The ‘ignorance premium.’ That’s a great term from Hugh MacLeod – it describes the exploitation of what I’ve called ‘asymmetric information‘ – when one party knows a lot more about the true value of a transaction than the other, and can therefore take advantage. As Hugh puts it, and has put it before,
With the Ignorance Premium, you’re paying extra for not knowing. Instead of MICRO knowledge, you’re basing your choice on the cooler, hipper MACRO Brand Metaphor. Branding is all about about being cool and hip, because branding is all about propping up the Ignorance Premium.
I’m excited these days because I see this ignorance premium getting whacked at all around me, as companies increasingly learn that the way to succeed lies in spreading information, not hoarding it. The start-up I’m working on is all about kneecapping that ignorance premium, and I know we’re not the only ones. Soon, very soon, Doc Searls will get the open marketplaces he’s looking for. Soon after that, the asymmetric information that makes the ignorance premium possible is going to be like an arbitrage opportunity on the financial market – there might be a chance to make money off it in the short term, but the market’s going to correct the situation, and quickly.
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Absolutely. And, indeed, I believe there is tremendous
(and new) value to be realized through transparency (the
opposite of ignorance) in ways heretofore unknown.
Those companies and businesses that focus on this (either
being transparent in their business practices or by
creating new businesses that market transparent processes)
have a lot of room for growth.
Good luck.