Escapable Logic

There are many kinds of viruses on the Internet. All of them pose as something they are not.

• Inactive code dormant in your computer until launched into action
• An email message apparently from your friend that carries a destructive payload
• A Word document with a destructive macro

And then there are the mind viruses that are destructive only when they force you to take actions you otherwise would not, which is the message’s only purpose.

• An email urging you to protect yourself against a computer virus that doesn’t exist
• A heartfelt plea to sign and forward a petition condemning the Taliban which has been circulating on the Internet for years, even though the petition forwarding address died from the traffic years ago and the Taliban have been eliminated
• A plea from a rich Nigerian needing your personal help to launder funds
• Junk mail promising impossible returns on dubious investments

None of these work if you know about them and can ignore the mind viruses or automate your computer to ignore them. Both actions inoculate yourself against the viruses’ effects.

The cost of spreading these viruses is low but they can infect the globe. No wonder it’s irresistible to create and propagate them – ours is an Attention Economy, and we all want to make an impression even if we can’t make a million.

The Internet has exposed a class of irritating attention-getters that we’ve lived with forever but never saw in such clear relief: that most business and political activities are not about profit but about vying for the spotlight. We’re preternaturally anxious to get others’ attention. We assume we’ll figure out how to profit from that attention once we have it. This was the theme of the DotCom bubble, where no one worried too much about real earnings, as long as the multitudes believed enough to invest in the attention itself.

For viruses designed to get your money, the model is to set up a company to be the recipient of funds (from customers or investors) and which the founders and early investors can profit from. From the perspective of the macro economy, such an enterprise is simply an accounting system, into which one invests time or money and out of which one hopes to harvest more money than the investment costs us.

Accounting Systems are Proprietary Too

Previously we explored the striking proposition that proprietary data is the root of tyranny, and has been since the Sumerians invented the first data base in or about 3246 BC. The insult is further compounded by the harsh truth that, search though we might, we can’t find a single instance of a data base that is not proprietary.

That figures – the pecking order constricts us all, whereby each of us is someone else’s tyrant, and data is simply a way to enforce the pecking order. So we would expect those who are subject to the data to be the peckee, and the dick who keeps the data to be the pecker. (Really, I’m not making this stuff up).

Would we expect any less from the special kind of database called an accounting system? That’s where the juice is in the macro economy, which is simply an immense collection of interlocking accounting systems investing in each other in the hope of future returns. Hell, we’ll even invest in the appearance of an accounting system if the potential reward is great enough, including state lotteries and Nigerian money laundering schemes.

The Subversiveness of a Non-Proprietary Accounting System

We’ve previously described an architecture for a non-proprietary cooperative accounting system which stores matching, non-repudiable transactional data on the web servers of both the buyer and the seller in a transaction. If invoked, the architecture creates the first unmanaged accounting system which saves it from the fate of yesterday’s HumanTech example.

Once we start down the non-proprietary design path, we’re in unfamiliar territory. By definition, there can be no edge given to one party in the transaction over the other. That design decision frees us from the huge intellectual overhead of scheming against the customers of our accounting system and lets us use the freed-up cycles to design a mutually rewarding system.

This has never been possible before, since there’s never been symmetrical (non-proprietary) data before. Once we start designing for both parties, we have the economic equivalent of cold fusion.

Imagine a world where some large minority of the population believes it can outwit the rest of the population  and grab a disproportionate share of the goodies. Further, assume a small minority that actually does outwit the rest of the players, especially including the large minority outwitting the majority. It’s a set of Russian dolls, really, with ever-smaller groups benefitting from the collection activities of the slightly more numerous but less skilled toll collectors around them.

The world you’re imagining is the one you live in, and if you believe you’re close to the center of this dance, then you’re as naive as the honest, hard-working Christians who think the Republican leadership is on their side.

The subversive nature of our proposed non-proprietary, unmanaged accounting system is that, unlike every other accounting system in history, it actually does what it says it will do. By its open nature, every promise is recorded and every action displayed, right down to the transaction level. The only challenge is to design the right algorithms and to come up with the kind of viral rewards system designed into yesterday’s HumanTech example.

How is this model subversive? When the entire world is based on a hierarchy where the better informed perpetually extract resources from the less informed, the ultimate subversive act is to break the extraction system. We’ve never had a global, interconnected Meme Machine before, but the Internet is exactly that. There’s no way to get the current players to change their M.O. overnight. But if we just get a tiny microeconomy together and provide the right viral mechanism, then the micreconomy can start to steal transactions from the outmoded economy, as we’ll describe tomorrow.

12:05:08 AM    

…As Mary Jenkins exclaimed to Jeff Greenberg in the HumanTech story. HumanTech’s management formalized a  compensation system at the heart of most large companies – you’re paid based on how many people you supervise in the command chain beneath you. It’s called Span of Control:

When given enough levels of hierarchy, any manager can control any number of people – albeit indirectly. But when it comes to direct reports, the theory suggests entrepreneurs must respect managers’ inborn limits.
                                                                      – Entrepreneur Magazine, Jan. 2001

Those inborn limits are consistently about eight people. Successful managers delegate to no more than about eight direct reports, who in turn manage another eight or so, out to the edges of the organization. Everyone is paid based on the population beneath them, not, as we’ve learned, based on the company’s profitability. Since the constant ratio is about one manager to eight people, the size of the organization – and the CEO’s compensation – is based on how many 8-person levels there are.

So organizations are hierarchical and pay is hierarchical and command structures are hierarchical. If you wanted to found the next big success story, you’d plan to hire eight people and grow until you had to hire another 64 people for those eight to manage, then another 512 people for those 64 people to manage, etc. When you had succeeded to the point that you had five levels of management, then you’d have almost 30,000 people in your company, and your compensation would be some small fraction of all those workers’ average salary, times the 30,000 employees.

If your average worker earned $40,000 per year (sound low? the math says that 7/8 of them are at the lowest pay level), then you might be receiving 1% of 30,000 employees’ salaries, or about $12,000,000 per year. That sounds typically outrageous but, well, typical. It seems that most companies are based on the same algorithm as a multi-level marketing scheme, like Amway or Mary Kay.

In other words, it’s a chain letter! If managements sound cynical, you should see the workers.

Desperately Seeking the Right DNA

The only problem with your success formula would be how to get your people to do consistently valuable work and get your marketing and sales departments to represent and quantify that value to your customers, and get your organization to respond quickly to new opportunities and let go of old ones just as quickly and be sure you hired skilled people exactly when you needed them to respond to opportunities. Good Luck!

Some organizations have the DNA to do much of this well and most do not. Why not? Because most people don’t care about the company’s silly Mission Statement, they care about their pay check.

Why do most people come to an organization? Dreams? Hopes? Challenges? Recognition? Sorry, it’s the money. The most interesting thing about a company is its likelihood to spit out cash regularly and to look like that will continue for a while. If you’re not convinced, ask the kids’ mom what a company is for.

We don’t go to work for a company – We go to work for an accounting system. If we could find a reliable accounting system outside a company, we might go to work for it.

Xpertweb’s viral expansion plan is based on real mentors doing real training and getting 1% of the prices paid or received by their trainees. The mentors are also expected to find their own trainees – four to eight of them. But mentors are not expected to supervise their trainees. Instead they get automatic reports on the grades and comments each trainee earns or gives as they sell and buy. The mentor’s only concerned if the trainee disappoints someone who’s a proven fair grader. Otherwise, the mentor is busy herself, buying and selling under the peer-to-peer protocols she was taught by her mentor.

The formula is just like the example company: train four people who buy or sell $1,000 per month, and collect $40 per month from them. Inspire them to train 4 each, so another 16 people are sending you $10 per month. Keep the growth happening and in a couple of years you’ll have 1,364 people sending $10 per month into your account. Where’s the accounting system? It’s distributed among the web servers of all those participants and their mentors, each of whom has formally committed to do work they get good grades for, and no other kind.

It’s not a centrally managed accounting system, but it has all the characteristics of one, except there’s no way to change the rules. An accounting system is a money allocation system that causes people to do work today in reliance on a future reward.

People learn who to trust and who to avoid, so they work or purchase today in anticipation of compensation next week. They also form a confidence that their trainees will forward the required 1% fee every month. As those responses accumulate a history of reliability, they will be relied upon.

And that growing reliance is the basis of any ambitious microeconomy.

