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Okay, so most of you believe the Karma system of payment that I described in the last post is redundant with cash, or at least contrary to human nature. I disagree, since I wouldn't walk your dog for cash, but I would do it for Karma points, so that I would feel free to ask you for a favor in return someday.

But I'll drop that from the plan because if Cheapatopia works in other ways, you will get to know all of your neighbors well enough to arrange for a free dog-watcher when you need one anyway.

The backbone of Cheapatopia would be social networking via the Internet. You might say Facebook does what you need, but I think something far more robust is called for.

For example, if you wanted to arrange an impromptu get together for any sport or activity, it would be nice to have a web service that matched just the right number of players, at just the right mix of skills, without much human intervention. I should be able to tell the system what I'm interested in, when I can do it, and how skilled I am. Then the system should find other players. And it should happen in minutes, because alerts would be sent to the smart phones of anyone nearby who was interested in the same thing. In Cheapatopia, every citizen is required to have a smart phone. And the city would have free WiFi everywhere.

Preparing meals could also be more organized and less expensive. It would be a lot easier to make a bunch of just one thing - say a big bowl of pasta salad - than to make several items for a meal. Imagine a system that matches you with the neighbors who have complementary dishes, and you all get together to trade Tupperware containers with your contribution. The system would keep track of whether you gave more than you got, and even things out over time.

Food preparation and games would be the primary way neighbors got to know each other. And it would substitute for more expensive recreational and dining options.

The web service should also match people who have no pets, but wish they did, with people who need their pets walked or watched while they are away. No money needs to change hands because both parties benefit in the transaction. Few things are more fun than a borrowed dog.

Likewise, you could easily find someone to watch your kid for an evening if doing so gave their own kid a playmate to keep him occupied for that time. Babysitters would be unnecessary. Parents know it's often easier to watch two kids that are amusing each other than one kid who has nothing productive to do.

Ride sharing would be made easy in Cheapatopia by this same Internet system. But the only rides you would ever need would be to the nearest airport. There would be no cars within Cheapatopia. More on that later.
 
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I didn't read all the suggestions for location, but it seems clear that there could be more than one great place to put Cheapatopia. For example, some people might enjoy desert living, where the inexpensive land and plentiful solar power are a good combination. Others might prefer to live in a place with four seasons, preferably above a geothermal power source. I can imagine the roads, driveways, and sidewalks in Winter Cheapatopia being heated to 33 degrees after a snowfall, so snow removal is never an issue.

Let's assume there can be more than one Cheapatopia, and that economists and engineers can identify the best locations. Our next question is energy costs.

I'm going to back into energy costs by discussing a barter system first. Imagine that Cheapatopia uses money just like the rest of the world, but for convenience, cash is banned. All payments are made by a credit/debit card (the same card).

Beyond regular money, the citizens of Cheapatopia would have a barter system whereby they earn what I will call Karma Points for services performed. For example, if you babysit for a neighbor, or walk someone's dog, you get some Karma Points that you can later spend to pay a neighbor to mow your lawn. You can still buy all of those services with regular money too, so this is just an option.

And perhaps seniors get double Karma Points for any services they perform, and kids get half points. That way the seniors can easily get help without feeling it is charity.

The key to making Karma Points work is a robust Internet-based service that sets prices for various services and keeps track of who has how many points. The real purpose of this system is not just the convenience of getting stuff done, but the social interaction it causes. Most people make their friends from their organized activities, past or present. They find their spouses and lovers the same way. Cheapatopia increases your social involvement and therefore your social life.

Bringing this back to energy costs, I wonder if there is some modern equivalent of pyramid building, without the alleged slavery, that can be applied to modern times. Could a community build an energy source through its volunteer labor that would be otherwise uneconomical?

For example, if you build an enormously tall tower, and put a wind turbine inside it, the natural air flow from the chimney effect creates energy. It's called a solar updraft tower.

http://en.wikipedia.org/wiki/Solar_updraft_tower


Could citizens be enlisted, voluntarily, to contribute labor to building such a massive energy structure in return for Karma Points, or even reduced energy bills? I don't see it being practical either, but maybe you do, using some sort of pyramid design instead of a tower. Assume real estate and labor are both cheap, and the project can last 20 years. The immediate benefit is in the social interaction it causes, and the collective goal.

