TPI Coefficient

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Concept and metric by Michael Goldhaber, author on the Attention Economy, which tries to measure the potential of its Ethical Economy vs. the potential of the money economy, in terms of human to human transactions.

It shows the Crisis of Value, i.e. how the ethical economy is expanding exponentially, while its monetization is only expanding linearly.


Definition

From Michael Goldhaber [1]

T stands for Transactions per Lifetime (of each individual);

P stands for the Pool of People Interacted With (in the total of transactions) that is the number of people who are operating in a pretty unified economy;

I stands for the Intensity of Interaction, the strength of its effect on the life of the typical person affected.


Details

Michael Goldhaber [2]:

Transactions:

In the feudal economy, the key type of transaction occurs only a few times per lifetime for the affercted parties, the knights (who can be lords or vassals, or both).

In the MMI (Money-Market-Industrial) economy there can be a few transactions per day, so maybe 1000,000 or so per lifetime.

In the Attention Economy, though, there might be a thousand or more transactions, individual paying of attention, per person per day, leading to millions per lifetime.


The Pool:

The POOL of people transacted with depends on how big the actual interactive economic unit is. In the feudal economy, because of the small distances people could travel and the small population, this number was smallest. In the industrial economy, for the most part factories and farms serve somewhat limited populations, even though the whole economy may be nearly worldwide. In the Attention Economy, audiences can be a billion or more, and vast numbers of the world can be in audiences for the same relatively few stars. So the pool is typically huge.


Intensity:

The final issue is the INTENSITY of the typical INTERACTION. In feudalism, each interaction was life-changing, either lifelong vows of loyalty and suzerainty for a lord and a vassal, or, alternatively, a serious fight, often to the death. In the MMI system, you occasionally buy a car or hire on for a new job, but mostly you buy things like a chair, a dozen eggs or a bag of potato chips, which have minimal effect on you. In the Attention Economy, paying attention changes who you are, in ways more profound than that, even if not as profound as in the feudal case." (http://goldhaber.org/blog/2007/05/08/the-number-or-tpi/)


More Information

Essay which mentioned the TPI Number for the first time, at http://www.goldhaber.org/blog/wp-content/uploads/2006/05/MMI8.pdf

How the increased TPI of the Attention Economy leads to a different kind of economy, at http://goldhaber.org/blog/2007/05/02/what-a-new-kind-of-economy-means/