sum aspect you describe is commonly described as return-on-investment in a capitalist society. The redistribution is taxes and government spending. The power law is created by the preferential attachment of capital to existing capital. Even a weak preference creates an extreme inequality. I'm not sure if it'll help you to think about it this way, but you can always model the system as zero-sum if you normalize the total amount of wealth in the system to 1 after every transaction. Or track participants' share of total wealth instead of absolute wealth.
- dnautics 11y ago
  Honestly it's the self-redistributiveness that's more important than the non-zero-sumness but being non-zero-sum in utility will taper the steepness of the power law
  - msellout 11y ago
    I'm not sure what you mean by "self-redistribution". I at first assumed you meant economic "market forces" as opposed to government intervention. If that's true, then those market forces are almost entirely rich-get-richer. Sure, there's the "creative destruction" as some fortunes are lost, but that's actually part of the driving force for inequality -- that's what forces capital-owners to seek growth as opposed to allowing them to stay static.
- mseebach 11y ago
  > but you can always model the system as zero-sum if you normalize the total amount of wealth in the system to 1 after every transaction Yes, if you "normalize" the world to fit your conclusion, you'll generally find that your conclusion is true. If we just normalize everybody's wealth to 1, then all wealth inequality disappears. Problem solved. The fact that you need to normalize the total amount of wealth suggests that you recognize that the total amount of wealth changes, which means the system isn't zero sum. > The power law is created by the preferential attachment of capital to existing capital. Even a weak preference creates an extreme inequality. The evidence doesn't really bear this one out. https://www.gsb.stanford.edu/faculty-research/publications/family-education-sources-wealth-among-richest-americans-1982-2012 https://www.gsb.stanford.edu/faculty-research/publications/f...
  - msellout 11y ago
    > If we just normalize everybody's wealth to 1, then all wealth inequality disappears. Problem solved. You misunderstood the use of the word "normalize". The point of normalization is to change the absolute magnitude but keep the relative magnitudes the same. Perhaps I should be more specific: if you have two values, 6 and 4, which sum to 10, and you'd like to normalize the total to 1, then you multiply each by 1/10 so that you end up with 0.6 and 0.4. > The evidence doesn't really bear this one out. Write some code to simulate this. I think you'll find that preferential attachment does in fact create a rich-get-richer phenomenon. For example, take a look at this simulation coded in NetLogo (http://ccl.northwestern.edu/netlogo/models/PreferentialAttachment http://ccl.northwestern.edu/netlogo/models/PreferentialAttac...).

jamespitts 11y ago

Excellent perspective, particularly so because it comes from someone who did so much to describe where a reputation economy could go. Science fiction writing is amazing in how it gets us to imagine, be bewildered, or be alarmed by things that have not happened yet, or could never happen. It is a starting point, giving us the confidence to keep building -- but also the foresight to be ready for the ills that our creations will no doubt introduce.

nickff 11y ago
Your post reminded me of a quote from Hayek: >"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." I think you bring up an interesting parallel between Hayek's conception of the purpose of economics and the common view of science fiction. Being an avid reader of both, this seems to be a great synergy!
- HillaryBriss 11y ago
  Then I wish economists would pay more attention to economics because they've designed our economy right down a hole in the ground.
  - HillaryBriss 11y ago
    Oy, now they're voting my karma right down a hole in the ground! Peace out bros.
notahacker 11y ago
I thought it interesting because despite the idea of reputation-based currency being by far the most convincing and fully-realised part of Doctorow's Down and Out in the Magic Kingdom, it wasn't until reading this essay I realised how much contempt he had for the concept. (without giving too much of the plotline away, the main distinguishing factor of the reputation-based currency is that people lose it very quickly when they upset people, and in the book people are usually upset for perfectly understandable reasons. Otherwise, people achieve high reputations with the same blend of shrewdness, endeavour and inheritance as required to get rich in today's economy).

api 11y ago

That's rather obvious. Due to Dunbar's number (the rough maximum number of human relationships you can maintain), reputation is a very scarce resource. To the extent that corporations and brands are virtual individuals, I think this explains why so many Internet markets are winner take all. There is only one Facebook because Facebook occupies a "Dunbar slot" in the minds of its users and those slots are scarce. Also means that more B2B or behind the scenes Internet companies may not be as winner-take-all as B2C Internet fronts and gateways. To an extent the 'portal' hype from the original dot.com boom was correct-- portals are super-valuable and tend to be winner-take-all or at least a few winners take most.

randyrand 11y ago

is economy the new word for market?

michaelchisari 11y ago

If you watch Community, there's a whole episode about this. Except instead of "whuffie", it's "meow meow beenz". (This came out the year before Peeple launched, I just noticed). https://www.youtube.com/watch?v=CI4kiPaKfAE https://www.youtube.com/watch?v=CI4kiPaKfAE Spoilers: The result is a Communist revolution against meow meow beenz.

