Re: [ox-en] Peer Economy. A Transition Concept.
- From: "Stan Rhodes" <stanleyrhodes gmail.com>
- Date: Wed, 23 Apr 2008 23:09:46 -0700
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Well Michel, those are easy to ask, but answering it requires me saying a
lot about a lot! I don't want to go into all that, and it's far more than
an email's worth, not to mention far more than I've documented. It also
continues to evolve as I integrate the work of so many. I'll try simply to
answer with my view on what's been said and tie that in a little with what
I'm working on.
No, I do not agree with Christian's assessment, and I maintain that he does
not understand that his weighted labor system has a market in the
distribution pool. To paraphrase what I've said before, the market in the
peerconomy system, as in all economic systems with a market, enables the
exchange of product ownership and services, which are evaluated and priced.
The money in the system, as in all systems, is just a unit of value that
exists as debit and credit (value owed and value given). Contributions are
tied to benefits with the distribution pool. So, market and money are the
distribution pool, but Christian does not see it. At this point, I can only
offer my analysis, and let people dig in and judge for themselves.
I see money much as E.C. Riegel did. Money is a cooperative agreement.
It's relative. To quote Riegel, "Money is a receipt for value, expressed in
terms of a value unit, and is a transferable claim for an equivalent value,
to be determined by competitive exchange, in which the issuer is an active
vendor, whose issue conforms to the customs of a convention of participants
in the monetary system." The "customs of a convention" in Christian's case
is the structure of the distribution pool and associated voting.
I do not think Christian's characterization of systems is accurate, either.
First, the free market and capitalism are not synonymous. Without getting
into a large discussion of the semantics, we must tease out principle and
practice. The "capitalism" of today, in practice, has hardly any free
market aspects to it, so I'm not going to use it as a term at all. Further,
as I have said above, Christian is creating a free market (supply and demand
in a weighted labor system is still supply and demand). Effort sharing
occurs in any cooperative business that is meeting demand.
The claim that market exchange is "how to turn money into more money" is
simply bogus. I'm going to assume he means a free market for the sake of
discussion. A free market has buyers and sellers in cooperative
agreements--mutual consent--on the values of their goods and services.
Inherent in this concept is that there is no coercion or misinformation.
That's basically it, the free market in a nutshell.
One of the big problems, of course, is that there IS coercion and
misinformation, meaning the free market is not a perfect market, and doesn't
achieve pareto efficiency (basically, the maximum social benefit possible
for the allocation of resources across that population of participants).
Joseph Stiglitz and others identified, for example, the problems of
information asymmetry. Along with that is the problem of externalities.
However, the free market is a principle, and the practice is how we design a
socioeconomic system that is pareto efficient, or at least, evolves in that
direction.
I put forth the claim that the only way to work toward this free market is
by creating rival and nonrival commons. (A rival good is anything that's
use prevents others' use. A nonrival good does not have this rivalry.)
If we were to create a fantasy system that is democratic, equitable, and
sustainable, we'd need to start with the concept that all human beings on
Earth, in principle, are equal stakeholders. They should each have equal
"share," or %, of all material assets: 6.6 billion equal shares (although
obviously, that number needs to begin shrinking). When a shareholder uses
rival resources--material assets--beyond their "share," they should
compensate all other shareholders equally for their "resource trespass."
The concept, simply, is the more you use, the more you pay. It's the
responsible thing to do!
With nonrival commons--information--use must be open for all. This is
another discussion in itself, so I'm going to continue under the big
assumption that nonrival goods are open to all. As Patrick Anderson would
point out, use of information does carry a rival cost (energy and matter),
and that falls in the domain of the rival commons. However, the information
itself is not scarce, and must be open to all to create a free market.
After all, how can we maximize social benefit by creating scarcity where
there is none? A person's "share" of everything nonrival IS everything
nonrival! Now, "use" from here on out will only apply to the use of rival
goods.
A system of rival and nonrival "vested" commons, with everyone as equal
stakeholders (that's the "vested" part), captures all externalities of the
current system. The governance of these commons must be democratic, and
must be build to evolve toward "democratic efficiency."
So, there's the pie-in-the-sky ideal, in my view.
When it comes to work, I'm all for effort sharing. However, I think this is
a "business" problem. The problem with businesses currently is that most
are designed structurally and legally to maximize profit, rather than being
social-purpose based. Add in our sham of a money system and you have the
economic crisis we have today. Increasing awareness of the conflict between
profit and social benefit, and the systemic pressure to choose profit, has
led a lot of people to question the corporate model. Particularly the
megacorporation. They question it for good reason!
