What happens when time really is money?
Not just that we’re trading hours for dollars, but when we start to see each minute of the day as an asset that could be sold to the highest bidder.
In May 2021, a new app, called NewNew, dreamed up by entrepreneur Courtne Smith, was doing the PR rounds. It billed itself as “a human stock market where you buy shares in the lives of real people, in order to control their decisions and watch the outcome.” The idea is that a user posts a poll—like “Should I quit my job?”—and then their followers pay for the chance to vote.
Here’s what the BBC website had to say about the app:
“For many of us that sounds a bit ominous, but the reality is actually far less alarming. [NewNew] is aimed at what it calls “creators” – writers, painters, musicians, fashion designers, bloggers etc. It is designed as a way for them to connect far more closely with their fans or followers than on other social media services and, importantly, monetise that connection.”
Okay, I’m not entirely sure how that makes it sound less ominous. I find the whole premise stomach-churning. And the phrase “human stock market” should never be used as a way to describe your product.
As best I can tell, the app hasn’t taken off. The website today says that they’re building a “new and better” NewNew.
But this app and its premise feel like the natural extension of so much of what’s happening around our time and money right now. I think there’s a vague sense something is very off about the ways that the new economy is being sold to us.
Yet, there are so many problems with the “old” economy that we continue to hurl ourselves toward the new.
It’s part survival, part rose-colored glasses, part forgetting that history repeats itself—even when the operating system is different.
Today, a story in 3 acts.
It’s a story about how the old economy is creating a not-so-new economy. And why we need to think carefully about speculation, financialization, and liquidation if we want to create something truly revolutionary.
This article is also available as Episode 388 of What Works.
Click here to find it on your favorite podcast player.
Act 1: Speculation
I bought a house in 2015 when I moved back to Pennsylvania. I did it out of necessity. There was nothing for rent that met our needs, and the places that came close would have cost twice as much as what I estimated a mortgage payment would be.
Now in 2022, thanks to the national housing shortage, the value of my house has gone up by about a third. I have a lot more equity in the house than I did before.
As I was on a walk the other day, I got a text message from an unknown number. It read: “Hey! How about a buyout agreement for your place? It could be a really fun personal project for me. — Grace” While I certainly harbor fantasies of just cashing out now and finding a place to rent before we move to Montana in a few years, I have no interest in actually moving our stuff.
Turns out, Grace is from a company that specializes in this kind of real estate buyout. They make selling real estate fast, often when someone needs to get out. But what’s with the proactive pitch? Speculation.
As I said, my house is now worth a third more than it was in 2015. While there’s always the potential for a crash or even just a dip in the market, there is also the potential that that growth will continue. Or, that with some renovation, the house could be worth even more in today’s market. If I were in the real estate business, I’d speculate on my house too.
Grace is speculating that if she buys out our house—probably just a bit under market value—that she can make a tidy profit on it in the near future.
Speculation, of course, is nothing new.
People have been making bets on the ownership of all sorts of assets for a long time. When venture capitalists funnel millions of dollars into startups, they bet on the success of that business in time. When a production studio buys the rights to a novel, they bet that they can turn the book into a blockbuster film. When an art collector buys a piece at auction, they bet that the piece will increase in value over time. Speculation isn’t the only reason a VC, production studio, or art collector might make an investment—but it’s a big one.
Of course, you and I do a fair amount of speculating, too. Maybe you’ve never thought about it that way—but consider this:
Imagine that you want to start working for yourself. Yeah, probably not a hard thing to imagine.
Let’s say there’s a subject you’re really passionate about, and you love talking to people about it—and you venture you might even be able to make some money from it. Maybe… your passion is soup.
So you start a soup-themed podcast. You set up a soup-themed Instagram account. Maybe you even make soup-themed TikTok videos.
In the beginning, absolutely nobody knows what you’re doing besides maybe your mom or your best friend. But you bet that once you start making all that soup-related content, you’ll gather a large audience of soup lovers.
You also bet that once you gather that audience of soup lovers, you’ll be able to attract sponsorship from Campbell’s and Pacific. Maybe you see yourself doing a whole series presented by Whole Foods or Thrive Market.
