Exchanging Value

It’s taken for granted in modern society that our wonderful “elites” deliberately divide and conquer the public for their own benefit. No doubt that’s true. But what is less often discussed is that most people do a really good job dividing and conquering themselves without any outside assistance.

One of the main ways in which humans divide themselves is arguments over the exchange of value. This usually takes the form of disagreements about money. Introducing money into a friendship or even a family situation is a very dangerous thing if money has played no role prior to that. I know friendships that have broken up over $20 and families who no longer speak to each other over an ambiguously-worded will.

We have financialised almost everything in modern society and so value disagreement are usually over money. But value also includes concepts like meaning, significance and utility. (Interesting etymological side note, value is from the Latin valere and is related to valour).

One non-monetary way to create value is to be able to say the right thing at the right time. Sounds simple. Yet most people receive no training in delivering this kind of value. In fact, many people are terrified of public speaking because not only can you fail to say the right thing but you may very well end up saying the wrong thing. In that case, you create negative value.

I once attended a work lunch which was a send-off for a colleague who had resigned. The CIO was in attendance. He’d only been at the company for one week. As a result, he didn’t know the person who was leaving. But when the person who was supposed to give the farewell speech got called away at the last minute, the CIO was asked to do the speech in his place.

Imagine being given 5 minutes notice to speak in front of a roomful of people about somebody that you don’t know personally. Most of us would have to fall back to clichés and we’d struggle to sound genuine. But the CIO gave a 10 minute long speech that was not only not cliched, but somehow managed to seem personally relevant to the guy who was leaving the company. It was a very impressive example of saying the right thing at the right time.

Knowing how to say what needs to be said is a skill. For C-level managers, it’s probably the one truly mandatory skill because, even if you have no other skills, you can probably still bullshit your way out of trouble. On the other hand, you might be technically highly skilled, but if you can’t communicate your knowledge in the form others can understand, you won’t win support. Therefore, you can’t trade value. In a world where value was purely objective, these problems would not occur. But we do not live in such a world.

Knowing how to trade value is a skill that most people do not seem to have. They certainly don’t teach it to you in school. In fact, school is part of a default script for value trading. You get good grades and then you get a good job. The job allows you to provide value but providing value is very different from trading value. Trading value requires that you know what you are worth and that’s not something that is taught in school.

I learned some hard lessons in trading value back when I used to be active in the Melbourne indie-music scene. The indie-music scene provides a useful case study for the subject precisely because there is no real money involved. Almost all amateur musicians lose money on the deal. You have to pay for instruments, for rehearsal rooms, for sound engineers etc. Even if you manage to get signed to a record contract with some small label, you’ll probably still be lucky to earn more than what you could make serving burgers at your local McDonalds.

The value that gets traded at the bottom level of the indie-music scene is not money but gigs. Once you’ve formed a band and rehearsed your songs, the next step is to play in front of people. A gig normally requires there to be three bands on the bill. When you organise a gig, you’re not just booking your band but you need to find two others as well.

In organising a gig, you are creating value for those two other bands because you’re saving them the trouble of organising their own gig. If you stay on the scene long enough, the bands that you gave a gig to will offer a gig in return. Whether you realise it or not (most bands do not even realise it), you’re now trading value. It’s only the tiniest little slither of value, but this trade is enough to create “friendships” with the other bands on the scene.

So, it’s all a happy egalitarian world where everybody is comrades-in-arms, right? Well, for the most part, yes it is. It’s a communist utopia as long as everybody remains equal. But that changes when one band starts to succeed.

Let’s call the scene as we’ve just described it – Level 0.

All bands begin at Level 0; 0 being the number of fans your band has. The only people coming to your shows in the beginning are your friends. At the average Level 0 gig, there’s about 20-30 people in the audience all of whom are friends of the 3 bands who are playing the show. Sometimes, if it’s a Wednesday night in the middle of winter and it’s raining, there’ll be 5 people in the audience. In rare cases, there’s nobody except the sound engineer, which can challenge the morale of even the most enthusiastic wanna-be rockstars.

