I'm way overdue for an update here. I have about 20 partially written posts that I've just never finished. I guess I just need to put them up however they stand.
So Eric and I decided to translate all our abstract MetaCurrency theory into practical, engaging action and start Emerging Leader Labs.
We're creating a template for social impact incubators to flourish outside of the monetary economy.
One of our participants captured the spirit of the project pretty darn well in this new video he just made. Go Ben!
Thursday, August 23, 2012
Monday, August 29, 2011
Future trajectory for our species?
I just contributed to the Human Project on Kickstarter, but I'd also like to open an inquiry here about the direction of our species that doesn't sound like it's included in their plans.
It has to do with the rapid evolution we are undergoing which is creating a capacity shift for humanity that changes all the rules we currently take for granted in our industrial age economy and completes our shift into completely different information age dynamics.
We have an anthropocentric notion of intelligence. Consider, for a moment, the cells in our body. They communicate, collaborate, share scarce resources, work together to build, maintain and manage extremely complex systems, and each one carries a copy of the agreements (DNA) that they use to cooperate. Cells do all those things better than we do, yet we don't recognize that as intelligence.
But what would happen if humanity had a breakthrough in our capacities to do these kinds things together because of the advent of new kinds of "Social DNA?" Social DNA which enables rapid self-organization, organizational adaptation, resource allocation, communication, decision-making and new patterns of collective governance...
What if these breakthroughs freed us from the inefficiencies of bureaucracy, the inequities of centralized financial instruments and computing architectures, and the ineffectiveness of representational hierarchies?
What would the "Human Project" look like then?
This is actually happening. And it's a game changer. We're building it now.
What kind of futures do you see possible with this and other new capacities?
It has to do with the rapid evolution we are undergoing which is creating a capacity shift for humanity that changes all the rules we currently take for granted in our industrial age economy and completes our shift into completely different information age dynamics.
We have an anthropocentric notion of intelligence. Consider, for a moment, the cells in our body. They communicate, collaborate, share scarce resources, work together to build, maintain and manage extremely complex systems, and each one carries a copy of the agreements (DNA) that they use to cooperate. Cells do all those things better than we do, yet we don't recognize that as intelligence.
But what would happen if humanity had a breakthrough in our capacities to do these kinds things together because of the advent of new kinds of "Social DNA?" Social DNA which enables rapid self-organization, organizational adaptation, resource allocation, communication, decision-making and new patterns of collective governance...
What if these breakthroughs freed us from the inefficiencies of bureaucracy, the inequities of centralized financial instruments and computing architectures, and the ineffectiveness of representational hierarchies?
What would the "Human Project" look like then?
This is actually happening. And it's a game changer. We're building it now.
What kind of futures do you see possible with this and other new capacities?
Thursday, July 21, 2011
The Deepest Importance of Currencies
The reason I blog is because there are not many people writing about the topic I'd most like to engage people in. Specifically, it is about currencies as social DNA.
You see, corporations, institutions, governments, and nations are in fact living organisms. This is not a lofty metaphor, but literal truth.
They have a survival instinct to self-perpetuate, they breed new corporations and institutions, and even as the cells within them are replaced, their fundamental pattern continues. And we are their cells.
We fail to see this because of our deep assumptions about organisms as limited to bodies with single physical boundaries. Even though we donate blood, graft and clone apple trees, and have discovered huge aspen groves are a single organism, our assumption about what an organism looks like hasn't changed much. This has us fail to see the new organisms we build and are part of, making it impossible to be responsible for them whether a corporation or an ecosystem.
Instead, we act like changing the mind of their cells (people) will solve the world's problems, but the significant problems stem from the systemic pattern of these social institutions which persist at a layer of social encoding quite distinct from the beliefs and behavior of individuals.
Think about it... It is corporations that are wage-enslaving people in sweat shops, pillaging natural resources, spilling oil into oceans, marketing false needs, etc. If one of these corporations happens to get an enlightened CEO who wants to do things nicer, but won't plunder profit fast enough, then the board and shareholders will replace him with one who will.
Until we learn to rewrite the DNA of these social organisms, we truly can’t solve any of the big problems. And currencies are the key to doing this. They are the formal encoding of currents at the social level. And it is currents/flows that make a living system alive. This is true whether it is a biological organism or social organism.
Learning the power of currencies enables us to re-encode social DNA, rewire social nervous systems, enhance the perceptual systems and upgrade the collective intelligence of our social organisms. Failing to do these things is a fundamental failure to deal with problems at the level at which they actually exist.
