To pay or not to pay for Facebook

Would you rather pay Facebook with money or data?

Not long ago, Zeynep Tufekci, a sociologist who studies social media, wrote that she wanted to pay for Facebook. More precisely, she wants the company to offer a cash option (about twenty cents a month, she calculates) for people who value their privacy, but also want a rough idea of what their friends’ children look like. In return for Facebook agreeing not to record what she does—and to not show her targeted ads—she would give them roughly the amount of money that they make selling the ads that she sees right now. Not surprisingly, her request seems to have been ignored. But the question remains: just why doesn’t Facebook want Tufekci’s money? One reason, I think, is that it would expose the arbitrage scheme at the core of Facebook’s business model and the ridiculous degree to which people undervalue their personal data…

The trick is that most people think they are getting a good deal out of Facebook; we think of Facebook to be “free,” and, as marketing professors explain, “consumers overreact to free.” Most people don’t feel like they are actually paying when the payment is personal data and when there is no specific sensation of having handed anything over. If you give each of your friends a hundred dollars, you might be out of money and will have a harder time buying dinner. But you can hand over your personal details or photos to one hundred merchants without feeling any poorer.

So what does it really mean, then, to pay with data? Something subtler is going on than with the more traditional means of payment. Jaron Lanier, the author of “Who Owns the Future,” sees our personal data not unlike labor—you don’t lose by giving it away, but if you don’t get anything back you’re not receiving what you deserve. Information, he points out, is inherently valuable. When billions of people hand data over to just a few companies, the effect is a giant wealth transfer from the many to the few…

Ultimately, Tufekci wants us to think harder about what it means when we pay with data or attention instead of money, which is what makes her proposition so interesting. While every business has slightly mixed motives, those companies that we pay live and die by how they serve the customer. In contrast, the businesses we are paying with attention or data are conflicted. We are their customers, but we are also their products, ultimately resold to others. We are unlikely to stop loving free stuff. But we always pay in the end—and it is worth asking how.

Perhaps we are headed toward a world where companies like Facebook would have to show customers (1) how much data they actually have about the person and (2) what that data is worth. But, I imagine the corporations would like to avoid this because it is better if the user is unaware and shares all sorts of things. And what would it take for customers to demand such transparency or do we simply like the allure of Facebook and credit cards and others products too much to pull back the curtain?

Is it going too far to suggest that personal data is the most important asset individuals will have in the future?

A Harvard sociology class where students will distribute $100k in grant money

A Harvard sociology course with $100,000 in grant money to distribute sounds like a cross between the work of a typical intro-level social problems course and what foundations do:

While most Harvard College students focus on what they will take away from a course, students who enroll in Sociology 152: “Philanthropy and Public Problem-Solving” this spring will have the opportunity to give back­—in the form of $100,000 in grants to Boston-area non-profits of their choice.

Students enrolled in this new course will split into teams based on area of interest. Each team will conduct research on a particular social issue, ranging from homelessness to education reform, and will eventually choose a local organization to provide with a grant.

The Once Upon A Time Foundation, based in Fort Worth, Texas, has donated $100,000 for students enrolled in the course to distribute to non-profits. The foundation has funded similar courses at Stanford, Princeton, Yale, and various colleges in Texas.

Harvard Kennedy School Senior Lecturer Christine W. Letts and Senior Research Fellow James L. Bildner will co-teach the class, which will be open to both College and Kennedy School students. “It’s an exceptional opportunity,” Bildner said.

An opportunity indeed.

While this could be good practice, I wonder if students might reach another conclusion: handing out just $100,000 is not enough to tackle serious social problems. Even major money sources like the Bill & Melinda Gates Foundation can only do so much.

Digging into the moral reasons the American middle-class doesn’t like paying taxes

A new sociology study looks at the moral opposition middle-class Americans have to taxes. Here are some of the main findings:

“In this study, we demonstrate how people associate the income tax with a violation of the moral principle that hard work should be rewarded,” he added. “Our research has implications for how policymakers should frame fiscal issues. Because people intertwine fiscal issues with morality, approaches to tax policy that only emphasize economic benefits for the working and middle classes do not resonate with everyday understandings about what taxes mean to people.”…

Interview respondents saw themselves as morally deserving and hard-working people, whereas they perceived a tax structure that benefits the idle poor and the idle rich…

Respondents frequently associated their earliest memories of taxation with their first jobs, or wage labor, which in turn was associated with the absence of personal autonomy and dignity, or the ability to control one’s own time and work…

Hard work was viewed as a virtue, and respondents didn’t like idea of being taxed while they work, instead speaking in favor of a flat tax on consumption. “Tax whatever,” one respondent told the researchers. “Don’t take my paycheck.”

A note: the study is limited to a particular sector of the American public. Here is the study group: “24 semi-structured, open-ended interviews with white Southerners who owned or managed small businesses—a demographic group that is typically anti-taxation.” This study has a small N and a targeted group so this limits its generalizability but its value seems to be in hearing how people talk about and understand taxes.

