Sunday, November 18, 2012

Fungibility and the Loss of Demandingness

Certain items demand a great deal from their owners. Significant non-monetary costs must be incurred in order to locate, choose, use, and care for these goods.  Knowledge, aesthetic sensitivity, carefulness, work, membership in an insider community (as with black-market goods or single-tree tea), openness to experience, and even pain (as with tattoos) may be demanded in order to own these items; not just anyone with money may own them.

In return, many of these items - more than items that have only monetary costs - increase the value of their owners. Not only does their ownership and use signal carefulness, expertise, and other values, but owning and using these items actually does increase the owner's value to his group, realized in terms of sociometric status

From objects as well as work, we want not only surface-level "use" or money, but we also want to increase our own value, and we want positive and reliable feedback about this increasing value in ourselves. To the extent that our objects are purchasable and usable by anyone in exchange for the ultimate fungible commodity (money), with few non-monetary costs, they are incapable of increasing our value and delivering reliable messages that they increase our value.

This last point explains an important exception to the overjustification effect. Ordinarily, to the extent that people are given extrinsic rewards for a desirable behavior, they will tend to engage in the behavior less in the absence of rewards, indicating less enjoyment of the behavior. The important exception is if the extrinsic rewards provide reliable, positive information about the self. One interpretation of this exception is that a major desire of humans, not satisfied by extrinsic rewards, is to increase their value and track this increase of value.

The intuition that demandingness creates value is illustrated in two other contexts. First, the longevity of nineteenth-century religious communes has been found to correlate with their degree of demandingness from their members, supporting a costly signaling theory of religious memes. Costly signaling here is not "mere signaling" but, rather, a solution to the problem of how to actually solve complex coordination problems and increase value delivered to all members. Similarly, organizations that use hazing are often of long duration and excite substantial loyalty, supporting the theory that demandingness can create value in this context. Second, demandingness within relationships can increase bonding, a fact that is often explained as an application of the consistency bias, but which is probably more properly seen in light of costly signaling as a solution to a coordination problem.

To sum up, the modern economy is primarily composed of things and services available for money, ratcheting to allow fewer and fewer non-monetary costs. When things are available for money, anyone can acquire them; this dilutes the information about the self that can be contained in the ownership. Similarly, a major trend in the labor market is toward fungible skills that anyone can supply, reducing opportunities for virtuosity and positive information about the self through work. Everything is increasingly available for money, except, I will argue, a major thing we all want to buy that gives us the feeling of meaning: our own value and specialness. 

This is not to say that money has no value to signal about the self. Those without adequate money may experience their deprivation as negative messages about the self. However, someone with adequate money is less likely to get enough positive messages about the self from simply spending money. He will increasingly desire,and increasingly fail to find, outlets that genuinely let him build his value - although expensive illusions about this, as well as escapes from this dilemma, are plentifully supplied.

Work and Virtuosity in the EEA

In the environments in which humans adapted, everyone would have spent a hundred thousand hours doing something demanding that added value to the self in the eyes of the tribe. Everyone would have realized the pleasure of virtuosity. 

None of the ancestral patterns involved email or swivel chairs or levers to pull on machines or cash registers. These modern items of work infrastructure do not invite virtuosity - in fact, they are specifically designed to obviate the need for it! When Robin Hanson suggests that work can be pleasurable enough to give meaning to life, he points to a sushi chef - an example of virtuosity that is so rare and desirable as to be oversupplied even now. How many options for virtuosity in work are actually available in the modern economy? And, more ominously, how many will be available in the future, given present trends? Given that this kind of demanded virtuosity is actively pleasurable, it seems likely that these skills will increasingly turn into costly hobbies, rather than the kind of work one can expect to be paid to do.

The non-fungible skills demanded by EEA work (gathering, hunting, cooking, creating goods and tools and collectible proto-money) and a decreasing fraction of modern work are, in my model, analogous to the non-monetary costs of goods. They are examples of rewarded demandingness. 

I will now turn to certain examples of phenomena and classes of goods in an attempt to hermeneutically flesh out the problem of decreasing rewarded demandingness.

The Aspiration Index

A significant proportion of food that is purchased is not eaten, but rather goes bad and is thrown away. The proportion of a particular food that meets this fate may be seen as its aspiration index - the degree to which it is purchased for self-signaling, for the positive information about the self and future self value it seems to provide at the time of purchase. The more difficulty involved in preparing and eating the food - while still appealing to people unlikely to prepare it - the higher its aspiration index. 

