Economics Takes a Leading Role in the Biodiversity Story

March 8, 2021 By David Griesing Leave a Comment

Someone starts telling a story so that those who are listening can start imagining.

We need stories that challenge us with new ways to find political consensus, to confront climate change, to learn from the triumphs as well as the shortcomings of our common past.

Without the liberation of stories like that, we can be paralyzed when confronting the hostility of our politics, the inevitability of a rapidly degrading earth, and the unfinished work of our imperfect but often noble forebears.

And sometimes, as with this particular story, no less than Prince Charles, Boris Johnson and David Attenborough were invited to play bit parts on the story’s opening night (more about that below).

These very different men stood front and center for a few minutes because this story had already invited them into it. When a storyline is bold and surprising, curiosity often finds famous listeners before it blossoms into broader engagement and we’re sharing it with those that we care about too.

A report presented earlier this month begins to tell such a story, skillfully deploying economic theory to get our juices flowing in new directions.

– It admits what we already know: that humanity is taking more from the earth—extracting more of its minerals, fishing more from its seas, destroying more of its diversity, undermining more of its climate patterns, polluting more of its habitats—than the earth can replenish, correct or restore on its own.

– It wonders out loud—in a flight of real-world imagination—about what might happen if we treated Nature’s systems and productive capacity not as “free” for the taking (as we still do almost everywhere today) but as “economic assets” that we must start “investing in” (like we invest in the homes where we live) and managing, as we would any “portfolio.” We’d utilize concepts like “asset value” that acknowledge not only the price that a natural asset commands in the marketplace (its so-called “use value”), but also its “intrinsic value” as part of an ecosystem “that is greater than the sum of its productivities” and contributions. Similarly, we’d account for the “depreciation” of these assets so we could understand their diminishing value to us and their systems as we continue to rely upon them.

– It’s a story that begins to tie “the regeneration of the biosphere…to the sustainability of the human enterprise” (or our economic activities on this planet) in a way that’s never been told before.

– It’s a story whose drama comes from the uncertainty of our survival because, given the current rate of Nature’s depletion and imbalance, the Earth will be unable to sustain life as we know it into the foreseeable future.

This story, formally presented earlier this month by the U.K.’s Treasury Department, was written by Cambridge University professor Partha Dasgupta and is called The Dasgupta Review on the Economics of Biodiversity. You can read an abridged version of it (around 80 pages) or his full Review (at 600 pages) by downloading them here.

The Dasgupta Review begins with the simple observation that: “We are all asset managers.” Professor Dasgupta then describes how we all must learn to manage Nature’s limited and deeply-troubled portfolio of assets in ways that an economist might:

Nature’s goods and services are the foundations of our economies. They include the provisioning services that supply the goods we harvest and extract (food, water, fibres, timber, medicines) and cultural services, such as the gardens, parks and coastlines we visit for pleasure, even emotional sustenance and recuperation. But Nature’s processes also maintain a genetic library, preserve and regenerate soil, control floods, filter pollutants, assimilate waste, pollinate crops, maintain the hydrological cycle, regulate climate, and fulfil many other functions besides. Without those regulating and maintenance services, life as we know it would not be possible.
Biodiversity is a characteristic of ecosystems. It enables ecosystems to flourish and supply [this] wide variety of services… [J]ust as diversity within a portfolio of financial assets reduces risk and uncertainty, so biodiversity increases Nature’s resilience to shocks, and thereby reduces risks to the ecosystem services on which we rely.

As breathtaking a view of “a new world” as Tolkein’s (in fantasy) or Asimov’s (in science fiction), Dasgupta’s storytelling perspective invites us to imagine how governments, businesses, and individuals whose work depends on the vibrancy of Nature’s goods and services, along with the rest of us who enjoy the quality of our lives on this planet, can begin (at last) to sustain “the economic value” of the Earth’s biodiversity for everyone’s benefit. As surprising as it might seem, there has never been anything quite like The Review before.

Well into the 1970’s, we almost universally believed that human ingenuity could free us from Nature’s constraints and limitations. They were the days of “the Green Revolution” which brought rapidly increasing crop yields to smaller and smaller plots of land. They were the days when concerns about “over-population” (such as those voiced by Paul Ehrlich—a contributor to The Review) seemed grotesquely exaggerated. Until quite recently, we’ve acted like the Earth’s ability to fuel our continued “economic growth” and improve our living standards would be inexhaustible as long as human genius helped it along. Today, as we approach the environmental brink, we’re not only confronting our hubris but also beginning to storyboard our way out of the dead-end street where we currently find ourselves.

Even the abridged version of The Review will familiarize you with Dasgupta’s artistry when he identifies Nature’s asset classes and how they impact one another, how the planet’s stakeholders need to “re-invest” some of their profits into portfolio replenishment, and how all of us need to learn more about Nature’s “webs of interrelatedness” so that we’ll be more personally invested in managing these assets in our backyards and beyond them.

The Review is too rich in detail to summarize here and I hope you’ll to read it. But if you need more encouragement, an hour-long video-introduction to its findings, an overview teed up by the forenamed personalities, might convince you.

Why limit your exposure to Britian’s royals by watching another episode of The Crown? For example, I couldn’t remember the last time that I’d heard the real Prince Charles talk about anything important, but he puts himself garumphingly behind the findings of The Review in this film clip. Then, in a startling juxtaposition, there’s a wild-haired Boris Johnson putting his government behind proposals that have easily-imagined economic consequences for his voters (much like an American president announcing “exciting new taxes”), but here he is doing precisely that. And if you need even more convincing, the beloved naturalist David Attenborough writes the introduction to The Review itself.

As a storytelling exercise, here are perhaps the keys to how we can start imagining and then protecting the Earth’s biodiversity. In his video remarks, Professor Dasgupta says the Review’s contributions include:

[a new] grammar for understanding our engagements with Nature, how we transform what we take from and return to it, why and how in recent decades we have disrupted Nature’s processes to the detriment of our own and of our descendant’s future, and what we can do to change that direction.
What then is to be done to direct humanity to a sustainable mode of living, to reducing the gap between what we demand of Nature and what Nature is able to supply on a sustainable basis? It requires that we reduce our demand and help to increase Nature’s supply. It will require measured but transformative change for the task is to so change individual incentives that they direct the choice of our actions to actions that align with the common good.

This will require an implementation effort that easily dwarfs the Marshall Plan after World War II. Sometimes, the scale of The Review’s efforts to marry economic with environmental dynamics can take your breath away.

While economic incentives will be utilized locally to sustain the planet, an international equivalent of the WTO or World Bank will also need to be created to address (say) far-flung extraction practices in the Arctic and Antarctic, in the seas beyond territorial boundaries, and in places like the Earth’s rainforests, all of whose economic benefits are continental if not global in nature. As a piece in the New York Times observed when The Review came out:

International arrangements are needed to manage certain environments that the whole planet relies on, the report says. It asks leaders to explore a system of payments to nations for conserving critical ecosystems like tropical rain forests, which store carbon, regulate climate and nurture biodiversity. Fees could [also] be collected for the use of ecosystems outside of national boundaries, such as for fishing the high seas, and international cooperation could prohibit fishing [and other kinds of resource extraction] in ecologically sensitive areas.