Animats 11y ago

"But reputation is useless as a hedge against the real nightmare of a setup like Ebay: the long con. It doesn’t cost much, nor does it take much work, to build up sleeper identities on Ebay, fake storefronts that sell unremarkable goods at reasonable prices, earning A+++ GREAT SELLER tickmarks, even for years, until one day, that account lists a bunch of high-value items on the service, pockets the buyers’ funds, and walks off." That was the business plan of at least half the Bitcoin exchanges.

tcopeland 11y ago
The funny thing is that that is as old as the hills - that's practically the plot of the first couple chapters of Gogol's "Dead Souls".
- goldenkey 11y ago
  Part of me wishes it was turned into a Trigun like anime. Would do it poetic justicr
makomk 11y ago
Also partly how pirateat40's big Ponzi scheme worked. He built up a strong reputation on the Bitcoin trading community's web of trust-based feedback system and enlisted a bunch of other highly-rated people from there to resell his "investment" program. The people who accurately pointed out that it had all the markings a ponzi naturally had much lower reputations on there, especially after they'd done so.
- XorNot 11y ago
  What's really funny is EVE online has proven this exact phenomenon dozens of times and is essentially an accurate model of what 'anonymous digital currency' leads to.
roymurdock 11y ago
Or a ponzi scheme. The initial investors get paid out which builds up the schemer's reputation, then when the pot is big enough (or new investments slow down) the schemer walks away with the pot.

bobajeff 11y ago

Where Whuffies meet the real world is in reputation systems being used in society today: Amazon and eBay seller reviews, Uber and lyft driver reviews, Facebook and LinkedIn profiles.

dnautics 11y ago
The analogies is weak: a power law doesn't exist in those reputation systems since the value is constrained to [0..5]
yarrel 11y ago
Doctorow mentions eBay in the article.

ktRolster 11y ago

From the article: >[money] ends up pooling up around sociopathic jerks who >know how to flatter, cajole, or terrorize their way to the top It's actually kind of hard for me to care about the inequality of people who vote for Donald Trump

Nutmog 11y ago
Does that mean you only care about the inequality of people who vote for politicians who promise open boarders? Not having open boarders is also reinforcing inequality globally, which is even bigger (hence worse) than just in America. If you don't try to reason out your political opinions objectively, they're no better than the opinion of a screaming mob.
- ktRolster 11y ago
  Well, it's really conflating reality with the a hypothetical situation. The hypothetical is, money pools around sociopathic jerks who know how to flatter, cajole, or terrorize their way to the top, and if that hypothesis turns out to be true, then I don't feel sorry for those people who caused their own problems by supporting jerks.

siosonel 11y ago

"... Citizen Scores are a near-perfect expression of reputation economics: like most other forms of currency, they are issued by a central bank that uses them to try and influence social outcomes." It seems to me, and I could have misread, that the biggest problem with the examples of currency systems in the article is that the 'pooled' currencies are unquestionably accepted by participants. Take that guarantee away, and someone could design a reputation currency where participants could reject payments from disreputable participants. In which case accumulation of units does not imply the long-term ability to use them; instead, there will be a long-term incentive for participants to maintain a good reputation. See this overview of a counter-example to the article's point, a reputation currency system without a central issuer: https://tatag.cc/ui/home-about https://tatag.cc/ui/home-about. (Disclaimer: I'm the developer of the linked site.)

deleted 11y ago
[deleted]
seiji 11y ago
In which case accumulation of units does not imply the long-term ability to use them; instead, there will be a long-term incentive for participants to maintain a good reputation. There's an important distinction here: the score of your peers versus the score of your government/authority. It's possible your peers love you while your government hates you. Maybe you do great work, but are a pain to the power structure. In that case, you end up with high peer ratings, low "political office" ratings. If the goal is "orderly citizens," then the political ratings become more viral (as in, the people you associate with get boosted or discounted based on your Official Political Office Rating) and try to reinforce people conform to how The Political Office wishes people would behave. We can even make this local to HN. HN has secret "political rankings" on accounts to restrict the reach of people the "HN establishment" doesn't like (HI DANG), but the public vote counts are more peer-oriented rankings (which still aren't perfect because HN has 3 to 5 distinct sub-cultures fighting against each other, so a +100 from the "VCs are evil bastards" subculture in the morning gets canceled out in the afternoon once SF wakes up and you get -200 from the "VCs are genius darlings and we should all kiss their feet" subculture).

