Can it Scratch Glass?, or Of Scarcity and Value

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Major cultural transformations occur when events create imbalances in traditional social relationships.  Those imbalances eventually find new equilibrium, but the interim can be unsettling.  This early evolution of the Internet in American culture is one such event.  The Internet’s complex interweaving with all aspects of our lives nudges any number of traditional relationships towards reconsideration.  Among those is the dynamic that has long existed between scarcity and value.

On its surface that relationship is a straightforward one – the scarcer a resource, the greater its value.  Of course, scratching that surface reveals the details in which the devil revels.  The first obvious proviso is that the resource possesses intrinsic characteristics that make it desirable – we can eat it, or clothe ourselves with it, communicate with it, it is beautiful, or powerful, or makes us so.  Those intrinsic characteristics, in combination with its scarcity, make the resource valuable.

Complicating the equation further is the notion that all scarcity is not the same.  There are at least three important variants.  The default definition is natural scarcity – characteristics, elements and resources that simply do not occur that often.  About 1 in 10,000 people have perfect pitch, that is a naturally occurring scarcity, and one whose value increases if that one person also happens to be musically gifted, hence piling scarcity upon scarcity.  Second, there is manufactured scarcity.  Nobel Prize winners are of this type of scarce resource.  Only 543 have been awarded to date out of a world population of about 6.8 billion souls.  Talk about scarce!  However, the value of a Nobel Prize winner is an iffy calculation.  They are of significant value to research institutions and universities who point to “their” Nobel Prize winners as evidence of organizational excellence.  But to the average person on the street these incredibly scarce individuals have no greater inherent value than the next passer-by.  

The final type of scarcity is manipulated scarcity.  Manipulated scarcity occurs when an already scarce resource is artificially manipulated to increase its scarcity and hence its value. Diamonds are often accused of possessing this manipulated scarcity.  Data are sketchy in this area, as a matter-of-fact, I occasionally wonder if the purported information about the number of diamonds in the world is itself being manipulated to establish a "diamond mythology" that adds to the value of the gems.  The "mythology" narrative is based in the accepted natural scarcity of diamonds.  You don’t plough them up in the back garden when putting in tomatoes.  However, delicious rumors circulate that DeBeers has a stash of diamonds secreted away that exceeds the number of diamonds currently in circulation.  One also hears tales of discoveries of massive new diamond finds in this or that remote locale.  The icing on the cake is, of course, blood diamonds – a political manipulation of scarcity.  If the world market “de-legitimizes” diamonds from certain sources, scarcity, and value, of "legitimate" diamonds spiral.

The scarcity/value dynamic currently being disrupted by the Internet that raises my concern is the one that plays out among the variables of information, knowledge and wisdom. I have talked about this phenomenon before, but let me refresh it for you

Information:  This is the “Dragnet” part of the dynamic: “All we want are the facts, ma'am.” Information equals facts, the data as we are best able to discern it.  The boiling point of water at sea level.  The number of traffic tickets written in San Francisco in February, 2009.  Data, facts, information.

Knowledge: Knowledge grows from an inspection and ordering of the information.  It is the recognition of patterns in the information that allow us to make assertions regarding the relationship between behavior and outcomes; “if/then statements.”  If 10,000 traffic tickets are written in February in San Francisco, and if the average fine is $20.00 and if the average rate of payment is 68% within 30 days, then one might assume that approximately $13,600.00 in revenue will be available from those tickets by the end of March.  

Wisdom:  Put most simply, wisdom is the ability to discern from among all the potential “if/then statements” those that should be affirmed and pursued to result in the greatest good.  The end of wisdom is thoughtful, compassionate belief and felicitous policy.   The absence of both in most human endeavors is, at least, indirect evidence of the paucity of wisdom currently in play in our world.  Agreement regarding the nature of wisdom will always be slippery, but I am concerned that the Internet increases wisdom’s scarcity by flooding the world with component parts – information and knowledge – of questionable validity.  Let me explain.

Prior to the Internet there were cultural hedges to the dissemination of raw information.  Census data, the data from the Hubble telescope, satellite images from all over the world – none of this raw information was available to distract the private citizen.  Those data streams were gathered and analyzed by individuals and organizations with recognized expertise in the interpretation of that data.  The next step in the process – turning information into knowledge – also rested primarily in the hands of specialists who vetted the “if/then statements” that form the core of all professional literature.  The concerned private citizen then could, ideally, peruse the various conclusions of the experts and make a rational decision regarding which version of knowledge struck closest to truth and could, in rare instances, follow that truth to wisdom.

Now let us return to diamonds for a moment.  How do we know that a diamond is a diamond? Cubic zirconia and other faux diamonds are getting very good, and manufactured diamonds are reaching gem quality.  The informed consumer can make good calls based on brilliance, clarity, color, etc.  But if one is buying or insuring a diamond, your great aunt Lady Rutherford’s opinion isn’t quite enough.  You want a gemologist to break out the scientific instruments to peer into the depths of the stone, to note any flaws, to certify quality, color, and perhaps place of origin.  For a thing to have value you must, at the very beginning of the process, know that the thing is the thing it claims to be.

Back to the Internet.  Peter Steiner drew an iconic cartoon published in The New Yorker on July 5, 1993, that showed a dog seated before a computer, turning to a dog on the floor.  The dog at the computer says, “On the Internet no one knows you’re a dog.”  As recent news stories about Facebook and RapLeaf make clear, that assumption is now bogus.  The contemporary Internet now knows not only if you are a dog, it knows your breed and the most intimate details of your pedigree.  Reality has inverted.  The problem now is that it is difficult for us, the users of the Internet, to know if the page on our screen was composed by a purebred canine or a mutt. Is it a diamond, cubic zirconia or cut glass?

Imagine you walk into a handball court, filled knee-deep with stones that appear to be diamonds.  As a matter of fact there are several hundred perfect diamonds scattered throughout the glittering hoard.  If you can find them, you can keep them.  What do you do?  And, no, the back wall is Plexiglas, all the gems can scratch it.  This is what currently confounds our use of the Internet – there is a surfeit of information, an excess of asserted knowledge, and no reliable path to wisdom.  The cubic zirconia is pretty and may well get us the best route to tonight’s concert venue.  The online reviews, however, reviews are cut glass tossed into the court – some by the bands publicity staff masquerading as discerning fans, others, perhaps vitriol lobbed in by competitors or former lovers.  Not much chance of consistently informed opinion, less still of encountering wisdom .  .  . the odds of grabbing a diamond are one in hundreds of thousands. 

Still, the diamonds are there – that is what drives me crazy.  Out there, in a medium designed for distraction, amidst the masses of trivial, self-serving, ignorant, foolish, bogus, and malicious pretenders, are diamonds of exquisite perfection.  Finding them, however, does not lie within the purview of search algorithms or crowd sourcing, both of which are driven by well-intentioned but fatally flawed bias.  So how do we find them? How do we mine for diamonds instead of data?  I do not know.  But there is something sparkly over there .  .  .  . maybe if I rub it against the other pretty pebbles .  .  .  .

The problem with this "aimlessness" is that we tend not to tolerate it for long. We are inclined to a desire for certainty.  Hence, in lieu of a reliable path through information to knowledge and on to wisdom - we grab the bauble that catches our eye, that seems to fit best with our other gems, regardless of source or pedigree.  We stuff it in our pocket and walk out of the handball court:

"Wisdom be damned, don't I look good with this stuff?"

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