"He who steals my purse steals trash, but he who steals my good name takes that which little enriches him but makes me poor indeed." Shakespeare wrote in Othello. Reputation was important in 1600 and still is today. When someone attacks your reputation, when someone insults you in public, when someone lies about you, what can you do?
Today on the internet you can join in a "flame war" in which you insult those who insult you. You can withdraw from the interaction and hide away. Or, if you have the money and enough anger, you can sue.
None of these responses is very satisfactory. Flame wars leave everyone involved feeling hurt, angry, offended. They are a way for weak people to feel powerful. ("Look what words I can type!") But they accomplish little.
Avoiding such people is difficult, especially if they are lying about you to others "behind your back." Such "gossip" can be quite harmful in one’s social life and one’s business life. Telling everyone the truth doesn’t make them forget the lies.
Going to court helps keep the lawyers and judges busy but other than that, even when one wins a lawsuit for slander, the lies live on.
How would things be different in the society that adopts the new kind of money described in "Invisible Hand"?
To begin with the easy part, there would be no lawsuits. The new money cannot be transferred from one account to another. It’s not like a physical object at all, this new money.
But the computer system (much improved over the internet as we know it today) would make it possible to keep a "reputation" for each person. In other words, it is important to know with whom you are dealing. When you meet a stranger, whom you may consider trusting, it is good to know whether others have found them worthy of their trust. If you are lied to, betrayed, cheated by someone, it is immoral to allow them to go on to lie, cheat, and betray others without providing a warning. The accounts computer will already be keeping records on everyone who gets paid, showing what they did and what benefits (and harms) their actions produced. It is relatively simple to have that same database include information about such things as their job performance; how they treat the homes in which they live; and how they treat their families, friends, associates, and acquaintances.
In other words, one can have a computer-based reputation which can be accessed by others. If a businessman cheats those with whom he deals today, he can simply go elsewhere, change the name of the business or the name of the product, and pull the same swindles all over again. But with the new money computer system being everywhere in the society, such running away from one’s past becomes impossible. So the "reputation" protects those who might be victimized by the unscrupulous. But what about those lies and slander we talked about at the beginning of this piece?
I suppose it’s just human nature to be liked by some and disliked by others. So it’s also human nature to be biased both for and against specific other people. How can any system which shows one’s reputation be proof against such bias and even outright lies? I will not only concede but proclaim that no system developed by people can be completely free of bias. But I will, at the same time, assert that the bias and untruths can be minimized rather simply.
For one thing, the computer system, itself, contains much information which can be used to verify or disprove statements submitted for inclusion in reputations. The computer system will, for better or worse, be watching and listening to us more and more as time goes by no matter what kind of money we use. That’s just a fact of technology, like it or not. Therefore, if one is to lie and escape detection in this future world, one would have to be very careful to avoid any lie that could be proven by data in the computer system. That will eliminate many potential lies.
To be successful, lies about the actions of others will have to be relatively subtle to succeed in getting past the computer checks.
To make the submissions to reputations even more accurate, the words that can be used in those descriptions are limited and clearly defined. Simply saying something such as "I don’t like Smedley." will not qualify for inclusion. Such a statement contains no information. "Smedley set fire to the kitchen in my house." is something that can be verified. Or "Smedley told me he would be at work on this ditch by 08:00 this morning and here it is after 10:00 and he’s still not here." is also relevant. In other words, reputations are not composed of feelings but of actions. This makes them much easier to verify.
But what about simple insults? "Smedley is a jerk!" Such statements would not be propagated, broadcast, or spread around by others since there is no money to be made in doing so. In fact, publishing such a statement would cost those who participated in that publishing some money. Thus, the spreading of insults would be only "word of mouth." This reduces, though it does not eliminate, the ill effects of slander. But since making such statements in public will be obvious to the computer system, the speaker will still be held responsible for his words. This is completely different from today. Any detectable harm done to Smedley by such statements would reduce the pay the speaker/writer would otherwise receive. Such statements would also become a part of the reputation of the speaker. Therefore, being rude and insulting to others in public will adversely affect those who act in that way. This will be much more effective in getting people to be polite than are lawsuits.
So there are three things that improve matters in the society that adopts the new money described in "Invisible Hand":
1) Slander is not spread because doing so costs the spreader potential future income.
2) One’s reputation is checked for accuracy.
3) Those who slander will have slandering as part of their reputation.
Having a bad reputation makes it hard to find people to work with to make money and harder to get a place of one’s choice to live. Therefore, there are real consequences of having a bad reputation in this "new money" society.
Technical details of maintaining the reputations in the proposed new system:
First off, there are well-defined categories which are the only acceptable terms in which one is able to submit contributions to the reputations data base. That is, one can’t simply use just any words at all, one must use particular words selected for clarity and meaningfulness. For example, one could not say that Smedley was "unfair" but one could say that Smedley "discriminated against." Also, certain quite subjective terms such as "ugly" would not be available as being irrelevant. "Annoying" would not be acceptable but "distracting" would be appropriate.
Thus, the things one could say about another person would be somewhat limited but the content of what one could say will be relevant and precise.