While your band and all the bands you are “friends” with are at Level 0, you happily trade gigs and everybody gets along fine. That changes when one of the bands gets to Level 1.

Level 1 simply means that your band has more than 0 fans. This is usually very obvious because there are people showing up to your gig who you don’t know personally. The only way to get to Level 1 is to have word-of-mouth. Somebody liked your band enough to recommend it to somebody else.

The difference between Level 0 and Level 1 is that, instead of there being 20 people in the audience, there’s now 40 or 50. That might not sound like much. But, on the local indie scene, if you can bring 50 people to a gig, you are ahead of 95% of the other bands. Venue booking agents will notice that fact and they will start to offer you better gigs.

What has happened in the transition from Level o to Level 1 is that you have created more value and you can start trading that value. This might sound like a good problem to have. But most bands, like most people, have no experience in trading value. They now find themselves in a strange position which they don’t know how to deal with.

Perhaps the strangest part is how this changes your relationship with the other bands on the scene, the ones who are supposed to be your “friends”. You might expect that they would be happy to see your band succeeding. In fact, what happens is the little green-eyed monster rears its ugly head.

The underlying problem is that the terms of the value exchange you had with the other bands have changed. Because you are now at Level 1, your gigs are more valuable than they were before. Because they are more valuable, other bands will actively seek to get on the bill. You start getting phone calls and messages from every band you ever played with asking for gigs.

The trouble is that those bands no longer have an equal value gig to trade in return. They can offer you a Level 0 gig, but that’s no longer of value to you. As a Level 1 band, you’re now hoping to trade with the bands who are at Level 2 by bringing your audiences to their shows. You’ll be playing weekend gigs at larger venues with bigger crowds.

What this boils down to is that the perceived egalitarian utopia has gone. Instead, you find that you are actually in a value hierarchy where you are one level higher than the bands who are supposed to be your “friends”. Nobody discusses this openly, but it’s the reality.

Your friendship with the bands at Level 0 was based on a reciprocal and equal trade of value. That equal trade breaks down when you get to Level 1 and this places the friendship under threat. What can you do?

Probably the most common response is to ignore the problem by not replying to all the calls and messages you are now getting. You become “aloof” and “unfriendly” and the bands stuck back at Level 0 begin to resent you for not helping them.

Another option is to try and keep the friendship alive by giving gigs to the bands who call you. This will keep them happy but now you will be the one who gets resentful. You’ll feel that you are being used by the other bands.

Yet another option is to try and acknowledge the value imbalance by telling the other bands you’re doing them a favour. But that just activates all kinds of pride and self-esteem issues. Besides which, it’s not what “friends” do and so will probably end up breaking the friendship anyway.

If not handled properly, and in the overwhelming majority of cases it is not, the imbalance in value exchange inevitably leads to resentment. Friendship turns to enmity. Jealously and envy rear their ugly heads. People start bad mouthing each other. All of this because nobody knows how to re-establish an equilibrium of value exchange. All this even though there’s no money involved and the stakes are, if we’re honest about it, completely trivial.

When you view society through this lens of the difficulties inherent in trading value, you can see how many positions exist simply to facilitate the trade of value. In the music industry, the band manager is one who takes this responsibility on behalf of the band. Outside of music, there’s real estate agents, used car salesmen, bankers, politicians, priests, managers, marriage counsellors, online dating apps, second-hand goods marketplaces, the list goes on and on. All these jobs exist because people are really bad at trading value.

13 thoughts on “Exchanging Value”

  1. Is this what codes of honour are for? To ask for favours like that is dishonourable, for precisely the reason that as soon as you’re asking for favours you establish a hierarchy amongst friends. You are lowering yourself which leads to resentment one way or another. A friend may offer help if they can and you may accept, but calling and asking like that is off in some way. It’s also a violation if one friend showers the others with gifts in an ostentatious display, for the same reason.

    I remember reading once that amongst the Pashtuns too large a gift is viewed as a very bad offence and has resulted in murders.