However, if kale or parsnips or rappini are thrown away after going bad, they have failed to add value to the purchaser's life through demandingness. They have demanded something from the purchaser, but because of his failure to provide it, the vegetables have provided only the momentary illusion of adding value to life.

For modern sedentary people, exercise equipment - treadmills, running shoes, punching bags, gym memberships - likely exhibit a high aspiration index. Purchasable for only money, they nonetheless demand high non-monetary costs in their use, costs that frequently go unpaid by the purchaser. Their value is not realized, because their demandingness is not of the sufficiently alluring sort to entice the purchaser to sacrifice to it. 

Musical instruments, books, and language-learning software are examples of items available to purchase for money whose non-monetary costs frequently go unpaid by purchasers, resulting in a forfeiture of their value.

It is likely that when items with significant non-monetary costs are available for mere money - their purchase does not involve substantial non-monetary costs - their aspiration index will be higher, and their value will more frequently be forfeited. However, I also suspect that there are many cues that affect the investment of non-monetary costs, social and otherwise, and finding out exactly what these cues are would likely be a rewarding field of study. Unfortunately, the nearby field of the cues motivating people to buy things has received far more study.

The Kitchen Knife and the Pen

Where do Americans get their knives with which to chop food? What kind of knives do they buy? How do they maintain these knives?

Most kitchen knives are purchased at retail outlets, like most goods. These knives are made primarily of stainless steel, a rust-proof alloy that does not demand much from its user. You can leave it in the sink overnight and it will just sit there, not rusting, shining up at you damply. Unfortunately, stainless steel is  a poor material in terms of taking a sharp edge from sharpening. Indeed, it seems that over the past few decades, Americans have largely lost the skill of sharpening knives at all in their home kitchens. Most home kitchens I have visited contain dull stainless-steel knives, from the cheap knives John Thorne has accused of having "been made to look like a knife rather than to be one" to expensive Wusthofs. 

Knives have become easy, non-demanding, non-functional, and sad. They no longer demand much from their users, but they certainly don't deliver much. I suspect this is why vegetables are increasingly available pre-cut in plastic packages, obviating the need for the home cook to slice them up at all. Vegetables themselves demand less from the cook, simultaneously decreasing the reward the cook can receive.

Carbon steel knives, however, demand significant searching, care, and maintenance from their owners - and reward these demands with the pleasure of cutting and the promise of increasing virtuosity. You are unlikely to find a carbon steel knife at Bed, Bath, and Beyond. To get one, you might have to find the cluttered little shop in Chinatown that sells to restaurants, or the internet equivalent. To choose one, you might have to know what different kinds of knives are for. Once purchased, you have to care for it scrupulously; it cannot be left wet in the sink for twenty minutes, much less overnight, without rusting at you accusingly. 

It will, however, take an extremely sharp edge, if you spend the time to sharpen it. Cutting with it is a project to be sought out specifically - pre-cut vegetables will seem a pathetic waste of the joy of cutting. Its sharpness, and your ability to maintain its sharpness, contributes directly to your value as a cook. 

The market, exemplified by the Bed, Bath, and Beyond I mentioned, removes near "pain" - non-monetary costs and demandingness - and renders items legible to the purchaser without culture, knowledge, or care. This greater fungibility - stores selling pictures of knives - harms the quality of life and the ability of people to increase their value.

Similarly, a fountain pen is a bit of a hassle to fill. The tiniest hassle. It takes a bit of knowledge and a bit of work. Disposable pens obviate the need for this hassle and seem like a great idea, especially since when everyone was using fountain pens, their refilling offered no particular positive information about the self. In the interest of reducing the pain of refilling, the market began to supply disposable pens almost exclusively. You will not find a refillable fountain pen in, say, Target.

Unfortunately, disposable pens were able to get much worse once nobody remembered fountain pens. Ball-point pens, the cheapest sort of disposable pen, require so much pressure that writing is uncomfortable. Pens with a fine felt tip and liquid ink are nice, but hardly something to bond with. 

