[p2p-research] excellent contribution on flow money by Martien van Steenbergen

Tue May 26 16:52:21 CEST 2009

Martien:

I agree with what Michel wrote, first, and also reiterate his same
questions.

Second, you say we made the rules for money once, we can remake them
again...This I am having trouble with.  When did we "make" the rules for
money?  Is it not a more spontaneous self-ordering ecosystem?   There were
dozens of currencies in the Colonial US plus Sterling plus Spanish money,
etc.  Money happens.

I accept that many ecosystems need to be "gardened" to be made more
manageable, but I doubt you would succeed in convincing anyone to implement
a monetary system where money cannot be hoarded.  Do you think such a system
would be voluntarily accepted?  Why would people accede to a system where
they cannot transfer wealth to their children, or hold wealth for an
emergency, etc., and would there always be commodity wealth hoarding
anyway?  Gold, diamonds, paintings by Picasso, useful machines, etc?

Why would anyone ever give up personal security to participate in a system?
Would you compel them?

Ryan

On Tue, May 26, 2009 at 3:50 AM, Michel Bauwens <michelsub2004 at gmail.com>wrote:

> Hi Martien,
>
> thanks for these excellent explanations ...
>
> however, one problem: you seem to indicate that money would have no
> ownership ..
>
> but this cannot be politically instituted, unless by new and small
> voluntary systems
>
> is that how you see it?
>
> but how then to change the mainstream system? by example of the
> alternatives?
>
> Michel
>
> On Mon, May 25, 2009 at 6:10 PM, Martien van Steenbergen <
> Martien at aardrock.com> wrote:
>
>> Hi Ryan,
>>  On 21 May 2009, at 04:24 , Ryan Lanham wrote:
>>
>> Martien,
>>
>> 1. Please let me know if you still have mail problems.  I don't think I
>> sorted them out.
>>
>>
>> Still doesn't work. I've changed my subcription address back to the one
>> I'm using now. Tried to cut down on spam by creating unique receiver
>> addresses on mailing lists and like this. Didn't work :-(
>>
>> Typed in an elaborate response to yours the other day. Lost it completely
>> by a Select-All & Paste action that replaced it by just 4 lines from the
>> paste buffer, and then sent it off to the p2p list. Poof. Gone in a cloud of
>> orange smoke.
>>
>> So, here I go again.
>>
>> First of all, I've read the other replies as well, but prefer to answer
>> Ryan's first. May reply to those of others as well, but later.
>>
>> 2. I think your system involves a pricing fallacy.  It is that prices of
>> goods and services can be accurately valued.  They cannot.  We don't know
>> what your blog is worth or what an hour's work building a wall is worth.
>> That's because we don't know what demand is for those things.  Much as I
>> would love for something like this to work, it won't.
>>
>> Here is why:
>>
>> A. Money is a dynamic system.
>>
>>
>> So true. A healthy system should be in dynamic balance, driven by a
>> creative tensions that pull it into the chaotic as well as the ordered
>> direction, but when wandering off too far, it gets pulled back to the
>> dynamic balance.
>>
>> The reasons people "own" money is that we store consumption until when it
>> is advantageous.
>>
>>
>> Yes, that is one of the most useful traits of money: it abstracts trade
>> from time and space. That is, you don't have to trade 3 chickens for a ham
>> at the exact time and place, you can sell your chicks and buy something else
>> from someone else at some place and some time. Let's keep that trait.
>>
>> At the same time, let's design a system that removes the feature that one
>> can own money. Why? Because then no one can hoard it and as a result we
>> don't need any expensive uncontrollable constructs to keep money flowing.
>>
>> Money then simply becomes a distributed (p2p) reputation system. Money
>> then represents the effort (or energy) you have put into delivering a
>> product or service.
>>
>> If I offered you a feast immediately after you had a large meal, it is
>> nearly worthless to you.  But tomorrow, you may want that feast very much.
>> The makers of feasts count on their own skill at calculated just how many
>> feasts will be wanted today or tomorrow.
>>
>>
>> So true. A bottle of water at noon when you're all alone in the desert is
>> probably much more valuable than the same bottle sitting on the shelf with
>> 500 others in the supermarket around the corner.
>>
>> So the value of something is (extremely) context dependent. Another
>> example would be some ointment treatment, for pigs, say. You can buy it by
>> the barrel, for just €10/kg. The identical ointment can be used to treat the
>> rash on your baby's skin, yet a 50g tube sells for €10 at your local
>> drugstore. A 20-fold increase in price (€200/kg) , but you're happy to buy
>> it, since it's for your newborn child.
>>
