update, on opencc list ( which I moderate - low traffic till recently )<div><br></div><div><a href="http://groups.google.com/group/opencc?pli=1">http://groups.google.com/group/opencc?pli=1</a></div><div><br></div><div><a href="http://groups.google.com/group/opencc?pli=1"></a>... Eric and Art ( whom are, to my knowledge, designers of the <a href="http://www.metacurrency.org/content/extensible-game-format-language-xgfl">http://www.metacurrency.org/content/extensible-game-format-language-xgfl</a> ) express interest in gift economics :)<br>
<br><div class="gmail_quote">---------- Forwarded message ----------<br>From: <b class="gmail_sendername">Eric Harris-Braun</b> <span dir="ltr"><<a href="mailto:zippy.314.ehb@gmail.com">zippy.314.ehb@gmail.com</a>></span><br>
Date: Wed, Oct 20, 2010 at 2:37 PM<br>Subject: Re: [opencc] Re: Beyond alternative currencies : from Transactional to Gift-based Markets<br>To: <a href="mailto:opencc@googlegroups.com">opencc@googlegroups.com</a><br><br><br>
Me too. I had posted a short reply (which just got approved) onto that thread to try and take the conversation past the language of gift vs. exchange.<div><br></div><div><font color="#888888">-e</font><div><div></div><div class="h5">
<br><br><div class="gmail_quote">On Tue, Oct 19, 2010 at 6:08 PM, ArtBrock <span dir="ltr"><<a href="mailto:artbrock@gmail.com" target="_blank">artbrock@gmail.com</a>></span> wrote:<br>
<blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">I love Michel's post about this. I've recently been working on a Prezi<br>
which I hope will illustrate these principles in very vivid and<br>
concrete terms.<br>
<br>
It's time for currency thought leaders to stop thinking that better<br>
money will solve our core problems. We need solutions that go to much<br>
deeper levels.<br>
<br>
I'll post a link to the Prezi when I've got a version worth viewing.<br>
<br>
-art<br>
<br>
On Oct 14, 3:34 am, Dante-Gabryell Monson <<a href="mailto:dante.mon...@gmail.com" target="_blank">dante.mon...@gmail.com</a>><br>
wrote:<br>
> very interesting !<br>
><br>
> *" Moving from Transactional to Gift-based Markets "*<br>
><br>
> <a href="http://blog.p2pfoundation.net/beyond-alternative-currencies-towards-a.." target="_blank">http://blog.p2pfoundation.net/beyond-alternative-currencies-towards-a..</a>.)<br>
><br>
> Beyond alternative currencies: towards asymmetric account systems for<br>
> gift-based markets<<a href="http://blog.p2pfoundation.net/beyond-alternative-currencies-towards-a.." target="_blank">http://blog.p2pfoundation.net/beyond-alternative-currencies-towards-a..</a>.><br>
> [image: photo of Michel Bauwens]<br>
><br>
> Michel Bauwens<br>
> 13th October 2010<br>
><br>
> I am finding myself increasingly surprised and dismayed at proponents of<br>
> alternative currency who propose and promote systems that fundamentally<br>
> offer very little change from our current system. In most cases these<br>
> “alternatives” are simply non-governmental versions of the same<br>
> transactional-scarcity model. The majority of innovation occurring currently<br>
> is in inherently abundant informational goods and there is an intrinsic<br>
> incompatibility between scarce transactional currency and abundant goods.<br>
> This creates a ripe opportunity for a new model of value accounting that is<br>
> itself abundance based.<br>
><br>
> Great series by Gregory Rader in a posterous<br>
> blog<<a href="http://onthespiral.com/pages/about-me-rxCDk" target="_blank">http://onthespiral.com/pages/about-me-rxCDk</a>> in<br>
> which he makes some great points and a fundamental critique of many<br>
> alternative currencies, especially those that belief a demurrage-based<br>
> design will solve all problems:<br>
><br>
> (though I feel it’s better to more carefully distinguish between<br>
> transactional markets, recicprocal gift economies, and non-reciprocal<br>
> commons contributions, the following introduces very insightful distinctions<br>
> regarding money and non-money mechanisms, for dealing respectively with<br>
> logics of scarcity vs. abundance)<br>
><br>
> *1. First Argument: We are Moving from Transactional to Gift-based Markets*<br>
><br>
> “Greg” on three reasons why the evolution towards gift-based, instead of<br>
> transactional, markets is<br>
> inevitable<<a href="http://onthespiral.com/why-the-gift-economy-will-grow-unnoticed" target="_blank">http://onthespiral.com/why-the-gift-economy-will-grow-unnoticed</a>><br>
> :<br>
><br>
> *“A shift in productive activity towards reciprocal or gift based markets is<br>
> inevitable:*<br>