Uhhrrr 11y ago

It's interesting to see some of the problems mentioned play out in the article posted today about Arduino's origins: https://news.ycombinator.com/item?id=11212021 https://news.ycombinator.com/item?id=11212021 Especially since Doctorow flogs Arduino endlessly on BoingBoing.

haberman 11y ago

Did I miss something or does the article start by making an argument about what works or doesn't work in the real world by invoking a fictional novel that he himself wrote?

breadbox 11y ago
Not really. The fictional world is used only to contrast it with how badly it mirrors the reality. It's invoked merely for the author to have a chance to say "mea culpa" (and maybe to help illustrate that these wrong ideas are seductive).
EC1 11y ago
Ah the ole self citation. Always a classic.
joveian 11y ago
And ends with imagining how a proposed but yet to exist system will function... while ignoring historical examples of many societies that did organize themselves by reputation that worked out quite well without seeing anywhere near the type of inequality that currently exists. And, of course, some that organized themselves that way and didn't work out that well, although still not with the current level of inequality. For that matter, he doesn't actually show that even his imaginary reputation system is worse than our current monetary system, just that some of the same types of issues can happen.

dnautics 11y ago

I don't think his analogy to reputation economies is quite right: having been a Lyft driver, I did observe that it was difficult to get out of ruts when you have a low score (a passenger entering a car with a low score is going to be more vigilant and critical). Yet, scores are constrained to being between 1 and 5 so it's relatively easy, with the right strategy, to create upward momentum and bring oneself back into a high range. There is no power law distribution in the scores because they are constrained to a small range. I don't think the "inequalities" really generally apply to constrained reputation economies.

badsock 11y ago
That's kind of like Nigel from Spinal Tap's argument that his amp goes to 11. I doubt that internally Lyft stores your score on a scale of 1 to 5. It's almost certainly derived from a bunch of other data, or at the very least stored as a floating point number. You can approximate whatever curve you like with either, and then just round. I'd believe that Lyft doesn't currently have a power law curve, but the 1-5 system isn't what's stopping them.
- dnautics 11y ago
  I know Uber stores as a float. Lyft probably does not since it's averaged over 100 rides. Integer math is easy! Also you can't mathematically have a power law over (1..5)
  - klodolph 11y ago
    You can't have a power law over 1..5? Yes you can. Power law works perfectly fine with finite ranges. It works perfectly fine with discrete values as well. The only question is how accurate a power law model would be in this case.
  - SixSigma 11y ago
    How about : 100-90% you get a 5 90-75% you get a 4 75-40% you get a 3 40-5% you get a 2 5% and under a 1

Animats 11y ago

If you want to see a reputation currency treated seriously in SF, read "Daemon" and "Freedom™" by Daniel Suarez. Augmented reality meets level grinding.

jrnichols 11y ago
Two of my all time favorite books, and I love how he nailed that part.
caseysoftware 11y ago
I caught a panel this past summer where Suarez, Doctorow, and Hugh Howey (Wool) talked about their approaches to writing, taking ideas into the "what's next" stage, and their inspirations. It was fascinating.. unfortunately, recordings were not allowed. (possibly part of the reason it was fascinating)
- rosser 11y ago
  Please tell me that's recorded and on the web somewhere. EDIT: A cursory first pass at googling it doesn't yield anything. Can you provide any details on where/when or whatever, to help narrow the search?

deleted 11y ago

[deleted]

lisper 11y ago

This will come as no surprise to anyone who has studied game theory. The rational move in a prisoner's dilemma if you know (or control) when the game will end is to defect. This is also why term limits don't work.

