P2P Foundation https://blog.p2pfoundation.net Researching, documenting and promoting peer to peer practices Mon, 22 Jan 2018 10:33:56 +0000 en-US hourly 1 https://wordpress.org/?v=4.9.2 62076519 Toward an Ethical ICO https://blog.p2pfoundation.net/toward-ethical-ico/2018/01/22 https://blog.p2pfoundation.net/toward-ethical-ico/2018/01/22#respond Mon, 22 Jan 2018 10:31:00 +0000 https://blog.p2pfoundation.net/?p=69395 It’s the wild west out there, folks! Every week new ICOs are riding the wave of the crypto craze. Billions of dollars worth of investments this year… Yet many don’t know about the darker dynamics fueling the process. Why is so much flowing into these offerings? Could it be that exchanges can’t cash out the... Continue reading

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It’s the wild west out there, folks!

Every week new ICOs are riding the wave of the crypto craze.

Billions of dollars worth of investments this year… Yet many don’t know about the darker dynamics fueling the process. Why is so much flowing into these offerings? Could it be that exchanges can’t cash out the bitcoin whales so they need to dump into new coins just to diversify holdings? And bonus for them if they can seize control of enough of a coin’s supply to manipulate its value.

$30 Million raised in 24 seconds… Hundreds of millions in an hour… An ICO sold out in a single block of transactions… The whole Ethereum network bogged down by preemptive, over-gassed transactions… One thing we know is those ICOs as a crowdfunding tool are challenged in reaching much of the crowd of end-users for their product — whales are jumping into small pools where they can exert massive influence.

Yet, fundamentally, there are good ideas hoping to grow. And good people, hoping to support and benefit from good ideas. Can we establish a healthier pattern so that the possibilities inherent in decentralized currencies don’t collapse under the weight of over-regulation, and burnt-buyer-backlash?

If we don’t raise the bar of integrity for ICOs ourselves we’ll lose the opportunity to establish stable footing for them to continue. I think we need to challenge a lot of the assumptions that are already hardening in this immature ICO space, including the structure and very nature of the cryptocurrencies being used.

What makes an ICO approach responsible and ethical?

I’ve read the criteria from various rating sites. What stands out to me is their weird blend of obviousness and blindness. Obviously, having a revenue model and demand for your product still applies to crypto projects. Blindly, everyone pretends the clumsy first-gen, global-ledger, burn-the-planet (proof-of-work) approaches are here to stay. ICOs to build data centers just to mine near hydro-electric dams are ranked quite highly.

In other words, I don’t believe you should take these people’s advice. And frankly, you have no reason to take mine either. As a builder of blockchain alternatives, I’m completely biased and focused on the next generation of tools. Yet aside from these varying perspectives about the future of decentralized technology, I believe there’s some common sense about making better ICOs that we can identify.

(And a legal disclaimer — I am not a lawyer, please do not construe any of this as expert legal advice.)

The first question everyone should ask if considering an ICO: Is this ICO primarily a tool to reach money, or to reach people?

Don’t be lazy and say “both!” Even though it is a form of “crowd” — “funding”, there’s an easy way to tell if the operation is tailored to one goal or the other. If you sell out in 24 seconds, or even an hour or two, then it’s pretty clear you were structured for money — not participation. If you can tell yourself the truth about your actual priorities, that should change the shape and structure of everything about your ICO.

It sure looks like there are some pretty sketchy projects pretending to do something useful that will really just abscond with people’s money. And that’s going to bring down the regulatory hammer on everyone. In fact, while this blog post was sitting in drafts waiting to get published, and the SEC started rattling swords, China and South Korea both banned ICOs, and have then steered toward regulation instead.

For the Money

If your ICO is primarily about getting money, I believe you should consider full-compliance with securities laws in the jurisdictions you are selling. Register your offer. Get regulated. That’s exactly what those laws are for — preventing people from getting fleeced by investment offerings they are in no position to evaluate.

Buzz-kill, right? Aren’t ICOs exciting because they sidestep government regulations?

That’s certainly true of ICOs, past and present — I propose a different future.

For the People

ICOs don’t have to be about gambling on the value of some volatile cryptocoin. I’m convinced that it’s possible to design for value stability and to offer clearer kinds of returns. A truer path to thread this needle may involve doing the work to overhaul what you’re offering in order to reduce unnecessary risk, and actually attempting to engage actual, long-term users, not just short-term speculators. I also see ways to structure so that there is greater accountability for funding received and for delivering results.

There are law firms working on frameworks for ICOs, categorizing rights vs. equities and all that jazz. Others will tell you to start a non-profit foundation in Switzerland and pitch your coin sales as if they are donations. Although masquerading as a non-profit may be easier, it won’t build long-term trust with your user-base nor with regulators. (let’s tell the truth: a cryptocoin by any other name will still be as volatile.)

Look, it’s your lawyer’s job to cover your butt. However, when we are building truly decentralized, peer-to-peer systems, we’ve got to cover each other’s butts — in how we design, build, and fund. We can’t afford to take an us vs. them stance against our users in any part of the process. We are them. They are us. If you build in systemic inequities at the funding stage, there’s no reason to believe they won’t be there in every stage of operation.

A House Built on Sand…

Cryptocurrencies don’t have to be worthless tokens with their only value determined by gambling markets. Please see my previous post on Responsible Cryptocurrency Design if you want to understand what else is possible.

Fundamentally, you can’t make your ICO more responsible or valuable than the currency underlying it. And frankly there are some weak-ass cryptocurrencies out there which are really just digital poker chips that waste a lot of electricity.

I know it’s heresy to say some of what follows, but it must be said. Please do the whole community a favor of making the extra effort to improve the field of ICO approaches.

Elements of an Ethical ICO:

This post has gotten long enough, so I will just share some of the questions I’m grappling with:

  • Truthful: How could you structure for the most straightforward, truthful representation of your product and intention to your crowd? Cryptography and decentralized computing are hard enough to understand without being buried in marketing spin.
  • Measure of Demand: People buying a coin does not prove they’re interested in using your product. How can you separate demand for your product from demand for poker chips to gamble with?
  • ICO on proof not theory: How can you help people determine if your idea is possible, and if your team has the chops to build it? What can you build before an ICO as a show of good faith?
  • Don’t take it all up front: Can you design your currency to avoid needing to grab all funds in a single initial raise? How can you enable expansion in a manner that’s responsive to future demand and growth?
  • Reasonable Cap: Given the prior question, what is a reasonable amount to raise to deliver your first round of solid results? Can you structure so that your cap expands based on true, up-front interest from users of your product (not just the coins)?
  • Fair balance of power and wealth: If your thing is so darn cool, you’ll already have all the advantages of being the earliest movers and shakers. How can you structure the distribution of power and wealth to make it a good deal for latecomers as well?
  • Not a security: Can you reach more people by ensuring your offer is not interpreted as a security? Might this let you access people in the U.S. and other places with restrictions on securities? Can you offer a clear and known value, not just odds in a betting market?
  • Embedded Value: Can your currency be connected to reliable real-world value to strengthen and stabilize the market for it? Would value stability allow cryptocurrencies to move into more mainstream use for a productive economy, not just a speculation market?
  • Accountability: Are there ways to take accountability for ensuring the value of your offering, and for how much your community has funded you?

I’m really not trying to rain on your ICO parade. Let’s keep the party going! But that means that, as geeks and crypto-practitioners, we’ve got to raise the bar! Wasn’t at least part of the point to not get dragged down the path of corruption with the rest of the financial industry?

Remember, we started building ICOs to solve real problems with our current financial systems. Duplicating these problems (or worse) in crypto-space fails to accomplish that goal.

These kinds of questions must be asked and answered by more groups doing ICOs. SPOILER ALERT: I’ll offer some answers for all of them in my next post on the trials and tribulations of Launching an Ethical ICO.

This is part two of Arthur Brock’s three part series —. Part three will be available on the P2P Foundation Blog within the next week. 

Photo by ellen reitman

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Patterns of Commoning: Voyaging in the Sea of Ikarian Commons and Beyond https://blog.p2pfoundation.net/patterns-of-commoning-voyaging-in-the-sea-of-ikarian-commons-and-beyond/2018/01/22 https://blog.p2pfoundation.net/patterns-of-commoning-voyaging-in-the-sea-of-ikarian-commons-and-beyond/2018/01/22#respond Mon, 22 Jan 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=69326 Maria Bareli-Gaglia: Our story begins in 2006, during my fieldwork at the Greek island of Ikaria in the Aegean sea, when I picked up a hitchhiker, a woman named Frosini. As we began to talk, we realized that we were both anthropologists riding in the same car. This encounter was the start of a discussion... Continue reading

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Maria Bareli-Gaglia: Our story begins in 2006, during my fieldwork at the Greek island of Ikaria in the Aegean sea, when I picked up a hitchhiker, a woman named Frosini. As we began to talk, we realized that we were both anthropologists riding in the same car. This encounter was the start of a discussion on the commons, which still continues. It also marked the beginning of a collaborative endeavor to understand how commons are tied to land and local culture. What do the commons mean to people? What happens when people lose access to their commons? What happens to local cultures when natural and civic commons are enclosed?

