P2P Accounting for Planetary Survival

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* P2P Accounting for Planetary Survival: Towards a P2P Infrastructure for a Socially Just Circular Society. By Michel Bauwens and Alex Pazaitis. Foreword by Kate Raworth. P2P Foundation, June 2019.

URL = http://commonstransition.org/p2p-accounting-for-planetary-survival/ ; draft illustrations

How shared perma-circular supply chains, post-blockchain distributed ledgers, protocol cooperatives, and three new forms of post-capitalist accounting, could very well save the planet.


Summary by Alex Pazaitis:

"a) Chapter 1: Background of the study: A concise overview of the rationale underpinning this research project and a brief overview of the P2P Foundation work on the topic.

b) Chapter 2: Tools and technologies for integrated, fair, and sustainable ecosystems of production: A thorough presentation of the selected cases providing solutions for integrated ecosystems that take into account social and ecological externalities. Ten (10) out of sixteen (16) tools and technologies documented have been included in this chapter, comprising projects working on solutions for peer-to-peer organisation and mutual integration tools as well as tools that facilitate circulation and exchange. The rest of the tools, for reasons of balance between the different chapters have been included in Chapter 3, described below.

c) Chapter 3: Evolution of accounting: An overview of next-generation accounting cases, offering integrated solutions, frameworks and methodologies for biocapacity-informed planning and monitoring of impact and externalities. The chapter also provides a theoretical discussion on the history and evolution of accounting practices and places the documented cases in context. Finally, it offers a comprehensive overview of the function and interrelation of the current state- of-the-art on the technological development, with some tentative projections for future developments towards more sustainable forms of economic organisation.

In the Appendix another contribution has been provided by Bob Haugen, one of the key engineers in peer-to-peer accounting and network planning systems, with extensive experience from working with grassroots communities and entrepreneurial networks.

Finally, a short introduction has been provided by Kate Raworth, whose framework of the Doughnut is used as a basis for the discussion."

Chapter 1: The Background to this Study

  • The P2P Foundation’s study of the commons and the commons transition
  • Value in the Commons
  • The emerging crypto economy as a signpost for the cosmo-local transition
  • Our Vision

Chapter 2: Tools and technologies for integrated, fair, and sustainable ecosystems of production

  • Introduction

Tools for Mutual integration

  • Economic Space Agency (ECSA): an environment for inter-connected economic spaces and commons-based Distributed Programmable Organizations
  • Holochain: an alternative to a global distributed ledger, based on biomimicry
  • DAOstack: integrated mechanisms for large-scale governance

Tools for Circulation and exchange

  • FairCoin and FairCoop: tools for a cosmo-local, open cooperative ecosystem
  • Trustlines: mutual credit for common good
  • Circles: a decentralized basic income
  • Envienta: an integrated environment for open source manufacturing
  • FabChain: linking advanced research to urban metabolisms and mainstream production and manufacturing
  • Terra0: giving DAO agency to natural resources
  • Sustans: replacing Smart Contracts with Ostrom Contracts

Chapter 3: Evolution of Accounting

New Accounting and Planning Frameworks

  • Guerrilla Translation as an example of contributive accounting
  • Resources - Events - Agents (REA): an accounting system for networked cooperation and shared supply chains
  • Reporting 3.0 : direct access to a representation of matter and energy flows in interconnected supply chains
  • MusiASEM , accounting for material/energy flows and their limits

Accounting for Impact and Externalities

  • Regen Network: ‘ecological state protocols’ to verify advances in sustainability and regenerativity
  • The Common Good Accounting System: competing for positive impact

Multi-layer integration: how the new technologies fit together

  • Production for social needs within planetary boundaries



Foreword by Kate Raworth

"Eurostar: 10.52am, Brussels to London. I’m standing in line for passport control and I spot a familiar face in front of me: it’s Michel Bauwens! He’s clearly surprised to hear his name called from just behind him in the queue, but his surprise quickly turns into our mutual delight on realizing that we’ll get to have an all-too-rare chance to catch up.

We meet up in the train’s dining carriage where, travelling at 150 miles an hour under the English Channel, Michel tells me about his summer writing project. He’s only a few moments in to describing it and I have to pull out my notebook and start jotting things down because, in typical Michel fashion, he is coming out with intriguing phrases that I have never heard before but that have instant appeal. Cosmo-local production. Labour mutuals. The thermodynamics of peer production.

This resulting report, written over the last year by Michel, Alex Pazaitis, and a team of contributors, brings those ideas together with many more to envision the commons at the heart of a 21st century economy designed to deliver social and ecological health. In its ambitious vision, this report combines a long-standing commitment to commons-based peer production with a new, globally localized approach to the circular economy and - in the process - redesigns distributed ledger technology (think: beyond blockchain) in order to make it feasible.

