Wednesday, 11 June 2014

Contextual Economics

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By Neva Goodwin:
"There is no better way to force yourself to think through an entire theory than to write a textbook. I have now been the lead author on two textbooks for the college level: Microeconomics in Context and Macroeconomics in Context. In addition to the U.S. editions there are Italian, Russian and Vietnamese editions of these books. Roughly 40% of their content is similar to what can be found in a standard, neoclassical textbook. Much of the new material came from existing alternative schools of economics.
The starting premise for Contextual Economics is that an economic system is embedded within a social context that includes ethics, norms and human motivations, and the culture that expresses them. It also includes politics—that is, the deployment of economic and other kinds of power—as well as institutions, and history. Equally important is the recognition that an economic system is embedded within a physical context that includes the built environment, as well as the natural world from which all the materials we use ultimately derive. The health of any economic system is absolutely dependent on the health of these embracing contexts.
Next, contextual economics understands that the economy itself contains at least three spheres. In addition to the for-profit business sphere—the focus of mainstream economics—there is also the core sphere, consisting of families and communities; this is the focus of a good deal of work in feminist and social economics. Third is the public purpose sphere, which includes governments as well as institutions that are both non-governmental and not-for-profit, such as not-for-profit hospitals and universities, environmental advocacy groups, foundations, etc..
The business sphere is currently creating meta-externalities of culture and politics that place great burdens on the core sphere, and that tie the hands of governments. This does not necessarily imply that the for-profit sphere is “bad” and the others “good”—rather that institutional changes must be made to bring the purposes and functions of all three spheres into better harmony.
Another foundational question addressed by contextual economics is: What, in fact, constitutes economic activity? The list found in all standard textbooks is “production, exchange, and consumption.” Beyond these it is critical to include activities of resource maintenance such as work directed toward maintaining environmental sustainability, infrastructure maintenance, and caring activities. Theoretical economics, which has been praised for its ability to improve efficiency in production, will gain in relevance if it also teaches how to sustain and build human, social, natural and built capital.
The preceding is a bird’s eye overview of the content of what I believe needs to be included in an alternative system of economic theory—which is, of course, what is included in contextual economics. As noted, contextual economics has been woven together with strands of everything I and my colleagues could lay our hands on that appeared useful.
There is not perfect harmony among the various schools of heterodox, or alternative, economics. Ecological economists emphasize environmental sustainability. Socio-economists and others emphasize individual well-being, often within a communitarian context. Radical economists emphasize social justice, and often align with Keynesians in assuming that the only way to achieve that is by growing the economy—as Paul Krugman keeps urging.
There are real conflicts among these visions of what constitutes a good society, and how to get there. As I look at these, I am struck by the realization that we may not actually have the choice as to which value should be uppermost. The natural world imposes absolute resource constraints—e.g., on water, fish, wood, and land—that, if used in one way, are not available for another use. Not to mention the limits on the atmosphere’s ability to absorb climate changing pollutants.
If we start with nature as the binding constraint, the resource limits of a finite world mean that economic growth, as we currently understand the term, cannot continue indefinitely.
If we must accept the end of economic growth as we know it, this means that social justice cannot be achieved through the Keynes’s or Krugman’s prescriptions. In a non-growing global economy there is only one way for the poor to have more: that is for the rich to have less. Please note: this means less stuff, not necessarily less well-being.
There has recently been much good work directed to better understanding what really does contribute to well-being. Hedonic psychology and related studies suggest that there may be a reasonably good resolution to the dilemma of how to achieve environmental sustainability and equity and well-being: it lies in cultural and value change, to better understand what truly makes us feel happy and fulfilled.
Some of the unsustainable material pleasures and conveniences of the rich world may need to be given up: casual use of transportation; very large houses; water-skiing; the convenience of massive throw-away packaging, including in medical applications—and so on. But better urban design can offer compensating benefits, such as vastly reduced commuting time and more pleasant living environments.
If labor productivity continues to increase, as it has for the last two hundred years, in a post-growth world one result could be ever greater unemployment. But the obviously preferable alternative would be policies to promote an ever shorter work-week—hence more free time.
Keynes himself imagined this, in his paper on “Economic Possibilities for our Grandchildren.” He projected economic progress forward a hundred years—to the year 2030—when there would be very little reason for anyone to scramble for life’s necessities, and we could mostly devote our lives to the arts of leisure. I would look for those arts of leisure to include active participation in arts, crafts, and other makings, such as gardening, as well as athletics, time with family and friends, and more time available to give every child a superb education.
2030 is only two decades away. We may not have achieved Keynes’ vision by then, but the barriers to doing so lie not so much in the physical constraints posed by nature and technology as in human culture, politics, and values. To change these we need to change much more than economic theory—but changing economic theory is a good start." (

More Information

Goodwin, Neva , Julie A. Nelson, and Jonathan Harris (2009) Macroeconomics in Context. Second edition, M. E. Sharpe
Goodwin, Neva, Julie A. Nelson, Frank Ackerman, and Thomas Weisskopf (2009) Microeconomics in Context. Second edition, M. E. Sharpe
Goodwin, Neva (2005) The Limitations of Markets; available at
Goodwin, Neva, Frank Ackerman and David Kiron (1997), eds. The Consumer Society. Washington, D.C.: Island Press
Harris Jonathan, and Neva Goodwin, eds. (2009) Twenty-first Century Macroeconomics: Responding to the Climate Challenge Edward Elgar; paperback 2010.

About P2P Foundation..

P2P Foundation:About
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Mission and Objectives

The Foundation for P2P Alternatives proposes to be a meeting place for those who can broadly agree with the following guiding ideas, principles and propositions, which are also argued in the essay or book in progress, P2P and Human Evolution:
  • that peer-to-peer based technology reflects and holds the potentials for a change of consciousness towards individual and networked participation, and in turn strengthens it
  • that the "distributed network" format, expressed in the specific manner of peer to peer relations, is a new form of organizing and subjectivity, and an alternative for many systems within the current socio-econominic and cultural-political order, which though it does not offer solutions per se, points the way to a variety of dialogical and self-organizing formats, i.e. it represents different processes for arriving at such solutions; it ushers in a era of ‘nonrepresentational democracy’, where an increasing number of people are able to manage their social and productive life through the use of a variety of autonomous and interdependent networks and peer circles; that global governance, and the global market will be, and will have to be, more influenced by modes of governance involving multistakeholdership
  • that it creates a new public domain, an information commons, which should be protected and extended, especially in the domain of common knowledge creation; and that this domain, where the cost of reproducing knowledge is near zero, requires fundamental changes in the intellectual property regime, as reflected by new forms such as the free software movement; that universal common property regimes, i.e. modes of peer property, such as the General Public License and the Creative Commons licenses should be promoted and extended
  • that the principles developed by the free software movement, in particular the General Public License, and the general principles behind the open source and open access movements, provides for models that could be used in other areas of social and productive life
  • that it reconnects with the older traditions and attempts for a more cooperative social order, but this time obviates the need for authoritarianism and centralization; it has the potential of showing that the new more egalitarian digital culture, is connected to the older traditions of cooperation of the workers and peasants, and to the search for an engaged and meaningful life as expressed in one’s work, which becomes an expression of individual and collective creativity, rather than as a salaried means of survival
  • that it offers youth a vision of renewal and hope, to create a world that is more in tune with their values; that it creates a new language and discourse in tune with the new historical phase of ‘cognitive capitalism’; P2P is a language which every ‘digital youngster’ can understand. However, 'peer to peer theory' addresses itself not just to the network-enabled and to knowledge workers, but to the whole of civil society (the 'multitudes'), and to whoever agrees that the core of decision-making should be located in civil society, and not in the market or in the state, and that the latters should be the servants of civil society
  • it combines subjectivity (new values), intersubjectivity (new relations), objectivity (an enabling technology) and interobjectivity (new forms of organization) that mutually strengthen each other in a positive feedback loop, and it is clearly on the offensive and growing, but lacking ‘political self-consciousness’. It is this form of awareness that the P2P Foundation wants to promote.

