All Work is Created Equal
marc fawzi
Trying to get started on a $$ project but the P2P Economy keeps pulling me back in ! :-(
I was encouraged by certain folks, especially Chris Watkins, to produce an easy-to-read plain English version of the P2P Energy Model, for end users rather than developers.
In the process, a lot of clarity was gained and very powerful themes started to emerge.
These powerful themes are almost entirely backed up by the model's logic, which has now been further clarified for those who are technically inclined.
Anyways, the populous themes that have emerged are:
All Work Is Created Equal
Technically speaking, in the P2P Energy Economy, tokens of the currency (i.e. money) are created in proportion to the increase in the amount of electric energy flow from nodes with energy surplus to nodes with energy deficit, including households, charging stations, electric vehicle grid, and neighboring communities, which is then converted by those nodes into new work energy, which gives the tokens a real and absolute work value (in joules) in spent energy, which enables its use in trading the goods and services defined under this economy, at the cost of energy it takes to produce and deliver them.
To restate this in plain English, it suffice it to say that in the P2P Energy Economy all work is equal because all work is measured using the same unit of energy, i.e. the Joule, so a dentist's work is not any more valuable than a teacher's work, while still allowing those who work harder get more back. In other words, it values all work equally while allowing people to work as hard as they please and get compensated based on the absolute value of their work energy not the subjective value of their work.
The conditions of sustainable abundance, given below, must be met for all goods and services to be traded under this model. These conditions, when combined with the currency defined under this model, enable a complete departure from today's scarcity enforcing economic model by allowing everyone who wishes to get a given good or service to do so at the absolute work value of the energy it takes to produce and deliver that good or service.
- 1. On-demand production (which permits predictive inventory management so producers don't have to over produce, which causes waste and inefficiency and is therefore unsustainable, or under produce which causes shortages and high prices, which is also unsustainable)
- 2. Decentralized production (which assures there's no dependence on a few suppliers)
- 3. Renewable production (which assures there's no dependence on scarce resources)
- 4. Scalable production (which assures that volume is not limited by the production process)
- 5. Open source production and "share alike" licensing (which assures that the good or service can be produced by anyone, while enforcing social and moral rights of the originator, not their right to a monopoly.)
When the above conditions are met, for any given good or service, that good or service should be available to everyone who wishes to have at the cost of energy it takes to produce and deliver it.
So if health care (as a service) was to meet the above conditions then a visit to the dentist should not cost more than what it takes in energy to render that service.
Things Cost Less Over Time
Given continuous technological progress, work done today should take less energy to do in the future.
While that's true for the current economy, the P2P Energy Economy channels the profit motive (or greed) into achieving higher and higher efficiencies in the use of energy (in producing and delivering products and services) so given the currency does not lose its work value in energy more and more can be purchased with less and less currency.
Good Things Come to Those Who Care
In today's economy socially, environmentally and ecologically conscious producers of goods and services are beginning to see increased sales, but only in very limited niches and local markets.
In the P2P Energy Economy consumers identify, as part of each purchase of goods or services, the required attributes (for the given good or service) as well as their social, environmental and ecological values, which allows them to find producers (of the given good or service) who support their values. This means that money flows more in sync with society's values.
The More You Share, The More You Have
In the P2P Energy Economy, in order for producers to grow their revenue they have to share it with others.
The way it works is by rewarding producers who lend money to others (with no interest) with bigger access to the market, such that the more they lend the bigger their to the market.
Increased Autonomy Through Increased Inter-Dependence
In the current economy, reliance on one or few major players in each given market has created an unsustainable system. When the top 2 or 3 investment banks in each country failed the entire global financial industry collapsed, which has caused the global economy to falter (search: global economic meltdown 2008.)
In the P2P Energy Economy, increased autonomy is achieved by putting power with the whole rather than with one or few major players.
The current economic meltdown (search: global economic meltdown 2008) is a proof that we have reached or are reaching the limits of sustainability for the current economic paradigm, and that 'peer production' (the production of energy, goods and services by individuals as opposed to utilities and factories,) will make the system dependent on the people as a whole, instead of on one or few major players, which, as we can see, based on the current paradigm, makes the people dependent on the system and renders them helpless in times of instability, thus perpetuating and even deepening their dependence on the system.
The key concept behind the P2P Energy Economy is that it replaces increased dependence by the people on the system (i.e. on the major players) with increased inter-dependence between equally empowered peers, which puts the power with the whole and allows both the individual and the system to enjoy true autonomy.
