[iDC] Don Tapscott's Wikinomics: A Dismal Netology?

Michel Bauwens michelsub2004 at gmail.com
Thu Aug 30 17:47:46 UTC 2007

I may be somewhat out of step with the pace of the discussion, as I was on
the road. Below is also a contribution to an earlier point by Pat, which I
think didn't make it through the dismal connection I had in Ethiopa.
I also want to briefly mention that I've been compiling a whole bunch of
material around monetary reform and alternative currencies here at
http://p2pfoundation.net/Category:Money. It is my personal belief that
alternative currencies have been so far high treshold efforts (my own
experience with a lets in brussels was rather cumbersome), and that if you
are not yourself 'suffering', there is little chance that you'll abandon the
main system, whatever its flaws. What we need therefore is a low treshold
alternative, that first functions in the margins, finds space to grow in
there, and when it proves its superiority, i.e. by working both more easily
and efficiently than the mainstream alternative, will have a chance to
replace it, and not before. Clearly we are not there yet.

Yet in the margins, so much is happening.

I find Eric Harris-Braun's distinctions very useful (
http://p2pfoundation.net/Wealth_Typology). He shows us how much space there
actually is in those margins: "The Wealth
Typology<http://p2pfoundation.net/Wealth_Typology>teaches us that not
all wealth can be measurable, and that not all
measurable wealth is tradeable. Only the latter is well suited for money."
And this then leads to a proposal to build wealth acknowledge systems (
http://p2pfoundation.net/Wealth_Acknowledgment_Systems). The efforts of the
center for the adventure economy is one such example (
http://p2pfoundation.net/Adventure_Economy), and I have tried to compile a
list of projects here at
http://p2pfoundation.net/P2P_Exchange_Infrastructure_Projects, I think
Francois Rey's open exchange project (http://p2pfoundation.net/Open_Xchange)
covers the most ground, as it tries to combine both non-monetary and
monetary polarities.

All this points to the possibility of the direct social production of money
as a goal for the future. I think the idea is to work on all fronts at the
same time: 1) increase the scope of non-monetary exchange; 2) create
monetary alternatives, but especially low-treshold ones that function
without the interest protocol; 3) prepare the way for a macro-scale monetary
reform a la Bernard Lietaer.

A remark on the behaviour of the elite. I don't believe that any social
change ever made it without the complicity of major elements from the former
elite. Not because they wanted radical change, but because it pragmatically
made sense. It made sense for imperial slaveholders to shift to serfdom,
because it was in the end a more productive system; it made sense for feudal
lords to adapt merchant-based and capitalist practices, because it made them
richer. And by the way, it made little sense for the bourgeoisie to support
socialism, because it only meant a loss for them. By contrast, peer-based
modes of production as more productive, and any for-profit entity that
adapts open and free, participatory, and commons-oriented elements in its
strategy will in the end be more competitive than those who don't.

So, while communities can create direct peer to peer forms of production,
especially in the immaterial sphere, we are seeing more and more market
practices that are overturning the logic of capitalism. It is no longer
about producing for profit, but of using profit for social advancement.
Profit becomes a means for different ends, rather than the other way around.
As examples I see fair trade, a market form submitted to peer arbitrage,
social-entrepreneurship (profit is used for social advancement), the rise of
for-benetif structures such as the Mozilla, Apache and other foundations
that create an infrastructure for peer production, and the trend towards
'blended value' approaches.

The latter aims to overcome the 'two-pocket' approach, i.e. making money
purely for profit, then spending it eventually through philanthropy. Here,
an attempt is made to 'blend the two', and to create capital for social
purposes (see http://p2pfoundation.net/Blended_Value).

Of course, all these approaches are marginal. But in the context of a
growing impossibility of capitalism as a system of infinite growth within a
finite system of natural resources, will they not be the only ways for any
kind of market to survive? What we need to do as a mental exercise
therefore, is to see the market as simply another way to manage scarce
physical resources, divorced from the interest-based-money driven growth
cyles. (http://p2pfoundation.net/Markets_without_Capitalism)

So to conclude: 1) social change will be the result both of
alternative-world-construction AND by adaptation by the more enligthened
sectors of the current elite; 2) because peer-based forms are more
economically and politically productive, there is a lot of social weight
behind them

Please note I'm not excluding 'tough struggles', but I think we should be
open-ended in our expectations. As far as I know neither the transition
towards feudalism, nor the transitions towards capitalism, were clearcut
generalized models of straight antagonism ...

Below: 1) an excerpt of different kinds of wealth 2) wealth acknowledgement
systems 3) a previous answers that may not have made it

*1. Tradable Wealth:*

Food, shelter, services, time, are all forms of tradable wealth. We are all
familiar with tradable wealth--it is the stuff we need and want, the
resources that we compete for. Things we can trade are the products or the
components of systems.

