# SESSION 8: STABILITY, VOLATILITY, VALUE

THURSDAY 9.7.2020
6amPST/9amEST/3pmBERLIN/11pmSYDNEY

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

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

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READING:

**7 Stability, Volatility, Value**
7.1 Stability
7.2 Unit of Account
7.3 Fundamental Value: MV=PQ
7.3.1 Re-thinking MV
7.3.2 Rethinking PQ
7.3.3 Restating fundamentals
7.4 Volatility
7.5 Tokenized value: simple and expanded
Appendix MV=PQ: An Application to the Economic Space Protocol

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

Section on Stability

Akseli: why did the crypto discourse wake up to the importance of stability so late? Stablecoins have realized that it is important.

Why is stability so important? Why do we need to take that into account?

Dick: Whenever you claim to be able to measure, and as a state your measures are presumed to have integrity. If you are not a state, you need some benchmarks against which to measure. Not just a unit of account, monetary based, but also the idea if you are building an economic system, it has to demonstrate stability and sustainability.

In this section, one thing to have a token system with lots of moving parts and do lots of things, but the question is can it reproduce itseldf? In section 5 we started with simple exchange, and how do you understand process of exchange, where we exxchange time interval but nothing happens in time interval, there is netting, it is stable because nothing is happening except exchagne. When we come to the general form as we're doing here to follow Marx's shift from simple exchange from the general form, there's going to be more moving
parts, there's going to be dynamism. YOu also need stablility from which dynamism will develop as an extension.

Because our goal is way bolder than other cyrpto system, because we are building an economy, the claims to stability and our claims to measure are pretty closely related claims.

Akseli: And it relates directly to the idea of stable coins, which are now hottest hot of defi protocols. Why our stake on staiblity is different. That's one of the things we wrote couple months ago in the Medium- what is stability, and why the way stable coins are measuring stability in relation to fiat currencies are not enough in our perspective.

Fabian: The viability of the solution we produce. If we have stability, we differentiate ourselves. If they peg themselves, they are still subject to central banks. Whatever economy you build up, you are still exposed to continous inflation over time. Difficult to build independent stability, the core is deriving it intrinsically than as a secondary. I dont have issue if we have parallel to fiat currency, but we cannot derive stability from that pool that is continuously being inflated.

Second order issue is stability with regards to time. Issue important with derivatives. When we want to create programmable derivatives, the volatility arises out of changes in time. If we import the notion of time as we import stability from fiat currency, similar problem.

We need to devise them through internal measures.

Akseli: It is diffuclt to believe that we havent seen anybody question the stability notions of stable coins. If they are wholly pegged, they are considered stable.

We should think of stable coins as fragile systems. Technological moment right now enables us to think stability in a different way, through different kinds of social relations.

Claire: Argument about fiat currecnies seems obvious, the madness of Fed so on, also generalized instability of capitalism. I also like the way you guys questioned stability in realtion to what. Context was the key, it was useful to hear from Dick as ability of the sytsem to reproduce itself. Question is whether the economy ends up actually being able to do that.

Akseli: For us, the question of stability acutally opens the question of fundamental value.

Fabian: We face entangled national currencies where they hold each other stable. But what if everyone is sliding down at the same scale. The stability of fiat currency is not stable at all, in long term evreyone is going down.

Leanne: I'm not convinced of the stability. Because people have access to liquidity, is it that or?

Dick: It is largely a liquidity argument. There are many ways of framing stability. I think we are not talking about macro stability because we dont have a state that is enforcing stabilization policies. The notion of stability here is the capacity of the system to keep on, the ledger to keep on netting, and in that sense liqudity is one version. The other is we say we can run non inflationary verifiable economic system. we can demonstarate level of output. We cant factor employment because there is no notion of employment. People can move in an out of netowrk.

Building stable unit of account in a distributed network without having a state, that of itself is worthy of ackonlwedgement as a stability.

Leanne: I can see it may not be inflationary, but I cant see how there wont be liquidty limit, amount of match that is executed,

Dick: Why do you think there would be liqudity constraint?

Leanne: I asked it to Jorge and he said yes.

Akseli: If they keep on performing, then no.

Dick: Limit of liqudity is the value of stake.

Leanne: If I choose something, now I dont perform, then I'm at my limit. Is it bankruptcy?

Once you have a fresh start, am I constarained by my previous actions?

Dick: To relaunch yourself, you would make offers to the market, if people think you adapt, they might accept.