Monopolies are eliminated in the P2P Energy Economy due to the following conditions:
- 1. All goods and services meet the following criteria for sustainable abundance:
- a. On-demand production (which permits predictive inventory management so producers don't have to over produce, which causes waste and inefficiency and is therefore unsustainable, or under produce which causes shortages and high prices, which is also unsustainable)
- b. Decentralized production (which assures there's no dependence on a few suppliers)
- c. Renewable production (which assures there's no dependence on scarce resources)
- d. Scalable production (which assures that volume is not limited by the production process)
- e. Open source production and "share alike" licensing (which assures that the good or service can be produced by anyone, while enforcing social and moral rights of the originator, not their right to a monopoly.)
- 2. Consumers are automatically and anonymously matched to producers based on the required attributes for the given good or service and the affinity between the consumer's and the producer's social, ecological and environmental values.
The rest of the model, including the beginning sections of the User Manual, can be found at: http://p2pfoundation.net/P2P_Energy_Economy
All the best,
Marc
p.s. Michel, would love to blog this on P2Pf once James gives me access.
Stan Rhodes
is "sustainable," or doesn't pollute the environment, or doesn't
create some other sort of negative externality?
In other words, how does the system deal with intentional or
unintentional cheating?
You say below that I can find producers that share my values. How do
I know that producers who _tell_ the system they have particular
values and practices _actually do_ have those values and practices?
-- Stan
marc fawzi
Thank you for asking these questions.
What regulatory mechanism ensures that the generation of electricity
is "sustainable," or doesn't pollute the environment, or doesn't
create some other sort of negative externality?
Re: "polluting"
From "Model's Context" section
"It's expected that the community mandates certain criteria, e.g. solar, wind, renewable sources, with local storage, and a scalable decentralized electric grid."
Re: sustainability
From "P2P Energy Management"
"Sustainable abundance in energy can only come from having many equally empowered peers producing electricity not from one or few major suppliers.
Sustainable abundance in energy also requires close matching of demand and supply at the work value of energy (not at the so-called "equilibrium price," which artificially limits demand to meet circumstantially limited supply, and not at a price above this so-called equilibrium price, where supply is artificially limited, but at the actual work value of energy in joules which are exchangeable at 1:1 ratio with the "joule token" currency used here.) This implies that anyone who wishes to get any amount of energy can do so at the actual work value of that energy in joule tokens.
Below is a simple predictive algorithm for matching demand and supply:
- 1. P2P Bank takes historical inventory utilization data (during the start-up period) and calculate a Gaussian distribution with a Mean and Covariance and provide an inventory level prediction at a set time in the future.
- 2. P2P Bank compares the inventory level prediction to a first P2P Bank-set low inventory threshold.
- 3. P2P Bank compares the inventory level prediction to a second P2P Bank-set high inventory threshold.
- 4. P2P Bank requests energy replenishment from peers if the predicted level is below the low inventory threshold, or cancel existing requests if the predicted level is above the high inventory threshold. P2P Bank manages the response to its replenishment request by accepting a given quantity of energy from each peer, on first come first taken basis, based on a supplier scheduling algorithm that takes into account multiple factors such as: peer reliability (historical ability to fulfill replenishment request) and other factors (TBD) in diversity maximizing way to avoid creating unsustainable dependence on certain peers or certain categories of peers. Note that, as a result of this many-to-many mapping process, the producers and consumers are never known to each other, which adds to the security of the system without sacrificing transparency since all the demand/supply data related to energy is available to all.
- 5. P2P Bank records time dependent data related to inventory consumption and replenishment.
- 6. P2P Bank calculates time dependent cumulative-forecast consumption, cumulative-forecast replenishment, cumulative actual consumption, and cumulative actual replenishment.
- 7. P2P Bank uses the new data to update the Gaussian distribution, Mean and Covariance, and calculate a new predicted inventory level for the next time period.
It's important to note that the P2P Bank inventory is virtually centralized (as an algorithm) and physically decentralized."
<<
In other words, how does the system deal with intentional or
unintentional cheating?
From "P2P Energy Management" section:
"4. P2P Bank requests energy replenishment from peers if the predicted level is below the low inventory threshold, or cancel existing requests if the predicted level is above the high inventory threshold. P2P Bank manages the response to its replenishment request by accepting a given quantity of energy from each peer, on first come first taken basis, based on a supplier scheduling algorithm that takes into account multiple factors such as: peer reliability (historical ability to fulfill replenishment request) and other factors (TBD) in diversity maximizing way to avoid creating unsustainable dependence on certain peers or certain categories of peers. Note that, as a result of this many-to-many mapping process, the producers and consumers are never known to each other, which adds to the security of the system without sacrificing transparency since all the demand/supply data related to energy is available to all. "
<<
You say below that I can find producers that share my values. How do
I know that producers who _tell_ the system they have particular
values and practices _actually do_ have those values and practices?