The failure of change agents to re-encode social systems (especially ones with as much influence on everything as money has), is what keeps us on this intolerable trajectory of destruction. So far, the biological equivalent to our most "successful" social organism pattern is cancer. Corporations are structured as a cancer. They use all their resources to grow their own resources even at the expense of their host community or ecosystem.
If we don't want to be cancers on the face of the planet, we have to get much better at encoding social organisms. We need to spawn a huge diversity of new kinds of social organisms with new DNA and learn how to truly co-create collectively. In this domain, our own cells have proven to be much more intelligent than we are. They communicate, adapt to unforeseeable conditions, coordinate collective action, carry blueprints for the whole pattern, and share scarce resources so much better than we do that it frankly makes homo-sapiens look like brain-dead idiots.
However, this kind of intelligence isn't a function of IQ, but rather of having or inventing an appropriate language / expressive capacity / channel for this kind of coordination to occur. Guess what I say that language is? What is the medium that we use for formalizing these very of collective capacities?
Currencies of course.
Sunday, April 3, 2011
The Central Covenants of Successful Economies
Our commercial economy is headed for destruction. There are many contributing factors, but in the end it all boils down to the fact that we’ve broken the core covenants, contracts or agreements of successful economies. These rules exist for a reason and you can no more avoid them than you can the principles of mathematics or the laws of physics.
The commercial economy is completely dependent upon the two layers of underlying economies that it is built on. First, there is the social economy inside of which we raise our children, have real relationships and take care of each other. For example, we don’t pay parents to make babies, teach language, potty-train, or devote a couple decades of care and support. Parents “manufacture” the entire labor force for the market economy. They provide talented employees in a much more real way than head-hunting firms, yet earn no commissions for their years of work.
Second, the free-of-charge social economy also relies on its underlying gift economy of nature to provide drinkable water, fresh air, hillsides of timber for building homes, fields of fertile soil for growing food, herds of animals, and ample sunshine without which we could not exist. Nature manufactures our entire food supply and ecosystem – every carbon-sugar our cells require for sustenance – without receiving a penny or so much as a single share of equity in a corporation.
In case you doubt that these are in fact economies, just recall for a moment what an economy is defined as: a system of production, distribution and consumption. There is no question that nature is producing, distributing and consuming energy, organic compounds, biomass, plants, animals, rain and sunshine. Nor that families, friends and society are producing, distributing and consuming language, stories, knowledge, skills and culture.
Now that we recognize these are economies, let’s also note just how successful they are. Despite the setbacks of ice ages, meteor strikes and natural disasters, earth’s “savings account” of biological resources has grown in mass, diversity and genetic abilities for billions of years. Also, in spite of predators, wars, plagues and unsanitary conditions, human societies have grown in population, skills, and knowledge for at least hundreds of thousands of years. The Dow Jones could only dream of such success.
There is a very specific wealth-building pattern at the heart of both of these economic systems that is key to their success. Think of it as the ground wire that allows the electricity to flow through the circuits of the living systems which comprise our planet and society. Value fundamentally belongs to the whole system, not to the parts. Wealth is built and held in the commons.
These may just sound like nice ideas, but I assure you, they are neither idealistic nor merely theoretical. Organisms and species ignore them at their own peril. Those that break these covenants deplete their environment and progressively erode their chances of survival, eventually causing their own extinction (or near extinction). However, every species and individual that follows those rules enriches their environment and increases their chances of survival.
Let’s take a look at these principles in action in an economy you’re actually very familiar with – your body. Remember, an economy is a system of production, distribution and consumption. Your body takes the nutrients and sugars in food, distributes them to cells, produces other cells, enzymes, hormones, minerals, amino acids, bones and tissue which in turn keep the whole process going. All resources consumed by your body are returned to the larger ecosystem. And while your body is running, all resources that your organs or cells use are theirs only temporarily and must be shared with the rest of the body.
Do you know what cells that stop sharing their resources with the rest of the body are called?
Cancer.
That’s right. When cells stop sharing their resources and devote those resources instead to their own growth, they are considered cancerous. And unless that pattern of cancerous growth is interrupted, they grow consuming more and more resources until they kill their host.
This is what it looks like to break the rules of the commons.
When you think about that kind of cancerous behavior, do you see any connections to how companies are organized to behave? What do you imagine are the consequences of allowing this pattern of behavior continue?
How long until cancerous corporations, people and countries who keep breaking the rules of healthy economies strip the planet of resources and poison our ecosystems to levels that can no longer sustain human life?
When do we activate our social immune system to reject unhealthy patterns and anybody operating in those ways?
