DRAFT: SUBSCRIBERS ONLY: Þe Ideal-Type of an "Attention Economy"

Thinking aloud...

The 2020-2022 COVID-19 plague caused by the coronavirus SARS-COVID-19 has, many today think, put the world economy in an odd position. For more than a quarter century now the ongoing revolution in data processing and data communications technology has been profoundly altering the basic underpinnings of property and exchange and value—has been shifting us from a “commodity” to an “attention” economy. We have all watched this shift gradually lurch forward. But now, many say, our two plague years are packing, in some aspects, what would have been at least a decade of change and development into two years, as requirements of quarantine and social distancing have taught and humans have had to learn on an emergency basis how to better use information and communications technology to try to substitute for much face-to-face interaction.

But what exactly, are we moving toward? Let me attempt to set out the ideal type of an “attention economy”, more-or-less by simply reversing the polarity on a “commodity economy” <> under the four headings: excludability, rivalry, transparency, and coordination.

In a commodity economy the things of value—the goods that people want—are concrete objects useful to them that are both rival (hence you “should” in some sense pay a price for using them) and excludible (hence you can straightforwardly be charged a price for access). In an attention economy the things of value—the things that you can be led to pay attention to, and would be willing in the abstract to pay for—are neither. Hence, on the one hand, you “should” in some sense have access to them for free. And, on a second hand, you should be offered great variety conforming to your taste, because it is no longer make-one use-one, it is write-once run-everywhere. But how is such a system of creators and attention-payers to be sustained when you cannot charge directly for what people find valuable in terms of what they want to pay attention to? You must, somehow, sell something ancillary that is not itself an attention good that you can somehow bundle with the attention good, and often this will take the form of a side-channel that can be manipulated to get them to direct attention elsewhere, for people who think that they can profit for it.

In an attention economy information problems are not just a complication or a distraction, they are at the essence. You cannot know what you are consuming before you do so. Once you have learned what it is, you have already paid attention to it, and your part of the economic cycle is done. This seems likely to lead to a world in which reputation and branding are of overwhelming importance: since I cannot know what it is before I make my decision to pay attention to it or not, a natural heuristic will be: is this channel one that I have found it worthwhile to pay attention to in the past, or that has a warranty of quality from something I trust? 

This will, I think, lead repeatedly to the dominance of platforms and aggregators—of all kinds. 

Plus there is the problem that human attention is not human utility, not to mention not human flourishing. Looking at a lot of people I know, a number of them would really be much happier and much more well-balanced if Facebook had never existed. The sharp Matthew Yglesias has, I think, a good take:

Matthew Yglesias: “Future“ & the Future of Media: ‘Content distribution… is mediated via Google… Facebook, and… lesser… smaller networks like Twitter. All… especially Facebook… deci[ded]… to give maximum visibility to content that is maximally engaging…. Engagement-maximization mostly boosts rightwing populists pushing pessimistic negative-sum worldviews while giving a secondary boost to leftwing populists pushing a different set of pessimistic negative-sum worldviews. Oops!… https://www.slowboring.com/p/future-media

People woh are prosperous—even rich—in a material sense, and who are definitely engaged, but in a way that makes them extremely unhappy, and dangerous to their fellows who happen to look different, speak different, get labeled as different, and simply happen to be in the wrong place at the wrong time.

Then there is the question of the coordination problem in an attention economy. Back in the commodity economy, the price mechanism was an adequate communications channel because the details of the specification about exactly what was demanded were rarely if ever of the essence. Why not? Because since the division of labor was relatively shallow and simple, standard commodities could be purchased and altered to serve. 

For example, consider the 30-foot bronze statue of Athene Promakhos—Athene Fighting-in-Front—designed by Pheidias that the council and people of Athens had cast and installed on the Acropolis in the year -456. 63 tons of copper and seven 7 tons of tin went into the statue. Where were the artisans of Athens to find 7 tons of tin? Herodotos of Hallicarnassos reported that nobody in Athens could tell him where the tin was coming from: all anyone could say was that the ships had picked up the tin, already mined, in Sicily, and that they thought it came from “tin islands” in the ocean. But he could find nobody who would claim to have actually seen these “tin islands”. The answer was: from Cornwall, in Britain. The market as a mechanism “knew” that 7 tons of tin needed to be mined in Cornwall and then shipped to Athens—but apparently no individual human knew that.

But as time passed, and as the division of labor advanced, coordination requires much more than simply going into the marketplace somewhere, calling out your willingness-to-pay as a signal, and waiting for travelling merchants and the market mechanism to respond. In the 1930s the Ford Motor Company can run its assembly lines at full speed and efficiency only in the United States, and only near Detroit—its auto assembly plants elsewhere struggle to attain half that productivity, even in places like the United Kingdom. And when Ford sells its dies and jigs for the Model T to the USSR when it replaces it with the Model A? In Russia, worker productivity stalled out at about ¼ the U.S. value. During World War II, from iron ore to final test at which you try to drive it out the factory, a U.S. Sherman tank took approximately 10000 man-hours to build. A Soviet T34-C, approximately 30000. Tight, personal, face-to-face linkages of designers to engineers to assembly workers and then on to maintenance and sales staff who have visited the factory and know what the machines can do and what their quirks are becomes essential. And coordinating this led to the modern corporations that the French christened “Fordist”.

Now, of course, the coming of the attention economy has given what Richard Baldwin calls the “second unbundling”: that of intra-firm communication. With the coming of the internet it is no longer necessary that a firm's sophisticated industrial division of labor be geographically concentrated. Faxes, datafiles, and hopping onto a transoceanic jet as a last resort: the word is that in the Before Times Apple Computer had 50 first-class seats a day back and forth between San Francisco and China. Even for those cases in which the limits of the division of labor are not so much the communication of knowledge but the face-to-face, looking-in-the-eye establishment of trust and its limits was necessary, video calls cemented by a final jet-flight-and-handshake worked remarkably well.

And so we got the international value-chain economy and the smile curve: low in the middle, high at the beginning and the end. Great value was earned at the beginning by providing raw materials and resources and, more important, industrial design. Little value was added in the middle by increasingly routinized manufacturing and assembly. And great value was added at the end by marketing, branding, and distribution—providing information (and misinformation) to consumers about what they might want from the enormous variety of types and qualities of goods that could be churned out from the expanding capacity of factories. And it was, again, a quilt. Very good things happened in selected places. Other places, nearby in culture, political allegiances, and attitudes, got left behind—either their industries that they drew on for relatively high-value and high-income niches in the world’s division of good things packed up and moved away, or never arrived.

So here we have the characteristics of the “attention economy” that we are moving into in a nutshell: Increasingly, highly, highly sophisticated and integrated divisions of labor that need in no wise be geographically concentrated any more. Increasingly, information problems no longer complications but of the essence, and so we have the capture of high-value positions in the value chains by brands and platforms—and the remarkable phenomenon of clickbait in the small and the large: earning money by making your primary users more unhappy. Increasingly, the things of greatest value—with the highest notional willingness-to-pay—are experiential attention-grabbers, produced in a process of write-once, write-often, distribute-everywhere, and take advantage of what virally grabs attention to then make enough to sustain the enterprise via the sale of ancillary services.

This is the direction we are headed as we head away from the “commodity economy”. We are almost surely not going to get all the way to the end of the road. But toward this is where we are tending. And right now it looks as though we are packing ten to twenty years of this change into two.

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