Two years after our first encounter, as the 2008 financial crisis was starting to unravel, the daily agenda of Greek politics was marked by enclosures of natural and civic commons, through privatizations and commodification of public goods and services. In the name of “green development,” the government has been working closely with private companies to develop industrial wind parks along the mountain ridges of most of the Aegean islands. A new Land Plan was also legislated for the island, which re-designates uses of land in ways that seem incompatible with traditional uses of land. Perhaps the most characteristic example has been the designation of some areas below the mountain range, traditionally pasturelands, as “industrial zones.”

In 2012, the government announced its decision to downgrade the Hospital of Ikaria into a branch of the hospital of the nearby island of Samos, thus downgrading the quality and quantity of health services provided at Ikaria. That measure, along with other measures which promoted the commodification of health, threatened to sweep aside the very reason Ikarians, locals and immigrants had built the Panikarian hospital in 1958 – to give all Ikarians equal access to health services. For Ikaria, an island of 8,000 inhabitants, legislation promoting the privatization or commodification of natural resources, public goods and services was seen as a serious threat to their way of life.1

Frosini Koutsouti and I soon realized that Ikaria was a real-life laboratory for some key themes of our times: the various enclosures of the island’s commons, the people’s resistance in defending and/or reclaiming them, and their invention of innovative new commons. But how could we explore and document these phenomena? We concluded that such an endeavor could not be neutral, as if we could stand apart from local struggles. We could not ignore global neoliberal forces that are violently transforming citizens into consumers of goods whose production depends on relentless enclosures.

In 2012, Frosini and I formed a nonprofit group, the Documentation Research and Action Centre of Ikaria (DRACOI), as a “shelter” for our collaborative work on the commons. One major source of inspiration has been Ivan Illich’s Intercultural Documentation Center in Mexico, which he established in 1961 to document the role of “modern development” in the dismemberment of local cultures, the loss of traditional ways of life and the creation of poverty. Like Illich, we entered into collaboration with various locally based village associations, action committees, cooperatives and other collectivities. Our shared goals lay in protecting basic human rights like equal access to health, education and water. We also wanted to use the commons as a lens for understanding the larger processes of political and sociocultural transformation.

We began to realize that local responses to enclosures of commons could be “read” not merely as isolated moments of resistance against a neoliberal wave, but part of a much larger historical process of enclosure that began in England and elsewhere during the late Middle Ages. Local struggles can be seen as part of the double movement described by economic anthropologist Karl Polanyi, who explained that enclosures driven by the international market economy inevitably provoke countermovements of people seeking to reclaim their commons and create new ones. Seen in this light, the ideals of “green development”2 promoted by corporatists as a “solution” to the crisis resembles the “improvements” of nineteenth century Britain that require ongoing enclosure of natural and civic commons.3

In the course of our journey in the immense sea of literature, activism and dialogue on issues of the commons, we came across thinkers posing issues relevant to our own questions and aims. Each added to our navigational horizons. Some became passengers, joining us in common endeavors, for varying periods of time. We also joined larger “ships” of shared inquiry. Such was the “Mataroa” seminar, named after the historical ship that in December 1945 left Greece, loaded with young scientists, students and artists, who, over the course of their lives, contributed to the formation of the thought and visions that was culminated with May 1968. Our ambitious idea for Mataroa was that now an imaginary ship would return to Greece, loaded, this time, with concepts and ideas proper for a critical and radical understanding of contemporary reality. Those were the concepts of crisis, critique, and commons and their enclosures, as well as the idea of a Mediterranean imaginary – a vision of what the region could be.4

In 2013, the Mataroa seminar “arrived” at the port of Ikaria, bringing together twenty-seven researchers and commoners from the Mediterranean Sea and beyond, to share their stories. One participant brought the other, some found out about the meeting through its blog (mataroanetwork.org), and each found the main concepts of the seminar to be fruitful organizing concepts for telling many different stories. All participants agreed on the need to deconstruct the idea of “crisis,” which was not to be taken as an objective condition of contemporary reality but as a powerful discourse for “Othering” as a powerful means of legitimizing conspicuous violations of the social contract and fundamental human rights.5

The question posed by the “Mataroans” was whether the main components of a new imaginary challenging the capitalist one could be identified. Instead of conceiving of more and more aspects of life in terms of market norms and “development,” could we imagine one that protects and regenerates the very sources of life? Could we discover whether a “Mediterranean Imaginary” existed in contrast to the imaginary of a Hobbesian “war of all against all” – a vision defined by such core values as offering and conviviality within communal institutions,6 and within familial and friendly ties?

The seminar was convened without a budget and depended entirely on the local gift economy of Ikarians, who provided hospitality to researchers and commoners. The logic of the gift also penetrated the organization of the seminar, which would “open up” to local society through a series of public talks on current political and social developments in the Mediterranean and beyond, and on issues relevant to Ikarian experiences. With that in mind, the organizing committee invited some of the “Mataroans” to publicly share their experiences and ideas. Some discussed the popular uprisings in Egypt (Samah Selim), Turkey (Merve Cagsirli) and Kentucky (Betsy Taylor). Others addressed the international experience of privatizing systems of water management (Dimitris Zikos), the experience of neoliberal environmental management of commons in Tanzania and Senegal (Melis Ece), and the idea of degrowth (Giorgos Kallis). Another presentation, inspired by American and European press accounts of Ikarian longevity, examined “slacker politics” (Kristin Lawler). (“Slackers” are people who always seek to avoid work.)

The Mataroa seminar-ship left the port of Ikaria for unknown destinations of new initiative, leaving behind a wealth of material available to anyone through a Creative Commons Attribution-ShareAlike license. As a kind of countergift to our hosts in Ikaria, the Ikarian stakeholders of the Mataroa initiative prepared a publication that documented this dialogue about the commons.7 Instead of just publishing the proceedings of the seminar, we created a collection of essays that extended the dialogue sparked by the public talks during the seminar. We invited citizens and groups who are fighting privatizations and commodifications of natural resources, public goods and services, to share their thoughts and experiences. These included the vice chair of the local Association of Health Workers at the Hospital of Ikaria, for example, and SOS Chalkidiki, a coalition of collectives struggling against a huge gold mining plan that will have great environmental, economic and social consequences.8

This experience convinced us that, if we are to place the notion of the commons in our analytical epicenter, or use this notion as a compass, we cannot but do it in collaboration with people of praxis, within their own moral and social economies. The journey in this immense sea of the commons continues and new initiatives are already planned with new partners and enduring friends.9 The endeavor of creating a methodology of the commons has just started, many collaborations are to be made, and many more lessons remain to be learned.


Patterns of Commoning, edited by Silke Helfrich and David Bollier, is being serialized in the P2P Foundation blog. Visit the Patterns of Commoning and Commons Strategies Group websites for more resources.


Maria Bareli-Gaglia (Greece) is an economist, currently pursuing her PhD in Sociology/Social Anthropology (University of Crete). Her thesis involves the study of the annual festivals (paniyiries) at Ikaria. She is chair of DRACOI, a nonprofit, which aims, among others things, at creating the conditions for an equal exchange of knowledge between locals and researchers.

References

1. For an account of the islanders’ discourses and the ways they perceive and respond to crisis, see Bareli M., 2014, “Facets of Crisis in a Greek Island Community: The Ikarian Case.” in Practicing Anthropology, 36:1 (Winter 2014), pp. 21-27.
2. See essay by Arturo Escobar.
3. Esteva, Gustavo. 1992. “Development.” In Wolfgang Sachs, ed., The Development Dictionary: A Guide to Knowledge as Power. London, UK: Zed Books, Ltd., pp. 6-25.  See also Stiglitz, Joseph E. 2001. “Foreword.” In Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time. Boston, Mass.: Beacon Press.
4. The idea for a “Mataroa Summer Seminar” belongs to Nikolas Kosmatopoulos, and the title of the meeting at Ikaria was “Against Crisis For the Commons: Towards a Mediterranean Imaginary.” Besides Nikolas Kosmatopoulos, Frosini Koutsouti and me, the organizing committee consisted of Takis Geros (Panteion Universtiy of Athens), Penny Koutrolykou (University of Thessaly), Helena Nassif (Westminster University) and Stayros Stayrides (National Technical University of Athens).
5. See, for example, the report of the International Federation for Human Rights and its Greek member organization, the Hellenic League for Human Rights, on the downgrading of human rights as a cost of austerity in Greece, Dec. 2014, available at https://www.fidh.org/International-Federation-for-Human-Rights/europe/greece/16675-greece-report-unveils-human-rights-violations-stemming-from-austerity.
6. See essay by Marianne Gronemeyer.
7. The fruit of this endeavor was an edited volume, “Dialogues Against Crisis, for the Commons. Towards a Mediterranean Imaginary” (2014), which was made possible by members of the Mataroa initiative as well as of the team behind the electronic local magazine ikariamag.gr, to whom we remain grateful.
8. The editing of the book was also a collaborative endeavor, which I took up with a woman of praxis, Argyro Fakari, a high school teacher, who is active in the struggles of the educational community to guard the public character of the Greek educational system
9. The “Dialogues” project is continued in the journal Esto, the quarterly publication of an initiative based at the island of Kefallonia, which aims at the creation of a “Free University.”