These commonwealth economies contain deep wisdom. We have knowledge of the truth of them in every fiber of our being and literally in every cell of our body. Yet in today’s culture and economy we ignore this truth. We diminish it with marginalizing phrases like “Protestant Work Ethic” and deny the desire to provide as much value as we can.
But hard work feels good. It feels good to build something, to make something great happen, or to participate in the flow of energy of physical labor. Accomplishment is satisfying. Yet in the face of this emotional and physical response, we elevate an ideal of being wealthy and just being able to “make your money work for you” which actually means having everyone else do the real work for your financial gaim.
Maybe it is not religious acculturation but rather a biological urge – not a Protestant Work Ethic, but a Biological Worth Ethic. The bees, trees, ants and plants just keep working. They keep doing their part to keep the larger system going. I think they know that their biological "worth" depends on it. If they don’t keep the ecosystem going, there won’t be an ecosystem to feed them. Every creature, every cell, every living system is working to keep these agreements and build greater shared value, except us. We’ve built an entire economy on extracting value for our personal gain.
In our society, the wealthiest people are the ones who "just have money work for them." Typically it isn’t even their money; it’s ours – our savings, investments and retirement funds. They gamble with other people’s money instead of creating actual new value and then we bail them out with more of our tax money when they lose their bets. Sadly "too big to fail" really means "too greedy to follow the rules."
Ironically, we think we’re the most intelligent life-form on the planet.
The commercial economy is completely dependent upon the two layers of underlying economies that it is built on. First, there is the social economy inside of which we raise our children, have real relationships and take care of each other. For example, we don’t pay parents to make babies, teach language, potty-train, or devote a couple decades of care and support. Parents “manufacture” the entire labor force for the market economy. They provide talented employees in a much more real way than head-hunting firms, yet earn no commissions for their years of work.
Second, the free-of-charge social economy also relies on its underlying gift economy of nature to provide drinkable water, fresh air, hillsides of timber for building homes, fields of fertile soil for growing food, herds of animals, and ample sunshine without which we could not exist. Nature manufactures our entire food supply and ecosystem – every carbon-sugar our cells require for sustenance – without receiving a penny or so much as a single share of equity in a corporation.
In case you doubt that these are in fact economies, just recall for a moment what an economy is defined as: a system of production, distribution and consumption. There is no question that nature is producing, distributing and consuming energy, organic compounds, biomass, plants, animals, rain and sunshine. Nor that families, friends and society are producing, distributing and consuming language, stories, knowledge, skills and culture.
Now that we recognize these are economies, let’s also note just how successful they are. Despite the setbacks of ice ages, meteor strikes and natural disasters, earth’s “savings account” of biological resources has grown in mass, diversity and genetic abilities for billions of years. Also, in spite of predators, wars, plagues and unsanitary conditions, human societies have grown in population, skills, and knowledge for at least hundreds of thousands of years. The Dow Jones could only dream of such success.
There is a very specific wealth-building pattern at the heart of both of these economic systems that is key to their success. Think of it as the ground wire that allows the electricity to flow through the circuits of the living systems which comprise our planet and society. Value fundamentally belongs to the whole system, not to the parts. Wealth is built and held in the commons.
Rules of the Commons
- Any limited resource you take is yours only temporarily and must be returned in full when you’re done with it.
- Use what you take to grow the value producing capacity of the commons.
These may just sound like nice ideas, but I assure you, they are neither idealistic nor merely theoretical. Organisms and species ignore them at their own peril. Those that break these covenants deplete their environment and progressively erode their chances of survival, eventually causing their own extinction (or near extinction). However, every species and individual that follows those rules enriches their environment and increases their chances of survival.
Let’s take a look at these principles in action in an economy you’re actually very familiar with – your body. Remember, an economy is a system of production, distribution and consumption. Your body takes the nutrients and sugars in food, distributes them to cells, produces other cells, enzymes, hormones, minerals, amino acids, bones and tissue which in turn keep the whole process going. All resources consumed by your body are returned to the larger ecosystem. And while your body is running, all resources that your organs or cells use are theirs only temporarily and must be shared with the rest of the body.
Do you know what cells that stop sharing their resources with the rest of the body are called?
Cancer.
That’s right. When cells stop sharing their resources and devote those resources instead to their own growth, they are considered cancerous. And unless that pattern of cancerous growth is interrupted, they grow consuming more and more resources until they kill their host.
This is what it looks like to break the rules of the commons.
When you think about that kind of cancerous behavior, do you see any connections to how companies are organized to behave? What do you imagine are the consequences of allowing this pattern of behavior continue?
How long until cancerous corporations, people and countries who keep breaking the rules of healthy economies strip the planet of resources and poison our ecosystems to levels that can no longer sustain human life?