This is another reminder that money is not typically exchanged in solely neutral economic transactions: there is a lot of social and moral weight in economic transactions. Thus, when talking about taxes, policy makers and citizens are making moral arguments in addition to straight-up financial arguments. This applies to some of the current budget debates in the United States: the two sides may be talking some about fiscal issues but there are also underlying moral issues about how money should be used, how it should be acquired, and more broadly, how social life should work.


Is there such a thing as “wealth addiction”?

Citing the writings of a PhD in sociology, a commentator suggests that we should pay attention to wealth addiction:

The Occupy Wall Street and the 99 Percent Movement named the core issue of our time: the overwhelming power of Wall Street and large corporations. Now it’s time we named the problem underlying this issue. It’s called addiction. I’ve been treating addicts for more than 40 years and when I hear the descriptions of those for whom millions and billions of dollars in wealth drives them to want more and more, I know we’re dealing with addiction.

Philip Slater has an A.B. and Ph.D. from Harvard and taught sociology at Harvard, Brandeis and UCSC. He is the author of numerous books including Wealth Addiction. He says:

“Those who devote their entire lives to amassing or retaining huge sums of money are neurotically addicted, trying to fill an inner void with money. And since such psychic voids cannot be filled with money — any more than with alcohol, tobacco, cocaine, food, or sex — even a billion dollars doesn’t satisfy them.”We say people who can’t stop drinking when they’ve had enough are alcoholics. We say people who can’t stop eating when they’ve had enough are food addicts. We say that people who can’t stop gambling when they know they should quit are gambling addicts. “But people with a billion dollars who can’t stop trying to make more,” Slater says, “we call successful.”

I imagine this could be a good conversation starter. But this would have to be part of a larger conversation taking place right now about some other kinds of addiction including sex addiction and Internet addiction. Some might ask whether saying billionaires are suffering addiction lets them “off the hook” for amassing so much wealth.

The legal future: climate-change litigation?

Perhaps climate-change litigation is where lots of money is to be made in the coming decades:

In the past three years, the number of climate-related lawsuits has ballooned, filling the void of political efforts in tackling greenhouse-gas emissions.

Eyeing the money-spinning potential, some major commercial law firms now place climate-change litigation in their Internet shop window…

But legal experts sound a note of caution, warning that this is a new and mist-shrouded area of justice.

Many obstacles lie ahead before a Western court awards a cent in climate damages and even more before the award is upheld on appeal…

Lawsuits in the United States related directly or indirectly almost tripled in 2010 over 2009, reaching 132 filings after 48 a year earlier, according to a Deutsche Bank report.

Elsewhere in the world, the total of lawsuits is far lower than in the US, but nearly doubled between 2008 and 2010, when 32 cases were filed, according to a tally compiled by AFP from specialist sites.

Sounds like it will take some time and some important rulings before this field comes into greater focus.

Two questions:

1. How much money could be at stake in these sorts of lawsuits?

2. Does this mean this will be the subject of the next John Grisham novel?

A sociologist discusses giving money and gift certificates as gifts

The history and social significance of money is more complicated than one might think. One sociologist, Viviana Zelizer, has written a lot about money including pieces about how life insurance came to be seen as “moral” in the 19th century and how women’s earnings were seen as extra money rather than part of a household’s finances. In a recent New York Times op-ed, Zelizer tackled a subject that often comes up at the holidays: is giving money or a gift certificate an acceptable gift?

It turns out that both the economic realists who give money as presents and the traditionalists have history on their side, because this is a debate that began back in the early 20th century. As the consumer society expanded and Americans began giving more Christmas presents to more people, money emerged as an acceptable gift. Christmas money, according to a 1912 issue of Ladies’ Home Journal, “supplies dearly cherished wishes, adds small luxuries, prevents worriment and gives opportunities for helpfulness as no other gift does.”…

We can’t all be as clever as Lou Eleanor Colby, but buying a gift card that restricts what the money can be used for is just another way of distinguishing gift money from regular money, and a way for givers to demonstrate their intimate knowledge of what the recipient likes and cares about.

The key here seems to be the significance behind the money or gift certificate: is it simply a cash payout (and writing a check or withdrawing money from an ATM can be a fairly normal and heartless event) or does it have thought behind it (meaning it is a gift certificate that matches one’s tastes)? I know we have had these discussions in my family with people coming down on various sides.

But as Zelizer points out in this op-ed, this was a particular historical process that had to occur. Businesses, particularly those catering to women, had to create a safe space for a gift of money or a gift certificate. Gift certificates do not have inherent significance – it must be endowed with such by the society, the giver, and the recipient.

Personally, I would accept both cash or gift certificates. But they do have separate meanings: cash tends to go into a larger pot of money and gets lost while a gift certificate, say to a bookstore, helps keep that money destined for books or music or DVDs. I would also expect that the younger generations have less difficulty giving and receiving money or gift certificates.