The Foundation for P2P Alternatives addresses the following

  • P2P currently exists in discrete separate movements and projects but these different movements are often unaware of the common P2P ethos that binds them
  • thus, there is a need for a common initiative, which
  1. brings information together;
  2. connects people and mutually informs them
  3. strives for integrative insights coming from the many subfields;
  4. can organize events for reflection and action;
  5. can educate people about critical and creative tools for world-making
  • the Foundation would be a matrix or womb which would inspire the creation and linking of other nodes active in the P2P field, organized around topics and common interests, locality, and any form of identity and organization which makes sense for the people involved
  • the zero node website, i.e. the site of the P2P Foundation, would have a website with directories, an electronic newsletter and blog, and a magazine. It aims to be one of the places where people can interconnect and strengthen each other, and discuss topics of common interest.
Michel Bauwens, November 29, 2005

Structure of the P2P Foundation

The P2P Foundation is a decentralized organization. In order to foster its growth, however, it has been necessary to create some centralized and managed structures. These are documented here.
  • The P2P Foundation is a registered institute founded in Amsterdam, Netherlands. It's local registered name is: Stichting Peer to Peer Alternatives, dossier nr: 34264847.
  • There are no formal operational roles, but Founder Michel Bauwens produces most of the content creation and takes care of community management.
  • Bios are available for the P2P Foundation's 3 Founders
  • The P2P Foundation has several nodes on the web: a wiki, a blog, a social network, and an email discussion list. Each has an administrator.
    • The wiki is administered by James Burke; technical assistance is regularly provided by Kasper Souren.
    • The blog is administered, and the server by James Burke and Franco Iacomella.
    • The list is administered by Franco Iacomella, Ryan Lanham and Kevin Carson
    • The social network at Ning was created by Joseph Davies-Coates and is (mainly) administered by Michel Bauwens
    • Moreover, the P2P Foundation maintains a P2P Lab based in Ioannina (Greece), a blog and a wiki in Greek, which are administered by Vasilis Kostakis
Read here for more on the History of the P2P Foundation

What Other People Are Saying about Us

  • Franz Nahrada GIVE - Global Villages Lab, Austria:
    "The Peer to Peer Foundation is the one organisation that brings toghether knowledge about the emerging cooperative economy and society from all walks of life. Be it new products based on collective imagination and testing, be it participatory forms of decisionmaking, be it good practises of strengthening the cultural commons - P2P foundation spans it all and provides us with knowledge resources essential for our daily work in harnessing the power of local community and global networking."

  • Sam Rose:
    "How will humans solve the problem of working together to create new and better working systems for technology production, energy, knowledge creation, education, conflict resolution, media production, health care, design, research and development, finance and natural resource management? If you are interested in engaging these questions, P2P Foundation is one of the few entities that gives those interested access to explore, develop, contribute and benefit from the largest knowledge base in the world of people trying to set right what is really abundant, what is really scarce, and act accordingly. Trying to help create a better world? Start here!"

  • Natalie Pang:
    "In a world dominated by market relations, the Peer to Peer (P2P) Foundation provides a solid insight on how alternative structural mechanisms i.e. peer-to-peer and collaborative production can be applied to all aspects of everyday life. This includes technological developments, the economy, cultural and social development, research and development, and the sustainability of natural resources. While grounded in theory, the P2P Foundation also offers ongoing dialogue with interdisciplinary researchers and practitioners to explore pragmatic solutions to contemporary issues and problems."

  • Kevin Carson
    "The quality of writing on the P2P Foundation blog is incomparable, and I have relied heavily on material in the P2P Wiki on peer production, open source manufacturing, and desktop manufacturing, in writing Chapters Fourteen and Fifteen of my org theory manuscript. I highly recommend Bauwens' extended essay "P2P and Human Evolution," and his shorter introductory essay "The Political Economy of Peer Production."

Evolution of the P2P Foundation

Interview of Michel Bauwens by V. Sasi Kumar:
"Michel Bauwens was in Thiruvananthapuram, Kerala, in December 2008, to participate in the Free Software Free Society conference and talked about the work of the Foundation. In this interview, done through email after his return to Thailand, Michel speaks about how he decided to leave his job and start the P2P Foundation, what principles the Foundation is based on, what its work is, and how the work has been progressing.

You were an information scientist and magazine editor before you started the P2P Foundation. Can you tell us about this evolution? How did it happen?
MB: My first job (but without any formal library and information science training, as I studied political science) was nine years as reference librarian and information analyst for a centre in Brussels. In 1990, I started working as strategic business information manager at the headquarters of the agribusiness wing of British Petroleum. At that time, I reformulated the role of librarian into that of ‘cybrarian’, ie managing “just in time, just for you” information streams to senior management who were not in any real sense using the physical library resources anymore.
As the animal feed businesses were divested by 1993, I moved on to creating a Flemish magazine that was a mix of Mondo 2000 and Wired, and then became one of the Internet evangelists in my home country, leading to work as a serial Internet entrepreneur.
From my very first encounter with the Internet, ie collective mailing lists combining experts from around the world, I knew this was a technology that would change the very fabric of our world. Never before had there been such real-time possibilities for human cooperation and collective intelligence on a global scale. From now on, the privileged communication infrastructures that were only in the hands of multinationals and the State, would be distributed and democratised, a shift at least as important as the effect of the printing press.
At the same time, I became increasingly dissatisfied with the corporate world, seeing how the neoliberal system not only created increased social inequality, exacted a terrible psychic cost from even its privileged managerial layers, while also creating havoc in our natural world. I started seeing the system as a giant Ponzi scheme (a scheme in which the profit of those who invest earlier comes from those who invest later), so what surprised me was not the meltdown of 2008, but why it took so long to actually manifest itself!
At the same time, there was a revival of social resistance starting in 1995, and I was noticing, as a professional trend-watcher, that there was a common template in the new forms of social organisation, the one I now call the ‘peer to peer’ dynamic, or ‘voluntary permissionless self-aggregation around the production of common value’.
Key for me was the observation of the Internet bust in April 2000, which I witnessed from a privileged position as I was working in the same sector. As the stock market imploded, pundits were predicting the end of the Internet because no more capital was available for innovation and development. In fact the opposite happened -- rather than diminishing, innovation increased, entirely driven by the social field of aggregating geeks, giving birth to the Web 2.0, the first social model based on an interrelationship between new forms of capitalism and user-generated production of value. I knew then that I would study this phenomenon more deeply, and in particular since I consider peer aggregation to be a non-alienating form of work, how it could be leveraged as a force for social change.
So in October 2002, I decided to quit my corporate engagement, take a sabbatical to think things through, and moved to Thailand to create a global cyber-collective to research and promote P2P dynamics.

