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# System prepended metadata

title: 'SESSION 4: A VALUE THEORY OF PERFORMANCE'

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# SESSION 4: A VALUE THEORY OF PERFORMANCE

THURSDAY 28.5.2020 10amPST/1pmEST/7pmBERLIN/3amFriSYDNEY

PLACE: ECSA ZOOM https://zoom.us/j/2022138511

Telegram: https://t.me/joinchat/IivZHxdMBb3PKtNDr5QdVg 

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READING: Section 5: AN ECONOMY OF INFORMATION AND STAKE

5 An Economy of Information and Stake
	5.1 The Purpose
	5.2 Information, performances, indices and derivatives
	5.3 Stake and the expression of the social
	5.4 A value theory of performance



LINK TO THE TEXT: [**THE ECONOMIC SPACE PROTOCOL (ECSA ECONOMIC PAPER)**](https://docs.google.com/document/d/1TuTnsh50jtB710D5YwEuIxPG-bT1ZkokCLErV0l8Z60/edit)


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# [SESSION VIDEO](https://www.youtube.com/watch?v=1Jm-FTzRAyo)


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# NOTES

Akseli: Summary of last session: decompose and decosntrcut markets- information, especially as understood by HAyek and his disciples. We tried to show that the conventional understanding of price is restricted, when you understand it as protocols you can repurpose them about what can be done. Especially two things. One is that there could be multiple goals, so multiple rationalities living in the markets.

Other one was functioning of markets, making possible staking emotionally and financially, socially in these various goals.

In this section, now we are getting into how the system works.

Dick: We are trying to build a theory of value. Framing the theory of value is quite difficult for those of us who come from Marxian background. Because we dont want to measure commodities, open up the possibility that while someone is producing for the market process of profitability dont apply. So how you count has to  be separated from the notion of what is its contribution to profitability.

We want a theory of value that's not premise on an extractive surplus because there's no class of labour in this in story.

We're silent about the process of production because it's in a sense prior to and we aspire to think something that can be arranged on alternative basis nodes to capitalism. Then the issue was how do you talk about value, count something that is not registered in profitability?

We were talking about social impact funds- states sets the modes of calculating that do not go through the markets. In fact they're explicitly designed to be non market or some might say market modes of calculating. That led to lightbulb moment to the notion of counting performances and counting effects. The object of this exercise is how do you go about fashion a model of measuring a performance that doesnt have a surplus extraction logic and not framed by condition profitability.

While we dont elaborate a full theory of value, it is working in this direction.

Next section will put token on top of that which will build p2p mode of registering and issuing that.

Akseli: Any thought after you read that chapter?

Jonathan: I just want to register the presence of an internal conversation around performance theory of value which we've been having, which recognizes that there is a tradition of analysis of production which does recognize something that looks very much like performance. And thinking about autonomous Marxism and social cooperation that Negri develops as well as their
notion of virtuosity and of the score about the production score in which people's cognitive linguistic capacities are expropriated by capital and in order
to lubricate effectively that. production proces.

Closely to my own work on atention economies the attention theory of values, cinema and screens as deterritorialized factors which entered into social space and transform labour from what we used to think of it as a factory process extracted through the wage to screen-based extraction via social currencies. So you can think about the performance as being already in place actually as a modality of capital creation and extraction. And I think one of the things we're working on here is trying to create a set of tools that are capable of structuring performance in ways that we can but not available now. 

In other words you could program them from below basically and organize their distribution channels also from below rather than from the existing infrastructure which is fixed capital.

Jorge: Jonathan do you want to say about in this case performances are defined by agents themselves- and the value they create captured, by the agent themselves in contrast to the current situation. 

Jonathan: I think that's one of the research space and an experiment that is ECSA.

I mean in a way to re-engineer the structuring of performance rather than making it a command performance for capital, seeing it is actually a tunable performance which to produce solidarity and other effects equally as well. The current problem is that with the  communications infrastructure it's not a commons, it's an extraction space. But if we create an economic media which we're able to both program scripts which are participatory scripts, and invite participation and then also control the distribution of values that are created, doesn't necessarily have to collapse back into
the value form. Those values can be suspended in a way by the networks which they are circulating and created. 

Claire: For me reading this section, it is jarring because I work from the premise of wanting to destroy the value relation, so the idea of a post-capitalist value relation is very new to me. And so, I guess what this section makes me wonder question is what are the bits of value relation that needs to be dispensed with, to be destroyed for this to be genuinely post-capitalist. 

Thinking about how do I understand capitalist value form, for me it is exploitation and appropriation of one class' work and attention, so to think about it with this background of last decades.. I was wondering to the extent as a financial element what ECSA is proposing, how does this become post-capitalsit value?

I appreciate it is not based on imperatives the way cpaitalism does, like labor is not compelled to produce, which is essential to a post-capitalist form for me,but if there are not imperatives, what are the material benefits for the people involved apart from political-ideological? If I am not compelled to engage in order to survive, what are the material benefits? Why do I do it?

