December 31, 2006

The Long Tale of 2006

2006 is racing to a close and you may well be aware that Time Magazine has named "you" person of the year. If you work for a financial firm on Wall Street, in the City of London or on whatever expensive piece of real estate you've landed you probably could have figured that out by looking at your record breaking bonus check. Of course if you worked in New York's financial industry you were already making over $8,000 a week before that bonus even kicked in.

Across the East River from Wall Street there are parts of Brooklyn where the average household income per year is less than that average wall streeter is making each week. If you lived in one of those household you might be a bit more surprised about being named person of the year, no? Of course this radical inequality in income distribution isn't exactly news to anyone, it's been around ages and statically mapped out by the Italian economist Vilfedo Pareto about a century ago. If you graph that distribution out what you get is something called a power law curve. In 2006 though the trendy terminology was "the long tail", a phrase for just one part of the power law curve, the part where those of us making less than $8,000 a week happen to reside.

The long tail is in large part a phrase created and popularized by Wired Magazine's Chris Anderson in a book and blog of the same name. While I doubt Anderson intended it as such, the long tail is one of the more misleading pieces of rhetoric around. What Anderson wants to focus on is the stuff that drives Time magazine's "you", the increasing world of user generated content, movies, sound files, Flash animations, blog posts and all the other amusing detritus of unknown quality filling out the internet. And there is no denying that this stuff is exploding, sometimes in quite interesting ways. But what makes the long tail so disingenuous is that what happens in the long tail has almost no ramifications on what happens in the head. The language of the long tail often takes on the rhetoric of democracy or even revolution, but the fact is that nothing about the influx of user generated content necessarily impacts the inequalities encoded into the power law curve. If anything the long tail presupposes inequality, and Anderson is in essence saying "pay no mind to the inequalities at the top of the internet, look at all the exciting stuff over here in the tail".

Of course it's become increasingly apparent that the internet is wrought by, if not outright characterized by inequality. Web traffic is even more concentrated to the largest web sites.* Of course a couple of those top 10 sites are actually places like YouTube and MySpace where large amounts of user generated content drives traffic and then deposits money in hands not of the creators, but instead in the coffers of the large corporate landlords. Nicholas Carr aptly compares this setup to sharecropping. One can see foreshadowing of this effect in Chris Anderson's writing, for all his hyping of the long tail he sees far more concerned with creating the structures and situations in which long tails can occur than he is concerned with what things might actually be like inside those long tails. The owners of the MySpaces and Flickrs and the producers of video editing softwares are getting rich by enabling an unprecedented amount of people to make and distribute their own 'content'. And way off at the edge of these systems are a few alpha users who also may be getting rich, or at least famous to their peers by making some of that content. They aren't in the long tail though, they are in privileged head. Those in the tail might have a little fun, but they get neither the audience nor financial rewards that demarcate success in this 21st century culture.

No matter how you spin the long tail, and without a doubt there are aspects of it that are interesting and perhaps even admirable, you can't detach the long tail from the power law curve that it is part of. And as long as we are talking about a power law curve, we are talking about radical inequality. Unfortunately that's something that's predated 2006 for quite some time and doesn't look to be leaving with the new year either...

  • If you follow that link though, you might notice the story has a rather misleading headline "The Shrinking Long Tail - Top 10 Web Domains Increasing in Reach". That the top ten domains are increasing in reach is a fact, at least if the statistics in that article are correct, but that fact has no correlation the long tail shrinking or rising in any manner. It's perhaps easier to think about it in terms of income. When the rich get richer, does that mean there are less poor people or more? That's just not a question that can be answered without more information. The top websites are getting richer for sure, both in terms of money and in terms of attention paid to them, but there may well be millions of new tiny sites stretching the tail out further and further.
Posted by Abe at 01:16 PM | Comments (5) | TrackBack

December 30, 2006

Scarcely Economics

The cliche goes that the flapping of a butterfly wing in Asia just might be the movement of air of that triggers a hurricane in the Gulf of Mexico. The math of that cliche is relatively developed, but it's mainly a computer simulation situation, actually showing the effect of those flaps is a beyond our sensors...

Somewhere on the edge of academia circulates the idea that economics is defined as the "study of how human beings allocate scarce resources". It's a definition that doesn't show up in most dictionaries, but it has a stubborn persistence. Scarce resources are of course an important component to economics, but is it really all there is? Most definitions instead fall rather close to Webster's: "a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services."

It's a curious distortion to make economics strictly a study of scarcity, and like the textbook chaos theory case it starts out as a rather minor disruption. Scarcity is after all essential to the generation of price and value, and economists hold those processes dear to their hearts. There is of course more to economics than just studying scarcity, but it's not exactly an alien concept. What's curious is what happens when non economists start latching onto the distortion, what's curious is when scarcity meets attention from three different directions.