Often the first time someone writes with a fountain pen, they are surprised at how easy and comfortable it is. All of a sudden, one's hand doesn't cramp from writing! The pain of refilling pens was replaced, insidiously, with the pain of writing with substandard pens. 

Now, a fountain pen is something to be specially located - and the ink as well. Again, a tiny amount of effort must be expended in learning to refill, and refilling, a fountain pen. But all this is rewarded in the greater writing pleasure - not to mention bonding with the object through all that exposure and effort, as with a carbon steel knife. 

A pattern has occurred in the fountain pen market as it shrunk: more and more fountain pens appear designed, not for use, but for pure, referent-less signaling value. The background culture's idea of a fountain pen seems to be something gold-plated, perhaps inlaid with diamonds for good measure, and an ornately engraved nib - and possibly there are more dollars spent on fountain pens decorated non-functionally with expensive (though fungible!) metals than on cheaper, more practical fountain pens designed for use. This is an example of the expansion of a market to be more monetary and less represented by non-monetary elites as consumers, explored in a later section.

The Hipster and the Connoisseur

An archetype of our age is the hipster, a person who is attracted to the obscure because it is obscure, because it is hard to find, obtain, and understand.

The mistake is to view hipsterdom as pure signaling. It invokes signaling, of course, but also the genuine, authentic search for value in genuineness and authenticity. The hipster is a person who is particularly alienated by the world of purely fungible culture. His music and books, his old "vintage" items, are more demanding, harder to find. But at the same time, he is made more interesting and valuable through what they demand from him. 

Similarly, a connoisseur (exemplified in Evan S. Connell's novel The Connoisseur) is a person who seeks out goods that demand something. They may not be had merely for money, but through seeking and discernment. It is not their price, but their authenticity and beauty, that give them value. 

The connoisseur reacts to the scarce, beautiful object in and of itself. The connoisseur does not talk merely about the price of his acquisition; to do so indicates he is not a true connoisseur. The difficult, challenging objects he seeks out pay his effort back. 

The Evolution of SWPL Retail

Certain businesses start out catering mostly to people interested in use rather than signaling - in purchasing difficult items that require substantial non-monetary wealth in order to use. They cater to a certain elite. 

Gradually, in part based on the strength of the very reliable signal set up by the starting population, a different crowd gets interested - one that lacks the non-monetary wealth to bring to the goods purchased, but that nonetheless desires the self-value that they seem to promise. The elite is limited in size, so as the business grows, it becomes more and more dependent upon (and caters to ) the aspirational, signaling crowd. Soon, Whole Foods is selling vegan organic rice crispy treats, soda, and pre-cut vegetables; REI is selling dubious athletic clothing in sizes as inflated as mainstream fashion. 

The value such businesses provide to the core elite, in the cases mentioned, is not destroyed; Whole Foods still sells good whole vegetables, and REI still sells good backpacking gear. But the aspiration index of goods and buyers has increased - they are purchased more and more for the positive messages about the purchaser they seem to provide, rather than for actual use and enjoyment at the object level. The aspirational user may become representative of the class.

The Fungibility of Human Relationships

As mentioned earlier, there has been a trend since the industrial revolution toward less investment in the specialized skills of workers - fewer butchers and artisans per capita, more factory workers and, later, Starbucks baristas. The trend has been for workers to become as fungible and empty of non-monetary investment as the goods they often sell. 

The fungibility of work, the reduction of demand for long-developed special skills, the impossibility of virtuosity in one's limited job, has made work less and less a source of reliable, positive information about the increasing value of the self - because it has ceased to truly improve people. But people still desire to work at what they love, and to improve themselves. The market will sell them the feeling of this, but will not commonly supply them with food in exchange for pursuing virtuosity.

Since no-fault divorce became ubiquitous and dating more short-term and informal, less has been demanded of us in romantic relationships. As with work, this has resulted in romantic relationships producing less happiness and being less rewarding than more demanding ones. Here is an area in which fungibility of people is particularly likely to degrade welfare.

Humans evolved to form pair bonds - a kind of ultimate non-fungibility. Mating for life is hard; co-evolved biological and cultural adaptations help make it possible to maintain this kind of demanding, rewarding relationship. The aspiration toward a lifetime pair bond is still present; it is not, however, matched by social institutions that might enable it. Marriage has become an aspirational good.

