Mutualism in the Web3 era

• Special thanks to Val Elefante, Tracy Kunkler, Nathan Schneider, Michael Skyfield, Artem Zhiganov,Spencer Cavanaugh and others for their comments, suggestions, and copyediting. <3
  

It seems to me that the nascent web3 ecosystem, and specifically the 'regenerative' branch (a.k.a. regens) and the so called 'solarpunks' are showing us that 'token' technology is capable of creating new economic incentive systems that are more aligned with ecology and the basic needs of all people. 

Which, in my opinion, invites us to re-explore a basic concept that we often overlook and that we have discarded as a way to counterbalance the capitalist-extractivist system that has us trapped in failures of cooperation at a planetary level. 

Mutualism is an interaction where both parties mutually benefit. That is, a win-win dynamic where a sense of reciprocity prevails. 

From the economic perspective, mutualism leads us to revisit the labor theory of value, that supports an ethic where prices are based on cost (expenses + applied work). An unequal exchange or agreement, according to mutualists, would represent exploitation or usury. 

That is, in a mutual organization, the goal is not to generate profit (which would be an extraction of value; an extra element to the binomial expenses + applied work), but to generate benefits for the participants of that interaction. 

For Proudhon, the product of labor should belong exclusively to the one who produces it, arguing that private property in the capitalist context, especially that which generates rent or interest, is a form of exploitation. In his famous phrase "Property is theft," he criticized the accumulation of wealth through the ownership of the means of production by a few, while others work for their benefit.

This concept, I believe, aligns with the notion of a 'social enterprise' (at least with the vision of Muhammad Yunus) where the profit is reinvested in the organization to improve it and expand its reach. 

If an 'external' investment of resources is required to reach the break-even point, the profits are dedicated to paying off the debt. In case there is no other better financing, the investor could get more than his invested amount depending on the level of risk, but the percentage should be conservative and friendly. (I would personally say no more than 2x). 

Once the equity is re-purchased, it is as if the organization became owner of itself, free to explore its evolutionary purpose. 

The essence of mutualism is found at the heart of the p2p (peer-to-peer) movement that supports the convergence of collectives, groups, multi-constituent cooperatives and entities of the social and solidarity economy based on self-management for the effective management of common goods. 

Technology platforms and infrastructures part of this movement exist to promote mutual support and relationships between productive communities based on the common good and ethical business coalitions.

This approach contrasts notably with the pyramidal corporatist structures that make up the majority of technology companies that govern the social media platforms on which billions of us depend to interact on the web2.

Ironic that several of them emerged under the banner of a 'sharing economy' and yet, in practice the owners did not tend to share the capital gains of the platform; and the workers were not classified as employees but became 'service providers' without the labor rights that the unions fought so hard for years before. 

Although the world of DAOs (Decentralized Autonomous Organization) is enabling the emergence of decentralized peer-to-peer networks that call into question the need to have a central authority (thus reducing the risk of a single point of failure), it is important to highlight that these economic systems will continue to reproduce the deficiencies of capitalism unless we change the belief system that generates it and economic model that underpins it.

What would a mutual society look like in the age of Web3? How might we integrate the principles of social enterprise and the commons into the engineering of tokens that will govern that economy? 

I believe the Web3 industry is tapping into a very powerful concept: composability. 

Which refers to the advantages of building components that are compatible so that others can build on your work without having to start from scratch. That perspective of stacking ‘Legos’ as if they were parts of something more complex is triggering a wave of open innovation throughout the industry. 

On a personal note, I find that something curious about working at Web3 is that it seems like you are working for the entire web3 industry, or at least a particular ecosystem (like ethereum, solana, bitcoin, etc.) made up of hundreds of multidisciplinary teams that form and fragment according to market cycles.

This means that, while you may be contributing from a certain groups’ identity, particularly participating in certain communities (a.k.a. DAOs), you could say that there is a sense of alignment between the different projects. Like a flock of geese; or armada of ships following the same direction.

The useful thing about introducing the concept of mutualism is that it invites us to ask ourselves the question: How could we mutually benefit from better coordinating around a resource of common interest? 

And since we're talking about work, we could say in Marxist jargon: how could we better share co-ownership of the means of production? That is, coordinate better in the use of the instruments and work tools that allow us to appropriate the profit of that 'applied work' in the creation of value.

Instead of trying to solve it at the nation-state level (which I think has been a failure in the so-called socialist countries), because it tends to have a lot of power accumulated in a centralized group of people which is a magnet for personalities who end up colluding to hold on to power.