11:55:24 PM    

Criticism Won’t Change the DMCA, but Breaking the Law Will

Here is the plan. Everyone who hates the DMCA has to illegally copy a movie or a song, and then tell both the Congress and the U.S. Copyright Office exactly what they did. We need 10 million or so confessed and unrepentant intellectual property pirates. That’s too much illegal behavior to ignore (What could 10 million pirated copies of “Debbie Does Dallas” be worth?), but too many individual criminals to be prosecuted. Then, having pirated our movie or song, we also need to turn ourselves in to the authorities, clogging every hoosegow in America, facing our potential $10,000 fine, each of us demanding the jury trial we are guaranteed under the Constitution.

If we all do this, REALLY do it, the DMCA will be gone in a year. This follows the simple principal that if you or I drive 100 miles-per-hour on the highway, we get a ticket, but if EVERYONE drives 100 miles-per-hour, they change the speed limit. “They,” whoever that is, can’t afford to annoy so much of the population. We are, after all, the folks who elect all these officials who keep telling us what we can and can’t do. But it isn’t enough to just threaten to vote against your Congressman. To make the system really change we have to work it to death by all becoming criminals.

Now it’s your turn to steal this column. The trick is to present it as your own as you see it here, rather than as a quote of my work. It is my work, isn’t it? I mean, I haven’t attributed it to anyone, and I’m posting it here to see how much attention I might get – just as good as money in the Attention Economy.

If you do think I stole it, then you’re obligated to turn me into the authorities. If you steal it, then let me know so I can turn you in, in case you’re too hardened to do it yourself. (By the way, don’t tell this guy about this column because if he steals it, my charge against him might not hold up in court.)

Touretzky’s Syndrome

David Touretzky is on a crusade, er, jihad, uh, campaign against stupid copyright laws. He’s got a gallery of clever expressions of the illegal CSS Descramblers that let you copy a DVD onto your hard drive for sharing playing it later. When you report me to the authorities, you might want to tell them that I really like my cool illegal T-shirt,

saying:

I am a circumvention device
forbidden by 17 USC 1202(a)(2). Do not re-manufacture me,
import me, offer me to the public, provide me, or traffic
in me or in any part of me. You have been warned.

#!/usr/bin/perl # 472-byte qrpff, Keith Winstein and Marc Horowitz <sipb-iap-dvd@mit.edu&gt;
# MPEG 2 PS VOB file -> descrambled output on stdout.
# usage: perl -I <k1>:<k2>:<k3>:<k4>:<k5> qrpff
# where k1..k5 are the title key bytes in least to most-significant order

s”$/=2048;while(<>){G=29;R=142;if((@a=unqT=”C*”,_)[20]&48){D=89;_=unqb24,qT,@/small>
b=map{ord qB8,unqb8,qT,_^$a[–D]}@INC;s/…$/1$&/;Q=unqV,qb25,_;H=73;O=$b[4]<<9
|256|$b[3];Q=Q>>8^(P=(E=255)&(Q>>12^Q>>4^Q/8^Q))<<17,O=O>>8^(E&(F=(S=O>>14&7^O)
^S*8^S<<6))<<9,_=(map{U=_%16orE^=R^=110&(S=(unqT,”xbntdxbzx14d”)[_/16%8]);E
^=(72,@z=(64,72,G^=12*(U-2?0:S&17)),H^=_%64?12:0,@z)[_%8]}(16..271))[_]^((D>>=8
)+=P+(~F&E))for@a[128..$#a]}print+qT,@a}’;s/[D-HO-U_]/$$&/g;s/q/pack+/g;eval

That version is much more efficient than the C code below, and, even better, it’s illegal for me to publish it. It’s also illegal for you to read it and to possess the copy you now have in your browser’s cache. Your IP number has been logged…

If that’s not enough, here’s an MP3 file I put on my server in case I lose the CD version when I move it from my house to my car. I know that’s legal for me to do, since I own the original, which I’m just archiving for my own needs. If you download it, let me know so I can turn your ass in, because it’s illegal, even though there’s no market for the song, which is unavailable anywhere. We can’t have a legal copy of the song so that all the dead artists on the cut will be incentivized to create more art for us to listen to:

Doris Day: Pillow Talk

Making it Legal

I wish the following were as illegal for me to publish as the T-shirt code, but it may not be, since it’s an excerpt from a legal filing by John Hoy, president of the DVD-CCA, in the California trade secret lawsuit against Andrew McLaughlin and 92 other defendants. Let me get this straight. I can’t share the following with anyone, but it’s OK for the DVD-CCA to write it in a filing that is recorded in the public records of the state of California?

EXHIBIT A

[Fax header:   Jan-10 00 10:52AM; Pages 2, 3, 4]

                                              readme DeCSS11.txt

******************************************
*                                        *
*             DeCSS 1.1b                 *
*                                        *
******************************************

ASPI Problems:
If you get an error message saying:
"Could not load aspi layer", then please
try the aspi player included with DeCSS.

wnaspi32.w98.dll: Use this for Win98 😛
wnaspi32.w2k.dll: Use this for Win2k and NT.

(Remember to rename it to wnaspi32.dll!)

                      - Authors of DeCSS
10/06/99 - 06:27

*****************************************
*                                       *
*             DeCSS 1.2b    &
#xA0;           *
*                                       *
*****************************************
* 1.2.1b:                               *
* - Fixed an integer divide by zero bug *
*                                       *
* 1.2b:                                 *
*  - Added multiple selection of files  *
*  - Transfer Rate and ETA              *
*  - Checks if you have enough hd space *
*  - You can now merge vob files        *
*  - "Integer division by 0"-bug fixed  *
*                                       *
* 1.1b:                                 *
*  - First public release               *
*                                       *
#########################################
# - ASPI Problems                       #
#########################################
# If you get an error message saying:   #
# "Could not load aspi layer", then try #
# the aspi player included with DeCSS.  #
#                                       #
# wnaspi32.w98.dll: Use this for Win98  #
# wnaspi32.w2k.dll: Use this for Win2k  #
#                                       #
# Remember to rename it to wnaspi32.dll #
#                                       #
#########################################
# - How do I select audio stream?       #
#########################################
#                                       #
# You don't. DeCSS is just a decryptor, #
# nothing else. Copy all the files to a #
# video ts folder on your hd, and then  #
# try playing the movie.                #
#                                       #
#########################################
# - The aspect radio is weird?          #
#########################################
#                                       #
#   Same reason as above.               #
#                                       #
#########################################
|                                       |
| Credits/Greetings (in no part. order) |
| [ Canman, S0upaFr0g ]                 |
|                                       |
| - Authors of DeCSS                    |
| 10/09/99 - 18:22                      |
|              &#
xA0;                        |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

EXHIBIT B

[Fax header:   Jan-10 00 10:52-54AM; Pages 5, 6, 7, 8/12, 9/12, 10/12, 11/12, 12/12]

                                       [Handmarked “DeCSS 10/25”]

                                 CSSscrambleT.txt

unsigned int CSStab0[11]={5,0,1,2,3,4,0,1,2,3,4};

unsigned char CSStab1[256]=
{
    0x33,0x73,0x3b,0x26,0x63,0x23,0x6b,0x76,0x3e,0x7e,0x36,0x2b,0
x6e,0x2e,0x66,0x7b,
    0xd3,0x93,0xdb,0x06,0x43,0x03,0x4b,0x96,0xde,0x9e,0xd6,0x0b,0
x4e,0x0e,0x46,0x9b,
    0x57,0x17,0x5f,0x82,0xc7,0x87,0xcf,0x12,0x5a,0x1a,0x52,0x8f,0
xca,0x8a,0xc2,0x1f,
    0xd9,0x99,0xd1,0x00,0x49,0x09,0x41,0x90,0xd8,0x98,0xd0,0x01,0
x48,0x08,0x40,0x91,
    0x3d,0x7d,0x35,0x24,0x6d,0x2d,0x65,0x74,0x3c,0x7c,0x34,0x25,0
x6c,0x2c,0x64,0x75,
    0xdd,0x9d,0xd5,0x04,0x4d,0x0d,0x45,0x94,0xdc,0x9c,0xd4,0x05,0
x4c,0x0c,0x44,0x95,
    0x59,0x19,0x51,0x80,0xc9,0x89,0xc1,0x10,0x58,0x18,0x50,0x81,0
xc8,0x88,0xc0,0x11,
    0xd7,0x97,0xdf,0x02,0x47,0x07,0x4f,0x92,0xda,0x9a,0xd2,0x0f,0
x4a,0x0a,0x42,0x9f,
    0x53,0x13,0x5b,0x86,0xc3,0x83,0xcb,0x16,0x5e,0x1e,0x56,0x8b,0
xce,0x8e,0xc6,0x1b,
    0xb3,0xf3,0xbb,0xa6,0xe3,0xa3,0xeb,0xf6,0xbe,0xfe,0xb6,0xab,0
xee,0xae,0xe6,0xfb,
    0x37,0x77,0x3f,0x22,0x67,0x27,0x6f,0x72,0x3a,0x7a,0x32,0x2f,0
x6a,0x2a,0x62,0x7f,
    0xb9,0xf9,0xb1,0xa0,0xe9,0xa9,0xe1,0xf0,0xb8,0xf8,0xb0,0xa1,0
xe8,0xa8,0xe0,0xf1,
    0x5d,0x1d,0x55,0x84,0xcd,0x8d,0xc5,0x14,0x5c,0x1c,0x54,0x85,0
xcc,0x8c,0xc4,0x15,
    0xbd,0xfd,0xb5,0xa4,0xed,0xad,0xe5,0xf4,0xbc,0xfc,0xb4,0xa5,0
xec,0xac,0xe4,0xf5,
    0x39,0x79,0x31,0x20,0x69,0x29,0x61,0x70,0x38,0x78,0x30,0x21,0
x68,0x28,0x60,0x71,
    0xb7,0xf7,0xbf,0xa2,0xe7,0xa7,0xef,0xf2,0xba,0xfa,0xb2,0xaf,0
xea,0xaa,0xe2,0xff
};