Is there a basic set of hypotheses from which the Foundation starts?

Yes, I formulated the following principles when I started the Foundation:
  • That peer to peer-based technology reflects a change of consciousness towards participation, and in turn, strengthens it.
  • That the ‘distributed network’ format, expressed in the specific manner of peer to peer relations, is a new form of political organising and subjectivity, and an alternative for the current political/economic order, ie I believe that peer to peer allows for ‘permission-less’ self-organisation to create common value, in a way that is more productive than both the state and private for-profit alternatives. People can now engage in peer production that creates very complex ‘products’ that can achieve higher quality standards than pure corporate competitors.

I also believe that it creates a new public domain, an information commons, which should be protected and extended, especially in the domain of common knowledge-creation; and that this domain, where the cost of reproducing knowledge is near-zero, requires fundamental changes in the intellectual property regime, as reflected by new forms such as the free software movement; that universal common property regimes, ie modes of peer property such as the general public licence and the creative commons licences should be promoted and extended.
These principles developed by the free software movement, in particular the general public licence, and the general principles behind the open source and open access movements, provide for models that could be used in other areas of social and productive life.
If we can connect this new mode of production, pioneered by knowledge workers, with the older traditions of sharing and solidarity of workers and farmers movements, then we can build a very strong contemporary social movement that can transcend the failures of socialism.
I think it also offers youth a vision of renewal and hope, to create a world that is more in tune with their values.
I call the new peer to peer mode a ‘total social fact’, because it integratively combines subjectivity (new values), inter-subjectivity (new relations), objectivity (an enabling technology) and inter-objectivity (new forms of organisation) that mutually strengthen each other in a positive feedback loop, and it is clearly on the offensive and growing, but lacking ‘political self-consciousness’. It is this form of awareness that the P2P Foundation wants to promote.

Was this mostly your work, or were others involved in formulating these principles?
I formulated the principles on my own, but also after at least two years of reading, and of being attuned with the zeitgeist (zeitgeist describes the intellectual, cultural, ethical and political climate, ambience and morals of an era). Others were formulating similar ideas, though in different ways. So as usual we should not claim too much personal merit; we are standing on the shoulders of the giants of the past, and are simply lucky to accompany a deep shift in human consciousness that would be taking place without us just as well. At the most, we can try to put some extra grease in the machine.

What exactly does the Foundation do?
We want to be an interconnecting platform for people involved in realising the new open and free, participatory and commons-oriented paradigms in every social field. So, we are monitoring and describing real-world initiatives, theoretical efforts, creating a library of primary and secondary material, and trying to make sense of that aggregation by developing a coherent set of concepts and principles. We do this with a wiki, with nearly 8,000 pages of information, which have been viewed over 5 million times; through a blog reaching about 35,000 unique users last year, a Ning community with a few hundred members, and a number of mailing lists. The most active is the peer to peer research list, where academics and non-academics can collaboratively reach understandings. We also had two annual physical meet-ups in Belgium and the UK, and have some national groups such as in the Netherlands and Greece. There’s a lot of hidden activity acting as connectors between various initiatives, which, despite the global Internet, often don’t know they are working on very similar projects that could reinforce each other.
Peer to peer happens without us, but we want to add a little interconnecting grease to the system. My ultimate aim is to create a powerful social movement that can support the necessary reforms for social justice, sustainability of the natural world, and opening up science and culture to open and free sharing and collaboration, so that the whole weight of the collective intelligence of humanity can be brought to bear on the grave challenges we are facing.

How do you see the work that has already been done? Is it progressing according to your expectations?
I’m pleased on some levels, frustrated at others. In three years, we have constructed a sizeable amount of interrelated information and knowledge, and a ‘community of understanding’. I think we have a ‘really existing virtual community’ that cares about the ideals that we formulated. Each of these people are themselves active in their own real-world projects, some of which will be crucial change agents in the near future. Undoubtedly, the P2P Foundation is a global brand at least on the level of Internet users, as we have not crossed the boundary to mass media reporting. Our growth seems slow, but organic and rather strong, with not so much turnover and a lot of loyalty. Our internal culture of civil discourse seems very strong. On a personal level, I have a little more social and reputational capital, and have been privileged to explain P2P in several countries on four continents, which has allowed me to relate physical presence with the virtual network -- a strong combination.
My big frustration is that I failed to develop a ‘business model’ to sustain myself and my family, so I’m returning to paid employment in a few weeks, which will necessarily diminish my engagement, which has been full-time for the last three years, with the P2P Foundation’s work." (

