Commitment Pooling
* Article / Report: Commitment Pooling - An Economic Protocol Inspired by Ancestral Wisdom. By William O. Ruddick - Founder of Grassroots Economics Foundation, 2024
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"a protocol that GrE is developing for resource coordination. The paper theorizes concepts not as isolated phenomena unique to Kenya or GrE programs, but as universally applicable mechanisms that transcend regional and cultural boundaries."
Abstract
"This prospective report introduces the pooling of commitments, as a mechanism for curating and fairly exchanging resources within communities. This approach hinges on the idea that commitments can be effectively pooled to create a more equitable and collaborative economic system, and echoes traditional mutual service practices. To operationalize this concept, the paper presents a protocol being piloted by Grassroots Economics; the Commitment Pooling Protocol is designed to aggregate commitments while facilitating the management and fair exchange of resources. The study describes the background, development, and potential impact of this approach, demonstrating how it can support autonomous, decentralized, non-monetary, and polycentric systems of Commitment Pooling. The emphasis is on fostering community well-being, aligning economic practices with the ethos of mutual service, and collective agency. Through practical use cases and analysis, the paper showcases the versatility of this protocol in various socio-economic contexts, highlighting its potential in supporting a more inclusive and resilient economic future."
Excerpts
Theoretical Foundations
Will Ruddick:
"According to Bergstra and Burgess' (2014) work on Promise Theory, a commitment is a promise that requires a non-returnable investment of resources on the part of the promiser (commitment issuer). Trust, according to Promise Theory, is also built through the interdependence and flow of commitments. In a community, the fulfillment of one commitment often relies on others fulfilling theirs. This interconnectedness means that reliability becomes critical as parties consistently meet their commitments, trust grows. Vouchers represent a formalized commitment of the issuer to redeem the voucher as payment for specified goods or services (fulfilling their commitment) with various terms and conditions, such as expiration and transferability. A subscription can be thought of as a formalized commitment; you pay money upfront for a subscription and you use it over time for repeated, specified services of the issuer. A bus ticket or even airline reward points can be considered formalized commitments or vouchers. My mother holds about 5 forms of loyalty points - all of which are vouchers or formalized commitments of various businesses.
This is akin to the group voucher system GrE has used since 2010. This works when there are clear commitments in the group and processes to mitigate disputes as seen in the work of Ostrom (1990) on Commons governance.
A single business can issue a voucher, like a telecom issuing an airtime credit. In Kenya, exchangeable airtime credit - redeemable for using the mobile phone network - became a viable medium of exchange starting in 2008. These vouchers can flow and circulate as a medium of exchange if the terms and conditions allow it. However, in either case of a group voucher or single issuer voucher, one would be wary if the supply of vouchers greatly exceeded the issuer's (group or individual) ability to redeem them.
National Currency can be seen as a voucher redeemable by the state for tax payments and possibly, state services. When the state and banking system produce increasing supplies of their vouchers without clear service offerings (commitments), the risk of over issuing or overselling these vouchers is high and can result in a poor unit of account and can also cause inflation where the nation's subjects must increasingly pay for the state’s lack of commitment.
Note that the state is not alone here, the risk of over issuance (over commitment) can happen with individuals, groups and businesses as well. It is important to note that when vouchers are used as a general medium of exchange, there is a risk of glossing over their true backing or commitment. One would not want a telecom airtime credit to become the de facto national currency as it would risk the simple failure of that company (a single point of failure) to crash the entire system.
While any individual voucher could theoretically act as a general medium of exchange, a robust interconnected network of pooled vouchers can be much more polycentric and resilient. Learning from the ROLA traditions like Mwerya, commitments are pooled in order to be exchangeable for one another. These systems of exchangeable commitments are fundamentally different from group credit or voucher based monetary systems (credit money)."
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More information
This video explanation makes the concept simple to understand: https://www.youtube.com/watch?v=_TLly1aEkyE