Photo by almekri01

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Book of the Day: General Theory of the Precariat https://blog.p2pfoundation.net/book-of-the-day-general-theory-of-the-precariat/2018/01/22 https://blog.p2pfoundation.net/book-of-the-day-general-theory-of-the-precariat/2018/01/22#respond Mon, 22 Jan 2018 08:00:00 +0000 https://blog.p2pfoundation.net/?p=69334 Alex Foti, General Theory of the Precariat—Great Recession, Revolution, Reaction, Institute of Network Cultures, Amsterdam, 2017. (Free download) Description “From the fast-food industry to the sharing economy, precarious work has become the norm in contemporary capitalism, like the anti-globalization movement predicted it would. . It investigates the political economy of precarity and the historical sociology... Continue reading

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Alex Foti, General Theory of the Precariat—Great Recession, Revolution, Reaction, Institute of Network Cultures, Amsterdam, 2017. (Free download)

Description

“From the fast-food industry to the sharing economy, precarious work has become the norm in contemporary capitalism, like the anti-globalization movement predicted it would. . It investigates the political economy of precarity and the historical sociology of the precariat, and discusses movements of precarious youth against oligopoly and oligarchy in Europe, America, and East Asia. Foti covers the three fundamental dates of recent history: the financial crisis of 2008, the political revolutions of 2011, and the national-populist backlash of 2016, to presents his class theory of the precariat and the ideologies of left-populist movements. Building a theory of capitalist crisis to understand the aftermath of the Great Recession, he outlines political scenarios where the precariat can successfully fight for emancipation, and reverse inequality and environmental destruction. Written by the activist who put precarity on the map of radical thinking, this is the first work proposing a complete theory of the precariat in its actuality and potentiality.” (https://www.linkedin.com/pulse/just-out-alex-fotis-general-theory-precariat-geert-lovink/)

About the author

Alex Foti is an editor, essayist and activist based in Milano. He was among the founders of ChainWorkers and EuroMayDay, early instances of the self-organization of precarious workers in Europe. Trained in economics, sociology, and history at Bocconi, the New School and Columbia, he has written several articles and books, including Anarchy in the EU: Grande Recessione e movi.menti pink, black, green in Europa (2009).

Excerpt

Precarious Labor and Autonomous Marxism

In a literal sense, the precariousness of labor has existed since the dawn of steam-powered, industrial capitalism. Karl Marx addresses the issue in the first volume of Das Kapital,38 when he discusses the reserve army of labor. He described how the wage demands of the factory-bound proletariat were kept in check by the precariousness of labor demand, due to the irregular, crisis-prone process of capital accumulation (i.e. investment). If laborers didn’t organize, unchecked exploitation and misery would befall those working in the mills and fields. However, below the proletariat in the socio-economic hierarchy was the lumpenproletariat, whom Marx wrongly despised (and Bakunin eulogized): thieves and other petty criminals, prostitutes, tramps, vagrants, etc. The lumpenproletariat made up a reserve army of potential replacement laborers, keeping those in the factories in line, and keeping wages low.

A temporary workforce is a permanent feature of certain industries, exemplified by seasonal workers in sweatshops, and laborers in commercial agriculture. In this respect, things have not changed much since the 19th century. Informal labor remains the norm in emergent and developing economies. However, the recent swelling of the precariat is a symptom of a troubling return to informal labor markets inside the relatively wealthy societies of advanced capitalism.

While contingent labor has always existed in capitalist societies, Italian Autonomous Marxism was the first to argue that precarious labor had moved from the peripheral position it occupied under keynesian, industrial capitalism, to a core position in neoliberal, informational capitalism. Negri and others argue that informational capitalism − the current technological and social paradigm, according to Manuel Castells’ seminal work of social theory The Information Age

is based on casual, affective, creative, immaterial, and precarious labor.

However, a theory of the precariat is not immediately able to slot into the world as understood by Autonomous Marxism. The precariat comprises of two categories of workers with very differ- ent levels of skill and education: pink-collars working in retail and low-end services (cashiers, cleaners, janitors, cooks, waiters, etc.) under constrictive but standardized employment norms, and the digital creative class (editors, graphic artists, programmers, etc.) who are temping, sometimes at high wage rates, in the information economy connecting the world’s major cities. Furthermore, the precariat is also a plurality of young people of different genders, different classes, and different ethnicities.

Aside from Autonomous Marxism, contemporary Marxist thought tends to discount the notion that this precarious plurality constitutes an analogue of the 20th century working class; there might be precarity, but there’s no precariat. At most, they make up a section of the working class. I deny this. The precariat is the successor of the working class, emerging from the new form of informational neoliberalism expanded and radicalized in the crucible of the Great Recession. The precariat is a generation becoming a class. It has become a new historical subject, and is the only subject capable of progressive collective agency; it’s the precariat that both performs general labor, and constitutes the general intellect (to use Marx’s terms). The precarious have their identity based on exclusion from social status, rather than on nationalist, or cultural norms. The centrality of the service precariat for 21st century capitalist accumulation is equivalent to the role played by the industrial proletariat in determining the fortunes of 20th century capitalism.

Autonomous Marxism, as elaborated by Antonio Negri, Mario Tronti, Paolo Virno and others, places the revolutionary agency of the exploited subject at the center of philosophical analysis. After the defeat of the 1968-1979 insurgency of the western working class,40 the theorists of operaismo (workerism) turned to focus on urban movements, as well as emerging forms of service and intellectual labor, as a new Post-Fordist, digital economy was consolidating out of the ashes of industrial Fordism. In the work of Negri especially, this position is made clear: the precariat must be radicalized, in order for the multitude to cast off the dominating weight of imperial structures. It is within the relative obscurity of this intellectual tradition that the radical theory of precarity was forged in the 00s, centered around Milan, Rome, Barcelona, Madrid, Paris, Berlin, Helsinki, and Liège.

To summarize my previous point differently: the new digital capitalist class is confronted by a multitude of young precarious workers. It is the precariat’s labor, communication, and distribution that is making internet billionaires rich beyond imagination. The oligopolists have long acted jointly to protect their class interests (low taxes, low wages, etc.). However, the time has come for the precarious to act as class, and work with their collective interest in mind. It is time to cut into profits and end income insecurity. Just as Henry Ford needed to be buried for Fordism to rise, not only Steve Jobs, but also his free-market ideology, needs to die for Jobsism to rise. Although in vastly different technosocial paradigms (industrialism and informationalism, respectively), the implications of the Fordist and Jobsian compromises are the same regarding regulation: let workers share the bounty of productivity, either individually in the form of wages, or socially in the form of welfare, else risk economic crisis and class warfare. If an egalitarian solution to capitalist crisis was found against National Socialism in the last century, it can also be found against national populism in this century. Capitalism can be reformed. It has been reformed before, during the Belle Époque, and again after World War Two. However, today we need a simultaneous revision of both social and ecological regulation of capitalism. Social regulation has been experimented before with success, yet ecological regulation has not. If we consider Piketty’s laws of capitalist motion valid, and I think any thinking left-leaning individual should, then growth must be restarted, so that it can jump above the profit rate, and reduce capital-labor disparity. However, this ‘red’ (social) objective is posed to clash with the ‘green’ (environmental) objective, since additional growth would lead to even greater carbon emissions, pushing the planet further towards environmental chaos.41

Of course, anti-capitalists of all tendencies will just question why we don’t simply ditch capitalism instead. My answer to them is that capitalism makes innovation and mate- rial progress possible in ways that state communism has been unable to deliver at any latitude, even under well-meaning leaderships like those of the Soviet Union’s Mikhail Gorbachev, and Tanzania’s Julius Nyerere. Communism simply doesn’t work as an eco- nomic system; look at what China accomplished when it switched from Mao Zedong’s communism to Deng Xiaoping’s capitalism. Immediately following the fall of the Soviet Union, Russia’s GDP was still larger than China’s, at exchange rates reflecting purchas- ing power parities. By 2016, China’s GDP was more than five times larger that Russia’s (536% larger), making the country the workshop of the world, pulling hundreds of mil- lions out of poverty. It is hard to argue with these facts. Although the Communist party officially retained power in spite of the Tiananmen Square student rebellion, the lives of over one billion people were drastically improved by market reform: the rate of extreme poverty in China went from almost 90% in 1980, to less than 2% in 2013 (World Bank data). China’s might be state-controlled capitalism, but it’s capitalism nonetheless. In light of this, I do not see a viable economic alternative that can replace firms and markets. To adopt an effective, populist strategy, the instinctive anti-capitalism of the precariat must be of the transformative kind: changing both the state, and market institutions, in order to achieve social and ecological regulation of capital, abolishing the dictatorship of global finance, and expanding the domain of commons-based peer production, as an alternative to both state and market production.

Evaluation

Michel Bauwens: (a very provisional evaluation after reading the first 40 pages, roughly ch. 1 and 2)

I’m currently reading the book, and there are some surprising aspects to it:

  • the author sees the precariat as a ‘class in formation’
  • the author advocates a reformist outcome within capitalism, i.e. a new regulation of capitalism but calls for growth to allow for redistribution, recognizing that this may class with green objectives
  • he calls for an alliance of the precariat and the underclass against the traditional working class seen as allied to national-populism (he calls for social populism as an alternative)
  • there is relative little connection to be seen in this book between the precariat and commoning/commons, though Foti calls for expanding commons-based peer production within a capitalist reformation process and with CBPP seen as distinct from market and state production.