Key Theses on P2P Politics

Michel Bauwens:
Written in 2007:
"1. Our current world system is marked by a profoundly counterproductive logic of social organization:
a) it is based on a false concept of abundance in the limited material world; it has created a system based on infinite growth, within the confines of finite resources
b) it is based on a false concept of scarcity in the infinite immaterial world; instead of allowing continuous experimental social innovation, it purposely erects legal and technical barriers to disallow free cooperation through copyright, patents, etc…
2. Therefore, the number one priority for a sustainable civilization is overturning these principles into their opposite:
a) we need to base our physical economy on a recognition of the finitude of natural resources, and achieve a sustainable steady-state economy
b) we need to facilitate free and creative cooperation and lower the barriers to such exchange by reforming the copyright and other restrictive regimes
3. Hierarchy, markets, and even democracy are means to allocate scarce resources through authority, pricing, and negotiation; they are not necessary in the realm of the creation and free exchange of immaterial value, which will be marked by bottom-up forms of peer governance
4. Markets, as means to to manage scarce physical resources, are but one of the means to achieve such allocation, and need to be divorced from the idea of capitalism, which is a system of infinite growth.
5. The creation of immaterial value, which again needs to become dominant in a post-material world which recognized the finiteness of the material world, will be characterized by the further emergence of non-reciprocal peer production.
6. Peer production is a more productive system for producing immaterial value than the for-profit mode, and in cases of the asymmetric competition between for-profit companies and for-benefit institutions and communities, the latter will tend to emerge
7. Peer production produces more social happiness, because 1) it is based on the highest from of individual motivation, nl. intrinsic positive motivation; 2) it is based on the highest form of collective cooperation, nl. synergistic cooperation characterized by four wins (the participants x2, the community, the universal system)
8. Peer governance, the bottom-up mode of participative decision-making (only those who participate get to decide) which emerges in peer projects is politically more productive than representative democracy, and will tend to emerge in immaterial production. However, it can only replace representative modes in the realm of non-scarcity, and will be a complementary mode in the political realm. What we need are political structures that create a convergence between individual and collective interests.
9. Peer property, the legal and institutional means for the social reproduction of peer projects, are inherently more distributive than both public property and private exclusionary property; it will tend to become the dominant form in the world of immaterial production (which includes all design of physical products).
10. Peer to peer as the relational dynamic of free agents in distributed networks will likely become the dominant mode for the production of immaterial value; however, in the realm of scarcity, the peer to peer logic will tend to reinforce peer-informed market modes, such as fair trade; and in the realm of the scarcity based politics of group negotiation, will lead to reinforce the peer-informed state forms such as multistakeholdership forms of governance.
11. The role of the state must evolve from the protector of dominant interests and arbiter between public regulation and privatized corporate modes (an eternal and improductive binary choice), towards being the arbiter between a triarchy of public regulation, private markets, and the direct social production of value. In the latter capacity, it must evolve from the welfare state model, to the partner state model, as involved in enabling and empowering the direct social creation of value.
12. The world of physical production needs to be characterized by:
a) sustainable forms of peer-informed market exchange (fair trade, etc..);
b) reinvigorated forms of reciprocity and the gift economy;
c) a world based on social innovation and open designs, available for physical production anywhere in the world.
13. The best guarantor of the spread of the peer to peer logic to the world of physical production, is the distribution of everything, i.e. of the means of production in the hands of individuals and communities, so that they can engage in social cooperation. While the immaterial world will be characterized by a peer to peer logic on non-reciprocal generalized exchange, the peer informed world of material exchange will be characterized by evolving forms of reciprocity and neutral exchange.
14. We need to move from empty and ineffective anti-capitalist rhetoric, to constructive post-capitalist construction. Peer to peer theory, as the attempt to create a theory to understand peer production, governance and property, and the attendant paradigms and value systems of the open/free, participatory, and commons oriented social movements, is in a unique position to marry the priority values of the right, individual freedom, and the priority values of the left, equality. In the peer to peer logic, one is the condition of the other, and cooperative individualism marries equipotentiality and freedom in a context of non-coercion.
15. We need to become politically sensitive to invisible architectures of power. In distributed systems, where there is no overt hierarchy, power is a function of design. One such system, perhaps the most important of all, is the monetary system, whose interest-bearing design requires the market to be linked to a system of infinite growth, and this link needs to be broken. A global reform of the monetary system, or the spread of new means of direct social production of money, are necessary conditions for such a break.
16. This is the truth of the peer to peer logical of social relationships: 1) together we have everything; 2) together we know everything. Therefore, the conditions for dignified material and spiritual living are in our hands, bound with our capacity to relate and form community. The emancipatory peer to peer theory does not offer new solutions for global problems, but most of all new means to tackle them, by relying on the collective intelligence of humankind. We are witnessing the rapid emergence of peer to peer toolboxes for the virtual world, and facilitation techniques of the physical world of face to face encounters, both are needed to assist in the necessary change of consciousness that needs to be midwifed. It is up to us to use them.
17. At present, the world of corporate production is benefiting from the positive externalities of widespread social innovation (innovation as an emerging property of the network itself, not as an internal characteristic of any entity), but there is no return mecachism, leading to the problem of precarity. Now that the productivity of the social is beyond doubt, we need solutions that allow the state and for-profit corporation to create return mechanisms, such as forms of income that are no longer directly related to the private production of wealth, but reward the social production of wealth."

Peter Joseph on Economic Calculation in Resource-Based Economics

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And this leads us to part 3: Economic Organization & Calculation.[1]
Transcript of the lecture by Peter Joseph:
Now, if you are wondering why I spent so much time on the prior points of post-scarcity and those two core problems inherent to market capitalism: Social Imbalance and Environmental Imbalance – its because you cannot understand the logic of the economic factors involved in this model, without those prior awarenesses. A Natural Law Resource Based Economy is not just a progressive outgrowth of our increased capacity to be productive as a species, as though we would just gradually evolve out of the market system, step by step, into this approach...
No. The dire need for this system’s removal needs to be realized once again. It has to become a part, in fact, of the incentive structure of the new model - the historical understanding that if we do not adjust in this way, we will revert right back into this highly unstable periods we are in right now.
An economic model is a theoretical construct representing component processes, by a set of variables or functions, describing the logical relationships between them. Basic definition.
If anyone has studied traditional or market based economic modeling, a great deal of time is often spent on things such as price trends, behavioral patterns, utlitarianistic functions, inflation, currency fluctuations and so forth. Rarely, if ever, is anything said about public or ecological health. Why? Because the market is again life-blind and decoupled from the science of life support and sustainability. It is simply a proxy system.
The best way to think about a this [new] economy is not in the traditional terms... but rather as an advanced production, distribution, and management system which is democratically engaged by the public through a kind “participatory economics” - that facilitates input processes – such as design proposals and demand assessment - while filtering all actions through what we will call “sustainability” & “efficiency” protocols.
These are the basic rules of industrial action set by natural law... not human opinion. As noted prior, neither of these interests are structurally inherent in the capitalist model and it is clear that humanity needs a model that has this type of stuff built right into it for consideration.

Structural System Goals

All economic systems have structural goals, which may not be readily apparent.
Market Capitalism's structural goal, as described, is growth and maintaining rates of consumption high enough to keep people employed at any given time and employment requires, also, a culture of real or perceived inefficiency... and that essentially means the preservation of scarcity in one form or another. That is its structural goal and good luck getting a market economist to admit to that. This model’s goal is to optimize technical efficiency and create the highest level of abundance we possibly can, within the bounds of earthly sustainability, seeking to meet human needs directly.

System Overview

One of the great myths of this model is that it is “centrally planned”. What this means, based on historical precedent, is that it is assumed that an elite group of people basically will make the economic decisions for society. No. This model is a Collaborative Design System (CDS), not centrally planned. It is based entirely upon public interaction, facilitated by programmed, open source systems, that enable a constant, dynamic feedback flow that can literally allow the input of the public on any given industrial matter, whether personal or social.
Now, a common question when you bring that up they say “Well, who programs this system?”. The answer is everyone and no one. The tangible rules of the laws of nature, as they apply to environmental sustainability and engineering efficiency, is a completely objective frame of reference. The nuances may change to some degree over time- but the general principles remain.
Over time, the logic of such an approach will become more rigid as well because we learn more as we perfect our understandings- and hence less room for subjectivity in certain areas that might have had it prior. Again, I’ll be describing this more so in a moment.
Also, the programs themselves would be available in an open source platform for public input and review. Absolutely transparent. And if someone noticed a problem or unapplied optimization strategy, which would probably be the case, it is evaluated and tested by the community - kind of like a wikipedia for calculation except much less subjective than wikipidea, without the moody administrators.
Another traditional confusion surrounds a concept which has become, to many, the defining difference between capitalism and everything else – and it has to do with whether the “means of production” is privately owned or not. And this is replete throughout tons of traditional literary treatments on capitalism when they describe how it’s the ultimate manifestation of human behavior in a society.
If you don't know whist this means, the means of production refers to the non-human assets that create goods, such as machinery, tools and factories, offices and the like. In capitalism, the means of production is owned by the capitalist, by historical definition and hence the origin of the term.
I bring this up because there has been an ongoing argument for a century that any system which does not have its means of production owned, as a form of private property, is just not going to be as economically efficient as one that has or maybe not even efficient at all.
This, as the argument goes, is because of the need for price, the price mechanism.

