Think Bigger. Aim Higher. Go Further.

Tag: government

Municipal Governance On The Blockchain

treesviewAs a member of the City of Edmonds Planning Board, I hear a lot about what the public wants and what they do not want from their local government.  As a seaside town, property values can be greatly impacted by water and mountain views.  As such, there is an incentive to remove trees blocking views.  In other parts of town, the urban forest is extremely beautiful and there is great incentive to preserve trees from high density developers. So what happens when a town wants to regulate trees?  In our case, it was NOT an Edmonds kind of day. Perhaps it’s time to try municipal governance on the blockchain. 

Problem:

Many municipalities are adopting laws which may restrict the cutting of trees on private property in response to factors such as canopy loss, erosion control, wildlife protection, urban forest management, development, view amenities, climate change, etc.; or to enhance tree cutting to make way for new development and associated tax dollars. However, most models for tree regulation are unpopular with their imposing fines, permit fees, high density development, and government regulation on private property. Yet, these fines and permit fees are required to fund a bloated top-heavy tree code in the first place!!

Proposal:

Incorporate cryptographic and/or block chain technology to create a web-based public ledger and tree inventory that everyone can see and anyone can audit. By adding simple gamification features, the tree code may become self-regulating as players interact with the game. This may minimize government involvement, except in the most exceptional circumstances.

Discussion:

Think of it like a huge public accounting ledger that everyone can see, but can only edit their own data.  Instead of accounting for money, the ledger accounts for trees.  The game starts when a property owner registers his or her own trees on the ledger.  The city will issue cryptocurrency based on the number of tree units the property owner claims. These tokens would go into an electronic wallet on a blockchain associated with the property parcel number.  Each year, the resident will be issued more tokens by the city as their trees grow – the value of the tokens is derived from climate data or LIDAR surveys.  Some years may increase token values, some years may decrease token value based on estimated growth rates.

When a person wants to cut down a tree, they need to spend tokens to do so. Ideally, A property owner would not cut down more than they can grow. If they don’t have enough tokens, then they need to buy them from adjoining neighbors who are also trying to grow more than they must lose. If trading is restricted to adjoining properties (not commoditized like carbon credits), then community actions must be agreed upon by neighbors to settle any difficult situations.

The city would rarely get involved except to peg the value of the tokens on climate data. Algorithms programmed into the public ledger would manage the token values and electronic wallet exchanges automatically.

Shifts incentives

This sounds innocent enough.  But in reality, it changes all of the incentives that we are now attempting to manage with convoluted linear rules and imposing government regulations on private property.

For example,

  • It rewards tree preservation.
  • It rewards early and active registration,
  • It is self-enforcing because neighbors have a vested interest, and the ledger is public.
  • It is self-governing because neighbors need to agree on price.
  • It is self-limiting – an area cannot get rapidly stripped without progressive costs.
  • If a developer tries to take out a lot of trees, the neighbors can make it very expensive to do so – or negotiate concessions, etc.
  • If an arborist is needed, then the business case exists to hire one.
  • The municipality is able to referee disputes and establish coin allocations based on canopy quota or weather conditions, etc.
  • It provides tree liability (or asset) disclosure at property sale.

Business case

Today, proposed tree code regulations expose the citizens to cutting fees as high as $1000 dollars per tree. Violations for unauthorized cutting can approach $3000 dollars per tree. This money is required to fund a tree department that may consist of up to 3 arborists (for a small seaside town in Washington state; pop. 50,000), a permit reviewer, an enforcement arm, and possible court challenges. It could cost a million dollars per year to have an effective tree code for a city under 100,000 people, or 10 dollars per person per year just to regulate.

A price point of 1 dollar per citizen per year would therefore not be an extraordinary amount of money for a city to resolve a difficult social problem with modern technology.   Several thousand small cities dot the American coastline making this a strong candidate for private entrepreneurial partnership simply to maintain and audit the public ledger.

Conclusion:

A new generation of web applications and cryptographic technologies would allow this activity to happen autonomously. No new labor is required. No regulators are needed, no special penalties or enforcement mechanisms are required.  The city can stay out of the private property tree business completely.

Technically, this is called a multi-agent algorithmic game on a decentralized autonomous platform.  The difference is that today, these things can be made to look and feel like a game that is fun to play – people may play it. How many other Municipal Governance functions can be self-governed on a blockchain such as motor vehicles, animal control, gun control, schools, parking, water rights, energy, executive power, or any intrinsically valuable shared community asset.

 

The Scaffolding of the New Economy

Nobody cares if the congress implodes. People care about the institutions that keep the water clean, lights on, food fresh, streets safe, children educated,  medical services delivered, etc.

Institutions are run by people and there is no practical benefit of government when their primary role is to abolish the institutions that people depend on.  In effect, they abolish themselves.

For the last 5 years, since the 2008 train wreck, tens of thousands of start-ups and social media ventures have arisen in direct response to institutional failures.

  • When people don’t like where their taxes are spent, they reallocate their contributions elsewhere 
  • When education funding gets slashed, new forms of education emerge.  
  • When a currency inflates too fast, new forms on non-inflatable currency are deployed.  
  • When corporation reject their social charter, new forms of production systems are created. 
  • When jobs disappear, people reallocate their knowledge assets elsewhere 
  • When the law favors the few, new justice emerge

…and it goes on and on…

Today, we have constructed a scaffolding and everyone is laying their innovations and social apps and collaboration tools on he scaffolding.  When the output of one app becomes the input of another app, and so on, the new economy will integrate sufficiently to effectively bypass the governmental institution that is failing within it.  At that point, a new economy will emerge.

The following list of social platforms was compiled by Bert-Ola Bergstrand from Social Capital Forum in this document. From my experience and observation – there must be millions of people across the globe thinking along these lines.  People who would respond to a new way of organizing if a complete system were to emerge – or if the old system were to slowly evaporate.

