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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.


About bloggingthelonglist

An avid reader, but I tend to stick to what I know I am comfortable with. Trying to break out of the comfort zone...

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