Discussion

 

Reading notes by Giorgos Anadiotis: “I found the book to be a step in the right direction, as it focuses on the class with the most potential of driving social change, and does so under the lens of class-conscious analysis, which is sorely needed. I have however also found some things i am skeptical about, and some others that i find clearly flawed.

To start with the positives, Foti’s background in economics and involvement in grass-roots politics shows. To his credit, unlike many of his counterparts his style makes the book both accessible and interesting. His analysis of modern capitalism and the strata of the precariat is to the point, as well as the critique on the traditional left and its unions.

However, some of the book’s premises, as well as the ending and conclusions were somewhat lacking to say the least.

I am extremely wary of approaches that border on identity politics. Foti himself has some words of warning against that, but he seems imo to cross that border too. He does for example mention queer and feminist movements as possible actors of change. While i am all for emancipation and sympathetic to such causes, i am yet to find elements of radicality in such movements. Liberal capitalism gladly embraces those.

Perhaps he knows something i don’t, but citing for example a Women’s Strike in March 2017 as a sign of mobilization and radicalization does not make sense. This was largely unnoticed and unaffective (never heard of it before), reported only by Vogue. I understand his point was mostly the trans-national nature of the organization, and we all need to see hope where we can, but this seems way far fetched.

His overall reformist and EU-centric views are also something i am not really comfortable with. While i do see their pragmatism and the need for broad alliances, i think these can only be used as stepping stones towards more radical approaches. History shows that ambivalence, half-baked attempts and the logic of “lesser evil” do not really serve well in the long run if left to their own devices.

Foti for example speaks of free trade as alternative to war, which is true to some extent. But he does in this context also speak of the invalidation of treaties such as NAFTA TTIP and the like by Trump as a setback, without a word of critique on the treaties themselves. If you know anything about the treaties or the way they are negotiated and enforced, this is deeply problematic.

As for the EU, i find his thesis of defending and preserving it problematic too, both from an ideological and a pragmatic POV. While the EU is certainly the most progressive-looking among state apparatuses today, you don’t have to dig too deep to find its true nature. That has justifiably got it a bad name, which the nationalist populists are riding on, and a movement that would associate itself with the EU has no chance of appealing to the disenfranchised.

While i am all for internationalism, a union of europeans would have to be reinvented and rebranded to stand any chance of success. Hoping to simply capture the deeply flawed and malfunctioning cross-state apparatus that is the EU and fix it from within, while not breaking with its practices and trademarks is a doomed strategy imho. Just look how that worked for Syriza – been trying to make that point forever, sorry to see it proven.

But the most serious flaw i see is the assesment of the precariat’s position and leverage as referred to in the final part of the book. The claim there is that the precariat owns the means of production (smartphones, laptops etc), therefore if it becomes a class per se and claims its role in the productive process it can interfere with it and influence things.

“In a networked information economy, it is the precarious, not the capitalists, that control the strategic means of production – the computing power of connected smartphones and PCs – and enable the production and distribution of information, culture, and knowledge, through networks which are making the age of mass media obsolete”.

Wishful thinking at best, but flawed and dangerous. This is hard to explain for someone who has otherwise been so diligent in his economic analysis and classification of different sub-layers of the precariat in previous parts of the book. It’s certainly not true for the service precariat or platform users. It’s not even worth analyzing how (most) Amazon or Wal-Mart workers have nothing to do with this.

Uber or Foodora drivers may be owners of their vehicles for example, but what really makes the wheels turn are the platforms (algorithms and data) and they have no access to those. That is not to say they are powerless and they should not unionize etc, but it’s an important distinction.

Similarly, social media users do not directly produce value for the platforms, they mainly act as a target audience for advertisers. Fleeing en masse would put pressure on the platforms, data sovereignity and control issues can and should be raised, but it makes no sense to classify this as a traditional employer – employee relationship and this heterogenous crowd has very little potential for common awareness and action.

The only part of the precariat for which this somewhat applies is the cognitive precariat. Software and data engineers, content creators, artists etc are indeed the owners of the means of production since in that case production is mostly cognitive and digital.

Even they however they have no ownership of the networks required to distribute and run their products en masse (cloud and web platforms) and they must either pay (both money and skills-time) to use them, or rely on one-off contracts without redistribution, hence non scalable.” (https://www.facebook.com/ganadiotis/posts/10159815548640322?)

Photo by Keturah Stickann

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Loconomics Gives Gig Workers an Alternative to Investor-Owned Platforms https://blog.p2pfoundation.net/loconomics-gives-gig-workers-an-alternative-to-investor-owned-platforms/2018/01/21 https://blog.p2pfoundation.net/loconomics-gives-gig-workers-an-alternative-to-investor-owned-platforms/2018/01/21#respond Sun, 21 Jan 2018 11:00:00 +0000 https://blog.p2pfoundation.net/?p=69322 Nithin Coca: Loconomics is a platform cooperative that allows service professionals working in areas like dog walking, home care, child care, massage therapy, and tutoring to connect and offer their services on a platform that they own. Founded by Joshua Danielson in 2012, Loconomics, which is based in San Francisco, California, aims to provide an alternative... Continue reading

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Nithin Coca: Loconomics is a platform cooperative that allows service professionals working in areas like dog walking, home care, child care, massage therapy, and tutoring to connect and offer their services on a platform that they own. Founded by Joshua Danielson in 2012, Loconomics, which is based in San Francisco, California, aims to provide an alternative to investor-owned platforms such as Wagg (dog walking), Taskrabbit (gig work), or Handy (home cleaning). The company also just announced a collaboration with Doing What MATTERS for Jobs and the Economy, a program by California Community Colleges. The Loconomics platform will be used as part of a course on the gig economy, which will help bringing cooperative economic principles to students. We spoke with Danielson and Kyra Harrington, Loconomics’ Brand Marketing Manager, to learn more about Loconomics’ vision, their new partnership, and how a platform cooperative could empower service professionals and serve as a tool for economic empowerment.

Nithin Coca, Shareable: Where did the idea for Loconomics come from — and why did you feel it was necessary?

Joshua Danielson, Loconomics: In my 20s, I spent a lot of my money on services and I knew that the platforms, back then mostly temp agencies, often take 30-40 percent of people’s pay. Local services were something I believed in. The world’s full of products, while services are sustainable and personable. They enrich people’s lives in a way that products don’t. Ethos behind it is to do something that doesn’t increase wealth inequality. This is what many traditional businesses [with venture capital] end up doing.

We – Joshua and I – first met more than two years ago, and even then, Loconomics had been around for some time. Can you tell me about your progress, and the challenges you’ve faced in getting the platform cooperative set up?

Joshua Danielson: It’s taken much longer than expected, which is not atypical for any first-time entrepreneur. I started out neither having been a project manager nor having the technical expertise to move quickly. I’ve acquired a lot of those skills since then, and we’re able to execute things in a fraction of the time it used to take.

Loconomics started out as a benefit corporation, and our first round was a desktop version launched in 2012. It was bad timing. No one knew what a benefit corp was, nor did they care. It wasn’t true ownership, it wasn’t that differentiated from other platforms, and we didn’t have a mobile app. I began to wonder how this would look as a cooperative, but as most service professionals are freelancers, I didn’t know how that would work. I met Janelle Orsi with the Sustainable Economies Law Center, and she had been speaking out about the sharing economy/platform economy.

The conversion to a platform cooperative took a lot longer than expected because we wanted to do it right. The bylaws alone took over a year to write. Janelle has a lot of expertise and is in the cooperative movement. I let her lead, and I made sure to bring a healthy dose of business strategy to it, to ensure it was a sustainable platform, and we’d have staff that would want to work here.

What was the cooperative structure you ended up deciding on, and how does it work in practice?

Joshua Danielson: We officially converted in June 2014 to a California cooperative. We were a patronage based co-op at that point, with no shareholders. That means Loconomics is owned by workers and nobody else. We felt that keeping our focus on local services, and creating a platform that works for service professionals and clients has a lot potential to shift wealth inequality, so that gradually services can be booked without the middlemen.

Our revenue model is that service professionals will pay $20-40 for our ownership plans. With the $20 a month plan, they gain access to dividends, vote, can run for board, and get access to our sister platform where they can communicate, gain support, and have networking opportunities.

For $40, they also get access to scheduling software and new project management tools, in addition to being part of the cooperative. When there are profits leftover, they are entitled to dividends based on what they have paid into the platform. There are no commissions, and they elect the board, so they oversee the platform. Staff, like myself and Kyra, will be doing day to day activities — we are entrusted with the mission on their behalf. We’ve removed the traditional incentives and are self managed, have capped salaries, and  don’t have a bonus system. Staff elect one board member, two are nonprofit appointed, and six members are elected by service professionals. We get dividends based on how many hours we work, but this will roughly end up being the same as a service professional member who paid their dues.

So, can Shareable readers find services on the platform right now?

Kyra Harrington: Right now we’re focusing on recruiting on service professionals. Just over the last year, we’ve found there are a lot of challenges they are coming up against. They are often by themselves and face challenges on their own. That’s why we’re trying to build community through our sister platform — Loconomomics.coop — where service professionals can congregate. There are a lot of professional advantages they get from joining coop.