TRY THIS: Please take a look through his list and visit several sites randomly and see what pops up. Now, try to envision the integration that I described above where the output of one platform becomes the input of the next platform, and so on.  This is how the future will arrive.  This is the next step that we must take together – integrate.

http://www.ogunte.com (women focused)
http://www.socentix.com
http://www.volans.com/volans/
http://www.tallbergfoundation.org/
http://solabs.org/
http://www.hubbayarea.com
http://www.ideasproject.com/index.jspa
http://www.unconvention.co.in/
http://www.facebook.com/pages/Social-Bancorp/183421055082853
http://groaction.com/
http://www.facebook.com/pages/GroAction/215195255184778?sk=app_208195102528120
http://www.joyliving.net
http://www.biomen.org
http://the-hub.net/
http://www.williamjamesfoundation.org
https://www.facebook.com/pages/Call-to-Change/159881987362799
http://www.sitawi.com.br
http://www.globalgiving.org/projects/sitawi-loan-fund-for-social-enterprises-in-brazil
http://www.socialcapitalmarkets.net
http://w1sd0m.net
http://www.globalsustainabilityjam.org/
http://www.globalservicejam.org/
http://www.openworld.com/
http://factory.makesense.org/comingsoon
http://www.mygoodact.com/
http://www.makinglocalfoodwork.co.uk
http://thefinancelab.ning.com/
http://mindtimemaps.com
http://mindtime.com
http://www.wecreate.cc/
http://collabcafewelly.tumblr.com
http://nationbuilder.com/
http://wwww.socialenterpriseeurope.co.uk/
http://techaloo.com/
http://www.socialenterprise-chicago.org
http://www.facebook.com/ecoNVERGE
http://www.facebook.com/CAPix-Asia
www.relayfoundation.org
www.opencsr.com
http://www.goodfornothing.com/about/
http://www.linkedin.com/groups/Social-business-Benefit-corporations-80184?gid=80184&trk=hb_side_g
http://www.opportunejobs.com
http://www.p-ced.com
http://www.seeditproject.com/
http://www.facebook.com/BluePlanetLife
http://www.youtube.com/TheRationalFuture
http://www.i-open.org/
http://2le.ad/
http://www.co-society.com/about/our-story/
http://www.kennisland.nl/en/
http://bundlr.com/b/education3
http://incentivize.us/
http://p2pfoundation.net/
http://www.sensorica.co/
https://www.facebook.com/YouthOpportunitiesNews
http://www.facebook.com/Nationalyoungwomenscouncil1/info
http://www.jci.cc/guests/
http://www.harva.co.in/
http://www.gramweb.net/
http://solucionesverdes.co/
http://www.dreamacademia.at/
http://www.collectiveself.com/frequently-asked-questions/what-is-a-friendship-incubator/
http://www.blue-planet-life.org/en/welcome
http://www.facebook.com/AfricaIZWI
http://globalimpactcollective.org/
http://www.leadersinstitute.com.au/aspx/home.aspx
http://www.rehan.com/
http://www.idec2013.org/ (International Democratic Education Conference)
http://www.mediapoint.md/
http://greensmyles.com/
http://www.bagosphere.com/
http://shapeshifters.net/
http://portal.educar.org/
http://www.coffeeshopgurus.com/ (Social Enterprise promoting Youth & Women Entrepreneurship. Franchise/ License Available)
http://www.communityled.co.za/
http://www.lgtvp.com/
http://www.azimpremjifoundation.org/ http://www.facebook.com/groups/smallisgreat/ http://www.facebook.com/groups/sosialentreprenor/
http://dreamups.org/
http://producism.org/
http://metacurrency.org/
http://www.ingenesist.com/
http://p2pfoundation.net/
http://www.arthaplatform.com/
http://www.facebook.com/pages/Common-Unity-Project/407636092606114?sk=info
http://www.eq-cap.com/
http://www.livingmandala.com/Living_Mandala/Living_Mandala
http://maximpact.com/
http://www.mindmeister.com/190131707/living-bridges-planet
http://reconomy.net/
http://www.akhuwat.org.pk/
https://www.coursera.org/
http://www.iachievegroup.com/
http://pashafund.com/
http://dreamups.org/
http://www.innovativepeople.eu/
http://www.fsg.org/
http://www.giftingprosperity.com/
http://trap.it/2cLMAE
http://about.me/reachscale.com
http://www.thecitizensmedia.com/
http://wechangeworlds.com/
http://www.coolmeia.org/
http://www.molequedeideias.net/
http://www.silo.is/3×11/
http://www.cloud9startups.com/
http://www.facebook.com/SliceBiz
http://iluvmyplanet.com/press
http://www.buckybox.com/
http://www.societal-innovation.org/
http://createachangenow.org/
http://defindia.net/
http://thealternative.in/
http://www.dreamitventures.com/
http://www.svx.ca/
http://www.techpear.com/

Movements/Social Change
http://jellyweek.tumblr.com/
http://funkybusinessberlin.de/index_en
http://www.facebook.com/pages/Call-to-Change/159881987362799
http://www.uterus-myomatosus.net
http://www.WishesWell.com/invite
http://www.bankofideas.org.uk/
http://beyondsustainabilitymag.net/
http://socialforesight.net
http://thesociallab.dk/
http://www.jci.cc/guests/
http://scwf12.wordpress.com/activities/
https://www.facebook.com/groups/219724974712886/ (presente! – education)
http://www.yesworld.org/
http://seedfreedom.in/
http://www.facebook.com/pages/YUVA-Foundation/159965244127954
http://www.partnershipforchange.net/
http://www.icaf.org/ (the arts for the development of creativity and empathy)http://www.facebook.com/ICAF.org
http://www.thinkimpact.com/
http://changeinc.tigweb.org/
http://www.sekem.com/
http://www.peers.org/
http://www.greenpag.es/
http://www.youtube.com/watch?v=zS1WCyEJV3U&feature=youtu.be

 

