I’ve been meaning to get around to reading Down and Out in the Magic Kingdom by Cory Doctorow for a while now, and finally got around to it recently after downloading it to my iPhone (thanks, Stanza!). The most recent trigger to read it was from Tara Hunt, who is writing a book called The Whuffie Factor using a term from Doctorow’s book.

Whuffie is an idea stemming from Doctorow’s examination of “reputation economies” and “post-scarcity social dynamics”. In the book, all physical needs are satisfied for free, health is guaranteed, etc. So how do people compare themselves to each other? What do they strive for? The answer is “Whuffie” – essentially a numeric indication of reputation. If you see somebody rudely push somebody else aside, you indicate a debit on the pusher’s Whuffie. If you see somebody do something notable or impressive or selfless, you indicate a credit. People with high Whuffie numbers are more respected and tend to be leaders as others defer to their “Whuffie”.

“Whuffie” is basically measuring social capital, but in a publicly visible easily adjustable way. You can see why this concept would interest me, given my social capitalist post from a couple months ago. In the circles of society where I typically hang out, it matters less how much you make or what you have bought – instead, people are judged by what they contribute, the fresh ideas and perspectives they bring, and what they are building in the world. In other words, social capital matters more than fiscal capital.

From a purely capitalistic perspective, this “economy” doesn’t make much sense – it violates capitalistic assumptions to do things to impress others without necessarily having a path towards extracting fiscal value. And yet, it turns out that the things done in this way sometimes create much more value than projects designed to extract ROI (return on investment). When Hugh MacLeod drew the Blue Monster cartoon for Microsoft, he did it as a one-off because he thought it expressed an interesting idea, never thinking it might turn into a consulting business as other companies try to hire him to create a similar cartoon to express their brand. Many of the “A-list” bloggers didn’t start blogging to get famous – they started because they just wanted to share their opinion with the world. It’s a peculiar paradox – doing something for intangible rewards can sometimes pay off in tangible rewards, but only if you are not doing it for the tangible rewards.

Building social capital involves approaching interactions from the perspective of what one can do to help others. It has to be done from a selfless perspective, because we humans are reasonably well-trained in detecting ulterior motives. It’s like using the techniques of Dale Carnegie – when used for good purposes, they increase the value of the interaction for everybody, but when used for selfish reasons, they are often perceived as clumsy attempts at manipulation. Trying to calculate every interaction in terms of how I can benefit is going to limit my upside, whereas trying to do good for others creates the potential for much bigger wins.

To take another perspective, this ties into my theme of non-zero-sum thinking from earlier in the summer. Trying to help others creates the possibility of “growing the pie” of finding solutions that help everybody rather than just oneself. Trying to be selfish may ensure a larger fraction of the pie, but limits the size of the pie. Building social capital is an exercise in building “non-zero-sum-ness”, to use Robert Wright’s term from his book Nonzero (which I will read one of these days, honest!).

I was going to add a disclaimer here that this idea of building social capital may only make sense in affluent developed societies, but I’m not sure I believe that (disclaimer: the following paragraph is a wild extrapolation based on nothing resembling facts or research). The cohesion of villages has a lot to do with social capital, as people know they will be judged long-term by how they behave towards others. They can’t just up and move away to escape a toxic environment they have created, so they have a better sense of the long-term. Also, without the capitalistic urge towards me-me-me, villagers are less concerned with “keeping up with the Joneses” and more about what will build their standing long-term in the community. I’m reminded of Lewis Hyde’s The Gift, which explores the powerful resonance of gift-giving in myths throughout many different cultures, where those who hoard are punished and those who give are rewarded.

I’m not quite sure where I’m going with this concept, but I feel like there’s an important idea hidden somewhere in here about how social capital and non-zero-sumness interact and what that implies about how I should be behaving. I guess I’m also trying to figure out a responses to Adam Smith capitalism where the “invisible hand” will make the system work if everybody diligently pursues their own self-interest. I think that we are seeing the limits of that system, and I’m trying to understand what the motivating assumptions of a new system would be. In a future post, perhaps I will figure out how one might design a company around such a “Whuffie” system to create the proper incentives for employees to think of the long-term and of others rather than hoping the “invisible hand” will take care of the company.

P.S. I realize I never actually mentioned the book itself. The book explores how the quest for “Whuffie” influences several characters in a future Disney World run by “adhocracies”, fluid networks of people who have chosen to help run the park (remember, nobody has to work in this future scenario). It was a quick, fun read, but the idea of “Whuffie” as a motivating factor in society was the most interesting concept to me.