Or suppose the city of Cheapatopia creates its own factory for building the type of equipment used in huge solar power plant generation. The most economical types are the plants that concentrate sunlight on tubes filled with water, thus generating steam to power turbines. Cheapatopia could be its own first customer. The beauty of this system is that it is modular. The more units you set up in the desert, the more power.

If Cheapatopia is located where there is more wind than sun, then the enterprise could busy itself making windmills. The point is that the city could be organized around the production of its own energy, both for social reasons and for economics. Once Cheapatopia met all of its own energy needs it could become a provider to others, using the profits for city improvements.

 
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Engineers and techies are often misunderstood. They come off as looking cheap when in fact they are optimizers. It is their nature to solve any puzzle that is presented, and the persistent puzzle of life involves getting the most resources while expending the least.

I have a bit of that in me too. That's why my mental hobby for a few decades has been designing what I call Cheapatopia. Cheapatopia is a hypothetical city, designed from scratch to be an absurdly cheap place to live with a ridiculously high quality of life.

Step one in designing Cheapatopia is assembling the team of visionaries. That's you. I appoint myself team leader, and over the next week or so I will describe the elements of Cheapatopia and ask you to suggest the best design solutions.

Today I will discuss some assumptions. The first and biggest assumption is that the era of ridiculous consumption is over, at least for your lifetime. If we want universal healthcare, and a decent standard of living for the exploding population of seniors, the average household will have to learn how to make do with less. But in doing so, there is no reason we can't be happier at the same time, so long as we do it right.

Cheapatopia puts a big emphasis on entertainment and social interaction. If you have that, plus health, safety, and financial security, you might be willing to give up the over-consumption and needless complexity of your old life.

You might also be willing to give up some of the options you enjoy in your current life if the tradeoff is gaining more and better options of a different sort. We'll consider those later.

I believe the next big change in society will involve simplifying our lives, getting rid of the waste and inconvenience that we drifted into, and finding meaning through more social involvement. Cheapatopia would be an engineered city both in terms of its physical structure and in how the citizens participate in it.

For example, in Cheapatopia, no one would ever again hire a babysitter or put their dog in the kennel while they are on vacation. That sort of thing would all be done by neighbors, and you would know those neighbors well.

When you design Cheapatopia, don't assume you would be living there yourself. It won't be for everyone. Don't hold that against Cheapatopia. It's a mental exercise.

Today's design question is this: Where would you locate Cheapatopia, in general terms?

In your answer consider physical beauty, energy, weather, water, proximity to a major airport, natural disasters, and anything else you can think of. And assume Cheapatopians work at home or within the city, so commuting is minimal.

 
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What is the most valuable knowledge in the world? Let's say I rule out a few categories:
  1. Psychic knowledge of the future
  2. Psychic mind reading
  3. Trade secrets
  4. Company insider information
  5. National security secrets, such as war plans

Fair game is any sort of information that could be collected with some amount of time and effort, even if it isn't being collected at the moment. And it has to be legally obtained.

I'll take a stab at the question just to prime the pump. Suppose you formed a private online club of people who represented a random selection of investors in general. So you'd have some professional advisors and lots of regular folks who pick their own stocks. Every day at a set time the members of the club are asked to submit to the private online system their opinion of what stocks they find attractive to buy in the next 24 hours. Before the results are tabulated and distributed back to the members only, each member is given an opportunity to invest any amount of money in whatever the club ends up picking as the most popular stock. If they opt in, all of their trades would be executed at the same time, or perhaps randomly at nearly the same time, so no member gets an advantage. Only the single most popular stock would be purchased for all members, one per day.

If selected correctly, this random collection of investors would, on average, have the same opinions as the public in general, but they would execute their trades before the rest of the world, on average, and get in before the generally popular stocks run up. This concept banks on the notion that whatever ideas in the media or in life that are floating around influencing minds are influencing the member group in the same way as the public at large. Call it zeitgeist.

What's your take on the most valuable information in the world?

