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Wealth Inequality Is Even Worse in Reputation Economies (2016)

Linked by Paul Ciano on December 9, 2017

Cory Doctorow:

Unlike other virtual currencies like Bitcoin, Whuffie isn’t something you buy and sell: 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.

The characters in the novel generally love Whuffie, even though it’s destroying them.

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. Inherit (or luck into) a large fortune, and give a couple million to a good cause – never mind that it will affect your quality of life not at all – and you’ll be lionized as a hero. The great and the good will invite you onto their podiums – but a poor person who takes in a foster kid gets virtually no recognition, even if fostering involves real sacrifice on their part.

The story of “meritocracy” – a society that migrates wealth, status, and decision-making power into the hands of the most capable – is seductive. Rich people love the idea of meritocracy, because the alter­native is that their lion’s share is unfair, the product of luck, or, worse, cheating. But many of meritocracy’s losers love it, too. In the words of John Steinbeck, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”

Meritocracy is a tautology, of course. There’s no objective measure of “merit” so there’s no way to know whether your society is meritocratic or not. Every famous, powerful, rich person owes their status to a com­bination of skill, luck, and persistence. The best luck of all is to be born to fortunate circumstances, well fed and well educated and well loved. We know for a fact that billions lack some or all of these forms of luck, and among those people are innumerable potential Stephen Hawkings and Steve Jobses and Albert Einsteins.

It’s bad enough when the meritocratic delusion takes root in a money-driven economy, but reputation’s one percenters are even more toxic. They can go spectacularly bankrupt, financially ruining their investors, and promptly raise another fortune to gamble on.

Reputation is pretty much useless for any of these things. Instead, they’re literally popularity contests: “more people like me than you, so I win and you lose.” In theory, this kind of jerky behavior will cost you reputation – but in reality, many people are delighted to treat such jerks as “strong, de­cisive people who tell it like it is.”

But Peeple is a modest effort compared to “Citizen Scores,” the for-now-voluntary service run by the Chinese government in partnership with Tencent (a huge social media and games company) and Alibaba (China’s answer to Amazon). Your citizen score is visible to everyone the government wants – buying socially approved items, undertaking approved leisure activities, adhering to rules and regulations, and socializing with other high-score individuals. Of course, not doing these things makes your score go down. Just being friends with low-scoring individuals drags your own score down, creating a powerful incentive to conform.

Mandatory Citizen Scores are being phased in over the next decade, and with other “soft” tools of control developed by China, it promises to be more powerful than any overt coercion.

Citizen Scores are a similar soft-power move: rather than arresting you for being friends with dissidents, the politburo will just downrank you – and everyone will see that your rank has been decreased, and will know that befriending you will endanger their own score.

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. In this case, those outcomes are perfect obedience to the state.

Paul Ciano

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