New governance bodies that will monitor and value global assets while also collecting and re-distributing asset-related payments and fees in a kind of global clearing house are difficult–but still necessary–to start imaging, particularly at a time when competition among nations instead of international cooperation is on the rise.

The Review’s recommendations are also built upon a staggering number of economic checks and balances that will need to be administered locally.

A little more than a year ago, because I was unable to wrap my mind around a global model of this complexity without a “grammar” like Professor Dasgupta’s, I tried to imagine how economic incentives might support biodiversity closer to home. I looked at current research on lobster trapping in the Northeastern U.S., how the harvest impacts migrating whales, and whether the lobstermen could be reimbursed for changing their harmful trapping practices by monetizing the whales’ broader ecological value. A 2019 post called Valuing Nature in Ways the World Can Understand was my attempt to comprehend the economics of sustainability in a situation that had a smaller number of stakeholders and far fewer asset variables.

By contrast, the story told inThe Review is both top-down and bottom-up, envisioning at its horizons a dizzying array of parts that will eventually move in a synchronized fashion, but Professor Dasgupta ends his narrative with the same dilemma that probably led me to my post about lobsters and whales. We will never protect the Earth’s biodiversity until we understand the value of protecting it much closer to where we live and work. As he astutely notes, that’s because no international or local enforcement system can protect the diversity of life on this planet. That’s our job.

[U]ltimately, we each have to serve as judge and jury for our own actions. And that cannot happen unless we develop an affection for Nature and its processes. As that affection can flourish only if we each develop an appreciation of Nature’s workings, [my] monograph ends with a plea that our education systems should introduce Nature studies from the earliest stages of our lives, and revisit them in the years we spend in secondary and tertiary education. The conclusion we should draw from this is unmistakable: if we care about our common future and the common future of our descendants, we should all in part be[come] naturalists.

It’s a point that bears repeating. We will only treat the natural diversity that’s around us like an asset when we’ve gained “an affection” for it. Some of us gain that affection naturally but most of us—particularly in the developed world–have to learn it. A story like this one about imagination and survival invites us, both elegantly and engagingly, to do just that.

This post was adapted from my February 21, 2021 newsletter. Newsletters are delivered to subscribers’ in-boxes every Sunday morning and occasionally I post the content from one of them here. You can subscribe too by leaving your email address in the column to the right.

The Amish Test & Tame New Technologies Before Adopting Them: We Can Learn How to Safeguard What’s Important to Us Too

October 13, 2020 By David Griesing Leave a Comment

Given the speed of innovation and the loftiness of its promises to improve our comfort or convenience, we often embrace a new technology long before we experience its most worrisome consequences. As consumers, we are pushed to adopt new tech (or tech-driven services) by advertising that “understands” our susceptibilities, by whatever the Joneses are doing next door, and by the speculation “that somehow it will make our lives better.” The sticker shock doesn’t come until we realize that our natural defenses have been overwhelmed or we’ve been herded by marketers like so many sheep.

By tech devices and services, I’m thinking about our personal embrace of everything from smart phones to camera-ready doorbells, from Google’s search engine to Amazon’s Prime memberships, from car-hailing services like Uber to social networks like Facebook. Only after we’ve built our lives around these marvels do we start recognizing their downsides or struggle with the real costs that got buried in their promises and fine print.

As consumers, we feel entitled to make decisions about tech adoption on our own, not wishing to be told by anybody that “we can buy this but can’t buy that,” let alone by authorities in our communities who are supposedly keeping “what’s good for us” in mind. Not only do we reject a gatekeeper between us and our “Buy” buttons, there is also no Consumer Reports that assesses the potential harms of these technologies to our autonomy as decision-makers, our privacy as individuals, or our democratic way of life — no resource that warns us “to hold off” until we can weigh the long-term risks against the short-term rewards. As a result, we defend our unfettered freedom until we start discovering just how terrible our freedom can be.

If there were consumer gatekeepers or even reliable guidebooks, they could evaluate the suitability of new technologies not just for individuals but also for groups of consumers. Before community adoption, they’d consider whether a new innovation serves particular priorities in the community, asking questions like:

– Will smartphones make us more or less distracted?

– Will on-line video games like Fortnite strengthen or weaken our families?

– Does freedom from outside manipulation outweigh the value of, say, Facebook’s social network or Google’s search engine, since both sell others (from marketers to governments) personal information about our use of their platforms so that these outsiders can manipulate us further given what they are learning about us?

Gatekeepers that are worried about such things might even urge testing of new technologies before they’re marketed and sold so that: the initial hype doesn’t become the last word in buying decisions; the crowd-sourced wisdom of advance users can be publically gathered and assessed; and recommendations that consider the up- and down-sides become possible.

By welcoming testing data from across the community, this kind of gatekeeper authority would likely gain legitimacy from the strength of its feedback loop. Back-and-forth reactions would aim to discover “what is good (and not so good) for us” instead of merely relying upon tech company claims about convenience or cost-savings. Before endorsing a new device or tech-driven service, these testers would take the time to ensure that it serves the human purposes that are most important to the group while also recommending suitable safeguards (like age or use restrictions). Moderated time trials would be like previewing and rating new TV shows before their general release.

What I’m proposing is a community driven, rigorously interactive and “take as much time as needed” approach to new tech adoption that — to our free-market ears — might sound impossibly utopian. But it’s already happening in places like Pennsylvania, Ohio and Indiana, and has been for generations. Amish gatekeepers and community members continuously test and tame new technologies, making them conform to their view of what is good for them, with startling and even inspiring results.

Startled, then inspired were certainly my reactions to a story about the Amish that Kevin Kelly told Tim Ferriss in his podcast a few years back. It led me to a Kelly essay about Amish Hackers, a post from a different storyteller about an Amish community’s “experimentation” with genetic technologies to fight inherited diseases, and other dispatches from this rarely consulted edge of American life. (Kevin Kelly is one of the founding editors of Wired magazine and a firm believer that wandering beyond the familiar is the most effective education you can get.) I’d argue there are broader lessons to be taken from Kelly’s and other sojourners’ perspectives about how Amish communities have been grappling with new technologies, particularly when you start (as they do) with a sense of awe that skews less towards “what’s in it for me right now” and more towards pursuit of the greater good over time.

As Kelly followed his curiosity, he noticed that the Amish seem to choose all of their gadgets or tech-driven services “collectively as a group.” Because it’s a collaborative endeavor throughout, they have to start with “the criteria” that they’ll use in their selection process.

When a new technology comes along they say, ‘Will this strengthen our local community or send us out [of it]?’ The second thing that they’re looking at is what’s good for their families. The goal of the typical Amish man or woman is to have every single meal with their children until they leave home.

So they also ask: will a tech-driven innovation increase the quality of our family time together, or somehow lessen it?

Since owning your own car will take you away from your community, they frown on automobiles, favoring more localized forms of transit like the horse and buggy. Similarly, because electricity ties you to a public energy grid and makes the community dependent on outsiders, they limit its use, preferring fuel, wind or sun-powered energy controlled from their homes and workshops. At the same time, while Amish beliefs are founded on the principle that their community should remain “in the world, but not of it,” their inward focus has never dampened their curiosity about new technologies or the practical advantages they might gain by utilizing them.

