Emergent Productivity in a New Economy
This post is the fourth in a series of articles by Daniel Thorson and Michael Fogleman about cryptocurrencies and the possible futures they open up for organizations, communities, and individuals. This post argues that capitalism is successful in terms of scale but flawed in terms of its incentive structures. It reviews the work of a group of academics on motivation and coordination, flow and stigmergy. Finally, it points to the possibility of a transformative, blockchain-enabled economic model with the potential to address systemic problems like widespread inequality and environmental crises.
PART I | PART 2 | PART 3 | PART 4
Winston Churchill famously said “democracy is the worst form of government except all those other forms that have been tried from time to time.”¹ Perhaps one might say something similar about capitalism.
Capitalism is the best economic system yet developed for operating at the international and global scale of our modern economy. Capitalism is not the best economic system of all time, without qualification. Capitalism is successful at operating at scale, but flawed in terms of its incentive structure. Economically, it results in widespread inequality, or the Matthew Effect (“the rich get richer, and the poor get poorer”). More broadly, capitalism is fundamentally linked to the widespread political, social, and environmental crises we are facing (and causing) as a species and planet. Capitalism’s flaws are threatening to prove fatal.
Earlier economic models like gift economies and barter systems had the opposite problem: well-designed incentive structures that fail to scale. In a gift economy, if you have food that you do not need, and I need that food, you give it to me unconditionally. In a barter system, I would trade my labor or the fruits of my labor for your food: an exchange without the medium of currency. These systems are very simple, but effective, and they engender moral values like generosity and a deep sense of interconnection.
We cannot simply revert to these earlier economies, however. Barter and gift economies are highly inefficient when used at the complexity and scale of international commerce:
Such a gift economy can only work in a small community where there is a sufficient collective knowledge of people’s overall needs and contributions to keep the exchanges approximately in balance. This ability to survey the whole system — which Jean-François Noubel has called “holopticism” (Rousseaux et al., 2014) — enables a form of distributed intelligence that flexibly coordinates offer and demand. Our present global economy is much too complex for any individual or group to acquire such an overview of all the exchanges that occur. (Heylighen, 2015)
All of humanity’s best attempts at building economic models have failed, and our failure is not merely economic: it is also political, social, environmental, and ultimately moral.
We are faced with a Gordian knot of interrelated conundrums: What kind of economic model can restore the values and possibilities of localized gift or barter economies, while operating at a global scale? Even if we could find such a model, how could we persuade all humans to adopt it, and in so doing, dramatically transform our economy? Even if we could convince a sufficient number of people and nations to adopt this hypothetical, neo-utopian economic model, would this transformation be enough to resolve the many related crises that we face as a species?
Distributed ledger technologies could hold a crucial part of the answer. Fred Ehrsam argues that blockchains “allow thousands of governance systems and monetary policies to be tried at the speed of software” with “much lower consequences of failure… As a result, there will be a Cambrian explosion of economic and governance designs where many approaches will be tried in parallel at hyperspeed.” These blockchain-enabled governance models might be the answer we need. This post will track the evolution of a new economy by exploring pre-blockchain trends, current projects, and possible future directions.
In recent decades there have been some developments that hint at what an answer to our Gordian knot could look like. One example is the rise of collaborative communities, like those developing open source software, or creating Wikipedia, the global encyclopedia. Millions of people participate in these projects around the clock. These efforts result in useful resources and tools made available to all, despite their vast scale and complexity.
In his series Breaking Smart, Venkatesh Rao argues that such projects work because they pursue a “direction of maximal interestingness,” with principles like “rough consensus, working code” and “release early, release often.” They embrace chaos, and transform it into serendipity. Rao — an unabashed optimist or “Promethean” — concludes “we are messily slouching towards a non-pastoral utopia on an asymptotic trajectory where reality gradually blurs into magic, waste into wealth, technology into nature and work into play.”
The principles that Rao points to and connects are related to software. While software plays an increasingly important role in human governance, governance can be discussed in fundamental terms, as principles abstracted from the particular tools used to implement governance policies.