Leanne: That's where I see the constraint

Dick: If everyone has bad reputation then system would grind to a halt. That's up to network to say, that he fucked up but I will back him again.

Leanne: That's the cretion of inequality. We cannot say oh yeah I have a fair chance here.

Fabian: We are not talking about limit in the sense of hard limit as a ceiling you hit, but if you poor badly it can translate in a lesser efficiency. It is not black and white where you hit a limit and cant cover from that, it is more trust issue. If your token gets devalued, you have to start on a lower level, less efficiency, and build back up.

Dick: The other thing that deserves mention here is the floating iissue. We flot the possibility of introducing a guaranteed minimal stake, like a guaranteed minimum income so that you can do stuff up. We are encouraging people to experiment, and possbility of failure is always embedded. When we introduce guaranteed minimum stake, means you can mess up but get reloaded by the system.

Leanne: It's fine to have everyone starting with a blank slate each time but of course that's not what you're doing and so you know society is going to be separated
into those who are winners and those who are losers, so where is the pool?

Akseli: It is going to be better than now.

Dick: It is stronger than that. If everyone diversifies stake, so that when they lose, there will be others who lose with them, but there will be stakes in other projects. In a way stake distribution is a safety net. So, this system is not designed to stop inequality of wealth but it is deisnged to stop exporpiative and exploitative sources of wealth.

In a distributed system you cant stop inequality of wealth without having a state that is going to tax and redistriburte.

Fabian: There are certain things that can be done. One of the key motivations was to have a zero barrier of entry. It shouldn't require somebody to have all the funds to start out with and now that doesn't mean that we can deposit people with initial credit because that invites this kind of civil attacks where we just started opening new accounts so you can always deplete those credits, so that's not that's not what we want to do.

One option is, if you have nothing to offer like no wealth no goods no services, if you have your time, you can help others, and therefore start to grow a network and earn stake without any prior requisites. Then build up from there by issuing more credit, working through other people trusting you based on your performance which was not necessarily an economic or paid performance.

Leanne: I see that you can answer in a direct way. My question is the other tail which is going in opposite direction, and that can happen as well. In a bad luck, you will be put in a deficit.

Dick: What you think would be the sort of solution to deal with that problem?

Leanne: I suppose as post-Keynesian I would invent a community. In local currencies you can havae things where you could have a redistbiruion system that wasn't hated and despised but you would still need to have some pllanning of it. In your community, people know there's commonst, know they are contributing to the commons, redistributing in commons, we are lifting up those who are less fortunate. Why would it be a problem?

Create money and give it to them. I dont think inflation is not so bad thing. Inflation is something that equalizes the system, decreases the savers and redistributes. Having inflationary system is same as having demorash or overall equalizing system.

Fabian: We want to be immune to national inflation that pumps money into war machinery and takes money from collective. Since we are dealing with technological substrate, we have Moore's law, in computation it gets cheaper.

For me the defintion of stability is utility in the sense of buying power. If we recognize that computation power becomes cheaper over time, then you need to compensate for that as store of value. In that you can do redistribution and say larger pools are more affected .

Colin: The issue is this discussion is focused around how to have a monetary system without inflation. That's not the problem.

The major monetary problem is deflation. Deflation is the problem with money, we in 21 century think it is inflation, but that is peculiar to our circumstances. The relation between commodity and unit of account, Inflation is between debt policy and unit of account. The reason that you have mounted macroeconomic monetary policy is because you're trying to deal with all the contracts out there denominated in unit of account, which is really a fundamentally different thing than this question of like what's the purchasing power of the
dollars. There are three types of monetary regimes; inflationary regimes, there's deflationary regimes, and there's stable regimes. Stability means a small amount of inflation, that's what keeps the monetary system stable.

IT all comes back, we are imagining a monetary system with no state in it. That, I don't know.

The basic gesture in this text is saying we dont need to deal with inflation. We solve the problem of fundamental value bc we are agnostic about that. What if there are social problems that you need to deal with? States manage that stuff.

Not satisfactory to say there is no unemployment, but what if you can't eat? That's a problem. What you have to establish is not how you are making a currency that has a stable reference to something, the question is how have you programmed the way the need for macroeconomic policy as a kind of social function?

FAbian: Could you explain more about deflation?