Strengthening family ties dictates the pace and manner of their tech adoption too. While the Amish engage in a broad spectrum of industries, their work places tend to be close to home so that workers can spend meal times with their families. And there are additional benefits to this proximity. Because the Amish are effectively living and working in the same place, the technology they rely upon to forge farm equipment, make furniture or process their produce tends to be friendly to the land and the people living there. In other words, instead of exporting the environmental and social costs of their economic activities, their means of production are also sustainable for the Amish families that live nearby.

While these criteria seem to imply a kind of primitive simplicity, the reality couldn’t be more different. One wrinkle is the way the Amish distinguish between owning technology and merely using it. For example, those who need the internet at work or school might share that access instead so it’s available for an intended purpose (like operating a business or learning) but not for getting lost in distraction whenever, say, a laptop owner feels like it.

Their work-arounds for living and working off-the-grid are also ingenious. Sometimes instead of electricity, they’ll use gas- or propane-fueled appliances and equipment. The Amish also adapt a startling array of machines and other contraptions to use pneumatic or compressed-air power. Of the later, Kelly writes:

At first pneumatics were devised for Amish workshops [where compressed air systems powers nearly every machine], but it was seen as so useful that air-power migrated to Amish households. In fact there is an entire cottage industry in retrofitting tools and appliances to [so-called] Amish electricity. The retrofitters buy a heavy-duty blender, say, and yank out the electrical motor. They then substitute an air-powered motor of appropriate size, add pneumatic connectors, and bingo, your Amish mom now has a blender in her electrical-less kitchen. You can get a pneumatic sewing machine, and a pneumatic washer/dryer (with propane heat). In a display of pure steam-punk nerdiness, Amish hackers try to outdo each other in building pneumatic versions of electrified contraptions.

How some Amish communities began utilizing genetically modified seeds on their farms — after the customary period of trial and error — also illustrate how their priorities drive their decisions. Unlike the huge turbines used in commercial agriculture, their old, but highly effective (and debt-free) farm equipment could not harvest the pest-weakened cornstalks that GMOs were designed to fight. Amish farmers embraced this seed innovation because they could continue to use their harvesters in a cost-effective manner with little apparent downside. On the other hand, the Amish jury is still out on cellphones. But instead of banning them outright, they are still trying to figure out which uses are good for them and which are to be avoided. In his essay, Kelly celebrated their endless beta testing, both here and in many other areas:

This is how the Amish determine whether technology works for them. Rather than employ the precautionary principle, which says, unless you can prove there is no harm, don’t use new technology, the Amish rely on the enthusiasm of Amish early adopters to try stuff out until they prove harm.

When downsides become apparent, they find ways to minimize them (again, sharing phones instead of owning them) or to eliminate them altogether for community members (like young people) who are most prone to their harms. It’s a time-intensive process where an Amish bishop or gatekeeper can always step in to forbid them, but there is usually a dizzying array of experimentation before that happens.

These time trials may place the Amish as much as 50 years behind the rest of us in terms of tech adoption — “slow geeks” Kelly calls them — but he finds their manner of tech adoption “instructive” and so do I.

1) They are selective. They know how to say ‘no’ and are not afraid to refuse new things. They ban more than they adopt.
2) They evaluate new things by experience instead of by theory. They let the early adopters get their jollies by pioneering new stuff under watchful eyes.
3) They have criteria by which to select choices: technologies must enhance family and community and distance themselves from the outside world.
4) The choices are not individual, but communal. The community shapes and enforces technological direction.

As a result, the Amish are never going to wake up one day and discover that a generation of their teenagers has become addicted to video games; that smartphones have reduced everyone’s attention span to the next externally-generated prompt; or that surveillance capitalism has “suddenly” reduced their ability to make decisions for themselves as citizens, shoppers, parents or young people.

Given where most of us non-Amish find ourselves today, we’d likely be unwilling (at least at first) to step back from the edge of the technology curve for the sake of discovering what a new technology “is all about”—for worse as well as for better—before adapting our lives around it.

In Western cultures, individuals as consumers may have criteria for purchasing or adopting new technologies—like lower cost or greater convenience—but it seems almost impossible to believe that we’d ever be willing to bring others (beyond say a parent or life partner) into this highly personal decision-making process.

Indeed, our individualism as consumers seems so complete that it’s difficult to envision any community whose criteria we would willingly subject ourselves to for the common good. Or as Kelly puts it: we’d have to learn an entirely new skill, which is how “to relinquish” technologies and tech-driven services “as a group” until their efficacy, under the group’s standards, could be demonstrated.

So is it unlikely? “Yes.” But impossible? “No.” And what about desirable? I would argue that learning how to take-the-best-and-leave-the-rest when it comes to adopting new technologies is a consumer-wide competence that’s long overdue.

The Amish are clear that strengthening community and family are the primary goods for them. Like us, they’re drawn to “more convenient” and “less costly” too, but only if these lesser priorities can be made to serve their most important ones. At the same time, they’ll work long and hard to find accommodations for the sake of convenience or low cost by crowd-sourcing their experiences and considering all of the necessary angles before deciding how to proceed. They’re also willing to be one step or even several behind the technology curve. And when they can’t get over the hurdle of likely or actual harms with a product or service, they’ll put it behind them and move on without it.

At this point, it bears mentioning that Amish families and communities are not exemplary in terms of “goodness,” and they don’t claim to be. Indeed, their faith tends to make them more aware of their spiritual vulnerabilities than lesser believers, so they’ll readily acknowledge their sinfulness and struggles with temptation. On the other hand, their awareness of sin also distinguishes them from most of the rest of us. Compared to the Amish, we are relatively thoughtless about what is more and less “good for us,” especially in the long run.

That means our next step would be a big one. The unfettered freedom that we “enjoy” around what we buy and end up adopting makes it difficult for us to band together with others and agree to be subject to any group’s veto power. Our ad-based, consumer-driven economies have hooked us on instant gratification to the point that most of us would be unwilling (at least initially) to wait until the other beta testers in our group have finished their work and a consensus for the greater good could be reached.

On the other hand, given the deluge of new consumer technologies that keeps washing over us and the troubling consequences that come with many of them—like the community weakening propensities of “smart” doorbells and the privacy destroying nature of “smart” home assistants—we might be better off if we joined with others to learn more about what’s involved before embracing “the next shiny new thing” and discovering the downsides later.

We could learn the restraint of slowing down, the power of beta-testing new technologies, and the connectedness of considering what we discover with our fellow experimenters before jumping head-first into unchartered waters.

And perhaps most importantly, we could learn how to come to a collective agreement on the criteria for assessing whether a new technology is likely to be good for us, bad for us, or only acceptable with safeguards in place before adoption.

– What priorities would we test against as we experiment with new products and services?

– What assessment criteria would we apply in our consumer reporting about the next smart speakers, cell phone apps, facial recognition tools or geo-tracking devices?

– How could an interactive gatekeeper group like this avoid becoming a 21^st Century version of the Legion of Decency?

On this last point, any consumer protection group would certainly have to tone down the holier-than-thou attitude in its crowd-sourced application of first principles. As tech testers and reporters, the group would need to say: “we don’t know better than you, we’ve just thought about it from various, specific angles, and here’s how.”

