The fallacy of the dream of Decentralized (P2P) Trade Economies

Trade can’t solve the inequality issues, what we need instead is an approval economy, argues Heather Marsh. See the next installment on April 6 for the description of the logic of an approval economy.

Excerpted from Georgie BC:

“Peer-to-peer trading is being increasingly explored as a method to cut out corporate control of the trade economy. Peer to peer trading looks like the diagram above. People can trade directly with each other, or through a network, eliminating the central hubs that control distribution and block access of goods. An alternative distribution is the gift economy which follows a similar diagram but does not involve direct exchange; instead goods are given and it is hoped that equivalent goods will be returned. A common model to discourage freeloading in a gift economy is to require a certain level of contribution from each member.

The peer to peer-to-peer / gift economy structure is encouraged as a form of trade suitable to a non-hierarchical society. That depiction is based on an incorrect picture of the society those trading nodes belong to. The difference between a trade relationship and a society with dependencies is obvious to those dependent or unequal in society. Anyone unable to trade an object or act of direct value to a person in power will be left out of a trade network and dependent on charity as shown in the diagram below. The peer to peer model eliminates the corporate hierarchy but leaves the patriarchy alive and well.

Peer-to-peer and gift economies do not allow for society’s input to be inherent in the trade transactions. The value of goods traded is rarely created solely by the trader. Some production builds on previous work, some makes use of assets from the commons and some is produced at the expense of work left for others. Some products may violate human rights of others or damage the environment or the society. Trade relationships relate only to negotiations between individuals and do not reflect impact on an entire society.

Power in peer to peer and gift economies is retained by those that control assets. Not only does this not benefit all of the people who historically don’t benefit in capitalism, it is easy in the diagram below to see how the cycle will progress right back to where we are today as wealth will again concentrate in those who hoard assets and avoid caring for dependents. Peer to peer trade relationships are simply decentralized capitalism. Bringing that system back to its origins with no change will certainly produce the same result over time which it has produced now.

Diagram: [1]

In the diagram above, the two traders who have pooled their resources and have no dependents are the most powerful. The one with six dependents is working far harder and obliged to divide their assets by seven. The disabled individual all by himself, and the one supporting twelve children and two elderly parents cannot participate in the trade economy at all and are dependent on charity. Their needs are not inherent in a trade economy.

For every member of society who has something of outside value to trade, there are dependents who have nothing and others doing the internal society building work. All trade must benefit those powerful enough to reciprocate. People providing palliative or geriatric care, working with the mentally ill or children, or with criminals not participating in the economy, will have no means of survival except charity or a resurrection of the institutional structures described in Society vs Dissociation. Those whose own survival takes all of their available resources because of illness, disability or age, those investing years in a long term project with no observable output, or those working in research and other thought based fields also have no inherent value in a peer to peer structure and must have their needs tacked on as a charitable addendum or debt obligation.

A few months ago, an article appeared in a Canadian newspaper. It told the story of a very young woman in Uganda raising six children, all the product of rape, after being abducted at 13 to become a child soldier. The photojournalist gave her a camera and sold the photos she took with it. When he gave her the money, he said “This isn’t a handout. This is money you’ve earned.”

Consider that for one minute. Raising six children she did not ask for while still a teenager herself, being pregnant or recovering for six years, breast feeding all of these children for however many years, providing food, shelter, clothing, safety, medical, educational and other care, all 24 hours a day, seven days a week while in extremely dangerous and uncomfortable conditions and recovering from severe trauma, with no societal support and in fact in danger from society, was not worth payment. She is expected to sacrifice her health and risk her life for a job that was not worth payment. Surviving all the trauma of her life did not entitle her to support from society. Trading a picture was considered providing something of value and contributing to society. This is a society conducted as a trade relationship; she cannot sell her children, therefore her work for them is of no value. It would however be illegal for her to let them die, so she is legally slave labour. Slavery of caregivers and others in this and many other instances is the only reason societies under capitalism can survive.

There are many groups today advocating living a money free existence by using barter, scavenging, peer-to-peer trade and gift economies. Women have been living a money free existence for most of history. Women devote a year of their lives to each pregnancy and recovery period and still do by far the most society building and caregiving work worldwide; in trade economies they have to add additional labour on top of this to create some product of exchange that will appeal to a person in power or they and all of their dependents will be at the mercy of those in power. The peer-to-peer barter or ‘gift’ economy required for many to survive has been called the world’s oldest profession: prostitution in an endless variety of forms, many called marriage. Trade economies are rigged against women in traditional roles and anyone else creating or supporting society. The answer for equality in this system has been for everyone to reject support roles and embrace trade economies.