> *<br>
><br>
> Expanded Freedom/Self-Direction:<br>
><br>
> “When discussing the “free market” we often overlook the restrictions built<br>
> into the transactional model. Yet, a transactional market is by its nature a<br>
> contractual market. Once a contractual relationship is entered into, both<br>
> parties are obligated to follow through. This restricts the freedom of all<br>
> parties and leads to inefficiency in the form of negotiation before the fact<br>
> and potential litigation after the fact. This potential for conflict also<br>
> creates the need for legal standards that restrict the scope of individual<br>
> freedom further.<br>
><br>
> Gift markets avoid litigiousness by eliminating contractual obligations<br>
> altogether. In a gift market, producers seeks potential reward rather than<br>
> contracted compensation. Market participants sacrifice guaranteed<br>
> compensation for the freedom to contribute however they wish and the ability<br>
> to reach a much wider audience. Psychological research and empirical<br>
> observation both evince the fact that once basic needs are met, the ability<br>
> to pursue intrinsic goals is more motivating than additional (monetary)<br>
> compensation. To the extent that this is true, productive effort will be<br>
> drawn away from transactional activity and towards platforms based on<br>
> reciprocal voluntary gifting.<br>
><br>
> Simplicity:<br>
><br>
> The previous point implies that participation in gift economies is simple.<br>
> Rules and laws are replaced with looser social conventions. Barriers to<br>
> entry are eliminated. Meritocracy is facilitated because value can be<br>
> provided without prior agreement on compensation, providing new entrants the<br>
> opportunity to demonstrate value without accessing gatekeepers. Friction is<br>
> reduced at the cost of increased uncertainty, however uncertainty is more<br>
> easily coped with as reduced friction allows for increased experimentation<br>
> and entrepreneurialism. This simplicity enables efficient redeployment of<br>
> effort from the transactional market to the gift market.<br>
><br>
> Lack of Competition from Incumbent Currencies:<br>
><br>
> The transactional markets are wedded to traditional state-issued currencies.<br>
> Efforts to innovate on the transactional model will be hamstrung by the need<br>
> to convert people away from traditional currencies. On the other hand, gift<br>
> markets are ripe for innovation because there are no incumbents. Social<br>
> capital has to date gone largely unmeasured and the demand for a compatible<br>
> accounting system is apparent. Innovation in this area will meet little<br>
> push-back from traditional incumbent players as most will fail to recognize<br>
> abundance based accounting systems as currency per se. This ability to<br>
> innovate without resistance will continue to increase the appeal of these<br>
> markets.<br>
> *<br>
><br>
> *These three characteristics will increasingly attract new participants into<br>
> informational gift economies and draw productive effort away from<br>
> transactional markets.”*<br>
><br>
> *2. Second Argument: Therefore, we need Asymmetric Accounting systems to<br>
> uncover non-reciprocal value creation*<br>
><br>
> Greg <<a href="http://onthespiral.com/my-story-about-the-future-of-money-asymmetri" target="_blank">http://onthespiral.com/my-story-about-the-future-of-money-asymmetri</a>>:<br>
><br>
> *“I want to introduce the term “asymmetric accounting” to describe systems<br>
> that record and track the provision of value rather than the volume of money<br>
> transacted. Asymmetric accounting mechanisms are congruous with the reality<br>
> that freely given advice or knowledge can be just as valuable as purchased<br>
> knowledge. Such systems would not require a market price in order to<br>
> recognize value creation and provision. In taking this broader view,<br>
> asymmetric accounting reconciles our economic notions with the reality that<br>
> value exists independent of whether its recipient is obligated or able to<br>
> provide equal compensation.”*<br>
><br>
> Citing<<a href="http://alanrosenblith.blogspot.com/2010/09/currency-design-possibilit.." target="_blank">http://alanrosenblith.blogspot.com/2010/09/currency-design-possibilit..</a>.><br>
> *Alan Rosenblith*:<br>
><br>
> *“What’s most important about this new mode of production is that it is NOT<br>
> about the quid-pro-quo, something-for-something social contract. The primary<br>
> motivation for participation is intrinsic rather than extrinsic. Therefore,<br>
