This week I had the opportunity to sit down with Jeff Emmet, a Token Engineering Researcher for Giveth and The Commons Stack. In the interview we discuss how The Commons Stack is trying to create blockchain tools for handling the commons, political biases in crypto, and crypto-economic systems.
Note this interview took part over email as well as over a call so some answers have been edited to make it easier to read.
- Can you give a quick overview about yourself? How did you start with blockchain and cryptocurrencies?
I was very interested in applications of blockchain for social impact, and the co-production of public goods through socio-economic incentive alignment. I did a year of independent research, before joining Giveth and starting the Commons Stack with Griff Green, Michael Zargham, and the rest of the team.
- What made you interested in researching socio-economic incentives with crypto? Do you feel that there are things that are wrong with how our incentives are set up today?
In the world in general, massive problems. I think we can make better socio-economic systems that allow for better alignment of human-cultural processes and political-economic processes. I don’t think we have a system that merges the two well so you see groups that need to take action against their political or economic system and I think we can do a better job of building these systems so that they account for those social processes rather than the social processes having to take place against them.
Why do we have to rise up against a political party? We have these arbitrary locks on power. We say, Trump is in for four years and up until four years, you can yell or try to impeach him, but we have these arbitrary lock periods. I’m not saying viscosity is a bad thing but I think we need more liquidity in our political system. Of course there should be long term planning but ultimately, it comes down to this popularity contest and in some countries more than others. We can do a lot more if we rethink these systems from the ground up. It’s not simple or straightforward and it’s not like we’re trying to replace the US government because that’s not even realistic. We need to start small and thinking at the community level. This is what blockchain brings to the table. It empowers communities with tools that allow them to create their own economies, incentives, and ways to solve their own problems. It removes the information hierarchy in place now that creates solutions that don’t meet the needs of the community.
- It’s a bit of an anarchistic way of looking at it?
Ya for sure. I try to be careful with taking any ideology wholesale because it’s often a larger bite than people can chew. I identify with socialism, anarchism, and a lot of different things. I think we need more flow between our ideologies because socialism has a lot of great points, so does anarchism, and maybe even capitalism. Neoliberal capitalism takes it a bit far but capitalism in the sense that markets are good information aggregators, I totally agree.
There are people in the commons space that completely disagree, they say as soon as you introduce a market to the commons, it will extract and exploit all value. With poor system design that’s true, but I think if you build in the protections, you can have a capitalist-socialist economy, essentially the best of both worlds. I see things as a gradient instead of binaries because you can have system designs with elements of both. So these definitions are a bit too strict, that’s why I don’t identify too much as one over the other.
- What were your initial thoughts of crypto?
I went through phases of thinking it would solve all the problems in the world to thinking it’s the most disappointing technology ever developed. =)
- How did you get started with the Commons Stack and how does it work?
I sent a copy of an article I wrote on my views of the future of charity to Griff Green, the founder of Giveth. He called me up a few weeks later and said “we’re going to build that, when do you want to start?” That was late 2018, and the Commons Stack started up in early 2019. We are building an open source library of token-engineered DAO components, for use by communities who want to use our #cyberphysicalcommons infrastructure to provide incentive alignment to facilitate the achievement of shared goals.
- A common understanding among socialists / leftists is that the very existence of charities shows the inability of capitalism to provide for all and they end up actually reinforcing a broken system. Do you have thoughts on this?
What we’re building with the Commons Stack is not about for-profit vs. non-profit, I think there is some middle ground. In our world today, we give for-profits a lot of perks. People are handing money to companies like Google and Amazon, when they’re not looking for money, hand over fist in the stock market. They’re saying “I can buy your stock and lend you money. You can provide value with that money and my investment goes up.” This is like a ready available global pool of funds.
