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August 9, 2010

Gresham's Law is simply stated:
"Bad money drives good money out of circulation."
Although the law is attributed by westerners to Sir Thomas Gresham (1519-1579), Copernicus said it several decades earlier, so it's known as the Copernicus Law in Poland. Long before that, Aristophanes wrote of this principle in his play, "The Frogs,"[1] written in the fifth century BC. If you've never read Aristophanes' plays, I highly recommend them, since it's interesting to see how little human nature has changed in 2,500 years. Avoid reading Euripides for the same reason.

Counterfeit currency and shaved coins are not that much of a problem, nowadays. There was just one counterfeit US note for every 10,000 in genuine currency in 2006 [2], and currency "watermarking" technology has advanced considerably since then. I mention Gresham's Law in a different context; namely, "crowdsourcing."

Crowdsourcing is the outsourcing, by issuance of an open call, of tasks that would typically be performed by employees or paid contractors.[3] Before the internet, these would appear as things such as design contests by integrated circuit manufacturers. For a small sum in prizes, and a few lines of legalese on the contest entry form, the manufacturer would get enough ideas to write an entire application handbook to promote his chip. Now that we have the internet, crowdsourcing has expanded into admirable volunteer pursuits, such as Linux; and scientific endeavors like Galaxy Zoo, which I wrote about in a previous article (The Caves of Mars, July 23, 2010). Crowdsourcing has also become a way for companies to get things done on the cheap. Crowdsourcing can exploit individuals by offering below-market wages; or no wages at all, as in the contest example above. There are often no written contracts or employee agreements. Critics of commercial crowdsourcing say that it generates a low quality product, since the individuals who generate a high quality product value their work more highly and do not participate. Thus the analogy to Gresham's Law.

This dark side of crowdsourcing is highlighted in a recent article by Mike Isaac in Forbes magazine.[4] In this article, Isaac reviews a company that helps large corporations crowdsource graphic arts projects through its website. According to the article, more than 70,000 graphic designers are registered at the website, a number of whom compete with each other on various projects by offering graphic designs on speculation for a chance at a promised payout. As you can imagine, many graphics designers are upset about their work being so devalued, and there is even a website, http://www.no-spec.com, that campaigns against this practice. The website admonishes professionals to shun speculative work and put an "appropriate value on your profession."

The no-spec logo No-Spec Logo

Outsourcing has plagued industrial research for the last decade. Will crowdsourcing be the next step? Some research requires a laboratory environment and access to chemicals, expensive equipment and proper waste disposal measures. That part of science can't be crowdsourced. However, much of what I did in my last few years of industrial research could be crowdsourced. Proposal writing for government contracts and project management are two such areas. Computer modeling and simulation are another. All you need for these tasks are the appropriate experience and a computer. Will unemployed scientists speculatively compete with one another on crowdsourced projects? I think scientists are too smart to fall for that; at least, the best scientists.


  1. The Harvard Classics, Vol. 8, Edited By Charles W Eliot Lld, Nine Greek Dramas By Aeschylus, Sophocles, Euripides And Aristophanes, Translations By E. D. A. Morshead, E. H. Plumptre, Gilbert Murray And B. B. Rogers
    Often has it crossed my fancy, that the city loves to deal
    With the very best and noblest members of her commonweal,
    Just as with our ancient coinage, and the newly-minted gold.
    Yea for these, our sterling pieces, all of pure Athenian mould,
    All of perfect die and metal, all the fairest of the fair,
    All of workmanship unequalled, proved and valued every-where
    Both amongst our own Hellenes and Barbarians far away,
    These we use not: but the worthless pinchbeck coins of yesterday,
    Vilest die and basest metal, now we always use instead.
  2. "Treasury, Federal Reserve and Secret Service Issue Report on High Use, Low Counterfeiting of U.S. Currency Abroad," Press Release HP-154, US Department of the Treasury, October 25, 2006.
  3. Crowdsourcing page on Wikipedia.
  4. Mike Isaac, "The Future By Design - Why Designers Hate Crowdsourcing," Forbes (July 12, 2010).

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Linked Keywords: Gresham's Law; Sir Thomas Gresham; Copernicus; Poland; Aristophanes; The Frogs; Euripides; Counterfeit currency; shaved coins; currency "watermarking" technology; legalese; Galaxy Zoo; no-spec.com; Outsourcing; proper waste disposal; project management; Computer modeling and simulation