Instead of authority residing in an Amish bishop, the wisdom of this group of early adopters and community members could be captured in an evolving body of experience that is informed by both the testers’ feedback (like Yelp’s) as well as by moderating influences on the direction of the debate (like the guidance of Wikipedia editors). Built this way, arguments about what is likely to be good or bad for everyone will always embrace a broader perspective than that of any single tech influencer or seller. In fact, the counter-weight of a consumer protection group to each of us being “on our own” with consequential technology choices would be one of this group’s two greatest strengths.

The other would be pushing a leading edge of tech consumers to decide what is important to them and worth protecting with the strength of their numbers in the free market.

A consumer protection group like this would begin by deciding on the zones it would be committed to safeguarding. They might be our zones of personal privacy (from those who wish to exploit our data for their gain as opposed to ours) and autonomous decision-making (from those who aim to use our behavioral information to manipulate our choices). Group criteria could also include protecting socially or economically vulnerable populations (like the susceptible young or old, or even the self-employed doing ride-hailing, delivery or other gig-economy work) from exploitation or harm by new tech products and services. The group’s overall aim would be to offer a persuasive new perspective to a critical mass of the tech consuming public before we decide to consume a new technology.

Their invitation might sound something like this:

Given our stated priorities, we urge you to slow down your purchases and hold off on your adoption of this new technology until — because it will always take time — its likely impacts can be assessed. We, in turn, will provide you with regular updates as our assessment of the risks and benefits as our experience with this new technology evolves.

Group creation of a public interface that provides criteria-driven, crowd-sourced information about new technology would almost certainly have an additional benefit in the marketplace. As the group’s standing and credibility is established, it’s assessments would likely influence tech companies to be more forthcoming about the potential downsides of their products and services before we’re introduced to them, and even whether they keep fraught technologies on a path to market.

Instead of individual consumers (on the one hand) or government regulators (on the other) trying to figure out how to put the ketchup back in the bottle or toothpaste back in the tube once they’ve made a mess of things, the wisdom of a consumer protection group with “greater good” priorities could serve as a counterweight before a new technology’s stains become permanent.

The group could function like a crowd-sourced Consumer Reports, publishing its assessments on a quality-controlled Wikipedia-type page that every consumer can see, with the aim of laying out the risks (as well as rewards) of new technologies before they’re widely adopted.

The Amish have found a way to test and to tame new technologies so that their priorities of family and community are continuously served.

Aren’t there enough of the rest of us — united in our concern about privacy, surveillance and on-line manipulation — to test and then tame these same technologies?

This post was adapted from my October 11, 2020 newsletter. Newsletters are delivered to subscribers’ in-boxes every Sunday morning. You can subscribe too by leaving your email address in the column to the right.

Valuing Nature in Ways the World Can Understand

October 14, 2019 By David Griesing Leave a Comment

Nature has a big problem.

Too few of us believe that climate change will happen here or will affect us personally if it does. But these misperceptions are only one aspect of the problem.

Too many decision makers–and too many workers caught in the cross-hairs of the debate–still believe that the costs of changing how we consume, digest and expel the world’s resources are too high for the benefits that might be realized once we start paying for them. They don’t see “the benefit of the bargain” I see (and maybe you see) so clearly, only their share of an unacceptable price tag.

And indeed, the high costs of changing how we do things today tend to crop up everywhere in the climate change debate.

If we want to stop over-fishing, there are the costs to the livelihoods of the fishermen. If we want to reduce our reliance on carbon-based energy, there are the impacts on those who build and maintain today’s energy infrastructure, and on the communities that depend on those workers and suppliers. It’s dismantling one economy—the lost jobs and abandoned investments—for a new one whose economic upsides often seem to be worth less than the high costs of changing how we do things now.

In market-based economies, the challenge is proving that these transition costs will be justified by the long-term economic gains. A rough apples-to-apples type exchange between likely benefits and likely costs needs to be argued, presented and accepted by enough stakeholders for “the human family” to “voluntarily” undertake the expensive steps that are necessary to confront climate change.

Put another way: will the “value” of a healthier planet tomorrow cover the “costs” of ensuring it today? Perhaps the biggest challenge facing those of us who are alarmed by climate change is filling in the “quotation marks” in this cart-before-the-horse equation so we can convince the many hold-outs who still need convincing. But until now, we’ve mostly failed to do so.

Only quite recently have the number crunchers begun to calculate the cost benefits of a healthier planet that will, over time, offset the costs of ensuring it today. It’s the dollar-spent for dollar-earned scenario that is essential if we’re to turn climate change advocacy into meaningful action.

In the places where we work, most supporters that we’ll need to realize our visions start out skeptical if not flat-out opposed to the better worlds we can often “see” so clearly, so we need to translate our versions of both the problems and solutions into stories they can understand. Like it or not, that’s usually the economic story where we trade tangible costs for tangible benefits as we undertake the often painful changes that will be needed along the way. It works almost every single time, but until now that story has not been properly told in the struggle to confront climate change.

Well the time to start telling it is now.

The Economic Benefits of Whales Versus the Lobstermens’ Costs to Protect Them

According to a recent story, there’s been an on-going showdown between lobstermen and environmentalists off the coast of Maine. The point of controversy is right whales that environmentalists argue are dying when they get caught in the lines that secure local lobster pots. The whales are threatened with extinction. The lobster industry, which is already undermined by warming waters, will be further crippled by putting down fewer pots or otherwise reducing the number of lines that secure them.

Is there a way that the value of having more whales in this ecosystem might cover the high costs that lobstermen, their families and their coastal communities will have to incur to protect them?

Until quite recently, I would have said “no.” But before finding a better answer, it might help to have some additional background about the Gulf of Maine controversy.

The right whales got their name because they were the “right” whales to push towards extinction with our commercial activities, first with the harpoons of whaling boats and more recently by accidentally slaughtering them with boat propellers, fishing nets and lobster pot lines. These bus-sized mammals are slow moving and “built by evolution to be oblivious forage feeders,” according to a NOAA Fisheries’ official. It makes these whales unusually susceptible to getting ensnared and killed.

NOAA estimates that today’s population of right whales is only about 400, with fewer than 95 breeding females remaining, which means that the entire population is jeopardized by a single death each year. But more than 30 of these whales have been found dead since 2017. While the reason for these fatalities isn’t always clear, it does not appear that they are dying from natural causes according to investigators.

To address the problem, NOAA has proposed new regulations to clear fishing lines from the whales’ path. While the regs will cover all New England waters, Maine lobstermen, who “dangle more than 800,000 lines from buoys to ocean-floor traps in their busiest months,” clearly have the most at stake. To satisfy the proposed standards, they will need to remove at least half of those lines from the water. Says one lobsterman in blunt response: “We don’t want to go extinct either.” In addition to 4,800 harvesters working these waters, the lobster industry supports thousands more jobs on shore while contributing $1.5 billion a year to the state’s economy.

During the rule making period that we’re in today, scientists will be arguing about whether the proposed regulation goes far enough to protect the whales while those alarmed by its likely impacts will be making their case for reasonable accommodations or to reject the new restrictions altogether.

As tensions escalate, and opponents refine the dollar amounts that are likely to be lost if NOAA’s regulation goes into effect, it seems a useful time to ask whether anyone in that debate is calculating the economic benefit that is provided to Maine (and indeed to all of us) by the survival of these whales.