A non-profit has to spend something like 15 – 30% of its time seeking grants, finding donation, and convincing people they’re important. So already you have this massive opportunity cost just to raise funds to do something. This has actually held us back because we want to build. We’ve spent the last year writing, fundraising, and talking about what we’re going to do because we have to convince people about what we want to do since there is no non-profit stock market. And there’s a reason why there’s no non-profit stock market. It’s because people don’t want the value to be extracted by shareholders. Corporations are legally obliged to give value to stockholders, especially in the US.
What we can do now is create a protected market where you can participate in the market but it comes with certain rules like maybe when you sell the stock, you have to give 5% to this non-profit. It’s a new form of impact investing where we can raise a global pool of capital for organizations that are solving these problems and they don’t have to spend time seeking money and pleasing donors. Whereas for-profits get money handed to them.
Ultimately the problem I think is that we have this one form of value and it’s money. You can never have enough no matter how much you have. I think we need multiple forms of currency to represent different values that we hold. Money can be one, but you can have reputation in a community, community engagement, or trust in a community. Then we can have more facets to value. We don’t need to boil everything down to a dollar.
- What is the current status of The Commons Stack? What should people expect in the future from it?
The Commons Stack is currently preparing to fundraise, and finalizing our project overview/whitepaper. We are pursuing multiple grants, and also collecting donations from the wider blockchain space, while growing our trusted community. Donors will be able to participate in the launching of community field test commons, and be part of the initial action. Throughout 2020, we will be carrying out our fundraiser, so be ready to contribute and be part of the Commons Stack Trusted Seed.
- I would argue that blockchain and cryptocurrency are inherently political technologies with very real potential to change how we interact economically and therefore socially as well. Commons Stack is really interesting because it seems to be trying to rethink the Tragedy of the Commons problem compared to the usual market based solution that we find in most of the industrialized world. What are some of the more interesting designs you’ve seen so far using the Commons Stack?
The economic design space opened up by token-engineering methodology is wide open to explore. There are likely market and non-market based solutions to address varied challenges, such as the provision of public goods. We are interested in building tools to allow for different groups of developers to build economies towards the provision of community goods that are important to them. So far, some of the most interesting groups who want to use the Commons Stack are Grassroots Economics & the Red Cross, launching #CommunityInclusionCurrencies in Kenya, and Electraseed Fund creating democratized renewable energy access in Europe and the global south.
- Do you think there are political biases within the general crypto community? I find it sometimes difficult to point out to others in the crypto space that have certain assumptions that I would disagree with without trying to be political since crypto seems to attract a fair amount of people who think economics is outside of politics. Where I think inherently economics is political because incentives tend to accumulate and those with the most resources then get to disproportionately influence the rest of the economy. Politics is what we say we should do with our resources while economics is just the analysis of what we’ve done with them although the line is really blurry.
Definitely. A lot of it is that we bring assumptions from our old political systems when we have this new infrastructure layer where we can build outside of those assumptions and it confuses people. Continuous voting was just not feasible before with pen and paper. We’re in a unique time where we can question some of those basics. I don’t think people have clued into it yet and think blockchain is a new technology they can apply to old processes but it can be used for new processes as well.
I don’t think you can separate politics and economics in the blockchain space because you’re talking about issuing your own money. Who’s going to issue it, who’s in charge of it, and who’s going to upgrade it? I think blockchain really blurs the lines between politics and economics in that way. Whether you do it through an official governance policy or not, it is defining a governance policy.
I think that gives power to blockchain as well because we can question all these assumptions we’ve made for the past hundreds of years of currency as we know it and baking it into the nation-state system. Now it can be up to the ones creating it and there are tons of different options. There’s Proof of Work, Proof of Stake, and I don’t think we’ve even scratched the surface of Proof of Authority.
What we’re trying to build is essentially a library of different options so you can find the one for your context. That’s an important part because it’s going to differ between a ten person community, a thousand person business, and a million person province. You’re going to need different layers of government. We look at it biomimetically. Life is nested with cells, organs, beings, etc. each making their own decisions. We just need to make the cells (communities) be able to interact with each other with a modular library of tools.
