Communities are micro-economies

When money gets cheap, strange things happen

This post originally appeared on my blog, where I write on startups, software, community, and life a couple times every week.

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This isn’t the 250 GTO, but you get the point.

Money is contextual

The bill of materials of a 250 GTO is, very obviously, not 70 million dollars. So the majority of the value of the car must come from a more artificial sense of value. Indeed most of that value comes from the car’s critical acclaim and its place within the history of the auto industry. In the famous races the model has won, the critiques of the chassis as one of the most beautiful Ferrari models of all time, and its place in the heritage of the 12-cylinder Ferrari supercar lineage all add up to make the 250 GTO more than a series of axles and gears with a very (very!) low MPG rating.

The economic community

If strong communities have their own kinds of money, it doesn’t take a stretch of imagination to see that they also nurture micro-economies where that new community currency trades. The stronger the community, the more vibrant the community’s micro-economy, and the more resilient the micro-economy from the disturbances of the economic system outside the walls of the community itself.

When money gets cheap

In deeply developed communities with a strong sense of value, a strange thing can happen. The community’s own currency, whether reach or status or artifacts, can become more liquid and scarce than the “real” money of the outside world. When the sense of value flips like this, counterintuitive things unfold in the community. The community begins to spend money to buy community currency.

Thinking about community building, tool-making, and venture ecosystems. Fan of small teams doing big things. These days I write mainly at

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