Gamified Personal Finance

What is gamification? You could describe it as the extension of principles of game design, with or without the language of games themselves, into new territories. Gamification in this sense tries to transform tedious tasks into fun ones, or at least into less intimidating tasks.

Jane McGonigal, in her polemic Reality is Broken, outlines a kind of phenomenology of gameplay, complete with gameplay-specific emotions (Fiero, Epic Win, etc.). For McGonigal, gamification is about introducing these feelings into socially necessary or useful practices. And perhaps you could think of gamification as finding ways to introduce all kinds of positive feelings – not just those associated with gameplay – into socially necessary or useful practices. In this approach, gamification is about turning the means to an end into ends in and of themselves.

A slightly different way of understanding gamification, however, is simply as a specific set of conventions for communicating an incentive structure. The incentive structure may be backed up by storytelling and rhetoric, by quantifiable status within a community, by money or some other kind of claims on goods and services, or perhaps by nothing at all. The conventions – effectively an ensemble of data visualisation/conceptualisation techniques, such as a character class system, an array of interrelated stats, the chance to level up, the accumulation and completion of quests and side quests, bosses to defeat, achievements to unlock, and a leaderboard to scale – originate with computer games, but don’t have any necessary link with them.

Here’s an illustration of how gamification, understood in this second sense, might be used to create a new kind of current account product. Most banks are inherently unstable insofar as they loan long and borrow short. They face a maturity mismatch problem. Most deposits tend to be short term. Most loans tend to be long term – mortgages, for instance. The bank can’t turn up at somebody's house, type in its PIN, and withdraw the £100,000 equity it owns in that person's house.

Did you know you can now bank online?

In a gamified current account, a depositor would be asked on a regular basis to log in and set withdrawal requirements for the next time period. For the depositor, the aim of the game is to choose withdrawal requirements which are as low as possible, and then stick to them. There will be financial rewards for doing this successfully, and financial penalties for doing it poorly.

To take a very simple example, say a current account holder has $100 on deposit. The account holder decides that they will never require more than $40 net throughout the next quarter. They set the slider to $50 (giving themselves a $10 buffer) and click “commit.” So for the next three months, $50 is on loan to the bank at a very low rate of interest as a sight deposit – the account holder can withdraw it whenever they want – and the other $50 is a kind of short-term bond, earning a higher rate of interest. If the account holder withdraws more than $50 over the next quarter, they are effectively selling part of their bond before it reaches maturity – i.e. at a lower value.

When the account holder does not actively set the slider, the account eventually reverts to an ordinary current account, until whenever the account holder next chooses to play. There could be one or two other mechanisms: unlocking achievements to give the account holder one-off liquidity boosts, etc.

As a side note, there could even perhaps be a social / community aspect to this system. For instance, account holders could ratchet up a score when they transfer their excess liquidity to account holders who need it (who have underestimated their liquidity needs for the period). I am intrigued by the possibility that different ways of communicatively integrating a group of borrowers and lenders, and different ways of allowing them to visualise and conceptualise their individual and collective interests, might achieve different levels of robustness, and different levels of resistance to panic.

The current account, in other words, would be transformed into a flexible, intuitive portfolio of different kinds of debt, whose mechanisms would be mostly traceable to the bank’s need to make maturity matches.

Clearly there are a large number of issues – to do with game design, implementation, legal underpinnings, nudge economics, and wider social impact and ethics – and were such an idea to be developed by commercial retail bank I would treat it with outright terror. In principle, however, it seems like a promising way of mitigating the sharp maturity discrepancy at the heart of the fractional reserve banking system.

And as a final note, one possible area of application would be in the construction of an alternative community currency – both in terms of attracting users by the novelty of the system, and perhaps also in making a lower reserve ratio possible, allowing a relatively larger money supply to exist on the basis of a given injection of conventional currency.

Earlier: science fiction of gamification. See especially Tim Maughan’s entries on that list for a bit of perspective on shiny new ideas for gamification.

Elsewhere: SMBC on gamification.