Is anyone enabling an apples-to-apples comparison of costs and benefits so that both sides in this controversy are (more or less) in the same ballpark, with the opportunities for tradeoffs and compromises that “speaking the same economic language” might allow?

And beyond that, is there a way that the “value” of preserving these whales can cover the costs that will have to be borne by these communities if they can ever come together to protect them?

The Startlingly High Value of a Whale

In the past week or so, I came upon another whale story. This one involved a team of visionaries at the International Monetary Fund (IMF).

As is often the case, I overheard bits of the story in a Morning Edition segment on NPR, which took me to a story that had been published that day in National Geographic, and eventually to a much deeper analysis in an IMF publication. It was worth getting to the bottom of the story.

As far as I can tell, what the IMF team discovered about whales and ended up proposing for the sake of both nature and industry was not in response to the Gulf of Maine controversy, but it could certainly help to resolve it.

The IMF’s approach considered all the whales in the world’s oceans. Because of its boldness and breadth, it could make a significant enough dent in species degradation, at a rapid enough pace, to reduce the number of ocean-based harms that we can no longer repair. At the same time, its approach would utilize the whales’ enormous environmental “value” to help compensate the global fishing and transportation industries for the costs of adopting “whale saving” practices. Here in a nutshell is their argument (although I urge you to read the entire IMF article and to enjoy the visualizations they’ve included in it).

Essentially, the IMF team realized that a whale’s economic value comes from its extraordinary ability to capture and then sequester carbon. “When it comes to saving the planet,” they write, “one whale is worth thousands of trees.”

In building their economic analysis, the team relied on 2014 research about how whales remove (and help others to remove) carbon from the environment as well as upon international programs that have developed mechanisms to fund the preservation of carbon capturing eco-systems. The team’s signature innovation may be focusing on a particularly helpful as well as beloved animal to support this kind of cost-benefit analysis on a truly global scale.

According to prior research, a whale sequesters as much as 33 tons of carbon dioxide per year on average compared to only 48 pounds per land-based tree. Whales eat phytoplankton, which not only contribute at least 50 percent of the oxygen in the earth’s atmosphere but in doing so also capture 37 billion metric tons of carbon dioxide or 40 percent of the entire amount that is produced globally each year.

Whales have what the IMF team call “a multiplier effect” on the phytoplankton when they eat them and produce waste products (primarily iron and nitrogen) because these waste products are precisely what is needed for more plankton to grow. As they dive and rise again to the surface, whales “pump” these minerals to the surface across their vast migration patterns, increasing both the amount of plankton and the whale populations that feed on them as long as the whales can do so in relative safety. Moreover, when whales die, the carbon they have sequestered in their enormous bodies from eating plankton in the first place descends to the ocean floor and (according to the National Geographic’s coverage of the IMF plan) “is taken out of the atmosphere for hundreds to thousands of years, a literal carbon sink.”

Of course, whale populations would need to recover significantly to produce the greatest benefits. Continuing their “if-then” analysis, the IMF team notes:

If whales were allowed to return to their pre-whaling number of 4 to 5 million—from slightly more than 1.3 million today—it could add significantly to the amount of phytoplankton in the oceans and to the carbon they capture every year. At a minimum, even a 1 percent increase in phytoplankton productivity thanks to whale [pumping] activity would capture hundreds of millions of tons of additional C02 a year, equivalent to the sudden appearance of 2 billion mature trees. Imagine the impact over the average lifespan of a whale, more than 60 years.

(To put these benefits in a slightly different context, National Geographic cites economists’ calculations showing that these great whales alone could either capture or help more plankton to capture 1.7 tons of C02 per year, which is more than the annual carbon emissions of Brazil today.)

The question, then, is how to restore whale populations to pre-whaling levels. Those causing the current threat include nations that still allow whale hunting, industries (like fishing and ocean going transport of people and goods) that jeopardize migrating whales, as well as the actions of individual fishermen. Without covering the very real costs of changing these practices, it is nearly impossible to imagine that the necessary changes will be undertaken voluntarily.

With the aim of meeting these costs, the IMF team made “conservative estimates” of each whale’s value. For the largest so-called “great whales,” they used science-based estimates of how much CO2 each one sequesters directly or indirectly in its lifetime along with CO2’s market price. To this base number, they added value for a whale’s other economic contributions, including fishery enhancement and ecotourism. The IMF team concluded that the value of the average great whale is more than $2 million and that the current value of the global stock of great whales alone “is easily over $1 trillion.”

By using this “value” essentially as collateral for raising the necessary funds, monies would become available (from environmentally oriented companies, non-profits, consumers and even countries) to compensate those who are likely to suffer economic losses by changing their current business practices to protect the whales. “For example,” the team notes, “shipping companies could be compensated for the cost of altered shipping routes to reduce the risk of [whale] collisions.”

What is perhaps most noteworthy about the IMF team’s “good work” is the change in mindset that their cost-benefit analysis invites to help resolve one of our most challenging global problems: the seemingly irreconcilable conflict between nature and industry until now. The team recognized that the necessary changes will never be made unless those incurring those costs can be paid and the world can unite around sufficient compensation mechanisms to ensure that they are. Finding new ways to “value” and “leverage” nature (or “earth-tech,” as they call it) is the key they have identified.

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What the IMF team proposes doesn’t fit into a tidy package as yet, and a myriad of details still has to be worked out. In other words, the economic benefits from nature and the costs to industry of protecting it are not quite apples-to-apples yet. But this proposal boldly offers a new approach to balance the needs of both nature and industry on a global scale.

While it’s a financing mechanism that’s aimed only at whales, it introduces a framework for thinking about other carbon-rich ecosystems like sea grass beds or the forest elephants of the Congo River basin.

Proposing an earth-tech solution instead of an artificial, man-made one is inspired for another reason. When I worked in the energy industry, I studied carbon sequestration plants that were being developed at the time and know first-hand about both the technology challenges and the prohibitive expense of these man-made solutions. By contrast, nature can perform much of the same work “naturally,” if only we’d let it.

And for the on-going battle between the right whales and the lobster industry in the Gulf of Maine, there is now a rudimentary framework that, with imagination and a sense of urgency, may actually be able to serve both of them.

Good work often achieves its loftiest objectives by finding new ways to confront the dollars-and-cents obstacles that are right in front of it.

This post was adapted from my October 13, 2019 newsletter. When you subscribe, a new newsletter/post will be delivered to your inbox every Sunday morning.

A Course Correction for the World Wide Web

July 15, 2019 By David Griesing Leave a Comment

Pink shock and emerald green in the back yard

Emily was here for breakfast on Thursday and I had the morning’s news on public radio—the same stories staring at me from the front page of my newspaper—and she said with millennial weariness: Why are you listening to that?

It was a good question, and one I often answer for myself by turning it off because it’s mostly journalist shock, outrage or shame about whatever the newsmakers think is going on. Who needs their sense of urgency in those first moments when you’re still trying to figure out whether you’re fully conscious or even alive?