dragonwriter 11y ago
> This is also why term limits don't work. Its a limit on the utility of term limits where the term limited officer is unlikely to seek another elective office when termed out, but that concern does not apply to most holders of term-limited positions (it does apply to the US President, which tends to be someone's last elected position, but state legislators, for instance, often seek other, usually higher, offices with constituencies overlapping those of their prior office when termed-out, and so the concern doesn't really apply to them.)
- lisper 11y ago
  Actually, it does apply because there are vastly fewer higher positions than lower ones. Most politicians who term-out go into private industry, and they know it.
dllthomas 11y ago
> The rational move in a prisoner's dilemma if you know (or control) when the game will end is to defect. Can't they always control when they stop running for office?
- lisper 11y ago
  Yes, of course. The implication here is that someone would stop running in order to enable a defection, but that's a fallacy. People can (and do) defect for reasons other than knowing when the game will end. The problem is not the defections per se (those happen all the time), it's the fact that if the end of your term is known then not only does that force you to defect (if you are rational), it also forces everyone else to defect if they are rational.

patio11 11y ago

I wonder what the Gini coefficient of karma scores is. (In the sense of "legitimately curious" rather than "attempting to make a joke which will further concentrate karma in the hands of the 0.001%.")

minimaxir 11y ago
Karma is not a zero-sum game, though. There is such a thing as a free upvote.
- patio11 11y ago
  The same is true of wealth generally. (c.f. my favorite PG essay: http://paulgraham.com/wealth.htm http://paulgraham.com/wealth.htm ) Just like "Post a comment; people shower it with karma" is positive-sum activity, many efforts in the wider economy are positive-sum. That's why we don't eat grubs and use leeches for treatment.

chadk 11y ago

There is a chapter in Tom Slee's (excellent) book "What's Yours is Mine: Against the Sharing Economy" which goes into depth about rep systems and product ratings, why they are different, and why rep systems are a bad way to measure things. There are a bunch of footnotes. I recommend it if you are looking for an even more critical take.

akkartik 11y ago

There's been a couple of really deep articles recently on reputation economies and how they interact with conventional economies: http://www.ribbonfarm.com/2016/02/11/minimum-viable-superorganism http://www.ribbonfarm.com/2016/02/11/minimum-viable-superorg... http://www.ribbonfarm.com/2016/03/03/inequalities http://www.ribbonfarm.com/2016/03/03/inequalities

Tossrock 11y ago
Thank you for sharing these, I enjoyed them.

seeing 11y ago

There’s no objective measure of ‘‘merit’’ so there’s no way to know whether your society is meritocratic or not. Is this true?

nickysielicki 11y ago

> There’s no objective measure of ‘‘merit’’ so there’s no way to know whether your society is meritocratic or not. Does he really believe that you can't quantify ability in any way? I don't buy that.

dsernst 11y ago
so.... how do you do it?
saintgimp 11y ago
No, he's saying that "merit" is an incredibly easily-gamed metric. We can measure results all right, and we can measure ability rather less so, but "merit" implies a casual link between ability and results that is very hard to unambiguously prove and shockingly easy to fake (even if just by disregarding beneficial external factors).
- rlucas 11y ago
  More importantly: creating a scalar metric of "merit" is always an exercise in power, because it simplifies a hugely multidimensional space to a scale, and in collapsing all those dimensions expresses in a hidden way the preferences of the definer of that metric. This happens even in notionally quantifiable domains like finance. What asset gives the best return? Should be easy, right? Well, what about volatility? Oops, turns out the naive rank ordering of assets by expected return contains an implicit value judgment about volatility. See upthread for a mention of eBay seller scores being unadjusted for transaction size for another example.
  - nickysielicki 11y ago
    Good comment. Thanks. I just wanted to reply and say that you and saintgimp have changed my opinion.
cauterized 11y ago
Do you really think that ability is the only component of merit?

MarkPNeyer 11y ago

" it’s a score that a never-explained set of network services calculate by directly polling the minds of the people who know about you and your works, reducing their private views to a number. The number itself is idiosyncratic, though: for me, your Whuffie reflects how respected you are by the people I respect. Someone else would get a different Whuffie score when contemplating you and your worthiness. " This is exactly what i'e designed with github.com/neyer/respect It's basically the same as pagerank, but it has an important feature that the author doesn't seem to have considered. Look at the notion of 'soundness of respect' in my code, and see how different it is from anything out there. It provides multiple parties who aren't directly part of a conflict with an incentive to find a resolution. > Gamergate could use to destroy your’s employment and personal life, possibly permanently, just by mass-one-starring you. This is specially what the respect matrix works against; people who one starred someone else for spurious reasons end up dinging _themselves_ if they are at all connected, which the social graph says we all are. You'll lower your soundness score if you give someone else a shitty rating, and yet you have an implied positive rating through other links.