From "The Aesthetic Dimension: Aesthetics, Politics, Knowledge," by Jacques Rancière

Some consequences can be drawn from this regarding the mode of existence of the demos. On the one hand, the power of the demos is nothing but the inner difference that both legitimizes and delegitimizes any state institution or practice of power.

As such it is a vanishing difference that is ceaselessly annulled by the oligarchic functioning of institutions.

This is why, on the other hand, this power must be continuously reenacted by political subjects. A political subject is a subject constituted through a process of enunciation and manifestation that plays the part of the demos.

What does it mean to play the part of the demos? It means to challenge the distribution of parts, places, and competences by linking a particular wrong done to a specific group with the wrong done to anyone by the police distribution—the police’s denial of the capacity of the anyone.

This is what a political dissensus means. A dissensus puts two worlds—two heterogeneous logics—on the same stage, in the same world. It is a commensurability of incommensurables.

From "The Aesthetic Dimension: Aesthetics, Politics, Knowledge," by Jacques Rancière

To understand dissensus from an aesthetic point of view is to understand it from a point of view that neutralizes the ethical rule of the distribution of power. As I mentioned earlier the ethical rule is actually doubled; the common property is doubled by alternative capacities. According to this rule, power is the exercising of a certain qualification of some over those who don’t possess it; those who exercise power are entitled to do so because they are the priests of God, the descendants of the founders, the eldest, the best of kin, the wisest, the most virtuous, and so on. This is what I have called the circle of the arkhe`, the logic according to which the exercise of power is anticipated in the capacity to exercise it, and this capacity in turn is verified by its exercise. I have claimed that the democratic supplement is the neutralization of that logic, the dismissal of any dissymmetry of positions.

This is what the notion of a power of the demos means. The demos is not the population. Nor is it the majority or the lower classes. It is made up of those who have no particular qualification, no aptitude attached to their location or occupation, no aptitude to rule rather than be ruled, no reason to be ruled rather than to rule.

Democracy is this astounding principle: those who rule do so on the grounds that there is no reason why some persons should rule over others except for the fact that there is no reason.

This is the anarchic principle of democracy, which is the disjunctive junction of power and the demos. The paradox is that that anarchic principle of democracy turns out to be the only ground for the existence of something like a political community and political power.

There are a variety of ethical powers that work at the level of the social: in families, tribes, schools, workshops, and so on; parents over children, the older over the younger, the rich over the poor, teachers over pupils, and so on. But as long as the community is made from the conjunction of those powers and as long as it is ruled on the whole according to one or a combination of those powers it is not yet political.

In order for any community to be a political one there must be one more principle, one more entitlement, that grounds all of the others. But there is only one principle in excess of all the others: the democratic principle or entitlement, the qualification of those who have no qualification.

This is my understanding of the democratic supplement: the demos is a supplement to the collection of social differentiations. It is the supplementary part made of those who have no qualification, who are not counted as units in its count.

I have called it the part of those without part, which does not mean the underdogs but means anyone. The power of the demos is the power of whoever. It is the principle of infinite substitutability or indifference to difference, of the denial of any principle of dissymmetry as the ground of the community. 

The demos is the subject of politics inasmuch as it is heterogeneous to the count of the parts of a society. It is a heteron, but a heteron of a specific kind since its heterogeneity is tantamount to substitutability.

Its specific difference is the indifference to difference, the indifference to the multiplicity of differences—which means inequalities—that make up a social order. Democratic heterogeneity means the disjunctive junction of two logics. What is usually designated as the political is made of two antagonistic logics. On the one hand, there are men who rule over others because they are—or they play the part of—the older, the richer, the wiser, and so on because they are entitled to rule over those who do not have their status or competence.  There are patterns and procedures of rule predicated on a certain distribution of place and competence. This is what I call the rule of the police.

But, on the other hand, that power has to be supplemented by an additional power. To the extent that a power is political, the rulers rule on the ultimate ground that there is no reason why they should rule. Their power rests on its own absence of legitimacy. This is what the power of the people means: the democratic supplement is that which makes politics exist as such.