[p2p-research] query on Money Publications?

Fri Dec 5 11:10:08 CET 2008

<<
Marc,

Thank you for organizing your thoughts on the p2pf wiki in a way which
> makes it quick to identify some of the assumptions, and really helps
> show the rationale behind it all :) If you hadn't, this email wouldn't
> be going out.  Quickly, I'd like to challenge a few of these
> assumptions, starting (and ending, in this email) with your axioms:

>>

Most axioms in maths are non-logical (or non-universal) and are specific to
the particular theory.

The positions each piece in a set of chess pieces takes on the board can be
considered a non-logical axiom and that the rules of the game are the rules
of inference and so the player can generate propositions by planning their
moves and those propositions are provable based on the axioms and the rules
of inference. This is the way I use the word axiom and it may be due to the
fact that I have a background in computer science as opposed to pure maths.

I will change the wording to say "Basic Facts" as I certainly don't want to
mess with people's definition of truth.

A lot of your feedback centers on whether the "axioms" can be considered
"axioms" That's probably indicative that you come from a pure maths
background or economics? :) It's use in theoretical computer science simply
means basic facts.

Isn't the designer of a bran new game (or model) free to set the facts for
the model/game? The answer is obviously yes if it's just a game.

However, if the model is for more than a game, i.e. if it's trying to define
a mysterious creature known as an "economy" then all bets are off.

But it is a game for now, and I figured that if the game is realistic
enough, i.e. that people can make money, make things, buy things, accumulate
wealth, lend, borrow, and compete (along positive lines) then the game is
realistic enough for me, and I would setup a community (in say Second Life
or another virtual place) that would play that game. And what do we have
then? A contrived or made up economy but to people in that virtual community
it would be _the_ economy.

Now, having clarified the context, which is something I have to do in the
essay itself, I can answer your arguments from this context.

<<

> 1. Money is a carrier of both power and information, and as such it
> transfers both power and information in every transaction.
>
> "Money" can mean a lot of things, which must not be confused.  I'll
> stick with credit and fiat.  In both those cases, money is
> information.  In the case of a dollar bill, you could say it is
> carrying information, but when it comes to most USD we're talking
> about binary bits.  These binary bits describe a relationship between
> two entities.  Money is really a relationship.  It's not actually
> trust (just ask Michael Linton http://tinyurl.com/6jztlq ), but it is
> a relationship, and the most fundamental unit is always information
> manifested in some substance, but it a bill or a bit.
>
>>

OK, so assume the section heading said Model's Basic Facts, and the model
was/is for a game that I call p2p economy, then what is there to prevent me
from defining a basic fact that says "money is a neutral carrier of both
information and power" ? Absolutely nothing. As long as I'm designing a
model for a game. When it comes to designing a model for _the_ economy, the
question is what is this economy? Is it the current economy? some mysterious
creature? or a game that I am designing myself, basic fact by basic fact,
rule by rule?  If the answer is the latter then I'm off the hook. If it's
the former then I have done a really bad job explaining the context. The
idea is that I'm defining a model for a game that emulates a future vision
of a fictional economy that does not exist, and then I'm saying if I
implement this and people play it such that they end up creating money,
making and buying things, lending, borrowing, then that fictional economy
becomes _the_ economy for the players involved, and so as the economy's
designer I can set whatever basic facts.

Now the real question is: am I changing the nature of money from what it is
in today's economy?  I believe you're saying that I AM.... So I do need to
think about what you're saying and why you think that seeing money as a
carrier of information and power changes its nature from what we know today.
That I do have to look into so that I don't make a statement to the effect
that I'm not changing the nature of money in the model I'm working with.

<<

>
> If an authority controls the money supply, it is that authority that
> is the carrier of power.  Authority that can require a money to be
> "legal tender," and enforce it.  One must look at not only the
> explicit authority, but the transactional infrastructure (VISA for
> example).  In the case of a local currency that's not legal tender, I
> am not required to use it, or accept it.  The power is held in the
> relationships between users, money does not transfer it.
>

>>

Good point, but we're talking about two different kinds of power. There is
power transfer in every monetary transaction, from A to B, and then there is
the power in control of the supply of money. While the distribution of new
money supply is 'distributed' in the model the control over the supply is
still centralized. I think that control does not mean that power is held by
Peer Bank, which is the central authority in charge of money supply, not in
charge of money distribution, as
the distribution happens according to the arbitrary set of peers that sell
their excess locally
generated energy to Peer Bank in return for currency, which happens when
Peer Bank decides to print new money, which is controlled by automated or
semi-automated decision process since the entire economy is online and
measurement of growth is automated. This means that Peer Bank doesn't have
power over distribution of new money and not even over when to print new
money (since that can be automated under this simple model).. To be complete
in my description here, peers can also sell energy to each other and just
use Peer Bank as the financial/regulatory hub for those transactions.

<<

> 2. Most people agree on what's good for society, e.g. less toxins in
> food, more generosity, less selfishness, etc
>
> All people are overloaded with information.  In short, information
> asymmetry is inherent in human interaction, and is a fundamental
> factor in economic transactions.  People are ok at agreeing on
> something obvious being a problem, but they're not very good at
> identifying root causes, and they're particularly bad at coming up
> with solutions.  We shouldn't feel bad about this: it's really hard.
> I don't think this is really a usable or workable axiom.

3. Enough people will exercise socially conscious judgment when given
the opportunity.

I think this axiom doesn't work at all.  What is the "opportunity?"
How would we define a "socially-conscious judgment?"  Does it have to
actually lead to a mutually-beneficial decision, or just somehow be
aware of others in some way?

>>

If I'm given a choice to buy organic cucumbers or ones with pesticides that
are cheaper I personally would decide for the former. The affinity matrix
assumes full transparency. In a game that's possible. In an actual
economy... well, that's another story but some people have been calling for
producers to be transparent and once one big producer, e..g. WalMart becomes
transparent or requires it from other producers then others will follow or
lose out to WalMart ...

<<
Rather than an axiom, I think this should
be flipped into a question: at this time, what is the best situation
that enables the best opportunity for beneficial decision-making?
>>

In the context of the model, it is a basic fact that enough people will buy
organic, enough people will not buy food with MSG and other toxins, and
enough people will buy from sellers who support the same values as they are.
This is part of the thing to be verified in the actual game (when I have put
it together) or it will invalidate the second proposition of the model re:
directing money flows to be in sync with society's conscious values.  So it
is to been seen from playing the game not from talking about playing the
game as game theorists do. It's one of those things that maybe impossible in
theory and only possible in practice.

<<

> 4. In the peer-production-based economy (or P2P economy) of the
> future, it is natural (as well as ideal) for everyone to be a
> seller/producer, a buyer/consumer, a lender, a borrower, and a creator
> of money, all at the same time. In other words, all roles within the
> future P2P economy may be carried out by all peers.
>
> The core concept of money (as credit or fiat) IS this, it is not
> unique to a peer-production economy.  This seems an appropriate axiom
> for a democratic and equitable monetary system.
>
>>

Well, in today's economy I don't see everyone being a producer, a lender,
borrower, and creator of money all at the same time.  I don't see how
everyone can be a producer unless production and communication costs come to
near zero, e.g. in a peer production economy.

<<

>
> In short, I do not think these meet the standard for "axioms" in
> traditional logic.  I'm not trying to be pedantic with this, I think
> that in designing better systems, we must start with postulates that
> are "grounded" in science, and many "truths" that seem obvious to
> people are actually incorrect assumptions.  In this case, there's
> already a lot of work done we can draw on to frame a critique.
>
>>

I will repaste my reply from above here: