Issue #76: Nonmonetary Exchange of Value
I started the week writing about the downside of protocolizing everything. Silicon Valley loves to say that “software is eating the world”, but at what cost?
In the case of Twitter - a communication protocol imposing a 280 character limit - the cost is clear. We sacrifice context and nuance. I would argue not an even trade.
Does the same trade-off exist with DeFi, where we are standardizing the most common financial arrangements? Are we sacrificing something important in the name of composability and predictability?
Perhaps. Maybe personalized services, cultural and geographic differences, and the needs of the long tail and those not represented “in the room”. Interesting to consider the long term effects of this on global economics, but unfortunately an exercise I’m way underqualified for.
In parallel, I was reading One From Many by Dee Hock, founder and former CEO of VISA.
Turns out VISA had a very unique operational structure, inspired by what Hock observed in his community and in nature growing up in Colorado. One theme was the importance of nonmonetary exchange of value - basically, doing something without the expectation of anything specific in return. This is critical for a healthy, well-functioning community.
There’s a connection between these two ideas. Turning any process into a protocol necessarily forces it into a well-defined box. It’s makes it easy to use and predictable, but void of any subjectivity and humanity. A similar result occurs if we assign a dollar value to every exchange, regardless of context and size. It makes it easy to measure and predictable, but void of any subjectivity and humanity.
We need both. Hence the importance of nonmonetary exchanges of value for healthy communities.
I spent hours this week writing, but nothing I wrote was half as insightful as what I was reading. So I thought it best to just share an excerpt from the book…
Dee Hock - One From Many
“Over the years, I puzzled over an ancient, fundamental idea, the idea of community. In time, we came to believe that the essence of community, it’s very heart and soul, is the nonmonetary exchange of value. The things we do and the things we share because we care for others, and for the good of the place.
Community is composed of things that we cannot measure, for which we keep no record and ask no recompense. Since they can’t be measured, they can’t be denominated in dollars, or barrels of oil, or bushels of corn - such things as respect, tolerance, love, trust, generosity, and care, the supply of which is unbounded and unlimited.
The nonomonetary exchange of value does not arise solely from altruistic motives. It arises from a deep, intuitive, understanding that self-interest is inseparably connected with community interest; that individual good is inseparable from the good of the whole; that all things are simultaneously independent, interdependent, and intradependent - that the singular “one” is inseparable from the plural “one”.
The nonmonetary exchange of value is the most effective, constructive system ever devised. Evolution and nature have been perfecting it for thousands of millennia. It requires no currency, contracts, government, laws, courts, police, economists, lawyers or accountants. It does not require anointed or certified experts of any kind. It requires only ordinary, caring people.
In a true community, unity of the “singular one” and the “plural one” applies as well to beliefs, purpose, and principles. Some we hold in common with all others in the community. Some we hold in common with only part of the community. Others we may hold alone. In true community, the values others hold that we do not share we nonetheless respect and tolerate - either because we realize that our beliefs will require respect and tolerance in return, or because we know those who hold different beliefs well enough to understand and respect the common humanity that transcends all difference.
True community also requires proximity - continual interaction between the people, places, and things of which it is composed. Throughout history, the basic community, the fundamental social building block, has always been the family. It is there that the greatest nonmonetary exchange of value takes place. It is there that the most powerful nonmaterial values are created and exchanged. It is from the community called family, for better or worse, that all other communities are formed.
Without any one of the three - nonmaterial values, nonmonetary exchange of value, and proximity - no true community has ever existed or ever will. If we were to set out to design an efficient system for the methodical destruction of community, we could do no better than our present efforts to monetize all value and reduce life to the tyranny of measurement. Money, markets and measurement have their place. They are important tools indeed. We should honor and use them. But they do not deserve the deification their apostles demand of us, before which we too readily sink to our knees. Only fools worship their tools.
…When we attempt to monetize all value we methodically replace the most effective system of exchanging value for the least effective. Because we cannot mathematically measure the nonmonetary, voluntary exchange of value, we cannot prove to our rational mind the efficiency of the whole or the parts. Nor can we engineer or control that which we cannot measure. Nonmonetary exchange of value frustrates our craving for perfect predictability and control that monetary exchange always promises but can never deliver.
When we monetize value, we have a means of measurement, however misleading, that allows us to calculate the relative efficiency of each part of the system. It does not occur to us that we are destroying an extremely effective system whose values we can’t calculate in order to calculate the efficiency of an ineffective system. It doesn’t occur to us that attempting to engineer mechanistic societies and institutions based on mathematical measurement may be fundamentally flawed. As the popular dictum declares, “What gets measured is what gets done.” Perhaps that’s precisely the problem.
Thanks for reading,
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