The price mechanism

Price, which has a fluid ability to exchange value amongst virtually any type of good due to its indivisibility of value, creates indeed a feedback mechanism that connects the entire market system in a certain narrow way. Price is a way to allocate scare resources amongst competing interests, for sure.
Price, property, and money translate, in short, subjective demand preferences into semi-objective exchange values. I say semi, because it is again a culturally relative measure only- absent most every factor that gives true technical consideration to a given material or good. In other words, it has nothing to with what the material goods are it’s just a mechanism.
Perhaps the only real technical data in fact I would say that price embraces, very crudely, relates to ”resource scarcity” and “labor energy,” resource scarcity and labor energy, you can basically find that in price.
So, in this context, the question becomes, moving on, is it possible to create a system that can equally, if not more efficiently, facilitate feedback with respect to consumer preference, demand, labor value, and resource or component scarcity... without the price system, subjective property values, or exchange? And of course there is. The trick is to completely eliminate exchange and create a direct control and feedback link between the consumer and the means of production itself. The consumer becomes part of the means of production and the industrial complex, if you will, becomes nothing more than a tool that is accessed by the public to generate goods.
In fact, as alluded to prior, the same system can be used for just about any societal calculation, virtually eliminating the state government in fact and politics as we know it. It is a participatory decision making process.
And, as an aside, as far as the fact that there will indeed always be scarcity of something in the world, which is the very basis of existence of price, market, and money - human beings can, again, either understand the dire need to exist in a steady- state relationship with nature and the global human species for cultural & environmental sustainability ....or not.
We can either continue down the same path we are now and become more aware and responsible to the world in and each other.
Seeking post scarcity and using natural law rules of sustainability and efficiency to decide how to best allocate our raw materials or not. But I think the former is the most intelligent path. I state that because, again, this resource argument always comes down to the abstraction of resources, it never, excuse me, the abstraction of scarcity, it never qualifies what scarcity is in certain contexts. It doesn’t separate scarcity and that’s its fatal flaw between human needs and human wants.
Also, I want to point out another fallacy which of this “private ownership of the means of production,” a fallacy of this means of this broad concept is its culture lag. Today, we are seeing a merger of Capital Goods, Consumer Goods, and Labor Power. Machines are taking over human labor power, becoming capital goods, while also reducing in size to become consumer goods.
I’m sure most everyone in this room has a home paper printer. When you send a file to print from your computer, you are in control of a mini version of a means of production.
What about 3D printers? In some cities today, there are now 3d printing labs, which people can send their design to print in physical form.
The model I am going to describe is a similar idea. The next step is the creation of a strategically automated industrial complex, localized as much as possible, which is designed to produce, through automated means, the average of everything any given region has found demand for. Think about it. On-demand production on a mass scale. Consider for a moment how much storage space, transport energy, and overrun waste is immediately eliminated by this approach. I think the days of large, wasteful, mass producing economies of scale are coming to an end... well... if we want them too.
This type of thinking –true economic calculation, by the most technical sense of the term, I can’t reiterate that enough. We are calculating to be as technically efficient and conservative as possible, which again, almost paradoxically, is what will facilitate a global access abundance to meet all human needs and beyond.

Structure and Processes

Structure and Processes, moving on. So, I’m going to walk through the following three processes.
  1. Collaborative Design Interface and Industrial Schematic
  2. Resource Management, Feedback, & Value
  3. General Principles of Sustainability and the Macro-Calculation.
1) The collaborative design interface is essentially the new “Market.” It’s a market of ideas. This system is the first step in any production interest. It can be engage by a single person; it can be engaged by a team, if you have friends and you want to put it together sort of like how businesses think; it can be engaged by everyone. It is open source and open access and your concept is open to input from anyone interested in that good genre or anyone that’s online that cares to contribute. Obviously, it comes in the form of a website, as I’ve stated. And likewise whatever exists as a final design, whatever is put into production (even though, in theory everything will be under modification at all times) but what has been proved, if you will, is digitally stored in a database which makes that good available to everyone. Sort of like a goods catalogue. Except it contains all of the information digitally that is required to produce it.
This is how demand is accessed. It’s feedback, and it’s immediate.
Instead, of course, of advertising and the unidirectional consumer good proposal system, which it is – that we have today where corporations basically tell you what you should buy, with the public generally going with the flow, favoring one good, component, or feature which, using price of course so if they don’t like something then clearly that wont produce it anymore to weed out supply and demand– this system works almost the opposite way.
The entire community has the option of presenting ideas for everyone to see and weigh in on and build upon... and whatever isn't of interest, simply wont be executed to begin with. There’s no testing here, such as you would see in marketing. It’s incredibly wasteful. It is as simple as that.
The actual mechanism of proposal, would come in the form of an interactive design interface - such as we see with Computer-Aided Design or CAD as it’s called - or more specifically Computer-Aided Engineering, which is a more complicated synergistic process.
And, as an aside, some see Computer-aided design programs, as they exist, as having an enormous learning curve and of course they do. But just as the first computers were very difficult code-based interfaces, which were later replaced by small little programs in the form of graphic icons that we’re all so familiar with – the future CAD type programs could be oriented in the exact same way – to make them more user friendly.
And obviously, not everyone has to engage in design. Some people, like most people today, they appreciate what’s been created prior, they absorb and would use what other people come up with . So there’s a diminishing law of returns in a lot of ways, if you will, not everyone has to get in there and have some role to do this, but many will and many will enjoy the process.And of course you can customize things as you go which is a great point, there’s minor things that can happen with a product that someone doesn’t know anything about but maybe they just want to change the color and that’s it. Obviously, that doesn’t take a lot of education. More importantly, technically speaking, the beauty of these design and engineering programs today is they incorporate advanced physics and other real world, natural law properties, so a good isn't just viewable in a static 3d model, it can be tested right there, digitally. And while some testing capacity might be limited today, it is simply a matter of focus to perfect such digital means.
For example in the automotive industry, long before new ideas are built they run them through similar digital testing processes... and there is no reason to believe that we will not eventually be able to digitally represent and imitate and set in motion virtually all known laws of nature in time, and being able to apply them to different contexts.
Similarly – and this is critical – this design as proposed of this system is filtered through a series of sustainability and efficiency protocols which relate to not only the state of the natural world but also the total industrial system in as far as what is capatable. Processes of evaluation and suggestion would include the following:
  • Strategically Maximized Durability
  • Adaptability
  • Standardization of Genre Components
  • Strategically Integrated Recycling Conduciveness, as I’ve mentioned before and
  • Strategically Conducive designs themselves, making them conducive for Labor Automation
I’m going to go through these each quickly.
Durability just means to make the good as strong and as long lasting as relevant. The materials utilized, comparatively assuming possible substitutions due to levels of scarcity or other factors, would be dynamically calculated, likely automatically in fact by the design system, to be most conducive to an optimized durability standard.
Adaptability, this means that the highest state of flexibility for replacing component parts is made. Has anyone seen this thing called phone blocks? Where there, yeah, brilliant. In the event a component part of this good becomes defective or out of date of any good, wherever possible the design facilitates that such components are easily replaced to maximize full product life-span.
Standardization of Genre Components. All new designs either conform to or replace, if they’re updated, existing components which are either already in existence or outdated due to a comparative lack of efficiency. Many don't know this but a man named Eli Whitney, in 1801, was the first to really apply standardization in production. He made muskets and back then they were handmade and they were un-interchange. So the musket parts, if anything broke, you take apart from something else. He was the first to make the tools to do this and he basically started the entire process of standardization and the U.S. military was now able to buy high things of muskets and interchange them in much more sustainable [way] even though we were killing people. Which is interesting for the military, because if you think about it, the military is one of the most efficient systems on the planet, because it’s absent the market economy. If you really want to look towards where industrial efficiency was born, as much as I dislike it, the military is where it becomes, where it’s been harnessed the most.
So, anyway, this logic not only applies to a given product, it’s applied to the entire good genre, standardization.
And by the way this efficiency will never happen in a market economy with its basis in competition - as proprietary technology removes all such collaborative efficiency. No one wants that, no one wants to share everything like that. Otherwise, people wouldn’t have a need to go back to their company of the root company and buy the part, they would go somewhere else where they have access to it and other means.
Recycling Conduciveness, as noted before, this means every design must conform to the current state of regenerative possibility. The breakdown of any good must be anticipated and allowed for in the most optimized way, and
Made Conducive for Labor Automation – this means that the current state of optimized, automated production is directly taken into account, seeking to refine the design that’s submitted to be most conducive to the current state of production with the least amount of human labor or monitoring.
Again, we seek to simplify the way materials and production means are used so that the maximum number of goods can be produced with the least variation of materials and production equipment. It’s a very important point. And these five factors are what we could call, in total, the Optimized Design Efficiency function, if you want to be technical. Keep this in mind as I am going to return to it in a moment.[2]

