Narrative on Discovering the Peer Trust Network System

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I (Stan Rhodes) created the Peer Trust Network Project after nearly a year of researching issues affecting people all over the world. The project is a work in progress. The socioeconomic model proposed in the project is built from the work of countless others, reassembled into the principles and structures of a new model, to be built both from within and outside of the current model. This model was created with the United States in mind, both because of its role in affecting the world, and my experience as an American. I think--and hope--it can be adapted elsewhere with few changes.

I did not set out to make this system: I feel as if I discovered it, assembling it rationally from the ideas and works of countless people with whom I'd crossed paths during my research.

In the Summer of 2007 I decided to go all the way in biting off more than I could chew; rather than trying to help fix one particular problem or issue, I wanted to try to understand them all.

Global issues: too many targets

I came upon the Foundation for P2P Alternatives as I was doing research on global issues and possible solutions. The more I learned, particularly about the changes in how people can mobilize to affect change, the more my research crossed the material within the wiki.

In my research I noticed a lot of organizations that were working toward similar ends, or symptoms of common root problems. Sometimes these organizations were at cross purposes, but usually they were just in isolation, unaware of each other, and unknown to all the frustrated people who would like to make a difference. These frustrated peers feel isolated and hopeless. I have always been on the edge of that hopelessness, but unwilling to resign myself to it. I also never found anything that seemed the right fit for me; I wanted to find THE cause for myself.

One of the books I read was Blessed Unrest, where Paul Hawken explores the commonality of civil and environmental movements. He identifies thousands of organizations and millions of people with the desire and the will for change, working toward improving civil rights and the environment. His site, WiserEarth, is a social networking site for these organizations and people. Where he saw a common push, I saw, again, many isolated pushes. The problem wasn't that desire, ingenuity, or effort was lacking, the problem was there were too many targets.

I wanted to narrow down those targets--problems and global issues--to just a few. Ideally, one.

Research continues

Early on, Robert D. Steele's Amazon list of problems and books about them helped me start my investigation. I saw a presentation from him to an Amazon conference of some sort, and he had grand ideas of global intelligence networks and microtransactions. It interested me enough I looked through his presentation, which were slides packed with information and ideas. His booklists helped me amass a solid reading base, even if I didn't agree with his analysis. In looking through his issues I decided there were too many, and there had to be more common elements. A little later I found another solo effort to piece together the big picture: Anup Shah's From here I went into everything from the militarism of the United States (Chalmer's Johnson's Sorrows of Empire), to Peter Barnes' Capitalism 3.0, to Yochai Benkler's Wealth of Networks, to Dee Hock's One from Many, to Lawrence's Lessig's The Future of Ideas. Somewhere in there I read Dan and Chip Heath's Made to Stick (global issue: getting ideas to stick?).

Lawrence Lessig's own shift away from "intellectual property" to the issue of corruption, earlier in 2007, was a sign that he realized the hopelessness of legislative reform in the current atmosphere. However, I felt Lessig's quest would ultimately find similar frustration. Was corruption more root problem, or symptom? Power corrupts, so the root problem seemed to be both distribution of power and accountability. Perhaps he was chasing a bigger picture too, and just didn't realize it yet.

Thanks to Lessig I discovered there were efforts toward what I had decided was needed: a global network of transaction tracking built from public data and peer-submitted data: the internet incarnation of "follow the money." With such a tool I thought the public might be able to identify corruption, increase accountability, and nonviolently attack the worst offenders in the realms of big business and power, using boycotts and peer journalism to cut off the money supply to societal cancers. The Sunlight Foundation was looking to help shed light on these dark corners and backrooms, and was a Congressionally-focused start of the Follow-the-Money idea. However, was limited to the Hill and California. This information was needed everywhere, and their plan was to roll it out state-to-state. State-to-state? That would take a while. Why weren't they offering to help set other groups up in other states? Surely interested parties could create nodes all over the US (and the world), agree on basic standards, and build a network much faster than a single organization attempting 1-by-1 rollouts. I should have contacted them and raised that point. I thought about trying to start an Oregon version, but I wasn't satisfied that the "rootest" problem had really been identified. The socioeconomic situation in the United states and the world wasn't a result of just corruption or the flow of money.