When do we activate our social immune system to reject unhealthy patterns and anybody operating in those ways?
The Deep Wisdom of Worth
These commonwealth economies contain deep wisdom. We have knowledge of the truth of them in every fiber of our being and literally in every cell of our body. Yet in today’s culture and economy we ignore this truth. We diminish it with marginalizing phrases like “Protestant Work Ethic” and deny the desire to provide as much value as we can.
But hard work feels good. It feels good to build something, to make something great happen, or to participate in the flow of energy of physical labor. Accomplishment is satisfying. Yet in the face of this emotional and physical response, we elevate an ideal of being wealthy and just being able to “make your money work for you” which actually means having everyone else do the real work for your financial gaim.
Maybe it is not religious acculturation but rather a biological urge – not a Protestant Work Ethic, but a Biological Worth Ethic. The bees, trees, ants and plants just keep working. They keep doing their part to keep the larger system going. I think they know that their biological "worth" depends on it. If they don’t keep the ecosystem going, there won’t be an ecosystem to feed them. Every creature, every cell, every living system is working to keep these agreements and build greater shared value, except us. We’ve built an entire economy on extracting value for our personal gain.
In our society, the wealthiest people are the ones who "just have money work for them." Typically it isn’t even their money; it’s ours – our savings, investments and retirement funds. They gamble with other people’s money instead of creating actual new value and then we bail them out with more of our tax money when they lose their bets. Sadly "too big to fail" really means "too greedy to follow the rules."
Ironically, we think we’re the most intelligent life-form on the planet.
Monday, February 21, 2011
Gift Transactions vs. Commercial Transactions
A lot of people seem to struggle with the concept of gift economies. Over the recent few hundred years, we have gotten so acculturated to market economies that we tend to project tit-for-tat exchange onto every interaction and into every motivation. However, I believe this is erroneous. My goal in this blog entry is to remind us of our deep familiarity with gift economies and to provide a clear contrast between them and market economies.
When I use the phrase “gift economy,” many people assume I must be hearkening back to some ancient outdated matriarchal culture, a utopian scheme, or a science fiction story; because clearly, that’s not how the real world works. The “real world” is a dog-eat-dog competition for survival where there’s no such thing as a free lunch!
Clearly, such a person has a rather limited grasp on the world we actually live in -- because in THIS WORLD gift economies are alive and well, and we are utterly dependent on them for our survival. In fact, our mighty commercial economy is actually a very small layer which could not function without the gift economies it is built on top of.
Let’s illustrate this through a few examples. What does the sun charge for sunlight? What does nature charge for bringing rainfall to crops, or delivering drinking water through rivers, or for growing our food? What do bees charge for their pollination services? What do parents charge for potty-training their children, or teaching them to speak a language, to read or write, or be moral and social beings?
How well would our commercial economy function without employees who are potty-trained language-users? How far would our markets expand without the hillsides of lumber, oceans of fish, deposits of coal and oil, fertile soil for crops, and forests producing oxygen for us to breathe? Nature gives all of this free of charge -- a gift.
However, gift economies are not limited to nature. For as long as humans have existed on this planet, so have human gift economies. Now, we think of them as families and tribes and forget that they have their own kind of economies. Yet we would not survive to our second day on this planet without these gift economies. What does a mother charge for her milk? What interest rate do parents charge for the food, housing and clothes that they provide to their children? What do our friends charge for companionship and assistance?
If someone believes the only realistic view of the world is one where nothing is free, then they are clearly ungrateful for all they freely receive.
However, gift economies do not function without expectations placed on their participants. In the next post in this series, I’ll explore two very different kinds of gift economies and the contracts or covenants they function within. But in this post, I want to explore the differences in the transactions.
We give and trade all the time, yet we’re not used to thinking about how giving and trading actually work and all of the actual details of what makes them different.
Suppose I’m building more raised-bed frames for my garden and I realize I need another handful of nails to finish the project. I’ve got some options. I can get in my car and drive the Mega-Hardware-Depot chain to buy them, or I can walk across the street and ask my neighbor Bryan for nails.
First let’s look at the normal market transaction. Anyone with a few bucks in their pocket can walk into any old hardware store and buy a box of nails. You don’t have to know the owner, the cashier or anyone in particular. Once you’ve bought the nails, you still probably aren’t friends with the owner, cashier or anyone in particular (if you are, it was because of other freely-given social interactions, not the simple act of making a purchase). You selected a box of nails for which you were willing to pay the price marked on the box. You paid the marked price (or got them to agree to a new one via coupons or other negotiation). And when you left, the transaction was complete with no particular reason to interact with the people at the hardware store again.