Social Ventures/Social Enterprise/Social Business/

Here is a list of 200+ that the William James Foundation has worked with:

http://williamjamesfoundation.org/index.cfm?fuseaction=Page.viewPage&pageId=607
http://www.youcancook.org.uk/
http://www.solucionesverdes.org/
http://backpackfarm.com/
http://www.openworldcafe.com/
http://www.joyliving.no/
http://www.biomen.no/
http://www.wessociety.com/
http://www.idea.com.gr/ and http://www.idea.com.gr/i_landing_page
http://openworldvillages.ning.com/
http://globaler-wandel.blogspot.com/2011/11/barcamp-how-internet-changes-our
https://www.facebook.com/pages/Call-to-Change/159881987362799
http://www.betterworldbooks.com
http://www.makechange.tv/
http://w1sd0m.net
https://www.facebook.com/pages/W1SD0M/170262242214
http://www.treeswaterpeople.org/
http://www.intolife.no/
http://www.terracycle.net/en-US/
http://www.socentlab.com/
http://www.buckybox.com/
http://www.firstpowercanada.ca/
http://www.enspiral.com
http://www.purpose.com
http://www.luontoportti.com/suomi/en/
http://www.facebook.com/eco-sTrEAMs (@ eco-sTrEAMs)
http://www.facebook.com/eco.ViVaCity (@ eco-ViVaCity)
http://www.facebook.com/eco.Nable (@ eco-Nable)
http://www.facebook.com/groups/econologics/ (@ ECONOLOGICS – Incisive
http://www.digitalgreen.org/farmerbook/
 

Knowledge Converged!)

http://www.veggbox.appspot.com/
http://ideasociety.com/
http://www.tryggapengarimobilen.se/
http://www.advancednrgsolutions.com/
http://www.p-ced.com
http://www.facebook.com/pages/Aangan/176857645688413
http://www.youtube.com/watch?v=Mwi4d4mCUNk&feature=youtu.be http://www.mothercourage.no/
http://www.openideo.com/
http://www.laplandvuollerim.se/

 

Funds/Financing

http://www.goodcap.net/
http://www.bonventure.de/en/home (only German speaking regions)
http://www.vilcap.com village capital seed funding network for socent
http://www.toniic.com global impact investment angel network
http://hubventures.hubbayarea.com/ seed funding for socent in the SF Bay area
http://w1sd0m.net search 400 institutional impact investors
http://www.slowmoney.com
http://inventure.no/
http://www.fordfoundation.org/Grants/
http://www.soros.org
http://www.asef.org Asia-Europe FOundation

 

Inspiration/Strategy etc.

http://www.blueoceanstrategy.com/ making competition irrelevant
http://foundups.com/ FOUNDUPS® Open Startup – Changing the World Together.
http://100startup.com/tour/ Build a Startup with 100$, keep it lean
http://steveblank.com/ – Steve Blank is a teacher for entrepreneurship
http://projectofhow.com/ – Open library of creative methods.
http://www.cultural-entrepreneurship-institute.de/en/ – Theoretical Wisdom for the Global Society
http://www.respectserendipity.com – Serendipity as the ultimate source of inspiration
http://www.differentworkbook.com – Stories of people who deeply love their work & changing what work looks and feels like
http://www.differentoffice.com – Stories of self-created, soul-satisfying work spaces

 

Inspirational blogs

http://www.sadanamkaur.es/en/programs/excellence-in-learning
http://goodgeneration.org/
http://www.asmundseip.com/
http://truemaisha.blogspot.se/?spref=fb
http://hildygottlieb.com/
http://vicdesotelle.com/blog/
http://sharedtracks.wordpress.com/

 

Text/Knowledge/Books

http://en.wikipedia.org/wiki/Impact_investing
http://www.facebook.com/piceberlin – spreading knowledge for cultural return
http://apps.americanbar.org/abastore/index.cfm?pid=1620439&section=main&fm=Product.AddToCart – Social Enterprise: Empowering Mission-Driven Entrepreneurs

Are We Hard Wired?

Hardwired Control Matrix

It has been a challenging month at Social Flights.   Our soft launch story was broken by FAST COMPANY, then it was quickly picked up by  THE NEW YORK TIMESBLOOMBERG TV,  FORBESINC. TECH,  WASHINGTON POST, and MASHABLE, then picked up by various other magazines and bloggers across the web.

Huge Interest in The Business Model

Social flights picked up tens of thousands of hits and several thousand members within a very short period of time.  We also received almost a thousand RFQ’s for charter service and our web traffic rank according to Alexa.com is under 20,000 – better than any other private jet broker in the country, including NetJets.

I personally communicated with dozens of 3rd party entrepreneurs that want to plug into our value proposition and we are discussing multiple high value partnerships in North America and around the world.

Are We Hard Wired?

Introducing such a radical approach brings many challenges, especially in the area of customer expectation.  People are hard wired to schedules, and lines, and pat downs, and waiting, waiting waiting. Social Flights was never conceived to dictate on a market how they should fly and to where.  Social flights will certainly not take people someplace where they don’t want to go – like an airport hub for transfer.  Social Flights will never hold a passenger’s dignity hostage behind some hidden cost or irrelevant regulation.

Losing The Hard Wire

We estimate that Social Flights will optimize at about  2.5 Million members – or roughly 5000 people in each of 500 locations across North America.  At that point our service model will begin to “simulate” the selection and convenience of the commercial airlines.  Keep in mind – this system will “simulate” scheduled service except without hard wires.

5000 people X 500 places model

  • This is the point where there will be a high likelihood that 8-10 people will all want to go to the same place from the same place within reasonable intervals of departure times.
  • This is the point where fluctuations in price and schedule such as de-icing costs, landing fees, fuel cost, or seat cancellation policy can be absorbed across the whole system rather than an individual passenger load.
  • This is the point where ground support vendors will commit substantial discount incentives to controlled bundles of passengers.
  • This is a point where the data that is generated by The Value Game and held solely by the players becomes valuable enough to predict the outcomes of future Value Games.