The methodology behind Money’s 2010 best places to live

Every year, Money magazine publishes a list of “the best places to live.” I’ve always enjoyed this list as it attempts to distill what communities truly match what people would desire in a community. The winner in 2010 (in the August issue) was Eden Prairie, Minnesota

But one issue with this list is how the communities are selected. In 2009, the list was about small towns, communities between 8,500 and 50,000. In 2010, the list was restricted to “small cities,” places with 50,000 to 300,000 residents. Here is how the magazine selected its 2010 list of communities to grade and rank:

Start with all U.S. cities with a population of 50,000 to 300,000.

Exclude places where the median family income is more than 200% or less than 85% of the state median and those more than 95% white.

Screen out retirement communities, towns with significant job loss, and those with poor education and crime scores. Rank remaining places based on housing affordability, school quality, arts and leisure, safety, health care, diversity, and several ease-of-living criteria.

Factor in additional data on the economy (including fiscal strength of the government), jobs, housing, and schools. Weight economic factors most heavily.

Visit towns and interview residents, assessing traffic, parks, and gathering places and considering intangibles like community spirit.

Select the winner based on the data and reporting.

A couple of questions I have:

1. I agree that it can be hard to compare communities with 10,000 people and 150,000 people. But can the list from each year be called “the best place to live” if the communities of interest change?

2. I wonder how they chose the median income cutoffs. So this cuts out places that might be “too exclusive” or “not exclusive enough.” Are these places not desirable to people?

3. Some measure of racial homogeneity is included in several steps. How many home buyers desire this? We know from a lot of research that whites tend to avoid neighborhoods with even moderate levels of African-Americans.

4. Weighting economic factors heavily seems to make sense. Jobs and economic opportunities are a good enticement for moving.

5. I would be interested to see what kind of information they collected on their 30 community visits. How many residents and leaders did they talk to? How does one measure “community spirit”? If a community says it has “community spirit,” how exactly do you check to see whether that is correct?

Overall, this is a complicated methodology that accounts for a number of factors. What I would like to know is how this list compares with how Americans make decisions about where to live. Do people want to move up to places like this and then stay there or is the dream for many to move on to more exclusive communities (if possible)? How many Americans could realistically afford to or possibly move into these communities?

(A side note: the four Chicago suburbs in the top 100 for 2010: Bolingbrook at #43, Naperville at #54, Mount Prospect at #56, and Arlington Heights at #59. Naperville used to rank much higher earlier in the 21st century – I wonder how it has slipped in the rankings.)

Thinking about the sociology of cricket

If you thought that cricket was a pleasant and quaint sport with matches that last days, a British commentator suggests otherwise. Like other sports, cricket has become dominated by money (“lucre”) and this threatens to overwhelm the commentator’s interest in watching the interactions between players:

Cricket has had a real battering in the last few months. This was not just because of the match-fixing scandal at the end of the last English season; it was also because of the rather gutless way in which certain parts of the cricket establishment, here and internationally, responded to it. Cricket is a game now obsessed with money. Even those who do not engage in match-fixing, and who condemn (quite rightly) those who do, share the same devotion to filthy lucre. The only difference is that they prostitute the game in different, and entirely legal, ways.

I have never been an especially partisan follower of cricket. It is not just that, on one level, it’s only a game (I shall deal later with the charmingly old-fashioned notion that it is, by contrast, more than a game), and therefore which side wins or loses is in the end irrelevant. It is that the main interest to me, as a follower of the game, has been its aesthetics and, almost as much, its sociology. It has the capacity to be a visually beautiful game, and because games of cricket can go on for up to five days, there is plenty of time for the spectator to examine the interaction of the players with each other – with those on their own side as much as with those on the opposing team.

The solution for this writer is to watch cricket at a lower level, such as watching is son play with other 14-year olds. You will hear this argument from some Americans as well: the professional sports are tainted and if you want to enjoy an authentic version of the game where players play because they love the same, you have to go to the college level or lower. I tend to think this argument leaves out an important aspect of why people watch sports – they want to see the best athletes in the world perform amazing plays. High school athletes may love what they are doing but it is hard not to think about how a college or pro athlete could athletically do so much more.

I have also always enjoyed watching the interactions between players. Additionally, I enjoy going to sporting events to watch interactions between fans and the players and amongst fans. In short, if you gather so many passionate people together in a relatively small location with much on the line, there is bound to be some interesting interactions.

Of course, cricket on the international level also has the potential to open up discussion about colonialism and class – how exactly did an English sport find its way to the streets of Australia, the West Indies, Pakistan, and India?

The links between money and happiness

There is a lot of research exploring the links between income/having money and happiness. The New York Times discusses some of this research and how the recession might be pushing people to find satisfaction in things other than money.

With those who have cut back in spending or are legitimately downsizing (moving into a smaller home or giving up a car vs. giving up cable for a while), it remains to be seen whether such behavior will continue when economic times are better.