 
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Yesterday a financial institution offered to help manage my portfolio for a fee of only .75% per year. With that fee structure, they get ten times as much in fees from a client who has ten times as much in his portfolio, even if managing it is the same amount of work, which it presumably would be.

I assume at least part of the money these professionals propose to manage would get directed toward funds that are managed by yet other professionals who take even more of your money no matter how well they perform. And they too will get higher fees when you invest more, despite their workload being the same for any amount.

Part of the pitch for this financial service was that I would get to approve any adjustments to the portfolio they recommend.

Pause to digest that.

If I were smart enough to override the advice of experts, why would I pay the experts for advice? The entire system depends on me being dumb enough to think that concept makes sense. And what exactly was the opposite of that arrangement? Do other companies propose to invest your money against your will?

So suppose you give your financial advisor only half of your portfolio to manage, and then you duplicate whatever he does with the other half. Your results would be the same, but his fee would be halved. He'll argue that he needs to see the whole portfolio to do his job right, but he doesn't. You just need to be sure you have adequate liquidity (ready cash) in case you need it.

Someday someone will create a web service that has a few dozen sample portfolios that can fit just about any need. The user will answer a series of questions about his situation, and the system will spit out a portfolio suggestion. After that, the system will generate e-mails asking you to update your personal situation, in case that changes the portfolio recommendation, and alert you if any of your investments need to be tweaked.

The sample portfolios could be as simple as broad index ETFs, some domestic and some international, for the equities, and some bond funds for fixed income. All you would ever need to adjust is the percentage of your funds in each type of vehicle once every several years.

If the tiny fees of the ETFs are still too rich for your blood, it wouldn't be hard for someone in the know to come up with a sample portfolio of say 25 individual stocks that are likely to perform just like an index. You pay the discount broker fee once, and adjust every few years as needed.

Now you will tell me it is already being done.
 
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My previous post got one of the top ratings for anything I've blogged about. Several of you wondered if I saw the recent episode of Penn and Teller's Bullsh*t that apparently dealt with the "cold read" phenomenon, in which general statements seem more personal than they are. I missed that episode, but the cold read concept has fascinated me for a long time, both as a writer and a hypnotist.

Originally I was going to title yesterday's post "Cold Read" but I thought "Your Psychological Profile" would seem spookier. And besides, I'm not entirely sure where you draw the line between a cold read and an FBI profile of an unknown criminal. One method is a parlor trick and the other passes as something closer to science, allegedly.

One fascinating aspect of the cold read, as it applies to horoscopes for example, is that they are more entertaining than you think they ought to be. I don't believe in astrology, but if you put a horoscope in front of me I will immediately look for Gemini and read it. Likewise, I always take the time to open fortune cookies. What's up with that?

Answer: The most fascinating topic in the world, at least to you, is you.

My post from yesterday got a high rating partly because, for a change, it wasn't about some random idea, technology, or foreign country. It also wasn't about me. It was totally about you. And that, as it turns out, is one of the big secrets of writing. Readers care about themselves more than they care about just about anything else. I can most easily keep your interest when I write about something personal to you. And sometimes that requires me to use the writer's equivalent of a cold read.

The cold read concept also overlaps with hypnosis and other forms of influence, such as advertising, sales, and seduction. When people believes you understand them at a level they have not yet chosen to reveal, you get into their heads quickly, and that gives you influence. For example, you might say to a customer that you met only minutes ago, "I can tell you're a man who likes to get all the information before making a decision." It's a general statement that applies to most people, but it will feel to the customer as if you understand him, and his guard will come down a little, even if he knows exactly what you're up to. And he will like you better for turning the topic to him.

If you are trying to interest someone of the opposite sex, the cold read works there too. After a few minutes of getting to know someone new you might toss out a generality in the form of a question. For a woman, you might ask "How did you learn so much about design?" For a guy, you might ask "Which sports did you play?" It's a compliment disguised as a question wrapped in a cold read.

Right now you're wondering if something so simple would really work. You're a bit skeptical because things that sound that simple usually don't work. And if it were really that easy, wouldn't you already know about it? After all, you're extremely well read. In any gathering, you're the one who seems to know the most about lots of different topics. How can you test the cold read concept for influencing someone to see if it's legit? How would you Google it?