*2. Measurable Wealth:*

My health is non-tradable--I can't give it to you. I can give you my blood,
which may affect both of our health, but I can't give you my health itself.
It is a property of my body as a whole. However, you can measure my health
in lots of objective ways: the miles I run or the number of times I see a
doctor. Another thing that is non-tradable is the productive capacity of a
factory. I can sell you the products of the factory, or the factory itself,
but not its productive capacity. But you can measure its productivity by
comparing its output to the inputs it requires. Similarly the health of a
forest is non-tradable. Its diversity, resilience, etc. can, as with bodily
health and productive capacity, be affected and objectively measured, but it
can't be traded. Bodies, factories, and forests are all examples of systems.
Things we can measure but not trade are properties of systems as a whole.

*3. Acknowledgeable Wealth:*

Friendship, beauty, freedom, civility, culture, happiness, integrity,
reputation--these are all forms of acknowledgeable wealth. They are neither
tradable nor objectively measurable because their impact is only felt
subjectively. I can have friendships of different strengths--from an
acquaintance to a best buddy--and though I can tell the qualitative
difference between them, that difference is not measurable using any
external scale. Rather, it is a difference in quality of relationship
between one system (me) and two other systems (my acquaintance, and my
buddy). Similarly my professional reputation comes from my relationships
with my previous clients. As a potential client you can get a subjective
sense of my reputation by talking to my previous clients, but there is no
one objective standard to go by in making your choice. Those things that we
can acknowledge but cannot measure or trade are inter-systemic resonances."

Why a Wealth Acknowledgement System is necessary

"When I barter a dozen of my eggs for a pound of your carrots, wealth
acknowledgment happens in the act of haggling: It's where we determined how
many eggs for how many carrots. When I pay you a coin for your carrots
instead (because you don't want my eggs), the coin itself is the
acknowledgment of the wealth transfer. The advantage is that the
wealth-acknowledgment token, the coin, is redeemable elsewhere in the
community. And when communities start using paper notes as
wealth-acknowledgment tokens instead of precious metal, the number of
transactions is no longer limited by the amount of metal available. When
communities invent wealth-acknowledgment tokens for investment, like stock
certificates sold by entrepreneurs, they further unlock the potential for
growth of wealth.

These examples show how the evolution of wealth-acknowledgment systems
prepares the ground for the growth of wealth. They also show how
wealth-acknowledgment systems are adopted by communities to reduce their
risk in making transactions. Bartering is not risky because the wealth is
immediately exchanged, but what if I don't need your carrots? Accepting a
token allows me to give without immediately getting wealth in return,
because I know I can use the token to get wealth later. Stocks and bonds
work similarly in higher-risk situations. Thus wealth-acknowledgment systems
evolve in a feedback spiral with social cohesion and trust. They require
some level of trust and cohesion to function, but they generate much greater
cohesion and trust, which allows new wealth-acknowledgment systems, and the
loop continues.

Grant-making, endowments, charitable trusts, and donations (what we call
philanthropy), are all efforts to increase measurable or acknowledgeable
wealth. Organizations that seek to increase measurable and acknowledgeable
wealth in communities almost always suffer from the lack of money. To
increase our ability to cultivate these levels of wealth, we need a
wealth-acknowledgment system that moves beyond money." (

Hi Pat,

I'd like to offer some added perspectives on social change, based on your

I think that first of all we have a very simple 'logical' ( but actually
physical problem): can a system of infinite growth exist within a finite
physical environment. My answer would be no, and therefore, capitalism as an
infinite growth system is doomed eventually.

The second question is: what are the drivers of such infinite growth? I have
been convinced by the monetary reformers, that one of the key issue is the
protocol of the monetary system, in other words the interest-based system.
Interest cannot function in a static economy, it requires growth. In a
static economy, you can only pay back the interest (which is not created by
the banks) by taking it from someone else, while in a growth system, the
pain is less as you can get it from the growing pie. But what if the pie can
no longer grow? One of the key issues today is therefore to develop monetary
systems with different protocols, and I think the best way to do this is by
'distributing' the money creation, and to have direct social production of

I also agree with you that at moments of deep systemic crisis, we must
expect rather radical change. The shifts between the roman imperial slavery
system and the feudal serf system were pretty radical, a breach of the
fundamental logic of society, and so was the shift from feudalism to

Non-reciprocal peer production would seem to be the emerging logic of
immaterial production, since we see it emerging with such force, and
adapting open/free, participatory, and commons-oriented strategies are
competitive advantages for for-profit institutions and state forces alike
(apart from the natural tendency of communinities to adopt it). In the
physical world, the realm of scarcity, non-reciprocity cannot work, so what
I expect are peer-informed modes of production, such as fair trade (markets
subjected to peer arbitrage), social entrepreneurship (abandoning money as
an end, just keeping it as a means), trust-based resource management (see
Peter Barnes). Such a situation would be consisting with the historical
record of previous modes which always combined pluralism but always under
the domination of one core logic (respectively the gift economy, the
tributary logic and the exchange logic).