Colin: Imagine buying a house. How am I going to buy with oyur system? Problem with house, you have 30 year interest. If you leverage, and there is deflation, real value of your debt is going up. This is one of the goals of macroeconomic policy, to prevent deflation from creating cascading counterparty failure because everybody gets crushed under debt deflation. This is like one of the fundamental problems of monetary policy and the problem is that it's a class struggle problem.

If the state holds the contract, then creditors win and debtors get crushed. In modern world, we have staiblity to roll over debt forever with FED, but normally what states have to do is not states have to intervene in economy, but states are called in to economy because everybody's like you need to fix it. And a state
has to decide how much of a haircut the creditors are gonna take in order to keep the financial system at stake and that's the distributive question.Somebody gotta lose, there is antagonism based on creditor-debtor relationship about what the money to do.

States have to make thsese decisions. If you say we will have monetary system without state in it, you have to show how you solve that problem.

The last problem is FED printing too much money Dollar is falling. Fed is responding to who are asking ideological wrong questions.

These are the problems that existed in history.

So there is no intterest, so walk me through how do I buy a house. I'm 25 yars old, going to college, and I need a house.

Dick: I'd say, dont come to us to buy a house. WE dont have money, so the debates about money are displaced. WE have tokens that account for the flows. I think notions of money and monetary policy and inflation and deflation dont just apply to token system. If this network got truly big and evolved into something like comprehensive economy where all sorts of production can be done and needs like houses can be met, we are not at that scale. I think issues of inflation and deflation are not the right issues.

Colin: If I cant get a house in your system, then your system is just a complicated way for me to get dollars.

Claire: To me, we are having a conversation like a peripheral question in socail movements, asking how do you build an entirely different world. Building a new world trhoguh one paper is futile. This is a framework for valuing people's activities in a different way, and what it becomes is open question.

Colin: Nobody wants their activities to be valued in a different way people want to do work get a house eat the food. The real survival constraints like me, I need a house a job, what difference does it to of valuing my performance in a different way.

Claire: YOu are right, no question about immediate material interest.

Dick: Ok no houses, then what about carrots?

Akseli: We are using a use case sceneario for a different section. But we still need to be able to answer that question well.

about monetary policy, can the last resort be distributed? That's the big claim.

In next section, unit of account and fundamental value. REally intersting questions in my perspective.

Jonathan: I feel like the discussion so far has been too abstaract. WE are sort of debating at the level of values, like what we like to see, what we think is important, rather than looking clearly at mechanism . The question of stability, seeing the way it is maintend, what the technical measures are, the social relations. We havent made that discussion.

The ECSA ecosystem, even if it uses single unit of account, denominated as a unit of account or unit of exchange can maintain the use of that, but it can't do it in my view in total indifference to the economic context that is the rest of the world because people will always engage in jewel pricing process where they
price whatever they're doing in X units of account and Fiat or whatever the local few ideas, and there will always be a parity of way in running in their mind
between like what can we get on the platform versus what they can get outside of the platform. And any variance
that takes place there will be registered directly and systemically. So, on the issue f stability that's something we need to deal with.

If we dont have a system of transacting houses and carrots, then what are we really making. WE need to recognize how pressing how important these questions are, if we cant make it then we are not ready for prime time. We need to do it.

Maybe there is a little bit to say about question of state and macroeconomic policy. Relationship between money run on computational systems vs money on institutionalized central banks. What it suggests is
that there is a public availability for the parameters of the protocol which can be scrutinized. Every economic agents not gonna review the protocol, but publicness of the code and the fact that it is open sourced, means that there is constant collective negotiation about protocolization veersus the plutocratic governance of monetary policy, which usually has relationship to class struggle. State s are managing that process to furhter their own interest, which is. usally the interest of wealthy class. This KEynesian state questions and protocol are very very important. But it is not to say prtocols exist in vacuum. They are in a social unievrse, so cant control everything.

Colin: You need a different orienatation of analysis of stae. This paper takes granted idea that problem with state is it can produce too much fiat money. This is not my problem with FED, my problem is it is not doing that. As a young person, I really need the government to print some money and spend it. What they are doing is creating money out of nothing and bubbling asset valuation. FEd bubbling house value is a different money than FED printing money for me.

Also, they say in 2008 fiat money calls money into question. DOllar hegemenon has become more powerful as a result of 2008 and 2020. So it's like not really the case that this sort of instability is like creating a run on fiat money, it's the opposite.IT is not pumping fiat currency creating problem it is opposite. Problem is all hosues are priced in dollars and I cant buy them, their value is inflated. Just because you have a different measure doesnt mean I can get the house.