See what I just did there?
 
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Yesterday I went through my old blog posts to see which ones got the highest ratings from readers. Based on that information I have compiled a psychological profile of you.

You are unusually curious about how things work. You value function over form. You like solving problems, even if they are not your own problems, and other people don't always appreciate that about you. You can be argumentative. You like pets.

At least one of your parents is a bit of an intellectual. You place a high value on education. You think people control their own success over time, although luck plays a huge role in any given moment.

Your generosity has gotten you in trouble in the past. You don't trust the media. You think you're smarter than most of the people in your life.

You like finding ways to save time and money. Your relationships have been bumpy. You get angry a lot but you think it is usually justified. You wish you were funnier and more creative than you are.

You have imperfect vision. You don't exercise as much as you think you should. You wonder what it would be like if you were more attractive. You value science over superstition. Learning makes you feel good.

How'd I do?
 
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Last night we went to watch the new Transformers movie on the big iMax screen. As we got out of the car in the theater parking lot, in a rush to get good seats, a young man approached and asked if we had jumper cables.

Luckily I did not have jumper cables, because if I did, I knew we would be late for the movie. I did my best to make a face that said, "I sure wish I could help," while being secretly gleeful that this was officially not my problem.

I wondered if the young man thought I was lying about not having jumper cables. My fake sincerity face looks like a mime with an intestinal infection. I felt I needed to sell my concern just a bit more, but without making us late for the movie. So I asked, "Do you have a cell phone?"

Now keep in mind that 110% of all young men his age group, at least around here, have cell phones. The figure is higher than 100% because some people carry two, in case one has a low battery. So there was no real risk of him asking to use my phone. And besides, who goes to the movies alone at that age? Surely his pack of friends was nearby, all with cell phones if not jumper cables.

But no. This was the one young man in the solar system who had no phone, no friends, and a dead battery. So I handed him my beloved BlackBerry and hoped he wouldn't start running in the other direction. He looked fast. But he was legit, and dialed his mom.

If you want to imagine how his end of the conversation went, recall George Costanza from Seinfeld talking to his mother. It went something like this:

Guy: "Can you tell Dad to come get me? My battery is dead."

Guy: "Why does it matter?? I was listening to the radio. Just tell Dad..."

Guy: "Just tell Dad..."

Guy: "Mom, can you just tell Dad to..."

Guy: "MOM!!!! CAN YOU PLEASE PUT DAD ON THE PHONE!!!!"

Meanwhile, I'm tapping my feet, looking around, trying to look impatient without crossing the line into full jerk mode. I don't want to get the worst seat in the iMax theater. That's not a good one.

Now the young man's conversation turns to describing where he will be standing when his father arrives.

Guy: "I don't know, maybe near Fudruckers."

Guy: "FUDRUCKERS! FUDRUCKERS!"

Guy: "Or maybe by Game Stop. Near Fudruckers. Or I could just walk over and stand by the Game Stop. It's by Fudruckers. Fudruckers. Fudruckers."

Surely this conversation was coming to an end, I assumed. I imagined only one seat left in the theater. My heart was pumping and my palms were sweaty. We already had our tickets. I sent my best ESP messages to him: Please hang up. Please hang up. But things only got worse.

Guy: "I think it's in the dryer."

Guy: "Yes, in the dryer. Because it was wet."

Guy: "I know you think it was on the couch but it's in the dryer."

Guy: "Yes, I'm sure it's in the dryer. JUST LOOK IN THE DRYER!!!"

At that point I reached my limit. I started giving the slice-my-own-neck signal to him to cut the call short. I mouthed "We're late for the movie." He got the hint.

Guy: "Mom, I have to go."

Guy: "Look in the dryer."

Guy: "Because I have a borrowed phone."

Guy: "Just look in the dryer. And tell Dad I'll be by the Game Stop."

Guy: "Not Fudruckers, but next to it. By the Game Stop."

Guy: "JUST LOOK IN THE DRYER!!! MOM! I GOTTA GO!"

Phone retrieved, we raced to the theater. There were exactly two seats left, on the far end, in the front. If you haven't been to an iMax theater, the screen is the size of a three story building. From my vantage point up close I could tell that motion was happening on the screen, but I couldn't discern what it was. I think the movie was about robots that fight, but I can't be sure.