    The value exchange professionals arise is societies large and complex enough that strangers must be dealt with regularly, but it’s interesting that even within these large societies we still form our old tribal groups with similar codes and ethics.

  2. Skip – I think the problem with the indie-music scene is that it’s not clear what the context is. Compare it to a local amateur sports league where the context is clear and there are people whose job it is to organise things and they have official roles so that everybody knows that deal. The music scene lacks all that and so people fall back into a “friendship” frame of reference which is not wrong at Level 0 but becomes wrong when somebody gets to Level 1. Getting to Level 1 causes cognitive dissonance because it requires you to understand you are really in a hierarchy, not a friendship group. I recall that Kurt Cobain struggled with this because the punk rock scene was like a “family” while the music business definitely was not.

  3. My thoughts went down a dark tangent when you said family, going straight to Laurel Canyon in the 1960s and how almost everyone involved in that scene ended up in an early grave. It’s obviously not a very healthy lifestyle being a musician, just ask Spinal Tap’s drummers, but there was some really sinister stuff going on there.

    Los Angeles is a creepy place.

  4. Skip – I’m not sure that musicians are any more or less screwed up than non-musicians but the lifestyle encourages destructive behaviour and that’s true even before you get famous and your manager is paying you in suitcases of cocaine while siphoning off the money to pay for his beach houses in the Bahamas.

  5. Hi Simon,

    That’s a very interesting point about public speaking, and I reckon it is not an art form that we are taught, or encouraged to learn, in some ways, much like writing. Perhaps I’m being overly sensitive, but outstanding orators who can work a crowd, are perhaps viewed as dangerous folks? Still, how many politicians these days can churn out a good speech, and woo a crowd?

    Is it just me, or am I getting the distinct impression that you’ve lived the band experience you wrote about? For what it is worth, I am in agreement with your analysis.

    Dunno, but I have this vague notion that we’ve somehow swapped social obligations for monetary obligations. And when we’re faced with social obligations, mostly people run away screaming in horror! I’m not kidding. The mains power went out a couple of years ago for five days due to an epic wind storm. I let the neighbours know, many of whom I’m on reasonable terms with, that if they wanted to charge any of their devices here, or whatever required electricity, they could bring them around. The fear of the social obligation had become an insurmountable problem though that nobody wanted to navigate. It was truly odd and something I’ve been pondering ever since.

    So have you considered how to go from Level 1 to Level 2?



  6. Chris – the education system is there to ensure that you don’t learn anything that can make you “dangerous” 😉

    I agree that people don’t know how to handle social obligations now. Social obligations are bad for business cos they take time. If you’re trying to maximise “economic growth”, you need to make transactions as quick and easy as possible and that means you need to get rid of everything except the transfer of money. I’d say there’s a tipping point. Once enough people become unskilled at navigating social obligation, the people who still know how will avoid it because they don’t want to get involved in the world of pain that ensues when social obligation goes wrong. In a generation or two, nobody knows how to do it.

    As for Level 2, I’m not sure it’s worth the trouble, at least as far as music goes. The old record industry was brutal and unfair, but it did produce results. I think a big part of the reason was because it was a clearly defined hierarchy that you could climb if you were good enough. Compare the quality of music from the 60s and 70s to today. There’s no comparison. The old system worked but the internet killed it.

  7. Simon – enjoyed discussing your post w/ my partner, a veteran of the Sydney indie band scene & then the acoustic scene. The two are a little different; I spent many years immersed in the latter through my partner’s gigs & resulting social life: acoustic gigs often came via bookers, which took some of the strain out of musos’ friendships. One of the main bookers would mix, say, brilliant acts that might not pull heads due to poor self-marketing w/ often less impressive but popular acts. But bookers could still cop lots of flak for, say, delayed payment or decisions re order of acts & billing. And jealousy between acts could still occur through the social dynamics: who introduced who to who etc. A muso expressing genuine envy or awe in private – like, when they asked you round for dinner – would have to be brave to help a peer whose chops &/or talent could show them up. So I’d say these musos had no problem evaluating each other, & weren’t half bad on social obligation, but no-one’s going to come out & say, sorry but you make me look bad, bro. So one thing missing, besides knowing how to trade value, was incentive to prioritise originality + technical genius. Musos were competing too hard for their share of the low pay (though they used to sell & trade these cool things called CDs back in the day!)… Which is why what’s called music today has gone down the toilet. 🙂

