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Monthly Archives: February 2014

Josh Klein: the man and the reputation [Reputation Economics Part II]

So, I finished the book and I saw Josh Klein speak (thanks to MSL Group, London).  And I don’t take back any of my previous words – and the event was under Chatham House rules – so I will keep this one brief.

In person, Klein is impressive.  He can reel off stats and facts off the top of his head, but always connect them to the bigger picture. He is also willing to admit when he hasn’t thought about, or doesn’t have an answer for something, which always wins my respect.  My only slightly negative thoughts were:

1) I wish I’d got to listen to him for longer and

2) I wish he’d referred to more facts (which I am sure he has) which aren’t referenced in the book (although this may not be entirely fair, as the audience wasn’t expected to have read the book before the event anyway).


My thoughts on the rest of the book (the second half) are three fold.

Increasingly, as I got into Reputation Economics, it struck me as more and more subversive.  Its end point is fundamentally to claim the plausibility of the death of financial markets, as the “second and third world” (a phrase I am not entirely comfortable with using, but Klein does, hence the inverted commas) comes online, and is more comfortable interacting through reputational connections and / or on the ever-growing black market.  I am neutral about this idea (because I don’t really know enough to provide a binary response), but I am aware of the impact that this may have on our public goods.  If most of us aren’t paying tax, how do we get street lighting?  Or a police force?  Or, arguably, what is the value of Government (as at base, Governments were put in place to collect tax, for armies?.  I asked Klein this question and he didn’t really have a chance to answer.  But it interests me.

My second thought was about the next generation – the generation of kids and teenagers for whom all of this ‘change’ isn’t change at all.  I wonder whether they will be more or less creative than current generations in harnessing the power of the internet.  Will its mundaneness, its almost invisible presence in their lives discourage them from innovating?  Or will it be a building block for more and more innovation, because they don’t have to start from 0 knowledge, from the beginning each time?  Obviously, the impact of this generation will seriously impact Klein’s thoughts and predictions, which look 4-20 years ahead.

Finally, I am not entirely comfortable with Klein’s position on developing markets.  He seems to imply that most still exist in a world of bartering economy, limited bank accounts and literacy, which will make it easier for them to ‘jump’ straight to using Bitcoins rather than banks, for instance.  This seems like a gross oversimplification to me.  We are talking about 2/3 of the world here, including  India, where 34% of the population already get their news online daily, (9.4 million people); Indonesia with the world’s third highest number of smart phone users live and Africa, where internet usage increased over 3,000% between 2000 and 2012 (compared to c. 150% in Europe).  Yes, people in these parts of the world may quickly make the leap to using online banking (and other tools) rather than using traditional banks, but surely that relates as least as much to  the pace of their development and online engagement (and the time in history in which they are connecting to the world) as their traditions of bartering or their levels of literacy.


Reputation Economics: post-modern definitions and the democratic ideal

[Part one of a two part series – I am half way through, but have some thoughts to share]

Lately, I have been geeking out, reading a lot about how the internet, and specifically social media has exposed companies in all kinds of ways.  So, reading Josh Klein’s Reputation Economics has been somewhat refreshing….


Because, really what Klein is getting at, is that for good or for ill, the internet exposes all of us.  Both in ways we choose (reviews of products, blogs like this, LinkedIn) and in ways we don’t (geotagging, search histories, product purchases)  Klein argues that although currently companies still have the upper hand in ownership of this kind of information, it is becoming increasingly democratised.  Over time, we will all be able to access a whole lot of information about everybody else.  

So the focus on reputation in Klein’s title means more than we would initially think.  Not only does it mean reputation in the traditional sense (what I think about you, your trustworthiness etc.) but it also means your characteristics: what you like, what you worry about, what you know about.  Reputation comes to encompass who you are, or at least what other people can make out of who you are, based on the increasing amount of information made public about you.

Klein argues that in many ways this is akin to historical forms of engagement.  In a village, people knew about each other and bartering, information exchange and favours were, to a large extent based on what they knew.  Well, yes and no. Yes, people in the village would know about your ‘traditional’ reputation.  They would know if others had trusted you in the past and what the result of that trust – positive or negative – had been.  But I imagine, in most traditional villages very few people would have had access to your inner thoughts (which I would call Klein’s postmodern understanding of ‘reputation’) the way that the internet does.  My guess is that, just as today, people in these villages selectively shared their worries and dreams with a small, select group of people.  Only today are they available – sometimes for a price, sometimes for free – in the global marketplace.  And only today do you have no idea who is accessing them, how, when and for what reasons.

Also, in the view of Reputation Economics, reputation is increasingly based on a ‘democratic ideal’.  Institutions, companies and individuals who are perceived to be more transparent and open to sharing and co-developing new ideas improve their reputations. Protection of intellectual property is out, collaboration is in.  Creativity is valued above all else.  Well, again, yes and no.  Yes, probably, for intangible products, like software (and this is where Klein’s background as hacker comes in).  Here, cost of entry has been minimised, expertise can be leveraged across locations and time zones, all culminating in one product, developed in the cloud.  

