Apr 2, 2010

The Five Social Currencies

The more society has progressed the easier it has become to take its basic necessities for granted. The developed world spends more time debating accessibility to higher education, the cost of healthcare, and funding for the arts rather than availability of basic sustenance, shelter, or day-to-day assurances of safety. Generational increases in worker productivity have helped fuel this economic and societal progression, making the factors that drove career choices fifty years ago less of a concern today. This broad increase in material wealth has brought with it an equally broad shift in how we define our own life's purpose. Current generations might pass up a higher wage in order to teach or help others who are less fortunate. We are now more apt to pursue paths that serve to affirm of our creative and intellectual self-worth and find value in furthering the knowledge set of humanity rather than make our own lives more comfortable.

This multi-generational climb up Maslow's Hierarchy of Needs is not immune to temporary reversals. 2008's sudden rise in worldwide commodity prices unsettled our notions on the right to basic staples, September 11th pricked our complacent feelings of invulnerability, and the recent implosion of credit is forcing us to question the sustainability of America's deeply ingrained habits of consumption.

I've always been fascinated with how the tiering of values associated with this hierarchy translates into an individual's choice of occupation. While career paths that require some sort of education vary greatly in their expected monetary wage I posit that the all-in differences in compensation, which include intangible and psychological acknowledgment factors, are not nearly so gaping. In an attempt to quantify this idea I've created a simple framework that equalizes total compensation across all careers. I do this by first broadening the definition of compensation factors then assigning each of these five factors with a unitary value that sum to 100.

Post-collegiate career decisions are motivated by and compensated with five Social Currencies:

1.) Monetary: The most obvious, superficial, and sought after reward is many times the primary motivator for those who pursue skills that are highly valued in capitalist economies.

2.) Academic: The societal seal of approval paid to those who serve to maintain and further humanity's knowledge set. Research scientists, engineers, and historians sacrifice more superficial rewards for this honorable, psychological nod.

3.) Altruistic: Similarly, altruistic currency is the character approval given to those who put the well being of others ahead of their own. This motivating element makes up a disproportionate part of the reward given to elementary school teachers, firefighters, EMT paramedics, and social defenders.

4.) Celebrity: Recipients of this currency are either directly or indirectly involved with industries or individuals who are highly exposed to the mass public. Politicians, professional athletes, and entertainers are the main benefactors of the perks (and ills) of this payment.

5.) Cultural: Reserved for individuals who pursue more abstract and intellectual aspects of the arts, entertainment, and literature. Contrary to celebrity currency this form of acknowledgment isn't necessarily correlated to the level of public exposure. Rather, these individuals seek praise for their aesthetic perspective, creativity, and intellect in pursuits that are not necessarily tied to monetary gain. With celebrity and cultural currency comes the corollary currency of influence. The idea value or acknowledgment given to those who have the power to change the way people think and behave.

A few examples are included in the table below.

A few obvious limitations:

* There are surely more than five factors that motivate one’s career choice. This idea becomes more unwieldy when you include those without an elementary or advanced education.
* I believe that there are a small handful of superoptimal pursuits that sum to greater than 100 and a larger set of suboptimal paths that sum to less than 100. An example of a superoptimal path might be a famous documentarian who earns an abundance of all five currencies. A suboptimal example would be a white collar office worker who earns a menial monetary wage and little else.
* Even if you give credence to this framework the values associated to each category are highly subjective and exposed to the biases of the assigner (an interesting perceptional test in itself).


jy said...
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Omar said...

I think your social values breakdown is relevant and insightful.

Maybe there should be a "sleep-at-night" index for each profession, or a "cocktail party status" index. Different social contexts will skew the compensation scores in different ways.

In the end, there is nothing scientific about this, as it is a living and breathing set of data which will vary across person, place and time. Nonetheless it is indeed fascinating.

Inas said...