Now, you’re a soup influencer. You make a living creating content about soup for soup lovers.
But way back when you started, you spent a good bit of time making all that content and building that soup-loving audience for no pay at all. This is the kind of speculation I’m talking about—the kind you and I do without necessarily thinking of it as speculation. I’m not using that word pejoratively, by the way. “Speculation” is just the best word for investing yourself in something in hope of future gains.
In this case, your investment wasn’t money but time, personality, and ideas. You bet that putting in the effort would eventually pay off.
Speculation is investing in an asset with the hope that its value will rise—often dramatically—over time.
There’s always the chance of loss but some types of speculation are riskier than others.
In the example with my house, the speculation is anchored by historical housing market trends, recent comparable sales, and the actual real estate itself—in other words, it’s nearly impossible for a house and its lot to be worth nothing, even if it does lose value due to a crash or weather damage.
In the example of our soup influencer, the speculation is, to an extent, anchored in the content of the soup podcast, Instagram account, and TikTok videos. But content on its own isn’t typically a valuable asset. The more valuable asset is actually the audience. The bet is that eyeballs and earholes are valuable—and again, more likely to increase in value rather than lose all their value overnight.
The difference between my house and the soup influencer is simply degrees of risk. If Grace buys me out of my house, there’s a chance she might not make money when she sells it. But there’s a relatively low risk that she’d lose much money. If our aspiring soup influencer puts time into creating content but never amasses an audience, they’ve just lost that time—as well as other potential opportunities. Neither scenario has a high risk of catastrophic consequences.
But as the assets that anchor the speculation get less tangible and the markets become less tested, the chance of losing it all goes up significantly.
How did we end up in a world where soup influencing is a solid career move? The Great Recession. But before we can talk about The Great Recession, we need to talk about financialization.
This article is also available as Episode 388 of What Works.
Click here to find it on your favorite podcast player.
Act 2: Financialization
Before the 1980s, economies were driven by the exchange of goods, services, and commodities. Manufacturing, agriculture, real estate, and consumer retail built the foundation of our economic systems.
But starting in the 1980s, the world’s largest capitalist economies started to undergo a change called financialization.
Financialization is the shift away from the exchange of goods, services, and commodities and toward the buying and selling of financial products as a core driver of an economy. Stocks, bonds, derivatives, and currencies all fall into the financial products bucket. They might be pegged to a more tangible asset, like mortgages—but often they’re more ideas than they are products. Financialization in the US economy picked up steam as the influence of neoliberal economics produced rapid deregulation in banking, investing, and other industries.
Since the 1980s, the financial industry has chased short-term financial returns over long-term goals, which would require investment in technology and product development. One of the biggest reasons for this was simply a matter of Wall Street following its capitalistic instincts, which told them there was more profit in making money from money rather than in engineered products.
There’s more profit in making money from money.
That’s financialization in a nutshell.
The US financial sector makes up a whopping 22% of total GDP. That’s a lot of making money from money. The financial sector as a whole was estimated to be about $4.8 trillion in 2021, while the total GDP was just shy of $21 trillion. In 1950, the financial sector was less than 3% of total GDP. That 730% growth! I don’t want to get too far into the weeds here, but I want to make it clear just how much the financial sector has become a major driver of the US economy. People and companies making money from money produce almost a quarter of our domestic product.
Financialization has become such an influence on the US economy that it’s increasingly the lens through which we see all money-making opportunities.
It’s why we estimate the return on investment of college degrees, why we’re told to act like entrepreneurs even when working for larger companies, and why we’re responsible for our own retirement funds now.
Let’s go back to our soup influencer. The soup influencer creates soup-related content. It seems like the content is the product, right? After all, we talk about “valuable content” all the time. But most likely, no one is paying for the content itself. The content represents value, but it’s not valuable in real terms. So the soup influencer, in addition to a few choice sponsorships, starts a Patreon. Now soup-lovers can support the continuation of soup-related content directly!
But the soup Patrons are still not paying for content, they’re paying to guarantee the creation of more soup-related content.