unsigned char CSStab2[256]=
{
    0x00,0x01,0x02,0x03,0x04,0x05,0x06,0x07,0x09,0x08,0x0b,0x0a,0
x0d,0x0c,0x0f,0x0e,
    0x12,0x13,0x10,0x11,0x16,0x17,0x14,0x15,0x1b,0x1a,0x19,0x18,0
x1f,0x1e,0x1d,0x1c,
    0x24,0x25,0x26,0x27,0x20,0x21,0x22,0x23,0x2d,0x2c,0x2f,0x2e,0
x29,0x28,0x2b,0x2a,
    0x36,0x37,0x34,0x35,0x32,0x33,0x30,0x31,0x3f,0x3e,0x3d,0x3c,0
x3b,0x3a,0x39,0x38,
    0x49,0x48,0x4b,0x4a,0x4d,0x4c,0x4f,0x4e,0x40,0x41,0x42,0x43,0
x44,0x45,0x46,0x47,
    0x5b,0x5a,0x59,0x58,0x5f,0x5e,0x5d,0x5c,0x52,0x53,0x50,0x51,0
x56,0x57,0x54,0x55,
    0x6d,0x6c,0x6f,0x6e,0x69,0x68,0x6b,0x6a,0x64,0x65,0x66,0x67,0
x60,0x61,0x62,0x63,
    0x7f,0x7e,0x7d,0x7c,0x7b,0x7a,0x79,0x78,0x76,0x77,0x74,0x75,0
x72,0x73,0x70,0x71,
    0x92,0x93,0x90,0x91,0x96,0x97,0x94,0x95,0x9b,0x9a,0x99,0x98,0
x9f,0x9e,0x9d,0x9c,
    0x80,0x81,0x82,0x83,0x84,0x85,0x86,0x87,0x89,0x88,0x8b,0x8a,0
x8d,0x8c,0x8f,0x8e,
    0xb6,0xb7,0xb4,0xb5,0xb2,0xb3,0xb0,0xb1,0xbf,0xbe,0xbd,0xbc,0
xbb,0xba,0xb9,0xb8,
    0xa4,0xa5,0xa6,0xa7,0xa0,0xa1,0xa2,0xa3,0xad,0xac,0xaf,0xae,0
xa9,0xa8,0xab,0xaa,
    0xdb,0xda,0xd9,0xd8,0xdf,0xde,0xdd,0xdc,0xd2,0xd3,0xd0,0xd1,0
xd6,0xd7,0xd4,0xd5,
    0xc9,0xc8,0xcb,0xca,0xcd,0xcc,0xcf,0xce,0xc0,0xc1,0xc2,0xc3,0
xc4,0xc5,0xc6,0xc7,
    0xff,0xfe,0xfd,0xfc,0xfb,0xfa,0xf9,0xf8,0xf6,0xf7,0xf4,0xf5,0
xf2,0xf3,0xf0,0xf1,
    0xed,0xec,0xef,0xee,0xe9,0xe8,0xeb,0xea,0xe4,0xe5,0xe6,0xe7,0
xe0,0xe1,0xe2,0xe3
};

unsigned char CSStab3[512]=
{
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff,
    0x00,0x24,0x49,0x6d,0x92,0xb6,0xdb,0xff,0x00,0x24,0x49,0x6d,0
x92,0xb6,0xdb,0xff
};

unsigned char CSStab4[256]= {
    0x00,0x80,0x40,0xc0,0x20,0xa0,0x60,0xe0,0x10,0x90,0x50,0xd0,0
x30,0xb0,0x70,0xf0,
    0x08,0x88,0x48,0xc8,0x28,0xa8,0x68,0xe8,0x18,0x98,0x58,0xd8,0
x38,0xb8,0x78,0xf8,
    0x04,0x84,0x44,0xc4,0x24,0xa4,0x64,0xe4,0x14,0x94,0x54,0xd4,0
x34,0xb4,0x74,0xf4,
    0x0c,0x8c,0x4c,0xcc,0x2c,0xac,0x6c,0xec,0x1c,0x9c,0x5c,0xdc,0
x3c,0xbc,0x7c,0xfc,
    0x02,0x82,0x42,0xc2,0x22,0xa2,0x62,0xe2,0x12,0x92,0x52,0xd2,0
x32,0xb2,0x72,0xf2,
    0x0a,0x8a,0x4a,0xca,0x2a,0xaa,0x6a,0xea,0x1a,0x9a,0x5a,0xda,0
x3a,0xba,0x7a,0xfa,
    0x06,0x86,0x46,0xc6,0x26,0xa6,0x66,0xe6,0x16,0x96,0x56,0xd6,0
x36,0xb6,0x76,0xf6,
    0x0e,0x8e,0x4e,0xce,0x2e,0xae,0x6e,0xee,0x1e,0x9e,0x5e,0xde,0
x3e,0xbe,0x7e,0xfe,
    0x01,0x81,0x41,0xc1,0x21,0xa1,0x61,0xe1,0x11,0x91,0x51,0xd1,0
x31,0xb1,0x71,0xf1,
    0x09,0x89,0x49,0xc9,0x29,0xa9,0x69,0xe9,0x19,0x99,0x59,0xd9,0
x39,0xb9,0x79,0xf9,
    0x05,0x85,0x45,0xc5,0x25,0xa5,0x65,0xe5,0x15,0x95,0x55,0xd5,0
x35,0xb5,0x75,0xf5,
    0x0d,0x8d,0x4d,0xcd,0x2d,0xad,0x6d,0xed,0x1d,0x9d,0x5d,0xdd,0
x3d,0xbd,0x7d,0xfd,
    0x03,0x83,0x43,0xc3,0x23,0xa3,0x63,0xe3,0x13,0x93,0x53,0xd3,0
x33,0xb3,0x73,0xf3,
    0x0b,0x8b,0x4b,0xcb,0x2b,0xab,0x6b,0xeb,0x1b,0x9b,0x5b,0xdb,0
x3b,0xbb,0x7b,0xfb,
    0x07,0x87,0x47,0xc7,0x27,0xa7,0x67,0xe7,0x17,0x97,0x57,0xd7,0
x37,0xb7,0x77,0xf7,
    0x0f,0x8f,0x4f,0xcf,0x2f,0xaf,0x6f,0xef,0x1f,0x9f,0x5f,0xdf,0
x3f,0xbf,0x7f,0xff
};

