== Currency Based on CPU and Man Hours (for Digital Goods) ==
marc fawzi
Digitally produced goods and services exist in a world of their own
that can be thought of as separate from our physical world in that
it's almost infinitely more efficient.
For example, building a house in Second Life takes dramatically less
in work energy than building a house in the physical world and the gap
makes the difference between abundance now and abundance in 200 years.
A house built in the physical world using a high degree of automation,
e.g. with robots and open architectural plans can be sold at the cost
of work energy it takes to build it (assuming it's made from renewable
materials and its production process meets the conditions for
sustainable abundance) but when will we have such high physical
production efficiency?
There is a lot that needs to happen in terms of dramatically
increasing production efficiencies for physical goods _before_ we need
an economy to sustain and enhance the abundance.
When it comes to digitally produced goods and services, we can start
with an example of why a new kind of economy and currency is needed.
If I can get 10 "cpu hours" a day from my PC, i.e. 10 X (1 gigaflops
processor running for 1 hour, as assessed by the Linpack benchmark
Rmax), and if it costs me less than 0.2 "man hour" a day on average to
maintain my PC (general PC maintenance) then I have 10 cpu hours and
e.g. 7.8 man hours a day (based on an 8 hour work day) to produce some
digital goods (e.g. open source music, open CAD designs, open Second
Life models, or open software etc) and if I invest in faster and/or
more efficient PC I will have more CPU hours and/or more man hours to
make more digital goods.
So given that I'm limited in my resources it's not sustainable for me
to give away the digital goods I produce or exchange them in
expectation of a potential return (in other digital goods) that may or
may not happen or that may happen only partially with a net loss to
myself. If I don't get any return (in cpu hours or man hours or both)
I can not produce more digital goods, so my production will be limited
and that cannot lead to abundance.
I can sell both surplus cpu hours and surplus man hours I have in
return for cpu-hour tokens and man-hour tokens and I can also lend and
borrow both cpu-hour tokens and man-hour tokens. I can also invest
more man-hour tokens, i.e. hire someone with the tokens, or invest my
own man hours, and cpu-hour tokens, i.e. use someone else' machine (or
my own PC's cpu hours) to create more efficient production processes
for my digitally produced goods and services so that I get back more
than I put in when exchanging those digitally produced goods and
services for cpu hour tokens and man hour tokens. That's the only
profit that can be made and it drives the whole economy toward higher
and higher efficiency, i.e. otherwise, i get back roughly the same as
I put in in cpu hours and man hours.
~~
This model synopsis below is far less ambitious but far more effective
than the P2P Energy Economy that I've been working on. While it taught
me a lot as far as the principles of a sustainable economy, the P2P
Energy Economy, in attempting to apply itself to the physical world
outside of the computer, was aiming at a future when we have physical
abundance in essential resources.
For now, it seems that the only abundance we have is in computational
power and our own creative energy.
A lot of the ideas from the P2P Energy Economy are directly applicable
and will be reused but the model will become far less complex as it
changes trajectories from aiming to reinvent the world decades or
centuries ahead of the world naturally getting there (see prior
comment on the current "efficiency gap" between the digital world and
the physical world) to aiming at fixing the inequitable exchange model
for digitally produced goods and services.
One key difference between this model and the P2P Energy Economy
(besides the absence of smartgrid) is the existence of two currencies:
the cpu-hour token and the man-hour token. Like machine money and
human money.
Neither type of currency is meant to enable ownership. Both are meant
to enable production, not ownership.
So, I'll take the P2P Energy Model apart and compress it/remold it
into this new model that can be applied today to give us a sustainable
abundance economy in digitally produced goods and services.
Marc
marc fawzi
Abundance sustaining universal currency like the joule tokens can
exist (see P2P Energy Economy) but the Joule Token as a currency,
which is a universal currency for goods and services that meet the
conditions for sustainable abundance (i.e. universal in context of
abundance sustaining currencies) exist only as long as common everyday
goods and services meet the conditions of sustainable abundance, which
they don't at this time.
Today, the only "common everyday resources" that a meaningful economy
can be based on and that meet the conditions of sustainable abundance
is human energy (and more exactly creative energy is what we see an
abundance of) and machine-computational energy (which I believe
continue to double at the single node level every 18 months)
So then if nothing else meets the conditions of abundance why the
overhead of designing a universal abundance-sustaining currency? Why
not start from the special case and then generalize. If you want to
debate this last point, I suggest we debate mathematical induction.