Jonathan: If you can escape the compulsion to work, that is a really good experiment. It opens a huge field of experimentation and possibility. And I think that's sort of the idea that this becomes a creative space to create your own conditions of sustainability in order to posit values and things that are valuable socially, which you might get consensus or some kind of recognition for and engage in a process of co-creation.

Claire, if you would agree with this, in some ways your question is kind of like this: could there possibly is there such thing as a communist derivative? I mean is it possible to actually write a derivative contract which doesn't reproduce capital but instead places a set of contingent claims on value creation that is anti-capitalist, post-capitalist, or non-capitalis?

I don't know a great answer to that but I think one of the approaches that we're taking here is that because of understanding of denomination and basically money and finance, there's a recognition that every instantiation of value is also a derivative on the volatility of the
market. It's a contingent claim which has different structure to whether it's an apple or whether it's you know a piece of composable finance. And those positions can be structured and authored in different ways than they are right now. 

In fact if you can sort of democratize authorship the same way the internet democratized communication, but you can do that in a  financial medium and you can also control the way in which the communities form around and then in which way value is distributed. The reason we talk about this big put is because we feel like there's a possibility for a communal will to refuse the collapse back in the value as people experiment into a new kind of economy.

Akseli: In the introduction, basically we were really
trying to also define the capitalist and and address post capitalist as a financial system to so we could put the three key questions like what we're challenging, like what counts as value, what counts as collateral, and who gets to decide those are the three, like our angles, our lack of entry points to the struggle.

And then Jorge had a good ideato share with you in his screen.

Jorge: I will add one last question to these, that is what counts as liquidity? Showing presentation slide. One of the slides of ECSA protocol deck. 

Slide is showing the differences between capitalist protocol and ECSA protocol.

This is a little bit to the question of how would a different financial economic system that doesn't have the structured logical work and in this particular this one of the slides of the economic space protocol deck and it highlights differences. We hopefully can give a hint. All of this has already been spoken of in the paper before but this kind of collects them as comparison points one to one.

Medium-
    Capitalism:Closed and owned. It is control structure, only few agents have access to it literally and practically. You need to join the club and pay for it.
    ECSA: open and free. No barrier of entry. All agents have the same capcaity, there is no guardians of capital. Every agent can issue make offer and clear. It is an economic language that all agents can speak. that's why we describe grammar as a medium. So it's an economic language that agents are able to speak right now, there's people that are literally littered in this language and can speak with other agents that are only allowed to speak with like very basic words like cash or money. But there's so much more, especially to finance, take debt for example.
    

Issuance:
     Capitalism: centralized
     ECSA: p2p issuance
   
    
Price info:
    Capitalims: quantitative
    ECSA: qualitative and quantitavtive
    
Production mode: 
    Capitalism: competitive
    ECSA: collaborative 
    
Important distinction in capitalism is value gains are from scarcity. Capitalism tries to make something scarce. Game is all about trying to control what is scarce and own it.

In this system, and this what the performance does, is about really trying to capture what's valuable and it is the performance that allows us to cap create a financial representation of that which is not scarce. And we're
saying that valuation is based on adoption, use, and performance. So basically what an informational medium
allows us to track is precisely those things which cannot be tracked outside of an informational medium. So the same place where post capitalism plays out is the
place that has the distinct possibilities from the previous medium.

The ultimate goal is ecOnomic surplus is framed as an increase in the value of those performances in the form of staking rather than profit maximization. That happens when you find a way of valuing that which is not scarce. 

Akseli: Claire asks about redistribution.

Claire: Thinking through that slide, to what extent do we anticipate that people's current economic conditions  and positions will limit/shape their participation in ECSA?

Akseli: good question, we explicitly take that into consideration. 

Jonathan: I think that's a tremendous concern and I don't think it's a fully addressed by the protocols or even by the technology for it to exist in full form because there's some inequality of access certainly, and that's just one of the reality that would take other war many wars or an economy like this to address or who knows maybe both.

But the thing is that many people, even though they're relatively disenfranchised, still have access to something like a smartphone. In Philippines where I've done a lot of work and spend a lot of time, smartphones
are what everyone has order to to get by even if they're making two thousand dollars a year, you figure how to  get one when they're cheap ones available. So that would be an adequate interface to propose basically to write a derivative on this protocol medium-term.

And the other thing that happens is you sort of get  other currents of social collaboration which challenge the currency walls, which local economies thrive on. In the Philippine Peso as a way of making sure that the entire labor force, the Philippines stays devalued in their relationship to  other sovereign monies. And because you could make international connections with the Philippine diaspora for example you would all have a kind of equation process taking place among those peers which would challenge local currencies hegemony and also allow you to transfer and be created liquidity off granted in ways it didn't correspond to those currency inequalities.
So those are just really sketchy answers that's kind of the way we're thinking about.

