P2P Foundation

The Foundation for Peer to Peer Alternatives

In the west (and particularly in Europe) we tend to settle for the less-than-inspiring experience: the experience with the product that we cannot configure and use;

the experience with the train service that sells us the long distance ticket on the sardine-packed train with no seat;

and the experience with the institution that takes no extra step to realize the goal in such a way as would benefit everyone: the applicant, the civil servant who's getting paid to perform the job, and the group of people who are benefiting from the existence of that very institution.


Each of us have, I believe, had a truly great service experience at some point: one where we walked away energized and optimistic, with renewed faith in humanity's strange but nonetheless remarkable ability to excel. In my own life, I can speak of a few examples of exceptional service (Thai Airways) where everything from check-in to layover to final destination ran like comfortable clockwork.

Same goes for the product that "just works" (I found that many Sony products fit this) - we want to go out and buy the whole catalogue. And as far as institutions go, both Estonian Migration and Health administrations proove - hands down - that you don't actually need a huge budget to run a successful, relatively non-abusive "in-the-black" public organisation (Estonian corporate Tax: 0%; Individual tax 20%, population 1.34 million). Nor do the consumers of these institutions need to deal with demeaning sniping, general incompetence, abuse of power, and intellectual violence which unfortunately so typifies nearly all other western European bureaucracies). It's a more-than-reasonable institutional experience that doesn't cost much! It rather seems like the cooperative spirit between the client and the civil servant is built-in from the start of the relationship.

In short, the positive experience teaches us that the great product/service/institutional experiences are well within the range of the possible.

Of course, those of us who have had terrible experiences (product, service, or institutional) know well the anger, depression, loss of motivation and energy that these experiences can lead to. We complain to our friends and family (Note: the people in our lives who deserve that grief the LEAST), and it changes absolutely nothing. My point? Such substandard treatment is not only unacceptable, it is dangerous for human endeavor (ALL of us are consumers).

Not to mention unnecessary.

Too often we are told by employees of those who provide substandard goods and service experiences (particularly monopolies or state institutions in Europe) that "that's all we can do" or "I can do no more for you". And we must be resigned - forced to accept this at face value. This wouldn't be so bad if, regulatorily at least, there weren't an element of personal disempowerment built into the arrangement as well.

Fortunately for us, we really don't have to go there.

In a P2P network, we always have potential to access to the best that this network in question has to offer. If one company's monopoly on a particular type of service and lack of accountability for poor performance leaves us in a bad spot, if we wanted to, we could a.) Petition the company or the consumer organisations with meaningful numbers to force the quality of service to improve (or else a better solution will be sought) b.)force the institution into obsolescence, or best yet, c.) create a new framework that disrupts the current model and leaves it obsolete. All with the strength of numbers that the P2P network provides.

When we move to a new country and get established, isn't it as much our network of sympathetic friends and coworkers, who helps us get set up and established - (as opposed the disjointed band of utilities, public organisations, product retailers with whom we must deal)?

P2P, if I may conjecture, is all about empowerment. It is about having (and sharing with all) access to the best that the public and private sector have to offer, and about demanding change, in representative numbers, from those organisations that fail to deliver what is needed - the great, and failing that, superior consumer experience.

If you want it that way, and are willing to do what it takes, of course.

Views: 201

Comment by Michel Bauwens on April 30, 2008 at 8:34
Hi John, may I suggest you also post this at our regular blog?

Comment by SamRose on May 3, 2008 at 15:00
I agree with you on this. I think it's time that we start doing what you describe above. I am working right now with a group of food producers, distributors, processors, and others involved in local foods chains, in Ohio, USA to establish some of what you talk about above. see http://socialsynergyweb.org/oardc
Comment by AGNUcius on May 3, 2008 at 23:25
Hello John,

I wonder if you might consider a hypothetical situation to frame your question - one that I think has a chance of solving the problem, but I need some feedback in case I've missed something in my thinking:

What would happen to the quality of experience if the very community intending to utilize the product/service/institution could somehow get together and fund it for themselves?

For instance, what would happen if all the potential passengers of a train were organized enough to invest toward building the tracks and purchasing the train, and were therefore collective legal property owners of that entire transportation system - with nobody else to answer to?

Any passengers that had paid more would have more "vote weight", and those that cared less about control had paid less, but all the initial costs had been 100% funded by potential consumers/customers.