Dick: I get that, but I think it is differnt to say how you gonna get me house and say come build post capitalist economy with us.

Akseli: What do you see as the obstacle for you not getting the house?

Colin: YOu said we are not concerned with that question.

Dick: I said the phase of a startup where you try to imagine possibilites, first question isnt how you gonna get somebody ask, how do you create wealth out of nothing. That's not the question to ask of a token design system that is trying to conceptualize post capitalist economy.

Leanne: are we not asking the question of creating wealth out of nothin?

Akseli: Not out of nothing but other things that are not recognized and valued currently that we can make
possible. I see that house is a possibility.

Leanne: This is the money for solving a coordination problem.

Jonatahn: I think the way to apparoach that of how do I get the house, is not necessarily expect the house tomorrow. But to recognize that it s psobile to co house each other if we have a neconomy in which we can actually recognize one another's value creation in terms that are differnet from capitalism recognizing our value creation just to extract the maximum from us at every transaction.

The extarctive dimension- the extraction process actually gives you less than what you produce for the social. Life activity is genrating more than that with level of technogoly, then you recognize there is something fundamentalyly unfair about the way in which the economy is organized. If people work cooperatively, they can actually keep the values of their produce, and we can build a house together. It is more interesting to say I will let ECSA people come to house, and my wager is I am getting a less return giving to ECSA but I am building something that I think is worth. This unit of account has an intangible value in some way but tangible in materail and my relations. IT is to see the process to house people.

Colin: We have the solution to this problem. It is called mortgage. RIght now we have a sitaution in society, where boomers have classes and we dont. So boomers keep the houses but they lent it in a cool silicon valley way. But I would like new gen to get the houses.

Felix: This is a political problem.

Colin: Now we are discovering all monetary probelms boild own to political problem.

Felix: You are expecting economic system to solve political problen.

Colin: I say all monetary problems are fundamentally poltiical problems. What you are trying to do is to design a monetary system that would get the politics out
of the money.

Jonathan: I am trying to see the monetary system which will wage the reovltuion that you're talking about Colin in a way that's sustainable. I agree with what you are saying about dispossession of entire generation of people. That's the politics of the economy, colonization racism dispossession. What I am seeing is how do you minimze bloodshed, create a transition economy which moves wealth back to the people who make it? That's the question I 'm trying to answer.

FAbian: I am a little confused. In one side you say inflation is not problem and saying asset valuation is a problem. The statement to reform money, question would be how should it be administered? The healthcare aspect, university, there seems to be whatever produced doesnt end in the right place.

Colin: There is something called Cantion (?) effect. In the typical quantitave theory, doesn't matter in the system where you create the new money, it will all equalize out. What matters where the money is injected into the economy.So the problem is money created in the prime dealer system are used to bid up asset valuation, which creates asset inflation. With asset inflation economists dont mean inflation. So what I needed the state to do in 2008, was not to create a bunch of money in order to backstop Eurodollar bonds, which is
what they did, that's deflationary policy.

They tripled the monetary supply, and they deflated. What I need them to do, print money and put it into pockets of ppeople which creates inflation.

Fabian: What I see about how funds are distributed, is completely fucked up. When people talk about fascism, it is interaface between corporate instrumentalities nad staet. The currency that is being supplied do not acutally end up in pockets of people for food and shelter.

Most of these funds end up accumulating in upper classes.

Colin: That's the problem. What i need them to do is not do that.

Akseli: We are not apolitical. WE are political ,and this question is about that. SEction on volatility, I wanted to ask Ben his opinion.

Ben: Im always inclined to generate volatility out of this time interavl. That's differnet than what you are talking about in this section. I don't see it yet. I'm pretty sure you will, but my problem is I'm still worried about scaling of this model.If you are exchanging carrots for things, you ought to be able to scale it to house. That's my problem. I was never able to scale it Where I could actually flow diagram work, I can't scale there yet. I still have diffciulty with that.

I dont think issue with volatility and stability, we are doing two ways that things become more stable. One is risk sharing with stake, the other is decentralizing control of liqudity through distributed protocols that decentralize the role of the FED. The argument is that these distributed protocols in some sense distribute liquidty provisions across the network in some way. Sharing risk and liqudity provisioning that comes out of protocols themselves as they weave into this problem of stability and volatility, but I haven't quite put that up together yet.

