This is not so much of a blog post as it is notes for myself.
My quest for many years now has been to create a specific kind of specification language that would describe distributed systems, or in other words, multi agent systems, mainly human agents augmented by their computer devices.
Now here is an interesting thing. Let us assume that we do create such a language. How will be sure that the specification is respected by all participants?
For blockchains like Ethereum that have a weak type system, thus they do not have a specification language, the only way to trust the computation is to actually perform the computation in the public.
This does not have to be the case for us. A specification in a dependent type language does require computation to determine the type of the output of a function, but it does not require to know the function itself, just its type. Thus one could have a private function that computes a value, and that value can be checked against its expected type.
In other words, all we need is to compute the types of the outcomes of a computation to provide validation. This is huge because we can then abstract big parts of a distributed system, like a group of actors, and simply forget about its internal structure. Our only concern would then be the validation of the results at the edges with the outside world.
This can enable a hierarchical decentralized validation mechanism, where a single centralized blockchain is not needed.
( We do need to make sure that each abstract function is not called more than once with the same input, because then we would have to also check that they give back the same value, and we do not want to do that.)
Changing the world has been the main goal of revolutionary communist or anarchist groups. There is a plethora of evidence in my lifetime that such groups are ineffective.
In order to show that, I will not look into the strategies that they take but simply on the results. There have been multiple social movements that wanted change and those groups failed to provide the necessary organization that would make those movements successful.
The first of the social movements I took part in, was the European Social Forum in 2002.
It happened one year after the start of the Afghanistan War, and as you can see, we were holding anti-war placards. But this movements started a few years earlier in 1999 in Seatle where people were protesting the role of the WTO, the effects of Globalization and capitalism. The protests continued in Genoa, Italy in 2001 and then Florence in 2002 . The ESF in Florence was a gathering of political movements across europe that discussed for multiple days on an alternative to capitalism. This was followed by a 1 million people demonstration in Florence. I remember walking for hours.
The ESF continued for 2 more years, one in London and the next in Athens.
It was successful in a way since it inspired a lot of people that another world is possible. But I do not remember any decisions taken that would be helpful in transforming this world. There were two factions. The one promoted change through the elections, that we should build left parties that would take part in the elections and that would then perform change when they become the government. The other faction, the revolutionary one that I was part of, was interested in mass mobilization from below, that would force its view to any government that was in power.
Even if the revolutionary proposal was correct, there were no innovative organizational changes that would make such a movement successful.
Eventually that movement faded away, due to the fact that noone proposed something that would work and due to the fact that the EU used the police to suppress it.
The next social movement I am aware of was the result of the economic crisis of 2008. This triggered the Occupy movement, from New York to Spain, Greece and many other Countries, notably many Arab Countries like Egypt.
I didn't participate in this movement, so I can only say what i heard. In New York, and many other places In USA, the movement was about inequality, the fact that the 1% was holding a tremendous amount of wealth while the rest was simply trying to survive. The movement's main organization was the assembly. In Greece, the people that occupied the square organized a discussion in place in which the occupiers took decisions on what to do next.
This lead to a political crisis. The parliament was surrounded by demonstrators to the point that the MPs could not leave the building. In Greece , the steep reduction of GDP, the increase of unemployment to 25% led to a volatile political system. The people were angry and they were ready to follow anyone that was to propose a solution, either on the left or on the right.
The protests were met with police brutality and eventually they faded away. But the old political system was in disarray. The solution that was the most eminent was that of electoral change through the support of the Syriza party. This led to the capitulation of Syriza since it was unable to respond to the economic pressure of the EU.
But one should not forget about the inability of the revolutionary organizations of Greece to turn the movement into mass protests from below, into worker strikes and into the eventual electoral capture of the state as an intermediary step in the transformation of Society. The sad thing about all this is that even if they did all of the above, they wouldn't be able to mitigate the side effects of the economic isolation by the EU.
The third movement that has just started is that of the Black Lives Matter in 2020 in US and all over the world. Even though the movement focuses on Racism, the increased police brutality toward the protesters and the use of the military to suppress the protests has led people to question the role of the police and the military and to question the political system itself. People start to understand that they do not live in a democracy, and thus the movement has the potential to question Capitalism itself. Given that there is no way that this movement can be expressed in the elections, this could lead to a new era of political and social insubordination from below.
Given though that there is no organization that can provide an effective method that could lead to systemic change, this movement will fade away as well, even though its effect could linger for many years.
I think it is quite conclusive that the current revolutionary organizations are ineffective. This is very important to understand. Most organizations will blame either the people or the State and its mechanisms of suppression. But we should not forget that the role of a revolutionary organization is to mitigate those mechanisms.
The people are willing but the revolutionary organizations cannot. This can only lead to one outcome. Eventual social change will happen only after a complete social collapse, a collapse that would destroy all previous social, political and economic relations. This would lead into chaos and from chaos we may see a different society emerging.
That could be due to an ecological crisis or an economic crisis.
The other alternative is to try to find effective methods of organizing. It is imperative that communists and anarchists understand that they need to change their tactics.
In a previous blog post of mine, I had proposed a new rule that would give the right to those that consume an X amount of money, to work to regain the same amount of money. This , I proposed, would change the behavior of agents to consume as much as the infrastructure allows. We would have full utilization of infrastructure and thus a tremendous reduction in production costs and thus reduction of the cost of living. You can read about it here , though the algorithm is a bit outdated.
In this article, I want to point out that we will also have a secondary effect. Workers will stop having an aversion toward technological progress that endangers their jobs and their income. This is very important, because we want to avoid the need to create a structure / organization that forces technological progress in the production process . Instead workers / consumers will autonomously welcome progress.
I think that it is important to see how things work in Capitalism. In capitalism, workers or worker power is a commodity. Companies simply want to buy as few of it as they can, and for this reason, they adopt productivity increasing technologies. On the other hand, workers do not want to lose their jobs since they do not have the right to work, other than the one given by their employer.
It is for this reason that a secondary group in the company should take these decisions, whose interest aligns with the company itself. I think this is called the management team.
For worker cooperatives, member workers have the full benefits of capital investment. But if a non-member worker wanted to join the cooperative, those benefits would have to be split with him too. In other words, technological progress is welcomed by member workers but other workers are not.
Now, let me point to you what happens with the proposed ryaki network:
There are two rules that need to be taken into account :
A. You have the right to work the same amount that you consume. Thus you get priority with regards to others that haven't consumed as much on positions that you both qualify.
B. Each production unit has specific positions that need to be filled, but those positions do not belong to a single person. They belong to multiple people that take turns to work there. Workers are eligible to work in multiple posts.
Because workers can work in multiple positions and they have the right to work in any of those positions, their income remains stable when an organization adopts a new structure that reduces their hours of work , or makes their position obsolete.
While creating a language to encode and compute p2p social structures, I was thinking that parallel to those digital social structures, the Web would remain the same, used to store and retrieve information.
I am starting to believe that this is wrong. We need to encode the social contexts/structures around information. For now, they are either implicit or entirely missing.
Information is created by a social structure and it is used in other social contexts. Thus information has a social function. It is the input to other social processes.
If information provides a service to society or to some group of people, making this relation explicit also results in creating a feedback loop where those groups finance the creation of that information.
As you can see, information is not different from any other production process. A social structure produces a product, and that product is consumed by a specific group, which , if production was democratic, finances and guides production with participatory social structures.
Currently, information , on many occasions, lacks a social purpose and noone takes responsibility for the accuracy of that information. In the future I envision, information has a purpose and someone is responsible for it, for ex. to update it to make it more accurate or clear.
For every solution to a problem , we have assumptions about the state of the environment with which we interact. Those assumptions can stop being correct. What do we do when that happens?
Let us further assume that the problem is a societal one, and the solution is a social organization. If we define rules under which this social organization functions and we require the environment to respect some restrictions, then when it doesn't, we end up with no social organization that can solve the issue.
If the organization was mediated with software , then that software will be thrown away, and new forms of organization need to be developed from ground zero. Writing specialized software is time-consuming, thus practically, for a long period of time, the organization will need to use non-digital methods to preserve its structure. This, for many reasons, is both impractical and unacceptable.