The industrial complex

Moving on to the The Industrial Complex, the layout.
This means the network of facilities which are directly connected to the design & database system I’ve just described.
Servers, production, distribution, recycling is basically it - also we’d need to relate the current state of resources, critically important, as per the Global Resource Management Network, another tier, which I’m going to also describe in a moment.
Production, this means of course actual manufacturing, would evolve, as expressed before, as automated factories which are increasingly able to produce more with less material inputs and less machines, ephemeralization. And if we are to consciously design out unnecessary levels of complexity, we can further this efficiency trend greatly with an ever lower environmental impact and resource use while maximizing our, again, abundance producing potential.
The number of production facilities, whether homogeneous or heterogeneous, as they would be called, would be strategically distributed topographically based around population statistics, very simple stuff– no different than how grocery stores today where they try to average distances as best they can between pockets of people and neighborhoods. You could call this the “Proximity Strategy”, which I’ll mention again in a moment. Distribution can either be directly from the production facility, as in the case of an on-demand, custom, one off production or it can be sent to a distribution library for public access in mass, based on demand interest in that region.The library system is where goods can be attained.
Some goods can be conducive to low demand, custom production and some will not be. Food is the easy example of a mass production necessity... while a personally tailored piece of furniture would come directly from the manufacturing facility once created.
I suspect, again, this on-demand process which will likely become equally as utilized as mass production will be an enormous advantage. As noted, on- demand production is more efficient since the resources are going be utilized for the exact use demand as opposed to the block things that we do today.
In the context of the distribution library, inventory is assessed in a dynamic, direct feedback link, of course, between production/distribution and demand.
If that doesn't make sense to you, again – all you have to think about is how inventory accounting and tracking in any major commercial distribution center today, with, of course a few adjustments made in this model. We’re already doing this type of stuff already.
And regardless of where the good is classified to go, whether it’s custom or not – libraries or to the direct user – this is still an 'access system'. In other words, at anytime, the user of the custom good can return the item for reprocessing, just as a person who obtained something from the library can as well.
Since, as noted, the good has been pre-optimized, all goods have been pre-optimized for conducive recycling, odds are the recycling facility is actually built directly into the production facility or the genre production facility depending on how many facilities you need to create the variety of demand.
So again – there’s no “trash” here. Whether it’s a phone, a couch, a computer, a jacket, a book – everything goes back to where it came from for direct reprocessing. Ideally this is a zero waste economy.

Resource Management, Feedback & Value

The Computer-aided and engineering design process obviously does not exist in a vacuum, processing demands input from the natural resources that we have.
So, connected to this design process, literally built into the [Optimize Design Efficiency] function noted prior, is dynamic feedback from an earth-wide accounting system which gives data about all relevant resources which pertain to all productions.
Today, most major industries keep periodic data of their genre materials as far as how much they have but clearly it’s difficult to ascertain due to the nature of corporate secrets and the like. But it’s still done. Regardless, to whatever degree technically possible this is, all resources are tracked and monitored, in as close to real time ideally as possible. Why? Mainly because we need to maintain equilibrium with the earth's regenerative processes at all times, while also, as noted before, work to strategically maximize our use of the most abundant materials, while minimize anything with emerging scarcity.


As far as Value, the two dominant measures, which will undergo constant dynamic recalculation through feedback as industry unfolds, is “scarcity” and “labor complexity.”
Scarcity Value without a market system could be assigned, a numerical value. Say from 1 to 100. One would denote the most severe scarcity with respect to the current rate of use - and 100 the least severe. Fifty would mark the steady-state dividing line.
For example, if the use of wood lumber passes below the steady state level of 50 - which would mean consumption is currently surpassing the earth's natural regeneration rate - this would trigger a counter move of some kind - such as the process of 'material substitution' –hence the replacement for wood in any given future productions, finding alternatives.
And, of course, if you are free market mindset listening to this, you are likely going to object at this point by saying “without price- how can you compare value of one material to another or many materials?”
Simple - you organize genres or groups of similar use materials and quantify, as best you can, their related properties and degree of efficiency for a given purpose, and then you apply a general numerical value spectrum to those relationships as well.
For example, there are a spectrum of metals which have different efficiencies for electrical conductivity. These efficiencies can be quantified. And if they can be quantified, they can be compared. So if copper goes below the 50 median value regarding it’s scarcity, calculations are triggered by the management program to compare the state of other conducive materials in it’s database, compare their scarcity level and their efficiency – preparing for substitution and that kind-of information goes right back to the designer.
And naturally, this type of reasoning might, indeed, get extremely complicated as, again, these are numerous resources and numerous efficiencies and purposes. Which is exactly why it is calculated by machine, not people... and it’s also why it blows the price system out of the water, when it comes to true resource awareness and intelligent management.
"Labor complexity”. This simply means estimating the complexity of a given production. Complexity, in the context of an automated oriented industry can be quantified by defining and comparing the number of “process stages,” if you will. Any given good production can be foreshadowed as to how many of these “stages”of production processing it will take. It can then be compared to other good productions, ideally in the same genre, for a quantifiable assessment. The units of measurement are the stages, in other words. For example, a chair that can be molded in 3 minutes, from simple polymers in one process will have a lower ‘labor complexity’ value than a chair which requires automated assembly down a more tedious production chain with mixed materials.
In the event a given process value is too complex or inefficient in terms of what is currently possible or too inefficient by comparison to an already existing design of a similar nature as well, the design, along with other parameters, would be flagged and hence need to be reevaluated.
Again, all of this from feedback in the Design interface... and there is no reason not to assume that with ongoing advancement in AI, artificial intelligence, [the system] wouldn’t be able to feedback not only the highlight of the problem but it would also create suggestions or substitutions for you to understand in the interface.