Service professionals have created nearly 600 listings on the site so far — and as we transition out of beta and going to do a full push this winter to onboard new members.

Service professionals can be a huge category. Any specific fields or sectors you are focusing your outreach on?

Joshua Danielson: Currently we’re focused on handful of services that include self-care professionals, such as massage therapists, acupuncture, cleaning professionals, handymen, and also dog walkers, pet sitters, child care, and tutors. Existing platforms for dog walking and cleaning take commissions up to 40 percent. They also proved that service professionals are looking at these platforms to get services booked, so that shows demand.

Kyra Harrington: When you start talking about co-ops, people often have not heard about it. To focus our messaging, we’re focusing on what’s in it for them as a service professional. Our focus is on tangible benefits: software, marketing, community, and no commissions. No one is getting rich of your back. And we’re a platform co-op, so you have a voice in our future.

Joshua Danielson: Most platform workers don’t feel like they’re being taken advantage of. Not many people have done the math. We want to have the numbers to say that, for example, dog walkers on Loconomics earn X more than on Wagg. That works better than telling them they are being taken advantage of.

That definitely sounds like a stronger message. So, what are your goals further ahead — where do you hope to see Loconomics in the near and medium term?

Joshua Danielson: First goal is to reach financial sustainability, and that we can achieve with 2,000 member service professionals. That would give resources to hire staff, and ability to scale and build partnerships across the world. Scaling helps everybody through increased bargaining power and network effects.

Kyra Harrington: It’s about helping each other versus fighting each other for business. The co-op element allows members to get to know each other — and you are more likely to refer your clients to others via a trusted referral network. Loconomics also allows members to market their services collectively versus paying a platform to compete against each other.

Joshua Danielson: The power of the marketplace is that you can book different services with Loconomics. You might first find your dog walker, but when you are also looking for a massage, you can find that on Loconomics too. It’s another value proposition to any service professional: They’re likely to get clients from other professionals. Our cooperative business model lends itself to members helping each other in ways that other platforms cannot.

It may have taken longer than I thought it would, but we’re excited to get to that point. The financials back it up, and there’s a place for Loconomics in the market. We need to reach a critical mass to get the ball rolling faster, so we’d love for people to check us out and refer professionals who could benefit from the power of a co-op. We’re committed to reducing wealth inequality, and we feel ownership is the way to do that — ownership over the tools you use and the way that you access work.

Nithin Coca: I’d also love to hear more about your new partnership with California Community Colleges?

Joshua Danielson: Under the Doing What Matters for Jobs and the Economy Small Business Sector program, twenty-four colleges are participating in a Self-employment Pathways in the Gig Economy project starting February 2018. Students will create job listings as part of this program, and Loconomics will assist them in finding work opportunities, tracking their earnings, and supporting them in transitioning into the independent workforce as small business owners. This group of students is going to be introduced to cooperative platform ownership as an alternative to traditional gig economy platforms.

This Q&A has been edited for length and clarity. Header image courtesy of Loconomics. 

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Designing Ecosystem Flows for a Responsible ICO https://blog.p2pfoundation.net/designing-ecosystem-flows-for-a-responsible-ico/2018/01/20 https://blog.p2pfoundation.net/designing-ecosystem-flows-for-a-responsible-ico/2018/01/20#respond Sat, 20 Jan 2018 11:00:00 +0000 https://blog.p2pfoundation.net/?p=69386 A few things you might not know about Holo’s ICO strategy. Jean Russel: This week’s #Holochats theme is #responsibility. In that context, I want to share the strategy for Holo’s ICO, and how it is designed to support responsible flows in the ecosystem. [For those interested in knowing more about generating flows, Herman Wagter and... Continue reading

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A few things you might not know about Holo’s ICO strategy.

Jean Russel: This week’s #Holochats theme is #responsibility. In that context, I want to share the strategy for Holo’s ICO, and how it is designed to support responsible flows in the ecosystem. [For those interested in knowing more about generating flows, Herman Wagter and I wrote a book, Cultivating Flows.]

Starting Assumptions

We want to build a thriving ecosystem. To jump-start it, we are choosing to run an ICO together with a crowdfunding campaign in order to support three primary capacities in relationship to each other.

  1. We want reliable and widely distributed hosting capacity, which we create by offering hosting devices in the crowdfunding campaign.
  2. We want to engage developers in creating Holochain apps which can then use that hosting capacity. We generate developer engagement through educational and networking events offered in the crowdfunding campaign.
  3. We want an economy that rewards developers and hosts who build and support applications that the world uses on the web. To do this, we are creating a currency through an ICO.

Accomplishing this meant we had to answer several questions: How do we carry out our ICO responsibly so the ecosystem can thrive? Who are we being responsible to? How do we run the ICO in ways that honor the ecosystem as a whole? How do we reward both our initial community creating the ecosystem and the participants in the ecosystem?

Solving for Aspirations

In our ICO, the crowd’s participation is just as important to us as the funding we’ll be generating. We aspire to be an ecosystem of distributed participants. That means:

  • We want to make sure participation is widely distributed rather than ending up belonging to a few whales, which can often happen in an ICO.
  • We need to have a way to prevent a big crypto whale from buying up the tokens by paying a premium gas fee to jump in line.

We aspire to be an ecosystem of flows, where people are rewarded reasonably for engaging in ways that increase the health of the ecosystem. That means:

  • We want our team to rewarded for their time, talents, and commitment to growing this ecosystem.
  • But we must do so responsibly, balancing that with the whole. Therefore we must select a reasonable proportion for the team and put limits on “cashing out” after the jump-start of Holo.

We aspire to reward those with early faith in the ecosystem we are building. That means:

  • We can’t make speculation be the honeypot. We feel the best option is to get all participants to have some “skin in the game,” so to speak.

We aspire to raise enough funds to responsibly deliver on the promises, and the ideas put forth in our Green Paper (and other papers we created outlining the ecosystem). That means:

  • At the very least, we need one at least million euros to deliver on those promises to do work this year. As it says in the Green Paper, if the ICO raises less than that, then we will return ICO funds to the participants and seek other avenues of funding.
  • In order to have enough currency available for the ecosystem to flow people need to have Holo fuel to pay for hosting. In other words, the currency supply needs to relate to the size of the ecosystem. That is why the supply of the currency in our ICO is driven by the activity of backers (developers and hosts) in the crowdfunding campaign.

What that Means Strategically in ICO Design

Given our aspirations, how do we then design the shape, structure, flows, and opportunities of the ICO to fit those assumptions and aspirations?

  • Reasonable Funding: a small-but-functional ecosystem would need to be 2.5 million euros, so that is the supply we will launch with on day one of our ICO, January 23, 2018.
  • Supply Linked to Demand: After that, the supply of the ICO is calculated in proportion to the scale of the ecosystem. There is a supply formula we use to describe how each purchase in our crowdfunding campaign, whether a hosting device or a developer event, releases tokens in the ICO. We described this in our post, Attuning to the Crowd.
  • Reserved Tokens: People who have participated in the crowdfunding through Indiegogo get first dibs on the tokens their purchase released in the ICO.

Reserved Tokens: Tactical Details

We want our existing participants to have access to the economy they are participating in. So when the ICO launches, we will notify participants (except those in restricted locations) that the tokens that they have released into the ICO through their purchase are reserved for them. We know it takes some time to receive and read the notification email, get whitelisted, and purchase your reserved tokens so we have implemented a three-day waiting period before reserved tokens are added to the ICO’s available supply. They are available for purchase exclusively to the person who released those tokens for 24 hours. After that, they are openly available for purchase. The tokens created by purchases from locations that are restricted from participating in the ICO will be available for anyone (in non-restricted areas) to purchase.

We are quite excited to watch the movement of supply in Holo’s ICO. You can see the daily supply too at https://ico.holo.host.

Once the sale starts, you will be able to see the amount of supply, how much has been sold, and what is being held in reserve on this chart.

To release more supply in our ICO, bring in more hosts and developers through Indiegogo. Create this ecosystem with us, responsibly.

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Essay of the Day: The Protection of the Weaker Parties in the Platform Economy https://blog.p2pfoundation.net/essay-day-protection-weaker-parties-platform-economy/2018/01/19 https://blog.p2pfoundation.net/essay-day-protection-weaker-parties-platform-economy/2018/01/19#respond Fri, 19 Jan 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=69287 The following essay was written by our colleague Guido Smorto. It will be published in the forthcoming Cambridge Handbook on the Law and Regulation of the Sharing Economy but Guido has kindly allowed us to upload the essay and publish an extract. You can download the whole text here. Guido Smorto: Known by many names – platform,... Continue reading

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The following essay was written by our colleague Guido Smorto. It will be published in the forthcoming Cambridge Handbook on the Law and Regulation of the Sharing Economy but Guido has kindly allowed us to upload the essay and publish an extract. You can download the whole text here.