>> Every time you buy something you either implicitly or explicitly evaluate
>> its price, checking if you are able and willing to pay the price for the
>> value delivered.
>>
>> You can always compare two similar, yet distinctive, offerings. You can
>> always feel and rationalize which one is ‘closer to you’, resonates more
>> with you. Even, or in particular, for very subjective thing like a painting
>> or music this is true. You can always personally value these offerings: are
>> you willing and able to pay the price to obtain this product or service.
>> That is, are you willing and able to deliver a contribution to the community
>> at large at some time in the future that matches (compensates) your
>> receiving this product/value now. In other words, can you afford this? Can
>> you repay this over time (or have you maybe already done so in the past)?
>>
>> This begs the question of how much an hour of effort (energy) is worth and
>> if a difference between one hour from the janitor or the orthodontist can be
>> justified. If one hour from tha janitor is worth €10, say, then is €60 for
>> the orthodontist justified? Is there a fair or human maximum to the ratio
>> between two valuations? That is, while the janitor makes something between
>> €15k and €20k annually, the CEO of the bank he works for makes €1M annually.
>> Can this 50x be justified?
>>
>> To my opinion, differences in hourly valuation can be justified and should
>> be limited.
>>
>> All this implies that marktplaces still will work. People will still
>> compete to deliver an excellent price/value. They will strive to excell in
>> what they do, honing their talents and living their passions. In our current
>> monetary system, people have become slaves. Are you working for the money,
>> or is the money working for you? Many are compelled to work and do things
>> that do not match their talents and passions, just to pay the bill. A
>> unprecedented form of global slavery. Yet, we all seem eager to keep playing
>> this game, designed by a set of smart, yet unwise, economists.
>>
>>  B. A pure measurement system would always look at fairness from the
>> point of view of a centralized plan.
>>
>>
>> Is this true? Can you be absolutely sure that this (centralized plan) is
>> true?
>>
>> How does Google's PageRank work? And what about Ebay's solution to the
>> prisoner's dilemma? Is reputation measured by a centralized plan? Well,
>> centralized implementation maybe, but not a centralized judgement. There is
>> a set of centralized game rules that players must follow in order to play at
>> all. These game rules foster decentralized, autonomous behaviour and
>> implement, tmo, a distributed reputation system (although centrally hosted).
>>
>>   That cannot work because it will not satify point A above.  That is,
>> there can be no standard set of "scales" nor any standard "centimeters."
>>
>>
>> In the Google and Ebay and many other systems, the scales or centimeters
>> emerge from actual use and behaviour, and it satifies point A above.
>>
>> C. Money is already a p2p system in the way in spends.
>>
>>
>> Agree.
>>
>> It's just not a p2p system in the way money is created.
>>
>>
>> Agree.
>>
>> My recommendation to the micro-currency crowd is to focus on money
>> creation--how does money come into the system.
>>
>>
>> Ah well, this is were it gets interesting, at least to me.
>>
>> How about this: suppose money is created exactly at the time and place of
>> the transaction.
>>
>> If you go to the dentist for a root canal treatment, and the dentist
>> charges you €50, say, your account gets debeted and the dentist credited.
>> The money is created at exactly that time and place. A measurement system of
>> mutual credit. (Love to see the digital infrastruncture that supports this
>> in a true peer-to-peer fashion, as opposed to centralized).
>>
>> This way, you will always have the exact amount of money, no more, no
>> less. No scarcity, and no abundance of money. Just like centimeters.
>>
>> Zero sum, yes. That is the monetary system itself is zero sum, but open
>> your eyes and observe that each and every transaction actually creates
>> something of value for someone else, or there would be no transaction in the
>> first place. If you take everything into account, it is definitely non-zero
>> sum. It is a world of creation, creativity, unfolding, embellishing.
>>
>> Using money to reward something of value creates two opposing streams. The
>> product or service flows in one direction, the money in the other. It is
>> akin to the current in an electrical system: electrons and ‘holes’ also flow
>> in opposite directions. One also designs and build an electrical system so
>> that its currents and temporal storage of electrons (capacitor, battery)
>> most effectively and elegantly support the goals of that system, e.g.
>> amplifying audio signals a thousandfold with negligible distortion.