Not An Easy Puzzle to Solve:

Social Flights is attempting to do something that has never been accomplished in social media with such high value shared assets.  We seek to answer the question: Can people organize themselves around the concept of “Value” much like we have organized ourselves around the concept of “Money”.  Based on our earliest readings, the answer is that people are not as Hard Wired to money as those who control money would like us to believe. Looks like they’d jump the first plane out of Dodge if given a chance.

The Value Game Cracks the Monetization Paradox

The Value Game is becoming increasingly generalized as more entrepreneurs seek to learn how to apply it to new economic realities.  The first company to launch is Social Flights.  Quickly funded, in full operation, booking jets and signing contracts, the Social Flights success trajectory has been truly remarkable.

The Ingenesist Project is deploying several more applications of The Value Game.  Our next venture is to develop Reputation Management for High Net Worth Individuals (HNWI).  Here’s how it goes.

The Social Influence Game:

Player 1: At some point, the government is going to stop supporting many very important social programs such as schools, health care, child care, retirement benefits, and possibly even close the charitable tax deduction.  In order to survive, social causes will need to come up with new forms of support or fund themselves with a new form of currency.

Player 2: Many politically and financially influential people in communities are finding that their “Google Results” often tell a story that is less than flattering.  Some have old lawsuits, unpopular business associates, or just too much personal information that presents a skewed picture of how they actually feel toward their community.  It is risky, difficult, and expensive to change Search engine results and it is nearly impossible to “control” what other people say.

Player 3: Legions of Social Media Gurus have long learned to aggregate and influence markets using social media platforms.  They have learned to match knowledge surpluses to knowledge deficits as a means of building their own online reputation and influence.  Many Social Media Gurus have achieved a strong Social Media Presence, which supports book tours, lecture series, personal brand image, or corporate clients and sponsorships. They constantly seek new content.

Converting Political Currency to Social Currency

The Social Influence Game will match HNWI with Social Causes where the HNWI can exert their political and Corporate currency in exchange for Social Currency.  Many HNWI have a powerful lifelong network of other influential people from whom they can find advice, mentorship, assistance, or discover goods, services, or physical inventory that may become useful and available to a struggling social enterprise.

Social Media Gurus who make these connections will blog, comment, and promote their ability to match power surplus to power deficit.  Internet Search results will redraw the Social Graph.

Holiday Shopping For the New Millennium

In practice, HNWI can “Go Shopping” for social causes.  When they find one that suits their talents and passions, they will be able to see what that organization needs; beds, food, heating oil, legal advice, CEO mentor, someone to lean on the land lord or even exert a position with the local government, etc.  The HNWI then will pull out their lifelong Rolodex of powerful persons and exert their influence in favor of the social cause through the interpretation of the Social Media Guru.

Winning The Game:

After a short while, Google will start pushing the old search results of the HNWI farther and farther down the page as the tweets, comments, and blog posts accumulate.   The Social Media Guru will find gold in their own backyards instead of Corporate Astroturf.  Social Causes will achieve their mission while managing new resources and earning important new friends.

Perhaps most importantly, the HNWI community will collaborate in order to sustain their Social Currency in the community.  They will begin to bias their personal and professional actions in favor of social priorities over Wall Street priorities.

In Short, everyone acting in their own best interests benefits the interests of everyone.  This is Social Capitalism.  If it works well enough, maybe we can finally put those pesky social causes out of business.

May The Best Currency Win

If I was a very wealthy person and I wanted to put my money in a hedge fund that protects me from all possible future outcomes or perils in the financial industry – I would be looking for a fund denominated in social currency.  Should things go wrong, the only place you can go for support will be your immediate community.  After all, you can’t eat Gold.

The Cradle of Civilization, again?

Egypt has demonstrated with astonishing clarity in a remarkable twist in human social evolution how this game plays out.  The dictator may have all the money, but the military has all the social currency – domestic AND international.  What do you think every dictator wishes that they had more of right now: guns, money, or social currency?

What would happen in the U.S. if…

…government austerity measures stop funding education, health care, police protection, and the legal system?

Social media applications will move in to fill the void.

….if inefficient industries like the travel industry, publishing, advertising, politics, academia, and financial services hold their customers hostage by acting as the gatekeeper?

Social media applications will pull the gate down.

…if government, industry, and academia can no longer innovate ways to increase the productivity of people in their community?

They will become irrelevant as people will adapt to manage their own productivity on a platform of social media.

The Great Conversion Factor

Off on the horizon, a truly remarkable new financial system is taking shape.  This system will accomplish one very important task – it will provide a conversion factor between financial currency and social currency.

Every political gridlock, corporate controversy, wikileak, and dictator challenged by their own people is adding one more piece of infrastructure to this new financial system.  Each piece will soon join together to complete the chain required to define the social currency and the form of human productivity that will support it.   Hang on grandchildren, we are getting close.

The effectiveness of this currency will not be in it’s ability to replace the dollar, rather, it will be in the ability to convert between Dollars … and Yen, Euro, Pounds, Renminbi, Dinar, Rupee, etc., in the same Game within which world currencies exchange with each other today.

May the best currency win.

(Editors note: The above post is #5 in a series [1], [2], [3], [4], [5] introducing The Value Game to a new class of business methods.  The first real world application is Social Flights; a collaborative production / consumption game being deployed to the market.  If this works, the new business method class will be generalized throughout the economy to catalyze the convertibility of social currency.  Please join us at The Future of Money and Technology Summit in San Francisco on february 28th 2011 where we will unveil the work to the technology community)

Social Vetting Makes Knowledge Tangible

The term “Vetting” comes from the sport of horse racing where the animal is “vetted” by a veterinarian to determine if the animal is in suitable condition to race.  Today, there are many vetting mechanisms acting in society and communities.  Think of it as the referee that keeps the game fair.  This is important because if the game is not fair, people will stop playing.

Where the vetting mechanism fails, the system fails. This has happened in countless instances from the current financial crisis to nearly every product, market, environmental calamity, or political failure in recorded history – the referees who were supposed to keep their eye on the ball, did not. Likewise, where a vetting mechanism is effective, the system is efficient.