The things get even more difficult when we understand that social organizations depend on each other. If one is not able to perform its role due to a change in the environment, all other dependent social organizations will collapse as well. Thus, sometimes, we can end up with catastrophic failures.
How can a system be able to adapt to such environmental perturbations? Here , I mean adaptation under conditions it was not designed for.
In my opinion, we need to define a generic type of organization that can act as a fail-safe mode, it will try to fulfill the imminent problems and at the same time it will create the discussion space for the creation of the new organizational forms that will replace the failed ones.
What characteristics should this generic organization have? This is a question I need to answer.
Freedom is not free. It has an economic cost that depends on the material conditions that enable it. The same is true for Democracy. At the same time Freedom and Democracy are fundamental human rights. Without exceptions, all must afford those rights. Thus, any proposed social system must create mechanisms that provide those rights to its participants.
My exposition will start by analyzing previous movements on freedom and Democracy and possibly discuss their limitations.
Digital Freedom and FSF
One cannot discuss Freedom without talking about the Free Software Foundation. FSF supports the freedom of the users of Software It believes that the users have the right to understand how the software works and to modify it to better support their needs. It is important to understand software as an intermediary between the hardware and the user. It gives the user an interface to interact with the machine. It enables the user to perform certain actions or it restricts him. In this sense, the interface that the software provides is similar to a legal system that allows or disallows certain actions.
Thus , one could say that FSF supports the right of the users to change the digital system, rather than simply picking among the actions that are possible within the provided software. In this sense, FSF is consistent with revolutionary thought.
From a materialistic point of view though, this is not possible. Users almost never change the software to suit their needs. In fact, proprietary software might even be more perceptive of its users needs, because the users are also the customers. Free Software provides freedom as long as you are a hacker, and even then , it is very difficult to perform a change. Only the writer of the software and a select few that maintain it are able to make changes. As software becomes more and more complicated, developers only understand parts of the software and only together can they support it.
In order to have actual democracy and freedom, we need to create a welfare service that is free for all to use, that allows users to vote on changes about the software (or fork it and create alternatives) and provide funding so that the developers of the software will perform them.
In conclusion, digital freedom requires the existence of a welfare service.
Material D&F : Democracy and Freedom viewed from the Revolutionary Left.
The revolutionary Left had always had Democracy and Freedom as the goal. For the RL , social relations and the economy should be determined by the will of the people. But similarly to the digital case, there is an intermediary between the citizens and the execution of actions. The interface here is the rules that each community , group or society has demanded to be respected.
The type of rules can depend greatly on the context. In production, there is a specific workflow that must be respected. The use of machinery requires specific handling to avoid damaging it. Coordination in a community about social issues requires specific methods of decision making and types of actions to choose among.
It is in this context that the RL supports the right of the citizens to change the rules, the interface that each user will need to respect. Here though, we have the same problem, the citizens know what they want , but they have no knowledge how to acquire it. Can citizens change the rules themselves?
Consider the case of a nuclear plant. A community might decide that it wants to reduce the nuclear waste that goes to the environment. The community perceives the externalities of the nuclear plant. For the change to happen, it must interact with a group of nuclear scientists that will provide the new rules about the functioning of the nuclear plant.
Similarly, assuming that you eat at a restaurant, the customers can vote on changes of the food quality or provide directions on what type of food they prefer. Only a trained chef will be able to turn those directions into rules of cook-making that the cooks must abide by.
In conclusion, material freedom does not only require the right to vote but also the support of trained professionals that will provide the solutions, and will create the new rules that certain members of society must follow to have the desired results.
Since freedom and democracy is a universal right, this service must be provided to everyone, thus it must be a welfare service.
Cyber-physical systems : The elimination of the cyber physical barrier.
I have discussed digital and material freedom and the need for the existence of a welfare service that enables them. Digital freedom has been proposed by the FSF, material freedom by the Revolutionary Left. The interesting thing is that the cyber-physical barrier is starting to collapse. (And one of the goals of my work is its collapse.) The examples are many. ERP systems had been used in production for many years. Our interaction with the State has been digitized. New p2p systems start to emerge, such as airbnb and Uber, that use software to determine the interactions between the customers and the providers of a service. Blockchain and smart contructs promise to digitize part of the interactions we have as a society.
Software starts to determine our social relations and the economy. The interface that citizens use start to increasingly become digital.
The rules are written in software.
It is in this context, that the notion of Digital Freedom and Material Freedom start to blur and start to become the same thing. The RL has to start thinking about Free Software and Digital Freedom and translate its ideas to this new world.
Freedom as a welfare service
Any group that supports freedom as a universal right needs to understand that freedom requires maintainers. It requires a service that takes user input and produces changes to the rules and the software that create that user interface. That service needs to be free and it needs to be productive.
We need to measure the productivity of the service in order to determine the degree of freedom that it provides. If users propose changes, the service needs to interact with the users, provide guidance and actually perform the changes that the users want.
The group must find ways to support such a welfare service. In order to understand the magnitude of the cost, Research for new products or production methods need to be part of this welfare service, thus the cost is greater than the current cost on Research. This amounts to 2% of the GDP.
Freedom is not free but it must be free for everyone.
I recently had the chance to learn of a new theoretical model on Evolution called multi-level selection. I will try to describe it and provide my first impressions on the different interpretations / uses of that theory from the community and its rejection from mainstream social sciences.
( I wanted to make a more thorough research on the subject, but currently it is not possible.)
Now, the main idea of multi level selection is very simple but this simple idea has profound implications for our society. It goes against mainstream theories that were built to support the premises of Capitalism, basically, the notion of the individual selfish actor. Social sciences have thus been victims of the system they belong to.
Let us first describe the mainstream mechanism of Evolution.
A. The actor is an individual organism to whom we attach a fitness function with which we measure its ability to survive.
B. We perform a simulation and then compute the fitness results with which we remove actors that have not performed well. This could mean for example that those actors have not been able to acquire enough food to survive.
C. We introduce random mutations that change the behavior of actors.
D. We perform the above multiple times.
We assume that natural selection works in the same way. Actors that have favorable mutations increase in number while others perish.
The important thing to note is A. The fitness function applies on the individual. This means that behaviors that increase the fitness of the individual are the ones selected. This leads us to conclude that only selfish behaviors are evolutionary selected.
This is consistent with the mainstream economic theory of an actor that is super rational and selfish. Since it is on our nature to be selfish, any other theory that does not conceive the individual as the actor leads to failure.
Consider the case where we have a common piece of land where everyone can herd his sheep. Since the amount of grass is limited, it is best for each individually to overgraze his sheep. This eventually leads to the destruction of the land, not providing grass to anyone and the whole economy around it collapses. It is because of this that it has been suggested that individual property is the only way to govern resources.
Now, this is not true. Let us start with genetic evolution before switching to cultural evolution. Random mutations can propose any form of behavior, and it is selection that promotes those that increase survivability. Consider then the case that a specific mutation leads to an increase in the fitness of another organism whose behavior also increases the fitness function of the other. An increase of of the population of one organism leads to an increase of the other and vice versa. This is an example of a selection process that promotes a non-selfish behavior.
Mainstream evolutionary scientists will tell you that this is reciprocity, thus this only proves the selfishness of the individual actor. Note though that this is incorrect. Organisms do not necessarily have the capacity to judge actions. A selfish action here is defined as an action that directly increases the fitness of itself.
Multi-level selection thus proposes that a specific number of individual actors interact in such a way that their survivability depends on other. In such a case, we could consider the group as an actor that behaves in a specific way and which has its own fitness function. Individual mutations that increase the fitness of the group are thus selected while those that that do the opposite perish because the group perishes.
This formulation of evolutionary theory allows the existence of altruism, something that obviously exist in Human Society.
