Integrity Economy
From Banyan Project
The motive force of any economy is demand for resources whose supply is limited, so in our information-glut era awash in advertising and other manipulative messages, and rife with conflicts of interests, what’s scarce? Integrity.
The Banyan Project understands itself as engaging in the Integrity Economy.
Contents |
No Free Lunch (Really)
Chris Anderson’s cover story in the March 2008 issue of Wired, excerpted from his popular book Free, is a primer on web 2.0 economics as widely practiced. He makes many important points but fails to see -- as almost all publishers and broadcasters fail to see -- that what he calls three-party systems are inherently deceptive, and thus lacking in integrity. Conflicts of interest are baked into them.
Anderson disputes the idea that there’s no such thing as a free lunch, saying "a free lunch doesn't necessarily mean the food is being given away or that you'll pay for it later — it could just mean someone else is picking up the tab." Banyan's perspective is that when someone else picks up your lunch tab you nonetheless stand a good chance of paying, but just not directly out of your wallet in the moment: In a capitalist economy the usual reason a third party pays is the hope that you’ll later pay for something else or otherwise deliver value that at least compensates for the lunch tab. So the person whose tab gets picked up is tricked into thinking the lunch was free – and it wasn’t. This is the deception, and Banyan is not alone in this understanding.
The legal scholar Lawrence Lessig comes at three-party systems from a very different direction. Lessig, after devoting his career to the intersection of law and technology, has decided to redirect his prodigious intellectual energy to addressing issues of integrity and corruption in politics. He sees corruption, in this realm, as caused by dependency on sources of money from outside primary trust relationships. Lessig, formerly faculty director of Harvard's Berkman Center for the Internet and Society, and later a member of the Stanford faculty, is now back at Harvard as a law professor and head of the Edmond J. Safra Foundation Center for Ethics.
On his blog, Lessig says his goal is to focus the center "on the many institutions in public life that depend upon trust to succeed, but which are jeopardizing that trust through an improper dependence," and adds,
[T]hink of medical researchers receiving money from drug companies whose drugs they review; legal academics receiving money to provide public policy advice from the very institutions affected by that advice; or Congress filled with Members focused obsessively on how to raise money to secure their (or their party's) tenure. In all these cases, dependency on money in these ways tends to weaken public trust.
Even Henry Luce, the co-founder of Time magazine in 1923, was in tune with Lessig's thinking and at odds with Anderson's. Walter Isaacson, a former managing editor of Time, wrote in the January 2009 cover story that Luce "believed that good journalism required that a publication's primary duty be to its readers, not to its advertisers," adding, "In an advertising-only revenue model, the incentive is perverse." Isaacson writes that Luce called the ad-dependent formula "morally abhorrent" and "economically self-defeating" because "eventually you will weaken your bond with your readers if you do not feel directly dependent on them for your revenue."
Perversely, in his Wired cover story, Anderson lays out his thinking this way:
The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. . . .
In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is “free to air,” and so is much of television. Likewise, newspaper and magazine publishers don’t charge readers anything close to the actual cost of creating, printing, and distributing their products. They’re not selling papers and magazines to readers, they’re selling readers to advertisers. It’s a three-way market.
This is the conflict of interest that's baked into the three-party system: The readers think the reason the publisher is in business is to sell newspapers and magazines to them -- which is to say they think they're in what Lessig calls a primary trust relationship with the publisher -- but the publisher's true goal is "selling readers to advertisers." The readers think of themselves as human beings making choices in the information marketplace but in reality the publisher regards them as dehumanized units of commerce to sell to businesses making choices in the commercial marketplace. This is almost never made transparent to readers.
Therapists and organizational development experts have a term for three-way systems that lack transparency: triangulation. And they work hard to end clients' triangulation because it always pollutes family and work relationships, sometimes fatally.
Anderson goes on,
In a sense, what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce. Now an entire ecosystem of Web companies is growing up around the same set of models.
Of the revenue streams Anderson lists in the paragraph above, only "direct ecommerce" has the potential to have integrity -- it's one-to-one, with no third parties paying to lurk in the background, out of the sight of the innocents who are lured into thinking that their lunch is free. Direct and transparent ecommerce is at the heart of Banyan's model.
The poet Virgil Suarez brought an immigrant's fresh eyes to the U.S. when his family fled Franco's Spain. In his poem Free, Suarez writes of marveling that "everything we encountered / or bought had 'free' written on it." But, he writes, "My father and I got wise—the word / became cheap, untrustworthy, hollow." Perhaps Anderson should read Suarez.
Banyan and Integrity
The Banyan Project's bedrock foundation is its comprehensive commitment to integrity.
Banyan's value will arise not only from the quality and integrity of its journalism but more fundamentally from the quality and integrity of its relationships with the people who read and use the journalism.
Banyan will grow virally as people come to value the consistent trustworthiness of its journalism, then tell other people; word of mouth is the most trusted form of advertising because it is not deceptive, and the instantaneous viral spread of word from trusted friend to trusted friend through email and networking sites is the digital form of word of mouth.