Peer-to-peer networks provide no improvement for the rights of the weak as shown by a history full of peer-to-peer extortion gangs, paedophile networks and brotherly revolutions which became tyrannical immediately upon seizing power. Peer-to-peer is a survival of the fittest structure which ensures slavery of the weak. The persecution of the weak found in societies without inherent protection is frequently followed by a guardian coup d’état as when women are legally barred from bending over in Swaziland, sitting astride motorbikes in Indonesia or owning cell phones in rural India for their own ‘protection’. In a society with a trade based economy, currency and centralized power offers more protection to the weak than a peer-to-peer structure. This has been seen by the improvement in women’s lives when they have the right to vote and work for pay, and protection is provided (however theoretically) by the state.

When asked how they would allow for dependencies, advocates of peer to peer or gift economies speak of being ‘generous’, ‘giving’ food to the less able, and nearly always also mention condemnation for anyone having more children than they can provide for themselves, addictions, etc. In fact even one child puts the pregnant, nursing and responsible parent at a huge disadvantage and causes them to have to work far harder, for far less, and then need to divide their earnings. A number of dependents like six or more makes it difficult to survive. Many people around the world have far more than six children as well as care for other dependents in society. Even if the birth rate were reduced, every state in the northern hemisphere is experiencing an explosion in the elderly population, and disasters, environmental harm and other factors can cause sudden huge increases in dependents.

The decentralized capitalist structures treat this ‘problem’, in very much the same way as their corporate capitalist predecessors, with a begrudging charity or more hostile superiority and blame for those disadvantaged by their system. The value attached to trade versus creation and support of society is evident in every part of life, from obnoxious business travellers and others treating child caregivers as an untouchable caste to the removal of the elderly and less able to a dependent, burdensome role instead of recognizing the contributions and effort they are still providing or could. The nostalgia for a time before rampant corporate capitalism took hold, when ‘everyone’ benefited from peer-to-peer trade is an entirely masculinist view with a very narrow definition of ‘everyone’. As the male role in society has expanded to include far more caregiving, a trade economy suits no one.”

4 Comments The fallacy of the dream of Decentralized (P2P) Trade Economies

  1. Øyvind HolmstadØyvind Holmstad

    “The nostalgia for a time before rampant corporate capitalism took hold, when ‘everyone’ benefited from peer-to-peer trade is an entirely masculinist view with a very narrow definition of ‘everyone’.”

    When Adam Smith talked about “the invisible hand of the market”, what he really observed was “the invisible wing of the Arabian Babbler”, as founded by a thesis by Amoz Zahavi in 1975. The pre-corporate “capitalism” was much smaller with a number of connections among people which now has vanished. This made the handicap principle work much more efficiently than in today’s monocultures of zoning, like suburbia and the tower in the park, separated from business and other aspects of life.

    This is why pre-corporate trading communities cannot be compared with today’s corporate capitalism at all. The author seems to have no knowledge of the power of the handicap principle implemented on the smallest scales. I do here stress the smallest scales, as it’s only here the handicap principle can be implemented the most efficient way as a foundation of society. The best way to do this is by using pattern thinking, or pattern languages.

    I touched some of these aspects in my latest article at Kulturverk, in Norwegian: http://www.kulturverk.com/2013/03/27/er-livet-ei-gave-eller-ei-vare/

  2. Joe

    Rampant Corporate Capitalism… that pretty much says it all in a nutshell as the greater majority are tired of the lies, facism, double talk and pointing fingers while most whom do in some form or another have either had their hand in the cookie jar or likely have supported in some way, shape, or form those whom have.

    Passion Of Christ in its opening week alone netted Gibson 300 million according to reports I am sure he didn’t even bat an eye smiling all the way to the bank and that was just in the first opening… the industry more than doubled, tripled that amount when the dust had settled and yet street vendors, did their thing selling illegal copies and the world did not come to an end, the p2p (general population) also did their thing illegally sharing sharing with one another and sure enough the industry is still around crying bloody murder and poor revenues despite making a tons of money while legally selling their copies but always pointing the finger at the little guys while those on top continue to rape the general public at large.

    Rampant is a great term alright but for all the Corporate B.S. and finger pointing that goes on, its no wonder the why Vpn’s, Encrypted Proxies or even Decentralized venues have been explored not to mention what futuristic ideas further encroachment might eventually spawn, people are human and simply grow tired of the double standard and being pushed around and especially by an industry or others whom all have opinions while the real corporate crooks continue to corner, push and curtail the rest.

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