On the other hand, short ventures into my yard quickly provide more hopeful messages. It’s the early summer flush, fueled by plenty of rain, and everything is still emerald green. Summer is telling different stories than the radio, sees different horizons, including the one some kind of watermelon sprawl is trying to reach with its tentacles. These co-venturers aren’t fretting about the future, they’re claiming it by inches and feet, or celebrating it with explosions in the air.

While shock, outrage or shame can push you to do good work, it’s hope that sustains it by giving it directions, goals, and better horizons. Everything around the creeping reality of surveillance capitalism tiggers all those negative feelings and keeps me snapping at its purveyors with my canines because—well—because it deserves to be pierced and wounded.

But then what?

That’s where others who have shared these angry and disgusted reactions start showing me more hopeful responses in their own good work–the productive places where gut reaction sometimes enable you to go–and that my radio provides little if any of (ok, so now what?) on most mornings.

In the early days of the internet, the geeks and tinkerers in their basements and garages had utopian dreams for this new way of communicating with one another and sharing information. In the thirty-odd-years that have followed, many of those creative possibilities have been squandered. What we’ve gotten instead are dominant platforms that are fueled by their sale of our personal data. They have colonized and monetized the internet not to share its wealth but to hoard whatever they can take for themselves.

One would be right in thinking that many of the internet’s inventors are horrified by these developments, that some of them have expressed their shock, outrage and shame, and that a few have ridden these emotions into a drive to find better ways to utilize this world-changing technology. Perhaps first among them is Tim Berners-Lee.

Like some of my backyard’s denizens, he’s never lost sight of the horizons that he saw when he first poked his head above the ground. He also feels responsible for helping to set right what others have gotten so woefully wrong after he made his first breathtaking gift to us thirty years ago.

1. The Inventor of the Internet

At one point the joke was that Al Gore had invented the internet, but, in fact, it was Tim Berners-Lee. It’s been three decades since he gathered the critical components, linked them together, and called his creation “the world wide web.” Today however, he’s profoundly disconcerted by several of the directions that his creation has taken and he aims to do something about it.

In 1989, Berners-Lee didn’t sell his original web architecture and the protocols he assembled or attempt to get rich from them. He didn’t think anyone should own the internet, so no patents were ever gotten or royalties sought. The operating standards, developed by a consortium of companies he convened, were also made available to everyone, without cost, so the world wide web could be rapidly adopted. In 2014, the British Council asked prominent scientists, academics, writers and world leaders to chose the cultural moments that had shaped the world most profoundly in the previous 80 years, and they ranked the invention of the World Wide Web number one. This is how they described Berners-Lee’s invention:

The fastest growing communications medium of all time, the internet has changed the shape of modern life forever. We can connect with each other instantly, all over the world.

Because he gave it away with every good intention, perhaps Berners-Lee has more reasons than anyone to be concerned about the poor use that others have made of it. Instead of remaining the de-centralized communication and information sharing platform he envisioned, the internet still isn’t available everywhere, has frequently been weaponized, and is increasingly controlled by a few dominant platforms for their own private gain. But he’s also convinced that these ill winds can be reversed.

He reads and shares an open letter every year on the anniversary of the internet’s creation. His March 2018 and March 2019 letters lay out his primary concerns today.

Last year, Berners-Lee renewed his commitment “to making sure the web is a free, open, creative space – for everyone. That vision is only possible if we get everyone online, and make sure the web works for people [instead of against them].” After making proposals that aim to expand internet access for the poor (and for poor women and girls in particular), he discusses various ways that the web has failed to work “for us.”

What was once a rich selection of blogs and websites has been compressed under the powerful weight of a few dominant platforms. This concentration of power creates a new set of gatekeepers, allowing a handful of platforms to control which ideas and opinions are seen and shared….the fact that power is concentrated among so few companies has made it possible to weaponise the web at scale. In recent years, we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data.

Additionally troubling is the fact that we’ve left these same companies to police themselves, something they can never do effectively given their incentives to maximize profits instead of social goods. “A legal or regulatory framework that accounts for social objectives may help ease those tensions,” he says.

Berners-Lee sees a similar misalignment of incentives between the tech giants and the users they have herded into their platforms.

Two myths currently limit our collective imagination: the myth that advertising is the only possible business model for online companies, and the myth that it’s too late to change the way platforms operate. On both points, we need to be a little more creative.

While the problems facing the web are complex and large, I think we should see them as bugs: problems with existing code and software systems that have been created by people – and can be fixed by people. Create a new set of incentives and changes in the code will follow. …Today, I want to challenge us all to have greater ambitions for the web. I want the web to reflect our hopes and fulfill our dreams, rather than magnify our fears and deepen our divisions.

As the late internet activist, John Perry Barlow, once said: “A good way to invent the future is to predict it.” It may sound utopian, it may sound impossible to achieve… but I want us to imagine that future and build it.

In March, 2018, most of us didn’t know what Berners-Lee had in mind when he talked about building.

This year’s letter mostly elaborated on last year’s themes. In addition to governments “translating laws and regulations for the digital age,” he calls on the tech companies to be a constructive part of the societal conversation (while never mentioning the positive role that their teams of Washington lobbyists might play). In other words, it’s more of a plea or attempt to shame them into action since their profits instead of their public interest remain their primary motivators. It is also unclear what he expects from government leaders and regulators as politics becomes more polarized, but he is plainly calling on the web’s theorizers, inventors and commentators and on its billions of users to pitch in and help.

Berners-Lee proposes a new Contract for the Web, a global collaboration that was launched in Lisbon last November. His Web Summit brought together those:

who agree we need to establish clear norms, laws and standards that underpin the web. Those who support it endorse its starting principles and together we are working out the specific commitments in each area. No one group should do this alone, and all input will be appreciated. Governments, companies and citizens are all contributing, and we aim to have a result later this year.

It’s like the founding spiritual leader convening the increasingly divergent members of his flock before setting out on the next leg of the journey.

The web is for everyone, and collectively we hold the power to change it. It won’t be easy. But if we dream a little and work a lot, we can get the web we want.

In the meantime however, while a new Contract for the Web is clearly necessary, it is not where Berners-Lee is pinning all of his hopes.

The seed came from somewhere and now it’s (maybe) making watermelons

2. An App for an App

The way that the internet was created, any webpage should be accessible from any device that has a web browser, including a smart phone, a personal computer or even an internet-enabled refrigerator. That kind of free access is blocked, however, when the content or the services are locked inside an app and the app distributor (such as Google or Facebook) controls where and how users interact with “what’s inside.” As noted recently in the Guardian: “the rise of the app economy fundamentally bypasses the web, and all the principles associated with it, of openness, interoperability and ease of access.”

On the other hand, perhaps the web’s greatest strength has been the ability of almost anyone to build almost anything on top of it. Since Berners-Lee built the web’s foundation and its first couple of floors, he’s well-positioned to build an alternative that provides the openness, interoperability and ease of access that has been lost while also serving the public’s interest in principles like personal data privacy. At the same time that he has been sponsoring a global quest for new standards to govern the internet, Berner-Lee has also been building an alternative infrastructure on top of the internet’s common foundation.

One irony is that he’s building it with a new kind of app.

