Peer to Peer Democracy

Money and currencies are the tools we use to allocate resources in modern economies. It can be said that money is humanity's most powerful and widely held myth. It shows clearly how important our myths are in shaping the world and outcomes. The importance of the distinction myth or story as applied here is not to reduce their importance, but instead to point to their artificial origins. They are artifacts of humankind and powerful as such, as are all of the stories we find powerful and pass on. As such, myths  are also necessarily incomplete; imperfect and unfinished at best pointing to a perfection beyond the horizon.

The core operating systems of our economies need a clean sheet redesign for greater engagement and productivity.  We have the opportunity to design for abundance rather than scarcity.  Conventional capitalist wisdom maintains that a certain amount of "structural" unemployment must be tolerated for the market to do its work. Economic theory no longer distinguishes price from value, creating the absurd logic that creating scarcity out of abundance, such that something once abundant and free to access now brings a high price actually increases the GDP. This would destroy value in the commons; create a new commodity and collect rent on what costs almost nothing to produce or preserve.  We can design a better, more efficient and humane system.  

There are many good things about money, and no need to throw out the good parts.  Money functions to separate production and consumption in time and space.  Close attention needs to be paid to balancing production and consumption, and to the functions of the financial systems in relation to achieving that balance.  Scarce money systems inevitably lead to concentrations of monetary wealth in a small capitalist class,  who can exert control on investments and politics; that process actually disconnects individual producers and consumers from control the most fundamental aspects of their lives.  Naturally abundant currencies can recover that control, and unleash the productivity of many who are now excluded from production through long-term unemployment.

A system based on scarcity places value on what is scarce.  Many of our contemporaries are market fundamentalists, believing that markets have magical powers that automatically solve all of our social problems; however,  if that were true we would already be living in a market utopia which is clearly not the case.  Notice that balancing production and consumption depends directly on how value is measured.  Markets can only value what can be marketed, but the spectrum of value includes both what is most personal and what is common.  Water and air are so common and abundant that they are taken for granted, but they are also among our most precious resources.  Markets and corporate financial systems fail to care for these resources because they are not on their balance sheet, and they pay no price for diminishing the common wealth.  Nor are market driven institutions much interested in the value of community and solidarity.  Even when the value of social capital is acknowledged, it is just another common resource to be exploited and externalized.

A different system of currencies can be designed to acknowledge the full spectrum of values.  When value is created in the market system, some form of scarce currency must be available and allocated to that purpose; however, when there are no currencies available, opportunities to create value are lost.  Yes, a lot of social value is exchanged in an informal system, but that is among those who have their basic needs met; they have a safe place to live, good food and healthcare.  

In the system we intend to design, resources will flow to meet needs, not just because someone has hoarded enough of an artificially scarce token of value to exert control. Met needs are resources consumed, and they need to be balanced by productivity. We now have an expanded spectrum of value where much of the need is met by simple acts of care and attention. Care and attention are rarely simple, and certainly not unimportant. When the financial system, our money, also represents the production value in these simple acts of humanity, it is easy to see how the new system can balance itself and become very stable and productive over time. People will naturally and generously contribute what they can to create value to balance the system that meets their needs without taking hostages.  

By putting the pressure of scarcity on participants, markets are able to calculate the relative value of scarce resources. When they do so, they distort the value of everything outside a narrow spectrum. When markets are in the proper place of balancing flows based on sustainable production methods and sharing the work and the benefits equitably; when each market is a commons of value creation for all the participants, only then can they do their magic of creation of collective efficiencies through productive competition and collaboration.

Scarcity Empowers Middlemen, Not Producers

Before digging into production and consumption, it is important to identify currencies and financial systems generally as mediating systems.  They sit between production and consumption, but do not actually produce anything.  To the extent that profits are extracted in the process of mediation, they represent a friction or a tax in the system.  With the scarce money economy, if you don't have any money, you either borrow or you don't consume.  For most people, who are perpetually in debt, borrowing is either expensive or unavailable.  Because money is scarce, the offers for employment are scarce as well.  If you can only produce and consume in the dollar economy, both will be limited, and the whole economy is smaller for it.