If we now return our gaze into culture , we will see that the main ideas of multi-level evolution also apply here. Elinor Ostrom's work is important here. Elinor studied communities whose livelihood depended on a common pool of resources like the one I described before. She found that depending on the case , the members created rules to govern the common resource. They imposed restrictions on its use and they checked that each member behaved accordingly. Some groups were more effective than others. This lead to an evolution of the rules of governance based on a group fitness function.
Let me now link the above ideas with my work. It is only recently that I learned about multi-level selection but it is directly related to what I am searching.
In essence, I am searching for a digital language that describes the rules of a group / community , that will have the same functionality as the DNA in organisms.
A. The DNA is interpreted so as to determine the structure of proteins
This language will be compiled to create communication tools that permit the behaviors that the rules allow.
B. DNA can be copied and transfered into another organism.
The digitization of the rules will permit a group to copy the institutional rules of another without any errors.
C. DNA contains information about the organism that is subject to the effects of evolution.
Similarly, each group will be able to mutate its rules and will be subject to a fitness function.
What I hope with this is that the complexity of the rules of community institutions will increase to the point that their effectiveness will surpass that of the state or the undemocratic corporations.
This digital language is hoped to increase the speed of the cultural evolution of institutions.
Unfortunately for me, the rules describe the concurrent interactions of agents and there isn't any widely accepted theory around distributed concurrent execution.
Thus my main research is on Computer Science rather than on Social Sciences.
For a long time now, I have been thinking about ways to finance research in a non-profit economy like the Ryaki Economic Network. The only method I could find was a centralized one. Here I will propose a decentralized one. Since this is a new idea , I except it to be revised in the future.
Let me first define how a non-profit economy functions. In a non-profit economy, the revenue from the sales of a commodity is distributed to the workers that participated in the production process of that commodity.
In contrast, in capitalism , a percentage is kept by the firm which constitutes its profits.
Thus, in a non-profit economy, two problems arise.
A. How do you finance new capital expenditures?
B. How do you finance research?
The solutions we find need to distribute the decision making to as many people as possible. Thus, they need to be distributively democratic.
The first problem has been solved by Ryaki. New capital expenditures are financed by workers because they are the only way of storing value in the system. The value is retrieved back in the future as production uses the capital to produce goods.
This solution works because identifying the processes that took part in production is easy, Secondly, the risk of investment is low enough to attract investors.
Can the same be done with research? No it can't.
Scientific research is characterized by the search into the unknown. Predicting the outcome of a research inquiry is most of the times impossible.
Many fail to produce any results at all, while others do not produce anything other than new knowledge that has no applicability to production. The usefulness of a research project can be found after many years when a composition of scientific results creates a new method of production, or a new product.
Any financing of research needs to take into account that research failures and practically useless new knowledge are important in the long run They need to be financed.
Here lies the problem. In a non-profit economy, workers are compensated the total amount of revenue. At the same time , we cannot use ryaki, because the risk of investment is too high.
Let us look at one solution. One solution to this problem is to have people democratically decide on the percentage (per) of value that is to be spent on Research. For any product bought at price (p),
per * p is to be spent on research. One could then say that this amount is kept in an special account that belongs to the consumer. The consumer can only use the money to finance research.
This solution depends on the centralized democratic choice of the people with regards to the percentage. At the same time, the decision might not be optimal. Which percentage is the optimal one? If we don't spend money on research, then we reduce our current costs as a society. At the same time, we abandon the probability of future reduction in production costs due to automation.
Is there a way to remove the centralized part from above and find a somehow optimal way to spend money on Research?
Let us assume that the optimal ratio of total research to productive research is (rs).
Then let us suppose that we have a productive research of value (vr).
The change in production cost of a commodity due to this research is (d).
old price = op
new price = np
d = op - np
(Our research here decreases the production costs.)
Then one could finance research by increasing the price by (fr) such that
fr < d
for an amount of products (q) such that
fr * q = rs * vr .
Given that research is unpredictable, productive results can not be guaranteed to arrive when we need them, One could create a buffer of financing of new research. Secondly, if the reduction of costs is higher than
the cost of research we need to increase research. We do both by adding a multiplier (bf).
fr * q = rs * vr * bf
The outcome of this equation is that research increases when it reduces costs. Financing is constant for many years and it allows researchers to fail, or in other words try to solve difficult problems.
I think that one more question needs to be addressed here. How is this different from the capitalist firm that extracts value in the form of profit?
The difference is that firms extract value through exclusion. They maintain exclusive control over resources and research results is one such thing. The patent system is used to maintain that dominance. On the other hand, the wages of researchers is determined by the labor market. Given that they cannot produce research on their own, it requires laboratories and numbers, their wages do not reflect the value that they create for the firm.
Given that in an open value network, resources are democratically shared as long as they are used to produce useful things, anyone can be a researcher if he has the qualifications. Anyone can use a lab and form research teams.
The customers decide on the direction of the research but not on the individuals that will perform it, individuals will be selected purely on effectiveness.
Thus, the income of researchers will not vary substantially from other professions. Their income is independent from the total reduction of costs in production due to their work. (though the total reduction of costs consitutes an upper limit).
I have described a distributed democratic method of research financing that determines both the intensity and the type of research. At the same time, the model is dynamic because it reacts to the effectiveness of research to reduce production costs. This is just an initial version which will eventually need to be improved upon.
(update: Even though, the article still holds, the details of the implementation
are not correct, there is a much simpler version, and probably more simplifications in the future.)
One of the tenets of Keynesian Economics is that the current crisis is the result of Under-consumption. I disagree. I think that the problem is low profitability.
The basic idea can though be repurposed in an economy that does not allow profits to be an incentive of production, such as in my proposed Ryaki Economic Network .
The main idea behind under-consumption is that because income equals expenditure in the macroeconomic level, reducing the expenditure leads to a reduction of income. It is for this reason that Keynesians propose to increase public spending during crises.
In this video, Varoufakis tells the audience that austerity in the scope of a household works because if you spend money on a beer , you will not have money to spend on other things.
The reason is that workers do not control the amount of work that they can do to replenish the money they have. Even though, Workers have the right to work , someone needs to offer them work. Thus individually, they can do little to increase their income. Thus the income can be considered as a constant constrain that determines economic choices.
If I = Income , and bc = beer consumption , then the remaining income is
I - bc.
In the ryaki network, or in general an open value network, openness means that anyone has an equal right to participate to the network and thus create value for himself.
In other words, each worker has an equal right to work, assuming he is fit for the job. All created value is returned to the workers themselves, there is no extraction mechanism as in capitalism.
Even though this system is egalitarian, the resources of the system remain finite and thus the amount of income will remain relatively constant and constitute a constrain to economic choice as before.
The reverse ripple network tries to change that. Let us modify our Ryaki system a bit.
Before : Everyone has an equal right to work.
Now : The person who has consumed commodities of value x has priority over someone that has consumed y if x > y.
After someone has worked z hours, then this is removed from the value of consumed commodities. (x - z).
Now let us look at the constrains of a household income.
If C = consumption, and I = Income , then I = C.
This means that a person has no restrictions on expenditure. The outcome for the economy will be profound. Work that was before done by household members to save money will now be done by external services. (ex . Cooking, Cleaning) . Given that the external services have much higher productivity due to the investment in tools, this will decrease the total amount of work performed in Society.
Now, one might correctly ask how the network will provide so much work to compensate for the lost income. The trick here is that one's income is the others expenditure. In other words, when someone spends money in the economy, he creates work for himself.
Here , though, lies a problem. The transformation of expenditure to Income in the macroeconomic level is not automatic. Moreover, there are economic imbalances between geographic regions that do not permit such a transformation from happening.
Let us take two geographic regions (like Greece and Germany) that have different capital intensity and where one has a trade surplus over the other, (Gemany). Will our naive new rule allow greek workers to work more to compensate for their consumption? Obviously not, their expenditure creates work for the German population. The only option is to immigrate to Germany.
The reverse ripple networks solves this problem by giving an incentive to spend only to products that create Work for the Spender.
Let us consider 3 different productions. a fishery (F), a brewery (B) and a carpentry (C) .