Okay. So let put some of this reasoning together and I hope everyone can bear with me. If we were to look at good design in the broadest possible way with respect to industrial unfolding, we would end up with about four functions or processes - each relating to the 4 dominant, linear stages of design, production, distribution, and recycling. The following propositions should be obvious enough as a rule structure. All Product Designs must adapt to [Optimized Design Efficiency]. They must all adapt to [Optimized Production Efficiency]. And they must adapt to [Optimized Distribution Efficiency]. And they must adapt to [Optimized Recycling Efficiency]. Seems redundant but this we have to think about it.
Here is a linear block schematic, as shown before and the symbolic logic representation, which embodies the subprocesses or functions I’m now going to very generally break down.

Process 1

Process 1 , the design [Optimize Design Efficiency] A ‘Product Design' must meet or adapt to criteria set by what we will call [Current Efficiency Standards].
This efficiency process has five evaluative subprocesses, as noted before earlier in the presentation:
  1. Durability
  2. Adaptability
  3. Standardization
  4. Recycling Conduciveness
  5. maximize automation conduciveness
Further breakdown of these variables and logical associations can be figuratively made as well... of course... which I don’t think is conducive to this type of presentation because we’re going to get lost in every reductionist minutia, but for more detail this stuff will be developed much more and be put into this text which I just describe and will be available for free. I’m going to try to do my best to give the general efficiency process here.
So, in the end, when it comes to this design efficiency process set - we end up with this design function, at the top. And I’ll list, just to see it, I’ll list all of the functions meanings at the end.
We move on to Process two- Production Efficiency.

Process 2

In short, this is the digital filter that moves design to one of two production facility types, one for high demand or mass goods and one for low demand for custom goods.
The first uses Fixed automation - meaning unvaried production ideal for high demand; and the 2nd flexible automation which can do a variety of things but usually in shorter runs. This is a distinction that’s commonly made in traditional manufacturing terms.
This structure assumes only two type of facilities of course. Obviously there could be more based on the production factors, but if the design rules in the process are respected, as expressed before, there shouldn’t be much variety. And over time things get simpler and simpler.
So to state this, I’m just going to run through it for those that like to hear things spelled out like this: -All 'Product Designs' are filtered by a [Demand Class Determination] process - D. The [Demand Class
Determination] process filters based on the standards set for:
  • [Low Demand] or
  • [High Demand]
All [Low Consumer Demand] 'Product Designs' are to be manufactured by the [Flexible Automation] process. All [High Consumer Demand] 'Product Designs' are to be manufactured by the [Fixed Automation] process.
Also, Both the manufacturing of [Low Consumer Demand] & [High Consumer Demand] 'Product Designs' will be regionally allocated as per the [Proximity Strategy] of the manufacturing facility. This simply means you keep things as close to you as possible, as close to the average of any given demand as far as what type of facility you’re using. And this will change over time as populations change, so you keep updating.

Process 3

Once process 2 is finished, the 'Product Design' is now a ‘Product' and it moves towards [Optimize Distribution Efficiency] in short, all 'Products' are allocated based on the ‘prior’ [Demand Class Determination] as noted before.
So, [Low Consumer Demand] products follow a [Direct Distribution] process. [High Consumer Demand]s follow the [Mass Distribution] process - which would likely be the libraries in that case.
Both of course [Low Consumer Demand] & [High Consumer Demand] 'Products' will be regionally allocated per the [Proximity Strategy], as before.

Process 4

And Process 4, very simple . The 'Product" undergoes its life space. Ideally it’s been updated and adapted, ideally it’s been used to the highest degree and made as advanced as it could within its life cycle. And once it’s done and becomes "Void” it moves to process #4 which is simply [Optimized Recycling Efficiency]. All voided products will follow a regenerative protocol which is a subprocess that clearly I’m not going to go into because it’s deeply complicated and is the role of engineers to develop over time. And this is just a simple macro representation, again, these sub variable or sub processes go on quite a large degree.
So, keeping all this in mind, again a lot of this will be in the text, and hopefully others I think can see this stuff better that are fluent with this type of thinking, hone in and perfect these equations and relationships. What I’ve tried to do here is to give a broad sense of how this type of thing unfolds.


As a concluding statement more or less, the way this extrapolation of sustainability, it’s really quite a simple logical thing. You don’t have to be a rocket scientist to see how things work on this level. So creating a real program that can factor in - what are hundreds if not thousands of subprocess in algorithmic form, as they pertain to such an economic complex, is indeed a massive project in and of itself, but more of a tedious project. You don’t need to be a genus to figure this stuff out. And I think this is an excellent think-tank program for anyone out there that’s interested in projects. I have number of little projects that I’m trying to get going when I have time and one is simply called The Global Redesign Institute, which is a macroeconomic approach to design the entire surface of the planet basically and then this other programming concept where you create an open source platform where people can begin to engineer this very program that I’m describing.
And that’s it. I was going to make a conclusion section to this talk... but it was already way too long. So, I just hope this gives a deeper understanding of the model and how it could work and thank you for listening.
  1. Video via YouTube
  2. See 1:30:55 in the original full lecture

Link Listing of Relevant Resource Based Economic (RBE) Subjects from the P2P Foundation.


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Internal announcement

Dear P2P Research List Members,
I want to invite you to check the first version of
If you are native English speaker and want to help the project, please correct the text.
I want to
  • speak about the Project with you all, on this list,
  • embed your suggestions on the list into the wiki (if you won't do it yourselves:),
  • later on, invite other organizations to the discussion, and
  • officially initiate the Project by the parallel announcement on the blogs of the initiating organizations.
My main questions to you are:
1. Do you like the Vision of the Project, i.e., its
2. Are the subprojects necessary and together sufficient modules for the Project?
3. On what conditions should the P2PFoundation (as a distinct entity) join the Project publicly (on the blog) as its initiator
4. Later on, who could help us with his/her connections to some representatives of this set of organizations
Thank you:


  • Work in progress: please feel free to edit
  • Please help to correct the grammar in this wiki page: thank you:)


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We need a Project logo which expresses our Core Ideology: could you help us?




  • [initiators]

Potential Members

Core Ideology: Values

A small set of timeless guiding principles, core values require no external justification; they have intrinsic value and importance to those inside the organization. [...]
People involved in articulating the core values need to answer several questions:
* What core values do you personally bring to your work? (These should be so fundamental that you would hold them regardless of whether or not they were rewarded.)
* What would you tell your children are the core values that you hold at work and that you hope they will hold when they become working adults?
* If you awoke tomorrow morning with enough money to retire for the rest of your life, would you continue to live those core values?
* Can you envision them being as valid for you 100 years from now as they are today?
* Would you want to hold those core values, even if at some point one or more of them became a competitive disadvantage?
* If you were to start a new organization tomorrow in a different line of work, what core values would you build into the new organization regardless of its industry?
The last three questions are particularly important because they make the crucial distinction between enduring core values that should not change and practices and strategies that should be changing all the time." [Collins-Porras,1996]
Values are in preference order (i.e., first come, first served:).

Value I: Responsibility

We should make sure of ourselves that the free tax concept and project work seamlessly.
We should not force them: if we are not able to prove
1. their practical feasibility and
2. their theoretical
  • consistence and
  • coherence and
  • rightness (morality) and
3. whether it worth the risk to modify the world order:) based on them, judged by their consequences,
then we should give up our efforts to disseminate them.
Of course we should improve the free tax concept and project and the modified world order in order to work together seamlessly, as long as they do not prove to be intrinsically flawed.
Of course we should not abandon our project if it is not flawed but it hurts vested interests (of states).

