In Splitting the Social Currency Atom I explored how it was possible to make sense of the various uses of the term “social currency” by analogy to the different functions of money. “Social currency” means different things depending on whether we are talking about it as a “means of exchange” (jokes, information, rumours) or as “unit of account” (reputation points, badges, diplomas.)
While this analogy is useful, it isn’t perfect. In a number of important ways, social currency does not function like money. In this post, I will focus in on the “means of exchange” view of social currency. Exploring how social currency behaves differently to money can help shed light on what it is, and isn’t.
What kind of exchange?
To recap on my last post on this subject, what we could describe as “means of exchange” social currency is what we share in social contexts in order to earn social capital. A simple example is someone telling a joke at a party of people they don’t know very well. If it arouses some laughter, it will typically result in some people thinking slightly better of the joke-teller. It could be the entry point into a conversation.
One of the problems with the money analogy, is that this type of exchange (joke for reputation) is unlike a typical monetary exchange. When money changes hands it is usually in the context of a transaction: giving someone money implies a corresponding and explicit quid pro quo: there is something which must be handed back in return. The acid test of a transaction, rather than a looser form of exchange, is people’s reactions when one half of the exchange isn’t upheld. In the context of a transaction, there would be a legitimate sense that the person spending money had been wronged in some way.
Compare this to telling a joke at a party. If someone doesn’t laugh at your joke, and doesn’t think any better of you, they haven’t wronged you. There is no explicit bargain that they will think better of you because of your joke. In that respect, the exchange is non-transactional. You are not buying social capital with social currency.
A better way to characterise social currency is as a gift, not a form of payment. When gifts change hands, there is no guarantee of reciprocation, or that the person will think better of the gift-giver. You don’t buy gifts with gifts, and nobody has wronged you by not returning a gift, though there might be some less explicit kind of disappointment at non-reciprocation. Formally speaking, though, there is no explicit obligation to reciprocate – this is perhaps a defining characteristic of a gift exchange, versus a transaction.
What kind of gift?
However, if social currency is a gift, we run into another problem. We should probably dispense with the term altogether if there isn’t something which distinguishes social currency from all types of gift giving. Talking about social currency as a means to acquire social capital won’t cut it: all kinds of gift giving serve this purpose in part. So there must be something else which makes social currency what it is, and not just like any other type of gift.
I think there are two related things which make something social currency, as opposed to any other type of gift. The first necessary (but not sufficient) condition is the fact that social currency is abundance-based, rather than scarcity-based. When you give someone a physical book, the artifact can’t be reproduced infinitely from the initial gift. What’s more, convention dictates that your friend can’t just give the book on to someone else (this goes against the spirit of gift giving.) Social currency, on the other hand, consists in things shared which can be infinitely re-shared. Jokes, information, stories and other things don’t suffer from scarcity constraints like physical things do, and aren’t governed by the same conventions. You can pass them on.
This brings us to the second characteristic: pass-on value. Unlike gifts, which we don’t normally pass on, social currency is partly valued because it can be re-used as a medium of exchange in future encounters. In other words, the good joke you heard at the party is something which can be retold with the same purpose of acquiring social capital. This is quite a lot like money: social currency circulates partly because it has pass-on value.
What kind of gift is social currency? There are two things: abundance-based supply and pass-on value. The purpose of the gift is to gain social capital in social contexts.
What kind of value?
So far, I’ve used examples relating to jokes, information and stories, and social contexts like parties. These are only simple examples, useful for illustrating the concept of social currency, but in fact only a small part of the story.
The kinds of things which become social currency are the kinds of things which are abundant, easily shared, and which have pass-on value. Party banter are a small subset of these things. What makes social currency such an interesting and timely concept is the internet. What is the internet for, after all, other than a medium for sharing digital artifacts with large numbers of people at no cost? It’s an ideal environment for social currency to circulate.
As such, the kinds of things which we could call social currency are endless and varied: blog posts, tweets, thought pieces, short films, eBooks, and so on. We could say that jokes really live at the low end of the value spectrum. This isn’t to deny that jokes have their uses. However, we could assume a rule of thumb which says that the amount of social capital you can generate is roughly proportional to how valuable your social currency is. In the age of the internet, we are free to create refined value and share it online – we can print our own social currency.
This brings us to a few thoughts on the role of content creators in a digital environment. While we hear a lot about how the internet is undermining creative business models which make the production of cultural goods profitable, we hear less about the corresponding potential the web has created. While it’s harder to sell books, CDs and DVDs in a world where digital goods can be reproduced and shared at little cost, there are benefits to sharing, rather than trading culture. Giving creative works away creates social currency: things which people can pass on and share. Creating social currency is a way of earning social capital, which can in turn be tapped into to find opportunities to trade in the scarcity-economy.
While old models of publishing are collapsing, thinking about how creative works become social currency might lead to better business models, which are fit for a digital age.
What kinds of motivations?
Finally, it’s worth pointing out that the reasons why people share social currency are complex, and not reducible to simple self-interest. We partly enjoy the pleasure of sharing. We like to have excuses to bond with people over shared interests. There is no simple explanation of social currency which reduces it to an exercise in self-promotion. It can also be helpful to consider social currency from a broader, network view: the exchange of social currency provides a means for weak ties to become strong, and for networks of trust to form between strangers. As such, we might find social currency to be an important concept when making sense of social network formation, and the many kinds of social cooperation which depend on stronger networks.
Eli Gothill is the author of Webisteme, a blog about the future of money.