Perhaps we should have a new thing – somehow the term “fuzzy market” pushes into my space here.

And let’s say that in parallel to what today is considered the “real” market we build up a fuzzy market to include all those operations and interactions that don’t strictly fit into the normal, transaction-based economy, we would then need a whole new terminology and a denomination for the “fuzzies” (I’m not advocating to call them that).

An initiative that could supply the transfer mechanism for the fuzzies (or whatever they might be called) is underway at http://webcredits.org/

This seems pliable enough to be shaped into something usable for that alternative economy that isn’t really like the one we’re used to…

Very insightful, thanks Eric, I will upgrade this to full article status,

Michel

What I would like to add to this is that the language of “gift-based markets” keeps us in the old paradigm. “Gift” is a term created by that paradigm which hides a whole range of possibilities. This is because it carries very specific meanings of a certain kind of asymmetry, namely that the giver (for various reasons, usually altruistic) is not supposed to expect anything in return. In the current paradigm we are so focused on value-for-value exchange transactions that define marketplace exchanges, that the only other option appears to be some kind of gifting to account for when the value isn’t equal.

But we are actually quite familiar with many asymmetrical value building transactions that aren’t gifts: grades, credits, degrees, certifications, licenses, buy-10-get-1-free-cards, etc.. What we haven’t seen is that they are actually part of a unifiable pantheon of wealth-building information systems, in which monetary currencies and gifting are but two very small portions of the spectrum of what’s possible.

Two things have helped me open up to the realms of possibility: 1) thinking about the form of measurement used in transactions, and 2) how these forms relate to the systemic realities of the level of wealth the transaction is there to help build.

Some examples:

Money: Monetary transactions are measured by rational numbers. Rational numbers are appropriate for parts and products of systems, i.e. the stuff that is divisible in a way that doesn’t damage the integrity of the system. These are the aspects that are appropriately commodifiable (i.e. gallons of milk, hours of ditch digging, etc), and thus make sense to think of as tradable wealth.

Facebook “likes.” These are nominal measurements. Here, you “measure” your relationship with some web-page/photo,etc by naming it something that you “like.”
Zagat star ratings. These are ordinal measurements. Here you measure your relationship with a restaurant by ranking it against other restaurants.

These kind two types of measurement make sense in the context of whole-system to whole-system relations. Your liking of website, or of a restaurant is not divisible (i.e. representable with rationals). We can think of these forms of wealth as acknowledgeable and rankable, but not tradable.

In traditional economics the value of these subjective relationships are often called “intangibles.” But the truth is that they are anything but intangible as we have direct sensory experience of them. They are only intangible to economics, because economics measures everything with money, i.e. rationals.

Notice also that neither “likes” nor star ratings are “gifts” in any traditional sense. But both are huge wealth builders as Greg aptly points out.

One of the core aims of the MetaCurrency Project is to include in its “meta-ness” the capacity to define currencies that use all these (and other) forms of measurement. This will expand the expressive capacity of our transactions to address and simultaneously build all the levels of wealth in systemically appropriate ways. We are trying to break the stranglehold that the word “exchange” has on us, so that we can start to think in terms of full system wealth.

On the distinction between transactional markets, recicprocal gift economies, and non-reciprocal commons contributions:

I focus on distinguishing the first from the second two because the distinction between the second two blurs when exchange is intermediated by digital platforms. This distinction is ultimately a matter of the strength of expectation for reciprocation. Digital platforms allow us to better measure and account for who we have exchanged value with in the past. This information lessens the need for explicit reciprocation in the near term because the record of value exchange can persist through time.

On paying the rent:
I do not propose that non-monetary transactions are a panacea for all contexts. As noted in the discussion of demurrage, scarcity is a reality in the production of many goods and services. In these contexts transactional exchange will continue to dominate. I tried to outline the conditions in which each mode of exchange will be favored here:
http://onthespiral.com/defining-abundance-in-the-context-of-a-gift-e

I don’t see this as an either/or choice; both types of exchange will exist for the functions they are best suited to. I have focused on non-transactional exchange simply because it is under-appreciated, and as more of our value creation becomes digital/knowledge based this mode of production and exchange will become more relevant.

In fact I believe in diversity. Therefore many different solutions. And if a community decides to use a demurrage based system, why not. If another uses “Like”s, why not, or stars, or points, or hearts, or whatever.

In my view, we have not seen a real breakthrough yet because CC projects tend traditionally to be influenced by “localisation” thinking (well, in fact every currency is), where it also has been quite successful. So you may go to your local bakery, buy bread – but not buy a trip overseas. You may even pay the rent locally – but not invest in a start-up in Africa. In short: you are truly localised – but confined.

But our reality is different, and we hail an interconnected, glocal, and mobile future.

An online community may choose to exchange “like”s, or any reward mechanism, but this value could be useless to some other community! Or the merits I accumulate in an open source development project: will a non-techie be able to assess the value I have produced in a new context (new exchange)?

I am not sure I agree with the logic of demurrage as explained here, especially in relation with interest and investment. In a demurrage based system, if you invest your money, it will still loose value, so whatever you invest in needs to return more than the depreciation. Thus, I might want to spend it. An investment in a company is still risky, investing in my house (subjectively) less. And demurrage worked (see Wörgl).

Also, I want to challenge proponents of the gift economy to become more concrete in their visions – as much as I myself would love such an economy and am enthusiastic about abundance as the embedding meme! For example, in open source software, it works, but because the reward (explicit or implicit), the merits, help to build up trust. But can I get a bread with those merits? Maybe because all developers look at you as a guru (so what happens to less successful guys…), but otherwise, I need to transform this reward into tangible goods (e.g. open software training, talks, etc.), in order to get bucks to buy my bread.

I propose it is worth thinking of cooperating more towards defining a global standard for exchange – could the Terra be a candidate? Then, every community, online or offline, creates its own exchange format. As soon as exchange needs to happen outside the borders of the community, the Terra (or whatever) could step in, facilitating the exchange if there is someone wanting to exchange Terras with units. This might be just a start for some better mechanism, and looks a lot like the status quo, but seems more real to me than those attractive but still very cloudy formulations of value exchange, gifts, etc.

So, open source “contributors” simply pour their work into the mix and get satisfaction, feedback, and so on…it’s a “gift economy” as you call it.

But underlying the ability to do this is that these programmers tend to have jobs at universities and Government institutions that provide their food, clothing and shelter at a very good wage.

So, when everyone is rich, or at least well off, we can talk about how to manage the cream. But you haven’t explain how the “gift economy” pays the rent.