Today, we find severe problems in finance and government and people are investing their knowledge assets in social media as the place to “store and exchange” their present and future productivity – instead of deploying money or debt. As such, social vetting is taking many different forms to validate, qualify, and quantify knowledge assets in communities.

While the progression may not be noticeable, there will be a tipping point where the medium has built enough trust that it can support a currency. This new currency needs to be only a little bit more “trustworthy” than the currency it will replace. This is the point where knowledge becomes tangible.

Independence Is A State of Mind

Independence is a state of mind. Americans have always chosen independence – and they will continue to do so. It is often convenient to let ourselves trust elected leaders and the esteemed business titans to do what is in our best interest. Don’t be fooled, this is “trust”, not dependence.

It is likewise unwise to underestimate the independence movement – independence from corrupt currency, independence from fossil fuel, independence from corporate greed, independence from divisive politics, independence from endless war. Just when everyone thinks that Americans are up against the ropes, they come up with an idea so radical, so creative, and so astonishingly consciousness-altering, the rest of the world just shakes their heads in collective disbelief.

That is where we are today. Something extraordinary is about to happen in the way Americans organize themselves. Nothing is sacred, no one is immune. The next economic paradigm will alter the course of civilization.

All stages of human development were derived from the prior stage of human development by integrating the tools of that prior stage. For example, the agrarians integrated the tools of the hunter-gather such as using the chopping rock to till a field for planting – and so forth. Likewise, the industrial revolution integrated the tools of the scientific revolution; mathematics, chemistry, and engineering. Earlier this century, the computer age integrated the tools of the industrial revolution, etc.

The next economic paradigm will be derived from the Knowledge economy by integrating the tools of the knowledge economy; these are The Internet, Social Media, mobile communications technology, etc…

Americans will chose Independence every time.

Black Market Social Capitalism

A Black Market is not so much illegal as it is, extralegal. Extralegal means that a condition exists outside of a legal system. Street vendors in LA, Garage Sales across the US, some family transactions, alternate currencies, and increasingly, social media, are operating in an extralegal sector. It can be argued that most businesses probably started as an extralegal enterprise where extralegal “value” was exchanged in a simple brain-storming session.

This is only a problem depending on what side of the deal you are on. There are few liabilities, high anonymity, no lawyers, contracts, or licenses. You have a certain independence from government currencies, regulations, and oversight … and you don’t pay taxes, etc.

Tax evasion – the scourge of racketeers worldwide

However, if things go wrong, there is no legal recourse. You cannot engage the department of commerce if the garage sale item is defective. You cannot go to a bank to borrow money to finance an extralegal enterprise. You cannot sell an extralegal business in mainstream markets. If your extralegal enterprise infringes on a legal enterprise, you are liable – and vice versa. You also are vulnerable to obscure tax laws that may, or may not, eventually catch up with you anyway.

Modern Black Market

The difference with the modern black market is that social media inherently rewards high integrity and punishes low integrity. This effect makes the need for laws and law enforcement less essential in protecting business interests. If someone does dirty deals in social media, there is a form of community recourse that can take place to punish trolls and crooks. Social media does not always have physical, visible, or involuntary infrastructure to impose on the legal rights of others.

The “Little House on The Prairie” effect

The Last Mile of Social Media is an emerging condition where social media applications act in a community much as they did before all mass media. One example is Craigslist – if you sell me a dodgy lawn mower, well, I know where you live. I can “ask a neighbor” and conduct a social media search on anyone that I encounter. As communities form in close proximity, anonymity goes away and people work with people they know and trust.

Social Engineering

As governments and industries increase their usage of social media applications – this black Market becomes a grey market. Employers check backgrounds. Courts hold employers to public information usage laws in discrimination suits.   Anyone can be financially impacted by TMI on social media networks.

However, as long as it stays in the extra-legal sector Social Media will remain intangible in the eyes of the current financial system. This gives rise to two options: Government should regulate social media OR social media will operate in an alternate financial system.

My bet – and indeed the objective of the Ingenesist Project – is that an alternate financial system will emerge which will fully capitalize and securitize a social currency.   Then, and only then, it will become a relatively simple task to convert social currency to any financial currency much like currency exchanges legally operate around the world.

Social Media as a Vetting Mechanism

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Where the vetting mechanism fails, the system fails. This has happened in countless instances from the current financial crisis to nearly every product, market, environmental calamity, or political failure in recorded history – the referees who were supposed to keep their eye on the ball, did not. Likewise, where a vetting mechanism is effective, the system is efficient.

EBay does little more than defend the vetting mechanism (feedback system) and entrepreneurs do the rest. The credit score allows companies and people to capitalize and securitize assets. The US legal system keeps the game of commerce as fair as practical. Police officers and school boards keep our society safe and smart. We often overlook the importance of vetting in our communities.

Today, we find severe problems in finance and government and people are investing their knowledge assets in social media as the place to “store and exchange” their present and future productivity – instead of debt. As such, social vetting is taking many different forms to validate, qualify, and quantify those assets.

While the progression may not be noticeable, there will be a tipping point where the medium has built enough trust that it can support a currency. This new currency needs to be only a little bit more “trustworthy” than the currency it will replace. This is the point where knowledge becomes tangible.

Video: Money vs. Productivity

The questions are:

1. What is money? 2. Why is it important? 3. Why is it all so confusing?

The answers are:

1. You are money. 2. You are important. 3. You’re not supposed to know this.

This video provide an easy way to find the truth among the high-fiber ambiguity that has become our political morass. Oh Yeah, they want you to be confused because they don’t want you to act any differently.

Diversity in Innovation

Most literature on the subject of Innovation cites diversity as an important component of the innovation enterprise. Unfortunately diversity rides a political narrative rather than practical applications. Polarization is the death of diversity and the political narrative that plagues our country also plagues our ability to innovate.

Process Diversity

Not only does the diversity in innovation matter, the diversity of acceptable outcomes of innovation is also important. In addition, the diversity of attempts at innovation is essential, i.e., failure must be culturally acceptable. Preconception, bias, thresholds, and ideology often spell the end of a economic outcome.

