NFTs have garnered massive global media attention recently, and I believe justifiably so.
Are NFTs in a speculative price bubble, in some respects and corners of the market? Absolutely so.
But is everything that gets caught up in speculative price bubbles intrinsically meaningless BS? Certainly not – Internet stock prices in the dot-com boom being the classical counterexample.
Are NFTs fundamentally ridiculous? Yes, in a way.
It does feel crazy that one particular digital copy of an image should be worth so much more than all the other essentially-identical copies. But yet in the end this is no more or less ridiculous than paying a premium for a signed copy of a book.
The feeling of “ridiculousness” here is because: NFTs highlight and exploit the extent to which economic value is based on symbols assigned social meaning within social networks, rather than to practical or even aesthetic value of the substantive referents of the symbols. But this aspect of economic value is a reality in human systems, and – like so many other peculiarities of human nature and society – it’s something that can valuably be understood and leveraged rather than just laughed at.
Are NFTs a powerful and general mechanism with potential to play a significant role in the global economy over the next few decades (from here to Singularity)? Quite possibly, yes.
With SophiaDAO, Jam Galaxy and other SingularityNET ecosystem projects, my colleagues and I will be exploring various practical NFT applications in visual, musical and metaversal arts over the next months and years.
But here I want to use NFTs as a cognitive tool for thinking about some broader economic issues.
Reflecting on the core dynamics behind the recent NFT craze, I’ve started to think that NFTs contain the answer to the puzzle posed by many economic pundits recently: Why, with automation taking over and more human jobs, is unemployment not increasing much more rapidly throughout the developed world?
The crux of the answer, I think, is: Most people crave status and enjoy gamesmanship – so increasingly folks are moving out of the physical-production economy and into occupations that basically consist of participating in complex online games, and creating digital goods and services that are used in these games.
NFTs, obviously, are an extremely glaring example of this: Folks who occupy their time with creating NFTs are making art and then submitting it into speculative markets and vying to get attention for it ... basically spending time engaging in a competitive / cooperative online game (aka “the art world”) where real money is one of the game tokens.
But NFTs are just the purest form of a phenomenon that exists more widely. The social media economy is only a slightly less perfect illustration. Using social networks is largely a form of online gamesmanship, competing for attention of various parties rather than for money ... and then influencer marketing, memetic marketing and other such tools insert themselves here, manifesting money games that surf the social games. But the only way to make a money game work atop these social games is to expend a lot of resources playing the social games, and then play the money game in a way that resonates with one's social gameplay.
Popular music is also almost as pure an example. There is already a great amount of incredible music out there, more than any one human can ever listen to. There are all sorts of new musical frontiers yet to be explored, but very few musicians and composers are concerned with doing this, least of all in the pop music sphere. Rather, making it big in pop music is basically the same as making it big with a series of NFTs -- it's mainly about grabbing peoples' attention in an exponentially snowballing way, so that more people will pay more attention to you simply because more people are paying more attention to you. (One thing we’re aiming to do with Jam Galaxy is use well designed tokenomics to subvert this a bit, creating a novel variation of music ecosystem economy that incentivizes creation and discovery and propagation of innovative new music.)
The job category of web developer didn't exist a few decades ago. Now every small business needs a website, and a large business needs numerous. But why does the task of web design exist – as opposed to it just being utterly straightforward, simple and automated for a business to put information about their business into an online textual/visual/auditory form? Largely because, again, of attention/status/money games. A website’s job isn’t just or even mainly to provide information or offer services, it’s to defeat other websites in online attention games, as measured financially but also by other metrics like page views (which can be indirectly turned into money via venture capitalists rewarding sites getting lots of eyeballs).
So what's happening in developed economies today is basically: Less and less human effort is needed for material production, or for production of essential digital goods (say, delivering lectures, formulation of news about important events or dissemination of scientific papers). However, rather than remaining idle, the people not engaged in producing material goods or essential digital goods are largely engaged in "frivolous" digital money/attention games in which real-world currency serves as one of the game tokens.
Because people largely enjoy engagement in these sorts of games, they on the whole are easily convinced to work in jobs of this nature -- so the social machineries that previously existed to suck people into working on material production, are now being leveraged in significant part to suck people into working on various digital money/attention games.
Being a complex self-organizing, self-producing system, the modern economy complexly interweaves material production, concretely useful digital production and money-attention game focused digital production. This interweaving makes it fairly difficult to tease apart how much human effort is now going into work that is "useful" in the sense that it helps with something outside a digital money/attention game.
For instance, one would like to say that producing great art is useful outside a digital money/attention game -- but there is no standard for great art. By what universally accepted standard may we say that Picasso is actually better art than Bored Ape Yacht Club? How about Andy Warhol versus Bored Ape Yacht Club? The boundary between “art for art’s sake” and “art as part of a social and economic gamescape” has long since been impressionistically and postmodernistically blurred beyond comprehension.
One would like to say that science is generating real knowledge about the world whereas dueling TikTok influencer videos are not. But then modern science certainly contains its own element of money/attention gaming, – like the BS gamesmanship involved in soliciting research grant money, or the endless grotesquely overbloated press releases coming out of the PR departments of universities like MIT and going straight into science media. Between science media, Arxiv, science Twitter, Stack Exchange, science-experiment demonstration TikToks, what we have is a writhing multimedia mess in which status-posturing BS, curiosity driven discovery/invention and I-Thou interfacing between physically separated curious minds with diverse backgrounds are melanged together in beautiful and hideous inseparability.
What we are seeing, it would appear, is a gradual and funkily tangled-up morphing of an economy focused on material production into an economy focused on tokenized attention games, similar to the Whuffie economy in Cory Doctorow's novel "Down and Out in the Magic Kingdom."
The failure of automation to lead to massive unemployment has been an issue for economists since the Industrial Revolution era. When the vast majority of people worked on farms, and then automation reduced the need for agricultural labor by an order of magnitude, it seemed at first the world would be full of unemployed farmworkers — but instead the economy diversified, and we ended up with a situation where most people are working on stuff related to goods and services other than food. The big difference now is that the non-food goods and services people are working on are also largely non-physical, and the nature of digital goods/services makes them harder to measure in straightforward ways, and tends toward binding-up in novel sorts of economic value-networks that don’t make as much sense in a physical goods/services context.
All this is not a terribly new sort of conclusion, it's basically one of the themes Baudrillard and other postmodernism philosophers have habitually emphasized in their more economics-focused moments. However, the transition to "economy as simulation of economy" or to "economy as global real/virtual/augmented world video game with fiat currency as one of the game tokens" is not cited sufficiently often in discussions of economic productivity and the end of work.
What we are seeing is not quite the end of work. What we're seeing is the gradual transmogrification of work into the playing of various roles in various complex mostly-digital game mechanics.
Self-driving trucks will automate away truck driving as a profession; self-driving cars will automate away Uber driving as an income stream; robot house-cleaners will automate the operation of AirBnBs for travelers; neural-symbolic language generation models will automate routine journalism; supermarket cashiers and warehouse workers will gradually disappear as relevant automation technologies mature; etc. etc. Some of the folks liberated from these jobs will remain unemployed. But the new generation that doesn't have these sorts of jobs to go into will not necessarily remain idle living off government assistance– rather, they will largely enter into new jobs focused on status/attention/money games instead.
It seems plain that the same level of production of material goods and practical-life services could be provided without so many of these new jobs. But increasingly economic life in (especially) the developed world is not just about practicalities, it’s about tangled webs of aesthetics and social status and tokenized value-seeking games … mixed up judiciously with a measure of practical goods/services, in fashions fractally reflecting the deeper mixed-up-itude of individual and collective human minds at this stage of our evolution.
What does this say about Universal Basic Income and similar mechanisms? They are almost surely a good idea from a humanitarian perspective -- it is ridiculous and unethical in a global scenario involving so much wealth to have individuals literally starving or without basic modern resources like housing, electric power, Internet or medical care.