unsigned char CSStab5[256]=
{
    0xff,0x7f,0xbf,0x3f,0xdf,0x5f,0x9f,0x1f,0xef,0x6f,0xaf,0x2f,0
xcf,0x4f,0x8f,0x0f,
    0xf7,0x77,0xb7,0x37,0xd7,0x57,0x97,0x17,0xe7,0x67,0xa7,0x27,0
xc7,0x47,0x87,0x07,
    0xfb,0x7b,0xbb,0x3b,0xdb,0x5b,0x9b,0x1b,0xeb,0x6b,0xab,0x2b,0
xcb,0x4b,0x8b,0x0b,
    0xf3,0x73,0xb3,0x33,0xd3,0x53,0x93,0x13,0xe3,0x63,0xa3,0x23,0
xc3,0x43,0x83,0x03,
    0xfd,0x7d,0xbd,0x3d,0xdd,0x5d,0x9d,0x1d,0xed,0x6d,0xad,0x2d,0
xcd,0x4d,0x8d,0x0d,
    0xf5,0x75,0xb5,0x35,0xd5,0x55,0x95,0x15,0xe5,0x65,0xa5,0x25,0
xc5,0x45,0x85,0x05,
    0xf9,0x79,0xb9,0x39,0xd9,0x59,0x99,0x19,0xe9,0x69,0xa9,0x29,0
xc9,0x49,0x89,0x09,
    0xf1,0x71,0xb1,0x31,0xd1,0x51,0x91,0x11,0xe1,0x61,0xa1,0x21,0
xc1,0x41,0x81,0x01,
    0xfe,0x7e,0xbe,0x3e,0xde,0x5e,0x9e,0x1e,0xee,0x6e,0xae,0x2e,0
xce,0x4e,0x8e,0x0e,
    0xf6,0x76,0xb6,0x36,0xd6,0x56,0x96,0x16,0xe6,0x66,0xa6,0x26,0
xc6,0x46,0x86,0x06,
    0xfa,0x7a,0xba,0x3a,0xda,0x5a,0x9a,0x1a,0xea,0x6a,0xaa,0x2a,0
xca,0x4a,0x8a,0x0a,
    0xf2,0x72,0xb2,0x32,0xd2,0x52,0x92,0x12,0xe2,0x62,0xa2,0x22,0
xc2,0x42,0x82,0x02,
    0xfc,0x7c,0xbc,0x3c,0xdc,0x5c,0x9c,0x1c,0xec,0x6c,0xac,0x2c,0
xcc,0x4c,0x8c,0x0c,
    0xf4,0x74,0xb4,0x34,0xd4,0x54,0x94,0x14,0xe4,0x64,0xa4,0x24,0
xc4,0x44,0x84,0x04,
    0xf8,0x78,0xb8,0x38,0xd8,0x58,0x98,0x18,0xe8,0x68,0xa8,0x28,0
xc8,0x48,0x88,0x08,
    0xf0,0x70,0xb0,0x30,0xd0,0x50,0x90,0x10,0xe0,0x60,0xa0,0x20,0
xc0,0x40,0x80,0x00
};

void CSSdescramble(unsigned char *sec,unsigned char *key)
{
    unsigned int t1,t2,t3,t4,t5,t6;
    unsigned char *end=sec+0x800;

    t1=key[0]^sec[0x54]|0x100;
    t2=key[1]^sec[0x55];
    t3=(*((unsigned int *)(key+2)))^(*((unsigned int *)(sec+0x56)
));
    t4=t3&7;
    t3=t3*2+8-t4;
    sec+=0x80;
    t5=0;
    while(sec!=end)
    {
        t4=CSStab2[t2]^CSStab3[t1];
        t2=t1>>1;
        t1=((t1&1)<<8)^t4;
        t4=CSStab5[t4];
        t6=(((((((t3>>3)^t3)>>1)^t3)>>8)^t3)>>5)&0xff;
        t3=(t3<<8)|t6;
        t6=CSStab4[t6];
        t5+=t6+t4;
        *sec++=CSStab1[*sec]^(t5&0xff);
        t5>>=8;
    }
}

void CSStitlekey1(unsigned char *key,unsigned char *im)
{
    unsigned int t1,t2,t3,t4,t5,t6;
    unsigned char k[5];
    int i;

    t1=im[0]|0x100;
    t2=im[1];
    t3=*((unsigned int *)(im+2));
    t4=t3&7;
    t3=t3*2+8-t4;
    t5=0;
    for(i=0;i<5;i++)
    {
        t4=CSStab2[t2]^CSStab3[t1];
        t2=t1>>1;
        t1=((t1&1)<<8)^t4;
        t4=CSStab4[t4];
        t6=(((((((t3>>3)^t3)>>1)^t3)>>8)^t3)>>5)&0xff;
        t3=(t3<<8)|t6;
        t6=CSStab4[t6];
        t5+=t6+t4;
        k[i]=t5&0xff;
        t5>>=8;
    }
    for(i=9;i>=0;i--)
        key[CSStab0[i+1]]=k[CSStab0[i+1]]^CSStab1[key[CSStab0
[i+1]]]^key[CSStab0[i]];
}

void CSStitlekey2(unsigned char *key,unsigned char *im)
{
    unsigned int t1,t2,t3,t4,t5,t6;
    unsigned char k[5];
    int i;

    t1=im[0]|0x100;
    t2=im[1];
    t3=*((unsigned int *)(im+2));
    t4=t3&7;
    t3=t3*2+8-t4;
    t5=0;
    for(i=0;i<5;i++)
    {
        t4=CSStab2[t2]^CSStab3[t1];
        t2=t1>>1;
        t1=((t1&1)<<8)^t4;
        t4=CSStab4[t4];
        t6=(((((((t3>>3)^t3)>>1)^t3)>>8)^t3)>>5)&0xff;
        t3=(t3<<8)|t6;
        t6=CSStab5[t6];
        t5+=t6+t4;
        k[i]=t5&0xff;
        t5>>=8;
    }
    for(i=9;i>=0;i--)
        key[CSStab0[i+1]]=k[CSStab0[i+1]]^CSStab1[key[CSStab0
[i+1]]]^key[CSStab0[i]];
}

void CSSdecrypttitlekey(unsigned char *tkey,unsigned char *dkey)
{
    int i;
    unsigned char im1[6];
    unsigned char im2[6]={0x51,0x67,0x67,0xc5,0xe0,0x00};
    for(i=0;i<6;i++)
        im1[i]=dkey[i];

    CSStitlekey1(im1,im2);

12:17:32 AM&#xA
0;   

Markets are conversations that are archived in the minds of the participants. That works fine in a village, but it doesn’t scale well to a global community. We need information about transactions that’s more fine-grained than the gross overview provided by magazine reviews or the glorified spin spun by the sellers.

Call me cynical, but I’ve concluded that NO seller will tell the objective truth about how his customers perceive him. It’s not necessarily a lie, it’s just human nature. Therefore, no data base controlled by the seller will tell the truth about the seller. That would be like a 15-year-old telling his buddies how uneventful the big date reaslly was.

That’s what forces Xpertweb to set up data-tracking web sites for all participants, whether they’re buyers or sellers. This requirement causes consternation from every knowledgeable observer of this design study, “Why go to all the trouble of setting up multiple web sites when it would be so much more efficient to centralize it? How can you hope to motivate all those people to learn how to set up their own servers? Besides, you could then profit from the traffic. Surely there’s some way to put in the safeguards for your users.”

It’s a valid point. No company is well enough managed to get all their employees to manage their own web sites – their training is just not adequate. But if the incentives were strong enough, then perhaps the most energetic employees would learn to do their own sites, and, if rewarded sufficiently for mentoring, could train the next most energetic people.

But let’s play Devil’s Advocate. Let’s imagine a centralized system set up to do what Xpertweb proposes to do: coordinate a rapidly growing body of proven experts in a wide range of fields. Perhaps the best comparison would be to a temp agency:

HumanTech

Jeff Greenberg had been looking for a “real” job for 16 months. Despite the supposedly excellent demand for skilled workers, Jeff’s skills didn’t seem to match what employers were demanding. Jeff was an excellent writer and a logical thinker, with practical technical and people skills, but he seemed to lack the elevated combination of a technical degree and deeply technical experience they wanted. His common sense and likeableness never showed up on their radar screens.

Finally he went to work for a temporary agency which placed workers with employers who chose not to increase their head count. The agency was one he’d not heard of but they’d had the most tasteful ad in the Yellow Pages, their web site didn’t insult his intelligence and he related well to the people he met there. It was called HumanTech.

He found it interesting that his interviewer, Mary Jenkins, described herself as a “player-coach” rather than a manager. She seemed sincerely interested in his work needs and interests. He couldn’t put his finger on it, but she came across as unhurried and unstressed. He learned that HumanTech had almost no office staff, but rather that the senior employees trained and supported “newbies” for extra compensation. HumanTech offered a good benefits package and even a retirement plan after a ninety day trial period. He was to work on technical documentation and marketing materials for companies that “HT” seemed to have a long history of serving.