Akseli: For me one of the key phrases in this section, is what we are proposing is, we are moving from commodity exchange to perforamnces being staked. That kind of change of mind and using that as starting point is much better than carrots. That led me to question, why do we need to do this, yeah house is important, but what we do is commodities are being turned into something else than what they used to be. IT is not exchagne of carrots but these network informational things that require diffenret organization and different form of coordination.

Jonathan: Akseli is referring to network commidty. The paradigm for value creation and extraction is shifted from factory to mediation. The sites for value transfer has multiplied, sites of numeration has multiplied. We would go work in a factory, that would be source of production and exchange, now we go to socaility, which is related to autonomus Marxism. The social factory.The social factory requires an infrastructure and primarily that infrastructure is computation mediation. And so the question for me is how is that constant process of interfacing value productive and by extractive and
then what are the shifts in the traditional economic forms we can also register in order to understand the politics of those transformations.

But what is the commoidty? It is a network structure, which always was, we can see in a more nuanced way now. If you buy Ferrari, you are not buying car but also image and social reading of that car. It has a life and meaning, soci semiaticdeimesnion, even so with things more digital. So what you purchase is partioning of network, which has a future and derivative, which
I think we need to think about.

Akseli: We encapsulate it as performance.

Jonathan: Calling it perforamnce is emphasizing sociality in the construction of any object. Objects are more complex than objects just being objects.

Akseli: It is not only Ferrari but also hosue and the carrot. Dick, I wanted to ask you about repetitions, where you dont produce for sale but you produce for it being valued by others. It indicates that what I call repetitions and uses, but also adoptations in the system, repetiion uses but what are these? Copying, imitation, influence, how do they get adopted?

Dick: It certainly has its own issues of how do you design those metrics. I want to say about the part on volatility and metrics. The connection between them is that the object of this part of section is to say we have a simple commodity excahgnge with an interval but nothing happens in the interval. Then when Marx goes to expand reproduction and interval increases because capcity of technology to generate returns above average, that's associated with transformation process of re-evaluating labor. That direct labor are not actualt driect contribution to prodit. Anagoly is once we start to recognize that individual perforamnce mediated by their own idisonsycratic agendas, they are going to second round to stretch out the interval, a second round of evaluation, which is to say that the network as a whole will reward what it constitues to be a contribution to value. What is it to be commodity ,to be socially necessa5ry labor, does it clear or not. So
it's really gesturing here to that sort of criterion that the system the network as a whole, and will be through the ECSA performance token that we haven't yet introduced.

There will be some evaluation. That provides the contextin which there is need to say how do we evaluate value that doesnt direclty manifest itself as price but as a social contribution outside of it . This section is trying to open up loops in the network and say, if there is going to be social valuation of output that's not profit, but it's going to be intentional in the sense that the newtork will vote for it, then we need to have mechanics by which we can have a generalizable form of measure which could apply to profit but could also apply to things that clearly aren't profitable, aren't even dying for sale in the market, so that's what's motivated
this section.

That tokenized value within that, and volatility is playing on strategic positioning, just as in capitalist value tries to position itself to technological change.

Akseli: Ben do you want to take on realtive surplus value?

Ben: Major thing that Bob and I talk about is that in fact, in relative surplus value there is both an arbitrage in value and a spread. Both directional of course, because relative surplus value has to decrease socially necessasry labor time, but it is also not linear. Arbitrage and volatility are two components of derivative. That's really what we were trying to work out, but of course value arbitrage is monetary.

That's again. What we meant by quantitavie measure of qualitative dimension of volatility is actually still the real key in that. There is of course a theory of qualityative volatility, that's BErgson and other materials. That's get in to our effort because Bergson saw quantitative and qualitative approach to volatility as this jump, the question is whether it can be brought together. I think we are trying to do that with these performance indicies, because a quntitative measure of what might be qualitative values, that's I think there is some ontological issues, which certainly I havent worked out yet. I think that project is exactly is being able to get these performance indices in non monetary value. We are arguing that issues of measurable qualitative volatility and measuring something like arbitrage but not expressed in monetary values directly, that's where I'm at right now.

I wrote a paper anaylzing relative surplus value, combination of BErgson and Meisho's work, who was a leading MArxist probably after David Harvey.

Jonathan: I think it is worth mentiuoning social derivative. The volatility that Bergson promised. I remember getting the example of Laird Hamilton scateboarding taking place in pools, economic volatility created social opportunity, which people played in order to get, extract something from that volatility. That social derivative as a wager on volatility and a financial deriavive is something wort thinkin about.