A number of people have identified this problem independently. For example,
In Creating a World Without Poverty: Social Business and the Future of
Capitalism, Muhammad Yunus writes of the problem of the "profit-maximizing
business (PMB)" versus the "social business." Unfortunately we've legally
empowered the profit-maximizing business into quite a formidable beast.
It is with Chris Cook, Muhammad Yunus, and others (and me) that we begin to
hit the practical implementation of a new socioeconomic system. And
actually, I think Kleiner is approaching this too, but I would argue that
Marxist analysis does not recognize how relative the relationships are.
Perhaps that is my misunderstanding of Marxist theory, but I will save that
discussion with Kleiner for another time.
The purpose-driven business / social business / open corporate /
businesstrust / whatever-you-want-to-call-it aligns all parties toward the
social function of the business. You do that by having the assets held in a
sort of trust structure, where an agreement/charter defines some scope of
allowable use. The business can then use the assets--essentially, renting
them--and that rent goes to the investors/owners of the assets proportionate
to their shares. Anyone involved in the business can invest money or labor
or "money's worth" (as Cook calls it) for some share, and investors can sell
their shares. Basically, price paid beyond rent cost is investment.
Investors make a reasonable return, although not very high (and the various
limits can be define in the charter). The asset is protected, and the
business is accountable to the scope of use. This is particularly
interesting when it comes to assets like land, because it's a potential
"answer" to the problem we're having here in the States (property bubble +
food + environmental issues). You can create a propertytrust LLC, or as
Cook calls them, a Community Land Partnership. I'm currently working on
linking these interests together because of this real--but not
realized--alignment.
If that was hard to follow, I apologize. I need to make a series of
graphics to explain it (I've made some, but they suck, and I don't like
Chris Cook's either). You can read more about what he proposes on
www.opencapital.net, although he needs to put out some updated information.
I should have given him more guff at the conference for not having better
figures, but we were having too good a time.
If you network all asset "trusts" together within a democratic republic (no
central, established governance; my preference) or federation (central,
established governance) model that agrees upon the scope of use of those
assets (defined by something like a "rights and responsibilities"
constitution), you essentially have a vested commons. That commons "rents"
use of assets to businesses, and the cost of use is paid evenly to the
stakeholders, i.e. the global population is compensated fairly for the use
of their equity. To use the community land partnership as an example, a
republic composed of those constituent organizations can make the "one
Earthling, one equal share of land" a reality.
If everyone is renting from everyone equally, then those who use the most
pay the most. They are compensating others for their overuse (use beyond
their entitlement or "fair share") of resources. This models equity and
sustainability properly in the socioeconomic system, although obviously
there must be at least some layers of governance holding it together.
To return to effort sharing, in a proper free market, credit is used as an
expression of need or desire. Those who need the most--those who use the
least rival goods, the poor--are paid the most. The system's feedback loops
ensure the worse off are the most empowered to improve their "lot." The
demand of those needs and desires is met by the supply created by
purpose-driven businesses, very likely consisting of those with the needs
(again, the poor). Here, we will see the continuing emergence of peer
production--I'm going to define this as "voluntary, purpose-driven
participation in production"--because people are no longer coerced (or
coercing others, or both) into their current socioeconomic "roles" in the
system. They solve the problems they want to, and they rank them both by
credit created for a purpose, and by their own time investment. Efforts in
such a system are usually shared (there still may be 1-person efforts and
disagreements on how to do something), and competition is emulsified in
cooperation because rival goods are held in a state of equity. I call this
socioeconomic model "utilicontributism," because use is balanced with
contribution: it's only fair!
Granted, if you earn a lot by working hard, or by having special skills that
are in high demand, you could use more resources than the average person.
"Work hard, play hard," right? However, playing hard doesn't necessarily
mean resource use, and I think a lot of us could argue that truly, resource
use doesn't have much to do with playing hard--and having fun--at all.
Thus, I don't think this "problem" is much of a problem. The issue is
balanced: they can only play as hard as they've earned.
To revisit the peerconomy one last time, I think aspects of it are the
present or future (the aspects that touch or cover peer production), but I
also think it takes the constituent parts of the free market, and shuffles
them a little while renaming them. There are egalitarian communities that
use effort sharing as explicitly valued in time and, I think to some extent,
a primitive form of weighing labor, even if it's unwritten. As a matter of
scale, this sort of mental auctioning and bookkeeping makes the most sense
with small groups. These groups have created a local free market! The
"money" is mental: it's value owed and value paid, as accounted for by the
members in their brains. The problem of trying to scale weighted labor
beyond a small group of people is that an accounting system is needed, which
Christian has created. Without even looking at the efficiency and
cheat-ability problems of the peerconomy proposal that I have brought up
before, my point is this: pull back the curtain, and the same free market
mechanics are there. I think most economists would agree, they have to be.