Michael Goldhaber, Richard Lanham and Georg Franck, all more or less independently converged on a phrase, "the economics of attention" in the past decade or so. At the core of their thought (which varies widely in quality) is the observation that in a time where information is becoming, in Goldhaber's terms, "superabundant" what is scarce is attention. It's an interesting observation, one well worthy of economic exploration, but oddly enough Goldhaber, Lanham, and, from what I can tell without reading German, Franck as well all want to go much further. They pull back and wheel up with their distorted version of economics as being solely the study of scarce resources. It's a funny equation, an interesting observation plus a distorted definition equals a call for a whole new construction of economics.

The first irony is that if economics was really just to be about the distribution of scarce resources it wouldn't even be about money. For money is about as far from a scarce resource as there is. It can be printed out by any government and by a skilled counterfeiter too. Or it can be generated by any group or organization with enough clout. Airlines for instance have essentially created their own currencies of frequent flier miles, while towns like Ithaca, New York have created their own regional currencies with little more than a printing press and a PR campaign. Of course in this digital age a printing press is way to heavy, banks of course can famously create money by lending out money that people deposit for savings and in the twenty first century this operation has been extended into financial maneuvers of baroque complexity that span the globe in seconds. Money is anything but scarce. The problem is not there is not enough, but that it circulates with a damaging inequality.

Goldhaber and Lanham though don't seem really want economics to be about money anyways though. They'd much rather refocus it all around attention. It's an act of overstatement that probably does them far more harm than good. They get to make exaggerated statements about the need for a new economics, perhaps it makes their observations seem bigger, but it also makes it far easier to ignore them. They might want it all to be about attention, but quality and accuracy still have a bit of value left in them. Someone is going to make a career pulling attention scarcity into the wider economic stream of thought, but it just wont have the extreme ramifications the attention lovers vest into it. Goldhaber's work in particular is still worth of future attention, but until he pays a bit more attention to what economics actually is his insights will probably remain obscure to the discipline...

Posted by Abe at 01:50 PM | Comments (0) | TrackBack

December 15, 2006

Ghost Geometries

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December 13, 2006

The Second Trap

Clay Shirky on the Second Life overhype. I'm pretty partial to what he terms as "virtual reality is conceptually simple" argument. A large part of that hype I think comes not just from the simplicity, but by how easily it is for traditional marketing people to map their "real world" tactics to Second Life. To develop a web marketing campaign requires understanding of just how the web actually works. Second Life however is close enough to the real world that is very easy to just map traditional marketing tactics over. It's basically a big old baited trap for marketing people who are looking to get involved in the web, but don't quite get how it works...

Perhaps more than anything the mistake is in thinking that the value of internet is about what shows up on the computer screen. In fact the value of internet is in how it functions as massive relational database, and whatever shows up on the screen at any give time is thinest of thins skins to a couple datapoints.

What ultimately is funniest to me about Second Life though, is how closely it mirrors the cyberspace that William Gibson painted in Neuromancer when he coined that term. I was raised on that vision of the future the same way an earlier generation was promised jet packs and video phones. And when that vision actually became a technological reality, all I can do is shrug and turn back to the real future unfolding in completely unexpected directions.

Posted by Abe at 01:19 AM | Comments (4) | TrackBack

December 08, 2006


One of the odd things about the "anti-globalization" movement has always been that many, if not most of it's participants are not against globalization per se. After many travel across the world to protest, and some are rather active in campaigns to lessen, not strengthen many forms of border restrictions. It's been a well noted phenomena and sometimes the more accurate "anti economic globalization" phase is used, but never with much media traction, and inaccurate name has stuck. What makes it ironic though is a genuine anti-globalization movement just might be emerging, and out of a stock that overlaps only slightly from with the global protesters now stuck under a banner they didn't quite make themselves.

On can see it clearest in the local food movement, a movement rooted closer to the world of fine dining for rich people than with the anarchist squatters of the semi imaginary black block. It also is starting to show up with increasing vengeance in the writings John Thackara, who is reacting with perhaps unnecessary vigor and irony to the realization of the material impact of organizing international conferences in India has on the world. Of course neither the 100 mile dieters nor Thackara are the first localists, I'm sure it's an idea with century's of roots. But they do represent a crossing of a threshold, a movement of an idea from fringes beyond the pale and into fringes that actually touch base with the mainstream. How far it goes from here? Well you can mark this entry as a bit of radar tuning, it's a trend to watch not because I think it will be big or impactful, but because I have no idea where it goes next...

Posted by Abe at 01:53 AM | Comments (4) | TrackBack