Last September, Berners-Lee announced a new, open-source web-based infrastructure called Solid that he has been working on quietly with colleagues at MIT for several years. “Open-source” means that once the rudimentary structures are made public, anyone can contribute to that infrastructure’s web-based applications. Making the original internet free and widely available lead to its rapid adoption and Berners-Lee is plainly hoping that “open source” will have the same impact on Solid. Shortly after his announcement, an article in Tech Crunch reported that open-source developers were already pouring into the Solid platform “in droves.” As Fast Company reported at the time: Berner-Lee’s objective for Solid, and the company behind it called Inrupt, was “to turbocharge a broader movement afoot, among developers around the world, to decentralize the web and take back power from the forces that have profited from centralizing it.” Like a second great awakening.

First and foremost, the Solid web infrastructure is intended to give people back control of their personal data on-line. Every data point that’s created in or added to a Solid software application exists in a Solid “pod,” which is an acronym for “personal on-line data store” that can be kept on Solid’s server or anywhere else that a user chooses. Berners-Lee previewed one of the first Solid apps for the Fast Company reporter after his new platform was announced:

On his screen, there is a simple-looking web page with tabs across the top: Tim’s to-do list, his calendar, chats, address book. He built this app–one of the first on Solid–for his personal use. It is simple, spare. In fact, it’s so plain that, at first glance, it’s hard to see its significance. But to Berners-Lee, this is where the revolution begins. The app, using Solid’s decentralized technology, allows Berners-Lee to access all of his data seamlessly–his calendar, his music library, videos, chat, research. It’s like a mashup of Google Drive, Microsoft Outlook, Slack, Spotify, and WhatsAp.

The difference is that his (or your) personal information is secured within a Solid pod from others who might seek to make use of it in some way.

Inrupt is the start-up company that Berners-Lee and John Bruce launched to drive development of Solid, secure the necessary funding and transform Solid from a radical idea into a viable platform for businesses and individuals. According to Tech Crunch, Inrupt is already gearing up to work on a new digital assistant called Charlie that it describes as “a decentralized version of Alexa.”

What will success look like for Inrupt and Solid? A Wired magazine story last February described it this way:

Bruce and Berners-Lee aren’t waiting for the current generation of tech giants to switch to an open and decentralised model; Amazon and Facebook are unlikely to ever give up their user data caches. But they hope their alternative model will be adopted by an increasingly privacy-aware population of web users and the organisations that wish to cater to them. ‘In the web as we envision it, entirely new businesses, ecosystems and opportunities will emerge and thrive, including hosting companies, application providers, enterprise consultants, designers and developers,’ Bruce says. ‘Everyday web users will find incredible value in new kinds of apps that are impossible on today’s web.

In other words, if we dream a little and work a lot, we can get the web that we want.

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At this stage in his life (Berners-Lee is 64) and given his world-bending accomplishments, he could have retired to a beach or mountaintop somewhere to rest on his laurels, but he hasn’t. Instead, because he can, he heeds the call of his discomfort and is diving back in to champion his original vision. It’s the capability and commitment, hope and action that are the arc of all good work.

Telling him that Solid is a pipe-dream would be like telling my backyard encouragers to stop shouting, trumpeting and fruiting.

This post was adapted from my July 14, 2019 newsletter. When you subscribe, a new newsletter/post will be delivered to your inbox every Sunday morning.

Re-Bundling Protections and Benefits Around Our Work

May 27, 2019 By David Griesing Leave a Comment

Not so long ago, jobs came with a bundle of economic advantages beyond a paycheck. Those advantages included health insurance for you and your family and a pension or post-retirement paycheck based on your years with your employer and how much you’d been paid.

While already a vestige of days past, my job at a municipally-owned utility a little over a decade ago came with family health benefits, a matching 401(k) plan, a pension that vested after 5 years of employment, and days off for a raft of holidays including Flag Day.

That job also included additional economic benefits that I didn’t appreciate enough at the time such as the creditworthiness of my regular salary, continuous training to bolster old skills and develop new ones, regular contributions to Social Security for additional retirement security, unemployment compensation if I ever lost my job, and the stability and continuing enrichment of that job for as long as I had it.

Today, in many of our full-time jobs and nearly all of our part-time ones, between some and all of this bundle of protections and benefits has disappeared.

It is hard to overstate the significance of this unbundling.

Jacob Hacker, a political science professor at Yale calls it a shift of economic risk in his new book The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream. Hacker argues that the loss of this financial cushion around our work tests our economic resilience whenever unexpected burdens arise.

In the 50 years following the Great Depression, both employers and the government insulated workers from many of the economic risks they might confront when they weren’t working. By contrast, from the 1980s and continuing through today, there has been:

a massive transfer of risk from broad structures of insurance, including those sponsored by the corporate sector as well as the government, onto the fragile balance sheets of American families. This shift has fundamentally reshaped Americans’ relationships with their government, their employers and each other. And it has altered and sometimes dashed the most fundamental expectations associated with the American Dream: a stable middleclass income, an affordable place to live, a guaranteed pension, good health insurance coverage, greater economic security for one’s kids.

As a result of this sea change, the American worker is increasingly on his or her own when confronting whatever comes next, like sudden illness or loss of a job.

Writing this week in the New York Times, Hacker talked about how this “risk shift” is impacting the run-up to the next presidential election, particularly the fact that so many Americans feel insecure.

They may be doing well at the moment, but they fear that, however high they are on the economic ladder, a single bad step or bad event could cause them to slip. A booming economy hasn’t quieted these concerns, because insecurity remains a huge and growing problem in ways that voters and candidates instinctively get, but the sunny job numbers largely hide.

Of course, this insecurity affects not only workers but also the ability of their families, their communities and the country as a whole to flourish—an impact that I discussed a few weeks ago in the post “The Social Contract Around Our Work Is Broken.”

As more of us are “on our own” shouldering the economic risks that employers and the government once protected us from, it has become an increasingly important priority to re-bundle new versions of the benefits and protections that have been lost around working in America.

The leading edge of these rebundling efforts are perhaps most visible when it comes to the gig-economy workers who are striving to build a stable and dependable “living” out of a series of independent-contractor jobs both large and small.

As I argued last week, technological advances involving blockchain, digital currencies, on-line exchanges and markets are promising to make it possible for independent workers to preserve existing income streams while gaining new (and unexpected) ones. The needs of this growing number of gig-economy workers are stimulating efforts to re-bundle some of those traditional insulators around their work. Fortunately, these same innovations will also help to meet the needs of every insecure worker who is trying to get by in a job with few, if any, of the traditional benefits and protections.

1. Getting Paid for Jobs Both Big and Small

One of the most tantalizing possibilities of a future enabled by blockchain and digital currencies is that we could all get paid for time and effort we currently give away for free. Last week I mentioned a few of them, like providing traffic information to news outlets about roads we are already driving on at rush hour or being paid by a social media platform whenever we encourage the conversation there. I also mentioned the current backlash from the banking industry to the rise of on-line exchanges that will facilitate these payments. Part of it is an old guy-new guy turf war.

Over the past week, I’ve come upon some additional information about the hurdle that stands in the way of more seamless payments for a succession of small and big jobs. David Galbraith is a partner at Anthemis, a company seeking creative opportunities between the start-ups and financial institutions that are dedicated to reinventing financial services for the digital marketplace. In a recent interview, Galbraith remarked on the fundamental differences between on-line platforms that cater to consumers in America and their counterpart platforms in China.