The 'recurring' operational costs could be gathered as ticket fees similar to what occurs now with one difference: whenever a passenger (whether he is currently a partial owner or not) paid a price above cost for a ticket (such as when in a bidding war against other potential passengers), then that amount (what is generally called 'profit') would be treated as an investment from and for that very same passenger. Every little bit of profit becomes a sort of incremental funding that eventually 'vests' to the very same user that paid it.

This has an interesting effect that seems to self-balance the amount of capital the community needs: when a popular time slot is 'saturated' with simultaneous requests, the ticket price increases to push those not willing to pay the higher price into another slot and the extra payments made by those that won the bid becomes their collective investment toward *another* train since their overpayment has "proven" that the current amount of capital is insufficient to meet peak demand.

I've written much more about this, but that's the kernel of it. What do you think? Would such an approach address the issue of low quality? What troubles do you see?

Comment by Sepp Hasslberger on May 8, 2008 at 14:03
Interesting thought Patrick,

for my part, I see a problem with large organizations such as a train network.

Even if it was considered to be (and was) user owned, you'd still need a very similar distribution of jobs with station head, conductors, people selling the tickets, procurement office, finance, etc for the operation. So the only change organizationally would be a greater awareness of "who we are serving".

In reality, there would not be a great difference from a large corporation run by a person (owner) who cares to give a good service, but there would be a great difference from a corporation that works merely for profit, where all management is geared to bring in more profit (and to treat customers well if that is needed for that objective to be achieved). There would be an even greater difference from a bureaucracy, where workers and management are merely there to keep the service alive, without any real idea of interconnection between the service and those served by it.

Comment by AGNUcius on May 8, 2008 at 17:43

Thanks for the feedback.

It is easy to lose track of things as an organization scales in size. I'm working on a way to describe this graphically, but am not yet done with it.

For instance, you say a train network is too large, but what if we scaled the situation down to a group in need of a single bus? Or what about an even smaller group purchasing a car together?

Is it ever ok to co-own capital? At what point does the situation become a 'problem'?

If you see the trouble occuring somewhere between a car and a bus, then try to imagine something between those - such as a large van.

Is it the number of people, or is it the initial expense of the capital, or maybe it has to do with 'real' employment for those operating and maintaining the capital - as opposed to 'assumed' employment and maintenance?

for my part, I see a problem with large organizations such as a train network... you'd still need a very similar distribution of jobs

Are you saying the problem you see is a "distribution of jobs"?

Would you say specialization in general is dangerous or bad?

What would happen if a group owning a van were to pay someone to drive it? Would the driver need to be one of that group? What if none of the others had the skills to drive? This may sound weird, but is similar to groups that co-own light aircraft and hire a pilot because of the savings and control they gain.

Let's say everyone in the group could drive the van, and they took turns. Would that be ok?

What if two of the members secretly decided to trade something (say a cooked meal) in exchange for the other person taking their place at the wheel? Is trading labor a problem?

In reality, there would not be a great difference...

I see two big differences:

1. The consumers have full control, and by treating profit as an investment from the payer, that control remains in the correct hands. If the trouble John noted of a "sardine-packed train" were something a majority of the passengers with ownership disliked, they could easily fix it by limiting the maximum occupancy without pleading to an absentee landlord.

I think it is also important to let the minority secede whenever realistic. For instance, if 75% of the vote-weight (remember votes are not 1-per-person, but are determined by the percentage of ownership each person holds) was toward a reduction in maximum occupancy, and there was sufficient divisibility (say 4 separate train-cars), then the minority (the remaining 25%) should have the option of continuing to treat 1 of those cars as high-occupancy, while the other 3 are reduced by the chosen amount.

2. The users have "at cost"(*) access to the objectives of that capital since profit would tend toward zero. The floor price of a ticket would simply be a summation of all the costs needed to maintain the operation. Users would only pay more than cost during times of growth, and since those payments would be treated as investment from the payer, ownership would be continuously distributed as those investments 'vested' to the payer. I'm still unsure about when or what conditions should cause the vesting to occur.

(*) Consumer price would always be approaching cost, but would usually only stablize temporarily since the demands of the current consumers is always changing, and the set of current consumers is also in flux because of births, deaths, migration, etc.
Comment by Sepp Hasslberger on May 8, 2008 at 21:35

ok, let's look at a smaller group, a bus or a car.

