Towards Post-Capitalism
A Language for New Economic Expression
We have been working for some time now quite intensively with something I am very excited about: the Economic Space Agency economic paper Protocols for Cryptoeconomic Networks. It is right now in a pre-alpha private review, so still worked on, parts unfinished, and not yet publicly shared — but if you would like to join the process of rethinking economic conventions as protocols, and thus as a design space, please just contact me — we are happy to share the text. See below the Table of Contents.
We have realized that we are creating a language for new economic expression. It is an economic language that can express capitalist network protocols, but even more, it can go beyond them. It can encompass capitalist value calculus, but express more qualified values and refuse their collapse into the monological value-expression that disqualifies non-money values as economic externalities. It is capable of valuing, for example, the biosphere, care, intangibles and social innovation — without reducing their information into one index of price and one measuring unit of profitability. It is a post-capitalist language (a language for post-capitalist economic expression), in a literal sense. A new economic grammar for the information age.
The place where this post-capitalist economic network language is spoken and understood is the new economic space. It is a place of value creation where qualified values — at once in excess of and more granular than that of USD or BTC — can both be expressed, composed and rendered interoperable. It multiplies denominations, which remain interoperable, because they share the same grammar.
We have been working on this already semi-publicly last week in Berlin and are heading this week to NYC and the Cryptoeconomic Systems Summit at MIT. We’ll have there good part of the ECSA cryptoeconomic working team — which usually means that something interesting is going down!
Here is a short (11 min) discussion on the vision we have: Akseli and Dick on the ECSA vision in Berlin: An Economic Grammar for the Information Age
In the economic white paper, we deconstruct the basic protocols of capitalist economics — like price, market, money, profit, equity, clearing — and reconstruct them in ways they articulate with the potentials of a cryptoeconomy. We for example show how disaggregation of the different functions of money into separate protocols allows us to disconnect maintaining liquidity from validating the store of wealth. We then outline a distributed exchange and a peer-to-peer issuance of rights, money, credit, stake holding and sharing of surplus as distinct protocols — a peer-to-peer value creation system, really, as Jon Beller has already called it in his preface to the economic white paper.
These protocols — this language — allow their participants to set the terms of finance, of economic interaction, and valuation. It is an economic grammar. Like Jon writes, sharing it democratizes the ability to author and to offer “futures”. Democratizing the authorship of futures means not disintermediation but extensive and distributed remediation — a massive multiplication of the moments in which and points from which economic agents may denominate value.
Furthermore, we illustrate why the building of cryptoeconomy requires a distributed network protocol and, thus, why something like that cannot be built with current technological paradigms (centralized server/Google; logically centralized replicated state/Ethereum).
We also demonstrate how a distributed exchange protocol opens up the capacity to create liquidity without any one central party; and how the capacity to create liquidity (based on a capacity to issue and accept offers) is foundational for any cryptoeconomic network.
We also show how it is possible for us to fund a new economic space (the place where the language for new economic expression is uttered) without having to own it; how we can make the value of the network as a whole liquid without owning it, i.e., how can you capture value of a network with a much more nuanced relationship than “ownership”.
But before getting too much ahead, here is first about the process.
What we would like to do next is to start sharing our work on rethinking the “economic” component in cryptoeconomics. This post is just to start the sharing process.
For me it is simply exciting to be able to be part of a project which asks what happens to money, markets, price, unit of account, issuance, credit, investment, clearing… when they become distributed protocols. What becomes possible then?
Economy has a history, it has not always been nor functioned in the way we understand it today. And it will have a future. What is economy in the era of its digital redesignability? Could the promise of distributed computation be unlocked by a new understanding of economy? A new economic grammar for the information age?
See below the Table of Contents and the Abstract. And stay tuned. We will start putting it out now in digestible pieces and always accompanied by a deep discussion around the key themes and insights of the chapter.