Now let’s look at the gift transaction. If I’m not a good neighbor Bryan is not likely to do much to help me. However, because I am a good neighbor, he will go out of his way to find nails for me. We don’t need to agree on a price. In fact he’d be offended if I tried to hand him a few bucks, or brought him a handful of nails to repay him the following week. The transaction is purposely imbalanced -- something given for nothing in return. Yet it’s also a bit open-ended. It’s an investment in our ongoing relationship, in our neighborhood, and in a community where people do these kinds of things for each other.
So what do these examples show us?
Commercial Transactions / Trades:
Gift Transactions:
Consider the differences in these ways of transacting or interacting with each other and the cultural effects they have over time on a community.
In my last blog post, I pointed out how money (or commercial transactions) doesn’t build relationship. The beauty of gift transactions is that they do build relationship.
So think about the cumulative effect of these interactions with the people around you -- a few interactions a day, every day, every week, every month, and every year. In just a few hundred years of more commercial transactions, we’ve almost convinced ourselves that the gift economies of the previous millions of years are a fiction. Even though we still depend on them every day!
And think about what kind of difference it would make to tip the scale back toward more gift transactions. How much more connected would we feel? How much stronger would our communities be? How much time and money would we save?
In the next post in this series, I want to go deeper into the background fabric of these two types of economies. Specifically, what are the contracts, agreements, covenants by with they operate.
Gift Economies are Alive and Well
When I use the phrase “gift economy,” many people assume I must be hearkening back to some ancient outdated matriarchal culture, a utopian scheme, or a science fiction story; because clearly, that’s not how the real world works. The “real world” is a dog-eat-dog competition for survival where there’s no such thing as a free lunch!
Clearly, such a person has a rather limited grasp on the world we actually live in -- because in THIS WORLD gift economies are alive and well, and we are utterly dependent on them for our survival. In fact, our mighty commercial economy is actually a very small layer which could not function without the gift economies it is built on top of.
Let’s illustrate this through a few examples. What does the sun charge for sunlight? What does nature charge for bringing rainfall to crops, or delivering drinking water through rivers, or for growing our food? What do bees charge for their pollination services? What do parents charge for potty-training their children, or teaching them to speak a language, to read or write, or be moral and social beings?
How well would our commercial economy function without employees who are potty-trained language-users? How far would our markets expand without the hillsides of lumber, oceans of fish, deposits of coal and oil, fertile soil for crops, and forests producing oxygen for us to breathe? Nature gives all of this free of charge -- a gift.
However, gift economies are not limited to nature. For as long as humans have existed on this planet, so have human gift economies. Now, we think of them as families and tribes and forget that they have their own kind of economies. Yet we would not survive to our second day on this planet without these gift economies. What does a mother charge for her milk? What interest rate do parents charge for the food, housing and clothes that they provide to their children? What do our friends charge for companionship and assistance?
If someone believes the only realistic view of the world is one where nothing is free, then they are clearly ungrateful for all they freely receive.
However, gift economies do not function without expectations placed on their participants. In the next post in this series, I’ll explore two very different kinds of gift economies and the contracts or covenants they function within. But in this post, I want to explore the differences in the transactions.
Commercial Transactions vs. Gift Transactions
We give and trade all the time, yet we’re not used to thinking about how giving and trading actually work and all of the actual details of what makes them different.
Suppose I’m building more raised-bed frames for my garden and I realize I need another handful of nails to finish the project. I’ve got some options. I can get in my car and drive the Mega-Hardware-Depot chain to buy them, or I can walk across the street and ask my neighbor Bryan for nails.
First let’s look at the normal market transaction. Anyone with a few bucks in their pocket can walk into any old hardware store and buy a box of nails. You don’t have to know the owner, the cashier or anyone in particular. Once you’ve bought the nails, you still probably aren’t friends with the owner, cashier or anyone in particular (if you are, it was because of other freely-given social interactions, not the simple act of making a purchase). You selected a box of nails for which you were willing to pay the price marked on the box. You paid the marked price (or got them to agree to a new one via coupons or other negotiation). And when you left, the transaction was complete with no particular reason to interact with the people at the hardware store again.
Now let’s look at the gift transaction. If I’m not a good neighbor Bryan is not likely to do much to help me. However, because I am a good neighbor, he will go out of his way to find nails for me. We don’t need to agree on a price. In fact he’d be offended if I tried to hand him a few bucks, or brought him a handful of nails to repay him the following week. The transaction is purposely imbalanced -- something given for nothing in return. Yet it’s also a bit open-ended. It’s an investment in our ongoing relationship, in our neighborhood, and in a community where people do these kinds of things for each other.
