To say the internet has revolutionized the social sphere is an understatement. The way we relate to friends, family, and even perfect strangers is constantly being shaped by a new era of instant, seamless interaction on a scale never before seen. Your new t-shirt or invigorating chai tea can instantly be “shared” with a few close friends or thousands, even millions of people around the world. Before Facebook, one would have needed to be a well known television host to have such a platform. Now a bit of charisma and luck can produce similar levels of exposure.
The realization of socioeconomic potentials latent in this emerging technology will depend primarily upon our willingness to reimagine what is possible in the realm of human interaction and organization. In order to innovate we must reassess the value of current concepts in economic thought and determine how they relate to the new structural forms enabled by the web.
One such potential is that of moving beyond the current monetary system, which is based on exchange value, trade, and debt. The reason I believe this is possible, and indeed necessary is because the core functions of the monetary market system can be carried out more efficiently, and in a more decentralized, voluntary manner through social networking.
Exchange Value: An Unnecessary Barrier
Our current system is profit-driven. But what is profit? Profit is an accounting measure which does not reflect anything concrete in the world. It is created more or less as a social construct through the process of exchanging goods and services. This focus on exchange value is not directly related to use value, that is, the actual usefulness of a good or service. There are many things which are profitable, but not necessarily useful.
For example, owning a high value asset, such as a plot of land can earn someone a significant amount of money over time, merely as a result of inflation. Inflation is a net negative for the economy as those who benefit from it tend to already be very wealthy, while the higher prices affect everyone. Yet the government, in bed with speculators, has promoted and sanctioned practices which enable such upward redistribution of wealth through what is essentially monopolized private money creation (which will be a subject of future posts). This is exchange value in action. Our capacity to house everyone (a function of use value) has increased, yet our ability to provide the financial means to do so has decreased due to disproportionate increases in exchange value (unless you consider insane levels of mortgage debt a ‘solution’ to this contradiction).
To use another example, a few years ago discussion surrounding the BP oil spill included whether it would be a net gain for the economy. JP Morgan apparently thought so. This is an example of exchange value becoming so disconnected from the real world that we no longer know if what we are measuring as a positive economic indicator is consistent with any reasonable definition of utility.
Many other egregious examples exist, such as the proven profitability of war, illness, accidents, planned obsolescence, etc.
Use value is ultimately what we want to create. When you grow food in a backyard garden and use it to feed your family, you care most about the quality of the food. You would never deliberately feed your family food that would make them sick. But if exchange value was the determining factor in your decision to grow the food and serve it to your family, the food can effectively be stripped of it’s net use value in the event that serving your family tainted or spoiled food created exchange value (profit). This sort of contradiction requires moral reasoning, and large corporations and out of touch politicians have consistently proven their inability to apply sound ethical principles in their decisionmaking processes. So the more we can seek to minimize or eliminate conflicts between use value and any other perceived value, the better off we will be.
A minimal level of inconsistency and irrationality is not necessarily fatal to most systems of organization, and is to be expected. But after centuries of exchange value dominating large societies, the contradictions can become incredibly serious. The system functions on blind trust that profitseeking has a net positive outcome, once all externalized costs of activity have been accounted for, despite clear evidence that it is highly inefficient.
Exchange value is so overemphasized that we have forgotten what the real economy is: the sum of all production and distribution of use value. You add to the real economy whenever you create and/or distribute anything of real value to society, yourself, or someone else. Anything which hinders the creation and distribution of use value is fundamentally anti-economic.
By this definition exchange value is not only superfluous, but anti-economic in many respects when it hinders the production and distribution of use value in society. This is the difference between market efficiency and technical efficiency, as Peter Joseph likes to point out. We have the technical ability to solve pretty much any conceivable problem, but we are prevented from doing so by outdated socioeconomic systems and the tyranny of exchange value in the monetary system.
This more holistic view of what constitutes the real economy may strike you as too broad. But in reality we have been conditioned into a narrow system that tells us that any creation of value, tangible or intangible, which cannot be quantified and sold to create exchange value is either non-productive or at the very least non-economic.
Exchange value only has use value insofar as it facilitates the production of use value. Some will no doubt argue that it does, and that profit and money and capital are necessary for the organization of society but I hope to show that decentralized and distributed information technology has the potential to eliminate the necessity of such outdated concepts.
Trade: Not As Necessary As We Assume
The purpose of trading one good or service for another good or service is to meet mutual needs. But in a system dominated by exchange value, trade becomes exploitative. It becomes a matter of getting more out of the transaction than one puts in. It becomes arbitrary as sophisticated methods of artificially boosting exchange value are developed. And before long you end up with forms of high stakes gambling with privatized gains and socialized losses, as exemplified by Wall Street.