But what about when your product relies on stuff, that works?  Klein talks a lot about 3D printing, which can replicate a chair.  But, as yet, 3D printing can’t replicate a car, or a computer, or an oil rig.  These things still need to utilise technical expertise and build a thing (accepting that supply chains are now global) which is eventually manufactured in one place.  And although in some ways cost of entry to these fields has fallen in recent years (some widgets are cheaper, some activities can be automated) other costs have risen (non-automated labour, for instance) and the number of manufacturing companies going bust, year on year, shows us that not only the cost of entry, but the cost of operations remains prohibitive for most.  You could see that these industries cannot be fully transparent, and must maintain some level of IP to compete in the marketplace.  Could they share best practice better?  Absolutely.  Could they share everything and still operate with sufficient profit margin?  Probably not.

And this is where Klein seems to be getting ahead of himself.  Undoubtedly, the internet has challenged the previously unrivalled ascendancy of money and financial markets in the transactional sphere.  It has allowed us to recognise previously intangible or unreachable information around reputation, interests etc.  But money still makes the world go around.  Bitcoins are fashionable and may yet become ubiquitous, but at present they are nothing more than a philosophical challenge to the primacy of financial markets.   The Top Ten Companies in the Fortune 500 all trade in tangible goods.  And fundamentally, Klein is still arguing that reputation, as well as having personal value earns you money.  

Now, I accept I am only halfway through this book, and I may want to come back in a few days (and indeed after I have seen Klein speak tomorrow) and eat some or all of my words.  But I just wanted to share my thoughts with you at this stage, and empty my busy brain.  

Why we shouldn’t tell people that reading is good for them

Like many (most?) people of my generation I was never formally taught grammar. To this day, I admit, I can’t tell my noun from my verb or my adverb. This may horrify many of you. But, I think, it hasn’t stopped me instinctively understanding the rules of grammar and applying them to my writing. And I have books to thank for a lot of that.

I read endlessly as a child. And from that, I learned many things. Like aeroplane safety (thanks Topsy and Tim), how to make Playdough and that I didn’t want to be a ballerina because it made your toes bleed. But learning was always the subtext of what I was doing. Only maybe 10% of the books I read were explicitly learning – for school – and despite being an avid reader, I often resented reading those. Just like I resented (ok, just didn’t) eating my vegetables, which I was also frequently told were ‘good for me’.

As adults, we are more open to doing things that are good for us. We go to the gym, eat our vegetables, control our alcohol intake because this is good for us. Some of us enjoy these things, but as gym membership decline rates show us, most of us don’t. We both accept them and resent them. Then, there are other things we do for fun. We go to the theatre, or eat dinner with friends, or go on holiday. We all wish we had more time for these things.

This whole preamble is a way of telling you I hate it when people try and make you read ‘because it is good for you’. This puts reading into the first category: a must do, rather than a want to do. And I hope, for most of us, reading sits squarely in the second. We read to relax, to escape, to learn about our interests.


Recently, the Guardian has run a series of articles about the ‘good’ of reading.

How it can make you a better person
and how it can make you smarter
not once but twice

It’s not that I dispute many of the findings.
I agree that:

– variety adds to your experience
– thinking and talking about books is great after you’ve read them (well, indeed, that’s why I have this blog and why I started a book club)
– literary fiction is particularly engaging
– books can enlighten
– reading can help you manage issues you are facing
– readers are often better problem solvers
– books can teach you how to ‘do’ things

I read for all these reasons. And so many more. But please, don’t tell me I read because it’s good for me. Don’t liken reading to mange tout. That does you, and books, a terrible disservice.

Plot versus characterisation: a zero sum game?

Recently I haven’t had the best run of luck with books. I guess like everything, this waxes and wanes and isn’t 100% about luck but also about quality of judgement and the mood I am in when selecting and reading said book.

But still. It hasn’t been my best reading month. And although the novels I have read (or attempted to read – I haven’t always finished) this month haven’t obviously had a lot in common, it strikes me in retrospect that there has been a common issue running through this sorry month.

And that issue is: the plot versus characterisation conundrum. Now, it is obviously clear to all of us that the very best books have both awesome plot and awesome characterisation. Or is it? When I mentally flick back through novels I have known and loved this isn’t always true. Sometimes slightly sub standard characterisation can be glossed over by a challenging, fast-paced plot. Or vice versa. Rarely does a novel perfect both.

But this month I have felt more than ever it is becoming a zero sum game. 100% of one and 0 of the other. And weirdly with the last book I read, it switched from one to the other about ninety per cent of the way in.

Map of the Invisible World by Tash Aw is mostly a character-driven book, like his other novels. It focuses on a small number of characters, tracking their lives and decisions back in time and place between the 1920s and 1960s and Indonesia, America, Holland, Paris and Malaysia. Yes , of course there is a plot line but the plot line feels like a foil to display the characters’ complexities and the challenging, complex issues they struggle with. It settles you into that focus, and though it is a good, rather than great, book you come to enjoy it for what it is.

Then: bam. About 90% of the way through the novel suddenly becomes plot-driven. Issues and complexities are suddenly discarded. Reunions go unexplained. Decisions go unreasoned. All in an attempt to wrap up the book. This isn’t the first time I have experienced this, but it is weird. It’s like a teenager who has been told to write a ten page essay and reaches page nine only half way though their argument. It feels lazy. And very disconcerting.


On thinking about it, I have decided I can accept that a lot (most) novels are imperfectly balanced between plot and character drivers. But this bait and switch is a step too far.