When a carpenter buys x fish, a fisherman works x to catch the fish. In a reverse ripple network, the carpenter is awarded x for his consumption and the fisherman (-x). Now the fisherman buys a beer for y. The network now is like this.
c -----> f ------> b
x (-x) y (-y)
If a worker at the brewery buys a wood table of value z, then the fisherman has indirectly provided work to the carpenter of value , assuming y > z , z.
The network after the purchase of the table:
Assuming (x < z)
c -----> f -----------> b ------------> c
0 0 y - x (-y + x) (z - x) - z + x
(Negative values can only exist at the places of work, and positive values can only exist at consumption.)
Now, let us propose our new rule. The workers that want to participate in production are ordered based on the negative value that they have acquired. If they have a lot of negative value, they have less priority.
In our example, considering that we have a computer application that helps the carpenter in his consumption, each consumption choice is associated with an amount of value that will reduce his negative value. In other words, each consumption choice is associated with the amount of new work that he creates for himself.
The carpenter has (- z + x) negative value. If he buys fish, or a beer, he could create a maximum of (z - x) work for himself.
In our example with Germany and Greece, Greek workers will select local products for their consumption over cheaper German ones because this is the only way to guarantee their income. Similarly German workers will be incentivized to buy Greek Products. Eventually, it will be beneficial for all if new capital investments occurred in Greece. It would reduce economic immigration and increase the trade between the two countries. An increase in Greek exports will enable an increase in Greek imports as well.
To summarize, I have tried to solve two problems here. First the fact that income constrains determine expenditure and secondly, that unequal capital intensity and productivity levels between countries tend to
create a permanent trade imbalance that leads to increased Debts and bankruptcy by the weaker country.
My proposal can dramatically increase the efficiency of the network.
update :
I do believe that this idea can become better. Workers can decide which jobs they want and
accumulate points with their consumption through the use of the ripple
network. Then , when they work , they spend those points. This is a much better version.
In this post, I will consider two types of Processes. Social processes with multiple agents and computational processes performed by computers.
In the first case, the function of the process is the production of a tangible or intangible good. In the second, the computation of a value.
Secondly, this is not just a theoretical discussion. Social processes (as well as computational processes) can be described in a digital specification language, which is then used to create the communication tools that the agents will use to interact with the others to perform their task.
Understanding the concept of role helps us in designing a better specific. language.
Here's what I will try to show. The different roles in a multiagent process do not describe the functionality that each one performs, but rather it devides the work into parts that have fitness functions that can better be fulfilled by the agents, or the system as a whole has material conditions that make it work better with such a division.
Let us look at two examples.
What is the role of the doctor?
One could say that the role of the doctor is to inspect a patient and prescribe medication.The role here would be defined by the functionality of the agent.
In the computational context, the role is described by the type of the inputs and the type of the output.
ex. toString : Integer -> String
In PL, we already have a description Language for such a thing, it is the standard Type System that each language provides to the programmer.
Could on thus say that a specification language of roles is redundant? If we are to introduce a new specif. system, we need to understand what it describes.
More importantly, if roles describe something different, then the specific. lang should be independent of the type system that describes the functionality of the process.
Going back to the doctor, the description of the work that a doctor does , does not explain the reason that there should be a specific person that is to perform that job. There are material conditions that explain that.
First of all, the job of the doctor requires specific knowledge that needs to be acquired by a human being. Because of our limitations , we can only understand so much, thus it is necessary to split knowledge in smaller parts.
All doctors need to have that knowledge and there are institutions that train and verify the skill of subjects, medical schools.
At the same time, there are other material conditions that lead to the role of the doctor. There is the problem of locality. Even though drugs can be researched and produced in certain locations, doctors need to be locally found where the patients are. Because of this , we have doctors that are located in each city , individually or in hospitals.
Doctors at the same time require certain instruments to perform their job. Based on the cost, some are acquired by doctors individually. Costlier ones are available at hospitals. Here we see that the role of the doctor is also determined by the cost of acquiring their medical instruments. People who cannot buy them cannot play the role of the doctor even if they have a medical degree.
At the same time, we have found that higher-level roles, roles that describe a subset of the multiagent system is also affected by materialistic conditions.
Hospitals and the roles they contain cannot be understood in isolation to each other. There are cooks, cleaning personnel , nurses, administration staff that all work in coordination and in parallel.
Returning now to the case of a Multiagent Computational System, the roles are again created for material reasons.
First of all , certain types of computation require specific hardware requirements. Some require a lot of memory, other require a lot of cpu power, fast double precision arithmetic, fast encryption and decryption modules or ecc memory.
The requirements of hardware and software for a bank, a rocket , a phone or a car computer are quite different.
Next, Agency is an important factor for creating new roles. The client and the seller cannot be the same role. Each one has a different motivation. The first wants to buy something he finds useful and not pay much , the other wants to make money. The seller here, wouldn't be able to decide what the client should buy because he does not know the preferences of the client and his income.
Thirdly, data are owned by specific institutions or people. They do not wish to give them, thus they need to perform the computation that is related to their data by themselves.
Forthly, we have the concept of authority, in which a specific agent is given the task of validating a specific type of information, or authorizing a specific computation.
There are many material reasons why a specific agent needs to be an authority ,which leads us to create that role.
As we saw, the context of the computation, social process, the material conditions in which those processes are performed determine the roles that need to be introduced into our system. Thus, our design would need to allow the change of the schema of roles without affecting the rest of the type system.
How does one do that? That is a question to which I have no answer at the moment. (But I have some ideas).
One of the main points of Marxism, Exploitation , is directly related to the idea that an entity that does not take part in production decides how to spend the profits of Production. The same problem arises in Failed Democracies. The only solution is to decentralize Economic and Political Power so that such failures can be overcome.
Let us look at a centralized version of Communism. In this case, the state decides the amount and type of production that occurs. It gives redeemable coupons to workers which they can give to stores to buy products in exchange for the work that the state has assigned them to do.
Let us look at two scenarios. In the first case, the state takes decisions democratically. The population is given the ability to decide about the Economy. This can be done with local assemblies or with the internet. The decisions are then processed and the result is then passed to the individual sectors of the economy. Keep in mind that there is a bureaucracy that handles the democratic procedure , produces a solution and sends the signals back.
The second case is the same as before but there is a problem in the democratic procedure. It does not have to be a big problem. Simply the state starts to decide on things that it shouldn't. Some actors have a disproportionate ability to influence Production. It is at this moment that the concept of exploitation that Marx used to describe Capitalism starts to also apply to this scenario, to degenerate Communism.
Can we recover from such a scenario? It is very difficult. The reason for that is that all the processes that organize society are controlled by a single entity. The only solution is a Revolution by the whole of Society. It requires the subversion of big parts of the economy/Society in a scale big enough to be sustainable and to cripple the previous economic system. Small scale uprisings will simply fail unless they inspire others to follow.
There are many Revolutionary parties who want to create a Communist Society. None of them realize that such a Society can be very easily subverted into an Exploitative one.
There is a reason why most Communist Visions are centralized. The rejection of private property in production requires someone to take care and expand the means of production. And this requires that Society decides on the economy as a whole, since the means of production belong to all. Since the public property belongs to all, they all need to contribute in its production. This , thus, requires a centralized way to extract value from Society that is to be spent on the public property.
Another solution is to provide local rules that prohibit exploitation , maintain the means of production as a public property and at the same time have a decentralized way to invest in Capital goods. In this case, there isn't a centralized control of residue value / profits. In fact there are no profits. All the value is returned to the workers / producers. It is then up to them to invest in capital goods. The capital goods are used by Society and customers only need to give back the cost of investment. The investors have no claim on the product of production and they have no control of production at all. Investments are simply a store of value.
In this case, there can still be and should be democratic structures , both local and centralized. Since the method of value accounting is decentralized, if a centralized democratic structure becomes undemocratic, part of the network could simply split from the rest. The social productive relations depend on this decentralized method of accounting to continue functioning.
The ability to invest will continue to exist since it is local peers that perform it.
As long as economic power is decentralized , the democratic structures that are built on top will need to abide to Society's will.