One key question is how antagonistic the change will/must be. It does not
seem that the end of the roman empire and its transformation was antagonist
in the sense of two classes fighting each other, and many feudal to
capitalist transitions did not take the form of bourgeois revolutions. More
fundamental was that in both systems, the new social relations were slowly
being built up, and then, through some mechanism, reached a tipping point.
How that tipping point is reached is I think an open question, and given the
record of violent revolutions, I think not in the interest of emancipatory
forces. Rather, we must strive for means that are congruent with the ends,
and I believe that a constructive strategy of the 'distribution of
everything', is the best chance we have.

On 8/30/07, keith at thememorybank.co.uk <keith at thememorybank.co.uk> wrote:
> Paolo,
> Thanks for the links. I have spent some time with the film, Money as debt
> and recently wrote this about it.
> The film, Money as Debt -- an underground hit in activist circles -- seeks
> to explain where money comes from.  Most people probably imagine that the
> government issues the money they use and that, under its surveillance,
> banks lend amounts that are covered by assets such as gold and property or
> at least by cash deposits. In fact, over 95% of the money in circulation
> is
> issued by banks whenever they make a loan. The 'fractional reserve system'
> traditionally constrained them to lend up to nine times the value of
> deposits with the central bank; but this ratio has since increased and in
> some cases no longer exists. The real basis of money, the film points out,
> is thus our signature whenever we promise to repay a loan. The banks
> create
> that money by a stroke of the pen and the promise is then bought and sold
> in increasingly complex ways. The total debt incurred by government,
> corporations, small businesses and consumers spirals continuously upwards
> since interest must be paid on it all. The film briefly mentions some
> possible remedies, including local currencies.
> This attempt to demystify money is admirable, but the message is
> misleading.  Debt and credit are two sides of the same coin, the one
> evoking passivity in the face of power, the other individual empowerment.
> The origin of money in France and Germany is thought to be debt, whereas
> in
> the USA and Britain it is traditionally conceived of as credit. Either
> term
> alone is loaded, missing the dialectical character of the relations
> involved. The role of state-sanctioned banks in creating money involves
> some sleight of hand; but they are also subject to the same financial
> constraints as ordinary businesses. The film demonizes the banks and
> interest in particular, letting the audience off the hook by not showing
> the active role each of us plays in sustaining the system. Money today is
> issued by a dispersed global network of economic institutions of many
> kinds; and the idea of economic growth is fed by our own norm of getting
> ahead, not just by bank interest.
> Money as debt is a fable that never moves beyond the nationalist
> assumptions of twentieth-century North American society. It says nothing
> about the current world economic crisis. This has features that are well
> enough advertised in the media. The huge trade and budget deficits of the
> US economy are financed principally by Japan, China, the Gulf States and
> Britain (but not the US banks). The dollar's slide seems to be limited
> only
> by its role as the world currency and unit of account for the oil trade
> and
> by its creditors' desire to retain the value of their Treasury paper. The
> interests at stake in the global energy economy are manifested in the war
> for Middle East oil; the trade imbalances reflect the transfer of
> manufacturing production and many services from the West to Asia.
> Moreover, since the invention of money futures in 1975, world money flows,
> fuelled by bets on the future prices of notional assets such as stock
> market indices ('derivatives'), now dwarf the volume of international
> trade
> and national budgets.  The US housing market is a major part of all this
> paper debt, especially the dodgy loans known as 'sub-prime mortgages' now
> suffering massive default. The faith of the British middle classes in
> consumerism financed by ever rising housing prices hovers on the brink of
> the financial crisis. Reference is occasionally made to the Great
> Depression of the 1930s, but rarely to more recent demonstrations of the
> system's fragility: the global slump induced by the oil price hikes of the
> 1970s or the crash of 1987. We could be entering a new stage of capitalism
> where markets have been rationalized and risk is managed efficiently; or,
> more likely, we are heading for a deflationary crisis of unprecedented
> severity.  In either case, a lot more political education is needed before
> people can begin to reduce their dependence on an impersonal economic
> system and develop a more personally meaningful relationship to money.
> Cheers,
> Keith
> Original Message:
> -----------------
> From: paolo massa paolo at gnuband.org
> Date: Thu, 30 Aug 2007 11:54:59 +0200
> To: keith at thememorybank.co.uk, playethical at gmail.com,
> idc at mailman.thing.net
> Subject: Re: [iDC] Don Tapscott's Wikinomics: A Dismal Netology?
> I would like to suggest two resources that I think are relevant for this
> thread.
> They are linked from this blog post
> http://www.gnuband.org/2007/08/22/avoiding_central_money/
> 1) The video "Money as debt"
> http://www.gnuband.org/2007/04/09/money_as_debt/
> 2) And the ripple project. Ripple is an open-source software project
> for developing and implementing a protocol for an open decentralized
> payment network.
> http://ripple.sourceforge.net/
> In particular check the paper "Money as IOUs in Social Trust Networks
> & A Proposal for a Decentralized Currency Network Protocol"
> If you are interested, let me know your email address and I'll
> probably open a little line of credit (trust!) for you on ripplepay
> ;-)
> P.
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