So what do these examples show us?
Commercial Transactions / Trades:
- Require no previous relationship
- Create no substantive relationship
- Require agreement about the value of what is being traded
- Require a balanced exchange of approximately equal value
- Are complete or closed when the equal value has been exchanged
Gift Transactions:
- Emerge from relatedness, kinship or a shared sense of community
- Strengthen the relationship, kinship or shared community context
- Establish no agreement about the value of what is given
- Are imbalanced
- Are open-ended – they leave something hanging
Consider the differences in these ways of transacting or interacting with each other and the cultural effects they have over time on a community.
In my last blog post, I pointed out how money (or commercial transactions) doesn’t build relationship. The beauty of gift transactions is that they do build relationship.
So think about the cumulative effect of these interactions with the people around you -- a few interactions a day, every day, every week, every month, and every year. In just a few hundred years of more commercial transactions, we’ve almost convinced ourselves that the gift economies of the previous millions of years are a fiction. Even though we still depend on them every day!
And think about what kind of difference it would make to tip the scale back toward more gift transactions. How much more connected would we feel? How much stronger would our communities be? How much time and money would we save?
In the next post in this series, I want to go deeper into the background fabric of these two types of economies. Specifically, what are the contracts, agreements, covenants by with they operate.
Friday, January 21, 2011
Money Can't Buy You Love...or Trust
Money Can't Buy You Love...or Trust.
Let's lay this out on the table as simply and clearly as possible (continuing Alan's theme about Quid Pro Quo).
That's not how I interact with my closest family and friends. We share things freely. You don't need to pay me for meals or for using my car, my camper or my bike. We don't really keep track of things like who bought the movie tickets or paid more than their share at the restaurant.
Of course, we don't have to keep track of those things because we trust each other. We know that we all chip in to take care of each other. This is the way clans and tribes have worked for millions of years of human history. We're deeply steeped in this type of sharing and it comes completely naturally to us.
However, it hasn't scaled well.
As soon as you pass a certain threshold (probably around Dunbar's number of about 150 in your small village) it becomes very difficult to ensure that everyone is a responsible player and upholding their part of the social contract of mutual responsibility.
I live in a wee hamlet called Denver, Colorado with a mere 2.5 million people in the Metro area. It's very difficult to know if this fellow, Roger, responding to my Craigslist ad is as generous as I am. So I take the tried and true path of mediating my risk in giving Roger this bicycle by demanding that he hand me $1,200 of symbolic value because I believe others who don't trust me will accept those symbols (dollars) for the stuff of value that they offer.
Through a strange sleight-of-hand, I have transformed my risk from a single individual, to a shared agreement which honors these symbolic units to exchange value. I don't have to know or trust Roger, instead I'm gambling that most people in my community will honor dollars for a quid pro quo exchange.
Essentially, money is mediating my risk in two primary ways:
In other words, money lets us transact value even though we don't trust each other.
Guess what... transacting through money doesn't build trust either. By it's very nature, every transaction is based on distrust. It's really quite simple, heaping up piles of distrust does not create trust.
What? What about my brand? My demonstrated reliability? The proven quality of my product?
Exactly... If you bought a car and are happy with it's reliability, that trust was earned by the direct experience of the performance of the vehicle over time. It has nothing to do with the transaction in dollars which simply showed you got to drive away with the car you bought. Trust is earned through building relationship, demonstrating performance and showing goodwill, not by exchanging dollars.
Money does not require deeper relationship nor build deeper relationship. Commercial economies grew to large scale by using money, but that just allows more of us to interact with each other in the absence of trust. What if we want our interactions to build on each other and create stronger community, greater value and build more trust? How can we make that happen?
Gifts.
That's right, gifts.
Gifts foster trust, build new relationships and are central to our experience of community. If you think of your best experiences of tight, trusting, strong community, I'd wager that at the center of that community is something freely given, freely shared. Whether it's organized around enjoyment of music together, passion for food or commitment to an ideology. a large part of how you experienced belonging in that community, is because you had access to the shared gift.
A monetary transaction is designed to be balanced, and for both parties to be "made whole" by the end of the transaction -- to leave no loose ends. Gift transactions are all about the loose ends. They are rooted in the understanding that the giving party is already whole and not damaged (made unwhole) by the giving. The transaction is imbalanced. And the loose ends left hanging are called relationship, friendship, partnership, goodwill and trust.
We need an economic system with more loose ends like that.
(I'll make another post distinguishing the precise differences between commercial transactions and gift transactions. Juicy stuff.)