In a system without exchange value, items can be traded in a form of barter. But barter is very cumbersome because of the specific circumstance required for transactions to take place (two people must mutually desire to trade specific items). Money is much more convenient, as it allows one specific item to be given universal value by virtue of social agreement. Thus you will almost always be able to trade with most anyone at any time.
The first problem with this approach is that money quickly gives rise to exchange value. The pursuit of money itself becomes the goal precisely because of it’s exchange value. And in the case of fiat currency, there is no underlying use value attached beyond it’s presumed usefulness in facilitating trade.
The second problem is that some small oligarchic minority inevitably ends up creating and controlling large amounts of it. This leads to imbalanced power structures and exploitation. The leverage money has as a result of it’s universal acceptance makes it easily weaponizable in the wrong hands.
Comparing Giving With Trade-Based Systems
Why trade rather than give? It would seem the reason would be primarily a fear that one would not get the fair end of the deal; fear that giving would be a waste of time and energy if the giver is not compensated formally and instantly. This mentality thrives in the absence of trust and easily gives rise to coercive legal and governmental structures to enforce the rules of trade. Trade is predicated on certainty of compensation, and such certainty cannot exist without coercive arbiters.
This fear is largely rooted in scarcity. If there are not enough goods and services to go around, one becomes much more concerned about compensation. It’s a very natural and rational response in that scenario.
However, what few people realize is the fact that we are now in a predominately post-scarcity era, in terms of the ability to meet everyone’s basic needs. We, as a society have enough productive capacity for everyone to do this if we act intelligently and compassionately. So the scarcity element is less relevant today than it once was, at least when examining our economic potential.
That is not to say that giving couldn’t be efficient in an environment of scarcity, but rather that pschologically we are more concerned with guaranteed compensation in such situations, which leads to various forms of coercion. Competition also appears fairly rational when there is not enough to go around.
A good analogy here is the family structure. The typical family is largely a hierarchical gift microeconomy due to close emotional bonds and trust. But it is also mostly totalitarian by design, necessitated by financial scarcity, as well as the developmental challenges posed by the incapacity of children to act rationally and independently. In a sense, the family structure is akin to state communism on a societal scale.
The family structure, and historical state communism both seem to reflect scarcity based distribution methods and coercive practices. Post-scarcity trends, on the other hand, when unleashed, give rise to greater freedom and independence within an interdependent framework. This is crucial to understanding what separates a libertarian post-scarcity vision for society from traditional state socialism and other forms of paternalistic structures.
The late Austrian economist Ludwig von Mises is famous for his critique of socialist central planning. He argued that it would be impossible for a group of central planners to be able to run an economy. Whether it would be possible or not, I share the opinion of von Mises that it is not desirable. I believe the goal of economic planning, if we can call it that, should be to facilitate voluntary production and distribution of use value among empowered free individuals. This stands in contrast to disempowered citizens reliant on a collectivist economy managed either nominally or in practice by a relatively small number of plutocrats. Both socialist and capitalist economies as they have existed historically, in pretty much every case have fit this description. And there are clearly some who want to see that trend continue into an era of global statism; something I oppose strongly.
The market-based capitalist system has been touted by many ideologues as a post-paternalistic, decentralized, voluntary system, but in practice a high level of centralized, coercive control is exerted through various power centers (the state, media, stock market, corporate management, etc.). State communism on the other hand unapologetically centralizes all these various elements together into one entity: the state. Both are disempowering systems of centralized control.
Money is possibly the greatest tool for collectivism ever created. Coupled with division of labor, peasant land enclosure, monopolized markets in essential goods and services, globalized supply and distribution chains, it is no wonder we are looking to Washington, D.C. to solve our problems. We have told ourselves that we are no longer are capable of solving them ourselves. A process of reskilling, so to speak, will be crucial in order to gain true freedom. Cooperative networks can provide a bulwark against the effects of a crumbling economic infrastructure.
Trade is more impersonal and egoistic than giving. However, giving can be selfish as well, as the giver may expect some unspoken reward in return later down the road. There is usually a level of emotional connection which makes the transaction work in a personal one-on-one scenario to begin with, which makes it unique.
The question of motivation is always relevant. Some believe that only selfish motives can motivate people to work. But I think the problem is how narrowly selfishness is being defined. If I get a positive emotional feeling after working and then giving of the fruit of my labor, is it not somewhat selfish for me to seek that feeling? If I give out of sympathy, am I not trying to relieve a feeling of guilt or sadness? It seems there are a plethora of “selfish” desires which exist beyond the narrow definition of selfishness. The human nature argument may have been convincing before we knew about mirror neurons, but these days it seems most people can see through it’s one dimensional oversimplification of human behavior.