In America, digital platforms like Google and Facebook are supported by advertising revenues while in China a platform’s revenue streams come directly from consumers when they buy something they’ve seen there. In other words, the payments process in China is simplified by removing advertising from the business model. Another difference is that Chinese consumers pay for consumer goods with their bank account balances, while American platforms interpose financial intermediaries like PayPal or bank-owned credit card companies that stand between the tech platforms and consumers. As Galbraith observes, the transactions costs are lower in China, “friction is taken out of the system,” and purchases are completed in a “fundamentally more fluid fashion” on the smartphones of Chinese consumers without prompting by a blizzard of ads.

When the inefficiencies imposed by banks and an advertising-based model are removed from the digital “payments system” in America, payments to gig economy workers for big and small increments of work will also be facilitated—making these new jobs more robust. At the most basic level, these changes in how we get paid will support the ways that many of us are working now and even more of us will be working tomorrow.

2. Anxiety About Retirement

When it comes to re-bundling benefits and protections around workers, none may be more significant than retirement security.

A recent article called “Why Work Has Failed Us: Because No One Can Afford to Retire Anymore” provides statistics that indicate how much the “shift in risk” from pensions to “figure out your own retirement” has impacted American workers:

66% of millennials have nothing saved for retirement. Among the working-age families that have retirement savings, the median balance is $5,000, according to the most recent data available from the Economic Policy Institute. For families approaching retirement, the median savings is $21,000–after taxes, on its own, enough to last a couple a little more than a year living at the federal poverty line.

At the same time, the enormity of these unfunded liabilities—how will all of these people with limited retirement savings support themselves?—presents a corresponding opportunity for entrepreneurs who want to help workers regain at least some of their retirement-related security. In the same interview where he discussed digital payment innovations, David Galbraith also considered the enormity of the opportunity for the new fin-tech companies that are trying to meet this need.

[R]etirement is the biggest [risk] shift anyone can possibly imagine. To put a number on it — the committed pension liability shortfalls in developing nations are 450 trillion dollars. That’s half a quadrillion dollars. So when people talk about billion dollar market opportunities — this is a half a quadrillion dollar shift in money.

Of course, no one has found a feasible way to fill the deficit for those who have nothing to retire on today, but there is opportunity in providing expertise to workers who have at least some retirement savings.

Most of us don’t know how to take what we have today and marshal it to cover uncertainties like how much income we’ll need to live after we retire, how long we’re likely to live, what Social Security elections we should make, and how much medical care we’ll need along the way. This is where a new company like Kindur comes in, according to Galbraith.

Kindur helps workers create retirement portfolios that minimize their tax burdens while ensuring that the money they do have for retirement lasts as long as possible. Unlike investment advisors who charge commissions to maximize your savings, Kindur utilizes its on-line platform and need assessment programming to help individuals design their future income. There has never been a web-based service like this before. As the company’s tagline says: “It’s like fuel efficiency for your retirement.”

Kindur isn’t the only fin-tech company that is aiming to provide more comfort (or bundling) around worker retirement. This article from the New York Times last December discusses some of the others.

For a rising gig-economy workforce and the traditional workers who are seeking supplemental income and greater autonomy in the gig economy, the empowerment of acting in more entrepreneurial ways is easily undermined by retirement anxieties. Today, both traditional advocates and new companies are finding other ways to calm those anxieties too.

3. Additional Protections and Benefits for Today’s Workforce

With the exception of supporting teachers in several high-profile confrontations with school districts and state funders recently, labor unions’ ability to protect workers in “union shops” seem to have lost much of their influence over economic decision-makers. They’ve also had a spotty record protecting their members’ bundled benefits and protections over the past 35 years. But while continuing to be the obvious champions for workers pitted against corporate profit taking, as the ways we work evolve, organized labor has other important roles to play in benefiting its changing membership.

Workers no longer stay in one locality with one employer for the course of their careers like they once did. Moreover, the average worker today takes on several different kinds of jobs. In this new world of work, services to meet these realities are desperately needed by the rank-and-file.

For example, unions could help their memberships “vote with their feet” when unbundled jobs no longer support them while providing assistance with “reskilling” when needed, help in finding new work, and housing in the new communities. Moreover, if unions were already providing these services in a tight labor market like we have today, their negotiating power with employers who are reluctant to lose workers would be enhanced significantly.

As Nicholas Colin writes in his thoughtful new book about the future of work called Hedge: A Greater Safety Net for the Entrepreneurial Age:

[I]t’s time we imagine unions that support workers as they switch jobs, unions that would provide their members with all of the resources necessary to find inspiration (“What should I do?”), train (“How can I acquire new skills?”), find a new employer (“When do I start?”), relocate (“I need an affordable house close to my new workplace”).

Labor unions should be key contributors to a re-bundled workforce in traditional companies as well as in the new gig-economy as free-lancers, for example, unionize to protect themselves.

The tremendous need among workers that has been created by the unbundling of jobs has also spelled opportunity for new service providers beyond the need for a more secure retirement. Take a company like Portify that aims to help independent workers in the gig economy who are unable to obtain affordable credit without “a regular salary” and an employment contract.

Portify is currently in the beta-phase of providing financing to independent workers whose only source today is a payday loan charging an exorbitant interest rate. With access to information about its customers’ cash flows and bank accounts, Portify is able to understand what its customers can afford to borrow and to make loans at a substantially lower rate than payday lenders. By doing so, it will provide gig economy workers with the ability to finance growth opportunities so that a succession of smaller jobs can eventually add up to a sustainable and profitable business.

Another promising start-up is Dublin-based Trezeo, which is “an income-smoothing service” for self-employed people. The company calculates its clients’ average weekly income. If that income dips because a client takes a day off or someone doesn’t pay them for their work, Trezeo “tops them up to” their average income with the understanding that it will be paid back when the client is paid again. A service like Trezeo’s allows workers to maintain a steady quality of life–some of that bundling again–despite the ups and downs of gig-economy work.

Finally, Zego is a new company that provides gig economy workers with flexible insurance. For example, if you occasionally drive for Uber, you may not earn enough to afford the additional monthly or annual car insurance coverage that you should have.

To meet this problem, Zego sells insurance by the hour. For drivers, it utilizes an app to collect data about how often they are working and where they are driving that helps it to assess their insurance risks and issue coverage more affordably. Moreover, without a product like Zego’s, independent workers could be put out of business by a single workplace loss that they are unable to cover. A start-up company like this bundles these workers in greater risk protections than were available before.

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The upside of entrepreneurial, gig-economy jobs is that they promise greater autonomy, flexibility and self-fulfillment, but these work rewards can never be realized when the jobs themselves are laced with insecurity.

The bundling of benefits and protections around these new jobs (and their re-bundling around traditional jobs) promises to reduce more of that insecurity for millions of workers.

Instead of giving up in the face of growing income inequality and job-killing automation, there are thinkers, writers and entrepreneurs who are more hopeful about the future of work because they acknowledge their own and other people’s agency to build a future where workers, their families and communities can flourish again.

Slowly but surely, that hopeful future is being built by the re-bundlers of work today.

This post was adapted from my May 26, 2019 newsletter. When you subscribe, a new newsletter/post will be delivered to your inbox every Sunday morning.