Leanne: you say in the paper that you want to neutralize wealth. Jonathan wrote on the chat, I was wondering - no matter how distributed, there is always tendency towards recentralization and accumulation based on differences of access and creativity. I don't know what Sipohon is, what Jonathan wrote

Jonathan:I meant Sipohon the idea being that if you create a space of economic creation which is more convivial than current conditions, basically capitalism, people will begin to put more and more their life more and more the creativity more of their stake into that platform which has a fair and just economy rather than extracted one. And as they do so also withdraw their powers from capital society so in a way the value of the holdings of capital will be put into question and challenge because they will not be able to realize the
same returns that they can now as more participation comes into post- capitalist economy.

That's like a kind of a macro thesis and maybe there's a lot of places to interrogate that. I mentioned war and I wasn't completely joking because part of my thinking is about anti-imperialist struggle rather concretely. Short of using military forces to expropriate wealth, which I'm not necessarily against, sometimes, this process is a slow value transfer which grows out of people's existing creative capacities.

Adam: I am a bit critical about Jonathan's perspective. I think design of this value theory is great. It would be wonderful if you could a wide range of social norms or the noncapitalist or non monetary evaluations, and turn those different things into different assests that can operate in economic networks that are not necessarily capitalist. 

I used to be economics undergrad. It was neoclass econ, they told you that if something works on the market it will be adopted by the people. That's what Jonathan is saying, people find this convivial, and it will work.

Historically that doesn't seem to happen with value. Historically,  value regimes are not an effect of grassroots choice but top-down imposition of power. Very Nietzcheian, if you are powerful your value will be counted. That's sort of what capitalism evolution was like. 

For example if you are looking at the sitatuion here in Southern Italy, what you are seeing is the actors moving in to determine what the values are are not the bottom networks of ordinary citizens but organized crime. They have the power to structure markets under their term.

In a some sense I like this attention to the power dynamics, because without that it becomes a solutionism that has been criticized.

Colin: Want to suggest something about value and escape from it.

I think that in a way value is the problem. The concept of it is the problem. A lot of these problems can be sidestepped by rather then thinking of value using a risk- analysis. In Marx, there is section about Marx in value form, what gets exchanged, my first question is what is wrong with profit if you redefine unit of what is accumulated? If you redefine what value is, I dont understand the problem with profits.

Another is that hidden underneath in analysis of MArx is a futures contract- the wage relation. The capitalist gets all the risk and worker non, then capitalist forces some of the downside risk onto the shoulders of workers, he has the option to lay off for example, but he gets all the upside and downside in the transaction. The problem with exploiation is the worker doesn't get any of the upside risk. This is what we want, everyone should get their upside risk.

Original state, how do people enter the network with the orginial state. The system as a whole has upside and downside risk associated with getting in new member. You scale but you could get freeloaders. How much of that upside risk is of having new people- what is the price of that, how much is it worth the original state to new person and what is the mechanism by which it is accomplished.

My point is that, I think as long as you're thinking in terms of value terms, which is a substance metaphysics,
you're gonna circle around the drain of are we in and out of capitalism forever. It would be better to reframe the whole process in terms of risk.

Akseli: We agree pretty much about redefining of value as a risk distribution. We talk about surplus which kind of for rather than profit but that is the idea, and we are really thinking about this as a real risk redistribution.

Jonathan: Traditionally and it's currently, value
extraction regimes are organized by the police and military force, that's the way sovereign states work. To me, capitalism markets are not really voluntary in any sense of the word, theyre sort of based upon hegemony that's held by state violence and other forms of coercion. 

--bad connection-- . There is a wager on desirability of life without this level of coercion and violence and that the objection and burnout and psychosis, which is currently prevalent globally, is seeking various forms of cure or transformation. I mean if we could provide new kinds of community, new kinds of kinship, new ways of making making care and remaking the world people might read in that direction. And maybe that's optimistic, I don't know. It's not really a simple solution is, it's not sort of like create a new market and people will come. I mean it is really about a different imagination of sociality and there may be more to say about that. Maybe this won't answer your objection so I just want to sort of register an agreement with things you said and sort of say well maybe there's another another way.

And one quick response to Colin. I think you stated something quite precise and sort of metaphysics of value is really not the fundamental way many of us think about these questions. It's much more about risk and organization and performance, which are about sociality
and risk management, basically kind of wagers and what many more things are the social derivatives as doing economy. 

Dick: I am really interested in set of comments both written and spoken in the conversation. Adamon solutionism is calling on risk, Olivier on efficiency.

These concepts play together in interesting ways. I think we are alwasy in danger of overwriting a document to look like solutionism. Thre is alwasy going to be an indetereminancy here that we need to make somehow explicity so that solutionism is not an obvious cirtique. 

The critical issue we have to think about when we get to performances, cirtical issue is the stake- both upside and downside risk. So they can do their money, or they can do well, in that sense there is massive indeterminancy, with these protocols we are tring to locate volatility and riskiness in sort of areas where it is purposeful. I think solutionism is trying to lock out risk and volatility, and we are trying to steer them. 