Ben: That's where DIck began talking about risking together, Randy nad Martin, there is some qualitative experience to that. One is aggregated, then becomes commodified, but not necesssarily along strict monetary values. That's what we were discussing. I am always intrigued by descriptions of options traders talking about surfing the volatility. The surfing of it watching Bloomberg graphs. They seem to say it is differnet phenomenologically, it is sort of tracking something rather than decision making. I figured that led to a different model than all of finance models. Something like a flow model, which FA\abian is acutally talking about, a Daoist monastery. I also mentioned that Cannamon, in thinking fast and slow, said acutally in systems thinking, you marcate them. That's the interface I saw betweeen decision making coming out of expected utility theory , and all the first generation of decision making under uncerainty that went on analytic philosophy. This other model of Bergson, affect theory, that's what we are trying to meet. That's where I began thinking that Dick's and Jorge's idea that you would start with totality rather than the individual exchange, as if genral form written into simple form, that's what distributed protocol would do, then create a social time series through matching, netting ,and celaring would actually distribute this risk taking across the network itself. That in itself have enough implciations for me. So I am not as concerned with some of the macroeconomic eissues, nor with political issues, but then I've been stuck thinking out what that interface should be.

Two notions of time, that's what Ive been focusing on time. There is time that most of finance done in, extensial time, reverse homogenial, Bergson introduce this duration of tense time, past present and future, that's huge tension between homogenous time and indexical time. It is related to problems with thense logics. I again dont know all the connections here, one person I work with, Emanuael Dorman wrote a paper in contrasting volatility measures calculated in indexical time versus extensional time, and show that they lead to differnet predictions of boom and bust.

akseli: To ansewr simple question like getting house, we need to talk about the entire system first. It is not easy to solve. I'm just think of how to wrap it up. What next? We have to answer the house question. And we have one last section to cover to get the paper done.

FAbian: Mechanical time and tense time have a lot of implications about volatility. Volatility deals with cahnge over time, so notion of time becomes fundamental. This decoupling becomes not one time on top of other time, they are differnt notions. The problem is insturments we use on our daily life is mechanical time, but when you deal with open intervals involving future, that conventional way serves very poorly, that's why we need an intrinsic, I call it like like a synthetic construction of essentially the function of time that we
can project something at a future event without necessarily meaning to know how how soon or how light that's going to happen because distance in duration is only important in the traditional notion of time.Whereas if you have a synthetic construct of that future event you can create derivatives that really become informed of the event and the changes over time themselves and not how it is being chopped up up to that point because that's the main problem with all this high-frequency trading that they target on extraction where you basically hve deviation of that which basically come from inadequatio measurement or breaking up of the time, is not correlating the events and the changes over events. This decoupling is something very important.

BEn: One way of thinking about hwat I got really excited about, and discussed, is this notion of a grammar. The problem with tense from a linguistic and logical standpoint is its reference shifts in every moment of speaking. Past present future is defined by speech event. The question is how do you translate all these moments that have different temporal referance. That's what a distributed protocol that JOrge trying to do by matching netting and clearing, by creating a time series that is shared by everybody and is inter translatable.

I thought that was a fantastical accomplishemnt. That's what Landa calculus does, it is intentional logic, a logical way to commensurate referance shifts. because ref shifts cant happen naturally in classical physics, there is a problem. It took me long time to see it, now I see it is interesting because grammar means you have linguistic community you create through use of protocols. It relies upon a new orientation towards time. IT is acutally creating a social time that can be partialed out and accessed, and that's question of relative surplus value because Marx is arguing that absolute surplus value, then relative surplus value where abstract time becomes inserted into socially necessary labor time and becomes history-historical labor time. This was enough for me to be interested in this project, even though I never quite understood the broader implications.

Akseli: the grammar works for us really well as a framing. Also Landa calculus and eocnomic space claculus as extension is really important.

Felix: I still want to go back tyo Colin's house and politics. In some way to question your asking is what is the poltics of this distrubted systems, is there an inherent politics? Are they agnostic, I would acutally argue they inherently limit solidarity. becasue you can alwasy opt out, that is big difference to state.

Akseli: where does that shift the value creation?

In these economic space communities, they need to be better than now.

Felix: You dont have this one central decision making process, then that process disappearing that drives asset valuation.