So while mathematical induction as defined commonly (the weak case)
may be an over simplified analogy it is basically the same exactly
logical process.
Joule tokens, which is a case of trying to derive the
generalized/universal solution through direct axiomatic deduction was
leading down a path of increasing complexity. I figured the whole
approach to arriving at a universal abundance-sustaining currency
should be rethought and so I'm starting out now from the special case.
What "cpu hour" tokens and "man hour" tokens enable is the equitable
trading in human and machine work energy such that we can have a
sustainable abundance in digitally produced goods and services (like
open software, open CAD models, open Spice models, open Matlab models,
open music, etc, anything that is both open [since openness is part of
the conditions for sustaining abundance] and is produced by people on
a computer)
Today, most if not all popular open software is highly and critically
dependent on major corporate donors, which is not sustainable. Think
Firefox, Linux, KDE, Gnome, etc. All are funded by major corporations
directly or indirectly (e.g. by employing lead developers, funding
startup ventures involving those lead developers, or directly funding
them as Google has done with Firefox) This is not "sustainable" since
if the economy melts down (as it has but to worse degree) and those
corporations cease to exist then who will fund those projects that
each have hundreds of millions of users? The users of course, but only
a tiny portion of users fund those projects today. So then we need an
abundance sustaining p2p economy that allows the equitable exchange of
man hours and cpu hours between equally empowered peer producers to
enable true sustainable abundance.
>
> If I have $6 then I can exchange it for anything I may end up needing
> at the time I need it that those monetary units will be accepted for.
> That is my point. No "I spent CPU os I should be compensated in
> CPU". Flexible, universally acceptable currency (trading units) are
> essential.
Kevin Carson
> Today, the only "common everyday resources" that a meaningful economy
> can be based on and that meet the conditions of sustainable abundance
> is human energy (and more exactly creative energy is what we see an
> abundance of) and machine-computational energy (which I believe
> continue to double at the single node level every 18 months)
I don't understand why it's necessary to have any such backing for a
currency system. The accounting/warehouse receipt functions don't
require any backing: just a secure network and an accounting unit
that can't be counterfeited. I expect the producers in local
economies will be creative in working out barter arrangements through
LETS systems and the like, on an ad hoc "let a thousand flowers bloom"
basis, when the FRN suffers a catastrophic loss of value and the
official banking system collapses. And the free market mechanism will
result in inter-exchangability between such local systems for
long-distance trade, or for working out units of exchange for
networked production. As for pricing particular goods and services,
why not just let the producers set their own price in whatever
arbitrary unit is being used, and adjust it depending on how many
takers there are at a given price--IOW a market price system, but
absent the artificial scarcities currently built in for privileged
classes?
--
Kevin Carson
Mutualist Blog: Free Market Anti-Capitalism
http://mutualist.blogspot.com
Studies in Mutualist Political Economy
http://www.mutualist.org/id47.html
Anarchist Organization Theory Project
http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
marc fawzi
I think the question of "why do we need to back money with anything"
is very important question (although it's not applicable to the kind
of money creation I have developed) The question keeps popping up so I
need to address the response to all those on the relevant lists, so I
don't have to re-answer it on all lists.
I'm looking at the economy as a programmer working with a model made
up of several algorithms, running at various times, concurrently, for
each participant, and in this view of the economy complexity at the
level of the whole economy arises from a starting set of basic rules.
If I said "let there be money" and waved a magic wound and let the
resulting system run then I would have lost the ability to model the
system's behavior, deductively and would have the kind of system that
can only be modeled numerically, which isn't bad for the whole
economy, if the constraints on money creation assure long term
stability, but I couldn't then guarantee each given participant that
if they follow the rules of the game that they would do well. I have a
problem with that.
In other words, unless I link money creation to higher productivity, I
would not be able to predict deductively what an increase in money
supply would do, i.e. what is the money being linked to? In the case
of the joule tokens and the "cpu hour" and "man hour" tokens, money
(tokens) is created based on the increase (delta) in the flow of man
hours and cpu hours (two different tokens) from peers with surplus to
peers with deficit (which represents a definite future increase in
productivity as those surplus man and cpu hours are spent rather than
being idle), so this linkage allows me to deductively predict the
outcome of new money. I would not be able to deduce what new money
would do to productivity if it's not linked directly to it.
The money is not "backed" by energy (or in this new model human and
computer energy).. It's "linked" to productivity.
So the right word is "linked to" not "backed by."
Marc