The value of soup content futures is unlikely to change much but it’s not a bad market to play in for our soup influencer. The more people who are willing to invest in the belief that there will be more soup content, the more money our soup influencer makes. If our soup influencer stops making content or starts creating content about, say, pudding, Patrons will cancel their subscriptions. There isn’t a ton of risk on either side of the equation—but neither is there much leverage.
The sponsors, however, are playing with a bit more risk and a bit more leverage. Unlike the soup-themed content, which has a nominal value at best, the soup-loving audience represents a unit of attention to invest in. There’s more opportunity to speculate on the value of that attention because there’s more leverage, more potential upside. A sponsor is going to look at the soup-loving audience and weigh whether they think they can create more upside with the attention of that audience than it costs for them to invest in that attention.
It’s this bet on potential value that leads us to the financialization part. The savvy soup influencer can package up the attention of their audience in a variety of ways. The audience is not a single asset to be sold—it’s an asset that the influencer can use for leverage. They can sell off ad spots on their soup podcast, create sponsored soup content on Instagram, or make a sponsored soup TikTok. What’s more, all that soup-loving attention can be packaged and repackaged in different ways for different sponsors, or even sold through an agent or advertising collective. Think of these packages as attention-backed derivatives. No attention, no value.
This isn’t exactly how real assets turn into financial products, of course. But hopefully, it gives you an idea of how ephemeral the value of a financial product can be, as well as how creative repackaging creates the biggest opportunities to cash in. What both our soup influencer example and the financialization of the economy writ large have in common is that they generate wealth based on perceived and potential value rather than static, material value.
Alright, let’s talk more about this creative repackaging as a means of selling off potential value. It’s the creative repackaging that was at the center of the biggest financial catastrophe since the Great Depression.
The 2003 Economic Collapse
In The Big Short, Michael Lewis details how it all went down. He writes:
One man’s liability had always been another man’s asset, but now more and more of the liabilities could be turned into bits of paper that you could sell to anyone. In short order, the Salomon Brothers trading floor gave birth to small markets in bonds funded by all sorts of strange stuff: credit card receivables, aircraft leases, auto loans, health club dues. To invent a new market was only a matter of finding a new asset to hock.
In the early 2000s, a whole new category of mortgage lenders emerged. These companies offered huge loans to people with “subprime” credit—in other words, people less likely, statistically speaking, to pay those loans back. Very little paperwork. No income verification. No money down. The mortgage lenders weren’t lending to make money on interest—these big loans came with low 2-year teaser rates. To make their money, lenders offered these loans in big groups creatively packaged into bonds and sold to bigger firms.
A few market insiders got wary of what was going on. And by 2005, there was a new way to bet on these bonds—against them. This time, the creative repackaging was insurance—insurance on the potential of those bonds to be eventually worth nothing. These insiders weren’t just trusting that the housing marketing was just going to keep on humming, they were actively investigating what the bonds were worth and discovering just how likely most of the borrowers would default on their loans.
In the short term, the investment banks buying the asset-backed bonds made money—both on the bonds and on the insurance against those bonds. But within 3 years, they were forced to pay out billions because the market had collapsed. Speculation on housing and subprime borrowers, plus the creative repackaging that over-leveraged investors revealed just how valueless a large portion of the economy really was.
The financial markets came up with new, more complex financial products to skim profits off the hopes and dreams of borrowers.
The investment banks and hedge funds were making money from money, rather than creating value or social benefit in real terms.
The Great Recession didn’t just change the housing market or the bond market. It changed the job market. According to reporting by Marketplace, post-recession, the job market created more “alternative work” jobs than full-time permanent jobs. That means more gig work and more contract work. TO make matters worse, entry-level salaries for college graduates haven’t budged since 2005; and, the average hourly wage today has equivalent purchasing power to the average hourly wage in 1978.
The average US worker is just plain stuck—and has been for decades.
So it’s no wonder that today, we’re seeing income opportunities start to take a shape that’s eerily similar to financialization.
YouTubers, TikTokers, and Instagram influencers make millions off of their audiences. They score brand deals, benefit from revenue shares, and offer custom videos to followers willing to pay. More power to them! But they’re the tip of the spear when it comes to how financialization is reshaping our lives. The quote-unquote value that’s being created is completely ephemeral and inherently self-alienating.