I don't mind us talking about efficiency so long as it doesn't get imbued with neoclassical meaning. Our attention is alwasy to get optimization. Staking becomes a question of efficiency but efficiency without an allocating end. Agents are alwasys renegotiating about what is relevantly more important, what is valuable in the system- value of stake move up down accordingly. 

The goal in our framing is to get opinions about what is valuable. Staking becomes a discussion about what counts as value- that's the space we are trying to open. I think it is not solutionism, it is efficiency designed differently, and it's explicitly based on risk.

Akseli: I would add that voting is not the same way as current election voting, more complex in internet context.

Adam: there is alternative to this perspective. One is socialism idea, it is all about power taking control of state, sitting on top of control leavers.

On another is market based, people adopt solution is about perspective.

But there is also a third way, that is historically there tend to be spaces for alternative solutions to manifest themselves in times of systemic breakdown. Collapse of feudalism, as soon as it crumbles there is a big space for consolidation of mechanism that we might recognize now as being fairly established and hegemonic like military extractions and markets, etc. But before, they were quite controlled and subalterned, I think also now if you believe there is going to be increase chance of, like Wolfgang perspective that the end of capitalism is going to be a long time of accumulation of inefficiencies that maybe each by themselves is not catastrophic but added on to each other, it's going to sort of create a situation where a growing amount of people are no longer principally oriented towards  a capitalist economy in order to make their living but have to rely on other types of systems and networks.

Of course in that situation, there's a lot of space for  if you can propose new types of efficiency there's a lot of space for these type of alternative solutions to to developing situation sort of relative powerlessness.

If they become important, they will always become a target of power in the end. But to think of areas left open in the margins is important.

Akseli: Form our perspective, margins sure, but we are thinking of bridges to the capital markets because it makes sense to everybody, that's the idea of Big Put. 

Adam: Offering alternative pensions for people who don't have money, for example. One of the most important phenomenon is migrant entreprenurship- a lot of people forced to migrate and trade in bazaars in the limits of legality. These are the people who are in dire need of new and efficient types of financial services.

Jonathan:An example I remember from Foucault you know the entrepreneur oneself right, it was the migrants
who invests his capital and risk in order to get a better return, which if you take to put in another discourse, it's actually about seeking reparations, where people are seeking reperations from the violence of history, and that's totally going on. I think that's part of what we really have in mind here in building these tools. Allowing people to issue one another liquidity based upon their own sense of each other's futurity, possibility, they don't get caught in these liquidity traps which force them to sell their own futures short.

I think what Colin was getting at the wage contract, you lose all the upside on your creativity when you sell it because first of all because you have to sell it becouse you can't wait. And second of all, you may not find any other buyer. So the upside of your creativity is  incredibly costly situation which we're trying to  address.

Adam: I concur.

5.2

Akseli: Then, I though that it would be good to spend time in the definitions to sort out how do we get it done, and how does it make sense. how do we define event as a virtual community- performance as new definition of value- performance derivative. 

Jorge: The objective in here is to allow agents to financially articulate intangibles. We are playing with the term informational goods. 

The way computer substrate becomes aware of information is through definition of event. This and that happens, then this thing. There is a logic that allows you to associate causes with effect. We have bunch of info entering the system but also a lot of info being generated  on that information by that system. For agents to be able to instruct this particular conditional system, they need to express those happenings as events, articulate them. System then can say when this happens, then this other thing. In financial terms, we are expressing contingency on a futures event where agents can actually express a risk position against. Event is one of these programmatic expressions getting triggered and causing another event that is economically meaningful and financially performative. 

Performance derivative for example, it's a very simplistic conceive of the market and exchanges as some sort of informational computational substrate, is whenever a strike price reaches the underlying gets transferred. That is a very simple and common kind of economic event with a financial contingency associated with it. So for us we're expanding that into a much more
expressive grammar. Basically, anything can be an event, anything that can be registered in the network for as long as there's someone that is willing to participate on it and validate as a financial instrument. 

Relationship btw event and perfromacnce: performance allows the event to be better articulated. If event is currents of a number of conditions that happens in a space, performance is occuring of something through time as sequence of events, the way in which we capture a dynamic system- dynamic processes. It is basically extending the logic of event into something that moves over time. 

Jonathan: Part of the conversation made about performances a couple days ago was about TikTok, and the way in which TikTok put kind of wager on the social. And so one could think Tiktok is also structuring events and their minimum is   structured there's a lot of range in them. People produce scripts which other people can perform with a variation. And so you get this strong repetition in difference logic, which is super interesting. 

This is a social and semiotic process, it's also obviously an economic process at least for TikTok. So yeah, I think if you want to think about social derivatives, it's useful to keep things like TikTok in mind as performance.