For the same reason, the Capitalist states need to obey to the economic actors that control the productive forces of the economy. Firms have full control over their production, over the accounting of their revenue, and over the investment opportunities that they could pursue. Capitalist democracies can either obey to the economic actors or be overthrown.
If one needs to create a Society where there is no money, then there is a generalization to the previous solution. You need to build a Society where Societal Power is decentralized. Previously, power was based on money or credit. In a moneyless Society, the democatic structures need to be decentralized and self-healing. If one fails, the other can continue to work and eventually overpower the failed one. This does not mean that Centralized Structures should not exist but that they are powerless without the support of the decentralized Social structure.
Assuming that you believe in a reformist transformation of Society, you need to check that you maintain the political power locally at your political organization, or your trade union. If you allow a secondary party to hold the political power, then that party can do what it wants, and it will most probably succumb to the Economic pressure of the Capitalist class.
I recently read an article on the difference between Physics and Biology.
Even though both type of systems are able to (re)act to their environment, DNA allows biological systems to store information that is then used to have a more complex set of interactions. The outcome of evolution is for that information to expand. Can we use this model for human societies? What would be the limiting factors in the increase of societal complexity? And what solutions have already been found and used?
It seems to me that the model can be expanded. When humans invented writing, they were able to write down newly discovered techniques. These techniques are then copied and used by others , who at the same time have the ability to modify them so as to make them better.
In biological systems, the DNA is interpreted into proteins by specific cell chemical mechanisms. In human societies, it is humans that must interpret technological knowledge into actual tools and final products. Thus as our knowledge expanded, it was important to have specialized personnel for each part of the technology. Our own cognitive skills were not good enough to understand all the codified knowledge that we had as Society.
If we have people specializing their technical knowledge , that creates the problem of interaction of the different groups that have different kinds of knowledge.
I call this the problem of composability. Composability is currently achieved by creating specifications which describe the phenotypic limits / properties of an object, or a system of objects, or possibly human processes.
Specifications thus create an abstraction over the complexity of a specific technological knowledge. This reduces the cognitive burden to the rest of Society.
Now , there is a new problem. The experts in the field need to create objects that abide by the specification and the rest of the world needs to interpret the specification correctly.
If there was a way to do this automatically, that would reduce failures to zero. New technological methods would more easily be accepted and used. If one considers a system with a multitude of parts where a single failure has a cascading effect on the rest of the system, then it becomes apparent that automation of the verification process is very important.
With regards to software, and thus to anything else that can be digitized, dependently typed languages like agda and idris have the ability to verify that a specific specification is being respected.
In terms of our current state of affairs, Society's knowledge is currently privately owned by companies, thus the knowledge cannot be duplicated and it cannot be mutated. Even in the case that knowledge is open source, the capital cost of materializing that knowledge is prohibited for the majority of people.
Interactions between companies is mostly done with material objects. When there is a human coordination between them, like in an R&D project, the interactions themselves are under close doors and are very simplistic.
If we are to have complex interactions between individuals in an open environment where everyone can join and / or propose new methods , social processes, then it becomes apparent that it is necessary to have specifications of Social behavior, that would allow social processes to be composed and to be mutated without fear of cascading failures.
If we are to use digital methods of Communication and coordination , then current research developments in the verification of communication protocols could provide to us exactly what we need.
What we would then have is the specification of the social processes of Society itself and their dynamic interactions. Given that the cost of verification would be zero and because the specification would be available to anyone to democratically modify, I predict that we would have an explosion of Social complexity.
Libertarians , both left and right, are very much interested in freedom as their name suggests. Unfortunately, their version of freedom describes the ability of the individual to interact (or not) with others at a local level. But freedom is also emergent. It arises from the social structures that we belong and then becomes a property of the individual.
Let us look at an example from physics. The most common example here is that of the ideal gas law. Let us have a number of melecules of gas inside a container.
These molecules are free to move at any direction and because of that their movement is random. From a libertarian point of view, the molecule has complete freedom since it can "choose" (due to randomness) to go wherever it wants.
There are though two properties of the molecule that can not be conceptualized other than if we look at the container itself and the gas as a whole. First of all, the molecule cannot escape the container it is in. Second of all, the amount of collisions with other molecules is determined by the pressure , volume and temperature of the gas inside the container.
Neither the pressure , volume or temperature are properties of the molecule. They describe the macroscopic properties of the gas. But at the same time , they impose on the molecule an emergent notion of freedom which measures the probability of collisions with other molecules.
Now, if we return back to human beings and Society, we will see that emergent properties affect most of our lives.
Milton Friedman was one of the proponents of economic freedom, the ability of the individual to take economic actions, and the reduction of government intervention. Of course, the government never stopped to intervene in favor of the big Corporations but let us look at this theory at face value.
It is true that people can decide to work for someone or not. But the type of work, the wage, the conditions of work and the quality of the output is not decided by them. More importantly, unemployment is an emergent property of Capitalism. Unemployment leads to a reduction of wages that is necessary for profits. Hierarchical structures is also an emergent property of Capitalism derived due to the accumulation of wealth. The existence of the working class and the capitalist one is also an emergent property.
So despite having economic freedom, you are forced to live in poverty, work for low wages or be unemployed. If you work, you will take orders from someone in the hierarchy that is not more qualified than you. And you will be a worker for all your life , though you may believe in the American dream that you can become anything you want.
If we now look at the ideas of left libertarians, we will see that they make the same mistake that right wing ones do. They are talking about voluntary association which is indeed a good thing to have but they do not acknowledge freedom as also being an emergent property.
In this blog post, Heather Marsh discusses the evolution of Democracy and proposes that the future Society should be stigmergic. Stigmergy in general describes the indirect coordination and possible collaboration of many individuals. The main point here is that such a coordination is indirect instead of authoritarian. But as I pointed to her, stigmergy can be a good property to have but it is important to understand that it neither promotes freedom nor autonomy. At the microscopic level, you might think that you are free but at the macroscopic level, you are not.
In other words, left libertarians from a conceptual point of view do not differ from right wing ones, even if the one is pro-capitalist and the other anticapitalist.
BlockChain/Ethereum is said to enable the creation of Decentralized Autonomous Organizations with the use of a technology called smart contracts.
Even though, it is theoretically possible to do so, the creation of a DAO by performing an initial Coin Offering is intrinsically contradictory. If it was truly a DAO, the price of the coins would be zero.
Non-zero value means that there is an asymmetry in power and control and thus the DAO would't be decentralized or autonomous. To understand why this is the case, one needs to translate the decentralization promise of Ethereum / BlockChain to social / economic relations of power and control.
BlockChain's main feature is that it enables the decentralization of the infrastructure and the open access of the data. Any asymmetric power relations that arise from the control of the servers , software and data are made impossible.
The infrastructure is though not the only way that enables asymmetric power relations.
Let me give you an example . The company that created the ripple protocol and network has open sourced its software. At the same time, they created billions of coins. They gave away some for free and the other , they kept to sell.
One could say that anyone could just take their software and create their own network with their own coins. Unfortunately, this is not possible. First of all, it requires a team of professional programmers that are able to fix the bugs that are to be found. They also provide expertise to organizations that want to join the network. As soon as Banks and other organizations join the system, it immediately gains value that is not present in the software itself. This is called the network effect. After a while, the value of the system is big enough that is difficult to create another network.
For this reason, the price of ripple coins is not zero. For the same reason, the network is not decentralized.
When we talk about DAOs, we need to distinguish between the decentralization of power and control and the decentralization of the infrastructure. The blockchain only enables the latter.
Let me make another example to show you that any real DAO would be unable to have an ICO whose price is not zero, let us look at a much easier example.
Let us say that you bought a song at price x. Assuming that you are able to copy the song and give it to anyone you want at zero cost without repercussions, noone else would buy another copy as one would simply get it from you.
The price of the song thus almost immediately becomes zero.
If someone was able to simply copy the code and data that reside in the blockchain and create a copy of the previous DAO, then the price of the coins would be zero as well.