The major problem I see is one of constancy of intent. It may be easy to get such a group together, even on the spur of the moment, but in the long run, one of the people says they need the money back which they invested (they found something more exciting to do with it) or they had a falling out with another one of the people who they co-own the car with. I think this is called the "human factor" and it's perhaps the major obstacle against owning things in common with others.

So a pretty strong agreement would have to be made to guard the group from destruction in case one or more of the human elements that are part of it change their mind. People for instance should be able to leave but not to have their investment returned to them, unless they bring a "replacement" investor/member agreeable to the group.

It's ok to co-own capital in other words, but it is also important to treat the agreement itself as an entity entitled to protection from possible destructive actions of the single investors/members, and to make that protection explicit in the form of a clear contractual relationship.

The larger a co-owned venture, the more there will be a different kind of problems, this time organizational in nature, which any entrepreneur has to routinely solve. In a co-ownership arrangement, I could imagine that the "firm hand" of the entrepreneur who makes sure things function smoothly might be missing. The more people are needed to run the enterprise, the less these people feel part of it. They become merely employees and although that is not a bad thing in itself, a company with employees also needs direction. Of course a director can be employed as well, and can be instructed how to run things. We are coming back to the need for a clear contract that spells out the rights and duties of investors/users/members on the one hand and employees/managers on the other.

Are you saying the problem you see is a "distribution of jobs"?

In a way the problem is that at a certain point there will have to be a separation between the user/owners and the employees/management. But it can be overcome by having a clear and enforceable agreement.

Would you say specialization in general is dangerous or bad?

No, specalization is necessary and positive. We can't all be pilots, for instance. Specialization only becomes bad when it gets so prevalent that there are no generalists left, people who can "put it all together".

The driver in your example could be a member of the group or not. It's a question of "hats". If the driver is a member of the group, then he is - strictly speaking - wearing two hats. He's an investor/member but he is also an employee. Each hat brings its own obligations and benefits.

Of course if each member could also be a driver, that distinction would lose importance. No problem trading something to get someone else to take over one of the obligations, like a turn in driving.

I see your differences and they could be sufficient to make such arrangements attractive.

The 'vesting' is an interesting problem. I could see that such systems need computer code to run efficiently. Each member could have their Identity and each payment into the system for service gets 'vested' as a share as it is recorded.

In addition to code, such an arrangement would also need a kind of model contract, something along the lines of creative commons, a generally agreed-upon kind of pact.
Comment by AGNUcius on May 10, 2008 at 15:22

I agree a contract will need to be written. I've started writing one based on the "GNU General Public License" I call the "GNU General Public Law", but it is confusing and incomplete.

About the "constancy of intent" and the idea that someone "wants the money back": 'regular' corporations don't have this problem, so maybe it won't be an issue if the each group always 'incorporates' ... but I'd rather not require incorporation, so I think you are right, the contract should probably outline how shares can be sold.

I'm not sure I agree that the collective others must 'approve' of the new partial owner, but I see your point. Maybe the rule should be that the collective others must always have some kind of "priority to purchase" - so the selling shareholder puts his portion up for bid on the "open market" (anyone in the world can attempt to buy it), but all of the collective others must be informed of the intent to sell and have the option of paying the winning amount instead? Or maybe they just need to be informed and allowed to bid?

You say the 'vesting' would need to occur in a computer for efficiency. I agree it would help, but have also envisioned (and I think this is important for visualization and our early debugging) a system based on "time limited coupons/receipts".

Here is a rough idea of what I was thinking: Let's say a group of 1000 people get together to buy a small dairy so they have control of how the animals are treated and so they can have "at cost" milk, butter, cheese, ice cream, etc.

Now, if each person guesses just right, and invests just enough, they will each receive exactly as much product as they expected they would need. In this case, there would be no selling of product at all, since each consumer would already own the results of that which they had funded. They would only need to come to the dairy (or storehouse) each day to pickup their product.

But since predictions are usually imperfect, and since people change their minds, some owners will be selling some things, while others will be buying a few things. It is during those transactions that profit must be calculated.

What I think we could do is: make sure the buyer receives a receipt that displays the real costs of the product, the price paid, and the difference as profit. This receipt/coupon is actually also a title of ownership for the very small fraction of ownership the buyer has gained as a result of their overpayment.