That said, Banyan will not be a utopia; it cannot guarantee 100 percent integrity -- who can? -- but it can and must guarantee that it will strive to achieve the highest possible level of integrity.
Banyan's inability to achieve 100 percent integrity starts with the truth that even the best editors and editorial processes have unintended biases. So Banyan will, in its Editorial Platform, acknowledge the inevitability of bias and promise to heed the rich feedback from its public as it works to squeeze out as much bias as it can. Foundational to this will be a commitment to serving each of its reader/users as individually as possible, starting with hyperlocal news and data that is directly relevant to the area where the reader/user lives and works; this will be the basis of a comprehensive news report that extends to news and service journalism of national interest.
Members of the Banyan Public who become active in its 2.0 Web community will be solicited to become member/owners of the nonprofit co-op that is Banyan's structural base. The member/owners will be asked to make modest continuing payments that, when aggregated, will be Banyan's primary revenue source. This guarantees that Banyan will have no structural conflicts of interest -- its member/owners are its most deeply committed reader/users, and their payments are "direct ecommerce," to use Chris Anderson's term. There can be no third parties lurking.
In short, Banyan member/owners will engage as individual human beings with an institution whose owners are limited to individual human beings and whose charter insists on devotion to relationships that are as close to human-to-human as an institution can manage.
Policies governing other Banyan revenue streams -- including advertising that's screened to bar untrustworthy businesses -- will be posted in vividly obvious places all over the Banyan site along with invitations for reader/users to flag questionable ads that might have slipped through the screen.
True Identity, Privacy and Integrity
Crucial to Banyan's integrity will be the extraordinary steps it must take to protect the identity and privacy of its reader/user/members so that it can insist that they use their true identities when they take part in the Banyan community.
This is another area where Banyan will inevitably diverge from perfect integrity. The imperfect human beings who form the Banyan community will exhibit varying degrees of integrity; as in the real world, some will be cynical and some will be toxic. What Banyan must guarantee is deep commitment to ensuring a protected community environment.
First, it will bar anonymous and fictional identities, which are inherently without integrity. Second, membership will be subject to a behavioral covenant. One element will be Banyan's institutional promise to protect privacy in a myriad of ways; this will extend to a system by which member-generated material may be presented with the member's name withheld; another will lay out circumstances under which a member may be expelled for repeated offenses against the covenant.
Banyan hopes to work with ProjectVRM, the Information Valet Project, and the Information Card Foundation to ensure that its systems are designed to engage with its reader/users in ways that preserve their personal information and privacy -- and that they can use Banyan as a trusted intermediary to engage in VRM-compliant Web transactions and other commerce beyond Banyan. These relationships will strengthen the integrity of the relationship between reader/users and the Banyan co-op.
Chief Integrity Officer
Every piece of Banyan’s structure must serve to strengthen its integrity and thus the trust the community of readers ascribes to it; every operating decision must be measured for its impact on integrity and trust. Banyan's senior management will include a Chief Integrity Officer; a manager of right relationship may report to her or him once Banyan scales.
Economic Perspectives
Integrity Economy is a more precise term than the currently popular Reputation Economy. And the Integrity Economy differs significantly from the so-called Attention Economy, a concept primarily useful to advertisers who, in promoting their products, add to the manipulation glut -- and by doing so ratchet up people's yearning for scarce integrity.
The Integrity Economy concept embraces the Intention Economy, Doc Searls's way of balancing the power of buyers and vendors; in current business custom vendors dominate relationships with buyers and the Attention Economy meme buttresses this dynamic. The Intention Economy concept provides grounding for Searls's Vendor Relationship Management idea, whose development he is leading through ProjectVRM as his project at Berkman Center for the Internet & Society at Harvard University. VRM provides customers with tools for engaging with vendors in ways that work for both parties, thus enhancing the integrity of buyer/vendor relationships.
Because all Web activities compete for people’s attention -- and because advertisers paying for their attention is the dominant source of Web revenue -- it’s common to hear Web-oriented people say that in an information-glut era attention is in short supply. Banyan sees two problems with the Attention Economy concept:
1) There is indeed an information glut, but this neutral term fails to note the manipulative character of so many of the incoming messages that bombard us daily.
2) Since the day evolution delivered Homo sapiens, people have had exactly the same number of hours in a day and thus the planet's per capita supply of attention has been the same. There's no question that there’s an imbalance between ventures wanting people’s attention and the attention available, but attention is a constant. It is scarce only in relative terms.
It is also common to hear Web-oriented people say that to compete successfully for attention requires a winning reputation; hence the term Reputation Economy. But reputation is routinely faked, and even when an institution's reputation accurately reflects what’s beneath its surface it’s only a reflection of a deeper, fundamental value: the extent of the institution's integrity.
Integrity is vanishingly scarce in this era of deceptive, manipulative, dehumanizing, and even predatory propaganda (in the broad definition of Edward Bernays, the originator of public relations). In such a culture people yearn for trustworthiness, so any entity that radiates integrity should earn, and deserve, trust that will create value and inspire a community to form around it.
In short, integrity creates reputation, which creates trust, which creates value. Thus the Integrity Economy.
