(By David Nordfors) My latest TechCrunch column, Moving The Economy Beyond The Turing Test And Man Vs. Machine, describes the “Humane Economy”. It’s one step beyond the “people-centered economy” that maximizes the market value of people (as an alternative to the “task centered economy” that minimizes the cost of tasks) that I looked at in The Untapped $140 Trillion Innovation For Jobs Market.
I’ve been catching some flak for using Martin Buber‘s “I-Thou” idea for defining the humane economy. Buber’s “I and Thou” is a poetic text with strong spiritual overtones. I’m afraid I may have triggered some anti-‘new age’ reflexes among more serious economists and management theorists for this reason. I can understand if I did. But this is not about spiritual management. As much as I love poetry and respect spiritualism, let’s strip that away. I’m suggesting Buber’s “I-Thou” can be used for modeling “humane economics”. Hardcore math in the service of a humane economy. How? Here goes.
Here is what I write in my TechCrunch piece about Buber and economics: “There are only two types of relationships, says Buber: “I-You” and “I-It”. “I-You” is connecting with another living being. It’s a completely different feeling from relating to an object. My friend is a “You”, my computer is an “It”” and “The humane economy defines meaning: improving interpersonal connection, relating to other living beings. We create the means for doing that by relating to things: ideas, objects, activities” and “Empathy puts us in the mood for inspiration, affects our choices and plans. It improves teamwork and culture” and “So the humane economy will be an even better economy than the others. But watch it – we’ll need to find new ways of measuring the economy than those we use today. Because even though empathy between people is a recipe for increasing revenues, we must not fall into the trap of seeing interpersonal connections as the means and creating revenues as the meaning. We need economics that sees dollars as means and improving the connection between people as the meaning.”
So let’s attempt convert this into “economics”, or let’s perhaps just say ‘math’ for safety sake. Disclosure – I am trained as a physicist, not an economist, so there might be mistakes from an economists point of view. If you are an economist, feel free to comment – I am interested.
First lets look at the economies I’ve discussed – task-centered, people-centered and humane – and how macro- and micro-economy interact in them.
- There is macro economy and there is micro economy.
- Macro says that people need to earn money in order to spend it.
- Micro sees worker and customer as different people.
- Micro is the driver of the market strategy / Macro is the driver of labor policy
Comparing the economies, then
- The task-centered economy – i.e. minimizing the cost of tasks – sets macro and micro in opposition. Growing Micro – i.e. effectivizing tasks – points toward shrinking macro via technological unemployment.
- The people-centered economy – i.e. maximizing the value of human resources – macro and micro are in synergy. Growing Micro – i.e. maximizing the value of human capital – means growing Macro.
- The humane economy – maximizing interpersonal “I-You” connection (this is my Buber-inspired suggestion that I’ve been taking flak for) – aligns wealth and wellbeing. It’s based on the assumption that interpersonal connection is the component of wellbeing that is not implicit in wealth. Money can’t buy you friendship we say.
Buber’s formalism is constructive for conceptualizing (3). One benefit with Buber’s formalism is that it can be represented mathematically. Here is how.
Let’s start by looking at Buber’s basic assumptions and compare them to what we know about life
- The “I” exists through the “You”: The human species is dependent on sexual reproduction, family and social structure, Darwin and Buber are in accordance.
- The “I-You”-encounter is meaning and that “I-it”-experiences are the means: Clinical psychologists, biologists/ecologists will agree
- The are only two ways of relating: “I-You” and “I-It”. The only other one I can think of is “I-We”, but that sorts into one of two “We”. One I’d call the ‘interpersonal We’ shared between two people – it’s a different perspective of “I-You”. The other I’d call the ‘impersonal We’, a collective identity, a persona (like a brand, ethnicity, football club etc) – which is an “It”, because we are connecting to an idea, not a being.
Given the above three assumptions apply,
- All interaction can be represented by a graph, i.e. nodes connected by edges.
- Nodes have two attributes: 1 Beings (I/You) and/or 2. Ideas (It). A node can be both.
- Edges are either 1) “I-You” or 2) “I-it”. They are mutually exclusive. (Here is the beauty of Buber)
We now connect the nodes in a graph
Here starts some handwaving – I have a hunch, but can’t nail it squarely. We define value as different graph measures, inventing currency for intermediating connections/transactions, probably equivalent to attributing weights to the edges. We observe clustering, study the cluster-dynamics. (end hand waving)
Through Buber’s design, we can separate between ideas and beings: nodes without “I-You” edges are ideas, nodes with “I-You” edges are beings. This is elegant, in my eyes.
Handwaving again: The two edge types are interdependent, but they are different dimensions, i.e. you can’t convert an “I-You” to an “I-It” – you can’t price friendship in dollars.
We have constructed a way of describing the economy both in terms of ideas and interpersonal connection.
Now we also realize that we can optimize the graph in either one or the other dimension – means or meaning. It’s not a simple relationship – maximizing meaning does not mean minimizing means or vice versa. In fact, we know that there is some positive correlation. But if we optimize the means, there is no guarantee that meaning will also be optimized – we know it often won’t. This is equivalent to using your emotional connections to generate more resources. The alternative is to optimize the the meaning. Use your resources to improve your emotional connections.
I find this a very compelling model, I’ll see if I can play around with it in Mathematica.
If you have seen anything before that reminds of this, let me know – because I want to read it an perhaps reference to it.
Back soon I hope! 🙂