Jeff had five assignments during his first three months, paying $15 per hour. He wasn’t bragging about it, but the situation felt comfortable, well within his capabilities, and he really enjoyed the vacation from office politics. He simply made sure that he understood his assignments, which he was then able to perform rather easily. He relished the project-specific nature of the work which he could dig right into, and he especially enjoyed leaving his work at the office.
He was unprepared for the level of support he received from Mary and Oliver West, another player-coach who, coincidentally, had been Mary’s trainer. Mary checked in with him every few days, was instantly available to consult on the practical aspects of his work, and seemed to be deeply respected by his clients’ managements.

Quarterly Review

After three months, Mary and Oliver presented his initial review, which proved to be more detailed than he expected. Reviews in previous jobs were usually an odd combination of vagueness and rigidity, focused on his work ethic and personal qualities, forced into a rigid rating table that didn’t bother with the actual issues of work skills and specific projects.

Instead, Jeff found that he had received a grade and a written comment for every one of the 27 projects he had completed, some as short as a half day. He was amazed that HumanTech could get their clients to rate him so diligently. His average grade was a gratifying 88.3%, and his comments were uniformly positive, with a couple of minor exceptions. He also learned that his scores were, on average, 1.7% higher than the average score given by those grading his projects, so he was deemed to be slightly above average vs. other HT employees, and 5.4% above the average score of other HT new hires.

Mary told Jeff that he was naturally valued at HT, and that he was now eligible for the benefits package. He also was invited to earn extra money for training and supporting newer employees.
“What’s that involve, and how much do I earn?” He knew that Mary’s e-mails to him were often written at night or weekends, though there hadn’t been more than a couple each week. He was wary of getting sucked into a stressful management role.

“You’ve seen what I’ve done for you, which is about two-thirds of the job. The other third involves reviewing these project ratings and encouraging your trainees to listen well enough to their work supervisors at the client companies. We rely solely on the client’s ratings to judge ability, so there’s not the detailed kind of oversight that many companies get caught up in.
“It doesn’t sound like much, but you’ll get a 1% bonus, called an “override,” on each of your trainee’s pay. However, you also receive an override on your trainees’ trainees, through five levels of trainees, so it can become sizable. I’ve been with HT for 3-1/2 years, and I receive 1% of the income of 796 of our people.”

Mary paused and appeared to be reviewing Jeff’s benefits brochure. Jeff was calculating in his head and suffered a kind of disconnect. “I don’t mean to pry, but you’ve been very open with me. Are you saying that your bonus is 796 times 1% times, say, $2,500?”

“Their average income was actually $2,738, on average, last month,” said Mary with the slightest of grins. This conversation was the best part of her job, and Oliver seemed to be enjoying it also.

Jeff was talking out loud to himself, very slowly, “Whatever… call it $2,500 times 800 people… would be $2,000,000 of total income per month… times 1% would… be… You’re not saying you get more than $20,000 each month in bonuses?”

“You get the idea,” smiled Mary.

“I, uhh, how… Could you expand on all this a little? I’m really at a loss here…”

Oliver spoke up for the first time. “The founders of HumanTech are very creative people. They recognized that workers are getting smarter and very mobile, and they proposed to employ the smartest and most mobile of all workers – technical people working temp jobs. Since HT’s only asset would be its workforce, they didn’t want to wake up one morning and find their Company’s assets working for someone else. So they decided to create an employment structure so compelling that no one could even consider leaving it. Essentially, they created a co-operative.”

“5% of every employee’s pay is distributed in 1% pieces to the five people who are responsible for that person’s training and support. Mary and I ar
e two of your five. Each employee is graded by the client for every task they complete, or every week, whichever comes first. That way, we know exactly how well each employee is performing. That alone would be enough to put HT above and beyond its competitors, but it would also be an easy model to copy. The 5% redistribution really locks in the most experienced people. How could Mary or I ever leave HT, even if it were a miserable place to work? And none of us can afford to be less than excellent. Excellence is an individual choice, you know.”

“However, HT’s also a great place to be, since the overrides bind us all together as teammates. I’m committed to the people who pay me a fee and to the people I pay a fee to, since they got me here. It’s not like we have bosses and employees, but rather a network of interdependent entrepreneurs, selling our skills to the clients. Of course it also helps that we don’t have to put up with each other every day. The only jerks we run into are employees of our clients, and we get to cycle through different environments. As you can see, high bonus levels make us less dependent on our paychecks, so we work for less than our competition, making it an unbeatable combination.”

Jeff still wasn’t satisfied. “That really sounds great – I’ve always wanted to work in that kind of environment, but I’m still unclear as to the mechanics. Mary, how’d you go from $2,500 per month to $20,000 in 3-1/2 years?”

Mary answered, “As you know, I’ve been working with you and Cicely Brown for the last three months. That’s pretty typical – I’ve been coaching for three years, so I’ve trained 22 people, counting you and Cicely. On average, those people have been working here 18 months, and they train at about the same rate I do. Actually they’ve trained 14 people each, for a total of 157 people at that level. Those 157 people have been here about nine months on average, each training about 4 people, on average, for a total of 617 people at the third level. 617 plus 157 plus 22 equals 796 total times $2,728 times 1% equals $21,714.88 last month. It works for me.”

Jeff was quiet for a long time, and Mary and Oliver let him be, since it was a typical reaction, as if he were afraid of popping a bubble. Finally he said quietly, “You know guys, I was once a very enthusiastic employee, but I’ve had eight jobs in the last twelve years. I’ve been conditioned to disappointment. Every company or division that seemed to have its act together came unglued after it grew too fast, changed management, got taken over or lost out to overseas competition. I’ve learned not to invest myself in anything that sounds great. My rule is, if anything sounds too good to be true, it is. When it comes to workplace enthusiasm, I guess I’m autistic.”

“So help me out here. How can HumanTech stay healthy long enough for me to get just a few $20,000 months?”

“There are no guarantees, but the right structure’s in place. As you know, HT is privately held, and it’s very secretive about its real numbers. If you sign this nondisclosure statement, we can tell you a little more.”

Jeff signed without a second thought, barely reading the score of repercussions, should he reveal HT’s business secrets, “Hell, I was only looking for a temp job anyway”, he laughed.

“Thank you. Do you know how big HT is?”

“No. It seems bigger than I’d expected. I never heard of it before I started looking for a temp job.”

“That’s typical. If we were a public company, we’d be no. 41 in the Fortune 500. That’s not unusual for the top tier of private companies, which includes other little-known companies like Bechtel, Morrison Knudsen, etc., but we’re big in terms of employees – 227,000 worldwide and growing fast. Companies like HumanTech are run by people who view the public stock markets as a way to make sound management impossible, for reasons we can discuss later. One of the key goals of public companies is to reduce head count by improving work flow and processes. Those are goals which their employees and middle managements fight at every opportunity, with good reason.”

“Enter HumanTech. We specialize in converting jobs to tasks. Then we assign a proven expert to each task for as much or little work the client needs. We often find that our clients’ employees have jobs with no responsibility except two or three one-day tasks a month, but they appear busy all the time, and their work takes up the entire month. If it weren’t so wasteful, it would be laughable. Once a client gets a taste of the HumanTech way, they can’t get enough of it, so we have an insatiable demand for new people.”

“Our goal is not to become the biggest company in the world. Our goal is to do all of the world’s work.”

“Whoa. That’s strong. How can it keep up? How can HT manage all this growth?”

“The system is set up to be self-managing. The IS department doesn’t massage the data, they just make sure the servers are big enough. All the data is just thrown on the hard drives as XML-formatted raw text, and it’s retrieved with a web browser when needed and organized into reports. We really only keep track of a few things: tasks performed, by and for whom and what grades and comments are earned. Also, of course, we track who is trained by whom, so the 1% fees get paid. We wouldn’t want to lose track of that.”

“No we wouldn’t,” Jeff agreed, “no we wouldn’t. So where does it end? Does everybody in the world go to work for HT and get rich?”

The Chain Letter

Mary laughed. “Of course not! It’s a chain letter! The whole thing quits escalating when we hit whatever natural barrier to growth is implicit in the HT system. The founders are very clear about that. They’re just not clear as to what the natural barrier is, since there’s never been such an organic work and growth structure. When we get there, despite the wiring of the globe and HT contracting with every electronic cottage and janitor it can, we’ll see no more growth. At any one time, only a small fraction of the HT people are making significant bonuses – 1% or so. The rest of them will simply have a better work experience than most people do today. As for the 5% fee deduction, none of us ever miss it. Have you missed it these last three months?”