Guido Smorto: Known by many names – platform, sharing, peer-to-peer (p2p), collaborative economy, and so on – entirely new business models have emerged in recent years, whereby online platforms use digital technologies to connect distinct groups of users in order to facilitate transactions for the exchange of assets and services. Compared to both offline and online providers, these platforms do not act as direct suppliers, but leverage the widespread diffusion of internet and mobile technologies to operate as virtual meeting points for supply and demand, providing ancillary facilities for the smooth functioning of these markets.[1]

This dramatic shift in business organisation and market structure has opened an intense debate on the persisting need for those regulatory measures that typically protect the weaker party in bilateral business-to-consumer (b2c) transactions. In the platform economy both customers and providers are said be empowered, with the former enjoying wider choice and lower prices and the latter benefiting from countless new business opportunities, while platforms make transactions safe and efficient by adopting new mechanisms to enhance trust. Widespread calls for a more “levelled playing field” makes a strong argument for reconsidering the scope of regulation and delegating regulatory responsibility to the platforms. Accordingly, the appeal for lighter rules and reliance on self-regulatory mechanisms is pervasive.[2]

The chapter calls into question these assumptions. It demonstrates that platforms make frequent use of boilerplate, architecture and algorithms to leverage their power over users – whether customers or providers [3] – and that it is still not clear to what extent effective market-based solutions are emerging to tackle these issues. Part I illustrates the reasons for the alleged reduction of disparities, and it explains why such conclusion fails to fully appreciate the many grounds to the contrary. Part II scrutinizes terms and conditions adopted by online platforms to assess whether they mirror an imbalance in the parties’ rights and obligations. The article concludes that it is crucial to protect the weaker parties in these emerging markets, and it presents some brief recommendations.

Click here to read the whole text: The Protection of the Weaker Parties in the Platform Economy


[1] Cf. Kenneth A. Bamberger & Orly Lobel, Platform Market Power, 32 Berkeley Tech. L.J. (forthcoming 2017), https://ssrn.com/abstract=3074717; Liran Einav et al., Peer-to-Peer Markets, Annual Review of Economics, vol. 8, 615 (2016); Bertin Martens, An Economic Policy Perspective on Online Platforms, Institute for Prospective Technological Studies Digital Economy Working Paper 2016/05. JRC101501 (2016), https://ec.europa.eu/jrc/sites/jrcsh/files/JRC101501.pdf.

[2] See generally Adam Thierer et al., How the Internet, the Sharing Economy, and Reputational Feedback Mechanisms Solve the “Lemons Problem”, 70 U. Miami L. Rev. 830 (2016); Christopher Koopman et al., The Sharing Economy and Consumer Protection Regulation: The Case for Policy Change, 8 J. Bus. Entrepreneurship & L. 529 (2015); Molly Cohen & Arun Sundararajan, Self-Regulation and Innovation in the Peer-to-Peer Sharing Economy, U. Chi. L. Rev. Dialogue 116 (2015); Darcy Allen & Chris Berg, The Sharing Economy: How Over-Regulation Could Destroy an Economic Revolution, Institute of Public Affairs (2014).

[3] See Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions “A European agenda for the collaborative economy” {SWD(2016) 184 final}, at 3 (“The collaborative economy involves three categories of actors: (i) service providers who share assets, resources, time and/or skills — these can be private individuals offering services on an occasional basis (‘peers’) or service providers acting in their professional capacity (“professional services providers”); (ii) users of these; and (iii) intermediaries that connect — via an online platform — providers with users and that facilitate transactions between them (‘collaborative platforms’)”).

Photo by Tankesmedjan Futurion

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Why do we need a contribution accounting system? https://blog.p2pfoundation.net/need-contribution-accounting-system/2018/01/19 https://blog.p2pfoundation.net/need-contribution-accounting-system/2018/01/19#respond Fri, 19 Jan 2018 08:00:00 +0000 https://blog.p2pfoundation.net/?p=69278 This article was first published on 3 January 2014 and last modified on 8 January 2018 ……………………………………………………………. NOTE: Before 2017 SENSORICA used the expression ”value accounting system”. The current expression in use is ”contribution accounting system”. See more on the OVN wiki. The origin of this modification is a redefinition of value, inspired by Tibi’s essay ”Scale... Continue reading

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This article was first published on 3 January 2014 and last modified on 8 January 2018
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NOTE: Before 2017 SENSORICA used the expression ”value accounting system”. The current expression in use is ”contribution accounting system”. See more on the OVN wiki. The origin of this modification is a redefinition of value, inspired by Tibi’s essay ”Scale of social structures”.
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With the advent of the Internet and the development of new digital technologies, the economy is following a trend of decentralization. The most innovative environments are open source communities and peer production is on the rise. The crowd innovates and produces. But the crowd is organized in loose networks, it is geographically dispersed, and contributions to projects follow a long tail distribution. What are the possible reward mechanisms in this new economy?

Our thesis is that in order to reward all the participants in p2p economic activity, and thus to incentivise contributions and make participation sustainable for everyone, we need to do contribution accounting: record everyone’s contribution, evaluate these contributions, and calculate every participant’s fair share. This method for redistribution of benefits must be established at the beginning of the economic process, in a transparent way. It constitutes a contract among participants, and it allows them to estimate their rewards in relation with their efforts. We call this the contribution accounting system.

For the rest of this article we will try to explain why a contribution accounting system is needed in a more decentralized economy, and unavoidable in a p2p economy.

Contribution accounting and exchanges

First, we need to make a distinction between a contribution accounting system and an exchange system. Suppose that we have 3 individuals picking using one basket. The contribution accounting system keeps track of how many cherries everyone puts in the basket, so that when they sell the basket on the market they can decide to redistribute the revenue in proportion to everyone’s contribution. It describes how contributions from multiple individuals amalgamate into a product, during a co-production processes.

Once a product is created, i.e. once the basket is full and ready to go to market, it can be exchanged using an exchange system: barter, currency, etc.

The contribution accounting system is not a currency, not a barter system. It doesn’t refer to an exchange between our 3 individuals who are picking cherries, or between them and another entity like a company. They are not getting paid a salary in exchange of their work. They are collaborating, they all add cherries into the same basket, which is their product to be. The exchange might occur at a later point in time, once their basket is full and ready to go to the market. Meanwhile, they all share the risk of having their cherries being eaten by birds, or of not getting a good price for their basket.

Production processes

A production process that requires more than one individual can be based on the following 3 arrangements, or on a combination of them:

  • stigmergic coordination–  Participants don’t have aligned goals, don’t maintain a relationship other than being contributors to the same process. Ex. this is how Wikipedia is built. 
  • cooperation – The goals of participants are not necessarily aligned. Ex. in a corporation employees and business owners usually have divergent interests and goals.
  • collaboration – Requires a large degree of alignment in goals. Ex. a group of individuals climbing a mountain together.

The traditional capitalist economy is mostly about cooperation, which doesn’t require an tight alignment of interests and goals. Production is sustained through an exchange process, where workers exchange the time they spend on different tasks against wages. The exchange process transfers risk from workers to the owners of capital, but at the same time, the workers are stripped of their rights to the output of their labor. Workers cooperate (despite some inconveniences and misalignment in interests and goals) with the owners of capital in production processes because there exists an economic dependency between the two groups. Workers need money, which are by far the predominant means to acquire basic necessities. On the other side, the owners of capital need labor to generate more wealth. This economic dependency is not symmetrical and makes the system prone to abuse, which explains the existence (and necessity) of unions to counterbalance the tendency for exploitation.

In peer production we have a blend of the 3 arrangements mentioned above, mostly coordination and some stigmergic collaboration. In general, no one works for anyone else. Everyone involved is a peer, an affiliate of a peer production network. The p2p culture prescribes that the output of a collaborative and participatory process should not be owned or controlled by anyone in particular, but shared among participants in a fair way. Immaterial artifacts that are produced in such way (such as software or hardware designs) are usually released as commons (they are openly shared). Material goods can be exchanged on the market, and the revenue generated is shared among all the participants. Service-based models also exist, where services are exchanged on the market against some form of payment, which is redistributed to everyone involved in the providing the service. A good example of service-bases p2p model is the Bitcoin network. If we focus only on the mining aspect, minors form a open network of peer participants, they collectively maintain the hardware infrastructure of the entire network. Minors are rewarded in proportion to the computing power that they provide to the network.

The normal and the long tail modes of production

normal mode of production

In the traditional capitalist economy wages should be regulated by the free labor market, if we make abstraction of all sorts of mechanisms through which this market can be biased (labor unions and governmental intervention included). The market is responsible for the difference in salary between an engineer and a clerk. The notion of jobimplies that a salary is determined and agreed upon before the employee starts working (with the possibility modify the salary based on performance). Since the amount of $ per hours of work is pre-established, the capital owner needs to make sure that the employee produces enough during the work hours. Therefore, a new role is needed within the organization to guarantee this, the beloved project manager. Traditional organizations spend a lot of energy doing time management, because usually the interest of the worker is not perfectly aligned with the interest of the capital owner (see cooperative production above). Classical organizations operate on the normal mode of production (from the ”normal curve” or ”bell curve”), where the number of workers is minimized, and the majority of employees in a category of roles produce almost the same amount. Very few workers produce less than the norm, because they are eliminated (i.e. fired). Very few produce more, because there are no incentives to do so, the association with the mission of the traditional enterprise is weak, the sense of belonging is usually low (usually fabricated by the HR department), the sense of ownership is almost absent, etc.

long tail mode of production

The situation is very different in a peer production environment, which is open to participation, is decentralized in terms of allocation of resources, and uses a horizontal governance system.

