The gift economy (E)

0:00Hey, it's Seth, and this is an Akimbo announcement.

0:08I know I've been gone for a while. I've missed you. I've been writing. My new book, This is Strategy, comes out in October 2024, right at the end of the month at a local bookstore near you. Starting in September, we will be back with new episodes based on the audiobook, based on the Udemy strategy course and a special Q &A series where you can volunteer to go over your strategy as part of the show. If you'd like to share your journey, what you're up to, what you're challenged by, visit akimbo.link and press the appropriate button and we will be in touch. Thanks for holding on. Thanks for the work you do.

0:57Keep making a ruckus. We'll see you at the end of September. On the day you turn three, on your third birthday, something extraordinary happens. It might have even happened to you. People come over to your house. Some of them might even be strangers to you. They come over to your house and they bring you gifts. Gifts that are yours. Gifts that just arrive. They belong to you, not someone else. They're yours. Hey, it's Seth. And this is a Kimbo.

1:39One of the basic laws of mechanical physics is that it's really hard to have two things in the same place at the same time. And one of the laws of capitalism and private property is that things are owned by one person at a time. And what we learn when we're two or three or four is that if someone else has a toy and you want the toy, you can't have the toy just by taking it. That there are a complicated set of rules about how a toy comes to be in your possession and what it means to have something in your possession. To work that out, we have come up with a whole bunch of training devices. One of them, for example, board games.

2:22Board games, and you remember them probably as one of your earliest memories, the stupid ones like chutes and ladders in Candyland, working all the way up to ones that involve strategy, diplomacy, and bluffing, generally involve private property, trading, and winning. Some people win by accumulating more of something, whether it's points or stuff, and other people lose. Then we send you to school, where we start to grade you, rank you, put you into boxes, where we create an industrial system around winners and losers. We have class rank and the honor roll. We have people who make the cut for the football team, because not everyone, we're told, can be on the football team.

3:09If you decide to be in the fourth grade musical, well, only one person gets to be the Wizard of Oz. So you have to go to tryouts and auditions, and they will pick the best person to be the wizard. Well, to be picked as the best person means that you gain some sort of status, and it's something that you might want. And it also means you have to put in effort and preparation to be better than the other people. Private property is pervasive, and we really don't consider very often that there might be alternatives. Because most of the alternatives, when they've been tried, have proven to be unworkable at scale and don't lend themselves to the difficult work that industrialism requires to create modernity as we know it.

4:02But wait a second. What about Crosby, Stills, and Nash? What about this?

4:20There's harmony here. There isn't private property. There's community. That somewhere along the way, these four men learned to listen to each other and to contribute to something that is greater than any of them could make on their own. There are very few board games that teach people how to do this. One of the side effects of that third birthday party is an understanding that economics, technically household management, is about the management of scarcity. If everyone can't have the same toy at the same time, how do we figure out who does get the toy? This leads to all of the formulae, calculus, and theories that bring us modern economics.

5:11Modern economics is based on the idea that rational people who have the same consideration of time will make rational decisions about how to allocate scarce property. And because it is such a powerful engine of changing our culture and the world around us, this dynamic of private property has spread from things that are obviously private property, like that coin in your pocket, to things that traditionally haven't been thought of as private property at all, like the heir over the building that you own. What happens though, as our world shifts, shifts to things that are more digital, shifts to understand that private property, has externalities, has side effects, has things that affect everyone.

6:06What happens if more and more people have what they think of as maybe enough stuff? After all, we spent more money on self-storage units in the United States than we spent on going to the movies, and instead seek out something like meaning or respect or dignity or connection. How do we reconcile private property with the idea of harmony.

6:43It's worth going back 140 years and a guy named Harry Kennedy. Harry Kennedy wrote a song called Cradles Empty, Baby's Gone. And that song, sort of popular, was put on a player piano roll. Now, you may not even remember what player piano rolls were, but they're the original digital medium for music. By punching holes in a long strip of paper and putting it into a device that could read the paper, the folks who made player piano rolls could sell them to people who had player pianos, often in a public place like a bar, but sometimes in the home of a wealthy person.

7:29And then, by pressing play or turning a crank, you could listen to an exact note-for-note reproduction of the song that was encoded on the player piano paper. Now, this was early in the history of recorded music. Before this, it's worth remembering that the only music you heard was live music. Live music is hard to consider private property. You hear it, and then it's gone. You get to remember the tune anytime you want for free, but the performance itself, it comes and it goes. So when these player piano roles showed up, One company, the company that got an early head start, decided that what they would do is find people who had written songs and pay them royalties.