And at the same time, these careers in many ways feel less exploitative or uncertain than so-called traditional forms of work.
We could look at how people are making money online today in a similar way to the complexity and layering in the bond market. At the bottom layer, there are creators and entrepreneurs who create value through goods and services. On the next level up, there are the technologies that make that possible—say, Squarespace, Shopify, ConvertKit, or Mighty Networks. Another layer up, there are the platform companies that collect and package the data that we create doing business or just living our lives and sell it off. These companies might claim to have an interest in whether users succeed or fail, but that interest only extends as far as the users’ data does.
And now more people in our social media world are talking about crypto assets. Crypto assets are, you guessed it, another layer of financialization. Enthusiasts tout the benefits of turning creative works into tokens. They extol the virtues of minting & selling our interests, data, and art. It’s all about “ownership” they tell us—without ever explaining why that’s a benefit or what exactly it is that we’re owning.
Just like big money was looking for any and every asset they could convert into a derivative in the early 2000s, cryptopioneers promise that everything about us is an asset we can tokenize. The best I can come up with is that tokenization is just liquidation—not only selling your labor but finding ways to sell every minute of your time in one way or another.
And that leads us into the final act.
Act 3: Liquidation
I recently read an account of an author who is using a crypto model to crowdfund a novel. Typically, the way a novel gets published is that the author writes the manuscript on their own and pitches it to agents. Ideally, the author finds an agent to represent them, and that agent pitches the manuscript to publishers. If a publisher likes it and thinks it will do well, they’ll pay a small advance on future royalties to publish it. If the book does well, the author earns out their advance, the publisher makes back their expenses, and both publisher and author earn money as sales continue into the future.
Naturally, a lot can go wrong in this scenario. So other models for publishing have emerged. The crypto author is arguing that their model could be the future of publishing. The author used a platform called Mirror to set up what, on the surface, looks like a pretty typical crowding funding project. There’s a goal and a set of promises for backers. But the funding is happening in ether and backers don’t just earn cool bonuses or early access to the end product, they actually own part of the project. Because in crypto, ownership is everything. Ownership is everything: remember that, we’ll come back to it soon!
The project works like this: the author promises to write one chapter for every .25 ether raised. You can invest the whole .25 ether or a fraction of that amount. Or, of course, more. Anyhow, when an investor puts in their ether, they’re not just saying “this is cool, keep going!” They’re saying, “This is cool and I believe you’ll be able to sell this later on for more money.” Because as part owner now, when the value of the novel goes up as it trades hands, each owner continues to earn more. The investors are speculating against their potential future earnings.
So a backer who puts in .25 eth owns a chapter as an NFT—a non-fungible token. And all owning the NFT means is that, essentially, you have a sort of certificate of authenticity. Which I think is a helpful way to frame things since we’re essentially talking about digital collectibles at this point. This does not mean that that chapter is only readable by the owner, or that the owner—as best as I can tell—can withhold their chapter from the larger work. It’s more like a symbol of part ownership in the larger project.
The symbol part is important, too. The NFT is a symbol of ownership. The owner of an NFT doesn’t own the jpg or word doc or pdf. They own the sole claim to it, essentially a link to the actual file. And if owning a link seems less than appealing, you and I are on the same wavelength.
Alright, so each backer’s investment is converted to tokens—like shares of stock—that are specific to the project. That’s how the shared ownership of the completed work is divided up, plus whatever share of tokens the author retained. Again, the shared ownership of the book simply means that the token holders can cash in if the NFT of the book is sold. In this case, the author has minted the NFT so that all owners also get earnings on all future sales of the NFT. There is no provision for actual royalties based on hard sales, again, as far as I can tell—just the potential for the perceived value of the project to go up.
If you’re thinking, Tara, that sounds like a whole lot of hype, risk, and speculation…
Ding, ding, ding! You are correct!
This is the financialization of a creative work and the liquidation of culture.
Let’s call this a hype-backed derivative. If there’s no hype, there’s no value.
