Building Currencies for Open Collaboration

Written by Eli Gothill Sunday, 19 February 2012 15:31
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I’ve been thinking about some of the major obstacles to online collaboration, and how currency design might be able to help overcome them. As Guillaume Lebleu has pointed out, a currency can be thought of as a tool for enabling collaboration between a group of people. Markets would be unable to function without money, which provides a unit of account and a way for people to agree on the relative value of different goods and services. The ability to exchange, in turn, allows specialisation and the creation of economy: a very large, complex collaboration between millions of agents who do not necessarily know each other.


The idea that we need currencies to catalyse collaboration between people implies that, left to their own devices, they probably wouldn’t collaborate as much, if at all. Obviously though, collaboration between individuals likely existed long before the invention of money, or even writing. The anarchist Peter Kropotkin believed that “mutual aid” – the ability of a species’ members to cooperate with each other – has always been a significant factor in natural selection and evolution:

The animal species, in which individual struggle has been reduced to its narrowest limits, and the practice of mutual aid has attained the greatest development, are invariably the most numerous, the most prosperous, and the most open to further progress.

Peter Kropotkin, Mutual Aid (1902)

If cooperation is such a deep-seated aspect of human behaviour, it seems mistaken to think that we need currencies to help solve collaboration problems. However, there are degrees of collaboration. It is quite hard to imagine a complex, modern economy without markets to organise and incentivise production. It is just as difficult to imagine how markets could work without money. Although markets might not represent the highest ideal for human cooperation, they have nonetheless been effective in motivating and rewarding people to create wealth, in large amounts, for people they have no bonds of kinship with.


A more nuanced argument about currencies and collaboration, which I tried to develop in this post, is that cooperation does occur more ‘naturally’ within smaller, real-world groups. Part of the reason for this, at least, is that in the real world, a group of a few hundred or less will find it easier to develop trust, to organise people according to roles based on their strengths and weaknesses, and to provide recognition for individual and collective achievements. Online, and especially in larger groups, these tasks are much harder: you are often working with people you’ve never met: communication is difficult, roles are not clear, and pre-existing trust may be low.
An economist might think that these collaboration problems should be solved with markets. Would-be online collaborators could define tasks the want to get done, and attach a certain amount of money to each task. That way, they wouldn’t need to trust anybody over the long term, or even work out if they have the skills required to do the job. They could just pay whoever manages to do the job. After the transaction, each party could walk away. Such markets for online work do exist, of course. However, this leaves a lot to be desired: markets are not the right way to go about achieving ongoing collaboration based on trust and mutual aid rather than money and competition.


The problem seems to be that where bonds of trust are weak, such collaboration is very difficult to achieve, despite the best intentions of those who may want to collaborate. Yet, to try to strengthen them would require meeting in the real world. While that might be a good solution for some projects, it belies the power of the Internet as a networked environment to have to take collaboration offline. It seems that, somewhere between markets and mutual aid within the context of real-world relationships, there must be an intermediate state: a way of collaborating which is both complex, requires less trust than real-world teams, but doesn’t resort to money.

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