From "Affinity Matrix for P2P Trading" section
"The Affinity Matrix requires that existence of standards for transparency (on the part of producers) that are followed by all producers. For example, all packaged foods sold in the US must carry a label indicating all ingredients. Organic producers have a certifying organization that certifies their farming processes, and so on. The more such standards exist and the more they're followed (e.g. by law) then more realistic this idea becomes. "
~~
One thing I know I missed is the part where you say "create a negative externality" .. unless you mean "depends on negative externality" in which case the answer would be that the community must dictate the criteria for energy production in its set of rules and that's an administrative issue related to implementation.
Marc
Christian Siefkes
> To restate this in plain English, it suffice it to say that in the P2P
> Energy Economy all work is equal because all work is measured using the same
> unit of energy, i.e. the Joule, so a dentist's work is not any more valuable
> than a teacher's work, while still allowing those who work harder get more
> back. In other words, it values all work equally while allowing people to
> work as hard as they please and get compensated based on the absolute value
> of their work energy not the subjective value of their work.
Hm, measuring (human) work in joule is a bit like measuring energy in meters
or feet, isn't it?
Best regards
Christian
--
|-------- Dr. Christian Siefkes --------- chri...@siefkes.net ---------
| Homepage: http://www.siefkes.net/ | Blog: http://www.keimform.de/
| Better Bayesian Analysis: | Peer Production Everywhere:
| http://bart-project.com/ | http://peerconomy.org/wiki/
|------------------------------------------ OpenPGP Key ID: 0x346452D8 --
There was only one guy in the whole Bible Jesus ever personally promised
a place with him in Paradise. Not Peter, not Paul, not any of those guys.
He was a convicted thief, being executed.
-- Neil Gaiman, American Gods
marc fawzi
So I think I might change it to say that and it still would say exactly the same thing except in a language that doesn't bother people who feel that human work energy for a dentist is more valuable than human work energy for a carpenter, when measured by the same stick.
marc fawzi
Here you go:
All Work Is Created Equal
Technically speaking, in the P2P Energy Economy, tokens of the currency (i.e. money) are created in proportion to the increase in the amount of electric energy flow from nodes with energy surplus to nodes with energy deficit, including households, charging stations, electric vehicle grid, and neighboring communities, which is then converted by those nodes into new work energy, which gives the tokens a real and absolute work value (in joules) in spent energy, which enables its use in trading the goods and services defined under this economy, at the cost of energy it takes to produce and deliver them.
To restate this in plain English, it suffice it to say that in the P2P Energy Economy all work energy is equal because all work energy is measured using the same absolute-value unit, i.e. the Joule, so a dentist's work energy is not any more valuable than a teacher's work energy, while still allowing those who work harder (produce more work energy) to get more back. In other words, it values all work energy equally while allowing people to work as hard as they please and get compensated based on the absolute value of their work energy not the subjective value of their work.
The conditions of sustainable abundance, given below, must be met for all goods and services to be traded under this model. These conditions, when combined with the currency defined under this model, enable a complete departure from today's scarcity enforcing economic model by allowing everyone who wishes to get a given good or service to do so at the absolute work value of the energy it takes to produce and deliver that good or service.
- 1. On-demand production (which permits predictive inventory management so producers don't have to over produce, which causes waste and inefficiency and is therefore unsustainable, or under produce which causes shortages and high prices, which is also unsustainable)
- 2. Decentralized production (which assures there's no dependence on a few suppliers)
- 3. Renewable production (which assures there's no dependence on scarce resources)
- 4. Scalable production (which assures that volume is not limited by the production process)
- 5. Open source production and "share alike" licensing (which assures that the good or service can be produced by anyone, while enforcing social and moral rights of the originator, not their right to a monopoly.)
When the above conditions are met, for any given good or service, that good or service should be available to everyone who wishes to have at the cost of energy it takes to produce and deliver it.
So if health care (as a service) was to meet the above
conditions then a visit to the dentist should not cost more than what
it takes in energy to render that service.
~~
Measuring work energy in joules is like measuring distance in feet or meters....
How would you argue against all work energy being equal when it is?
marc fawzi
So if all it takes is electricity then why would it cost $100,000? It should cost more like $1000 including R&D cost spread over e.g. 5 years.
So why the 100X factor of profit above cost?