>>
>> With our current technological digital infrastructure (a.k.a. the
>> internet), it is almost trivial to implement. In fact, our current banking
>> systems already provide the secure infrastructure to make this a reality. It
>> is not a matter of technical issues, it is a political issue. It is an issue
>> of willpower, guts and leadership.
>>
>> Of course, you still need to move within the limits of your dynamic
>> trustwidth, your growing benefit of the doubt. Every time your contribution
>> to the communities that you're in matches the value you received from the
>> community—you are in balance when you touch zero—your trustwidth increases,
>> while decreasing over a period of inactivity.
>>
>> No more need for hierarchically centralized banks. No more need for
>> overpaid officers to regulate and administer the delicate balance of the
>> amount of money needed, or the interest rate. Just like you don't need
>> expensive superfluous institutions to regulate the amount of centimers in
>> the world, let alone interest on centimeters.
>>
>> This turning the dials and gauges of the money amount and interest is an
>> extremely delicate process indeed. Consider two mobile phones in the same
>> room, one calling the other. Make the connection and put them both on
>> loudspeaker. Now slowly move them closer to each other, the microphone of
>> one juxtaposed to the speaker of the other. At some point you will start
>> hearing an echo, and a high pitched tone as a result from the
>> self-reinforcing feedback loop just created. The echo is due to the delay of
>> signals through the phone system.
>>
>> Now, move the phones closer, and the sounds almost become unbearable. Move
>> them farther away from each other, and the sound fades away. There is a
>> subtle, fragile area somewhere in the middle where you can delicately
>> control the volume of the sound. But it is a small and sensitive range
>> indeed. Now imagine we have zillions of these kind of feedback loops with
>> unpredictable delays and amplification, and you are out of control. Simply
>> because they are only self-reinforcing feedback loops. There is no
>> dampening, no immune system. Our current scarcity-based compound positive
>> interest money systems works likewise. And you and me and our planet are
>> paying the price.
>>
>> As a reference, I invite you to read Places to Intervene in a System<http://www.developerdotstar.com/mag/articles/places_intervene_system.html> from Donella
>> Meadows. We need a new paradigm, new goals, and a set of matching
>> self-organising, self-healing ‘game’ rules that facilitate and catalyse it,
>> and in that order. A system that minimizes the need to turn dials and toggle
>> buttons.
>>
>> I challenge the P2P Foundation (and myself, of course) able to come up
>> with just these things.
>>
>> Most of the research focus now on this list is on trying to create
>> infinite consumption or infinite earning machines.  These are like perpetual
>> motion machines and will not work.
>>
>>
>> I agree that perpetual motion machines will not work. However, the
>> monetary system is just part of a larger whole. If you limit your view to
>> just the monetary system, your view is, well, limited. The monetary system
>> should act like oil or water. It lubricates trade and makes the energy flow
>> to create (non-financial) wealth for human kind as well as for the planet as
>> a whole.
>>
>> The infinity is not in the earnings or consumption. These kind of systems
>> will eventually self-destruct, commit suicide. The inifinity is in the
>> diversity, variation, creativity, (non-financial) wealth, as it unfolds and
>> embellishes itself into pure self-expression. Ever increasing layers of
>> s-curve-like unfoldings.
>>
>> The dynamics of supply and demand are very difficult to challenge without
>> coercion.  People simply want to make their own decisions when they wish to
>> make them.  If you allow those things, then the question becomes one of
>> price.
>>
>>
>> Hmmm... complex adaptive systems can be designed so that they foster
>> dynamic balances between supply and demand with an exalted society and
>> prosperous nature as spin-off. Let's design and adopt systems that support
>> this, and omit some design failures from the past.
>>
>> Price is inherently tied to the supply of money as well as demand.
>>
>>
>> The outlined system of mutual credit still supports personal evaluation
>> and decision-making, as explained above.
>>
>> It isn't about measuring production where money is interesting, but in
>> measuring the nature of where money comes from in the first place.
>>
>>
>> Money comes from our mind in the first place. We wrote the game rules. We
>> can change them.
>>
>> Succes en plezier,
>>
>> Martien.
>>
>>
>>
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>
>
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