Akseli: when you think of performance like that, it opens organization as a performance. This thing happening, then people coming to relationship, working in order to get things done, is a sort of performance, which opens a very interesting perspective about what has been thought of as a dao is in fact the
performance. And it makes much much more expressive and powerful .

Jorge: The last part is utility of defining these performances programmatically and financially is to stake on them. Example: bitcoin is a perfect example of social stakeble performance. Mining of bitcoin happens everytime a node solves a proof of work problem and publishes the block. That coinage is a payment given to this particular node, evreyone that is holding a bitcoin is staking in the performativity of the bitcoin, in the fact that it can keep a ledger going on. In different levels of success, but that's performativity and how it is rewarded, the value is actually indexing the valuation of that performance. Bitcoin is not defined by whteher this should be valuable or not. That is an example of a network of agents valuing our performativity and stake on it.


It doesn't mean that it's true, certainly they think so by their own criteria. We are seeing something more robust in the sense that we actually want to encode that performativity mroe explicitly that is more measureble and operable. 

Second, the expressivity of the performance to be a capacity that we give to every single economic agent. 

Dick: A performance derivative is really an attempt to deal with how do you make a series of events turn into something financial and stakeble. If we are thinking of data that is being generated in this system, then we need to weigh a causal connection. The importance of it is framing something as a contingency, something may or may not happen. Two issues have to be thought of.
1 Which events which events in combination which cause a consequence which of the matter, a whole lot of trivial things will arise there, so one issue is how do we discern which perfromances are worth taking into cosnideration. That's where material conception of value arises, people should stake in performances they think are valuable. 

But the other thing is Jorge was saying is that by giving it skin in the game as a financial contract, you're actually creating the form of a call option. So, 
what's important about the performance derivative dimension is that it's about putting evidence of social processes that aren't linked to profit but can be linked to value that those that are seen to be linked to valued by agents staking in them. They can be extracted from the data, and an agent can say I'm going to put this up for steak because I think it has social value, and I'm gonna test what other people think. Other people in the network think do they truthy this is an analytic of social value, in which case they will invest in the stake. If they don't, they won't.


It is a second dynamic with a feedback level, but this is more of focus of next section. That stake will go on value as network reaches its decisions about what create value and which dont. There is very intentional fluidity and indeterminancy that comes to the system, that's why derivative form is very critical. We are explicitly trying to define upside risk, not remove downside risk, but creating opportunities for the agents to hedge against a downside.

Jorge: When you're rewarding a particular performance in such a way, actually
 there's more of it happening. So, the staking and off staking on the performance actually is the way that which the network modulates a particular occurrence.

Akseli: let's define stake- what is stake- ownership of a performance derivative

Dick: Like the word efficiency, we could use equity but it is imbued with such capitalist meaning that the simplest term is stake.

Going back to the redistribition issue, if members of the network think some degree of equalization is important, then there will be staking of performances that value equalization. Redistribution is a word we can't use because that has the notion of an authority taking and giving, levies and bounties. But the performances and outputs that facilitate people who are less powerless if the network thinks of those things are valuable, then stakes that enhance that will appreciate in value. And that's sort of the mechanism of redistribution without the statement. That's the nearest we can come to that proces.

Akseli: Collin writing about that value is an equilibrium concept, but how we frame it isn't. I think we try to move from there. 

Colin: Yeah, I agree. I'm just encouraging you to make the move fully out of value world. You're getting there, I'm just trying to radicalize it. 

Jonathan: One of the holdover conversations which ECSA has to have, is sort of the question of value as thought in the dominant, and the transformation or transvaluation of value by values. Deterritorialization of value and sort of the qualification of value because value in an economic sense talked about, it's definitely a metaphysical conceit.

Values as things people care about- well, they're sort of like in this strange epistemic space. There's their qualities, they may be abstractions, but they may be extremely concrete and experiential. I think the emphasis of values- possibility for the expression of individual qualitative values on the platform is something that we do want to continue to talk about, even though I do agree if the meta conversation is really about structures of risk and derivatives. But really this is all about the ability to author derivatives in the same way that one could author a blog post.

Colin: im trying to point out that in framing the question as a choice between whether we're still in value or a post-capitalist desire or whatever, I mean the problem is in what capitalism calls value already has values in it. Like in order for any estimate of GDP to be constructed, we have to construct a normative representative consumer who consumes and enjoys. And so there is no value, it never has been independently of values. And all this kind of stuff like what we call value and what we think we're trapped in already is constructed in this Nietzschean way. That's sort of what I'm trying to keep.

Dick: I'm wondering what people think about the politics of focusing on performance. When we talk about staking performances and stake-markets representing social valuation, we step around issues of who controls the production of performances, or who controls delivery of performances, production, and therefore class. I use step around as provacitve term because I don't think we do. I think silence in production and class is intentional. But I'm wondering what people think about going over them silently in a post-capitalist economy?