In peer production, we see a log tail distribution of contributions, which means that a very large number of individuals are involved in production, only a very small percentage of those contribute a lot, the great majority of them contribute very little, and most of the production is done by those who make small contributions. A prearrangement on revenue is impossible in this context. First, because the production process is very dynamic and relations of production cannot be contract-based. Second, the process involves a great number of individuals that are distributed all over the planet, therefore it is impossible to do time management. Moreover, no one can force anyone else to work more. In this mode of production we need to evaluate rewards after the fact, based on deliverables or based on the type of activity and its potential to increase the probability of production of valuable products. A system is needed to account for everyone’s contribution, to evaluate these contributions and turn them into rewards.We call this an access to benefits algorithm.

In some sense, the access to benefits algorithm is a distributed solution to time management, which can be applied to large scale and very dynamic peer production processes. It embodies positive and negative incentives, and can contain parameters to influence individual participation and quality of contributions, it can regulate behavior, it gamifies production. For example, a reputation system can be tied to the access to benefits algorithm: a higher reputation results in a higher reward, all other things being equal, and vice versa. Moreover, it can also contain parameters to incentivise periodic and frequent contributions, and to prioritize important processes.

Contribution accounting and network resource planning

The long tail mode of production needs a contribution accounting system in order to allow fair redistribution of rewards. It allows participants to record contributions of various types and it uses an access to benefits algorithm to turn them into benefits. But this is only the first part of the story.

In the OVN model contributions are attributed to the creation of resources, which can be documents, designs, parts or full prototypes, etc. (some contributions go into infrastructure of community development and they lack clear resource or deliverables). From the resource level, contributions aggregate at the project level. A project is an open venture, or a business unit. It is the smallest unit within the OVN that can generate all sorts of benefits, including revenue.

The fact that contributions can be attributed directly to resources (not projects) is very important for commons-based peer production (CBPP), which builds on open source. On Github, pieces of open source software (OSS) can be picked up by someone and remixed into something else. Open source hardware (OSHW) development follows the same path, i.e. designs (mechanical, electronic, optical) are forked and remixed. This ability to fork and remix parts of more complex systems makes open source development a very efficient process. This explains why modularity and interoperability are very important properties of OSS and OSHW. If rewards are envisioned for the work done, CBPP needs to find a way to account for contributions at the resource level and to track the way resources are put together in different contexts (projects are considered contexts). If contributions are only recorded at the project level, projects become silos of economic activity with a reduced possibility of benefits flows between them.

Taking into consideration the structure of OSS development, the solution to the benefit/reward redistribution problem is to attach some information to individual resources created that allows their reevaluation later, when they get remixed and integrated into larger systems, in other contexts. The metrics of evaluation can vary depending on the context. This is the role of the network resource planning system NRP, which allows benefits/rewards to propagate upwards through value streams and the creation of a single resource can generate rewards from many different sources (many projects), depending on how many successful projects are using it.

This goes even further, because this same NRP also provides a growth mechanism for CBPP networks. To illustrate this, imagine that members of a CBPP community decide to attribute equity to resources that are created by other communities. (Example: SENSORICA decides to integrate a piece of open source hardware developed by another OSHW community). First, why would SENSORICA affiliates decide to diminish their revenue by giving equity to other groups when they can just copy the open source design? The economic rationale is to reduce efforts required to internalize new capacity (new knowledge and know how around that piece of open hardware) and to increase the speed of execution (a first to market advantage). CBPP networks grow by affiliation. By offering equity to other CBPP communities they are essentially building bridges to innovate faster and improve production processes. This is the higher-level structure of networks-of-networks (see the Open Alliance).

We believe that in order to sustain the CBPP we need to create infrastructure that allows attribution of value-related properties to individual resources, to allow reevaluation of these individual resources in context, and to facilitate the formation of networks-of-networks that preserve the individuality of every community part of it, but at the same time brings them together on the same economic platform.

Contribution accounting in transition models

As the economy transitions to a networked state, existing organizations are trying to adapt. We already see traditional corporations going from in-house R&D, to outsourcing R&D and more recently to crowdsourcing R&D. This movement is forced by the need to innovate fast, and by the fact that open source lowers the price to a point where traditional high-tech corporations can be put out of business. Crowdsourcing R&D means utilizing all sorts of schemes to attract the participation of the crowd into innovation processes that are sponsored by these corporations. In early crowdsourcing practices corporations tried to control the innovation by signing non-disclosure agreements with the participants. Crowdsourcing platforms were created to match corporate projects with skilled individuals. The practice was competitive, i.e. the company would chose a winner among different proposals, and usually the winner was rewarded with money. This practice gradually became more open, since the first iteration of crowdsourcing platforms were not very successful in attracting highly skilled individuals. In order to attract innovation, in order to grow open innovation communities around them, corporations need to think seriously about the reward mechanisms they put in place. It is not so difficult to understand why the early crowdfunding platforms were not very good attractors. I would not compete in a call by a company to design something for a few bucks, with a good probability of losing the race, knowing that the company will monopolize the work and probably make a lot of profits on it. The trend is to go from closed crowdsourcing to truly open source innovation, which must be accompanied by a broadening of the reward system. Since companies are going to deal with the crowd more and more, they need a contribution accounting system to account for contributions. See this presentation by SENSORICA making the distinction between competitive crowdsourcing and collaborative crowdsourcing.

In parallel to the adaptation of traditional companies we also see the creation of hybrid organizations and models. For example, in the realm or hardware, we have the emergence of ecosystems like Arduino and 3D Robotics/DIY Drones. They are composed of a traditional for-profit organization surrounded by an open source community. This post describes the situation. The difference here is that in most cases the open source community pre-existed the traditional for-profit, the later being created to manufacture and to distribute the products that are based on the innovation created by the open community. These hybrid models, the ones that are sustainable and successful, maintain an precarious equilibrium between the profit motive that can arise within the centralized traditional organization the open and sharing culture within the open innovation community. In some cases, this equilibrium is not maintained and the synergy between the two entities disappears, destroying the ecosystem. This was the case of Makerbot and the RepRap community, well captured in the Netflix documentary Print the Legend.

Photo by Muffet

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The Commons Transition Primer Demystifies and Delights https://blog.p2pfoundation.net/the-commons-transition-primer-demystifies-and-delights/2018/01/18 https://blog.p2pfoundation.net/the-commons-transition-primer-demystifies-and-delights/2018/01/18#respond Thu, 18 Jan 2018 19:00:00 +0000 https://blog.p2pfoundation.net/?p=69221 You are not likely to encounter a more welcoming set of texts and infographics to introduce the commons and peer production than the Commons Transition Primer website. The new site features four types of materials suited different levels of interest: short Q&A-style articles with illustrations; longer, in-depth articles for the more serious reader; a library... Continue reading

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You are not likely to encounter a more welcoming set of texts and infographics to introduce the commons and peer production than the Commons Transition Primer website.

The new site features four types of materials suited different levels of interest: short Q&A-style articles with illustrations; longer, in-depth articles for the more serious reader; a library of downloaded PDF versions of research publications by the P2P Foundation; and a collection of videos, audio interviews and links to other content.

The website does a great service in introducing topics that are sometimes elusive or abstract, giving them a solid explanation and lots of working examples. Go check it out!

Start with a series of Short Articles that addresses such questions as “What is a commons transition?” and “What is distributed manufacturing?” Then browse the Longer Articles section and read “10 ways to accelerate the Peer to Peer and Commons Economy,” a visionary piece on the movement to design global and manufacture locally.

The Library contains a number of major reports on how to embark upon a commons transition. The organizational study of Catalan Integral Cooperative as a post-capitalist model is fascinating. Check out the new conceptualizations of value in a commons economy, and the two-part report on the impact of peer production on energy use, thermodynamics, and the natural world.

There is also a wonderful overview of some leading commons, especially tech-oriented ones, in a collection of fifteen case studies. These explore such projects as Wikihouse, Farm Hack, L’Atelier Paysan, Mutual Aid Networks, Spain’s Municipalist Coalitions, and the Ghent’s urban commons (in Belgium).

Elena Martinez Vicente has produced a number of fantastic infographics that really help demystify some abstract ideas (the new ecosystem of value creation, patterns of open coops, cosmo-local production). Mercè Moreno Tarrés did the dazzling original art for the site, which helps make the material so engaging.

The Commons Transition Primer was produced by the Peer to Peer Foundation and P2P Labs with support from the Heinrich Boell Foundation. Kudos to Stacco Troncoso and Ann Marie Utratel for conceptualizing the project and preparing much of the material, and to Michel Bauwens and Vasilis Kostakis for their contributions to the text.