Value II: Freedom

We think that our present world order is based on partitions and equivalence: partition and equivalence
  • of humans (human bodies),
  • of states (state territories), (cf. this outline) and
  • of tangible goods (i.e., properties).
We think that partitions and equivalence are the robust base for the present world order, and we are responsible for the (for an) order.
At the same time, we think that
As first approach (before the provable ethical conception of sustainable creativity in case of intangibles), and as a default concept, free tax
  • means libre tax and, at the same time, optionally gratis tax (cf. Wikipedia: Gratis versus Libre, The Free Software Definition and The Open Source Definition),
    • but does not mean that it should be gratis and should exclude the opportunity to express the responsibility towards the political units their citizens feel allegiance to.
  • means free choice of the destination of the tax of intangible goods, depending on political allegiance of producers of these goods (by the option of setting the default tax destinations) and/or of customers of these goods (by the option changing the default destinations),
    • but does not mean that you can not pay tax of intangible goods to a territorial state (e.g. if a producer and/or a consumer feel political allegiance primarily to it).
  • means free from monopolization (e.g. by the states), i.e. the tax market of intangibles should be contestable, i.e. free for competition
    • and does not mean either that this tax market should be freely monopolizable (e.g. by the states),
    • or that some hypothetical (e.g. a super-state) authority should enforce tax competition, i.e that this tax market should be competitive,
  • means independent tax (e.g. free from dependence of states),
    • but does not mean that taxation of intangibles should not practice public cooperation e.g. with states in order to maintain free choice.

Value III: Respect

Respect means, first of all, respect for partitions and equivalence, cf. above:

Value III.I: Respect for individuals

Value III.II: Respect for states

Value III.III: Respect for properties

Value IV: Commonality

The Project is defined as the Greatest Common Divisor among
specifically, the initiating organizations as an informed reference group, within
Constraint: the predetermination of the desirable scope of the state is certainly not included in the Greatest Common Divisor. The contestable tax market of intangibles (i.e., the consequence of the desirable scope of the taxation by the state) should shape the environment for the states and they will proactively/reactively adapt themselves to this environment.

Value V: [...]

[Do we need any other values? This needs to be cleared by the Members of the Project.]

Core Ideology: Purpose

Free Tax Project - Choose Your Tax on Bits
[Free Tax Project - Free Your Tax from States ???]
[Free Tax Project - To Caesar the Things that are Caesar's / To Yourselves the Bits that are Yours ???]
[E.g. like "Nokia - Connecting People"; this needs to be cleared by the Members of the Project.]

Envisioned Future: Big Hairy Audacious Goal

The Free Tax Project is a project with a beginning and an end. What is the end = SMART BHAGoal of the Project?
1% of world GDP collected as free tax. [???]
[This needs to be cleared by the Members of the Project.]

Envisioned Future: Vivid descriptions

Based on Built to Last.
How will the world look like after the BHAG has been reached?
[This needs to be cleared by the Members of the Project.]


The Strategy is
  • the way
  • of the Members of all time
  • from here and now
  • deliberately
  • to the Envisioned future (BHAG and Vivid descriptions)
  • based on the Core ideology (Purpose and Values) as
    • guiding principles and
    • constraints.
Here and now:
The pulls of conflicting loyalties are not new. Country, church, corporation and family have always competed with one another, coexisting easily at times and uneasily at others. The issue, however, is not the conflict between overlapping loyalties in general, but between overlapping political loyalties. [...] The problems with self-determination, the rise of supranational authorities and modern, often electronically based, transnational relations all loosen the ties to geography and again increase the probability of multiple and conflicting political loyalties. [Kobrin,1998:20]
Currently the word ‘neo-medievalism’ is generally used in two ways. Focusing on how states have lost control over their domestic affairs, one details the rise of non-states actors, transnational networks, and international institutions. However, increasing interdependence and reduction in domestic capacities does not necessarily reduce sovereignty in the absence of new organising principles competing with the state. The European Union (EU) may represent an alternative view of neo-medievalism. [...] While the EU is already more than the sum of its states, states are not disappearing. While sovereignty may be diminished, authority structures are not in open competition, as would be the case if authority were truly overlapping. Because of this strong institutionalisation, the EU is far from the chaos and competition implied by neo-medievalism. Furthermore, neither of these models generates real issues of multiple loyalty. [Deets,2006:19]
Our strategy is based on the Values, but not independent from the following presumption:
The anticipated growth of new communications technologies, including the Internet and other digital networks, will make it increasingly difficult for states to tax global commerce effectively. Greater harmonization and coordination of national tax policies will likely be required in the coming years in order to address this problem. Given that the history of the state is inseparable from the history of taxation, this ‘‘globalization of taxation’’ could have far-reaching political implications. The modern state itself emerged out of a fiscal crisis of medieval European feudalism, which by the 14th and 15th centuries was increasingly incapable of raising sufficient revenues to support the mounting expenses of warfare. If new developments in the technology of commerce are now undermining the efficiency of the state as an autonomous taxing entity, fiscal pressures may produce a similar shift in de facto political authority away from the state and toward whatever international mechanisms are created to expedite the taxation of these new forms of commerce. [Paris,2003: 153]




The subprojects should be defined as the necessary and together sufficient open system modules for the project. [Are the Subprojects below necessary and together sufficient for our Project?]

Sustainable Creativity

An ethical basis for free tax in the form of a firm conception of sustainable creativity in case of intangibles.


Independent Communication and Participation

Infrastructure for secure communication and political participation (e.g. in spending our taxes) independent of states (through a process which is not necessarily democratic, but necessarily based on a constitution).


Independent Money and Tax

The option to exchange bits and pay our tax on bits to the political units to which we owe our political allegiance (i.e., independent of, but not excluding, the states), cf.
  • default rate > 0
  • option out (i.e., e-cash)
The extreme 0% tax rate still does not mean gratis transaction: the costs of transaction and tax rates are not the same concepts.



  • Defending the option of producers and consumers of intangibles to avoid double taxation by states.
    • default: no double taxation
    • option out (i.e., pay taxes on bits to states as well)
  • Ensuring that our tax is free from cartels, cf. Barnett,2006:
1. Focus prosecutors on “hard core” cartel activity
2. Treat cartels as serious crimes, and cartel members as criminals
3. Provide amnesty and amnesty plus
4. Vigorously prosecute obstruction of justice
5. Charge cartels in conjunction with other offenses
6. Provide transparency
7. Publicize enforcement efforts


Customary Law

Laws revealed by our customs of our communities on the internet.
Customary law does not mean that we should avoid prescriptive laws or constitutions: it just means that we should review and appreciate the experiences we acquired through our cooperation of different kinds on the internet.


Citizen Experience

To offer average users a kind of user experience as Apple provides, and to advanced users as open as Linux provides and as formal as machine readable ontologies; for all above.


Public Transparency

Deliver push and pull information to the public on
  • the strategy and tactics of the tax cartel of the states and our evaluation,
  • the project.