Praise-based Economy: How Much Are You a Part of It?

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applauseI came across this very interesting BusinessWeek article by Stephen Baker last week, which discusses how willing we are to do free work online, without even trying to receive monetary compensation for our efforts. Instead, he argues, we’re looking for different kinds of payback.

The non-monetary rewards most people who do these kinds of things, which include answering questions on Yahoo! Answers and finding weird buys to post to, consist of things that we valued before we valued money, including praise and admiration.

For businesses and institutions hoping to use this massive emerging voluntary force to drive their own goals, the difficulty lies in determining just what it is that’s motivating people, and developing a rewards system accordingly. The difficulty is that much of the reward seems to be community-based, i.e., you contribute because you want to earn the respect of your peers, and to become an authority of sorts on whatever subject you happen to be interested in.

The article got me thinking about web working, and how much work I “give away”, as opposed to how much I receive compensation for.

Part of my work day, everyday, is uncompensated. It involves building my personal brand through any number of activities, including Tweeting, blogging, commenting, and writing for friends’ websites. The idea being, of course, that all of these things represent a certain kind of investment.

But is that really the reason I do these things, or is it just an excuse that makes it seem more reasonable in a money-based society? If I look closer at the sorts of activities I do everyday without expecting any kind of immediate or directly correlated rewards, I’m less sure of my motivations. If I’m honest, many of the things I do, I do to earn the respect of my peers, first and foremost.

There’s no doubt that it also helps build my personal brand, but the point is that that isn’t the driving factor behind it. There’s even a huge chunk of work that I would probably grow tired of if it were compensated monetarily. The dangled carrot of eventual respect is what keeps me at it, and for some projects, there is no better motivator, in my opinion.

How much of your day would say is taken up with uncompensated web work? What do you see as your motivation for doing these things? What do you think about companies trying to capitalize on this kind of labor?

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As one of my favorite blogs always loves to point out, there are markets in everything. Here you are making a rational transaction: work for respect. It really is no different than trading work for money (labor), money for things (consumption), money for risk (insurance), or even things for things (bartering). It’s closest to the last of these, because there’s no metric to perform this comparison and thus situations like the one red paperclip guy can emerge.

Companies that use crowdsourcing use this leverage of respect, evaluation, and achievement in order to add value to their offerings, and there are many companies that do this (I even used to work for one). Although on first glance it seems suspect, they are acting rationally and ethically, because all of the participants are willingly putting their effort into the transaction without coercion. These participants do not trade their time for nothing though. They trade time for respect, and they prize the results of their labor. Think of how popular the achievement system is for gaming systems and websites (like the XBox and Kongegrate) and you can see how powerful a force this is when it’s quantified.

This is where your quandary comes in: how can you be sure that the effort that you put into such a transaction will be worth it when it’s not quantified? One red paperclip guy was able to get his house through the art of arbitrage, IE trading in separate markets with a price differential enough to make a profit. There’s no good way to get around this issue until some numerical value (or vector of numbers for that matter) in some unit of respect (for example, the concept of Whuffie in Down and Out in the Magic Kingdom by Doctorow) is established and enough time is allowed for honest arbitrage to occur to stabilize this market.

Until that point, your working in a murky pool of a market. However, it’s not a futile affair. I work under the assumption that I give nothing away. Everything I do is for some transaction, even if the transaction is work solely for my own enjoyment or satisfaction.

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