Moving Against the Grain

Unfortunately, the forces acting against diversity are deeply ingrained in each of us whether we’ll admit it or not. For example, if you are in charge of producing diverse groups, processes and outcomes. How does one extract their own personal bias? How does one determine how much diversity is needed? Removing oneself produces randomness. Including oneself produces similitude. Polarization returns.

A Diverse Quagmire

Most companies innovate with existing personnel whose behavior can only be a function of their interaction with the company for their career and retirement prospects. Utilizing external sources does not eliminate this bias and may in fact magnify it.

There may be a way out of this quandary; we must open our observation to include all possible outcomes as worthwhile. Then we must distribute the results broadly. Where diverse people observe the same event, objectivity is achieved.

A striking resemblance to social media

By observing something derived from unobservable events, we can gain a great deal of information. because Social media is experiencing extraordinary growth we can say that a great amount of innovation is occurring. It is our prerogative to capture the innovation and not to expect the innovation to capture us, our government, or our corporations.

Diversity by Proxy

At the Ingenesist Project, we define innovation as outcomes proportional to the rate of change of knowledge with respect to time. As such, all we need to do is look for high rates of change of knowledge and we know that innovation is taking place. We do not know what the innovation is, where it’s directed, or what the market for the innovation may be. However, when we employ diverse observation, these answers begin to emerge.

Social media provides an interesting backdrop to the innovation process. Social Media does not care what you look like, the clothes you wear, or the church you attend. Social media hold no monopoly of opinion on diversity –

Diverse Incentives

If we take a lesson from economics, we know that people will generally act in their own perceived best interest. Then we can apply a set of incentives that modifies the best interests of the people. These incentives may be rewards, access to more incentives, or reduction of risk. Suppose that diversity were in fact a process of self selection or self removal from an objective? That is, people would have enough information regarding the potential outcomes that they could choose to interact with the process or not. In effect, innovating as an economy.

Photo credit

Is Freedom A New Economic Paradigm?

A New Economic System of the country of Montenegro is based on complete and unfettered economic freedom; in other words, the elimination of all barriers to conducting business.  Is Freedom A New Economic Paradigm?

Veselin Vukotić ‘s paper titled Economic Freedom and New Economic Paradigm, offers a case study that enlightens us as to some of the core changes, some easy and some difficult, that any proclaimed ‘new economic paradigm’ would place on people, culture, politics, and the markets.  From this insight, perhaps we’ll see a new paradigm emerge.

Freedom; A competitive Advantage

Montenegro has achieved a competitive advantage in their Eastern European region by reducing international trade barriers, treating foreign and domestic concerns equally, reducing “contribution” fees and other taxes, reduction of public spending, affirmation of private property, and encouraging entrepreneurship.   Veselin Vukotić  also notes that the concept of economic freedom is a complete theoretical and practical expression of an idea.  He quotes Plato:

The difference between concepts is the difference between starting ideas!

Therefore, he concludes that the idea of economic freedom is freedom of an individual to conduct business (earn money), and that business is the key factor of a society’s development and individual wealth.  While we now know that unfettered capitalism breaks down at some point, he does accomplish something important – the elimination of all government as a defining element of freedom.

The Singularity Solution

We know it is often easier to solve a problem if we can remove certain elements, even temporarily, and analyze components individually.  Suppose we eliminate Government from the equation, corporations would rule.  However, corporations are made up of individuals, so individuals would rule…they would rule whom?  The logic also breaks down.

There is one exception: what if all individuals were corporations and they ruled only themselves? Corporations are keeping government out of their affairs by keeping people off the books.  The solution is for everyone to structure their existence as a corporation contracting to each other for every conceivable business arrangement.  Heck, it only costs 40 dollars to open a business in the the U.S.

Self-regulating Freedom?

Knowledge would be shared freely, people would be paid for their productivity, diversity and strategic combination of knowledge would be rewarded.  Everyone would own their knowledge and would seek to accumulate more.   Trade barriers would be eliminated, taxes would be reduced, private property would be affirmed, and entrepreneurship would be encouraged.  Like a family, no corporation could become wealthy at the expense of another corporation for very long.

Would you be willing to pay the government to leave you alone? Is that Freedom or a new economic paradigm or both?

Seeding the Clouds of Social Media

cloud seedingOK, so what part of: Governments and industries have no intention of fixing things that they broke are we still having trouble with? The climate change summit ended in a draw after Kyoto ended in party pooper. You can count the financial crisis, endless warfare, world hunger, slave labor, forest-to-dump consumerism among the same pile of sun dried bullshit. Does anyone still trust the “leaders”?

There is a way out. People need to organize themselves around their a social media financial system. This is actually a relatively easy thing to do. Social media is like a big cloud – a big gray mass with no beginning, end, center or physical boundaries. The only way to engage the cloud is to talk to it. If you talk to it the right way, it delivers rain. If not, the well stays dry.

Now here is the trick. As social media applications continue to integrate, a correlation between conversation and rain becomes “diversified”, the randomness begins to disappear. Steady, consistent, and sustainable conversations across a wide array of social action will delivers steady, consistent, and sustainable rainfall across a wide area of social landscape.

At some point, someone will notice the similarity between the social media rainfall and the behavior of large diversified cash flows. They will develop a financial instrument to “capitalize” this value because it has become predictable. Predictable value flows can then be “securitized”. Unfortunately, the dollar is a debt backed currency and a productivity backed currency will need to arise in its place.

China accuses the weakness of the US dollar for driving speculation bubbles in anything and everything of “value” that is not a dollar. The problem is that the dollar is the only game in town. If there were an alternate currency with superior representation of human productivity, all dollar denominated assets will be converted to the new currency. The entire 50 Trillion dollar debt pressure on the US dollar will convert to a productivity backed currency forced to drive innovation at a comparatively astonishing magnitude – almost on the scale of the problems that face humanity.

A productivity backed currency means that those who are most productive earn the most money. Think about that for a minute, then go read The Next Economic Paradigm.