I spent the next two and a half hours wishing I could meet the a-hole who decided to squeeze a few more seats into the iMax theater by putting them where no human being could enjoy the show. I'm peaceful by nature, but I'd make an exception for that guy.

Attempting to look at the screen was a losing strategy because it was just headache inducing. Luckily I can nap literally anywhere. I even fall asleep when I'm having my teeth cleaned (true). So I had a nice snooze through most of the movie, and I needed it. I guess it all worked out.

 
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Let's say you have a problem or a need or a want, and you're sure there is product somewhere in the marketplace that would help. You Google, and a handful of web sites pop up that offer promising solutions. But obviously you don't believe anything you read from vendors, so you check for online reviews. Then you wonder if the favorable reviews are planted by the vendor, and the bad reviews are planted by his competitors. Can you trust reviews from anonymous strangers?

You ask your coworkers and friends if they have ever used the product that you're interested in, and no one has. What now?

Shopping is broken.

How much more stimulated would the economy be if the people who have money, and are willing to spend it, could be reliably connected with the products that they desire?

What the world really needs is some way to connect you with the people who already use the sorts of products you want, and are willing to answer an e-mail or two about the topic.

About a year ago I had surgery to fix my voice. The information on the Internet about that particular surgery was outdated and didn't address my questions. The only way I could become a consumer of that surgery was by communicating directly with people who already had it, which I did. And since then I have answered questions for dozens of people who have the same questions that I had.

Likewise, as my wife and I make a zillion decisions for the home we are building, we prefer products and solutions used by people that we have spoken to personally. The Internet is virtually useless for any of the hundreds of product decisions we have made so far.

And what about choosing a destination for a vacation? You're much more comfortable if you have spoken to someone who visited the same place.

The obvious problem with connecting past consumers with potential consumers is that while people are generally helpful by nature, no one wants a million e-mails asking how they like their new can opener. So how do you strike the right balance?

Imagine a system that works like this: When you buy a product, you agree in advance to answer up to four e-mails from future potential customers, beginning no sooner than one year from when you make your purchase. It's totally optional, but agreeing gives you access to people who already bought the product you're considering today, to help you make your own decision. It would strike you as a fair deal.

For privacy reasons, this imagined system would disguise your e-mail address. And the system would have to be administered by some third party, not the vendor selling the product, or you wouldn't trust the strangers giving you advice.

Maybe you have a better idea for fixing shopping.
 
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I pay my bills online. The interface for the bill paying system is a tragedy, as you might expect from a bank. But it's not entirely accidental. Banks inconvenience their customers for a reason.

For example, I would like the option of automatically debiting my checking account every month to pay off my credit card balance just before it is due. The system could easily send me a courtesy e-mail warning me the transfer was about to happen, in case I changed my mind. And if I didn't have enough money in my checking account, it could warn me by e-mail and abort the transfer. This system would save me time and avoid late fees on my credit card.

You won't be seeing that feature anytime soon. Banks and credit card companies make a lot of money from late fees. They have a naked interest in keeping their service as inconvenient as possible. My bank doesn't even offer a check box option for paying the entire balance on my credit card. Instead I need to write down the balance from one screen, or try to memorize it, until the screen appears where I can enter that figure. In other words, they even make money from my typos. It's totally intentional. Bastards. That trap has worked on me several times.

If consumers mattered, your bank would offer one retail product. It would be part checking account and part credit card. And by that I mean your balance could either be above zero or below zero at any given point. When your balance is below zero, you pay interest to the bank. When it is above zero, the bank pays you interest. You'd have one plastic card that does what your ATM and your credit card does now.

If you needed more credit, you could secure your account with your home equity. That way you wouldn't have multiple types of credit with the same bank, where the bank hopes you misplace at least one of their bills so they get the late fee.

Banks might argue that they can't offer that sort of product for regulatory reasons. But I haven't seen a bank shy away from trying to influence regulators when it works for them.

Did I say bastards yet?

(P.S. I started my career at a bank. And that's where Dilbert was born.)
 
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