Colin: I am sceptical that you can gget rid of it by saying you got rid of it.

It is not the case that for everything you can just walk away. If you have multiple parties trying to share water rights, you cant just walk away.

Jonathan: What do people want to discuss next time.

Akseli: from our side, this process helps us to get this round of writing down. WE can use next time, but then what?

Jonathan: I do feel like we have hit the level of dissonance. I dont feel for myself I can speak if answers exist. I would like to change the dybnamics of discussion so that people set out to solve problem together. Questions are good and answers are not there in some cases. Let's take this seriously and see how can we solve this problem together.

Eric: I would like to hear more about your computational model. We dindt talk about technology.

Dick: We are looking for to be computationally more precise than it actually is. It needs to take in. That's being worked on now, but we are not there yet.

Akseli: It is a different paper.

Eric: they are intertwined, we are having a economic theory discussion, but I dont see them as being seperate.

Dick: I agree, because that's part of the reason we dont have answers.

Akseli: For me, two processes. First getting this writing down done with Dick, then using balance sheet approach and it needs organizing.

Zoom Chat:

From Leanne Ussher : Is it also claiming to be “stabilizing” or countercyclical in some sense.
From Leanne Ussher : I didn’t see in the text, anything about unemployment, or under utilized resources. in your MV = PQ.
From Leanne Ussher : (But I read it quickly).

From Dick Bryan : no unemployment because there is no employment!! because this economy is not discrete
From Leanne Ussher : I know some post keynesians have criticized stable coins
From Leanne Ussher : but are there not under utilized resources?

From Colin Drumm : I think the wrong question is being answered. It’s not so much the question of how things are “stable” but about how you have somehow programmed away the need for macroeconomic policy

From Eric Drasin : thats what im thikning
From Eric Drasin : it seems like more deterministic
From Eric Drasin : why not
From Eric Drasin : why not program the system to redistribute wealth
From Eric Drasin : but what about people who aren’t capable of performing

From felix : because System is inherently voluntary
From felix : this Limits enforcement of solidarity

From Eric Drasin : that sounds like the radical markets notion?
From Eric Drasin : Leanne, how do you feel about MMT?

From Leanne Ussher : I’m supportive about MMT
From Leanne Ussher : because I don’t money is the issue
From Leanne Ussher : it is the utilization of resources - or the access to everyone’s contribution and innovation
From Leanne Ussher : so ultimately we don’t want money to constrain our access to each others contributions to the network

From Eric Drasin : me too

From Leanne Ussher : surely the algorithm ECSA IS the state

From Eric Drasin : yea so the crypto becomes the redistributive system
From Eric Drasin : but we take it as a type of technological determinism that we have to reify current market ideologies
From Eric Drasin : i don’t understand how any of this addresses these issues

From Leanne Ussher : Low or zero inflation is helpful for banks and finance.
From Leanne Ussher : It creates inequality
From Leanne Ussher : Inflation is good for innovators and mainstreet
From Leanne Ussher : Isn’t ECSA the state?

From Eric Drasin : in this case I think they are…
From Eric Drasin : or the network is

From felix : voluntarism is the crucial difference to states. you can Always fork and create a less redistributive System, which is in the interest of capital.

From Eric Drasin : like if you are creating stability through liquidity then it could become a networked MMT

From felix : ECSA cant force any participants to use redistributive protocols. states can (by Police force)

From Leanne Ussher : There is still a risk in stake
From Leanne Ussher : there is interest in the discounting of stake?
From Leanne Ussher : liquidity tokens and stake tokens are discounted
From Leanne Ussher : for risk of default.
From Leanne Ussher : so isn’t this interest
From Leanne Ussher : (maybe not a macro interest rate - benchmark by fed)
From Leanne Ussher : But there is still a burden to be paid by the deadbeat who wants purchase a house or something else.
From Leanne Ussher : How does stability relate to Q

From Colin Drumm : @Eric what ECSA proposes is fundamentally different from MMT. This is a theory of pure inside money, while MMT is a theory concerned with the creation of outside money
From Colin Drumm : Which is just the problem with ECSA: the idea that one can do away with outside money. That’s the deep issue

From Eric Drasin : yea i get this

From Colin Drumm : Outside money = a credit with no corresponding liability

From Eric Drasin : protocol exists as a a highly technocratic debate
From Eric Drasin : not a part of public discourse
From Eric Drasin : we need pitchforks and torches

From Roberto : Perhaps a way to think about it is the creation of a new operative system confronted with market auction contradictions outside embedded state & corporate violence, where new, less extractive and more fair, solidarity driven initiatives may be nested via p2p issuance.