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SMart welcomes Michel Bauwens for a 3 year research and development residency https://blog.p2pfoundation.net/smart-welcomes-michel-bauwens-for-a-3-year-research-and-development-residency/2018/01/18 https://blog.p2pfoundation.net/smart-welcomes-michel-bauwens-for-a-3-year-research-and-development-residency/2018/01/18#respond Thu, 18 Jan 2018 08:00:00 +0000 https://blog.p2pfoundation.net/?p=69310 Readers of our blog and wiki will have noted various references to the labour mutual SMart. We find this an important movement and mutualistic solution for the autonomous workers that are becoming more and more numerous, but also ever more precarious, in our western societies. SMart membership converts income into wages, and thus into access... Continue reading

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Readers of our blog and wiki will have noted various references to the labour mutual SMart. We find this an important movement and mutualistic solution for the autonomous workers that are becoming more and more numerous, but also ever more precarious, in our western societies. SMart membership converts income into wages, and thus into access to social protection, while also guaranteeing the payment of the invoices through a mutual guarantee fund, along with a number of other mutualized support services. Between the figure of the lone competitive entrepreneur who takes all the risks without social protections, and represents the fastest pauperized population sector in the western economy (autopreneurs in France, ZZP in Netherlands), but also as an alternative to work subordination in the classic salariat, we believe SMart represents a very fruitful third way towards collective and cooperative enterprise. Hence we believe that SMart is potentially the new form of solidarity and social power for the form that work is taking in the 21st century, while also being animated with a vision of social change. In short, I believe labour mutuals are the form of self-organization appropriate for 21st workers, which not only fights for just distribution, but also for a more just and sustainable society, in which the commons orientation plays a vital role. The leadership of SMart agrees with this vision.

Starting last November, I have accepted a consulting association with SMart and the press announcement below explains the strategic priorities of this engagement:


SMart welcomes Michel Bauwens, joining us for a research and development residency for the next 3 years.

Collaborative economy theorist, co-author of Network Society and Future Scenarios for a Collaborative Economy and founder of the P2P Foundation, Michel Bauwens works in collaboration with an international group of researchers on the application of peer-to-peer in governance, production and ownership.

Peer-to-peer (P2P)

This concept stems from the tech world and describes peer-to-peer relationships in networks, where all those with access to computers are equal. Michel Bauwens was one of the first to apply this principle to other aspects of society, considering it as a social structure. For him, P2P is principally concerned with the capacity of people to create common value as equals, and without authorization (permissionless).
For Michel Bauwens, the society of the commons, emerging from P2P dynamics, can offer a response to the ecological and social crises we are faced with today.

Objectives of the residence

Over these three years, Michel Bauwens will work alongside SMart on various projects:

  • SMart is based on a digital platform that makes the right to economic initiative accessible to as many people as possible through a large-scale open cooperative. A new narrative is being created that should be better known at the international level.
  • SMart aims to reorganize and accelerate its international development. Michel Bauwens will guide this process.
  • Another of his missions will be assisting SMart in strengthening its connections with the world of platform cooperatives.
  • Most of SMart’s community services were constructed in a centralized, top down way. We aim to promote grassroots development in a participative and contributory manner (peer-to-peer). Some of our new computer applications could benefit from development using peer-to-peer logic. With this in mind, Michel Bauwens will lead a change in our teams and help create conditions for contributors to participate;
  • Finally, Michel Bauwens will stimulate the implementation of the ideas of the Commons in our cooperative.

Photo by Filmatu

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Regenerating a Carbon Drawdown Economy Through Reverse Mining and the Blockchain https://blog.p2pfoundation.net/regenerating-a-carbon-drawdown-economy-through-reverse-mining-and-the-blockchain/2018/01/17 https://blog.p2pfoundation.net/regenerating-a-carbon-drawdown-economy-through-reverse-mining-and-the-blockchain/2018/01/17#respond Wed, 17 Jan 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=69258 This is a very exciting project! Connecting agriculture and finance in this new way is cutting edge and you are really breaking ground with this. My one caution for you is that in emphasizing the rejuvenation of the carbon cycle, you are marginalizing the rejuvenation of the hydrological cycle and the nitrogen cycle. While you... Continue reading

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This is a very exciting project! Connecting agriculture and finance in this new way is cutting edge and you are really breaking ground with this. My one caution for you is that in emphasizing the rejuvenation of the carbon cycle, you are marginalizing the rejuvenation of the hydrological cycle and the nitrogen cycle. While you may believe that some dimensions of water and soil problems will be solved indirectly by giving primary attention to the carbon cycle, as noted in the paper I would ask to consider that all three cycles are of equal and interrelated importance and all deserve balanced attention if we are to create an economy based on the carrying capacity of the planet.

Read their whitepaper draft. Additionally, here is Regen.network’s website and the following text, written by Gregory Landua is reposted from their Medium account:

Implicate Intersections: The Global Weirding

The Emerging Crisis of Trust

Gregory Landua: Centralized failures of management of resources resulting in cascading ecosystem failures, increases in surveillance of citizens by unaccountable agencies as well as corporate actors, behavior and social manipulationthrough media and social media, and engineered mistrust intersect to form a general crisis of trust. Even trust in neighbors is undermined as polarized views and media is used to divide and conquer. This all forms into the necessity of revisiting trust as a fundamental layer for social interactions and the basis of our social contract. Regen.network is built to grow the capacity to focus on common interests and empower all stakeholders to hold those resources in trust as stewards of both outcomes and verification of those outcomes, providing a remedy to the generalized malaise of rightful distrust of centralized, opaque and degenerative governmental, economic and social structures.

Machine Learning

The rise of AI, big data and machine learning is already having huge impacts on society. Many of the impacts are visible in the earlier mentioned crisis of trust and incomplete machine learning algorithms are used to manipulate behavior of citizens as consumers. The larger debate about the safety of AI ranges from Elon Musk’s alarmist stance and public statements that AI should be governed and humans augmented, to enthusiasts who are blindly investing billions of dollars and significant human resources to feed the growth of “artificial” intelligence. Whether or not machine intelligence is truly artificial is not the focus on this conversation, however it warrants further discussion. AI is an important emerging disruption to our reality and, as such, warrants significant design consideration in any Information Technology project. Regen.network aims to grow the capacity of machine learning and attend deeply to the subtle nuances and complexities of ecological dynamics, health and regeneration, and to create a space for a deep human-machine partnership with the biosphere. This dynamic partnership is essential for all three elements of the whole to thrive.

Ecosystem Collapse

The rapid acidification of oceans, increasing rates of soil loss, accelerating loss of biodiversity, warming climate, environmental toxicity, and global scale degeneration of living systems is all emerging faster on a wider scale than humans have had the capacity to deal with. Humans are notoriously bad with exponential foresight and decision making. Apparently calculus is not our strength, and most of us, especially in governance decisions, have very short aims focused into the sharp point of survival instincts gone awry in the form of greed, optimization of financial liquidity at the expense of eco-social health. This collapse is passing our ability to attend to and respond to with centralized and glacial scientific structures. The structure of academic peer review is broken and mostly used to maintain positions of status instead of increase the capacity of the learning community to understand complex systems. The perverse economic and bureaucratic incentives of centralized power must be removed as obstacles and the ability of business, community, and individual initiative must be unleashed to find creative solutions to regenerate ecosystems around the world. Regen.network will start with terrestrial agriculture and expand to other lands, mariculture and ocean management as quickly as the creative genius of communities around the world can be unleashed to solve for peer-to-peer monitoring and verification and baseline calibration solutions for ecosystems.

Money Eats the World

Whether the destructive power of hyper liquidity in financial markets ripping away the foundation of living capital and turning it into financial instruments, or the massive energy weight of running proof of work consensus to avoid coercive centralized currency issuance, it is plain to see that money is literally eating the world. While we believe that the transparent costs of a proof of work cryptocurrency is far preferable to trust we all have in the continue ability of the US military to control the worlds metro-resources that makes the dollar the global currency, Bitcoin’s designed decentralized inefficiency is still world eating. It is less bad, but not good enough, and needless to say it is certainly not regenerative. The imperative to generate a decentralized currency system based on regenerative utility, that is a real use that increases the health of ecosystem through use is essential to a healthy functioning economy, and the maturity of the cryptocurrency and blockchain community which threatens to teeter into a war between crypto kitties and hyper liquid financialization instead of fulfilling the philosophical promised and potential of what the distributed ledger and decentralized economy can bring.

The Distributed Economy

Distributed ledger technology, sharing economy (both real and pseudo-sharing economy), micro transaction networks, token economics, and the new decentralization and distribution of technology and fungibility of decentralized cryptographic network tokens that represent various forms of assets unlock the potential for a new economy optimized for cooperation, evolution of diversified niche economic roles, and massive participation in a non-coercive mutualistic network economy. This emergence is not a minute too soon. Massive experimentation is now underway and many DApps and platforms are being born. Regen.network is designed to be a network and platform that serves to accelerate decentralized innovation to reconnect human economy with living systems and the imperatives for biological and ecological health. This is accomplished by providing the framework for the exchange of verified ecological data as the basic currency for a new regenerative, bioregionally-sourced, global decentralized economy.

Regenerative Agriculture

The growing movement to leverage the potential of soil to sequester carbon including governmental and business initiatives globally, also has deep strategic and ethical imperatives. As noted in the previously published Levels of Regenerative Agriculture white paper (Soloviev, Landua 2016), Regenerative Agriculture goes far beyond simply soil carbon sequestration. Soil Carbon Sequestration represents a regenerative outcome, but all levels of the value stream from soil to the human consumer of a product and back to the soil are part of the regenerative imperative that is now growing into a movement. Individuals and businesses are increasingly motivated to explore how to participate in a co-creative and regenerative economy where human needs are met in style while ecosystem health is increased and the capacity of the system itself and all members of the system to evolve more robust vitality and viability is grown.

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