Very insightful. However, I would like to disagree with your assertion that money is the most superficial currency. Monetary incentive is NOT superficial. Most people who produce and generate wealth, do so because of the rush of innovation and of discovery. Money is merely the OBJECTIVE measure of the value of their ingenuity. By what other standard should one seek a reward, if not by an objective one. You also need to factor in that those who produce wealth contribute more to society in terms of generating opportunity for others then those who are motivated by altruism.
And yet they are accused of seeking the lowest form of compensation. I do not think its fair to assume that the social currency for a teacher is grounded in good will, while that of a business man is grounded in greed. They might both be driven by passion to display their unique talents. A teacher is not avarice to the prospect of monetary compensation. However, A teacher can only measure her output according to student success. While a business man of any kind can only measure his output in terms of dollars. Unlike a teacher, he cannot assume success on the basis of any other standard but monetary, just by the very nature of his profession. The fact that he ends up contributing more in terms of renovating society for the better, is totally discounted because he stands to benefit? This does not seem like a fair evaluation.
But i love the idea of social currencies and think it needs further exploration.

Modestmerlin said...

JY: This system says nothing about how you utilize or "spend" the currency that you've earned. So yes, potent currency in one category can surely be accretive to another but not necessarily. One who earns a high monetary wage might decide to give it all to cultural or altruistic causes. This note doesn't assumes that people are super-rational in how that choose their professions. It's more a comment on how various forms of payment have more intrinsic worth to different people. This also gets into the idea of how different tribes of people value those who are rich/poor in various currencies. For example, there are groups of people in NYC who value cultural currency above all else and will scorn those who choose celebrity or monetary compensation. Then there are tribes who value monetary above all else, looking down on the wasteful self-indulgence of many cultural pursuits.

Modestmerlin said...

Omar: The scores are somewhat relative but not in the way that you suggest. As I mentioned in response to JY we all reap the benefits and perils of the currency in our satchel depending on who we are socializing with. While the currency we earn is somewhat absolute the currencies we value are certainly not.

Modestmerlin said...

Inas: Thanks for your insightful comment.

I disagree with your assertion that "most" people who produce and generate wealth do because of the rush of innovation and discovery. In fact, practically every wealthy person I know (multi-millionaires across various industries) did nothing that would be considered innovative. While your point is well taken I would simply add that traditional measures of monetary wealth don't take into consideration the externalities they create and the non-economic resources they exploit. Also, you said that those who produce wealth contribute "more" to society in terms of generating opportunity for others than those who are motivated by altruism. I think this is a very tricky statement to make and would refer to my previous comment that the accumulation of wealth, tallied by money alone, is certainly not an accurate all-in measure for the potency of one's ability to generate economic and non-economic fulfillment for others.

It was never stated that monetary currency is the lowest form of compensation but admittedly my tone suggests this. Also, I don't think it's assumed that the receipt of altruistic currency is grounded in good will but simply a fact of how this person is paid. This person might not have been able to find another job and thus were forced to accept a different composition of payment. I don't think that a businessman is always only compensated monetarily. There are multitudes of for-profit businesses that further altruistic, cultural, and academic pursuits. And yes, there is certainly nothing wrong with a businessman who employs people to create a necessary good or service that his/her community values.

Omar said...

I agree. I was touching upon the "currencies we value" part of it. Everyone values each currency to a different degree.

I suppose what i really wanted to say is more related to the currencies we earn. Your goal of assigning an objective earnings statement based upon social dynamics & values is a lofty one.

In order for all these scores to add up to 100, you need a society that's cultured enough to realize the objective value in each currency. If a score of 100 across jobs satisfies a necessary condition for the success of your theory's underlying equation, then i think the whole thing starts to fall apart the farther into cow country one may travel.

Of course, if you didn't intend for localization of currencies to factor into this, instead outlining this framework for a more progressive audience - then I can surely appreciate that.

goblinbox said...

You have not posted since April.

Modestmerlin said...

I know. I'm less bored than I used to be though I'll likely put up a few thoughts this winter.