From Eric Drasin : this issue of the auction i take issue with, and admittedly don’t understand. I’m reading radical markets and i find this really problematic...

From Leanne Ussher : I think this is a coordination problem
From Leanne Ussher : It is not about creating wealth out of nothing
From Leanne Ussher : but having enough money, or access to liquidity, to allow for coordination
From Leanne Ussher : which does create wealth.

From Eric Drasin : i agree with that
From Eric Drasin : so that would be a circular currency
From Eric Drasin : down with the boomers
From Eric Drasin : what about creating a moderated exchange
From Eric Drasin : so the circular currency can be exchanged with the fiat economy

From Leanne Ussher : you can’t be apolitical

From felix : I think we all agree on that!
From felix : (also with Boomers, give us the houses)

From Colin Drumm : I don’t think we do agree. I see mostly here a fundamentally apolitical view of monetary systems.
From Colin Drumm : What I am lacking is an idea of what politics without the state looks like. The point is that at some point, an arbitrary decision has to be made that creates winners and losers. Otherwise the system falls apart.

From Fabian : How a collective arrives at decisions to govern itself, its behavior, and the interaction with its environment

From Colin Drumm : Can we like, be specific about that
From Colin Drumm : about the how

From Jonathan Beller : Maybe consider why bitcoin is seen as a libertarian idea?

From Eric Drasin : @colin have you looked into quadratic voting?

From Leanne Ussher : digital commodities

From Colin Drumm : I don’t think the issue is “how do you vote.” The issue is, once you vote, what entity executes the decision
From Colin Drumm : that’s called “a state”

From Leanne Ussher : with increasing returns to scale - zero marginal cost of provision?

From felix : yeah, and here my point on voluntarism comes in: if potential losers can run away, they will do so - if they have the means to create a new System in which they are not losers
From felix : oops Forget that comment

From Colin Drumm : Bitcoin is a libertarian idea because it’s a creditor ideology. It’s an ideology based on the idea that the state is bad because it might inflate away the debts of the people who owe you money.

From Leanne Ussher : Who was the author? “The social factory”
From Leanne Ussher : ?

From felix : Mario Tronti?
From felix : was developed in 1960s among italian autonomists, I believe Tronti was the first to use it, Negri did so as well

From Jonathan Beller : yes, also Paolo Virno who was later. A Grammar of the Multitudes
From Jonathan Beller : Yes, negri too!
From Jonathan Beller : “Twenty Thesis on Marx"

From felix : social factory and General intellect are interesting concepts to rediscover in the context of cryptoeconomics

From Jonathan Beller : see also Matteo Pasquinelli on the general intellect and what he calls the Noosphere

From Leanne Ussher : thanks

From Eric Drasin : distributed systems are not agnostic.
From Eric Drasin : it becomes federated competition?

From Roberto : someday we’ll return to Colin’s house, but for a beer.

From Colin Drumm : once the pandemic is over you are all invited!
From Colin Drumm : When I buy the old school building down the road then we will really be cooking

From felix : re: Eric - I believe they do have inherent poltics on some high Level of abstraction

From Eric Drasin : computation isn’t agnostic

From Jonathan Beller : it’s a racial formation

From felix : agnostic as to the politics we inscribe into them (i.e. Redistribution)

From Dick Bryan : i agree Eric

From Jeff Emmett : My biggest takeaway from currency design thus far is not that there is one solution to solve all the problems, but that multiple different options offer much greater value for users. Mutual credit may not be appropriate for buying a house, but having it as an additional currency to use brings value regardless. Lietaer's emphasis on *complementary* currencies was not that there should be any one dominant system (whether EcSA or dollars) but that they can exist in parallel to help counterbalance each other
From Jeff Emmett : Wonderful convos today all - I've got to run to another call!

From Jonathan Beller : Cheers!

From Colin Drumm : Mutual credit is exactly how you buy a house, that is what a mortgage is

From Jonathan Beller : but I hate my bank

From Leanne Ussher : I agree Jeff. Pluralism is good

From Jeff Emmett : Mutual credit in the absence of interest, as it is usually understood in these circles afaik

From Leanne Ussher : We don’t have to solve every problem

From Oliviero Di Lanzo : Thanks to all!

From Jeff Emmett : <3