[p2p-research] query on Money Publications?

[marc fawzi]

FYI, the following changes were made as a result of Stan's arguments:

1. Added the following under Model's Scope:

"This model equates money to a neutral carrier of power and information.

While that may not be the 'nature' of money as we know it, it is what this
model recognizes about money (or, more specifically, the currency that is
described by this model.)"
2. Added the following under Model's Axioms:

"These axioms are not necessarily universal axioms.

They are 'basic facts' that are specific to this forward-looking model."
and a new [non-universal] axiom:

"4. Most producers and sellers would agree to complete transparency in their
own social, ecological and environmental value and those of the thing
they're selling and those of the transaction itself (see Affinity Matrix)"

3. Added new section, Peer Bank, with following explanation:

"

New money is only created by Peer Bank when Peer bank needs to inject new
money into the economy (e.g. in line with economic growth) and the peer
produced energy exchanged for this new money is stored by Peer Grid to hedge
against unexpected rise in demand (over available peer energy supply.)
Otherwise, Peer Bank simply simply acts as a financial hub for exchange of
peer produced energy for Peer Dollars and Peer Dollars for peer produced
energy.

Peer Bank does not have power over the distribution of newly created money.
The distribution of new money is decided by the collective process of peers
selling their excess locally generated energy to Peer Bank during the time
when Peer Grid is storing energy (see above paragraph for context.)

Peer Bank does not have power over when to create new money (or how much to
create). Under this model, the decision to print new money is automated and
linked to growth in the economy. This maybe too simplistic by comparison to
the factors involved in the decision to print new money in the current
economy, but other factors can be added later as part of this automated
process.

In other words, Peer Bank does not hold the power to manipulate the economy
in opaque and/or arbitrary fashion."

---

I believe that what's going on is that the level of discourse I've seen so
far assumes that the model is to be based in some way on the existing
economic/monetary model.

I hope the changes above, together with what's already stated under Context,
do the job of clarifying that it is an entirely new model that is to be
turned into a game to test out its propositions, i.e. does it work like
expected? If it does then the next step would be to build a P2P client and
the step after that would be to trial it in a brand new off-the-grid
community in say 10 years when the technology and people are ready for
something new that works better, at least in limited context. It may very
well evolve into a 'niche model' for small off-the-grid communities of the
future.

For now, it's its own world, defined from the ground up, with no connection
to today's economy and with the context being a game.

Stan: Thank you for the thought about money as a "relationship"  ... I think
I agree with that perspective and will do some thinking and further updates
to reflect that ....

Essay has been updated as noted above:

http://p2pfoundation.net/P2P_Social_Currency_Model
Thanks,










On Fri, Dec 5, 2008 at 1:56 AM, marc fawzi <marc.fawzi at gmail.com> wrote:

>
> <<
>
>> 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:
>
> 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
>
>  <<
>
>>
>> I apologize for not covering more, but I think this gets a critique
>> started, challenges some assumptions, and gives you some possible
>> leads, if you had not found them already.  I skimmed background work
>> you've done, and I saw Chris Cook responded, but I did not see
>> responses from Michael Linton or Thomas Greco, who I believe are both
>> on the p2pf Ning.
>> >>
>
>
>
> You've basically set me on a mission to re-write the Context section, as
> well as to clarify the levels of power (re: Peer Bank vs Peers) and why the
> real power resides with the peers and with the whole rather than with  Peer
> Bank (the powerless central entity)
>
> <<
>
>>
>> In closing, consider that this: "adding meaning to each transaction to
>> bring money flows in sync with people's conscious values" is what the
>> free market is supposed to allow, and most efficiently.  The problem
>> with that, once again, is information asymmetry.
>>
> >>
>
> I need to add "transparency on parts of the producers" as one of the Basic
> Facts ;)
>
> <<
>
>>
>> Good luck,
>> -- Stan
>>
> >>
>
> :)
>
>>
>> > On Fri, Dec 5, 2008 at 1:41 AM, marc fawzi <marc.fawzi at gmail.com>
>> wrote:
>> >>
>> >> Hi guys,
>> >>
>> >> I am feeling _pretty confident_ about the current state of the currency
>> model:
>> >>
>> >> http://p2pfoundation.net/P2P_Social_Currency_Model
>> >>
>> >> I'd like to approach academic journals in Europe (more forward thinking
>> these days!!!) about consideration for publication.
>> >>
>> >> I had passed up an opportunity to publish the 'Wikipedia 3.0' article
>> back 2 years ago in the IEEE Transactions on INternet Computing (I was
>> contacted by an editor there but I just couldn't get the time I needed)
>> >>
>> >> I'm free these days and I'm looking to spread well-thought out ideas.
>> >>
>> >> The big idea, that I know you're very aware of, is that good ideas have
>> good consequences.
>> >>
>> >> I'm continuing to take a step back and visualize the game, so I can
>> actually deliver something that engages people.
>> >>
>> >> But for now, given my level of confidence, it would be great to get
>> more exposure for the model itself in academic circles.
>> >>
>> >> Do you know of any academic publications that are concerned with
>> renewable energy or new currencies?
>> >>
>> >> It's key that they're academic because at this point the narrative is
>> inaccessible to the mass reader.
>> >>
>> >> Thanks again for any tips/help here
>> >>
>> >> Marc
>> >>
>>
>
>
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