And if modern culture continues as it now is, UBI will not result in a mass exodus from the workforce -- because the majority of the population will remain engaged with complex social/attentional/financial games involving various digital value tokens.
There is a connection between these thoughts and David Graeber’s concept of Bullshit Jobs — but it’s an indirect one. Bullshit jobs are jobs that serve no useful function and exist purely out of institutional momentum, like a middle-manager whose job is to carry out formal management of a team of workers who in practice don’t need any management, or a clerical worker whose job is to supervise the filling-out of forms and recording of related data even though the information on the forms is basically of no value to anyone. These exist partly because institutions are slow to adapt to technological and cultural changes; and in the context of government agencies or contractors, sometimes because of an explicit desire to keep employment levels up.
NFTs, social media marketing and so forth are a different kind of bullshit – they exist not out of institutional momentum but rather to entertain people and to gratify people’s need for speculative, competitive gambling-type activities. They may interoperate with bullshit jobs in various ways, though — for instance, insofar as bullshit jobs serve as a sort of social welfare, providing people with paychecks while they sit at their work-desks all day surfing social media or creating NFT art. In this case the paychecks from bullshit jobs may serve as a hedge against the volatility of speculative gamified markets.
What could break all these intriguing, exponentially complexifying and perversifying dynamics we see around (and within) us would be a cultural shift toward uplifted human consciousness -- toward states of consciousness in which social/attentional/financial games become less interesting than other forms of collective and individual pursuit. One question in this regard is whether the same mechanisms underlying NFTS – tokenization, decentralized networks and so forth – can be differently leveraged toward the end of human and transhuman consciousness expansion. Jam Galaxy and SophiaDAO both have some aspirations in this regard, in their respective domains. But I will leave this direction for some future blog posts...
Good one, Ben. We should catch up. I like your thinking here.
Hey Ben,
I really enjoyed this post, having been considering these issues recently myself. I just wanted to post a few relevant links, which you may already be familiar with. They come from the IMF, a Deputy Director, Andrew Berg, primarily. He is an applied mathematician and macroeconomist who has modeled the automation scenario extensively. The papers are:
Robots, Growth, and Inequality (2016): https://www.imf.org/external/pubs/ft/fandd/2016/09/berg.htm
Should we fear the robot revolution? (the correct answer is yes) (2018): https://www.imf.org/en/Publications/WP/Issues/2018/05/21/Should-We-Fear-the-Robot-Revolution-The-Correct-Answer-is-Yes-44923
For the Benefit of All: Fiscal Policies and Equity - Efficiency Tradeoffs in the Age of Automation (2021): https://www.elibrary.imf.org/view/journals/001/2021/187/001.2021.issue-187-en.xml
His outlook is not necessarily grim, but it's not as rosy as yours either.
"NFTs highlight and exploit the extent to which economic value is based on symbols assigned social meaning within social networks, rather than to practical or even aesthetic value of the substantive referents of the symbols."
Some are actually pretty good art, in my opinion, albeit well overpriced! I would get in on it, but it's impossible for me to engage in this type of Gamification; my Quora answers rarely top 100 views!
"One question in this regard is whether the same mechanisms underlying NFTS – tokenization, decentralized networks and so forth – can be differently leveraged toward the end of human and transhuman consciousness expansion."
I don't know about that, but Virtual Reality is already being exploited to develop empathy, although the empathy generated is not equivalent to that generated by, say, meditational experiences; see, for instance, Virtual Reality Improves Emotional but not Cognitive Empathy: A Meta-analysis (https://tmb.apaopen.org/pub/vr-improves-emotional-empathy-only/release/2?readingCollection=545bdd55). You may recall that I told you in an email a long time ago my idea about Ritual Reality and that's where I see benefits from Virtual Reality. I've engaged with some Vajrayana Buddhists on this, suggesting the very complex visualizations utilized in deity yoga be rendered in VR, just to facilitate one's ability to generate these visualizations at will. They normally use artworks, thangkas and such; I'm simply suggesting VR could be more time-efficient.
Anyway, nice post, thanks!