Let's lay this out on the table as simply and clearly as possible (continuing Alan's theme about Quid Pro Quo).
1. You hand me $1,200.
2. I hand you a beautiful bicycle.
That's not how I interact with my closest family and friends. We share things freely. You don't need to pay me for meals or for using my car, my camper or my bike. We don't really keep track of things like who bought the movie tickets or paid more than their share at the restaurant.
Of course, we don't have to keep track of those things because we trust each other. We know that we all chip in to take care of each other. This is the way clans and tribes have worked for millions of years of human history. We're deeply steeped in this type of sharing and it comes completely naturally to us.
However, it hasn't scaled well.
As soon as you pass a certain threshold (probably around Dunbar's number of about 150 in your small village) it becomes very difficult to ensure that everyone is a responsible player and upholding their part of the social contract of mutual responsibility.
Mediating Risk
I live in a wee hamlet called Denver, Colorado with a mere 2.5 million people in the Metro area. It's very difficult to know if this fellow, Roger, responding to my Craigslist ad is as generous as I am. So I take the tried and true path of mediating my risk in giving Roger this bicycle by demanding that he hand me $1,200 of symbolic value because I believe others who don't trust me will accept those symbols (dollars) for the stuff of value that they offer.
Through a strange sleight-of-hand, I have transformed my risk from a single individual, to a shared agreement which honors these symbolic units to exchange value. I don't have to know or trust Roger, instead I'm gambling that most people in my community will honor dollars for a quid pro quo exchange.
Essentially, money is mediating my risk in two primary ways:
- I don't release any value without receiving an offsetting symbolic value
- The value-stability of those money-symbols is distributed across a large group of people
In other words, money lets us transact value even though we don't trust each other.
Guess what... transacting through money doesn't build trust either. By it's very nature, every transaction is based on distrust. It's really quite simple, heaping up piles of distrust does not create trust.
What? What about my brand? My demonstrated reliability? The proven quality of my product?
Exactly... If you bought a car and are happy with it's reliability, that trust was earned by the direct experience of the performance of the vehicle over time. It has nothing to do with the transaction in dollars which simply showed you got to drive away with the car you bought. Trust is earned through building relationship, demonstrating performance and showing goodwill, not by exchanging dollars.
Creating a World of Trust
Money does not require deeper relationship nor build deeper relationship. Commercial economies grew to large scale by using money, but that just allows more of us to interact with each other in the absence of trust. What if we want our interactions to build on each other and create stronger community, greater value and build more trust? How can we make that happen?
Gifts.
That's right, gifts.
Gifts foster trust, build new relationships and are central to our experience of community. If you think of your best experiences of tight, trusting, strong community, I'd wager that at the center of that community is something freely given, freely shared. Whether it's organized around enjoyment of music together, passion for food or commitment to an ideology. a large part of how you experienced belonging in that community, is because you had access to the shared gift.
A monetary transaction is designed to be balanced, and for both parties to be "made whole" by the end of the transaction -- to leave no loose ends. Gift transactions are all about the loose ends. They are rooted in the understanding that the giving party is already whole and not damaged (made unwhole) by the giving. The transaction is imbalanced. And the loose ends left hanging are called relationship, friendship, partnership, goodwill and trust.
We need an economic system with more loose ends like that.
(I'll make another post distinguishing the precise differences between commercial transactions and gift transactions. Juicy stuff.)
Thursday, March 4, 2010
Beyond Quid Pro Quo
Quid pro quo is Latin for “something for something.” It implies an exchange of goods or services that are more or less equal in value. A key underlying assumption in monetary currencies is that once you accept it for something, it will buy something of equal value from someone else who accepts it. Even in a mutual credit system, your balance is a way keeping track of where you are in the quid pro quo game. But, is the quid pro quo game the most efficient way of allocating resources?
Gift economies come in many forms, but usually what we mean by a “gift” is when quid is less tied to quo. Clearly, this is a matter of degree as there are many possible social contracts around gifts.
For gift economies to function properly a certain degree of familiarity and intimacy must exist among the participants. For instance, very few parents keep accounts on how many breakfasts they have given their children with the expectation of equal reciprocity. For parents, caring for their children is its own reward, and we think poorly of parents when this stops being the case.
When you are dealing with people who aren’t as close to you, the quid pro quo game comes more into play. Imagine, for example, two tribes coming together to trade. Each tribe operates with a gift economy inside its membrane, but when trading outside the membrane, there is an expectation of equal reciprocity in trade.
Until the industrial revolution, the majority of economic interactions were in the gift economy. Money has, of course, been around for thousands of years, but most of what people needed was satisfied through the gift economy on the village level. Think barn-raisings, shared child-care, borrowing tools, etc. Only when goods were needed from outside the community did the quid pro quo money game come into play.