"All Work Energy Is Created Equal" is what the title should say to emphasize the absolute value of work energy vs the subjective value of the work
In a world of abundance, you don't need to pay for any good or service more than the cost of energy it takes to produce and deliver it
You can choose to pay nothing if you can count on giving and getting stuff for free which ultimately evolves to barter, which is less efficient form of trading than using a currency, so then we're back to using a currency and the currency proposed by the P2P Energy Economy model is one that allows work energy to be measured in absolute terms.
The full model is available at: http://p2pfoundation.net/P2P_Energy_Economy
Would love to discuss some more....
Marc
marc fawzi
Work Only If You Love Your Work
The result of trading in goods and services at the cost of
work energy it takes to produce and deliver them is that, unless one
manages to produce and deliver the good and service with less work
energy than other producers of the same good or service, producers will
get back the same amount of work energy in joule tokens as they put in. And since people can sell their own produced energy, goods or services for joule tokens at the work value of energy and at cost in work energy it takes to produce and deliver those goods and services, respectively, and use those joule tokens to get the goods and services they need at the cost in work energy for delivering those goods and services, they can go on living indefinitely without the need to generate 'profits.'
Therefore, the thirst for artificial motivation in the
form of profits (i.e. greed) is out of the picture, which means that people will only do the work (to produce and deliver a good or service)
if and only if they love the work.
It also means that, since no one has to work unless they love their work, no one will need -or have any incentive- to work for another person, which means that most people will be both consumers as well as producers of goods and services, or "prosumers."
~~More at: http://p2pfoundation.net/P2P_Energy_Economy
Samantha Atkins
> Here is the latest added section in the "Introduction to the User
> Manual" for P2P Energy Economy in case anyone is interested in the topic:
>
>
> Work Only If You Love Your Work
>
> The result of trading in goods and services at the cost of work energy
> it takes to produce and deliver them is that, unless one manages to
> produce and deliver the good and service with less work energy than
> other producers of the same good or service, producers will get back
> the same amount of work energy in joule tokens as they put in. And
> since people can sell their own produced energy, goods or services for
> joule tokens at the work value of energy and at cost in work energy it
> takes to produce and deliver those goods and services, respectively,
> and use those joule tokens to get the goods and services they need at
> the cost in work energy for delivering those goods and services, they
> can go on living indefinitely without the need to generate 'profits.'
>
Since I presumably had enough energy to produce the goods and I got back
only what I had to begin with exactly where was the additional work of
inventiveness, creativity, care, time etc repaid? If all the
non-energy portions are never compensated or judge to have any real
value then why would anyone expend those at all? Is it somehow ideal
to judge those very desirable values as worthless? I am not seeing it.
> Therefore, the thirst for artificial motivation in the form of profits
> (i.e. greed) is out of the picture, which means that people will only
> do the work (to produce and deliver a good or service) if and only if
> they love the work.
>
To profit is to create some value that produces a net gain of the amount
of value in the world and thus in the amount of value you can produce in
the future. Otherwise all economics is a zero sum gain and their is no
progress. I don't think you want to live there.
> It also means that, since no one has to work unless they love their
> work, no one will need -or have any incentive- to work for another
> person, which means that most people will be both consumers as well as
> producers of goods and services, or "prosumers."
>
In the world outlined very few would wish to produce anything since you
only allow them to produce at a net loss since all values input to the
process are not compensated.
- samantha
marc fawzi
The agile process is what it is, i.e.: raw, partially baked and frequent.
Within minutes after sending that I went in to clarify that the model does reward creativity and hard work (with had been stated clearly in existing section on Trading At Cost with Joule Tokens)
I went into further details of how the calculations would be carried out to account for all inputs.
Having said that, the biggest logical constraints for the model which may also be the greatest opportunity is that it ONLY holds true for very narrow category of goods and services, limited by the conditions for sustainable abundance that I've been able to identify. This makes the model a very niche model for now, until MORE goods and services meet those conditions. It is unlikely that ALL goods and services would ever meet all of the conditions. There is always something scarce in the world, be it a special massage service (example due to Chris) or some unique and closed invention or whatever thing that has a scarce quality that justifies paying over cost.
If you care to look at the updated descriptions below for "All Work Is Created Equal and "Work Only If You Love Your Work," you should see the model's logic w.r.t. rewarding creativity.
I plan to go through one example calculation (as part of the use case development) in end to end fashion showing the entire set of inputs (for a product that meets all of the conditions for sustainable abundance) and how they contribute to the cost in work energy.
For now, if you see any incompleteness in the argument itself please let me know.... Thanks
The updated model sections:
All Work Is Created Equal
If we do not flatten the value of work we will never flatten the hierarchy.