So, if the buyer paid $6 for a gallon of milk but it only cost $4 to produce, then the title would indicate that he now owns (or will own) $2 worth of shares in the dairy at some future date.

Something like that. Damn. There is so much to write, and I'm running out of time.

The idea is very simple on the surface but teeming with complexity underneath.

I hope anyone with questions or suggestions will post them here - or maybe we should start another entry for some of these details?

Comment by John Hammink on May 12, 2008 at 12:51
Guys, these are excellent comments! Sorry I have not had time until now to respond - I'm on the road with limited internet access. Although I had it in my mind to elaborate on some of your comments later!
Comment by Sepp Hasslberger on May 12, 2008 at 21:57
Perhaps we need to look at whether one contract is enough or whether it would be better to have several - for different kinds of situations.

What are the imagined situations we would wish a (model) contract to regulate?

For sure there will have to be some input from legal people, although we should guard not to get lost in legalese. First of all, the contract should be a clear statement of what the people are agreeing to, and for that it has to be simple and understandable. The legal input, I imagine, would ensure that in case of dispute whatever the contract stipulates would be enforceable.

I would tend to agree that incorporation is unnecessary and that the contract should stipulate how to get out of it, i.e. how to sell one's share. And yes, an option or "priority to purchase" of the other co-owners would make sense.

In your Dairy example, I would keep things separate, meaning the owners have one price (at cost) for their goods. At cost means that the costs of running the dairy including upkeep and any employees are taken care of as well. Any product to be sold to non-members has a "public price".

I would imagine that any one of the owners has freedom to decide whether or not he wishes to take his part of today's production or save the credit for when he wants a larger quantity. In practice things would be run like in a normal store. Only difference is the price of goods, which if different for members/owners from the price an external customer pays. Coupons could be used to run this - everyone has their monthly share divided in 30 coupons...

I woudn't go into profits or shares for overpayment at all. Keep it simple. It's a good way of getting one's dairy products at a lower price. And it should be arranged so there is freedom over what you want to take home. Maybe someone likes more milk but doesn't care for the butter. Shouldn't be a problem.

Of course there is also a risk in being an owner. Somehow the show must be run. The dairy must function, and ultimately the owners are responsible for that. So provision must be made for how to govern the asset, how to keep it functioning properly. Someone needs to appoint the management, and keep an eye on how things are going.
Comment by AGNUcius on May 12, 2008 at 23:33
What are the imagined situations we would wish a (model) contract to regulate?

My vision is for the contract to be applicable to *any* physical sources that any users choose to share. This universality is important for the higher goal of eventually using the coupons/titles as a form of currency across disciplines.

All production requires physical sources. Anytime someone uses a term such as "immaterial production" there is a chance someone (maybe even the author) is accidentally thinking physical sources are not needed or are a "marginal" in cost that needs no consideration. That thinking is faulty.

Here are some example applications and associated physical sources the contract could cover:

A Social Networking Website: The initial and recurring costs of the computer hardware, electricity, rent or cost plus tax of the land and building house the computers, cooling...

A Restaurant: The rent or cost plus taxes for the land and building, electricity, gas, water, ingredients for the recipes...

A Farm: The rent or cost plus taxes for the land and buildings, cost of implements such as tractors and tools, fuel, seed, eggs, spores, housing for some of the animals & plants & mushrooms...

A Clothing Production: Land and buildings, tools such as a loom, spinning wheels, heavier sewing machines...

There is no situation needing co-ownership that is exempt. If you can think of one, let's talk about it and make sure.

I woudn't go into profits or shares for overpayment at all.

That might be ok to keep things simple for the initial brainstorming of what the contract should contain, but treating profit as user investment is absolutely essential to insuring the enterprise continues to remain in the hands of the users. If we do not specify the destination of profit (profit is the same as "price above cost"), the originators will retain control even as the number of users increases to slowly become well-meaning dictators. Democracy will cease to be direct and product will no longer be approaching "at cost" for all users.

If you are thinking of writing up one of these examples, choose the Restaurant - as Vinay Gupta is calling for that example over at GlobalSwadeshi.net

Thanks for continuing with this. Hopefully we can distill some of this and start another post that is not so long (I think most people coming to read this page will not have the patience to read so much).

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