Excerpted from Alan Rosenblith:

“There is an often unspoken assumption for many of us in the currency design world that good currency design is what gets people to behave in new and more sustainable ways. In essence, if you can get enough people to participate in a well designed currency, their behaviors will be incentivized in ever more sustainable and virtuous directions. The more I have become aware of this assumption, the more I have grown wary of it.

The core problem in this assumption is that currencies DO NOT create behaviors. Currency designers DO NOT play puppet master to the unsuspecting and largely ignorant masses. Currencies are adopted and adapted because they support existing behaviors. For instance, when we made the shift to fractional reserve banking, the merchant class already needed a form of money less controlled by monarchs to support an emerging industrial production model. The evolution in currency happened because it supported an ascending pattern of economic production.

So, where do we see an ascending pattern of economic behavior today? While there are lots of experiments in local artisanal production, IMHO these are dwarfed in significance by what Yochai Benkler has called “commons based peer production.” This kind of production has been most famously embodied in Wikipedia, open source software, and Creative Commons licensing. Commons based peer production is global in scale, and is made possible by the many-to-many communications technology of the Internet.

The main question for us then, as currency designers, is not how to get people to buy local, or how to incentivize more sustainable behavior. The main question should be how to support the growth of this entirely new type of economic production. Now, in no way I am discouraging folks from experimenting with different incentive structures for the existing economy. I am simply saying the sea-change we need to catalyze will be founded upon an entirely new pattern of production. Imagine what would happen if manufacturing was organized in the same way as Wikipedia. This is not as far fetched as it sounds now that the cost of 3d printing is dropping into reach of everyday folks.

What’s most important about this new mode of production is that it is NOT about the quid-pro-quo, something-for-something social contract. The primary motivation for participation is intrinsic rather than extrinsic. Therefore, in the most fundamental way, this new currency will NOT be based on the quid-pro-quo social contract. This is difficult for us to conceive of since all modern money is based on the assumption that producers of value should be incentivized with rewards as determined by the market. Even most alternative money substitutes simply recapitulate this basic pattern. The logic of the quid-pro-quo market goes something like this “I’ll provide my service at $50/hour but not $30/hour, and if you can afford it, you are worthy of my time.”

Instead, these new currencies will be about making it easy to find the right place to put one’s own efforts based not on extrinsic reward, but on intrinsic value. In other words, where will my efforts be the most fulfilling to me and most in harmony with my community? This is about right placement, and about being in economic communication with people all around the globe.”