For a true peer-to-peer (P2P) economy to exist, there must not be a hierarchy.
Technically speaking, in the P2P Energy Economy, tokens of the currency (i.e. money) are created in proportion to the increase in the amount of electric energy flow from nodes with energy surplus to nodes with energy deficit, including households, charging stations, electric vehicle grid, and neighboring communities, which is then converted by those nodes into new work energy, which gives the tokens a real and absolute work value (in joules) in spent energy, which enables its use in trading the goods and services defined under this economy, at the cost of energy it takes to produce and deliver them.
To restate this in plain English, it suffice it to say that in the P2P Energy Economy all work energy is equal because all work energy is measured using the same absolute-value unit, i.e. the Joule, so a dentist's work energy is not any more valuable than a teacher's work energy, while still allowing those who work harder (produce more work energy) to get more back. In other words, it values all work energy equally while allowing people to work as hard and smart as they are capable of and get compensated proportionately, with increased sales and/or increased profit through higher production efficiencies.
The conditions of sustainable abundance, given below, must be met for all goods and services to be traded under this model. These conditions, when combined with the currency defined under this model, enable a complete departure from today's scarcity enforcing economic model by allowing everyone who wishes to get a given good or service to do so at the absolute work value of the energy it takes to produce and deliver that good or service.
- 1. On-demand production (which permits predictive inventory management so producers don't have to over produce, which causes waste and inefficiency and is therefore unsustainable, or under produce which causes shortages and high prices, which is also unsustainable)
- 2. Decentralized production (which assures there's no dependence on a few suppliers)
- 3. Renewable production (which assures there's no dependence on scarce resources)
- 4. Scalable production (which assures that volume is not limited by the production process)
- 5. Open source production and "share alike" licensing (which assures that the good or service can be produced by anyone, while enforcing social and moral rights of the originator, not their right to a monopoly.)
- 6. Non-Scarce Production (this catch-all condition refers to the absence of any factors that would justify paying more than the cost of work energy it takes to produce and deliver the given good or service)
When the above conditions are met, for any given good or service, that good or service should be available to everyone who wishes to have at the cost of energy it takes to produce and deliver it.
So if health care (as a service) was to meet the above conditions then a visit to the dentist should not cost more than what it takes in energy to render that service.
The hard problem here is figuring out the energy costing models for the types of goods and services that fulfill the sustainable abundance criteria given above.
We can know how much it takes in energy (calories) per day to keep a 25 year old human being functioning, and we can estimate the other costs of living in terms of the work energy required to maintain living conditions. We can also know the energy use of various processes used in producing and delivering a given good or service. Assuming the given good or service meets the above-mentioned criteria for sustainable abundance, i.e. no dependence on scarcity economics, we can measure the energy it takes to produce and deliver that good or service, and, using historical sales data, we can adjust that eventually to be based on an average volume of production for that good or service (instead of raw estimate) and then calculate the median cost in energy it takes to produce and deliver that good or service, per each instance of that good or service.
Such calculation involves building realistic energy costing models (for the various goods and services that meet the sustainable abundance criteria,) and when it's automated it via cost estimation software (as part of the P2P trading application) it offers us the opportunity to understand the real cost of production to ourselves and the environment.
When it comes to rewarding those who work harder and smarter, the model fully supports that through two different paths:
1) Those who invest work energy in increasing the efficiency of their production processes get to have a profit margin (because their good or service costs less than the median cost in work energy to produce and make, so they get to keep the difference.)
2) Those who invest work energy in improving an existing good or service get to sell more of that good or service if they select the right improvements (but also get to lose if they select the wrong improvements, so this second path involves educated risk taking.)
The result of trading in goods and services at the cost of work energy it takes to produce and deliver them is that, unless one manages to produce and deliver the good and service with less work energy than other producers of the same good or service, producers will get back the same amount of work energy in joule tokens as they put in. And since people can sell their own produced energy, goods or services for joule tokens at the work value of energy and at cost in work energy it takes to produce and deliver those goods and services, respectively, and use those joule tokens to get the goods and services they need at the cost in work energy it takes to produce and deliver those goods and services, they can go on living indefinitely without the need to generate 'profits.'
Therefore, the thirst for artificial motivation in the form of profits (i.e. greed) is out of the picture, which means that people will only do the work (to produce and deliver a good or service) if and only if they love the work.
It also means that, since no one has to work unless they love their work, no one will need -or have any incentive- to work for another person, which means that most people will be both consumers as well as producers of goods and services, or "prosumers.