The problem of copyright: the tip of the iceberg

I caught a cold from family at the beginning of 2008 and, as I went through boxes of tissues and liters of tea, I followed and posted in a forum discussion on copyright. Through this discussion I began questioning the logic and relevance of the "incentive argument," the argument behind Article I, Section 8, Clause 8 of the Constitution. I came to believe, I think reasonably, that it wasn't valid: restriction was doing more harm than good. In so arguing, it sunk in, again, what a hopeless and pointless struggle removing those restrictions would be. However, something more positive was also emerging: I was having to look at the fears of creators. In some cases, these were reasonable, but in other cases they were irrational, vitriolic hate toward pirates, communists, and idealistic hippies (one-in-the-same, of course). To ask creators to jump ship on copyright was asking too much. The risks were their very livelihoods. They needed to have a viable alternative that was more attractive. They needed a compensation model that would work reasonably in a world where information was free, as in freedom, for all.

I was up for this thought challenge, and I began brainstorming what this meant for films, literature, music, and video games. I figured that scientific literature and patents already followed a service model, as did a lot of commercial software creation and writing; creators were paid to create through either a grant or a wage, and didn't retain rights. Entertainment was nearly there. The future was a service model.

Looking at file-sharing the need for a solid service model became even more clear. File-sharing is near-zero distribution cost if you're online. People know this, particularly each new generation. Trying to restrict those freedoms hasn't worked, isn't working, and won't work in the future. So what model do we use right now? The current model, any time someone buys a copy of a work they could download for free, is a donation model. Regardless of any moral judgement, the reality is that the person is choosing to give money, even though they can obtain the work for free. Donation seems like a really weak compensation model, and I couldn't reasonably expect creators to go for it.

I had thought before about a site that has prize pots for game ideas, and contests between creators to make those ideas. It would be a collaborative, yet competitive, environment. I didn't like the competitive element much because the internet seems much more collaborative, but I didn't see a better way at the time. Other people had tried or suggested other models, like digital art auctions (never made if off the ground, but it might work), pledge systems, fund-per-milestone, and on. There wasn't any reason all those couldn't be tried, and donations could be possible at any time.

I realized that the problem wasn't the right model, the problem was enabling every possible model people could come up with. The creators and users needed ownership of the means of facilitation so that transactions would be as liquid, cheap, reliable, and direct as possible. Middlemen had no place.

Brainstorming a new framework

Means of facilitation between users and creators had to be non-profit. The organization had to exist completely and only for the purpose of facilitation: we needed trusts. Trusts could establish that purpose as the purpose of the organization, and provide legal means to enforce that mission and duty. Peter Barnes had identified trusts as a check and balance to corporate interests, looking after resources like the air and water, but I was seeing them in a new light. Trusts could maintain a non-profit mission while providing democratic oversight to their trustees. They could, if they got enough momentum, out-compete corporations: they only need to listen to customer needs and break even.

Further, it had to be opt-in. Dee Hock's tale of the creation of VISA played in my mind. These organizations needed basic principles that kept them democratic. The benefits of joining had to carry a responsibility to support the purpose and principles of the organization. All works, once released in the system, would be free to distribute outside the system. They would each be, in short, GPL-ized.

So to build this new system that could support users and creators, what would be needed?

First, a value exchange system. In other words, a non-profit Paypal or VISA. It had to be reliable, trustworthy, and charge only enough to cover operating costs, whether the charge was per transaction, or per time period, like a subscription fee. The trustees could ultimately decide the best method for this fee, changing it if needed. I came to call this the "banktrust" concept.

Second, a virtual agora that was part marketplace, part directory of works, part playground, and part personal media center. It needed the same properties as the banktrust: reliable, trustworthy, democratically-controlled, and non-profit. It would be essentially an enabling layer of metadata for all the works within it, which would have to be freely available. It would handle all methods of compensating creators: grants, prize contests, pledges, milestone-funding, auctions, and donations. It would use the metadata layer to provide unprecedented visibility to the "long tail:" people could find anything in the system, no matter how obscure, and use the metadata for recommendations, and use their friends metadata for recommendations. I was envisioning a super hybrid of Amazon, imdb, Facebook, Steam, MySpace, iTunes,, and Google. The look and feel could be customized for communities and individuals: all that was necessary was a solid layer facilitating communication, transaction, and development between and for all members. They would build what they needed on top of it, just as they have with the internet. I didn't need to guess what they'd need beyond that. The same with compensation models: members would try different models and use what best fit. I didn't need to worry about it. Build it, and if they come, everyone wins. As Buckminster Fuller observed, an alternate reality will make the old reality obsolete.

