The Rise of the Cooperative Economy, cont.
Guan-shi
What is money? Before you grab the dollar bill out of your pocket, think
about what you actually have. A dollar is a certificate that basically
represents a measure of confidence in the U.S. government. At one time (prior
to 1973), the United States kept a supply of gold that could (in theory) be
used to redeem a certain number of dollars -- the United States was said to be
on the Gold Standard. One of the prerogatives of government (one of the first
mentioned in the United States Constitution) is the ability to limit the
printing of money to only those agencies that it specifically designates. If
you don't have a license to print money, then not only is the money worthless
but it guarantees that the government will go after you with every
prosecutorial means at its disposal to make sure that no one else prints
money.
As the country has moved to an increasingly electronic medium, however, the
exact meaning of money has, like everything else the virtual world touches,
become increasingly fuzzy. Credit isn't money -- it is a promise to redeem a
purchase some time in the future, along with the payment of a percentage of
the purchase cost as interest (I'll come back to interest in a bit, as it has
some interesting consequences as well). Similarly, certain Internet
compensation schemes are not money. If you gamble on the Internet, you
basically purchase credit with existing money, that can be used as a stake in
whatever game is played. Likewise, credit card transactions on the Internet
still need to paid in cold, hard cash.
What about stock options? This gets into a little fuzzier area. A stock
option basically promises that you have the right to purchase stock based upon
the initial value of the stock at the time the stock option was granted. If
the stock goes up wildly, then so do the value of the options -- they are
essentially worth the difference between the current price and the purchase
price. You could in fact use the stocks to purchase the stocks, either
pocketing the difference in dollars or in the acquisition of more stocks. In
other words, the worth of an option is a measure of the confidence, or
reputation of the company that issues it. This is beginning to sound
suspiciously like a company is issuing money.
Back to Finland, and Linus Torvald in particular. When Torvald released
Linux, he did so under a formal agreement called Copyleft, in which the code
stayed in the public domain and couldn't be made into a proprietary system and
still be called Linux. Now, such Open Source concepts have been around
for years -- indeed, the programming community has until fairly recently
followed the paradigm that you help one another out with code to improve its
quality, and many of the major pieces of software in existence owe their
production to the open interchange of information about such code. (The open
source movement has been strongest on Unix systems, but even that's
changing).
However, Linux made the issue of open source code movement one that carried
beyond the fairly exclusive domain of computer programmers into the
mainstream. In a way, it served to highlight something that's beginning to
occur -- our notion of ownership and money is unravelling. Linux would have
been impossible without the distribution of the Internet, which itself would
not have evolved with two other open source technologies -- HTML and HTTP. As
Tim Berners Lee, the creator of both the HTML and HTTP standards, readily
admits, if either one of those standards had been proprietary, the World Wide
Web would not have happened. With them, data transfer has become more open,
more able to move from one system to another.
The Chinese have a concept called Guan-shi. My wife, who lived in Taiwan
for a couple of years, introduced the word to me and translated it roughly as
the English idiom "I'll scratch your back if you scratch mine". Ironically,
this is a term that carries a certain negative assumption in the United
States, because it hints at cronyism, back-room deals, and most importantly,
the lack of a formal exchange of money. Bartering, the immediate exchange of
goods without the transfer of cash, likewise has this stigma, because it
implies that the two principals in the transaction are making an arbitrary
exchange of items (or services) of value without having a legal entity
determine the values of this transaction.
Governments, the U.S. Government in particular, do not like bartering. The
reason for this is simple. A barter does not leave a paper trail, and hence is
more difficult to tax. A favor to pay a favor generates no visible revenue,
cannot be monitored, and moreover cannot be arbitrated. Lawyers similarly do
not like barter because the transaction is amorphous; there is no written
agreement on value and no contract, and as such cannot be litigated. Yet a
form of bartering is likely to become the dominant form of value transaction
in the twenty first century.
Guan-shi, however, is becoming a very visible part of the Internet, and in
the process is creating an entirely new system of wealth based upon a person's
reputation. Linux (and Linus Torvald) is a prime example of this. Torvald
released an operating system that wasn't dependent upon any specific company.
It could be modified, pieces could be added or improved by anyone with the
skill to do so. Those that made the system work better or gave new
functionality survived became Internet celebrities in their own right, and
could both control the development of that functionality and gain a certain
level of prestige that could translate into better job opportunities, speaking
engagements, book contracts, and so forth.
This same principle is beginning to filter into other areas of the
Internet. A number of expert sites have begun to coalesce, places where people
can provide advice effectively for free (monetarily) on subjects as diverse as
computer programming, Celtic languages, automotive repair, and family care.
Some of the advice is effectively worth every penny, but much of it is also
very sound and worth thousands of dollars to consultants or other experts.
Similarly, the amount of new fiction, essays, poetry, non-commercial music,
self-produced movies, computer code in every language and flavor and other
intellectual works coming out (again effectively for free) is beginning to
approach staggering proportions.
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