So leave behind today’s widespread obsession with smart contracts, platform capitalism and economies of scale: these only serve to reinforce last century’s dominant and extractive modes of production. Instead, dive into this report and discover the possibilities of Ostrom contracts, platform cooperativism and economies of scope. These ideas are the seeds of a generative commons-based economy that is fit for the 21st century’s social and ecological challenges.

If you want to flip your economic mind, and leap to the cutting edge of commons-based thinking, simply read on."

Introduction by Michel Bauwens

"Why should you read this latest report of the P2P Foundation, and why does it matter?

Our inspiration comes from the great synthesis provided by Kate Raworth in her book, Doughnut Economics, which graphically presents the great question of our age: can we produce for human needs, without exceeding planetary boundaries?

In our opinion, this requires a fundamental change towards a commons-centric economic system, which can successfully not just conserve, but regenerate human and natural resources. How? By using the ‘technosphere’: our accumulation of technical and scientific knowledge, but on a new basis of a deep ecological consciousness, in partnership with the other beings on the planet.

To do this, we must take fully into account our impact on the world. First of all, we must recognize and mitigate our negative impacts, but we must also recognize positive contributions that remain unrecognized. Thus we enter into the sphere of what economists call ‘externalities’, and which are present barely recognized in our value and accounting systems.

The good news is that, at the same time that a growing number of people are recognizing the systemic crisis and its relation to ecology, tools are coming online that allow us to manage our economic processes differently. Using the principles of cosmo-local production, i.e. sharing knowledge globally but producing as local as is optimal for reducing our human footprint, we can now use shared logistics, and shared accounting systems. This report will introduce topics such as contributory accounting, which recognizes generative contributions to the wellbeing of the earth and its inhabitants; value flow accounting, posed as an alternative to the narcissistic double-entry bookeeping, upon which capitalism relies to remain blind to its social and ecological impact; and thermo-dynamic accounting, which provides direct access to non-financialized streams of matter and energy. The tools exist, that is the good news, but they are not integrated yet. This report offers a vision of how they can be integrated in a cosmo-local production infrastructure.

Some of our readers may be familiar with the ‘calculation debates’, of the 1930’s, which pitted liberal pro-market economists, like Hayek, who favoured pricing mechanisms, against the socialist economists like Bauer, Neurath and ultimately, Polanyi, who argued the benefits of planning. In our industrial societies, this lib/lab discussion has obscured a third dimension: that of the commons and their self-management through mutual coordination. Today, large capitalist firms certainly plan, but they do not plan for balance with humanity and natural beings, it is extractive planning. The market allocates resources, but without any knowledge of impact. And finally, we see a substantial amount of commons-based mutual coordination occurring in the production of so-called (but not really!) ‘immaterial resources’ (knowledge, software, design), but has hardly touched the coordination of material production yet. Through shared accounting, which sits between transactions in the material world, and our human decision-making, this now becomes possible.

So what we are describing here is a 3-layered economy, and its infrastructure, that is able to coordinate production, by transcending and including the 3 great methods of allocating resources:

  • Mutual coordination through shared logistics and shared accounting
  • Ethical, generative market mechanisms for the fair exchange of resources
  • A planning framework, indicating the planetary resources available for human choice, so that we can produce while preserving the planet and its beings, and even regenerating them.

We hope you enjoy our analysis of work done by innovative pioneers, who are developing the tools we will need to save our planet.

Executive Summary

Michel Bauwens:

"How to read this report ? If you are not an expert but interested in future infrastructures, then chapter 1 is the most readable ‘visionary’ chapter, which will give you the broad background about what we want to achieve with this report. Chapter 2 and 3 are aimed for the more motivated experts that are specifically interested in a number of technical tools that are becoming available to enable this vision. Each of these chapters also has its contextual introductions, which might be useful for the less technical reader.

The key issue addressed in this study is how to change a system which incentivizes and rewards extraction, but cannot recognize and reward the wealth created by generative activities, towards a system which can reward and incentivize generative practices.

This report is based on the understanding that one of the main weaknesses of the current political economy is its inability to recognize and deal with ‘externalities’, i.e. costs and benefits received or caused by economic actors that are not accounted for and that they are not paying for. Under capitalism, a firm becomes competitive in a large part because of its ability, and that of the system as a whole, to not ‘pay’ for positive social and environmental contributions, and to leave the reparations of social and environmental damages, to other actors, i.e. mainly the citizenry or the state. There is no structural solution to fund (re)generative activities except mostly ‘after the fact’ or through ‘regulations’ that are imposed ‘from the outside’, by the coercive force of the state. This report looks at efforts underway, even in prototypal and experimental forms, to remedy this situation, i.e. to have a productive systems that can fulfill human needs without violating external boundaries, i.e. pretty much like Kate Raworth has explained it in Doughnut Economics. These solutions would be located much more ‘internally’, within the system of production itself. This way of thinking is analogous to thinking about more socially just ‘predistribution’ of wealth, rather than mere ‘redistribution’. These would not replace external regulation, which still has a role, but complement it.