Community Currency; Ithaca Hours

Ithica DollarsEditor’s note: I found this copyrighted piece from all the way back in 1995.  I find such history enlightening.  As a researcher it allows me to eliminate certain variables such as Social Media, 9/11, TARP, GWB, BHO, Global Warming, and a host of other firebrand influences on public opinion and action.  That said, the clarity is remarkable. Take strong note of the intention of fulfilling social priorities.  Today, as our corporations and government (federal, state, and local) continue to cut social programs in order to service interest on debt, the void on social programs will induce an inevitable condition; Community Conversational Currency.

by Paul Glover

Originally published in IN CONTEXT #41, Summer 1995, Page 30
Copyright (c)1995, 1997 by Context Institute

Many communities are giving up waiting on large corporations or government to invest or provide jobs, and are instead building on their own strengths and resources.

Social Currency; History Matters

historymattersHistory often provides clarity in the present. I was searching the term “Social Currency” and I found these two posts on a forum from all the way back in 2001.  The authors are quite explicit in their expectations of social currency in their present and deep into the future.

A framework for the future:

I find such framework to be useful in grounding my own opinions, expectations, and aspirations in the social media space.  The authors here are quite intimate in their views and we would all be remiss in not searching the hidden layers of our consciousness on the subject.  Enjoy.

(I left all the links in hoping that this would suffice for credits back to the source  http://everything2.com/title/social%2520currency)

A Learning Revolution

Today I received an invitation to join a poll, but it was not the Gallup organization.  Today, I was given some currency to trade – it was not dollars.  Today 1200 people read my ideas – but not through traditional media.  Today, I did not work for a corporation – but I did work and I did earn convertible currency. I voted 10-15 times today, but not for politicians.

Is this the way things will become?  Ask any 25 year old what their aspirations are and, by definition, that is the way things will become.

A Learning Revolution

Today, the Wall Street Journal is reporting a strange new paradigm of populist angst.  In the past, public sentiment would swing back and forth between anger against the corporations (liberals) and anger against government (conservatives).  Today, however, things are different. People no longer view these populist swings as opposing forces.  Rather, people see government and business as one big swindle that takes all of the assets of the people and delivering them directly to the hands of the rich and powerful.

“They’re [people] mad at institutions — all institutions,” said Karin Johanson, a Democratic strategist. “Nobody can underestimate the angst, or even fear, of the American voter right now…The institutions they were relying on which were assuring them of their security were not there.”

So, dear reader, here we sit at our computer screens fully rational and aware that there is nothing we can do to impact change at this macro level.  Sure, we can join fringe groups on Facebook, or we could write a letter to our so-called Representatives.  Or… WE CAN REVOLT!!! Except, who are we going to revolt against?  Government? , Corporations?, Each other?  It’s like attacking a cloud…no middle, no defined edges, and no distinguishing features, except lightening.

For example: (WSJ) The double-edged anger is creating difficulty for both parties. Voters are demanding solutions to problems in health care, but remain wary of both government agencies and private firms that could play a role in a solution. People are upset about deregulation and furious at re-regulation. They want government action, but not if it swells the deficit.

“The greatest movement within the tea party is ‘None of the above,’” said Jim Bancroft, a founder of the tea-party group in Hartford, Conn. Officials in both political parties “need to be totally removed — every single one of them,” he said.

It would really not have mattered if John McCain or Barack Obama were president.  The difference would have us entering the same vortex with either a scowl or a smile.    The job of the President in this day and age is not unlike US Airways Captain “Sully” Sullenberger – land the crippled jet on the icy river by gliding as slow as possible, as low as possible, as level as possible, for as long as possible and hope that the hull does not sink.

Whatever is left will become the new economic paradigm: the fabric of society must remain intact, capitalism must be preserved, and social priorities must be enabled. It will be neither socialism not capitalism – both have failed.  We need to learn Social Capitalism where social media is the dominant institution that issues a productivity based currency.   So sit back, keep your eyes, ears, and minds open. Learn from each other. Let the pilot do his job – love him or hate him, he’s got the rudder.

Photo credit:  Bill Moseley

Is a social contract legally binding…and who cares?

Trillions of dollars in play:

Trillions upon trillions of dollars worth of value that once coursed through the veins of Market Capitalism is being transferred to social media from the legacy economy now stifled by insurmountable debt.  These numbers are indeed spectacular because they account for the invisible value “lost”, and most importantly, the calculations provides clues on how to “find” it again.

What is a Social Contract worth?

According to Legacy Economics, the term “social contract” describes a broad class of theories that try to explain the ways in which people maintain social order. The notion of the social contract implies that people give up some rights to a government or other authority in order to receive or maintain social order. Otherwise, we would each have unlimited natural freedoms, including the “right to all things” and thus the freedom to harm all who threaten our own self-preservation; there would be an endless “war of all against all”.

Take me to your leader

By contrast, Social Media begs the questions: who or what exactly is that authority?  Isn’t the greatness of the Internet the lack of an all powerful authority? So why aren’t we at a war of all against all?  What keeps social media at peace instead of an endless flame war?  Whatever this alien is, it is capturing and storing trillions upon trillions of dollars of value away from the legacy economy, but where?

Separating facts from fiction

According to the old economy, it is a “fact” that human knowledge is an “intangible asset” of which there are only two types defined:

1. Legal intangibles such as trade secrets, copyrights, patents, and goodwill (brands).

2. Competitive intangibles such as knowledge activities, collaboration activities, leverage activities, and structural activities.

However, when we consider social media;

1.    There is no law governing the phenomenon – so there are no legal intangibles.

2.    Collaboration, leveraging and structural activities are not being conducted in a competitive environment (the context of one “Company” against another).

So, the definition fails to account for knowledge assets in social media. The Ingenesist Project discovers the lost trillions simply by treating the social contract like a legal contract.

Tangible assets are managed by contracts

Technically, any oral agreement between two parties can constitute a binding legal contract. The legacy economy limitation, however, is that only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck.