Perhaps even friendship and neighborliness have been rendered essentially fungible by increased mobility. To the extent that they have, they have probably also become less rewarding.

However, perhaps a great deal of lived, experienced specialness (non-fungibility), even in our environments of evolutionary adaptedness, has been an illusion that sufficiently abstract thinking reveals. Seeing through specialness that satisfied the ancients would be especially hard on moderns able to do so.

Education and Other Fashions

Compared to other goods, the monetary price of education has skyrocketed in recent decades. At the same time, its market share has expanded drastically. Just as ultramarathons have replaced boring old marathons as the elite test of endurance, graduate degrees have replaced bachelor's degrees as the elite degree of education.

Education, unlike most other goods or services, is mostly composed of messages about the self and of adding value to oneself, real or illusory. The monetary costs increase because it really is, to some degree, scarce. It distorts the overall market by being one of the few items for sale that actually stands a chance of increasing one's value to the tribe.

The demandingness of education, I argue, is part of what you're buying in money. There is a special premium for scarcity (such as Ivy League educations), but this premium is largely still paid in non-monetary costs (intelligence, preparation, work). However, through a lack of barriers (and even an attempt to remove barriers) on consumers, the education market has followed the predictable path of Whole Foods and REI - even at the elite end.

Moreover, as one of the only parts of the market that appears to offer the chance to genuinely, measurably add value to the self, it occupies a greater and greater share of the economy. Unfortunately, it cannot add as much value as it promises. The aspiration index of education is high and growing.

Education is becoming more like clothing. Since clothing has become more mass-produced and cheaper, hence requiring no skill to make, more effort has been put into choosing and buying it. Fashion might create the least value in individuals of any industry. Scarcity is expressed mostly in dollar value and necessarily non-functional addition of recognizably precious, but ultimately fungible, commodities, like gold or brand names.

There are a few non-monetary costs still involved in fashion. Retailers such as American Apparel retain elite status despite being relatively cheap in part because their clothing only comes in small sizes, and only looks good on skinny, healthy people. Elite bodies are demanded, but this is ultimately a superficial, deeply unsatisfying kind of value to have demanded from us. Make-up and fashion "knowledge" is replacing other knowledge as it seems to perceptibly add value to the self; unfortunately, this value is so superficial as to be ultimately unsatisfying. 

Escape from the Self

If reliable, positive information about the improving self is not available to help people feel valuable, people will seek escape from consciousness of their pathetic-feeling selves. A large share of this escape is provided by the entertainment industry, including entertainment electronics. Baumeister, in Escape from the Self, argues that alcoholism, masochism, spirituality, and even suicide are phenomena in which people attempt to escape from painful information about the self - a self that, by the way, has had to bear more of the weight of meaning than when other sources of meaning were commonly available. 

Fewer people are able to get positive, reliable information about their increasing values, and some are more sensitive to the emptiness of certain signals than others. I expect that those unable to get the desired, necessary information - unable to improve their value and feel it - will be more likely to seek out palliation and suicide gambles

How Do People Find Demandingness In Life?

Those who do not escape must find some source of demandingness in order to get information about their increasing value. Much money and effort is spent on competition, an explicit source of costly information about oneself, from athletics to chess. There is a guarantee of a winner and a loser in competitions; the loser's risk is what renders the winner's success valuable information about himself. Vicarious competition (through professional spectator sports) seems adequate for many. 

What I have termed "insight porn" provides important messages about the self and gives at least the feeling of improving one's value, through possessing a better, more compact model of the world and the kind of mind capable of understanding the insight.

Video games, especially massively multi-player games, demand and creatively reward virtuosity through systems of levels and achievements. To some degree, this may be providing a superstimulus, artificial version of increasing one's value; however, in another sense, people may get genuine sociometric status from their online gaming guild. This is unlikely to provide for one's bodily needs for food and shelter, however, so the benefits of improving one's value to the group may be in some ways illusory compared to their evolved function. In fact, gold farming - the excised monetary aspect of gameplay - is reviled and low in status, generally undertaken in poor countries (thanks to the fungibility of their labor with our own, and their lower upkeep costs).

What are the implications of this trend for the future? The desire to add value to oneself is the essence of our kind of social creature. Will people find ways to add value to themselves when everything is fungible, when perhaps anyone can modify himself at will? Or will they discover new and better ways to palliate this need?

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