> in the most fundamental way, this new currency will NOT be based on the<br>
> quid-pro-quo social contract. This is difficult for us to conceive of since<br>
> all modern money is based on the assumption that producers of value should<br>
> be incentivized with rewards as determined by the market. Even most<br>
> alternative money substitutes simply recapitulate this basic pattern. The<br>
> logic of the quid-pro-quo market goes something like this “I’ll provide my<br>
> service at $50/hour but not $30/hour, and if you can afford it, you are<br>
> worthy of my time.”*<br>
> **<br>
><br>
> *Instead, these new currencies will be about making it easy to find the<br>
> right place to put one’s own efforts based not on extrinsic reward, but on<br>
> intrinsic value. In other words, where will my efforts be the most<br>
> fulfilling to me and most in harmony with my community? This is about right<br>
> placement, and about being in economic communication with people all around<br>
> the globe.”*<br>
><br>
> Greg continues:<br>
><br>
> *“How would this accounting be accomplished? The challenge is to devise<br>
> non-invasive mechanisms of value recognition. “Non-invasive” implies that<br>
> these mechanisms should not create the expectation of reciprocation.<br>
> Consider for example – How do you react when someone approaches you with a<br>
> “free” offer at the entrance of a store or on a crowded commercial street?<br>
> If you are anything like me, you quickly avoid these overtures altogether.<br>
> You realize that the offer is not really free, that there is an implied<br>
> expectation. Even if the initial token is free, the goal is to create an<br>
> implicit obligation.*<br>
> *<br>
><br>
> When money is our only accounting system and transactions are the only<br>
> ubiquitous means of reciprocation, we are condemned to this state of<br>
> affairs. We avoid generosity in order to avoid the obligation to<br>
> reciprocate. Internet social platforms create new possibilities. Anyone can<br>
> hit a Like button, or subscribe to a blog, or amplify a message. These<br>
> actions record the recognition of value without requiring any exchange of<br>
> scarce currency. Over time, accumulated statistics begin to delineate who<br>
> has provided value in the past and who is likely to provide value in the<br>
> future. These first experiments with social media will develop eventually<br>
> into comprehensive tools that record the creation and provision of value in<br>
> many forms.<br>
><br>
> These tools will reframe our notions of for-profit and non-profit, enabling<br>
> more subtle distinctions that better describe new business models. The<br>
> coarse distinction between for-profit and non-profit is only necessary when<br>
> our notions of value preclude non-monetary value. “For-profit” becomes a<br>
> misnomer when many businesses dedicate funds to charitable ventures while<br>
> many others simply fail to generate monetary returns. Ultimately what we<br>
> mean by “for-profit” is: Seeking symmetric exchange. Seeking to be<br>
> compensated to a degree commensurate with the value of the products or<br>
> services delivered and the costs of their production. When the monetary<br>
> system assumes that all exchange is transactional and symmetric, then a new<br>
> category, “non-profit”, is required for ventures that don’t fit this<br>
> description. But, these distinctions are not as clear as legal distinctions<br>
> would lead us to believe. Some ventures truly seek symmetric compensation<br>
> while other ventures, to varying degrees, disproportionately benefit some<br>
> stakeholders over others: Google is a for-profit corporation funded by<br>
> investment and ongoing revenue, yet stills outputs far more value to users<br>
> than it will ever gain in revenue (monetary input) Government institutions<br>
> are non-profit yet, in many cases, deliver far less value in output than is<br>
> allocated to them as monetary input Volunteer organizations generally<br>
> consume very little monetary input and yet often create significant value as<br>
> output Current accounting methods treat $1 million of Google employee salary<br>
> as equal to $1 million of public employee salary, irrespective of the value<br>
> produced by these disparate endeavors. Furthermore, volunteer organizations,<br>
> to the extent that they avoid monetary transactions, are accounted for as if<br>
> they provides no economic value at all.<br>
> *<br>
><br>
> *Asymmetric mechanisms will remedy these anomalies, providing a more subtle<br>