Colin: What is class in MArx? Wage is a futures contract. I as a laborer have to self forward the products of my labor. The rate of exploitation is the premium
on the futures contract. Why do I have to do this? I have to do this because I have funding constraints. That's the reason that I have to alienate. I have to
give up my upset wrist. And once you're talking about how if  there is a mechanism by which any actor in the system cam issue, and if there is a mechanism by which the taking of the staking of agents without stake is price ,and it is carried out by the, system then what you're doing is freeing people from the discipline of payment.

That is the abolition of class in Marx, if you reintrpret him in the way I am suggesting. 

Dick: I agree with Colin. In Chapter 6 of Vol 1 MArx talks about wage system. He makes this comment that the laborer gives credit to capitalist because laborer does'nt get paid until the end of period, if the worker didnt do this capital couldn't exist. 
Marx got juicy because he wants to get to surplus value, but I think this notion of reciprocal issuance of what we are doing is a statement that Marx jumped out.  He made a fabulous observation here about the distinctively capitalist form of credit. It is the provision of labour as  payment in the end of the work period, so that for that period the capitalist gets free labor to make the revenue to back to pay to the labor, and that's in a sense the basis of surplus-value.

That's what got me into thinking about labor in relation to futures conrracts, the relation to risk. I like the way Colin pitched it. 

Leanne: I think that just because you solve for the opportunity for reciprocity by giving liquidity doesn't mean everyone will access it. There is still different risk profiles. Thinking of mutual credit schemes, I am guessing that you are allowing people to in a mutually credit way create money and go into debt but have to earn it back. But, even if you give the people this opportunity to finance their action, it doesn' mean that everyone is going to do it. People have different risk profiles- behavior,  some will be doing more than others, inequality will still emerge, even if less than now. 

Jorge:  I suppose that's like different agents are going to have different degrees of economic activity, and there's different levels of through the system self enfranchisement, through trade.

Leanne: And wealth. Therefore power and ability to access liquidity. I can see in local currencies and mutual currencies that I work with, that just because everyone has access, doesn't mean they access it. 

Jorge: there is a critique of trade in general as a form of social relationship creationg.

Colin: There is a deep question about whether inequality is bad. What is bad is accumulation of wealth. You can have inequality in which you can prevent accumulation of wealth in the form of people. 

Inequality as such should not be negative.

Leanne: I'm presuming that leads to accumulation of wealth and to access to liquidity

Colin: accumulation of wealth is good, if we are talking of real wealth, like in terms of investment in infrastructure. One form of wealth is bad, that's accumulation in the form of people, that could be slavery, debt capture. But accumualtion of wealth as such is not bea problem. 


Jorge: It is also important.to redefine wealth in post-cap society. 

Liquidity is as valuable as illuqidity. Depends on what you choose to make liq- illiq. Whatever agent's performance that he has to contrbiute, he has a choice of not to make it liquid. 

Doesn't mean that only what is represented system is wealth.I might be very wealthy with my time and choose to spend 1 hour, and what the system is tracking may not be valuable to me, but what the system is tracting is the socially valuable. 

Other thing is performances can't be controlled, can't be owned, if we are staking we are all recipients of those performances. SKnowledg happens, I'm affected by it whether I staked or not. So knowledge, the commons this system accumulates, commons because there is no restriction of access. Only when it takes economic form then the system tracks it. 

Some people will access this wealth, this knowledge, but some won't. It comes to choice. I'm with Collin that as long as the agent is not coerced into subsistence, I don't see it an issue. The agent can define what he needs to subsist.

Akseli: Not to reveal too much, but for us it's moving from mutual credit to mutual stake. It is a different arrangement of liquidity.

Ben: I dont think we are answering Leanne's question. This is the issue with Rawl's theory of justice, that the natural lottery is unfair.

So, your ability to make choices and risk take is distributed, and it's distributed unfairly, and that was the question that Rawls was trying to raise
in the theory of justice.

The distrubiton of the the ability to make good decisions itself is a distributed good. And it is socially unfair. So, the issue of socail injustice hunts our project. But nobody else tried to answer this, that natural lottery is unfair. 

Rawl's big move was not attack on utilitarianism but that natural lottery is unfair.

Even if we define protocols for risk taking that are much more fair, the ability ot take advantage of thes ethings itself is distributed. Potential inequality is not remedied by the system. I just think that we need to admit that. Others dont event do it, we can say that we are solving some of that problem. 

WE don't solve everything. 

Jonathan: I'm  sympathetic with that to a certain extent. I'm also critical of those kinds of anthologies at the social. I mean sure, to begin with a particular slice of time and perspective things look that way, and in fact are that way in a particular formation. On the other hand, the sort of historical devaluation of people's and people's contributions, I think it makes it easier to overlook the unbelievable wealth and richness of their social networks and their capacities to support one another and survive in spite of the system of accounts, which gives value of course value in one way or another. Nothing that we're gonna like overcome all of that you know in five minutes or even 50 years , but it does seem that there's been a really radical underestimation of the qualities and contributions of the dispossessed. 