8:27And the Automatic Music Paper Company had a plan, and their plan was to monopolize all of these rights and then help musicians sue companies that didn't have the rights so that they could corner the market on player piano rolls. Well, as you could imagine, even 100 years ago, this ended up going to the Supreme Court, and then it went to Congress. And what they came up with was the idea of the compulsory license. The compulsory license says that anybody who wants to make a mechanical version of a song by putting it into a player piano format can do so by paying a given, stated, non-variable license to the person who wrote the song in the first place.

9:13thus busting open the monopoly. But what it also did was extend the notion of private property. Because now that a song can be written down and put into a medium where you can sell it, it has a different sort of value. Suddenly, it's not the happiness of sitting around the Campfire singing together. It's who owns this song. The great Levon Helm and the great Robbie Robertson ended their friendship around who owned some of the songs that were recorded by the band.

10:07Take a load for free. Take a load off Fanny. And you put the load right on. The feud lasted for decades. A feud that only existed because private property showed up in a region of our culture where it didn't used to exist. So what are the other things in our lives, in our culture, that we might measure instead of scarcity? Well, consider what's going on in social media. More and more people have a following. More and more people have a reputation. What is your reputation worth? Is your reputation a piece of private property? Once you have this reputation, what will you do with it? Well, just 30 years ago, what you did with that reputation was you stood tall as you walked through town.

11:05Now, if your last name is Kardashian, what you can do with that reputation is become a billionaire. That what we have decided to do was take this idea of standing in the community and try to figure out some way to monetize it. And now, a question. how much exactly do we owe Albert Einstein? Because E equals MC squared, that's him. That's from Einstein's great work. Everyone knows it. Very few people know what it means, but we know it. And we know it without having paid Einstein anything for uncovering the idea. What happens when we get an idea? Where does it come from? That's a topic for another podcast.

11:54And where does it go? And when ideas spread through our culture, whether they are important life-saving ideas like you should wash your hands several times a day, particularly before handling food, or complicated scientific ideas about how we go about making a medicine or how we go about saving a life, sometimes we turn those into private property by patenting them, and sometimes they spread and benefit others. And so we have a different class of goods, goods that work better when more people engage with them. If everyone knows your idea, your idea is worth more, not less, than if no one knows your idea.

12:38As Tim O 'Reilly has said, the enemy is not piracy, the enemy is obscurity. More than 10 years ago, I did a book called The Big Moo. 32 other authors and I got together and each wrote a chapter of a book. We did all of it for charity. So far, it's raised nearly$300 ,000 for Room to Read and the Juvenile Diabetes Research Foundation. The question is, did the authors get a good deal? Should the authors have been paid more than nothing to contribute to this book? Or were they paid nothing? Maybe the increase in their reputation, maybe being part of a circle, being insiders instead of outsiders, was value unto itself.

13:26And so we see this idea that digital goods outside of the player piano role can spread from person to person, ideas that spread when. But we can take this much further because it's not just about ultimately being able to cash out. Maybe the entire point of spreading our gifts is to spread our gifts, not so that ultimately we will be able to turn around and make some money. So my guess is you're already ahead of me, but let's catch up for a second here. If there's a world where interoperability matters, where people being in sync is better than people not being in sync. If we have a choice of living in a culture where good ideas spread, where people feel connected, where there is actually joy in being able to help someone move forward, particularly when it doesn't cost us anything and might benefit us because our teaching someone else how to read, how to do math, how to cross the street safely, doesn't cost us anything, but it makes things better for everyone.

14:39If that culture is a culture we'd like to live in, then maybe our obsession with turning everything into private property where we all come out ahead when everything is bought and sold might be a little misguided. And maybe learning to sing in harmony ends up producing more value than us versus them. So now we end up with The Gift by Lewis Hyde, based on a book from many decades earlier by Marcel Mauss of the same name. And this book, obsessively researched, is all about a different economy, not an economy based on scarcity, but an economy based on gifts. Now, there are a couple ways to think about a gift economy.

15:28One way to think about it is as a hack of reciprocity, that if I give you a gift, you owe me a gift, and you owing me a gift is going to help me in the long run get more private property. But there are other ways to think about this. And in fact, through history, when we look at folk tales, when we look at native cultures, when we look at things that happened before we commercialized everything, what we see again and again are gift economies. You may have heard someone called what's supposed to be a nasty term, Indian giver. Where does that come from? Well, it's actually not nasty at all. What it comes from is when the first pilgrims arrived in North America, the first peoples who met them were gracious and open, invited them into their homes, and gave them gifts.

16:20But then the pilgrims were surprised, shocked, and disappointed to discover that months or years later, that Native American came back and took the gift back. Well, this doesn't match the mindset of private property. In private property world, when you give someone a gift, it moves from your private property to their private property. But in the culture that the pilgrims were invading, it was totally different. There, the gift was a chance to welcome someone, but it came with a proviso, which is you're supposed to give it to someone else, that a gift needs to keep moving in order for it to be a gift.