It serves the middlemen, or the banksters to use a common neologism, to have scarce money in order to profit from debt transactions.  Recently,  the criminal nature of the financial industries has become clearer as they are empowered to get money at the discount window and mark it up many-fold as they contract the availability of credit to businesses and individuals.  The current rates are essentially zero, and it begs the question of why these institutions are given such a lucrative oligopoly.  Given their behavior in the periodic crises they inevitably create, there is little justification for this special status.

If markets functioned adequately in this sector, there would be low barriers to entry and power would not concentrate in several "too big to fail" private businesses.  They would be judged by low cost and high responsibility to safeguard the system, but instead they are judged only by profitability which necessarily runs counter to both of these factors.  If they can use scarcity to back other players against the wall, they can grow by acquiring a larger monopoly position.  Take a big risk and either it pays off, or you write off the losses that others are forced to bear.

Profits for the financial sector represent losses for the productive sectors.  Further, the actions of private financial institutions do not benefit society by appropriately regulating the economy; they regulate in order to profit, which create perverse incentives that can kill off general productivity.  We could live with the costs if it produced something close to full employment, but when that sector profits while the rest of the economy is tanking, there is clearly something fundamental wrong with the system.

Producers and Value Creation

Much of the value created in production is created by labor, skillful and often largely abstract labor.  Even a casual glance at income statistics shows that few earn much more that minimum wage levels.  Who can really say what the value of individual acts are, particularly when the health and wealth of the entire community are considered, but somehow we are to be satisfied that the oracle of the market sets these levels fairly.  This even when the logic of the market dictates a certain level of structural unemployment, and actual levels are often much higher.  Competition for wages and depressed labor market are deemed to be good for the financial markets and by some perverse logic therefore good for the whole society.  The great works of modern society are rarely the work of a single individual.  Given the way we structure collective endeavors largely as corporate entities organized under scarce money, the incentives are to back people into the position of accepting almost any offer of work for money and cut them off if through tragedy or simply age they are no longer productive enough under the same standard of scarcity.

I say that currencies of abundance can and should be issued for the sake of broadly determined need, and this would free producers in the form of labor to contribute much more broadly towards common goals.  Can we not safely assume that given the right social motivations everyone will earn their keep and then some if they are given the opportunity?  That if we allow each person to be able to consume the basics to live on whether or not they have positive cash balance then there will always be sufficient collective abundance to take that risk and even absorb the losses that sometimes occur.  Instead of wasting away into a society of free-loader and slackers, people will naturally compete to offer the most value and in the process this will transform how we think about and determine value.

We need abundant currencies that relate to the excess value produced when people collectively strive for excellence.  Scarce currencies are rival by design, but excellence is not rival at all.  Simply notice how general literacy functions to raise the productivity of whole societies and create a mass market for knowledge.  There is something wrong when a society produces an abundance of PhDs and we find many of them working minimum wage jobs because they are placed in competition for scarce wages.  Wouldn't it be better to provide a basic stipend for living and see what under-employed PhDs might produce of freed from the need to work for wages?  Same thing applies to a creative mechanic who might otherwise have few options when the economy turns down, or maybe they are injured.  They might invent something we can all use tinkering in their garage.

Consumers and Value Realization

At the point of consumption where the good or service is actually experienced, we also experience quality and value.  Money allows us to take a measure of many kinds of input, some tangible, some not, but scarce money creates more perverse incentives here.  If some quality is valued, but not essential to the use value of the product, the consumer will often choose a lower quality simply because they don't have enough scarce currency. Because money is simply not available, many services are rendered with no payment expected; what we do in caring for our families, for the young, for the old.  An abundant currency would allow for someone without any family at all to earn a living providing simple care for others.  We wouldn't worry about issuing such a currency abundantly in payment because we don't have to worry about running out of money.  If I pay a living wage in abundant currency when I need healing or teaching to become productive, I don't have to worry that I will not have enough for me and my family because as a community we have the abundance to handle it.  I don't have to worry about being un-employed and not being able to be paid enough to produce what I need, just about what need is there that I can meet from my abundance and do my part.