We believe that a significant number of these necessary ingredients for such a structural change are available through some of the emerging techno-social systems that are co-evolving with distributed networks.

The first structural element is a shared supply chains for a perma-circular economy. At the P2P Foundation, we believe a circular economy cannot be achieved without sharing the logistical knowledge that is presently locked up in the walled gardens of private logistics. Only by sharing each other’s input and outputs can partners in a open ecosystem adapt towards a real circular economy. In this report, we pay some attention to a shift to eco-systemic collaboration, but without going into the details of supply chains themselves. The concept of ‘perma-circularity’ refers to the necessity for the growth of our material and energy usage to remain under one percent a year, in order to avoid the exponential increase in resources we need from our planet.

We do pay attention to a number of technologies that will allow us to shift towards ecosystems of collaboration, specifically open and shared distributed ledgers, mostly coming from the so-called ‘blockchain’ space of technical development. But we focus in part on ‘post-blockchain’ developments, which avoid a number of systemic problems associated with the first generation of blockchain technologies, for example, issues of scaling, exponential energy usage, etc.. Protocol cooperatives are global open source depositories of knowledge, code and design, that allow humanity to create infrastructures for the mutualization of the main provisioning systems (i.e. food, habitat, mobility), and that are governed by the various stakeholders involved, including the affected citizenry.

With distributed ledgers, three new forms of collaborative accounting can be introduced, which will allow economic actors to manage their production while recognizing positive and negative social and ecological externalities. Contributive accounting, which we discussed in our previous report, Values in the Commons Economy, allows for the recognition of all types of contributions, not just waged labor. REA accounting, i..e accounting for Resources, Events, Actions, allows actors to see their transactions as part of an eco-system of collaboration, i.e. this is ‘flow accounting’ rather than a vision based on the accumulation of assets in a single firm. Finally, we need direct access to the real ‘thermo-dynamic flows’, necessitated by production, i.e. the amounts of matter and energy needed, in the context of planetary boundaries.

Chapter 1 of this report is a summary of ten years of research at the P2P Foundation, including by our own P2P Lab but also by our partners in common research programs, of what we know today about the emerging commons economy. It includes a basic account of why the ‘invention’ of the blockchain has been important, but stresses that the needed distributed ledgers may take other forms in the future. This section may not offer a lot of new elements for those that are already technologically savvy about the topic, but it does offer a critical engagement with the qualities and flaws of the current model, and suggests how it can be tweaked and transformed, to also serve as a basis for a post-capitalist, commons-centric economy.

Chapter 2 of this report goes into the details of various technological projects that could be used as tools to develop ecosystems of collaborations, based on distributed ledgers. The aim of that report is to show that solutions are being worked on, but remain fragmented to date, so our aim is to show that an alignment in a higher integration, would lead to significant advances towards sustainable production.

Finally, chapter 3 focuses on the accounting innovations that we will need, and will need to be integrated in the new practices based on shared supply chains using shared ledgers. This includes, as explained above, tools for contributive, flow-based, and thermo-dynamic accounting.

This report focuses not on the innovations within mainstream industrial players striving towards more sustainability, but to seed forms that have the advantage of not having legacy systems to deal with, and therefore can re-organize themselves much more in direct harmony with the possibilities offered by the new tools reflecting the new paradigm. Of course, this means they have much less resources, but they offer more clear pointers to a possible future.

The aim of this report is therefore to open the minds towards new possibilities of integration, so that we can transition to a regenerative economy, and to show that emerging tools are available to implement these necessary changes."


Some Lessons Learned

By Alex Pazaitis:

"Some of the main points are being summarised below:

• There is a increasing number of projects working on the development of technologies that would enable positive social and environmental outcomes. There is diversity in viewpoints that ranges from techno-deterministic and individualistic views to more socially-minded and collective ones.

• A substantial part of the stakeholders involved, despite their diversity in background and methods, find merit and invest their efforts on the narrative of the commons and peer-to-peer practices. Many have been inspired and make explicit references to existing work and concepts developed by the P2P Foundation community.

• There is growing enthusiasm around Distributed Ledger Technologies and cryptocurrencies that goes beyond speculative motivations for quick profiteering. There is still no consensus on the exact implications or the future direction of the technology and in many cases the assumptions underpinning the understanding of the relations between technology and society can be questionable. Nevertheless, the underlying motivations that mobilise people in these efforts are to a large extent towards the attainment of a positive social outcome in their own subjective interpretation of it.

• We can argue for a certain level of technological maturity that could potentially allow the development of sophisticated tools and solutions to account for social and environmental externalities and steer societies through more sustainable forms of governance. However, appropriate economic and political institutions need to facilitate this process."