“No. I can see that. But that 1% ratio makes me uncomfortable. Is that the system’s fatal flaw?”
“Maybe, but we’ll have to wait and see. Meanwhile, it’s like worrying about the sun going to super nova. It’s inevitable but not imminent. In about five or six years, we’ll know a lot more about how the model works around the edges, because we’ll experience saturation in the more developed societies. Unless, of course, some other factor interrupts it all in the meantime.”

 Epilogue

Jeff enjoyed a success rate higher than the HT average. Four years later, he was earning $42,000 per month in fees, which turned out to be the highest level he would see. He had paid little attention to the event that ended his wild ride.

About two years earlier, when his bonuses were approaching $10,000 per month, one of HT’s three founders had died in a sailing accident, and his HT stock was distributed to his heirs, who were aggressively courted by a consortium led by EDS and Microsoft. A bitter proxy battle ensued.

HumanTech was forced to go public and its new management immediately started to “improve” the override fee formula, for the sake of the shareholders, naturally. It seemed that no responsible management team could watch $1.7 trillion in override fees flow through its hands without getting creative.

Six years after Jeff started with HumanTech, it had been broken up into several public companies and was shrinking rapidly as its once stellar team of employees retired or quit in disillusionment. The management team which had changed the fee structure had also moved on, to work their magic at other large companies. Several of them were celebrated on the covers
of Fortune or Forbes.

HT remained a leader among the many firms providing outsourced help, in much the same way that McDonald’s has remained a leader in the fast food industry.

And HT’s business model became just about as innovative as McDonald’s.

10:15:56 PM    

Have you noticed that of the many topics routinely discussed, sex and money are the two that most get our attention?

My wife Tamara, a urologist, is a medical director for a major pharmaceutical company, working on a team running clinical trials on a drug to treat erectile dysfunction. Therefore we’re at a major meeting in Montreal – the 10th World Congress of the International Society for Sexual and Impotence Research. Dr. Ruth and Pele are here, raising awareness among other things, but it’s a sober crowd, perhaps the only group in the world that doesn’t crack Viagra jokes. (That’s also why the blogs have been sporadic – too much ambience here in Montreal and a persistence-averse 800 connection from my ISP.)

Last night I found myself as the only layperson (pun intended) in a broad-ranging conversation among Tamara, an innovator in trigger point therapy for female pelvic floor disorders, a British male researching clinical responses to drugs and a California-based female psychologist specializing in couples’ sex therapy. For a compulsive conversationalist, this was a promising constellation of banter.

Sure enough, the issues ranged from female genital mutilation in Eritrea, America’s entry into the colonialist stage of its new imperialism, Howard Bloom’s brilliant books Lucifer Principle and The Global Brain, Jared Diamond’s Guns, Germs and Steel and how men’s and women’s sexual responses differ. On that topic, these experts agreed that a major factor keeping a woman from sexual enthusiasm is financial pressure.

We bloggers will have to leave sexual sattisfaction to the experts, but we can do something about the money part.

What do You Mean We?

Seriously, we bloggers have some collective experience with web-based data solutions. We’ll eventually get our collective minds around the fact that money is just data and the economy is just the transmission of money-data among buyers and sellers. Then we can act on the imperatives of the Peer Economy.

The premise of the Peer Economy is that our peers are more likely to meet our needs than are the companies they work for. If that is true, then we should consider companies to be intermediaries which have locked up the most productive resources – people – and locked us in as customers for the work of their people. So, if the Peer Economy’s endoscope, the Internet, allows buyers to locate and transact with people inside the corporation in significant numbers, then the Internet is acting as a disintermediary in the same way it does when it connects us directly to carmakers, airlines, produce warehouses, book distributors and software publishers.

Just as the retail intermediaries now being cut out of the distribution channel are screaming foul, so will the corporations whose knowledge workers depart to freelance from home, not fromm downsizing but by choice. Suppose my previous premise is accurate enough to be useful:

• All transactions are forms-based
• All forms are data-based
• All databases are controlled by sellers
• All sellers seek to charge more and reduce service costs
• All sellers use data to grow profits, contrary to their buyers’ interests

If so, then it’s clear that a change in the fundamental data architecture underlying transactions can be the catalyst for a renaissance in the market-based economy of customers collaborating with customizers which predated the industrial age model of passive consumers locked in by mass producers. Thanks to Doc Searls for the important distinction between enfranchised customers and passive consumers.

I believe a new peer-to-peer customer-centric data architecture is inevitable and obvious. If/when it occurs, we’ll note retrospectively that the consumer era was an artifact of the seller-centric data model – an architecture that couldn’t scale to the rich data types required in a market-based economy: quality, timeliness, courtesy and expertise.

Open Resources

“The best expert for your most important project doesn’t work for your company.”
                                                       - Bill Joy

Companies are based on closed data resources. Even when open source tools are used, they are only used to manage closed-source data, locking customers into using company resources to solve the entire class of solutions the company claims to excel at. Of course, that’s untrue and the customers know it.

I’d argue that the closed-resource lock-in model cannot and is not scaling to the Internet. Whenever a web-based solution is good enough to be viral it breaks under the strain. Microsoft can’t make HotMail reliable. AOL/TW can’t deliver enough dial tones or ad-free utility.

Let’s do the math.

Viral growth is exponential by definition: your many HotMail or AOL messages may inspire, say, 2 new accounts every month. By the time Microsoft even heard of HotMail, it had 8 million users. Let’s assume no growth that was still the number of members when they bought it for $400 million. Again, this is based on a viral growth model, not an advertising-based model: we’re imagining a web application so compelling that each user inspires 2 new users every month (could be years – doesn’t really matter.

As long as the service is satisfactory and there are potential users, the demands on Hotmail’s server farm will grow by the same exponent – twice the members every period. Cool: 16, 32, 64, 128 million users in four additional months. During one of those incremental periods, the server farm will be under-provisioned and will break under the load. We all know that exponential growth is unmanageable but we’ve failed to apply that wisdom when lured by the siren of limitless success.

This is quite different from Nicholas Negroponte’s vision of wireless repeater stations proliferating like lilies in a pond. In that case, the capital comes from private citizens accessing as many data servers as there are ISPs. The costs of growth are so broadly scattered that its energy is like the sun, available everywhere, and not like HotMail’s large gro-lite, dependent on Microsoft’s single electric line.

If the Water Lily Model works for WiFi, it will work for a range of services. Imagine an RSS-based service index aggregated from the customer-certified reports of an exponentially expanding network of competence:

• A transaction stolen from American Express A travel agent leaves the agency and specializes in custom tours for which she charges a flat $250 administaration fee, payable based on the quality of the memories upon your return. As an expert, she passes on to you better deals than you could find or agencies would disclose and designs uniquely satisfying itineraries. As her global reputation grows and becomes more visible, customers rely on each others’ glowing recommendations to bid for her availability. Her systems grow in efficiency so each booking takes
  less time.
• A transaction stolen from Home Depot You need a power washer for Saturday afternoon. You could rent it from Home Depot for  $150 and also hassle with picking it up using the trailer they provide, towing it home and back, screw around with the instructions, nozzles and starting ritual. But it occurs to you to check the P2P service index and discover there’s a retired dude in the next block who’s accumulated all the power tools you could imagine. He’ll rent it to you for $75, bring it by, show you how to run it, volunteers to stop back for any help you need and picks it up at your convenience. And he’ll let the satisfaction of the relationship determine whether he gets all of his $75.
• A transaction stolen from Roto-Rooter Your drains are backed up when you return from travel at 6:30pm, so you check the P2P index and discover a plumber in your zip code with a tiny Yellow Pages ad but with a disproportionately huge regard by past customers. Because he has a network of quality apprentices he’s mentored into service, he can have someone there in 17 minutes, charging half of RotoRooter’s service which won’t happen until tomorrow morning. And his charge varies with your satisfaction with his apprentice’s responsiveness, professionalism and competence.
• A transaction stolen from Kinko’s About noon, you discover that your small company needs a brochure for tomorrow morning’s presentation. In the past you spent the evening at the office and Kinko’s transforming your Word doc into an obviously amateur flyer. The P2P Index leads you to a specialist 5 states away who charges you $125 to create and print a knock-out, graphically interesting and well-written piece that’s FedExed to you by 8am. The printing quality – all originals – is better than Kinko’s high-speed color copier, and its excellence rubs off on your presentation.