And that the dispossessed, the sheer fact of their survival the survival people who are not meant to survive shows an incredible capacity for decision-making under conditions of uncertainty and adversity. And one of the big problems is that people don't have access to the protocols which allow them to do something else with those abilities because they're so indebted to the future with a wage future. And that creates problems of incapacity which mutual provisioning of liquidity might not solve once and for all, but actually it really changes the equation in a radical way.

Ben: that's exactly where Rawls ended up. He argues for a radical redistribution. 

Even though it is generated out of individual utility maximization behind the veil of ignorance, it ends up in a radical conclusion.

In fact, you could argue That book is maximization of alternative values- not the money but that of justice. He said, we got all these Pareto optimal distributions, and some of them are unfair, even though utilitarian. And then you could actually be able to talk about efficiency and maximization of distributive justice rather than utility maximization.

I actually think that that has a lot of problems. We might want to take a look at those arguments because they go to issues of efficeincy, utilization, for value maximization.

These will be very complicated issues in trying to get new metrics for new measures.

Colin: what is liquidity. The option to transact at demand. I can be buyer or seller at anytime I want. By demanding liquidity I want control over price. In demanding liquidity, I require some agent who is going to short liqudity, and that's the market maker. So the market maker is someone who gives up the ability to be flexible-- and inflexible about price.

The crisis of capitalism that Marx described is really of liqudiity crisis. Where evryone wants to be long in liqudity but nobody wants to short it- meaning there will be no market. Existence of liquidity requires a market maker. It requires a short liquidity actor, that's the question. The market maker is somebody who gives up the ability to decide which side of the transaction could transact on and when to do it. They'll transact either direction at any time, and so they're flexible about those things but they're inflexible about the price. That's what the market maker is. 

Who will short liquidity is really a liquidity crisis. Liquidity crisis is what happens when everybody in the economy is demanding liquidity. So everybody wants to be long liquidity, which means nobody is short liquidity. And if there's no market for me to exercise my option for liquidity in, then my way doesn't exist. So, if everybody is trying to get liquid at the same time, then liquidity vanishes. So the existence of liquidity requires a market maker. This is the trainer model stuff I told you guys about. It requires a short liquidity actors, and that's the question. Who is going to short liquidity, and what is the gain from shorting liquidity? 

Ben: That's a great summary of Bob's whole book.

Akseli: There is one more question I wanted to raise. In the beginning, we make the point that the staking model we are proposing is we are comparing it to voting models- I was going to ask Felix if he could say a couple things about conviction voting and how that works.

Felix: Conviction voting is proposed by Common stack as their first governance model. You transform decision making from instance- events and indicate your preference until you have to vote to signalling of prefernces. The longer you hold your conviction steady, the more wait it accumulates. There is still plutocratic base in common stack version. If I have 1000 tokens, that is the maximum, but I start accumulating over time, you can shape it how you want the curve accumulation, the interesting thing is that I come from event based model to continuous signalling.  

You foreclose time based attack vectors.  BEcause usually you have the problem of some whales making last moment swings in their decision, or You can fake some tendencies and then swing in very last moment, use this strategically. 

Akseli: and we see that happening in the events in practice in DAO bots.

Felix: I wrote 5-7 pages if you want to circulate that. Will be attached to note.

Alex: Let's put Colin's text here too. 

End of session. 

Zoom Chat: 


From Leanne Ussher : I’m wondering where is redistribution?
From Leanne Ussher : Surely there is still a tendency towards recentralization

From Jonathan Beller : ECSA works as a sipohon

From Leanne Ussher : But you could design small transfers from those that accumulate to those that dont
From Leanne Ussher : e.g. transaction taxes

From felix : These would ultimately always be voluntary, right? 

From Leanne Ussher : based on some democratic system.
From Leanne Ussher : But that is complicated.

From felix : we haven't gone to external decision making yet 

From Jorge : It is… but there are ways… like token value decay unto surrounding network, demurrage, etc.
From Jorge : But that is some of experiments / subnetworks that we would like to see created with the new economic grammar
From Jorge : And of course, with voluntary participation

From Leanne Ussher : yes exactly, but this is not stated in the text, rather it infers that liberating everyone from “prices” will be free and fair

From Jorge : We want to put in the end a section about “further research’

From Leanne Ussher : What about Polycentric governance, rather than distributed

From Jorge : That can emerge as an expression of a distributed network...
From Jorge : A distributed network can even encode a centralized network… if the agents voluntarily assemble that way
From Jorge : So, distributed is the most ”malleable” topology

From Leanne Ussher : This is not what you say in the introduction.

From Jorge : I see this poly centrality emerging

From Leanne Ussher : but I do like what you say here.