Money is a relationship, and the free market is an egalitarian / equitable /
democratic ideal.
The question is, how do we get to an ideal free market from here? The
answer to that is emerging, but the implementation is not inevitable. The
whole of human history shows that the collapse of a power structure does not
guarantee the creation of a better one in its stead. What's crystal clear
is that, if we as a society or species were aiming for the free market
ideal, we've surely failed. And I think if we weren't aiming for it, we
should be.
I hope this answers your inquiry. I have not engaged in continuing debate
with Christian both because of time, and because of what I feel is a
fundamental rift between our use and understanding of economics and economic
terms. As for my project, the open corporate / businesstrust model, which
can be made into asset-specific structures like propertytrusts, is hard for
me to explain well for others. I'm working on it.
All the best,
-- Stan
On Sat, Apr 19, 2008 at 12:33 AM, Michel Bauwens <michelsub2004 gmail.com>
wrote:
Stan,
do you agree with christian's assessment?
how does your project relate to both market exchange and effort sharing?
Michel
On 4/17/08, Christian Siefkes <christian siefkes.net> wrote:
Hi Michel, hi all,
Michel Bauwens wrote:
yes, that weighted labour idea is something that I find most
interesting. Have you any idea of a plan of implementation?
Well, actual implementation doesn't make much sense without any projects
using it. I have some ideas in that direction, but it's definitively a
topic
for further work... ;-)
Such patterns, I suppose, will emerge whenever people try to solve
the
problems I discuss (whether they know my book or not), because there
simply
aren't that many possible solutions. If my book will inspire some of
them,
so much the better (that was indeed one of my goals).
that is indeed the value of your work, indicating a possible pathway
do you have a typology of 'possible solutions' other than your own?
Well, I only have a typology of possible modes of productions, which
roughly
looks as follows:
1. based on personal dependencies (feudalism etc.)
2. based on market exchange (capitalism)
3. based on hierarchical planning (Soviet Union etc.)
4. based on effort sharing (Peerconomy)
Most so-called "solutions" (including, e.g., Stan Rhodes' ideas; and
Dmytri
Kleiner, of course) are just attempts to somehow "improve" mode 2, not
realizing that market exchange is already optimal for a very specific
problem (how to turn money into more money) and very inadequate as a
base
for need-driven production.
And then there's the "techno-utopian" branch (exemplified on this list
by
Stefan Merten), who conclude, that, since we already know how to produce
and
share freely copyable things, all we have to do to generalize this model
is
to ensure that everything can be copied freely! That's not a solution --
it's just an attempt to wish away the problem.
I think there is actually quite a bit of activity around open
hardware/physical production through open design communities
only 2-3 years ago, the field was in the doldrums, with negative
assessments of the previous wave of experiments (expressed by graham
seaman if I'm not mistaken); but as I discovered about 6 months ago,
and which prompted me to create the design pages, see
http://p2pfoundation.net/Category:Design, the field is again in a
strong moment of re-emergence, with tons of practical projects
emerging in all kinds of fields:
http://p2pfoundation.net/Product_Hacking
Well, open design is important, but it's only the first step. A peer
production process for turning open design into physical goods is still
missing. Compared to free software, it is as if you know how to design
software, but lack a programming language to implement it, and a
compiler to
turn it into byte code. I think that'll change, but it'll take a few
years
(at least).
Still, all those open design projects are very nice, and it would be
great
to have a better overview of them -- some detailed directory such as
FreshMeat, but for open/free design instead of software. As far as I can
see, there are some long lists of free design projects (your Product
Hacking
page in the P2P Wiki, and in the Wikipedia:
http://en.wikipedia.org/wiki/Open_design ,
http://en.wikipedia.org/wiki/Open_source_hardware ), and there are some
directories for specific areas, such as Graham's www.opencollector.org .
But
there doesn't seem to be a general-purpose directory collecting detail
information (which projects can add and edit themselves) over all kinds
of
free design projects. Or did I overlook something? Anyone knows better?
--
Graham, I assume you would know whether there exists some such
general-purpose "Free Design Directory"?
And if it doesn't yet exist, maybe it would be a good idea to set it up?
Best regards
Christian
--
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