17:05It is not a transfer of private property. It is, in fact, something that works precisely because it is traveling. And now back to the idea of creativity in the arts, because it is possible to imagine that that idea, whether it is E equals MC squared or the mysterious smile on the Mona Elisa, is a gift, a gift from the muse, a gift from our experience, a gift from our subconscious. And that only when we give that gift away does it become art. Because art is what we call it when a human being does something original, something personal, something generous, and something that might not work. And it can only become art when we share it, because that's where the it might not work part comes in.

17:57And when we share it, when we give it to someone else, we change them. And then what happens? Then they can give it to someone else. Now, the canvas that the art is on, that's a piece of private property in our modern world. That canvas can be bought and sold. It can appreciate in value. People could make a living making the canvases. But for tens of thousands of years, it never occurred to anyone to get rich making a painting or a song. That the purpose of making a painting or a song or a sculpture was not to get rich, was not to create a piece of private property out of nothing. The purpose was to express our gift, our humanity, to share a little bit of our soul.

18:46And that when that idea is spread from one person to another, it creates society, culture in sync, people like us doing things like this. So if I mention to you the painter Susan Rothenberg, it's entirely possible you know who she is. And if you do, then you're people like us. If I ask you, have you seen the Clifford Stills in Denver? And you say yes, now we have something to discuss. Neither one of us gave any money to the Clifford Still estate. Clifford Still didn't make those paintings, hoping that 60 years later, you and I would somehow send money to his family. That's not what it's for. That's not what it does.

19:30And so we have another economy, an economy that isn't really done justice when we call it an economy. Because when we think of economy, we think of scarcity. And when we think of scarcity, we think of private property. Two people can't hold the same toy at the same time. No, it's a different thing. You can't say you can't play. The gift economy works because culture surrounds us and that sharing ideas, spreading them from one to another, it feeds each of us, particularly the artist who was generous enough to make it in the first place, all of which is a way to say that our race to figure out how to make it pay might be replaced or at least augmented by a different urgency, the urgency to make it matter, to do work that matters for people who care, to create circles of gifts, gifts that keep giving, that keep circulating, clockwise or counterclockwise.

20:35It doesn't always matter from one person to another, not because we seek reciprocity and more private property, but because we seek the idea of together, because together might be better than alone. Thanks for listening. We'll see you next time.

21:10Do do do do do do do do do do do do do do do do do do do do do do do. TV.

21:29Thursdays and Saturdays. Hey, Saturday. What have I got to do?

21:41Thanks for listening. We'll be back in a second with answers to your questions from last time. Hey Seth, it's Maria. Hey Seth, my name's Kyle. Greetings, Seth. This is Stephen out in Madison, Wisconsin. Hi Seth, Alicia from Charleston here. Hi Seth, this is Anupam. Hi, this is Caitlin. Hi Seth, warm greetings from Curacao. Hey Seth, my name is Nick Ryan from Pittsburgh, Pennsylvania. Hey, Seth, this is Rex. Hey, Seth. Hi, this is Vasilis from Greece. Hi, this is Roberta Perry. My question is... And that completes my question. I do love to hear from you. I hope you will take a minute to submit your question.

22:17It's easy. Just go to akimbo.link, that's A-K-I-M-B-O dot L-I-N-K, and press the appropriate button. A couple questions came in about my rant about privacy. So first, to clarify, I was not defending wholesale corporate snooping in which we are taking disparate bits of data streams, integrating them into one data river and using it to control and influence the way people behave. I was simply pointing out that it's all on a continuum and it's been going on for a long time. Hi Seth, it's Casper from Berlin. I found your podcast a few weeks ago and I've been going through it at about two to three episodes a day, which quite surprised me because I normally don't engage very well with people trying to teach me marketing.

23:08But I found the way you framed it around helping people do meaningful work really resonated with me and the engineer in me, helping me a lot and thinking about how to promote my own work. However, when you bring up the topic of privacy, I found myself really strongly disagreeing with you. Hello, Seth. This is Denise from Berlin speaking. I have a question about your last episode on privacy and surprises. You were talking about the convenience of targeted ads. And I absolutely agree. They're very convenient. And I guess we would go kind of crazy if we didn't have them. Same goes with optimized search engine results.

