Deja vu economy

Regarding Michael H Goldhaber’s recent review of Richard A Lanham's (UCLA) "The Economics of Attention: Style and Substance in the Age of Information," Rick Thomas writes:

"Goldhaber is annoyingly focused on the provenance of the attention economy idea, which he assigns to himself as of 1985 - annoying, because as far as I can tell he has never acknowledged this 1971 quote:

"What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

Herbert A. Simon

Has Goldhaber really taken the idea past Simon's basic insight? In 20 years? … What he describes is already pursued in myriad scientific, political, business, and discourse practices.

Simon's observation is in economic terms and so launched the idea of attention economy. But the analogy of scarce attention to scarce goods and service adds no theoretical value, because, as Goldhaber acknowledges, attention fails to be like money in several critical ways - it is not measurable, not uniform, not fungible, not storable. The metaphor of attention as value is little more than an extension of the idiom "to pay attention" or "to spend time."

We obviously allocate attention without forging it into a currency. In fact attention is already implicit in any definition of economy through the mass of individual decisions. No "attention economy" will emerge as a replacement for *the* economy, because attention and money are inextricably related. Take away the material constraints … and attention wouldn't be scarce and there would be no pressure to efficiently allocate it. …

I hope there will be new science to explain and guide human collaboration, but it won't need the "attention" tag."


Ken's response: Perhaps, but I'm not sure that either Lanham or Goldhaber are exactly proposing that an "attention economy" will displace the money economy. My understanding of the core of the discussion (informed by my training as a political economist, but also by earlier study of cognitive science) is that individually and collectively, we humans have perceptual and cognitive processing limits (as Simon pointed out).

What this means in practice is that we (must) make choices about what we focus on, and what we ignore. I suspect this is true to some degree for all cognate species, regardless of their level of technological or linguistic sophistication. But since Guttenburg, human society has accreted more and more cultural products – we have long since passed the point where one individual can know “all that is written.” An “economics of attention” derives added value by helping us sort through the oceans of cultural products (of any media) for desirable content. This is what really gives the Dewey decimal system and Yahoo! their core value.

While the story may not exactly be new, I think most would agree that as the Internet grows, being able to tell desirable from less-desirable data is increasingly difficult for any single end user. At least that’s what my email sysop tells me.

Moreover, finding the “most valuable” data among the marginally valuable is increasingly difficult. This leads to other solutions, such as Google, Digg et al. All are services that create value by helping us to identify what is “worth our attention” from what is not.

RT again:

I do read G. as saying that the attention economy will replace the money economy. For example, these quotes:

"We are moving into a period wholly different from the past era of factory-based mass production of material items when talk of money, prices, returns on investment, laws of supply and demand, and so on all made excellent sense. We now have to think in wholly new economic
terms, for we are entering an entirely new kind of economy. The old concepts will just not have value in that new context."
"... in a pure attention economy money has no essential function, no real role to play. In the period of transition from old economy to new, however, the connection between money and attention is significant and needs examining."
Beyond that, yes, I agree that many competitive innovations will emerge to help "allocate attention" but I would want to see the next step included in the analysis - allocating the resources and creative effort that follow attention. In other words, improvements to our still crude and aggregate notions of "markets".

Ken's response: must say, I think I agree with you. It seems a bit optimistic to think that money (or the need for it) will simply evaporate.

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