But social media, email, and blog posts, etc., all constitute vast “written” agreements and material evidence as far as most people are concerned.   So what is missing?  Are we waiting for permission from government, Wall Street, corporations, attorneys, or the Federal Reserve to say it is OK for people to stop competing with each other or to renegotiate the terms of the social contract (and currency of exchange)?

The mystery is no mystery

Guess what, there is nothing there. Absolutely nothing except philosophical barriers carried over from legacy economics built upon political division. The mystery is that there is no mystery except using social media to unite people.  After all, the biggest Brand in the world is a Community Organizer.  Such calculation provides clues on how to “find” value again.

The 2.3 Trillion Dollar Mentor Market

Mentors provide expertise to less experienced individuals to help them advance their careers, enhance their education, and build their networks. In many different arenas people have benefited from being part of a mentoring relationship: Freddie Laker mentored Richard Branson, Bach mentored Mozart, Dr. Dre mentored Eminem, Aristotle mentored Alexander the Great, and Obi-wan Kenobi mentored Anakin Skywalker.

Mentorship: a Valuable 2-way Conversation

Suppose that mentorship could be monetized like financial instruments.  Within the structure of an innovation economy specified by The Ingenesist Project; a knowledge inventory, a percentile search engine, and an innovation bank will match the most worthy student to the most worthy mentor in the respective market structure.  The mentor would take an equity position in the protégé, not unlike taking a stock in a corporation.

For example:  A single mid-career mentor could take on 10 protégés with an option to exercise, say, 1% of the students future salary for every year mentoring upon predetermined retirement date. Say that the average mentorship lasts 10 years.  Likewise, each of the protégés also becomes a mentor taking on 10 protégés of their own.  The Master mentor will collect 1% of the revenue that each of the 100 sub-protégés provide to their middle mentors per year.

The Educational Pyramid Scheme

If each protégé becomes at least as successful on average as the mentor, the master mentor can collect the equivalent of their average salary for the duration of their retirement.  If each of the protégés become equally effective mentors, then the master mentor can double their average salary for the duration of their retirement.   A third tier adds another salary to the master mentor.

This is what actually happens in an informal way within companies, government, and Jedi Knighthood; the exception is that social media will enable this to occur outside the construct of a corporation – and such.

Game Theory for the Rest of Us

An interesting social game emerges:  It becomes the best interest of the mentor that each of their protégés is successful in their field and practice high integrity.  It is in the best interest of the mentee to learn as much as they can and become as proficient as they can. It is the best interest for mentees to pick appropriate mentors and it is in the best interest for mentors to take on appropriate mentees.  It is efficient for mentees to form a social network among themselves and for Master Mentors to form a network among themselves. A multiplier effect surges with cross-mentoring.

In aggregate, it is in the best interest for the membership in the social network to cooperate rather than compete because their income would ultimately benefit less from competition than from cooperation.

2.3 Trillion Dollars Market

The American Public education system is in disarray.  Standardized education defies the diversity of the country.  Teacher’s pay has been stagnant. Curriculum takes years to respond to new knowledge. Recent McKinsey research finds that a persistent gap in academic achievement between children in the United States and their counterparts in other countries deprived the US economy of as much as $2.3 trillion in economic output in 2008

None of this has anything to do with the dreams of our children.  None of this has anything to do with the intellect, motivation, and perseverance of our kids.  It has everything to do with Political stalemate and failure of the economic system.  All children can achieve their dreams, and ours, if there were a market for mentors.

Out of Cache; Will Work For Bandwidth

We can measure the time in minutes, we can measure distance in miles, and we can measure mass in grams – so how do we measure Innovation?  Am I missing something or is this possibly the most stunning omission in the history of civilization?  Who is keeping score? Where’s the referee? This is serious business, folks – the fact, factors, and factories of innovation should be in laser sharp focus to everyone right now, here is why:

The total US liability is estimated at 53 trillion dollars. Every US citizen must become more productive by $175,000 each to cover the invisible mortgage.   Government and corporations are not going to fix this problem – they will leave it to the kids to figure out how to make, mix, and measure innovation.

Natural Resources of Bandwidth

It is official; the United States has run out of bandwidth and we need to create more. The only way to accomplish this is an extraordinary expansion in the breadth, depth, and scale of innovation. This is a situation that cannot be rationalized by any conventional school of thought – starting with our definition for innovation.

The accepted definition for innovation is “something novel and useful”. I hope that I am not insulting any B-school professors or innovation guru’s but “something novel and useful” is already bankrupt as a definition for the only thing that can pull us out of this flaming tailspin of debt economics.

So let’s try something that the kids can do well (because they get to pick up the tab):

Innovation = Bandwidth Created / Bandwidth Expended

So there it is: a simple, clean, and effective:  If the number is greater than 1 we have a creation of wealth. If the number is equal to 1 we have a transfer of wealth, if the number is less than 1 we have the creation of more debt.

It should not matter how one defines bandwidth as long as the top number and the bottom number are measured the same way. If the kids can increase the top number, or lower the bottom number for anything anywhere by using their social, creative, or intellectual ability, alone or in groups, then they can become successful innovators.

Business case

There is a clear and rational business case for bandwidth – people will pay for it at a price relative to their own available bandwidth. Let’s give the kids a game they can win.  Let’s give them a score that they can keep. Let’s show them how entrepreneurs work, think, and play.

For the same amount of bandwidth expended, they can create more bandwidth for 10 rich people or more bandwidth for 1000 poor people. Let the kids decide. If they give some people more bandwidth at the expense of the bandwidth of others, they lose.  If they find synergies that act as a bandwidth multiplier, they win. Let the kids figure it out.

All we need to do is help develop standards to measure bandwidth.

It’s the least that our old people can do and a much simpler problem for our feeble minds to solve.  The Ingenesist Project specifies 3 web applications which if deployed to social media will allow social capital, creative capital, and intellectual capital to become tangible outside the construct of the traditional corporation – we believe that this may do the trick.  There may be others working on the problem too, we don’t care – at the end of the day, we all work for bandwidth.

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