PROTOCOLS FOR CRYPTOECONOMIC NETWORKS
The crypto-political economy of Economic Space Agency
1. Introduction
1.1 The economy is a network
1.2 Outline of the economic white paper
1.3 Design principles of new economic space
2. Crypto-Political Economy
2.1 The ECSA agenda
2.2 An economic primer
2.3 The Hayekian turn: knowledge, price and spontaneous order
2.4 Transcending Hayek and his digital disciples: the market, prices and profits as protocols
2.5 Do ‘big data’ change the story?
2.6 A derivative framing of Hayek
3 Markets in the New Economic Space
3.1 Market is a “space of exchange”
3.2 Sociality as a design field
3.3 Mutual issuance of ‘rights’
3.4 Tokens and money
3.5 Mutual issuance of tokens
3.6 Mutual issuance of ‘equity’
3.7 Tokens and network derivatives
3.8 Knowledge and individual economic agents and individual economic spaces
3.9 Trust
3.10 Significance
4 Performance Indices in the new economic space
4.1 The task
4.2 Valuing care, valuing art, valuing intangibles, valuing biosphere
4.3 Performance indices put at par: a derivative logic of the social
4.4 ECSA as a data union, not a data market
4.5 The ECSA surplus
5 Money in a Distributed Cryptoeconomy
5.1 Money without state backing
5.2 The functions of money
5.2.1 Medium of exchange and distributed exchange protocols
5.2.2 Store of value
5.2.3 Unit of account
5.3 The role of credit
6 ECSA’s Tokens and ‘Fundamental Value’
6.1 Background
6.2 MV=PQ: Real Exchange Economy
6.3 MV=PQ: Monetary Economy
7 ECSA’s Token System
7.1 Distributed exchange protocols and tokens
7.2 Unit of account
7.3 Commodity tokens
7.4 Liquidity tokens
7.5 Stake tokens
8 Issues of Governance
8.1 Governance of stake tokens
8.2 ECSA tokens and ECSA securities: the roles of ECSA Finance and ECSA Agent
8.3 New issuance of ECSA Security Tokens
9 The Big Put
Abstract
Maybe the most difficult thing to understand about a cryptoeconomy is that it has the potential to cause an irreversible change in what we understand as ‘the economy’: making the economy itself a design space. In the face of a widespread rejection of ‘neoliberalism’ as both an economic and cultural agenda, and a distrust in the capacity of states to deliver the social good, we are looking to design and build an economy that is distributed and decentralized, while directly responsive to socially-constructed visions of ‘value’.
This paper expands upon the technologies that enabled bitcoin to create a virtual economy and present an economic stack (see Appendix 1) to develop new distributed organizations and value forms. This stack is the structured collection of protocols on which a new decentralized, interoperable cryptoeconomy, and new vision of ‘value’, can be built.
This vision involves three key ingredients:
- A cyber-social stack which enables distributed agency through a shared grammar on top of a secure distributed computing substrate to create a programmable social network with transparent governance.
- Multi-agent peer-to-peer token issuance on a logically distributed ledger network, rather than single-agent token issuance of a logically centralized ledger. The supporting economic grammar, which all the agents share, means that agents themselves create the conditions of exchange, liquidity and risk sharing.
- A new peer-to-peer value calculus in which the economic protocols enable new value forms, modes of measurement, and definitions of ‘surplus’, that embrace different starting points and social goals, including aesthetic and qualitative evaluations of what is thought to be ‘valuable’.
This proposal starts by re-encoding capitalism in the language of cryptoeconomics as but a particular value calculus, to be juxtaposed with the ECSA offering. ECSA offers an alternative to a capitalist mode of doing economics. We describe our offer as ‘The Big Put’: styled as a put option to short current capitalism. It enables participants to buy the right to off-load their exposure to the capitalist calculation of value and gain exposure instead to new value forms.
This economic white paper spells out the economic background to this value agenda. It also explains ECSA’s multi-level token system and the governance processes which make this alternative economic calculus both verifiable and viable. It stands as an independent statement but is best understood in combination with ECSA Technical White Paper and ECSA Political White Paper.