One can describe any governance mechanism in terms of motivation and coordination. You need a way to motivate people to act, and you need a way to coordinate those actions to meet the collective goal. Motivation is a problem that relates to individuals. Coordination is a problem that relates to groups of people. In Rao’s examples, the “direction of maximal interestingness” is a motivation mechanism, and “rough consensus, working code” is a coordination mechanism.
Accordingly, to optimize governance, you need to optimize for motivation and coordination. To investigate these issues, we will look to the works of several academics and researchers. This group centers around the work of a Belgian academic philosopher named Francis Heylighen, who has collaborated with others over decades to discuss issues like cybernetics, complex systems, memetics, and self-organization. I will refer to them collectively as HEA (Heylighen et. al.).
HEA suggest two mechanisms to optimize individual motivation and collective coordination: “Csikszentmihalyi’s concept of [psychological] flow and the mechanism of stigmergy.” (Heylighen, 2012)
Flow is sometimes colloquially referred to as being “in the zone.” It is a psychological state that is pleasurable, focused, and productive. People usually experience flow by means of engaging but challenging activities like playing a sport, performing music, or creating a piece of art.
Stigmergy is less well-known. French biologist Pierre-Paul Grassé introduced the term in 1959, combining the Greek words stigma (“mark”) and ergon “work”. He used it to describe insects, whose pheromones left marks that other insects could later interpret and act on.
HEA describe stigmergy as “a mechanism of spontaneous coordination between actions, where the result of an individual’s work stimulates a next individual to continue that work.” They consider stigmergy to be the collective analogue to flow, which are “two sides of the same coin” : “Both describe the close interaction between an agent (the user) and a medium (the system or technology), so that an action by the one incites an immediate response by the other.” (Heylighen 2012)
Together, flow and stigmergy explain the success of collaborative projects like open source software development. For example, flow explains the feeling of intrinsic reward that motivates a software developer to voluntarily contribute to an open source project in her free time.
Similarly, stigmergy explains the coordinated evolution of a Wikipedia article over time. I often read Wikipedia articles and find typos or ungrammatical sentences. Unlike when I read other publications, I don’t take these flaws as a signal of failure. I understand and accept Wikipedia as a publication that gets better over time, and contribute to that gradual improvement by fixing the typo or sentence. Later, others will revise my work even further.
Optimizing flow and stigmergy optimizes motivation and coordination; optimizing motivation and coordination optimizes governance. HEA termed any system or governance model that reliably motivates individuals with flow, and coordinates groups with stigmergy a mobilization system.
HEA also point to how the components of these optimal governance models — flow and stigmergy — might be organized on a collective level. These musings come from an unlikely avenue: the productivity system Getting Things Done (GTD). On an individual level, GTD tends to result in flow. If every individual in an organization applied the GTD system, that would result in increased collective flow. HEA speculate that there is a potential for even further productivity gains by applying “quantitative, marker-based stigmergy.”
HEA describe a collaborative organization-wide task system that organizes information based on the GTD system and taxonomy. If the item was actionable, the person entering the item would decide who would complete the action rather than a boss or other superior. Additionally, tasks would be quantified with points that estimate its importance. The organization would compensate individuals based on tasks completed and the point value assigned to those tasks.
As HEA point out, similar tools such as job ticketing systems existed when their GTD paper was published in 2008. Since then other productivity tools have been developed that quantitatively implement stigmergy. However, these tools lack a crucial element: compensation. By tying actions to compensation, it would become possible to distribute profits to the people that completed the tasks that resulted in those profits, as determined by the number and value of those tasks.
Distributed ledger technologies might make this connection possible, and projects are emerging that intend to do so. The clear market leader in this area at this time is Colony.
Colony is a blockchain layer on top of Ethereum designed to help organize people, projects, and organizations. An individual colony is a coordination mechanism used by a group using the Colony software. Colonies have members, who complete tasks. After successfully completing tasks, they earn reputation as well as monetary compensation in the form of the token of the local colony, the token CLNY², and/or Ether. Colony has devised a series of protocols for creating, categorizing, completing, and verifying tasks; for assigning reputation; for creating and resolving disputes; for aligning voting rights and granting ownership. Colony is meritocratic, but pragmatic, and is intended for daily use in a variety of organizations and organizational structures.