From Jorge : yeah… it has been a challenge to say everytjhing

From Leanne Ussher : I think it has been a little too doctrinaire about imposing a distributed system

From Jorge : Perhaps we need to frame it as the distributed system being the encoding of equal agent capacities…
From Jorge : So it is a consequence of equality

From Oliviero Di Lanzo : As capitalism is moving more and more into centralization through platforms and the value crisis is more and more evident, efficiency gets always more important as value, also as vehicle for neoliberal thoughts - see the whole smart city / data city / life improvement discourse.

I think there should be a focus on that term to highlight why the economic space protocol is more efficient than the traditional protocol and how this term shouldn’t be stripped of his different nuances, as it is done in neoliberalism.

From Jorge : IT would be great for you to voice this here Oliviero… in my experience, this is kind of a demonized term in the discourse most people interested in changing economy are in. So I learned not to mention it! hehe

From Oliviero Di Lanzo : I know hahahah I didn’t want to say it out loud

From Jorge : Solutionism is the trained doctrine of the engineer! So we need to keep ourselves check. Are you are an engineer Olivier?

From Colin Drumm : the traditional left economic moralism assumes that 100 percent risk aversion is the optimal state.  communism is a society with no risk. so what you're up against is the common sense that the just society in defined as one in which "everyone gets exactly what they deserve with no risk."  its baked into the value theory

From Oliviero Di Lanzo : No I’m just a „little bit“ into development, but efficiency is the term that if hijacked by neoliberal ideology will bring forward centralization

From Jorge : right
From Jorge : Colin, It adds to your point about centering the narrative on risk management.

From Colin Drumm : this also easily answers the question of what I want when I participate in the system. I want upside risk!  or I want a hedge against downside risk (labor market collapse e.g.).  exposure to upside and hedging against downside are fundamental goods

From Jorge : Exactly, that is the whole reason of being for an economy of stake. Although it has not been worded that way.

From Colin Drumm : right.  because you still have one leg in value world and one leg in risk world in the way you present it

From Jorge : The world value is like the word distance… is not absolute. It is definitionally relative. But the problem it has been loaded to be some sort of self evidence. So it is a problematic term… but we still need capturing the concept of “”distance” in economic terms
From Jorge : As an index

From Colin Drumm : the problem is that value is an equilibrium concept and the economy is a far from equilibrium system.  in a nutshell

From Jorge : yeah… distance in moving agents, is always changing.

From Jeff Emmett : Great conversations everyone! Unfortunately I have another call to jump over to, but will follow up with the recording later!  Cheers <3

From Leanne Ussher : From each according to his ability, to each according to his needs"

From Jonathan Beller : :)

From Colin Drumm : 100 percent risk aversion!

From Jonathan Beller : Risking together?

From Leanne Ussher : I’m wondering if you can run out of liquidity
From Leanne Ussher : if you use it all up, are you not at the boundary.

From Jorge : That is a good question LEanee, we are trying to answer how liquidity is created continuously in the next section

From Leanne Ussher : and cumulative

From Colin Drumm : liquidity vanishes when everyone goes long liquidity at once
From Colin Drumm : in order for liquidity to exist some agents must be short it

From Jorge : Can you unpack that a bit further through voice Colin?

From Leanne Ussher : but I guess it comes back to this “risking together” of social insurance

From Colin Drumm : I can. i also discuss this (and marx) at length in my first dissertation chapter which I can share

From Jorge : Please do

From Jorge : And yes, that is why liquidity takes of a secondary functional role to facilitate the time interval across exchanges. It does not server as liquidity accumulation device. Stake does.

From Jorge : Liquidity is issued always in proportion to stake… and as credit always cleared automatically at first opportunity.

From Leanne Ussher : If liquidity is issued in proportion to stake, then doesn’t that mean an in build ability to accumulate wealth by those with more stake.

From Jorge : yes.

From Jorge : But I do not think that level is when the consequence is solved… If we are hinting at some form of social security or universal income… that can be also created in the system.
From Jorge : But participation is voluntary

From Dick Bryan : yes there can be wealth (stake) accumulation, and agents can consume more than others based on their wealth, but to express wealth through controlling stake in others is, in effect precluded by the protocols -  there is no incentive, because with a focus on inside (token) ‘money’  something must be given up to secure  more stake, and holding stake doesn’t give control over the issuer of stake

From Economic Space Agency : https://medium.com/giveth/conviction-voting-a-novel-continuous-decision-making-alternative-to-governance-aa746cfb9475

From Colin Drumm : the point here is just the difference between debt and equity.  theres no problem with investing in someone else if you share the same upside.  the problem arises when my upside is their downside, and that's an asymmetry that arises from debt as opposes to equity. this is just gold old fashioned Islamic principles

Felix's Text: https://docs.google.com/document/d/1NdZMBbLROVBXtuqpkLkdPDwu0CN_zE_1e_7bQakxWRE/edit

Collin's Dissertation: https://drive.google.com/file/d/18MhWuuf2qfnGI4702Flt7vwaXZ2Uog-i/view?usp=sharing