This is a reply to Matthew Slater with regards to his article on protocol cooperatives vs platform cooperatives:
Hello ,
I agree with you that we need open protocols, or open value networks. But we also need accumulation of capital , something that cooperatives are trying to solve.
Both open protocols and a decentralized accumulation of capital would be better than either alone.
I can't see how creating an interoperable network of alternative currencies will solve this problem. Ryaki tries to fix this problem.
Keep in mind that if you look at the capital/labor ratio of world's GDP (capital depreciation / labor) , it continues to increase every passing year, as automation takes over the production.
It is important to look at the statistics , because some would argue that in a knowledge economy, capital has no important role to play.
On another topic, blockchain is not designed to create a multitude of protocols that are composable. The cost of creating new protocols will be high. A new language is needed, a new type system. Session types is one such solution.
http://simonjf.com/2016/05/28/session-type-implementations.html
More importantly, you have low expectation of success for cooperatives, but your argument (from the point of capital accumulation) also applies to open value networks. If the network is not able to accumulate capital , it eventually dies, in the same way that an organism does when it does not eat.
And I agree with you. There is little chance of success for both open protocols and cooperatives. The internet is one example where networks have transformed into centralized hubs. This is why our work should not be done so as to succeed but to inspire a new generation of people that another world is possible. Our work should be to inspire them to demand that such a world becomes our world.
You say that CIA can create dictatorships in countries that are out of line. That is why protocols should enable the coordination and cooperation of the people that are part of the resistance. The protocols should enable the political movement to succeed.
In this article, I will try to explain how to build a new incentive mechanism for investment in order to replace profits as a motivation.
Is it possible to have people invest with a zero or negative rate of return?
At first, this will look impossible to happen but one will soon find out that there are examples where this actually happens. Some banks have recently decided to have negative interest rates on their saving accounts. The reason why people did not withdraw their money has to do with risk. Putting the money somewhere else would increase the risk of losing most of the money, in other words, eventually it is better to have a negative interest rate than losing your money.
There are two points to be made from the above example. First, investors chose a negative interest rate because there was no other choice. Second, risk aversion can be a motivation mechanism for investment.
How can we introduce risk in our monetary system?
Let us look at the stock market. The value of the stock of a corporation is determined by its equity, the value of its assets and its liabilities and its price is determined by the belief by the investors of its future valuation.
Let us introduce three new rules in the stock market. First, selling stocks to get fiat money is prohibited. There can only be an exchange between stocks. Second, the above corporations become non-profit. Third, you can use your stocks to buy the products of these companies. For example, if a product has a price p, and the capital depreciation for its creation is c, you need to destroy shares of value equal to c (because the capital they represented does not exist anymore) and transfer shares of value (p - c) to pay the labor cost.
The first rule guarantees that investors will not flee into non-risky financial instruments because of the second rule. The third rule introduces a new incentive mechanism for the ownership of shares, the use value of their products. At the same time, we have introduced a new problem, we do not have a single currency with which to perform our exchanges, thus most exchanges will fail to materialize. We need to find a way to solve this problem.
The problem can be solved with a version of the ripple payment protocol. The ripple protocol was invented by Ryan Fugger, a Canadian developer that initially wanted to enable people to create credit and use it to perform transactions. A few years later, the main idea was used to enable cross-border payments and cheap inter-banking money transfers. The currency of this company that is used to make the transactions is currently the third most prominent digital currency after bitcoin and ethereum.
Let me make an example of the use of the ripple protocol in our case. I will use the simplest method. Better methods could exist.
The first rule of the protocol is that investors input the stocks that they would like to own and the maximum number of shares per stock. The ripple protocol is then permitted to exchange stocks by itself as long as these limits are respected at the current value of the stock. (In our case the value is constant and is determined by the initial investment in capital)
Consider investors Alice , Bob and Tom.
Alice owns 5$ shares of A and wouln't mind having 4$ shares of B.
Bob has 8$ shares of C and wouldn't mind having 3$ shares of A.
Tom has 6$ shares of B and he would like to buy a product from C that is worth 3$.
Alice works at company C, for every product, 2/3 of its price goes to repay the capital investment and 1/3 goes to her.
Ripple checks to see if there is a transaction path. It there is, it performs the payment.
After the transaction:
Alice owns 3$ shares of A and 3$ shares of B.
Bob has 6$ shares of C and 2$ shares of A.
Tom has 3$ of B and his product.
As one can see, ripple enables us to use the equity of companies as an exchange currency without having to use fiat money.
It is also worth to see the total credit before and after the transaction. After, the total credit is 2$ less because the capital has been expended.
Ripple creates a trust network on top of the stocks with each edge representing that the investor is willing to own the specific stock. Will this network be connected enough to permit seamless payments inside it? This is a research question that requires agent based simulation and that I do not have the time to perform. I have a specific transaction routing algorithm in mind that incentivizes investor to disperse their investments to multiple stocks, thus increasing the connectivity of the network.
Consider the case where
a 500$ stock of A is owned by
Alice 200$
Bob 250$
Tom 50$
and someone buys a product with 5$ going to the investors (total price is irrelevant here).
One would think that Alice would get 2$, bob 2,5$ and Tom 0.5$. If the rate of sales is r, then the rate per capital remains equal among all the investors.
If on the other hand, we equally split the money to all the investors, 5/3 to all, the rate per capital would be lower for Alice and Bob and higher for Tom. This incentivizes Alice and Bob to create trust connections in the ripple network to split their capital to as many stocks as possible.
(The investors want to take their money away from stock A because the investment is old, new technologies have emerged and thus new investments that are less risky than stock A.)
Let us now investigate a new property of the network that resembles a property that banks have.
Let us consider a single bank. The total amount of its customers saving accounts is more than its reserves.
Everyone , though, believes that they have unrestricted mobility on their money and that is because only a small percentage of it is used and when it is used, it is actually circulated among the banks.
The reserves of the bank are a hidden limit to the mobility of money. Another hidden limit is the production capacity of the world. If the total gdp of the world is tgdp and one has more money, one will realize that the total amount of money cannot immediately materialize into use value.
Now let us go back to our ripple, now called ryaki (meaning stream), network.
At first the total production of the network will be limited and thus the credit inside the system will feel restricted and limiting. As soon as the internal production expands above the average needs of the people, then the limit will be forgotten and we would have achieved to have a monetary system that uses the stock of the companies as the currency.
How are new investments financed?
A. Investors that want to reduce their risk extend their trust on the new investments. This means that if there are transaction paths between the company that produces the machinery and this new investment stock, the machinery will be bought through these new credit paths. The total money in the network expands by adding the cost of the new machinery.
B. Sales that are done outside of the network are used as well. In a traditional for profit company the sale of a product of value v is split to pay for the capital cost, the labor cost and the profits. v = c + w + p. In the ryaki network, the workers will be given w. p will be given to them to invest it inside the ryaki network. There are details on this example that I omit but It is worth noting that the rate of expansion of the network will initially depend on the profits that will be acquired by the external market.
I would like to conclude here even though there are many important details that are not mentioned. If the above trigger your interest, feel free to ask me questions. Not only that, It would be really nice if one did agent-based simulations to verify properties of the network. One could verify by performing random transactions that we will not have inequality. Economic crises will also not be triggered due to debt or due to the profits falling very low.
It is also worth noting that this monetary/production network is not designed to be the best way to distribute resources or the best way to guide production. Its design has been shaped by the initial conditions of our society.
When one looks at new ways of organizing society, one immediately needs to solve the problem of motivation. People need to want to participate in these new social structures and they need to be motivated to spend effort in them.
What kind of motives do humans have?
Let me expose a few prior theories before expressing my own thoughts on the matter.
"In The Conquest of Bread,
Kropotkin proposed a system of economics based on mutual exchanges made
in a system of voluntary cooperation. He believed that should a society
be socially, culturally, and industrially developed enough to produce
all the goods and services required by it, then no obstacle, such as
preferential distribution, pricing or monetary exchange will prevent
everyone to take what they need from the social product. He supported
the eventual abolition of money or tokens of exchange for goods and
services."
I have recently read Ursula Le Guin's "The dispossed" in which she describes such a world.