  8. Shane – that’s why I kept my discussion to Level 0 and 1. It gets more complex from there especially because money gets involved. There’s also not that much difference in the quality of music between Level 0 and 1, so little reason to get jealous about that aspect. Especially in rock music, the main problem is how to get the band tight. That’s a very different thing from individual musicianship. Much like a sports team, you can have a group of good musicians but the band is only as strong as the weakest link (hello, Pete Best). There’s also a different psychology in relation to bands who have “made it”. There’s very little jealousy there since you’re not competing in the same league.

    As for today’s music, there’s a guy called Rick Beato who does a good breakdown of why it sucks from a semi-technical point of view. He’s very, umm, gentle about it 🙂

    Worth a watch – https://www.youtube.com/watch?v=xVcnsQS-eqQ&ab_channel=RickBeato

  9. Howdy, I’ve been reading along, though not commenting, then you link to Rick Beato, who is great. I love his enthusiasm and genuine love of all things musical.
    I got to number 2 and couldn’t bear it. ????????
    Yes, he’s very generous ????.
    Then there’s something like this:
    Oh to have that talent!
    I bought myself a keyboard a few months back and also acquired a free piano, which just got tuned last week.
    I’m practicing every day, but I have zero natural ability so it’s quite a slog.
    I’m pretty clumsy and unco, my fingers don’t match my thoughts! Not to mention learning the notes ???? so much to take in! Like I need another hobby ????
    I am enjoying it though and I’m in no rush.
    I did want to ask, what do you think about 5G?
    Work just gave me a new computer and screen (I’d have been happy with a software upgrade, but the iMac was too old apparently ????)
    The tech guy wants to get me a 5G modem, but I’m a bit leery.
    What do you think?
    Regards, Helen

  10. Helen – I like how Beato tries to find something positive to say about every song. It’s a good heuristic to apply to life in general, especially these days where people are quick to criticise and condemn.

    It’s said that piano is more difficult to learn at the start than other instruments eg. guitar, but gets easier once you get over the initial hump. The trick is to practice at least 15 mins per day as a minimum. Consistency wins in the end.

    I haven’t looked into 5G and don’t have it myself so really can’t offer an opinion there.

    I’m seeing the emojis ok now, although there was a week or two a while back where I was also seeing ‘???’. Might be a browser issue.

  11. Simon – Beato is generous. Shrewd guy. But he’s pretty much sticking to technical analysis. And music is so much more than its technical components. Do any of those top ten possess much (or any) emotive power? Will they still be played fifty years from now? Do they define an era? And even when something’s technically good these days, is it ever original? Ditto the visual arts, literature, cinema etc. Everything’s derivative of derivatives of derivatives, mash-ups started out as innovation but now everything’s so mashed up it’s blander than baby food. (Hello, Devouring Mother!) Meanwhile, there’s concern about AI being trained on a mix of both human & AI texts (digital equivalent of what caused mad cow disease), & getting stupider in the process, but culture’s already cannibalised itself, so how can AI be other?

  12. Shane – you’re preaching to the choir here 🙂

    The problem, I think, is in this phrase that Beato uses “professional song writer”. Once you get professional song writers you get people who are taking orders. “Write me a song with that fashionable latino beat that’s popular at the moment”. Then you’re one step away from telling the same thing to a machine learning algorithm which can do the same job even better cos you can ask it to generate as many as you want.

    True art comes from the muses, or the unconscious, or the will, or God, or whatever you want to call it.

Leave a Reply

Your email address will not be published. Required fields are marked *