The Progress Economy

Price signals effort in service (applying capabilities) and not value

Draft

It expands the question of worth to now be: how much effort of I need to exert performing service for other(s) to get enough service credits to exchange for the service I want.

Do I feel the exchange is equitable, that is, am I happy with the price.

It also opens the door to business model innovation – how can we structure the return in effort in a way that minimises the feeling a Seeker has. Can

Service Effort – The basis of price

Lastly, let’s look at price. In traditional economic thinking, price and value collapse into one another: value is defined as the maximum price a customer will pay. Once we move beyond value-in-exchange, that equivalence disappears. Yet price remains very real and very consequential.

In the progress economy, price serves a different role. It signals the level of effort a Helper expects in return for the effort they will invest in helping a Progress Seeker make progress

price: the effort* a Helper expects to get from a service exchange

* this may be through direct, indirect service, or service credits

Importantly, the return need not occur in a single moment. It can unfold over time:

and if effort is usually thought of in terms of service credits, we could equally write:

In other words, price represents both the amount of effort – or number of service credits – and the frequency of exchange that the Helper proposes as an equitable exchange for the effort in service they will provide.

Setting price is a topic in its own right, which we will address later. It includes profit: the additional service credits a Helper requires beyond a pure reflection of the effort embedded in the proposition.

Ultimately, the Progress Seeker decides whether the exchange feels equitable – or, more precisely, whether the inequitable exchange progress hurdle is sufficiently low enough. That judgment is usually made alongside an assessment of progress potential and the heights of the other five progress hurdles, shaping what the Seeker interprets as potential value.

A note on service credits and psychology

Our treatment of service credits is sufficient for the purpose at hand, but it is not complete. For service credits to function at scale, they must possess additional attributes such as durability, divisibility, fungibility, scarcity, and the ability to retain strength over time. For now, however, a lighter view is enough.

Cash is a highly successful implementation of this mechanism, just as shells and rocks have been in the past. As money becomes more digital, it moves even closer to the idea of service credits, Living in Sweden, I can’t remember the last time I saw or used physical cash, it’s all just numbers on my mobile app that increase when I get my salary and decrease, through blipping my phone on a reader, when I get service. Do digital currencies like BitCoin work as service credits? Partially, but they may lack certain requirements like stability.

At our current level, service credits expose a simple psychological reality: I must give help, to get help. The effort I put in (effort multiplied by instances) I need to feel is reciprocated in a way that feels equitable. Price, in this frame, signals the amount of effort I need to commit in order to access a specific form of help.

Seen this way, the appeal of buy-now-pay-later, cr edit, loans, and business models such as subscriptions or subsidies becomes clear. They reduce the effort I must exert today to secure the help I need now.