I will try to describe it as accurate as I can, given that I have not read Kropotkin's books.
The main concept seems to be that of voluntary cooperation. This means that people form groups that they participate in. They have the ability to choose the group they will join and the work they will do. They are also able to use the social product without limitation. In other words, there is no explicit motivation mechanism to work.
With regards to free riders, Ursula points that the main mechanism might be peer pressure. If someone continues not to participate, then people eventually reject that person socially and most probably materially. There is no explicit mechanism other than people eventually refusing to give him what he wants.
My thoughts on this model :
First of all, this is a decentralized model. There is no central authority by design, even though it might eventually emerge by necessity. This allows people to create groups concurrently and in isolation, trying to fulfill both personal needs and societal needs.
From an individualistic point of view, one can form a group to work on something he likes. It could be a group about movies, food, role playing, or fast cars. The main limitation I see in this model is that members of the group have to be the same people that like these things. In reality, though, this is not possible. Someone might like good food but he is not a good cook. So, with this model, it is impossible to motivate others to work on things you like as an individual.
From a societal point of view, this model assumes that society has a common notion of what is important. After this common view of society's goals is established, people can work on these goals and be sure that their work is appreciated by others. The same rule applies within the groups that form because of individual needs.
From the above, we see that this systems lacks one of the basic properties that the market system has: transitivity
In a market system, person A gives money to buy a product from B that b uses to buy something from C, if C also wants to buy something from A.
A -> B
B -> C is the same as if A -> C.
A multitude of products would not have existed in Capitalism if that property was not there.
For example, I like role playing games. Society as a whole does not. Thus anyone who worked on developing rpgs would not participate in creating societal value according to this system.
Examples where it works and ways to enable it:
This model works well or better than market capitalism on many tasks.
Money is not good at signaling, motivating people in two cases:
A) There are many cases where Society would benefit as a whole that does not require an individualistic motivation. The protection of the environment, helping cities after earthquakes or providing necessities to region under famine are examples. Creating groups that build community projects, provide free health care to poor people, or help stray animals are other examples.
Let me give you a counter example that shows the inefficiency of the market.
When the hurricane Katrina passed through New Orleans, what could the market do to help the city?
It could increase the wages of the communal workers and similar jobs so that a lot of people would be motivated to help. Someone would have to pay for this surge in prices. But the increase of wages is not a motivator in this case, even if the state did provide for such an increase.
Disasters require signals that would organize a big number of people very fast so as to handle such events. The main issue here is not the motivation but the self-organization of a big number of people, the software that can enable such a thing.
B) There are cases where the individualistic gains of a person are not monetary. Social respect, fame, or simple self-fulfillment are good reasons for someone to participate.
Wikipedia is such a project where the joy of writing the facts outweighs the burden of the work. Hobby groups on research, free software, electronics have similar motivators.
The way to enable this is to understand the reasons why one does something and to make it visible:
Metacurrency follows this direction.
I will point one example : The stackoverflow site has a reputation system that rewards people that provide good answers to questions.
Capitalism and the market :
Having already compared it with Kropotkin's system let me point and possibly repeat a few things.
The market provides a single mechanism of signaling and that is the price of a good (and possibly the quantity needed).
Since the prices are set by corporations in a decentralized way, it is a decentralized system. Cooperations between companies are formed in the same way as in Kropotkin's system, in a voluntary way but property rights and Capital effectively determine those relations. The system eventually leads to centralized structures.
The main characteristic of the market is that it has a method of measuring the abstract value of the contributions of each person. (if we disregard the exploitation of the workers for a moment).
That measure is not very good because it can fluctuate due to temporal changes in demand and supply, but it is nonetheless a decentralized measure.
As we have seen from my critique of Kropotkin's system, its absence of a transitivity property, such an abstract measure is needed to account for the cases that his system cannot function.
Ryaki provides the same system that the market provides, since there are prices but it avoids being centralized or exploitative.
I believe that a society needs such an abstract measure in one way or the other.
Social Welfare :
The main characteristic of welfare is that the workers' motivations are their salaries but it is provided for free to the individual, the society as a whole pays for it.
Here, the workers(doctors, nurses , social workers etc.) cannot sustain themselves simply by the joy of providing a social good, they require in exchange tokens of abstract value.
From the point of the beneficiary, there is no method to restrict the use of this social good. From a societal point of view, this is good. People of need would serve society better if they were helped even if they cannot afford the expenses. Many times, they do not.
My opinion:
Ryaki as a system that provides a measure of abstract value is necessary but not enough to enable better social processes. Thus, we need to think of methods to enable the other systems as well in the cases that they are better. We need to build software that create motivation signals to enable them.
Open Value Network: A network of people that share a number of tools, their capital, freely, by paying only the cost of initial purchase. Anyone is able to use the tools. The only restrictions are technical, not economical.
And the context:
Capitalism: An economic system that uses the ownership of capital as a means to extract value from the workers. Workers here are those that sell their labor in exchange for money. The extraction of value is computed by subtracting the costs of production from the sales.
The problem:
What will be the social dynamics of having an open value network inside capitalism? How will it affect the OVN's functioning and qualitative properties?
Existence of the Problem - Do we live in Capitalism?
Before dealing with the problem itself, it is worthwhile to check whether the problem actually exists. What I mean by that is that there is disagreement whether capitalism continues to be as I described it or we are living in a post-capitalist economy where capital plays no important role in production.
The spectrum of denialists.
The proponents of the idea that we live in a new era that is not driven by capital, either physical capital or in general capital, come from many spectrums of society. We have venture capitalists of the Silicon Valley like Marc Andreessen who has declared to the world that software is eating the world. We have libertarians that are enamoured with new decentralized technologies like the blockchain and its ability to work outside the control of the state that imagine that this will enable the creation of distributed and open production processes/ organizations. We have the reformist left whose rejection of the possibility of actual political transformation from below has led them to find ways that will change capitalism without class struggle , and they are very eager to accept anything without too much thought.
Deconstructing Marc Andreessen's article.
Let me focus on Marc Andreesen's article that software is eating the world. In his article, he provides multiple examples of software companies disrupting sectors of the economy, eventually capturing the majority of the market. The examples are many and it would be difficult to say that they are not doing that. Companies from Amazon, apple, google, Uber, netflix etc, have disrupted the markets they entered into. Their profits are huge as is their growth. There are many other economic sectors that can be disrupted by software companies but not all or most as the article presumes. The main concept that we need to understand though is why they have that ability. Is it because they do not need capital (physical or not)? Is it because the value that software companies add is growing proportional to the value of other sectors of the economy? Let me answer those questions one by one.
Startups need capital to be successful.
First of all, startups need capital to be successful. The fact that some of them do not require physical capital is inessential. Let us look at some statistics:
According to data compiled by Fundable, 565000 startups are launched each year. The total capital invested per year is 531 billions. Around 240 billions are invested by the founders and their family. 55 billions are invested by Venture Capitalists, Angel Investors or Banks. The interesting part is that AI invest in less that 1% of the startups and VCs in only 0.05%.
If we look at two more statistical quantities, we will understand why. According to Paul Graham, another venture capitalist, less than 1 in 10 startups succeeds. If we look at the normal founder's equity dilution after a series of investments, they eventually only own 20% of the company. In other words, VCs invest mostly in startups that succeed and get 80% of the equity. Remember that they only invest 55 billions while people invest 240 billions.
From the statistics in startups, we see that they require a considerable amount of capital that can only be provided (in big quantities) by VCs, AIs and banks.
Software companies need physical capital.
Secondly, software companies need physical capital. Software companies that have infiltrated certain economic sectors that requires physical capital do use physical tools/infrastructure. Uber is using the cars of its "employees." Apple is using Chinese factories to produce its phones. So it is wrong to believe that physical capital is not needed. It is also wrong to believe that software or innovative ideas produce a lot of value that can explain the huge profits of apple, samsung, Uber, etc. If we look at the working hours and the percentage of people that work in the manufacturing of a phone and that in the design and software development, we will see that the profits of those companies do not go proportionally to the working force they employ. Most profits go to software companies.
