Inflation in the marketplace of ideas

Back in the dot-com days, we guru types used to roll out our favorite chestnut when we wanted to impress people, or to propose "radical" new business models: "consumer data is the currency of the Internet." But we never could have predicted how true this would be, what with the rise of social network marketing, psychographic and behavioral targeting, and widespread government surveillance.

Of course, this idea of information-as-currency hardly originated with us; it's central to a range of social theory by academic gurus like Daniel Bell and Manuel Castells, predicated on the notion that we are now living in an "information society" peopled by "knowledge workers."

Which leads me to my little thought of the morning (bear in mind I haven't had my tea yet): that just as global flows of capital and labor have helped to devalue our economic currency by putting our industry in a vastly larger and more competitive environment, global flows of information have helped to devalue our information currency.

Obviously, as I and others have discussed ad nauseum over the past decade, this applies to information-based commercial goods like music, video, news and such. However, I think it may also apply to other forms of information whose value has not traditionally been measured directly in economic terms.

For instance, a mere signature used to be enough to serve as a guarantee of our identity in legal, regulatory and contractual contexts. Now we are increasingly required to present multiple forms of photo ID, supply passwords, and even volunteer biometric information in order to complete transactions, cash a check, enter a building, or what have you. Traditionally, this "inflation" in the currency of personal information has been treated as a byproduct of the age-old cat-and-mouse game between information security (encryption) and information liberty (decryption). However, this doesn't preclude or conflict with another interpretation: our signatures have simply become a less valuable form of information currency as they have gotten more widely accessible. Today, even our social security numbers have become commoditized (they cost about $2 apiece online, according to a fairly recent NYT article).

Another potential effect of information inflation is the devaluation of ideas themselves. If profitable business, thriving culture, and even success in achieving the quotidian goals of our everyday lives are based on our ability to innovate, and on the strength of our ideas relative to other ideas, then the globalization of the conceptual economy certainly threatens to devalue our ideas, and thereby to undermine our potential success in business, culture, and quotidian achievements.

Of course, I'd be remiss not to invoke Jefferson's oft-quoted adage that "He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me." This premise -- that information, unlike other forms of capital, is non-rivalrous, non-excludable, and therefore increases rather than decreases in value with proliferation -- has been central to my work, and to many others', for some time.

This Jeffersonian framework for evaluating information is true when  we are discussing culture as a whole -- which certainly benefits from the "free flow of ideas" and the proliferation of cultural expression. Much as Metcalfe observed of all networks, the power and robustness of a cultural network grows exponentially as the number of expressive forms and practices comprising that network grows incrementally.

However, when ideas are in competition with one another -- as they must be for the Jeffersonian or Holmesian concept of the "marketplace of ideas" to function -- then the value of ideas-as-currency is derived from their relative strength, rather than their intrinsic qualities. Put in other terms, if you create a better mousetrap than I do, society overall will have fewer mice to deal with, but you'll end up with more food than I will.

Of course, there's nothing to stop me from taking your idea for a mousetrap, and adopting or even improving upon it myself. Hurray, everybody wins.

But wait -- not so fast. Technological and social latencies -- as well as ruinous IP laws (a/k/a institutionally enforced information latencies) -- invariably slow down the flow of ideas and the adoption of innovations (you might say the "free flow" is a myth -- always to be striven for, but never achieved), and therefore society becomes inevitably divided between information "haves" (those with better mousetraps) and information "have-nots" (those with worse mousetraps). And in some situations, such as a winner-take-all game (last one with a mouse loses), the speed of transmission is irrelevant, because only through the act of innovation (rather than the adoption of innovation) can an individual successfully achieve his or her goals.

Hence, the inflationary value of ideas. The wider and more fluid our information network, the more successfully and consistently we must innovate in order to prevent becoming information have-nots, or losing winner-take-all social dynamics. Today, we're already witnessing a kind of idea-hoarding that evokes images of Weimar-era Germans toting around wheelbarrows full of cash.

Before writing this post, I probably should have read the new Gladwell article on innovation and economics (it's been sitting on my night table for a few days). But I've got my own information latencies -- dozens of papers to grade, and only so many hours during which my son's in preschool. I'll take a look at it today, and check back in if I've got anything to add or amend.

UPDATE: The Gladwell article is great -- it punctures the myth of scientific genius by examining the ways in which ideas "in the air" occur to multiple innovators simultaneously -- e.g. Newton and Leibniz with calculus (strangely, no mention of Plato's contribution to the "in the air" premise). Unfortunately, he reserves the genius myth for the arts -- a claim I vehemently disagree with. However, other than describing the goings on at meetings of Myhrvold's idea-hoarding Intellectual Ventures (which sound like a lot of fun), the article doesn't have too much relevance to the question of information inflation.

UPDATE 2: Found this article from last year by Paul & Baron on a phenomenon they call "information inflation" -- however, their article refers to the sudden exponential growth in the volume of written information, and suggests the legal challenges associated with it. By contrast, I am using the term to discuss the devaluation of information, analogous to other forms of currency.