I don't need worry about having work because producing is only dependent on the existence of a need, and not on having enough scarce currency as well.  There still has to be a natural limitation on consumption so that the individual cannot reason, "I can consume all I want, and the bill doesn't come due."  Not that we need or want to shame anyone who through sickness, disability or tragedy and consumes more than they can produce in the final accounting, just that all of us seek to produce what we are able for the commonwealth.  Yes, it would be shameful to become a freeloader, to consume without feeling any obligation to produce in kind, and such social pressures would be effective controls on potential exploitation of the generosity of the system.  If there is an obvious need that I can serve, then nothing holds me back.  If there is no pressing need, then I can still produce out of the joy of it, do something creative without obvious consumptive purpose.  Jobs and work are not necessary to survive, but instead for creating social values and status.  The system we have puts people between the rule of law and the common values represented by the law and survival to the point that the rule itself is called into question.  Then observe that the law is only enforced most harshly on those at the bottom of the economic scale and not at all on millionaires and it is a wonder the morality of the rule of law can even be maintained.

Collective Goods

As noted above, production is mostly collective, but consumption isn't always individual either.  Constitutional governments are created primarily to create and maintain shared systems and assets.  Security and justice are usually at the top of that list, and over time liberal democracies have added health care and general welfare as areas of collective concern.  Endless ideological debates are sparked about the role of governments, and how to pay for it, but we can cut through all of that if we can shift to different questions.  If we pool our resources we can pursue any common goal we can articulate collectively.  When I say we need a currency system that supports our goals, I am talking about a new financial system.  By design it will make collective surpluses available to engage in collective asset building.  Financial systems are about control, and ultimately who controls where we invest current surpluses in future production.  Concentration of wealth is systemically bad, it narrows the control mechanisms into a few hands, so what matters is diversity in the control structures that decide when and where to consume and produce.

First with large open source software projects and now with crowd sourced knowledge portals exemplified by Wikipedia and others have demonstrated how goods constituted as knowledge commons can be collectively produced.  What is missing is a financial system that is compatible with this sort of production.  Even without any formalization, a vast gift space emerges around clouds of projects as they collaboratively produce and consume each other’s knowledge objects as a matter of course in pursuing local project goals.  If we had a gift-oriented financial system we would not only be able to know more about the contributed works of each participant, but we would know how that work is valued within the networks of production.  Then when someone wants to rally others to a large shared project, we can know collectively how and why they are credible in leading some new activity.

Profitable companies who rely on open source projects in the core of their businesses can contribute resources in ways compatible with their business.  They can sell into a community's currencies (i.e. accept a community currency for all or part payment for goods and services) and accumulate these currencies as investments, directing this investment to the projects of their choosing.  They can spend into these currencies by buying production, or making a gift towards commons building.  When they buy or give in cash, this provides the community currency network with cash liquidity so that community currencies can be redeemed for cash as needed.  Ultimately more of the flow of value in a whole network of communities is mediated by completely independent system of value and systems to account for value contributed and consumed, and there is less need for cash.  The obvious capital values represented by the shared works and accumulated value stored as community currencies will easily back efficient transactions in cash as well as the new currencies.  In fact, one or more entities we would want to collectively produce would be banks in every legal sense and participate thereby in their consumer and wholesale cash based networks.  Such a bank would be constituted as a public good designed to make everyone more productive, and not just to extract rents.

Working Forward to Democracy

Too often has the production of democracy been left those whose interest is other than public-spirited.  Too many times it is on-sale for the highest bidder, and all of this conspires toward further public apathy and more public corruption.  The call to peer-to-peer (P2P) democracy is a call to re-create democracy as a public good that is built and maintained by the people.  Returning to the idea of currencies as a way to separate production and consumption, we see the opportunity for new currency design to play a role in the process.  It starts by people being willing to work for nothing as a volunteer, but we offer them that we will keep track of all of their good work, and more importantly give them continued access to the networks of action that emerge in the process.  This is the working forward part, just to build the common assets for democracy on the ground.  Value is created and currencies are issued, and wealth is accumulated and held in common.