daodedickinson 11y ago

"Whuffie has all the problems of money, and then a bunch more that are unique to it. In Down and Out in the Magic Kingdom, we see how Whuffie – despite its claims to being ‘‘meritocratic’’ – ends up pooling up around sociopathic jerks who know how to flatter, cajole, or terrorize their way to the top. Once you have a lot of Whuffie – once a lot of people hold you to be reputable – other people bend over backwards to give you opportunities to do things that make you even more reputable, putting you in a position where you can speechify, lead, drive the golden spike, and generally take credit for everything that goes well, while blaming all the screw-ups on lesser mortals. If this sounds familiar, it’s because that’s how money works." No, that's how democracy "works".

elihu 11y ago

In "Liars and Outliers", Bruce Schneier talks about reputation as a tool that society uses to force its members to behave well. In small societies, reputation by itself is usually enough, but the problem is that it doesn't scale because people can ordinarily only keep track of about a hundred to a hundred and fifty people (Dunbar's number). I'm of the opinion that, since Dunbar's number is a purely biological limitation, there's no reason to think that computer-assisted reputation can't scale to much larger groups of people. I think Cory Doctorow is right to be worried that an authoritarian government could use reputation as a tool of coercion (and this is why we should worry about things like government collection of phone metadata). However, I think it's also worth considering that reputation could be used as a tool by the people to obtain some accountability from the rich and powerful, and to help distinguish grass-roots support from astroturf. (I went so far as to create a site, http://polink.org http://polink.org, as a sort of collaborative graph database of how powerful people and organizations are connected to each other. It's one of those side projects I feel like I should get back to and work on one of these days.) One of the reasons I think computer-assisted reputation hasn't taken off is that it's actually kind of hard to implement a good reputation engine, or even agree on what sort of properties a good reputation system ought to have. A lot of awful reputation systems have taught the technology industry to have very low expectations, which is a shame because I think they can be very powerful if implemented well and used correctly.

cam_l 11y ago
Interesting ideas.. ..tangentially, why even bother with reputations? The big issue with money based economy is that money is all cleansing. All the shitty things you did to get your money can be forgotten and your money used to buy yourself into a position of power, prestige, or even good standing. If we could tag money's history of exchange we could maybe avoid the both the issues of reputations (big if obviously). Individual transactions could be judged by the prior history of exchanges. Though this could be used as a proxy for reputation or to construct a reputation, the reputation is not required to complete the transaction as a seller. The seller only needs judge the transaction on the history of the money offered itself. Ideally this would create a situation where 'clean' currency would progressively become more valuable than 'dirty' currency, encouraging clean wealth creation.

musesum 11y ago

Perhaps reputation should behave like neural nets and have a tanh(x) activation function.

cousin_it 11y ago

> attempt to establish a basis for strangers to trust one another That's a perfect problem description for a new business. Existing reputation systems don't do it well, but then again, search engines before Google didn't do search well.

bb101 11y ago

Interesting application of reputation to market-based economies. Doctorow's article won't be a surprise to anyone who lived behind the Iron Curtain during socialism. The State held information on every citizen, and all official transactions resulted in stamps and signatures in little booklets. The stamps and signatures were a proxy to reputation. Don't have the 40 years worth of stamps in your employment booklet? That's a problem for your retirement. Know the right people with the right connections? You get a better apartment than everyone else. Plus ça change...

vixen99 11y ago

" As anyone who’s ever tried to figure out the he said/she said campaigns run by the US climate denial lobby can attest, doubt is much more powerful than outright suppression.". I don't know about the campaigns but the point about doubt is as it should be because if you put forward a hypothesis it's vital (a la Popper) to subject it to tests to see how well it matches reality. The CO2 versus global temperature relationship is anything but simple. Between 1998 and 2013, the Earth’s surface temperature rose at a rate of 0.04°C a decade, far slower than the 0.18°C increase in the 1990s. At the same time, CO2 levels rose uninterruptedly as they did earlier. Someone should compute the enforced degree of depression of industrial activity across the world which would according to the theory, have reduced global temperatures to be consistent with those figures. What a pointless and tragic exercise that would have been. http://www.nature.com/nclimate/journal/v6/n3/pdf/nclimate2938.pdf http://www.nature.com/nclimate/journal/v6/n3/pdf/nclimate293... Of course CO2 is implicated in the energy balance on Earth but to claim a direct strong causal relationship is simply in denial of the facts.

yason 11y ago

Reputation only works if you effectively can't disappear. One reason why good reputation can be trusted somewhat is that you can guess how likely the person enjoying it will go protect it for the future.