Since the value is hype-dependent, it’s in the best interests of anyone who owns part of a project like a crypto-funded novel to get more people interested in owning their own piece of a project. The more people who want to buy into “digitally scarce goods,” the more those digitally scarce goods are worth. The VCs backing crypto would like you to believe that crypto is a “rising tide lifts all boats” market. But it’s anything but. Even Bill Gates referred to it crypto as based on the “greater fool” theory instead—in order words, your investment is good as long as you can find a greater fool to come along and buy it off you. Gates also said that if you have less money than Elon Musk, investing in bitcoin is probably a bad idea. So, yeah.
Anyhow, what I’m trying to say is that an unregulated free market based on hype pretty much sounds like a neoliberal fever dream.
Am I hoping you think twice before you let a crypto influencer FOMO you into buying or minting your own NFT with promises of a future fueled by shared ownership? Yes, yes I am.
But, more importantly…
I want us all to examine the consequences of liquidating our time, personalities, and creative works as speculative financial products.
There are a lot of incredibly wealthy people, venture funds, and companies betting that we’ll jump at the chance to sell off our lives bit by bit, token by token, backed by the promise of future returns or marginally more comfortable lifestyle. It’s a classic Randian bait & switch: bait us on accessibility, freedom, and decentralization and switch it with an ever more libertarian replication of the systems we already have.
Now, I can understand how creatively packaging up your life and work as assets to sell might sound attractive to someone who has never compulsively uploaded photos and videos to Instagram or pinned their hopes on their latest rant going viral. The potential upside for turning your life into cash seems hard to beat. But the reality is bleak. I know this already—and you probably do too—because this is a game we’ve already played.
That brings me back to our soup influencer.
The soup influencer got started because they loved soup. Maybe that big batch of soup they made every weekend felt like a sacred ritual. Each bowl they ate or shared with a friend felt like a sort of communion. Turning soup into a job, though, changed their relationship to soup. They still love it—but every soup decision they make is seen through the lens of a camera or through the eyes of their sponsors. They don’t want that to be the case—they work hard to make it not the case. But it’s inevitable.
Writer & ceramicist Marian Bull put it this way in a piece for Vox:
Untangling the question of what I want to make from what will sell feels like crawling out of a very deep well.
Turning what you love into work changes your relationship with what you love. Further, we also know that it’s never just about the surface value of what we love. Our soup influencer isn’t selling their soup content. They’re selling soup-lovers’ attention—attention that the influencer earns with their personality as well as their content. The same audience most likely wouldn’t show up for a generic website all about soup. They show up because they connect with someone else’s love of soup. That means that not only has the soup influencer’s relationship to soup changed because it’s been commercialized, but their relationship to themself has also changed because it’s been commercialized.
This is what worries me so much about the promises being made to creators, writers, and artists right now—as well as to the general public—about the crypto market. When every aspect of our lives can be financialized, we cease being free in some meaningful ways. Our time is something that can be owned and traded. And it’s a very short hop from selling our time or interests to selling ourselves. We have a word for the novels that have already told this story many times over: dystopia.
What we so often fail to realize is that dystopias aren’t made overnight. They’re the result of a long chain of events that slowly but surely convince the public of the inevitability, and even rightness, of what would have been a worst-case scenario before those events went down.
We’re in the midst of the chain reaction right now. The promises sound good, right? Make money doing what you love. Support artists. Join a community. It’s all about connection. Decentralization, democratization, ownership. It’s the same promises that social media made us. The same promises that free-market capitalism made us. Writing for The Atlantic, Eli Cook put it this way:
…by making capital accumulation synonymous with progress, money-based metrics have turned human betterment into a secondary concern.
And yet, here we are in a culture with record wealth inequality, getting excited about the potential to get a small piece of power while the people with gobs of money & connections actually call the shots.
History repeats itself.
But the next act is not inevitable.
There are other ways forward—but to make them possible we have to dream them up. And to dream them up, we need to stop just trying to get by with the systems we have and start creating new systems. It might feel futile at first—like the actions of a single small business owner might not make a difference. But the ripple effects are transformative.
The best time to start was yesterday—the second-best time is today.
This article is also available as Episode 388 of What Works.
Click here to find it on your favorite podcast player.