Imagine your own transactions. We all know there’s an expert in Bangalore who could finish our messy code by the end of the week and there’s someone in our zip code to build our deck masterfully, if only we could find them.
4:11:16 PM    

The literature of any culture is silent on assumptions so fundamental that they describe how things “have to be.” Such assumptions need not be discussed, since there is no point. Yet at the heart of such assumptions may lie an obsolescent kernel of vanishing truth, the disappearance of which will change everything.

Imagine yourself as the most informed economist around 1850. As an economic guru, you would have a confident conception about the character of wealth and its formation (rather more about the former than the latter, since wealth formed so slowly it was hardly worth studying – it stayed pretty much where it was). Without question, 1850’s wealth is based in the land and little else. Even the first stirrings of industrialism seemed to ratify the importance of land rather than discount it. The railroads, big oil and what there was of large-scale industry were based largely on real estate. Since the land had been the basis of wealth and influence forever, it would not occur to you, the world’s foremost economist, that your great grandchildren would consider land an extraneous and inconvenient factor in securing their family’s prosperity. It would be inconceivable to you that ownership of real estate could become just another business and not a very interesting or influential one.

Selling an intangible (or marginally inexpensive tangible) to someone you have never met or sold to before has become the preoccupation of our age, since it is the only way to maintain and extend your company’s market valuation. Call it the Corporate Economy.

I’m suggesting that an underlying assumption of our Corporate Economy may be just as obsolescent as was the assumption that land is the basis of all wealth. However, it might take just ten years to see changes in our economy and culture equivalent to the last century and a half, so rather than a generation to get the drift, we’ve got a few fiscal quarters.

The assumption our culture should question is that the public corporation must be the basis of most meaningful transactions.

The shift from land-based wealth to the Corporate Economy occurred because we started using the corporate vehicle in earnest. Corporations had been around a while, but did so little business that their special focus had little bearing on the economy. But to use control of the land to create Union Pacific or Standard Oil required a corporation to raise the capital you didn’t need when your use of land was to mold serfs into soldiers to build your power base.

As the corporate mechanism became the dominant business mode, all economic activity became company-centric, evolving into the unsupervised gang warfare we call the free market economy. We may no longer emphasize our membership in a particular family, church, state or, increasingly, nation, but if you don’t belong to a company, you’re next to homeless. It doesn’t have to be a big company, as long as it has a shot at becoming big or bought by one. (Stock ownership is a better form of belonging, and belonging to lots of companies’ shareholder lists is the best form of belonging, as mutual funds have discovered. Since it’s a jungle out there, you never know which gang will be standing at the end of the day).

150 years ago, you would never have predicted the wave of wealth that has swept over the globe. You couldn’t, because you’d be unable to see past the land limitation. Decoupling wealth from land was the secret to a global economy functioning in the trillions of dollars rather than a few hundred thousand, with individual households (households!) owning most corporate stock. That growth has come not just because of inflation: most people work far less for a loaf of bread than did their great grandfather. We’re making more stuff and spreading it around better. Today’s poverty is found primarily where the corporations have not superseded feudalism.

But anyone who has worked in a company wonders if this can be the ultimate wealth-producing vehicle. Working for more than one company reinforces that view. Most companies are mockeries of human potential because so few of its members are “on task” at any moment. And the tasks they are on often contribute little to the bottom line. Real productivity and profit in most companies is concentrated in the core business – the one they were founded to execute and which they have honed into a reliable formula. The profit formulas they attempt to add rarely pan out. Will this difficulty be overcome by the Information Revolution? Probably not. It usually takes a group of people coming together in a new company to generate a new productive process.

If established companies are not reliable generators of new productive processes, how is it possible that another explosion of global wealth, again amounting to several orders of magnitude, might come about?

By releasing our assumption that work must remain concentrated in public corporations.

Corporations’ inability to keep people profitably on task is the key to the demise of the Corporate Age. If you want to see people on task, stop by your local cleaners or bakery. That’s where you find people who are close to their customers, sticking to their core competencies. They are blissfully unmanaged by overly creative managers dreaming up new line extensions to fritter away shareholder equity and their customers’ time.

The question is, how could the marvelous productivity of localized business become the engine of the next wave of democratic wealth? It happens when the global communications links forged by corporations serve the sole proprietor as well as the multinational corporations and interactive TV spuds they were designed for.

A ubiquitous Internet, unmediated peer-to-peer payments and eXtensible Markup Language (XML) are the building blocks of the Peer Economy, where you transact directly with another and not their company, although you’ve never met nor will, each with absolute confidence in your security and total satisfaction. The Peer Economy provides mechanisms for wealth creation which cut across corporate borders and are aggregated in the very fabric of the Internet, not locked inside the balance sheets of contending companies and mutual funds.

So, if great granddad toiled in the old country for half an hour for the loaf of bread you earn in one minute, when will your child work 10 seconds for her bread? It happens as soon as the means of production are on task six times as much (usefully tasked, as defined by consumers, not managements). This includes people in addition to the robots and computers staffing the impending golden age of automated slavery.

The point is not how many slaves we have, it’s how much they and we are deployed on tasks which are truly useful to each other, unmediated by clueless managers.

That’s the promise of the Peer Economy: billions of productive people and millions of J.P. Morgans.

10:58:49 PM    

We’ve conjectured that there’s a dark side to the seeming perfection of our equal opportunity system – our great meritocracy. If there is a dark side, it’s the sword of complexity wielded by the meritocrats. I thinke there are two reasons. The first is Blaser’s Second Law:

The complexity of a system expands to match the brainpower of its designers…
…and no one can manage a system they’re smart enough to design.

The second reason is that we just love to complicate things. We make computers more complicated than they have to be. Employee manuals are unnecessarily dense (yeah – like this blog). As George Gilder put it in 1996,

In every industrial transformation, businesses prosper by using the defining abundance of their era to alleviate the defining scarcity. Today this challenge implies a commanding moral imperative: to use Internet bandwidth in order to stop wasting the customer’s time. Stop the callous cost of queues, the insolence of cold calls, the wanton eyeball pokes and splashes of billboards and unwanted ads, the constant drag of lowest-common-denominator entertainments, the lethal tedium of unneeded travel, the plangent buffeting of TV news and political prattle, the endless temporal dissipation in classrooms, waiting rooms, anterooms, traffic jams, toll booths and assembly lines, through the impertinent tyranny of unneeded and afterwards ignored submission of forms, audits, polls, waivers, warnings, legal pettifoggery.

And it’s only worsened since then. The meritocrats’ inscrutable processes empower the clued-in and disenfranchise the rest of us – the Procedurally Advantaged vs. the Procedurally Disadvantaged (The Dissed?). When we see how pervasive and intentional this growing complexity is, (even though that intention may not be conscious), we can feel Gilder’s rage.

Most of us have almost no freedom in designing our lives, just as most of our ancestors were serfs indentured to a landowner who took most of the produce grown on his land. We have more toys and the appearance of owning our own homes, but the disparity in life choices and styles is similar. Aristocracy and meritocracy look remarkably alike to people who missed the boat. Even though they’re still too complex, computers have come a long way. Some Unix geeks still insist that you’re feeble if you don’t work from the command line, but we collectively abandoned that system because the system grows in value by the number of its participants, not by the average IQ of its participants. We’re about to make that breakthrough in economic matters, provided we can pry the meritocrat’s hands off the controls of our economy – the proprietary data structures that lock in their relative advantage.

As we design our microeconomy, the high order bit is its evenhandedness, possible only through the distributed shared-custody data architecture we’ve been discussing.
8:29:12 AM    

Someone asked me the other day if this blog had to be so dense. Meaning, as only English could cast it, that it’s hard reading, especially if you’re dense. I guess this blog has to be dense. People who read blogs are not idiots. Demographically, we’re the most clued-in cohort of the most connected segment of the wealthiest economy in history.

Steve Jobs challenged John Sculley, “If you stay at Pepsi, five years from now all you’ll have accomplished is selling a lot more sugar water to kids. If you come to Apple you can change the world.“

Our choice is to spend even more time watching Celebrity Fear Factor on our Tivos and swilling Pepsi, or we can get together, think hard and invent the future.

Inventing the future is not difficult, but it hurts the brain. We have to conform to the existing Internet protocols, add some standards of our own, but without requiring a wholesale adoption by the people we want to serve. We have to think hard on why things are as they are and how they might be and then design the answer to what keeps the past from becoming our future. After that we need to hack some code. And revise and revise and revise…

Besides, this blog is mental exercise for me, allowing me to trot out the ideas I’ve read and conclusions I’ve reached over a lifetime of saving the ideas that seemed worth saving. So I guess my writing will continue to be dense and I’ll hope you’re patient and persistent enough to help me make sense of this design study.