The Dauphin experiment with basic income in the 1970’s suggests that we are still willing to work if our basic needs are met. And primatologist Frans de Waal has argued based on his own research and that of others, that humans are cooperative, and that such moral tendencies can be observed to some degree in primates.
Clearly, people love to volunteer and be a part of projects which give back. According to the Corporation for National and Community Service (CNCS) and the National Conference on Citizenship (NCoC), Americans volunteered nearly 7.7 billion hours in 2014. The estimated value of this volunteer service is nearly $173 billion, based on the Independent Sector’s estimate of the average value of a volunteer hour. The existence of volunteer work, especially considering the pressures on the average American today, is a testament to our cooperative and giving traits.
I personally feel our society is starved of that feeling of solidarity and friendliness associated with the giving ethic. We want to contribute to projects which actually help people and make a difference. Yet the “economy” is so far removed from real human needs, one cannot help feeling emotionally and spiritually alienated when most of your time and energy is essentially being wasted.
Another important fact is that people are incredibly motivated by social expectations. Humans typically self-regulate their behavior in social situations so as to maintain respect and status within their community, which benefits them in the long run.
Duty is a great example of social motivation. Look at how much people are willing to sacrifice for their country through military service. Channeled into the economic realm, a sense of duty and social expectation can provide positive reinforcement of pro-social behavior.
Designing A Gift Economy Through Social Networking
So how do we design a gift economy?
A gift economy would only work with a reinforced social ethic reflecting the values of giving and trust, as well as interdependence. Such an ethic is best cultivated through voluntary direct experience with microeconomies structurally designed to promote and facilitate giving and receiving as a freely associated microcommunity. The effects of any single project are unlikely to be revolutionary, more likely complementary, but the evolutionary effect of such mutations in the metaphorical gene pool of society is the stuff lasting change is made of.
What I am proposing in more concrete terms is that we begin designing information-based systems to help facilitate voluntary peer-to-peer/cooperative production and distribution of use value with minimal to no exchange value present. All an economic system is at it’s core is a trust-based production and distribution system. As discussed, a lot of superfluous overlay is present in our current monetary market system which can and should be jettisoned in favor of a more streamlined design.
I do not believe this approach is the only way to create positive change in society, but I believe it is one of the more effective strategies that we can take. It is important to not give in to or create dogmatic ideologies as these often divide us when we have so much in common as human beings striving to survive and thrive as best we know how. The more we can unite around basic principles and values through community, the more likely it is that we will create positive change.
So without further ado, here is a tentative vision for a localized social network design which could more-or-less meet the above criteria. For those familiar with LETS, this is essentially a gift economy version of it:
1. Members will be able to post their “needs” and “wants” should they choose to do so. This function accounts for part of the demand side of the economic equation, and encourages need-responsiveness. No limitations to this aside from financial requests. The site is decidedly post-monetary, and designed to facilitate non-monetary activity. Members are free to exchange money and anything else as they please, since the site is merely a networking tool, but the site itself will not promote monetary exchanges.
2. Members will be able to post their available goods or services they wish to offer, as well as any personal possessions they wish to give away. The site is focused on giving, but sharing is also a welcome practice. Just like any online marketplace (think eBay meets Craigslist) you have a virtual kiosk, but the value created is not exchange value, but community value, of which you will be credited according to contribution. This functions as the supply side of the equation. The goods do not need to be the product of your own labor or production process, but if you have the ability to create and share something, it is certainly encouraged.
3. Filling the void of money, a publically available running tally of each person’s contributions to the microeconomy (the commons) in dollars (rough estimate) will be entered by the recipient and giver and logged on the site. This is not spendable, but rather functions similarly to forum based points systems. It is statistical, for the purpose of encouraging reciprocal attitudes within the community. In cases of scarcity or supply shortages, these scores may serve members as a helpful tool in knowing who is contributing to the common wealth and who is not. It also serves as a subtle appeal to one’s ego, as more points could have a positive effect on one’s perceived status as a “good member” of the community.
4. Transactions are a matter for the giver and recipient to handle. The site is not responsible for any complications arising from transactions. The site exists only to encourage and facilitate giving and sharing in the community, and not to act as an arbiter.
If anyone has suggestions, comments, critiques, etc. I would love the feedback. This is public brainstorming, and my ideas are bound to be underdeveloped without the input of others.
Thank you for considering my ideas, and please subscribe if you want to receive future posts.