> and granular interpretation of value. As they become more comprehensive, our<br>
> economic notions will become more consistent with reality and our markets,<br>
> broadly conceived, will better encourage value creation in all its disparate<br>
> forms.”*<br>
><br>
> *3. Third Argument: Demurrage-based currencies cannot solve this shift<br>
> towards abundance logic*<br>
><br>
> *Greg:*<br>
><br>
> Key thesis<<a href="http://onthespiral.com/the-role-of-interest-in-future-monetary-syste" target="_blank">http://onthespiral.com/the-role-of-interest-in-future-monetary-syste</a>><br>
> by<br>
> “Greg”: Interest exists because of the underlying conditions of scarcity,<br>
> not just from monetary design:<br>
><br>
> *1.*<br>
><br>
> *“Interest is the price paid for the use of borrowed money. Money itself<br>
> does not pay interest…this is money functioning as stored of value, value<br>
> lent by one party and borrowed by another that can be exchanged for<br>
> productive assets. The need for borrowing implies scarcity. Therefore we can<br>
> infer that interest is truly the price paid for accelerated access to scarce<br>
> resources. Like all prices, an interest rate is a market signal that enables<br>
> efficient allocation of these scarce resources – in this case resources<br>
> being allocated through time, between consumption and investment. This<br>
> analysis implies two preconditions for the existence of interest:*<br>
> *<br>
><br>
> * Scarce resources<br>
><br>
> * Varying temporal preferences for consumption<br>
><br>
> Critically, these preconditions refer not only to the monetary system but to<br>
> the constituents of the economy itself – its productive capabilities and the<br>
> psychology of its participants. A monetary regime intended to eliminate<br>
> interest would have to resolve at least one of these conditions in the<br>
> economy itself.”<br>
><br>
> 2.<br>
><br>
> “This (demurrage) proposal only addresses the currency system without<br>
> resolving the economic conditions that lead to interest. It seeks to<br>
> “design” currency without reference to the characteristics of the underlying<br>
> market it must serve as a proxy for. Whereas the gift economy creates<br>
> compatibility with new types of abundant value creation, demurrage currency<br>
> emulates a world of scarce resources – becoming more scarce (depreciating)<br>
> over time.<br>
><br>
> Given that our current monetary system exhibits behavior quite similar to<br>
> proposed dumurrage currencies, we can speculate as to whether such a system<br>
> would in fact provide a “disincentive against hoarding money.” What we<br>
> observe currently is that people do avoid hoarding cash…but instead of<br>
> circulating that money they transfer (hoard) their savings into investments<br>
> – assets that serve a productive function and appreciate over time. The net<br>
> result is that inflation (demurrage) does nothing to discourage the<br>
> accumulation of wealth, which is presumably the true goal of demurrage<br>
> proponents.<br>
><br>
> What does this mean for interest in future monetary systems? Interest will<br>
> persist so long as scarce resources persist and market participants endeavor<br>
> to shift their consumption of those resources through time. Interest will<br>
> diminish in importance to the degree that productive abundance facilitates a<br>
> shift away from transactional currency altogether.”<br>
><br>
> 3.<br>
><br>
> “The examples used by Rushkoff and others like him all come from societies<br>
> where financial investments are not available. These are societies where<br>
> there are only two choices – consumption or saving. In modern society we<br>
> have a third option – investment…and investment provides a financial return<br>
> because it uses scarce resources in the present to produce more scarce<br>
> resources in the future.<br>
> *<br>
><br>
> *Once securitized investment enters the equation the demurrage logic breaks<br>
> down. A market participant who previously had to choose between consumption<br>
> or depreciating savings, now chooses between consumption, depreciating<br>
> savings or appreciating investments. This choice simply shifts hoarding in<br>
> currency to hoarding in investment products. This is exactly what we<br>
> experience today, inflation (depreciating currency) does not lead to<br>
> accelerating consumption; instead it leads to investment in inflation<br>
> protected assets.”*<br>
<br>
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