Now, we can wax nostalgic about bygone eras, but there are good reasons why this all ended. The biggest reason is that this social architecture has not been able to scale. When a person lives in an urban environment, they tend to lack intimacy and familiarity with most people around them. In place of this intimacy, we make monetary exchanges. It must also be noted that a rich and impressive human culture has been built around quid pro quo social architecture.
However, while the gift economy has not yet been feasible on a large scale, on a small scale, it is actually far more efficient. Imagine how much wealth would be lost if you began to charge your children for breakfast. When and how would that debt be paid off?
What would happen if the gift economy could scale? Would it possibly serve as a far more efficient way to allocate goods and resources? What would it mean to actually live in the much talked about global village?
Quid Pro Quo as a pioneer species
A pioneer species is a species that shows up on new or recently disturbed land. They are quick to arrive, and they create the conditions for other species to thrive. As other species arrive, these pioneers are quickly outcompeted. Pioneer plants will leave their seeds in the soil for when the next disturbance occurs. This kind of succession ecology has worked extremely well for our biosphere.
I would contend that the quid pro quo social contract is a pioneer species in the social realm. Imagine you are meeting someone for the first time. Early interactions with this person are most likely in the quid pro quo space. Perhaps you try to talk for no more than half of the time. Perhaps you alternate who pays for the meals you eat out together. Perhaps you trade a ride to the airport for a day of dog sitting. In all cases, quid pro quo is used because you aren’t familiar with the person yet. As you become more familiar with each other, the ride to the airport probably doesn’t have strings attached, the meals become less formally tracked, and conversation may ebb and flow more naturally. Quid pro quo created the conditions for the other more advanced social contracts to emerge.
So how can we create the conditions for the global gift economy to emerge? What are your thoughts?
Gift economies come in many forms, but usually what we mean by a “gift” is when quid is less tied to quo. Clearly, this is a matter of degree as there are many possible social contracts around gifts.
For gift economies to function properly a certain degree of familiarity and intimacy must exist among the participants. For instance, very few parents keep accounts on how many breakfasts they have given their children with the expectation of equal reciprocity. For parents, caring for their children is its own reward, and we think poorly of parents when this stops being the case.
When you are dealing with people who aren’t as close to you, the quid pro quo game comes more into play. Imagine, for example, two tribes coming together to trade. Each tribe operates with a gift economy inside its membrane, but when trading outside the membrane, there is an expectation of equal reciprocity in trade.
Until the industrial revolution, the majority of economic interactions were in the gift economy. Money has, of course, been around for thousands of years, but most of what people needed was satisfied through the gift economy on the village level. Think barn-raisings, shared child-care, borrowing tools, etc. Only when goods were needed from outside the community did the quid pro quo money game come into play.
Now, we can wax nostalgic about bygone eras, but there are good reasons why this all ended. The biggest reason is that this social architecture has not been able to scale. When a person lives in an urban environment, they tend to lack intimacy and familiarity with most people around them. In place of this intimacy, we make monetary exchanges. It must also be noted that a rich and impressive human culture has been built around quid pro quo social architecture.
However, while the gift economy has not yet been feasible on a large scale, on a small scale, it is actually far more efficient. Imagine how much wealth would be lost if you began to charge your children for breakfast. When and how would that debt be paid off?
What would happen if the gift economy could scale? Would it possibly serve as a far more efficient way to allocate goods and resources? What would it mean to actually live in the much talked about global village?
Quid Pro Quo as a pioneer species
A pioneer species is a species that shows up on new or recently disturbed land. They are quick to arrive, and they create the conditions for other species to thrive. As other species arrive, these pioneers are quickly outcompeted. Pioneer plants will leave their seeds in the soil for when the next disturbance occurs. This kind of succession ecology has worked extremely well for our biosphere.
I would contend that the quid pro quo social contract is a pioneer species in the social realm. Imagine you are meeting someone for the first time. Early interactions with this person are most likely in the quid pro quo space. Perhaps you try to talk for no more than half of the time. Perhaps you alternate who pays for the meals you eat out together. Perhaps you trade a ride to the airport for a day of dog sitting. In all cases, quid pro quo is used because you aren’t familiar with the person yet. As you become more familiar with each other, the ride to the airport probably doesn’t have strings attached, the meals become less formally tracked, and conversation may ebb and flow more naturally. Quid pro quo created the conditions for the other more advanced social contracts to emerge.
So how can we create the conditions for the global gift economy to emerge? What are your thoughts?
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