23:52However, and I guess I'm pointing towards the filter bubble discussion here, I'm constantly wondering what effect this will have on our culture and whether this will produce people in the long run that are still able to think outside of the box. and there's this famous uh einstein quote which says we cannot solve our problems with the same thinking we used when we created them and this seems to be a big topic of your podcast as well you know how can we define something for ourselves that we can create that's meaningful valuable and improves our culture and i'm just kind of scared that the way our internet works will slowly kind of um prevent this from happening anyway i would love to hear your thoughts on that and i'm very grateful you're doing this podcast thank you for your work i always love to hear your rants and thoughts and ideas bye take care You're absolutely right, of course.

25:08Now, there has always been a filter bubble that I did not growing up reading the newspapers of Senegal or Paris, that when we lived in a place that was isolated from other places, spoke a language that was different than others, we basically have always lived in a filter bubble. But just as the streams of privacy being compounded by industrialists suddenly make it a problem. The filter bubble, the idea that we are insulated from other voices, becomes more and more profound as that insulation becomes wider. So what happens next? Well, what usually happens next is a combination of two things. One, it becomes the new normal.

25:57When rock and roll first showed up, old folks couldn't believe the coarsening of music and they thought this will fade. But of course, it didn't fade. It simply became the new normal. But second, at the same time, when people care enough, they figure out a way around it or through it. So through deliberate action, some people, people who realize that having a variety of inputs makes them more effective, are finding ways to use the very tools that insulate us to connect us. They subscribe to blogs that they don't agree with. They read newspapers, as long as there are newspapers, with other points of view.

26:42They figure out how to understand the bias behind the writing that they are reading. Yes, it's a challenge. Yes, it's difficult. Yes, most people aren't going to do it. The same way most kids eat chicken fingers at restaurants now instead of real food. And so we can wring our hands about it and complain about it, but we still have the ability to do something about it with our own mouths, with our own fingers, which is to intentionally seek out the ideas that might not be presented to us automatically. I wish I had a happier, easier, automatic solution, but I don't. Hi, Seth. This is Heather from Northampton, Massachusetts.

27:25I work in public education and have for about 20 years, and I'm now working at the state level. Here's my question. Do you have any thoughts on how we can fix a system that was built and designed with inequity in mind? In other words, inequity by design is the legacy of the current public education system. What can we do about it? I've thought a lot about this one since you asked it. Thank you. If we look at the history of public school in the United States, what we see is that it wasn't originally designed to be a tool to maintain inequality. It was actually designed to be a tool to bring illiterate people up to a level where factories could employ them.

28:14It was designed to counter the shortage of employees. But you are right that scarcity creates value, and the systems that are in place are designed by the people who pay for them to ensure that the people who are paying for it and their offspring and those they care about maintain their status. And that shouldn't be what public school does, but it is, in fact, baked in to the funding model and to the way we pay attention to it. It's worth highlighting that by the time a kid is five years old and enters the traditional public school system, it's often too late to do much of the work that needs to be done.

28:56So my take is this. First, we have to be really clear about the division between education and learning. We need to use the new tools that are available to us to sell, to promote, to execute, and to push forward learning. Actual learning, not because it's on a test, not because you're going to get a scarce certificate, but because learning through experience, through doing, through being present, is not only the way for us to combat inequality and inequity, but it is also the key to our future success and our future economy. So how to do that? Well, I think we do it by starting much earlier than five years old.

29:40We do it by dismantling much of what we keep score of in the education system, that tracking somebody to get them a scare seat in an institution that has status, where scarcity is baked into the entire model, can't possibly scale. But the alternative, which is creating generations of people who see possibility, who engage with each other, who learn to program as opposed to being programmed, who figure out how to be the ones who solve interesting problems and lead. We have seen people from every walk of life, from every continent, be able to do this. But it's very difficult to do it on one's own.

30:26So people like you, people who care, who have empathy for those they are seeking to teach and to lead, we have to figure out how to put systems in place. Because the smartphone can make us dumb, but it's also been shown that the smartphone can open the door for people who are ready to get smart. That access to information is insufficient. It must be accompanied by possibility, by belief, by the passion to go to the next level. And that means getting at the heart of the stories that parents tell themselves and the stories that parents tell their kids. And most of all, the story that kids tell each other and that they hear from their teachers.

31:11That this is possible. It is happening around the world. I was talking to the folks from the Acton Academy last week. There's more than 150 of them in dozens of countries around the world. The typical Acton Academy has dozens of kids and exactly two adults, counting custodial staff. Really? Yes. And one of the rules is if a kid asks one of those two adults a question, the adult may not answer it. That if we can create these schoolhouses back to the old model where kids learn to help each other and to help themselves, where they engage in inquiry, not compliance, we can get rid of the scarcity model and we can move instead to a leadership model, a model based on inquiry and possibility.

32:02Way easier to say than it is to do, but we have to begin by saying it. Thanks again for listening. We'll see you next time.