Social Hierarchy Economics: Twitter Followers as the New Money Supply

For all the ink and pixels wasted on media technology we’ve missed a once-in-500-years sea change who’s primary units of production are two fold: mobile data traffic and impotent rage.

Some will consider it heretical to discuss religion as media but it is impossible to argue that the bible did not provide the narratives around which pre-20th century life coalesced. A bad harvest invoked Job, suffering neighbors were assisted by Good Samaritan. Grace was spoken before meals. The rural population, mostly everybody, took a weekly bath on Saturday and headed to church the next day, the only time they would see non-family members.

The stories changed from the New Testament to Amos and Andy but the purpose and attraction– collective narratives – was the same. Movies, television, again, just an enhanced version of the same thing.

One can argue that internet-based entertainment is just an extension of this trend but one would be wrong.  Church, radio, television were all passive – the audience showed up or tuned in when they were told.  The Internet is a tool of self-selection.

The last time consumers were granted such an upward spike in empowerment – the printing press/Reformation – things did not go well for a couple hundred years. Importantly, the initial reaction was the same then: you lied to us.

But whatever, things will go the way they go. For our purposes let’s turn to what this new Internet-led empowerment was used for, best described in a brilliant essay by Freddie Deboer:

 

The internet has provided tremendous functionality, for facilitating commerce, communication, research, entertainment, and more. Yet for a comparatively small but influential group of its most dedicated users, its most important feature, the killer app, is its power as an all-purpose sorting mechanism, one that separates the worthy from the unworthy—and in doing so, gives some meager semblance of purpose to generations whose lives are largely defined by purposelessness.

 

This is why an increasingly virtual culture needs an economics of social hierarchy. The western world is now wealthy enough that the necessities of life – food, warmth, shelter etc – are provided in extremis and therefore have little economic value.  If practical utility is no longer important what does have value are things that make me feel better/of a higher social strata than you. The Water/Diamonds Conundrum goes away.

Let’s posit that the social hierarchy of the Internet (and particularly social media) is scored not by money but by attention and influence. Twitter followers are not just arbitrary votes of support in this reading – they are currency. So, if love and money are by popular consensus the root cause of all murders, and Twitter followers are the new currency, it is no wonder how vicious the shoutfest gets online.

“That’s stupid”, you say. “I can’t spend Twitter followers so the whole notion is stupid. They have no value”. Fair point – online influence carries no practical utility unless your name is Josh Brown or Joe Wiesenthal. New followers won’t get you fed, but that’s what the government’s for, no? The robots tuk’erjerbs, man. You’re not going to let me starve are you?

Denying  value to social media also understates the normal, human, Pavlovian response to interaction and acceptance. For one, the potential to more or less design a perfect, if virtual, version of ourselves completely independent of physical attractiveness is deeply, deeply tempting. RTs from television personalities are both largely pointless and a perfectly-designed machine for dopamine production. Most of us are just built that way.

Crap, this is getting too long. I intended to guess at more aggregate economic effects of the virtualization of human interaction. It dovetails nicely with Izabella Kaminska’s insanely good work on The New Abundance (will wealth move online?). Kids are already not bothering to get their driver’s lisence and Google has stolen 90% of the advertising revenue that used to go to print media. Mobile data traffic is still doubling every year. The Wii is only five or six steps away from a Holodeck. Jesus, what happens then?

16 thoughts on “Social Hierarchy Economics: Twitter Followers as the New Money Supply

  1. Or Reddit, for those so inclined, where Karma is not a bitch.

  2. kris says:

    Wow. I am quite speechless.
    This is quite a jump from you.

    • Interloper says:

      Related to your favorite question: what is money? Does it have value as a future call on consumption if the goods you want to consume will be freely provided?

      • kris says:

        You are not giving me time to enjoy the post. I’m on the 2nd read.

        However, the answer is: Zero value.
        And…..oh my God, this is an absolutely fantastic question. Give me some time to think.

      • kris says:

        You got my brain and memories working.