- You mentioned over Twitter that it would be possible to simulate some kind of socialist economy on cadCAD, how does that look like? Does it work together with Commons Stack?
The Commons Stack is creating a token engineering toolkit which can be used to model, simulate and validate cryptoeconomic systems. Depending on the mechanisms employed in your system design, you could create any kind of system, although we recommend token-engineered solutions to match the circumstances over following ideological lines in the design of an economy. However, the technology will be open source so anyone with the appropriate skills could implement a community economic system according to their group needs.
- I can imagine why as a company or organization you would want to say that. It’s good policy to be politically neutral. But, do you think that by encouraging people not to explore ideologically based designs of the economy, it insinuates that you only want to explore designs within the status quo, i.e. economic designs within capitalism?
I would say no. I think socialism makes many improvements on capitalism without a doubt. There are commons advocates out there that think a commons economy should be outside of capitalism or socialism and it should be producing for itself. That’s great if you want to produce everything yourself but we live in a globalized world and I think views that say we should have no capitalism to provide for ourselves is cool but those people have to live without money. I think we need to protect from the extraction out of an economy but we don’t need to build a wall from the modern world. We can win by taking the best from different ideologies, but we need to go way more socialist than today, neoliberal capitalism is brutal.
- I think it’s safe to say we could probably simulate many different types of capitalism with The Commons Stack since capitalism is the dominant economic system in the world. Similarly do you think it would be possible to test many different types of socialism, or some other mode of production?
I think that’s what I’m most excited about. It’s tough though because different ideologies mean different things to different people. A lot of the disagreement I’ve seen have come down to semantics. I say capitalist but I think we should define that because when I talk to some socialists, it’s like a dirty word. I think capitalism means using profit incentives to encourage behavior but I’m not sure.
- My view is that capitalism is more the focus on wage labor. The mode of production (how you produce goods for your society and economy) is where you have the capitalist who pays people who don’t have capital and they sell their labor on a market to make stuff for capitalists. The capitalist, because of that power structure, is able to extract the value of their labor and gain more of the reward. That’s how I like to define it.
So capital is a stock and labor is a flow (check out Donella Meadows’ Thinking in Systems). Capital accumulates and you can’t accumulate labor. I can only give it by the hour. They’re on a separate differential order. It’s like speed versus distance, if you’re familiar with calculus. What we need to do with labor is put it through an integrator function so you can allow labor to accumulate power. We do this through ownership-labor rather than wage labor. So if you work in the commons, you’re earning money and you’re earning voting power. The more you work, the more say you have along with the capitalists.
Right now, you can see altruist burnout where people want to help with open source projects but they realize they need to make money. Even in our project because they’re not getting paid and people need to get paid to eat and survive. In our current system, capital is upstream of labor because that’s the power structure. If we can have a capitalist give capital that’s fine but they do it one time. Then the laborers are working in the community and they get ownership. So now they’re co-owners and equal. It’s about peer governance and giving laborers more power. Capital makes the project possible so they can have some say but they shouldn’t have all the say. The laborer who puts in an equal amount of labor value should have an equal spot on the table. I think this is an interesting merging of capitalists and labor by putting them in circular flow with each other. You can also have a system of just time-dollars.
One of the problems I see in the space is that there’s plenty of people who want to help out but there’s no capital to pay them. It’s one of the problems with a lot of the DAOs. They’re all trying to figure out how to fund themselves. They want to avoid VCs and try to pool all of their own money. Capital isn’t the problem, it’s the expectation of an extraction of value because of an investment of capital. That’s where we go off the rails.
I’m not sure if we can go in the complete opposite way though. There are plenty of commons projects out there and they’re islands in the rough seas of capitalism. We need to build bridges between these isolated commons so they can cooperate without sacrificing all of their values on the open seas.
- If people want to help with the project or keep up with you, where should they look?
People can find us on telegram: t.me/commonsstack, twitter: twitter.com/commonsstack, medium: medium.com/commonsstack, github: https://github.com/commons-stack
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