Recursive Value Systems Frameworks
Context
Benjamin Life:
"The emergence of cybernetics—defined by Norbert Wiener as "the science of control and communication in the animal and the machine"—offers powerful tools for reimagining economic coordination. Cybernetic thinking emphasizes feedback loops, information flows, and emergent behavior within complex systems. Applied to economics, it suggests alternatives to both centralized planning and market fundamentalism.
Stafford Beer's Viable System Model demonstrated how organizations could achieve "requisite variety" through nested feedback loops and regulatory mechanisms that balance autonomy and control. Similarly, Elinor Ostrom's Nobel Prize-winning work on common pool resources showed how complex resource problems could be managed through polycentric governance—multiple, overlapping decision centers with appropriate rule systems for different types of goods and services."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)
Characteristics
Benjamin Life:
"These approaches suggest the possibility of "recursive value systems"—frameworks that can:
- Recognize heterogeneous forms of value creation
- Establish feedback mechanisms that detect externalities and adjust incentives accordingly
- Enable nested governance structures appropriate to different types of goods and services
- Incorporate plural value metrics while maintaining allocative efficiency."
Relevant Technical Characteristics of Blockchain Systems
Benjamin Life:
"Blockchain technologies provide the computational infrastructure for implementing such systems.
This infrastructure represents what sociologists Susan Leigh Star and Geoffrey Bowker might call "boundary infrastructure"—technical systems that enable coordination across domains with different values and practices. Rather than imposing a single metric of value, these systems allow for the coexistence and interoperation of multiple value frameworks.
* Cryptographic verification. Establishing trust in outcomes without requiring trust in specific institutions, enabling decentralized coordination across traditional boundaries.
* Programmable incentives. Creating conditional rewards tied to verifiable outcomes, allowing for complex incentive structures beyond simple price signals.
* State transitions. Recording changes in complex systems with cryptographic certainty, creating common knowledge about system states.
* Composable protocols. Building interoperable systems that recognize different value metrics while enabling translation between them."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)
Tools
Benjamin Life:
==Tokenization==:
"Pluralistic Units of Value:
At its core, tokenization represents the conversion of value and ownership rights into discrete, programmable digital assets. While much attention has focused on tokenizing traditional financial assets like securities, the true revolutionary potential lies in tokenizing previously non-financialized forms of value.
Tokenization enables several crucial capabilities for pluralistic capital allocation:
Discrete representation of diverse forms of value. Any form of capital—natural, social, cultural, intellectual—can be represented as discrete digital units. This creates commensurability without requiring total homogenization. For example, a regenerative agriculture project might issue distinct tokens representing carbon sequestration, biodiversity enhancement, and water purification, each with its own measurement system and governance rules.
Fractional ownership and governance. By dividing rights into small units, tokenization enables broader participation in ownership and governance of assets previously accessible only to large institutional investors or the wealthy. A community forest could issue tokens representing stewardship rights that are accessible to local residents regardless of financial means.
Programmable rights and responsibilities. Smart contracts can encode specific rights, restrictions, and responsibilities associated with different types of value. For instance, a community housing token might include both ownership rights and commitments to maintaining affordability, automatically enforcing community agreements without requiring trust in centralized authorities.
Composability across value domains. Different tokens can interact through programmable interfaces, enabling complex systems that recognize and reward multiple forms of value creation simultaneously. A local currency might automatically provide rewards when combined with tokens representing volunteer hours or ecological restoration activities.
Traditional financial instruments qualify value primarily through price; tokenization enables qualification through multiple dimensions simultaneously.
For example, the tokenization of carbon removal creates units that represent not just tons of CO2 sequestered but be bundled with tokenized representations of co-benefits (like biodiversity) and community impacts. These attributes can be priced, traded, and governed distinctly rather than being flattened into a single metric.
Such markets can better recognize and reward the unique characteristics of different forms of value creation rather than reducing everything to interchangeable units.
Critically, tokenization opens a design space for economic systems that transcend the monistic unit of exchange value in traditional economies. Rather than creating a single digital currency to replace fiat money—replicating its reductionist approach—tokenization enables a pluralistic ecosystem of value representations that can interact while maintaining their distinctive qualities."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)
Hypercerts and the Representation of Heterogeneous Value
"Hypercerts offer a formal framework for representing positive externalities—beneficial outcomes not captured by market prices— in the form of discrete non-fungible digital assets. Unlike traditional ESG (Environmental, Social, Governance) metrics that reduce impact to risk factors for financial returns, Hypercerts define a formal grammar for making claims about causal relationships between actions and outcomes.
For example, a carbon removal project could issue a Hypercert representing the verifiable capture of atmospheric carbon. This claim can be independently verified, decomposed into smaller units, combined with other claims, and traded without requiring its reduction to a single financial metric. The value of the Hypercert emerges from the social consensus around the importance of carbon removal rather than from its financial return alone.
This approach parallels what philosophers Amartya Sen and Martha Nussbaum achieved through the capabilities approach—creating frameworks that recognize plural forms of value without requiring their commensurability under a single metric. The critical innovation lies in making these claims tradable without requiring their reduction to financial equivalents."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)
Zero-Knowledge Verification and Privacy-Preserving Impact
"Cryptographic zero-knowledge proofs enable verification of claims without revealing underlying data. This allows for the verification of impacts without compromising privacy or creating new forms of surveillance.
For instance, labor conditions in supply chains can be verified without exposing individual worker data. A company could prove that all workers in its supply chain earn living wages without revealing specific salary information, addressing what technologist Jaron Lanier identified as the asymmetric relationship between data providers and platform controllers."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)
Quadratic Funding and Democratic Resource Allocation
"Building on the work of economist Glen Weyl and Ethereum founder Vitalik Buterin, quadratic funding mechanisms incorporate preference intensity and address coordination problems inherent in public goods provision. By matching individual contributions according to the number of contributors rather than contribution amounts, these systems give communities greater influence over resource allocation.
For example, a community development fund using quadratic matching would prioritize projects with broad support rather than those favored by a few wealthy donors. This exemplifies what Elinor Ostrom termed "institutional diversity"—creating governance and funding mechanisms appropriate to different types of goods and services rather than applying market mechanisms universally.
By incorporating these technical innovations, blockchain-based systems can implement what philosopher of technology Andrew Feenberg terms "democratic rationalization"—technical designs that incorporate a broader range of values than narrow market efficiency."
(https://omniharmonic.substack.com/p/beyond-narrow-optimization?)