        I will never ever forget when I was a little boy, sometime between 5th and 8th grade in Albania, the teacher told us that the whole point of communism was that when you want to eat, you walk out and go to the store and simply, quite simply pick up whatever you NEED to eat, but not more.
        “No need to have money in communism”, the teacher told us. She assures us that we were getting there slowly.

        Then after communism collapsed in 1990 somebody gave me a Bible. We are mostly all atheists. So I start reading it. As soon as I hit the Garden of Eden, I say,…craaap, this is communism. Adam and Eve were just picking up fruits from the trees freely available. Nobody used money.

        The difference was that it was God the one providing the goods freely, not the people.

  3. Interloper says:

    Right. And what screwed it up was it wasn’t egalitarian – there is a base need for hierarchy. Status was determined by position in the Party, not money, but it amounted to the same thing in the end.

    • kris says:

      There was no egalitarianism in communism. There were 3 groups:

      1) Top party officials – quite high salaries
      2) 2nd tier salaries like teachers and people graduated from university, usually residing in the capital, I’d say about 15-20% of the population, my family included.
      3) 3rd tier salaries like all working class (yes, it was a term used quite widely)

      However, when food stamps started to be introduced in the early 80s due to shortage of food that plagued all eastern europe, we were all converging towards being EQUALLY POOR.

  4. kris says:

    Totally agree, HIERARCHY is inherent of the current human condition.

    A human being is born with FREE WILL. 7 billion people means 7 billion free wills. Hierarchy is inherent and inevitable.

  5. kris says:

    I was at the gym and memories came back due to your post about Hierarchy.

    I remember going into 5th grade my parents sent me to another school by use of connections which was assembling a class having the following criteria:
    1) Teaching of english (as opposed to russian or french in most of schools)
    2) Most of children would be high achievers (I had 100% average)
    3) One sport would be mandatory to be trained with, in that case basketball.

    Nowadays the press calls this “hateful elite”, but at that time it was applied in …communism. They called it an “experiment” to see what would the effect be if all high achievers would be placed in class.

    I remember the teacher of english being so strict that 2 spelling mistakes would cost 10%. Anything less than 100% at the end of the year was not acceptable in my family (the requirements got loosened up once the economy deteriorated severely). I remember writing the word ‘apple’ tens of times so I wouldn’t forget about double p, as we do not have double lettering in albanian, except for double r.

    The competition was so fierce. God, these memories.

    Since most of goods were guaranteed to be provided by the government (until it couldn’t), we had an immense of amount of LEISURE TIME.
    A lot of reading, or going to the Academy of Arts with my childhood friends to see students sketching almost nude old people, or the beach playing volleyball on the sand with girls in bikini.

    I had a good life, I did. It was not bad….until the system could not produce anything and collapsed in 1990.

    • kris says:

      And if it rings a bell, the leaders were telling us that the economy was not doing that well because of…………weather.

      Have you ever heard that …recently?

  6. Here’s a very practical example of real life “value” in social media:

    http://www.usatoday.com/story/dispatches/2013/01/06/las-vegas-strip-club-plans-a-new-topless-party-pool/1810099/

    “The new club is looking to amp up its entertainment value, and is looking for a DJ. If you think you have what it takes to win the $100,000 contest (you need at least 5,000 social media followers and a demo tape)”

  7. [...] "The social hierarchy of the Internet is scored not by money but by attention and influence. Twitter followers are not just arbitrary votes of support in this reading – they are currency."  (Interloper) [...]

  8. [...] Social currency is the new net worth.  (The Real Interloper) [...]

  9. jonas says:

    Great post. I think it’s much better than the link to the New Inquiry article.

    I’m curious what you think will be the analogy of the “one hundred years not going so well” after the internet, when it’s discovered that they lied to us?

  10. alexander wayland-james says:

    actually once it was easy to get a job and meet one’s basic needs our worth turned to our social circle and our relative influence there-within. Twitter/facebook is simply the new way to quantify that commodity.

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