Software companies do not produce as much value as the profits they amass.
There are two reasons why software companies get so much profits. Exploitation of Workers at scale.
First, they get those profits because they exploit people en mass. Apple exploits the chinese workers. Uber exploits the car drivers, amazon exploits its employs. All exploit the software developers as I have shown above. The level of exploitation is such they have become infamous.
Monopolies in the captured markets.
Secondly, they acquire bigger profits because they create monopolies that others cannot enter. Facebook has the monopoly of private user data. Google has the monopoly of web search. Uber , that of taxi drivers. Apple has sued multiple companies so as to block them from the entering the smart phone market.
Till now we have shown that software companies need capital, Also that they have big profits, not because they create a lot of value but because they are able to exploit a lot people effectively and because they control markets in a monopoly.
What enabled the increased scale of exploitation?
What we have though omitted is to explain why software is able to disrupt economic sectors that made Marc Andreesen say that it will eat the world. Well there is an obvious answer to that. Software companies do not create value but allow the coordination and collaboration of a lot of people on a specific production process. They reduce the cost of the exploitation because they are able to exploit people in numbers that would be unimaginable a few years ago. Thus, if traditional companies do not change to scale the exploitation of the workers, they are to get bankrupt and their market share taken over.
How much value does the information sector produce? Statistics:
Let us now stop focusing on software companies and startups etc. and look at the economy as a whole. Here, we also have statistics that show that the percentage of value generated by the software/information sector or the research sector is very low.
The best way to find the value generated is to look at the number of workers employed in a specific sector. The reason I use this measure is because it is more accurate than taking labor costs per Industry. Wages in research positions or in software development are high due to the exploitation of other economic sectors. In an ideal economy where there is extensive worker mobility, wages would vary very little and the Open Value Network is such an ideal economy.
Let us look at some US statistics:
(Keep in mind that in the US reside most of the software companies, so the statistical data need to be adjusted to make conclusions for the whole world.)
Here is the percentage of software developers to the total workforce in 2014:
2014 Software developers : 1,114,000 Total workforce : 161,074,000
percentage : 0.69%
Let us also look at the researchers :
2012 researchers per 1mil population : 4,019
population : 314,100,000
workforce : 159,324,000
percentage (in the workforce) : 0.79%
We are looking at the number of researchers because the internet enables the collaboration in research, in the same way that it enables collaboration in free and open software. Let us not forget that researchers work on labs that are worth billions, thus researching requires a lot of capital. But even if we forget this, then it is obvious from the 0.79% percentage that research contributes very little in the production process. Even if we double the worth of a researcher or triple his value, the open collaboration due to the internet would not change the characteristic of the Capitalist system.
Most software developers also work for companies and they get a salary because software development is risky and it requires a lot of people and a lot of years before a final product is made. But even if we forget this, the percentage of software/information workers to the whole workforce shows that the percentage of value created by them is less than 2%. Fixed capital investment per worker
Let us also look at the fixed capital investment per worker in the US:
(Keep in mind that the average household debt is 90,000$. So, do not have high hopes for crowdfunding the capital needed.)
Conclusion
In conclusion, I have proved two things. First that we continue to live in Capitalism, thus the problem of Capital accumulation does exist. Second that the percentage of value captured from the software industry is disproportional to the value it produces because it has scaled worker exploitation. The ability to scale collaboration is one of the necessary parts for the success of the Open Value Network and the capital accumulation of the ryaki economic system.
Now that we proved that problem does exist, and trust me when I tell you that a huge number of people believe the opposite and thus the above was necessary, let me try to analyze the problem itself.
Analyzing the problem
The problem is rather simple. Since the Open Value network will provide, allow anyone to participate in the creation of of value with the use of the capital of the network, thus effectively putting the capital in the commons, obviously a great number of people will want to participate. And this is a problem because at first the capital of the network will be small and the participation interest high. A feedback loop that leads to the appropriation of the common capital. A problem of governance
That will effectively split the people into two categories, those that had access to the capital resources and those that did not have access. The main thus question is how the capital resources would be governed and by whom. If we allow the participants of the production in the network to determine the allocation and distribution of the resources, then we are prone to the closure and appropriation of the commons by them.
One does not need to immediately prohibit people from participating in the network. At first, it will introduce stiffer technical barriers that only people that have already used the tools can surpass. That will reduce the worker mobility in the network that will further increase the incentive to put more barriers. Having the Common resources governed by their users is creating a feedback loop that reduces worker mobility and thus lead to the formation of a single group of people with interests different from the public good.
This is not a theoretical concept. This process has happened and is happening right now.
There are two different places where it is happening.
Concrete examples: Immigration creates friction between the residents of a country and the newcomers. The high income inequality around the world leads many people to search for a better place to live and work. That results in accepting jobs at lower wages than the previous residents, who then either lose their jobs or see their wage reduced. That can lead many low income workers to request the deportation of the immigrants and the closure of the country borders. Of course, this policy will not help because Capitalism itself creates unemployment, not immigrants. Here, we see the need to politically explain this fact so that all workers together struggle for the overthrow of Capitalism.
Worker cooperatives have an incentive to accumulate private capital for the prosperity of its members and not of Society. Recently, we have seen the participation of worker cooperative in the Commons and Sharing Movement. And the friction between the commons and the interests of the members of Worker cooperatives became prevalent.
At the 2016 Ouishare Fest, Yochai Benkler did notice this friction during the festival.
Worker cooperatives have chosen the path of enclosing property, of protecting the workers, their own workers, not all the workers. Approaching the problem from an information point of view.
Analyzing the problem itself a little further, we see that we are trying to maintain a specific idea, the open access to capital while at the same time permitting the self-governance of the commons because we value democracy. Have there being examples of such a process? Political parties deal with the same problem. Let us see two different erroneous solutions.
Revolutionary parties try to maintain their revolutionary ideas by creating a hierarchical structure that allows only certain members to effectively take decisions about the party. Because of that, the party is open to new members, but the members lack any effective democratic control.
Reformist political parties allow for multiple views to coexist inside the party, not really caring for the social dynamics inside. As we have seen from the recent events, this leads the less radical ideas to take over and eventually suppress the different ideas when they become the government.
Learning from our mistakes - Some general rules of Governance
It is inevitable that for an idea to maintain its integrity, there need to be some form of restriction in the number of participants of the group. Hierarchical structures lead to the loss of democracy inside the group, something that makes the participants alienated. I think that we need rules that are easy to understand and easy to abide, that would not require a bureaucracy to interpret them, everyone in the group would be able to decide whether the rules are respected or not.
The relation of the working class struggle to the OVN.
It is important to note that the feedback loop is dependent not only on the capital scarcity but also on the well-being of workers, thus on having the working class win the class war and get good wages and working conditions. That would reduce the demand for work in the OVN and thus would increase the income that participants get from the OVN.
In other words, maintaining the property of the OVN open to everyone is directly dependent on the working class struggle. That is why the OVN needs to politically act in solidarity with the working class struggle.
The open nature of the OVN is directly related to the success of the working class struggle.
Proof of Ideology. Two possible solutions that resolves the OVN social contradictions.
We saw that Commonification of Property is directly related to the success of the worker's class struggle.
For the participants in the OVN, there are only two options that could increase their income from the OVN. Capturing the Capital for themselves or supporting the external struggle of the workers.We need to design the democratic governance of the commons so as to support the second.
How can we exclude people that want to appropriate the property for themselves and accept those that are in solidarity with the rest of the workers? We need a simple rule that is easy to follow. We need a proof of ideology that will guarantee that the majority of the members of the group that govern the commons have the right ideas.
Here is one solution which might work. Every worker that wants to participate in the governance of the commons needs to give 1/5 of their income from the OVN to an account that the group would then use to support the strikes of workers or the immigrants that arrive in the country. This will have multiple effects. It will bolster the solidarity between workers. It will help them win the class struggle and at the same time it will provide a guarantee that the commons will not be appropriated. This breaks the feedback loop and guarantees that the OVN will not degenerate.