The critical leap: a service model for property

Michel Bauwens's observation on the flipped notions of scarcity bubbled up immediately. I had taken nonrival goods--information, digital entertainment, ideas--and flipped them into entirely a service model. It made sense.

I began wondering about the implication of everything in the world following a service model. What if property were considered owned by everyone? Buckminster Fuller came up yet again, with the concept of spaceship earth. If we're all in this spaceship, don't we essentially all have a stake? If we all do, then we're all trustees of the Earth as well. We should be charging ourselves rent. We should be charging ourselves for how we use Earth. If we all have essentially the same basic needs, those who use more waste more. I realized what the biggest global issue was: inequity. This didn't hit me like a revelation, because I, and I suspect most other people, already know it. Of course inequity is a big problem, but it seems too general to solve. It isn't.

If we free information, we've partly solved knowledge inequity, but we also need physical resource equity to establish true human equity. You can only have information equity when the resources of transmission are shared, whether fiber or spectrum (e.g. broadcast and radio frequencies).

The fundamental concept of charging for use was the key that unlocked a new perspective, and a deluge of additional concepts, the most important being that the sum of use fees were paid back equally between all members. All of them. Neither were new concepts: they'd been mentioned by countless others, particularly Peter Barnes; heck, Alaska charges for its oil, and pays back its citizens. However, no one went far enough with these concepts. If I were to say that I can create a system that people choose to join, choose to develop, choose to empower, and ultimately selects for equity and ecological responsibility, who would believe me? That's the holy grail of the millions of people Paul Hawken found pushing for change through unrest.

Could it be that easy? Yes, but in design principle only, at a very zoomed-out, and abstract level. Credits could be created and paid through voluntary agreements to bring property into a propertytrust; all property under this agreement would be co-owned equally, and subject to use fees that were then redistributed to all members. The implementation will be a significant challenge, like every other component of the system. However, as with the other trusts, fulfilling the purpose of the propertytrust wouldn't necessitate a single method used by every trust. Each trust might have a slightly different method for establishing use fees, and some might be more accurate or easier than others. The variety of methods between the trusts would be a competition of ideas, and the best methods would likely be favored, mutate a little here and there, and continue to evolve. I realized that this scenario should not only be expected in each trust model, it should be encouraged, for the health and the progress of the networks.

A new system: simple, easy, and effective? (I'm not high, honest.)

I think the answer is yes and no. Yes, the concepts behind it are actually pretty simple, although they are somewhat alien, because we're used to thinking from an entirely different perspective. The system is still subject to human flaw and error, still has to be built, and still has to be maintained. It's not a panacea on autopilot, it's human-operated system that beats what we currently have, and can be bootstrapped into place voluntarily through the merits and benefits of individual components.

The system I'm proposing will strike different perspectives as different types of crazy:

  • It is more pure free market than what we have, yet ultimately the ideas are competing, not the people. Economically speaking, I think it's morePareto optimal than anything previously existent.
  • It is more pure communist than anything we have, yet ultimately it isn't communist either. People are having their rightful property restored: their share of the Earth. We're all equal stakeholders, and we should be charging for use. Those who use the most should pay everyone the most.
  • It distributes wealth to all, solving half of the root cause of poverty (guaranteed income advocates should be pleased).
  • It distributes knowledge to all, solving the other half of the root cause of poverty.
  • It distributes power, control, and governance to all; it minimizes corruption.

As I thought more about it, I realized it would also need to be a network of networks, which solved additional problems, like the inefficiency and corruptibility of hierarchical structures. The network model is also most resilient to damage.

= The present and the future of the system in theory and in practice: is there hope? What can be done?

So why aren't more people excited about this? Well, because of me.