We cover Colony in detail not to endorse it as a product³, but because it is currently the best indicator of what might be possible. Indeed, because Colony is a product, and a very early-stage product at that, it is not (yet) ubiquitous as a mechanism for motivation and coordination. If blockchain technologies are going to transform the nature of work so that we can coordinate solutions to the crisis at hand, the solutions will need to go much farther. Products like Colony will need to transform into utilities, like electricity or an internet connection. Utilities are:
- Ubiquitous
- Widely understood
- Widely accepted
- Efficient
- Nearly perfect stability
- Nearly invisible
If, as William Gibson says, “The future is already here — it’s just not very evenly distributed”⁴, in the future we’ll need solutions that are evenly and smoothly distributed.
When mobilization systems have become utilities, two further developments will become possible.
The first is what has been called an “offer network.” An offer network is a non-monetary economy, like a gift economy, where offers and demands are matched to meet the needs of all citizens. Unlike a gift economy it can operate at scale. In an offer network, all offers and demands are listed in a public database — specifically, something like the commodified mobilization systems that we have described. These offers and demands would be automatically paired using available production rules and artificial intelligence. With the correct information and well-tested algorithms, computers could easily reproduce and extend the “holopticism” present in local gift economies at a vast scale.
Just as the emergence of products like Colony will give way to the commodification of mobilization systems, the commodification of mobilization systems will allow for the emergence and commodification of offer networks. A second, similar transformation will then be possible. The combination of offer networks with artificial intelligence will result in a form of distributed intelligence that HEA call “the Global Brain.”
HEA see the possibility of a revival of a gift economy in the form of a convergence between mobilization systems, offer networks, and distributed cognition. They are clear that there are enormous risks and dangers as these trends develop — the possibility of addiction, manipulation, and even extinction — but they are no less clear that there is also a possibility of a wonderful and utopian outcome. In particular, the final evolution of this trend — the Global Brain — could “solve all problems confronting humanity– including poverty, inequality, scarcity, pollution, lack of sustainability, and poor resilience.” This would result in a “state of peacefulness and abundance” that they herald as a “return to Eden.” (Heylighen 2017)
HEA and the other authors we have discussed have a more or less explicit optimistic view of the future. Others might counter with a justified pessimism. Flow and stigmergy are important factors in human and political psychology, but are not intrinsically positive. They are actually morally ambiguous, and could be used for good, or could be (and have been) abused for negative and even evil ends.
As we have stated with regards to cryptocurrencies in particular, above the views of optimism and pessimism, there is room for a transcendent sobriety. The “Promethean” predictions cited in this article may seem fantastic, but prior examples like gift economies, modern-day equivalents such as collaboration on open-source projects, and developing blockchain-enabled tools like Colony suggest that we are moving towards the next step in this development: the commodification of mobilization systems.
The conscious use of the mechanisms of flow and stigmergy will motivate and coordinate individuals and groups on a global scale. A phase shift unlike anything seen before in the history of our civilization is at hand. Whether the new era will be a utopia, a dystopia, or something else remains to be seen.
² CLNY refers the forthcoming token for the Common Colony, the Colony which develops the Colony Network.
² The authors of this series have a friend who works for Colony. We received a demo of Colony, and are considering using Colony. We both hold Ethereum, which Colony is based on.
Cited Papers from Heylighen et. al.:
- Getting Things Done: The Science behind Stress-Free Productivity (Francis Heylighen and Clément Vidal, 2008)
- Mobilization Systems: technologies for motivating and coordinating human action (Francis Heylighen, Iavor Kostov and Mixel Kiemen, 2012)
- Distributing Cognition: from Local Brains to the Global Brain (Clément Vidal, 2015)
- Towards an intelligent network for matching offer and demand: From the sharing economy to the global brain (Francis Heylighen, 2017)
Vertical Context Cues
Curiously Related Rabbit Holes
- Emergent Productivity: productivity expert Tiago Forte describes how organizations and employees can move from an “uneasy truce” to a convergence of interests and goals
- Evolve: a helpful guide to tracking the evolution of a trend with Wardley Mapping, created by Ben Mosior
- Networkologies: A Philosophy of Networks for a Hyperconnected Age: A radical and optimistic vision of our emerging networked reality.