Candidates can be considered consumers, but better is if part of what the network produces in candidates.  Rather than waiting for candidates to promote themselves for an office, we want to encourage all citizens to be willing to serve, and we will encourage everyone in our networks of action to run if asked.  Part of the conversation of democracy is to talk about who the group likes for leadership and getting them started at an appropriate level.  Candidates chosen this way won't be able to rely on traditional campaign financing, but the network can do its work and even get paid in community currency.  You see, the network can extend candidates appropriate amounts of credit to have an instant ground game.  Once elected and established, the candidate's own name will draw contributions to redeem the debt issued in a winning cause, and for the losing cause it is just a carried debt that doesn't weigh against repeating the process until we win.  Success is closing the loop and backfunding any cause invested, even if that is general donations or other earnings to pay down past write-offs.

Since it is better for democracy when representatives don't need to raise money to get elected and re-elected, one of the network goals would be public financing of elections.  If P2P Democracy can be self-funding without any donor entanglements, all the better.  The financial system envisioned would support this.  As discussed above you need to balance production and consumption, P2P field work is performed and pay-forward currency is issued.  This is production by individuals for a common purpose.  Traditional producers sell and give into that network accepting and investing or re-spending the pay-forward moneys and provide liquidity for the new currencies.  Some contribute cash directly to common projects and provide additional liquidity.  Producers who do this will naturally attract consumers because of the solidarity in co-creation, as well as the simple fact that they can spend the currencies initially created in faith that paying it forward works.

The Citizen Contact App

With apologies to Lessig, code is law and law is code.  I'm not sure he endorses the flipped part of that, but it works for me.  The app we envision could be an invasion of privacy if carried out with the ethic of the typical social media provider, and therefore all the code and systems need to be designed for security from the start.  We want the power of the connected network, while keeping the intimacy of the first one or two degrees of separation.  The data will be a sharing commons of knowledge, but it will respect the privacy of the producer networks who will want share information that is private within a network of friends and collaborators.  Sometimes it may be a lot of gossip, but even that can be useful in bonding a community of action.  Leaders and stewards of the commons will help turn interest into compassion, and rivalry into support.

It will help to consider this from the perspective of user stories.  Imagine our twenty-first century version of a precinct worker.  He does not work for a machine and get a patronage job in return, she is a neighbor who wants to contribute to building a stronger democracy, and maybe eventually makes some money or get a job with the skills and contacts created along the way.  She probably has a smart phone, but even if not a paper and pad for notes and a computer at home are enough.  With paper, I print out the voter/residence lists, or with my app on the smart-phone I just walk and as I pass each house I see the information I need to know if it is time for a contact, and when I go up to the door I'm shown more detail while I ring the bell and wait.  I have a nice conversation with my neighbor while taking notes and checking boxes for follow up.  Maybe they need help getting to the poll, or with an absentee ballot, maybe they will help getting out the vote later, or come to a community meeting.  After a day or afternoon of working, I can see a summary of what I produced, how many new/updated voter entries, how many more active commitments, what percentage of by area is covered, how are my neighboring captains doing, and so on.

If I am gathering this kind of data for a candidate or party, I am going to be particularly interested in how they vote, and here we are discussing a system the first values participation.  This is not to say that we are not interested in that information, this is a question of what we place value on.  The generic voter conversation is about engagement in democracy, not about who you will vote for.  On the other hand, donors and workers will often want to express their support for particular candidates and issues.  Rather than propose a solution, I am pointing to questions the network of workers and the stewards of the commons will have to answer so that they can be implemented in code.  Maybe only the local participants can see certain data, or they can have it presented as aggregated data for further aggregation.  This can serve to demonstrate on-the-ground value to the local networks where it can be mobilized for positive participation investment where a candidate’s message is most effective, but not so much for negative and anonymous campaign tactics.

More important than aggregating poling data is aggregating actions and people.  When we ask instead about what concerns people we can create opportunities for the people themselves to aggregate in neighborhood rallies about issues of local concern.  At those rallies we can do the work of P2P Democracy at a larger scale.  We would have the opportunity to make presentations and gather for workshops that can spread the skills and experience from the current core group and recruit others into action.  Coming from shared concerns and building shared language and practice will grow the network.

This leads to another natural application connected to the contact app, a shared community calendar that marks the rallies and maps the issues and people engaged in them.  When someone comes to the website and sees events in another community, they can also see offers to bring a rally or a workshop to them and help them bootstrap a new node in the network that is tailored to their own community and concerns.

 

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