I've been trying to map out and explain everything. I've been doing a poor job. My writing could be better. I need diagrams, charts, citations, videos, podcasts, blogs, and most of all, HELP (no, not mental health help, although...). If you say you've come up with a new socioeconomic model that could save the world people think you're a nut. And, I've found out, they just sort of nervously smile and change the subject so you won't embarrass yourself any further. Depending on how much they like you, they may further humor you, but I've yet to see any excitement (yet there's been no show-stopping criticism either!). This, I think, shows the learned hopelessness so many have; if I pretended to have a winning lottery ticket they would be excited. Have we really all lost that much hope? I need solid explanation to be convincing, and I'm working on it. I want all the valid criticism possible. I've become fairly convinced of the feasibility of this system, and the phases that lead up to it, but I will never be totally convinced. I think it's psychologically, socially, and economically sound. There are examples, in the real world, of aspects and concepts of every part of this plan working, and working well. The parts aren't new, it's the whole built from those parts that is the revolutionary concept.

So, please, investigate this system, think about it, criticize it, ask me questions, and help improve it. I have much yet to explain, and I am just one voice in a sea of voices. This system creates a common target for the millions, if not billions, of people who want change, even the frustrated, and even the hopeless. When we all push the same way, we can move the world.

Peer Review This!

Review of Peer Trust Network System by Marcin:

The Peer Trust Network System is an integrated approach- based on sound critique of the existing state of affairs - aimed at providing an integrated solution to contemporary ills related to resources and their distribution. The model addresses issues, directly or indirectly, including: wars, poverty, hunger, quality of life, human evolution, and others. This model merits serious consideration by anyone interested in a better world by means of a bottom-up, peer-based approach.

One of the underlying issues involved with this model is the creation of a productive, well-stewarded commons. This means success at inviting people to place property into a novel and revolutionary usage and benefit model. This is perhaps the model's greatest challenge or weakness. Stan provides a beautiful picture of what can happen, but does not propose a well-defined incentive for people to join. My contribution here is aimed at arriving at clear incentives for joining.

First I start with 2 points:

POINT 1. People today use private capital to generate further capital, typically in ways that compromise our very life support systems, and that contribute to further wealth inequality. "Them that gots, gets." This is an attractive proposition for the haves. It works today because the prevailing economic mechanisms reward greed. Yes, the selfish agent goes through much inconvenience in the name of hard business - perhaps bureaucracy, overregulation, excessive taxation, slave labor, banking swindles such as high interest, or the destruction of ecosystems, among others. These inconveniences are by no means liked by any sane individual. However, the financial reward makes these pains worth the effort. Forget about future generations and the general good. "Forget my college idealism, I have to make money" is a common situation.

POINT 2. There is a number of idealistic individuals out there as well - such as you if you are reading this - who do see the possibilties. But a commons, as Stan suggests (and according to principles of organizational and ecological soundness) - should be created bioregionally. Thus, unless people come together from remote regions and put resources and property in to create a localized Peer Trust Network (PTN) - for example as an instance of an 'intentional community', this is not likely to happen. In general, it is not likely that propertied PTNs will be created to any replicable, mainstream-able degree.

Thus, a clear incentive must be created for people to pool property into a Propertytrust.

This incentive must have the following features:

  • It must guarantee that wealth will be returned to the contributor, therefore, the peertrust must have a productive capacity
  • It must generate at least as much productivity, provision of needs, or meaning to the contributor as the property would in private form
  • Property management is at least as easy for the contributor within the peertrust as it would be in private hands

A diverse collection of participants may invest in a property trust. These people will put serious commitment into sharing resources only if significant productivity may be guaranteed. For reasons of organizational complexity and for reasons of absence of open, integrated, ecological business models - this is impossible. The solution is the creation of building blocks for integrated, replicable, productive infrastructures.

Such a productive infrastructure may consist of digital and flexible production Fab Labs fueled by open design. This way, an entire, robust economy may be created to provide the wealth generation required by prospective entrants into a property trust. I believe simply that without such robust, low-cost, replicable production capacity, it is too expensive or complicated to generate a productive economy necessary for inviting people into a commons.

This is merely a restatement of the goals of OSE open product development, but phrased within the context of propertytrust creation.

I think that the details of the contract are secondary. Before discussing details of the contract, or of peer financial networks, we need to create the substance, peer production, that provides the foundation for the contracts, finances, and legal arrangements. How do we align our communication and work on this?