As Blaise Pascal said of one of his writings, “I made it longer only because I lacked the time to make it shorter.“

Hidden in Plain Sight

Our microeconomy design is coming along.

But we still lack the Rosetta Stone that helps us apply a universal human protocol to our shared record of transactions. If people don’t use the forms we’re designing to capture our Peer-to-Peer transaction data, they won’t be used, and we’ll have designed another Edsel.

The universal theme of Peer-to-Peer transactions in the open marketplace is Identify, Specify, Negotiate, Deliver, Evaluate and Pay.  

1. You identify a likely product, usually after some research. 
2. You specify how you want it and where and when. 
3. You and the seller negotiate any details or adjustments to your specification.
4. The seller delivers the service or product
5. You evaluate its suitability and your satisfaction and discuss it with the seller and others
6. You pay the seller

We like to talk about the marketplace as our model for Internet transactions, but that’s not how it works for most of us. If the globe is to be a global village, we need to solve the sequence demanded when the seller doesn’t know the buyer:

1. You identify a likely product, usually after some research
2. You specify how you want it and where and when. 
3. You and the seller negotiate any details or adjustments to your specification.
4. You pay the seller
5. The seller delivers the service or product
6. You evaluate its suitability and your satisfaction and rarely discuss it with anyone

It’s become the standard for mail and Internet orders and we don’t realize it’s a drastic revision of how things have always worked in the agora. In our P2P microeconomy, we’ll apply the traditional sequence even to distance sales. Why would a seller agree to that? Because the buyer has a published reputation the seller can rely on. It’s an extension of the role blogs are beginning to play. John Robb on blogs and reputation:

My weblog is my global business card.  It is the place everyone that wants to contact me can quickly go to find out who I am, what I am doing, and how to contact me.

Now that his blog has introduced him, I’d send John a figurine today and let him pay me later. If the trust problem can be solved, the get first, pay later model could unlock a lot of customer reluctance and get the cash flowing again. Money velocity is the oxygen of a free market.

We’ve described a totally transparent transaction model where everything is visible (initial inquiry, delivery details, promised start & finish, price, terms, in-progress remarks, actual start & finish, buyer’s grade & comment, seller’s grade & comment and anything else the parties to the transaction want to archive). Most of the data is in plain sight, though only the high points are published by the participants in their RSS feeds. Confidential data may be encrypted using the W3C’s forthcoming encryption protocols.
6:16:06 PM    

microEconomy?
Tim O’Reilly quoting William Gibson:

This design study is meant to be both focused and meditative. If we’re lucky, we won’t fail at both. After the last several meditations on the evolution of leadership personalities from Attilla the Hun to John Malone, it’s time to recap our study criteria and get down to the nitty gritty of Xpertweb data structures and why they have to be so idiosyncratic.

Conclusions to Date

1. The economy is an Operating System, due for a major revision
2. All transactions depend on forms and protocols constraining the participants’ behavior
3. The forms are based on data describing the rules – data controlled by sellers or government
4. Proprietary data is the root of tyranny
5. Sellers and buyers need equal authority over the transactional data archive
6. New standards are rarely effective because they need the buy-in of too many players 
7. To design an economy, we’ll start with a microeconomy and make it viral

Symmetrical Data

It’s not yet obvious how tyrannical proprietary data has become, but perhaps we’ll soon recognize that all our customer frustrations are based on the seller’s control of customer records and their disinterest and incompetence in satisfying a customer. Doc Searls was called by a Wall Street Journal salesperson after paying in advance for a two-year subscription:

“Wait,” I said. “Can you check and make sure you got the payment and it was credited?” “Sorry, I don’t have access to those records, but you can call customer service at 1-800…”
Translation: “I’m just an outsourced telemarketer reading from a script.”
Sheesh.

Doc’s frustration is based solely on WSJ’s inability to deploy people with access to and competency with all his account data and the authority to correct data errors on the spot. But why would they ever do that? They know their primary mission is to obligate him to assign some of his cash flow to them. There’s a lower emphasis on doing what we think their mission is: delivering a fine paper to his doorstep.

There’s another proprietary database lurking behind the scenes to enforce the WSJ’s one-sided rules, and it’s the most tyrannical private data in the world – the one that will hammer his credit rating if he goes to Tahiti for the winter and his subscription doesn’t get paid. If Dow Jones hires Doc to speak, they’ll probably pay him as companies usually do, 60-90 days after receiving the invoice. The Wall Street Journal will call that sound cash management. But if Doc pays his clients for their products on the same schedule they pay him, he’s labeled a deadbeat.

It’s solely because they control the data. Doc has no influence over it and a US citizen is an idiot if he doesn’t cower at the magic incantation, “will be reported to a credit agency.” That’s probably why he pays his WSJ subscriptions 2 years in advance (as if that helped him in this case). How much customer money is held by companies, simply because a late payment carries such an inordinate burden? How much stronger might the economy be if the cash spent more time in customer’s accounts under symmetrical data protocols?

The current data model is assymmetrical – all of the data is managed by one party.

Building the Symmetrical Data Store, one datum at a time

Every Xpertweb user maintains a complete record of every transaction they conduct, whether they’re a buyer or seller. The data for every transaction is identical on the buyer’s and the seller’s data store. That’s why every user has a web site even if all they do is buy stuff – their data record is always available and it’s stored in the open on each web site, so any attempt to change data is immediately detected by the other party’s specialized spidering software.

Every Xpertweb user has a mentor, who sets up the new user’s web site, teaches him how to use the forms and provides disk space to mirror all the user’s data. That leaves four copies of each record as a redundant archive. Each user could modify any data on their own web site, but the most damage thay can do is cause a transaction record to labeled as unreliable because it’s not synched with the other 3 copies.

Each user’s web site is managed by their local open source, trusted PHP scripts. When a buyer enters task data on the seller’s site, it’s immediately reviewed by the buyer’s own trusted script and written to the buyer’s Xpertweb site upon the buyer’s confirmation.

Here’s the high-level data structure for an Xpertweb user. Directories are blue, data is red:

myxpertwebsite.com
   xpwid.xml
   admin
   mentor
   buystuff
      sellers
   sellstuff
      buyers
      products

Here’s a detailed data structure depiction.

Wasting Newly Abundant Resources

“So today, the prime rule of thrift in business is “waste transistors.” We “waste” them to correct our spelling, to play solitaire, to do anything. As a matter of fact, you’ve got to waste transistors in order to succeed in business these days.”
                        – George Gilder

The Xpertweb data storage design takes that advice to heart. One reason data is proprietary is that it’s so complicated to manage efficiently. Millions of dollars are spent to make a corporation’s customer records quickly accessible to only its authorized employees and increasingly, to customers on the web. The data sit on huge dedicated server farms. It involves a lot of customers and just a little bit of data on each one. It rarely describes how happy the customer was with the last transaction, and never lets prospective customers know how happy are the past customers. When it’s accessed, it’s by using a specialized data program that knows how to read and translate all that encoded, compressed data.

So transaction data has to be sketchy but archives millions of encounters. But when you or I have a transactional data store we find useful, it will have lots of data on each of just the few transactions we participate in.

So the resources wasted by Xpertweb are web server hard drives. Most ISP’s give you 10, 20, up to 100 MB of storage for free, which is a lot of space for the 85-100 data items required to describe each of a few thousand transactions in enough detail to be useful to all interested parties.

The data is stored as XML data, which means it takes a lot of words to describe each datum (rather than looking like a compressed Excel table, with 1 header row describing the data, XML tags each datum with its own label):

<xpw_project_data project_id=’ADCGEFH.FHECDBAM.1003863968′>
  <xw_customer_email_address>brittb@xpertweb.com&lt;/ xw_customer_email_address>
</xpw_project_data>

The project ID is unique because it’s a combination of the seller’s unique
ID (ADCGEFH), plus the buyer’s unique ID (FHECDBAM), plus the number of seconds since the start of the year 1970 (1003863968). Presumably, this buyer will be unable to submit more than one initial purchase inquiry to this seller on that particular second.

In order to be even more wasteful, Xpertweb puts just one datum in each XML file, so this file might be called customeremail_ADCGEFH.FHECDBAM.1003863968. Like a packet sent over the Internet, the file contains all the information needed to relate this data item to its transaction forever.

12:31:19 PM