Monday, May 7, 2007

Valuation and Human Exchanges

This starts from the premise: How likely is code I write today to keep me fed in a year?

Human psyche is tuned to 4 types of exchanges (Quoted from The Blank Slate):
1: Communal Sharing - Where members of a community give and receive without keeping track of things.
2: Authority Ranking - Where things are given unquestioningly to members of a higher class or people in power, presumably in return for security and livelihood.
3: Equality Matching - Exchange of goods and favours at an equal level. More like barter and I will scratch your back if you scratch mine. Low level trades fall here.
4: Market Pricing - The firmament of modern economy, a complex global system of perceived value. The individual psyche is at loss to grasp the full breadth of it. Strange and asymmetric pricing may develop due to information bottlenecks, profit maximization strategies, government protection or artificially generated scarcity/abundance where there are only very few global producers.

I am very much at ease with Communal Sharing (working on Open Source projects) , but Market Pricing is the most interesting in its dynamics. How does the world value the efforts put into the shared pot by a community and how are they willing to pay for it ? How do individuals in the community benefit from it ? A value cannot be assigned to each man-hour or thousands lines of code. Instead value is in the perception of utility, primarily created by wide-spread application and bolstered with marketing glitz.
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