The difference this time is that we can now build and co-manage our ‘means of production’ among ‘self-managing mutualistic collectives’ facilitated by blockchain technology.

Interesting that mutualism, as a social movement, originated as an adaptation of the guild system, which brings together people who share the same trade or profession with the intention of establishing agreements and ordering the exercise of the trade. This type of coordination facilitated the creation of trade unions and groups that defended the economic, professional and social interests of workers. 

What would a common infrastructure shared by all those 'service providers' be—one which leverages composability by sharing what is 'general' yet also affords  autonomy over what is specific?

In software engineering jargon, forking means making a copy of the source code of a software package and starting independent development on it. In some cases it can be considered ‘hard forking,' where a group of contributors 'exit' from the larger community to create a new community around a version 'B' of the software. 

And although the hard fork is a great 'social innovation' in allowing for a relatively positive and viable 'rage quitting', it seems to me that there is a waste of resources by falling for such a blunt solution. That is, having a disagreement on an issue should not necessarily mean that there cannot be stable agreements that remain.

An example of this, to take it to something more mundane, could be food. 

Let's imagine that a group of friends get together to prepare a barbecue. 

And yet, as is evident, there are people with different diets. Let's say that in the group there are some carnivorous people and others who are vegetarians and vegans.

Of course, getting a meat-eater and a vegan to agree on what a person ought to eat would be enough to ruin the barbecue for everyone else. Fortunately, the important thing is not to reach an agreement on what each person should eat, but rather that each person eat what they want without affecting the other in doing the same.

In that sense, it is very likely that there will continue to exist a category of food that 'everyone could share' (carnivores, vegetarians and vegans) and the ideal, economically speaking, would be to buy these inputs collectively, to take advantage of the economy of scale. 
And even if there was no food that could be shared, the infrastructure for cooking—the grill, the fuel, the utensils and dishes—presumably could.

That is, the disagreement about carnivore vs. vegan does not displace other agreements where they continue to have 'compatibility of thought' and where both parties would benefit. 

Returning again to hard forking in the programming language, let's imagine what it would be like if when deciding to create that 'version B' due to a difference of opinions (with those who promote 'option A'), you had the option of continuing to share the entire common infrastructure where compatibility still existed.

To use the example of the Bitcoin community, they may not be able to agree on the right block size but they surely continue to share the ideal of building a form of payment outside the control of any person, group or entity. And seen from an economic point of view, with mutualist overtones, there are still many things that could continue to be shared where both parties would benefit. 

Isn't it somewhat counterproductive for a project to completely fragment, organizationally speaking, simply because it couldn't reach a (more superficial) agreement, when there was so much alignment at deeper levels?

What if, instead of breaking up completely (doing a Hard Fork), they had stayed together (in what they shared) to promote the success of all three versions (and thus further the purpose that brought them together in the first place)?

Well, I propose we call this org branching, highlighting when initiatives decide to separate their efforts while maintaining a common infrastructure. An attribute that could help us uphold better the ethic of mutualism in the web3 space. 

What kinds of economies of scale could we take advantage of, if we learned to share resources, tools and services with other compatible initiatives at the base layer?

I understand that these concepts may sound either very basic or naive and idealistic perhaps. Some might even ask: if this has so much potential, why doesn't it already exist? Why has it not already been a counterweight to the current system?

Well, first of all, in this mutualistic model the ultimate goal of the organization is not profit, but rather the benefit of the people involved. Therefore, there is less incentive to initiate such a coordination effort. Generally speaking, it requires social will for something like this to work. And yet, it seems that this is an idea whose time has come, thanks to the new coordination tools that are being built on the web3.

Furthermore, I believe that mutualism has not been a counterpoint to the capitalist-extractivist system (that promotes the accumulation of capital at all costs), precisely because it has never been generated on a global scale.
That is, in the example of friends at the barbecue, it is important to highlight that they were already 'friends' so we assume that there is a shared degree of trust. 

In fact, one of Elinor Ostrom's contributions in her study of the Commons was to demonstrate that coordinated collective management can be extremely efficient and sustainable over time. Even more than a market perspective and government regulation. But as long as there is a certain level of trust in the system. Without trust, coordination is not possible, and without coordination, resources cannot be mutualized. 

In other words, the level of mutualization depends on the type of asset and the level of trust required to share that type of asset with another unknown person.

Rivalry in ‘goods management’ refers to the extent to which my consumption of a resource prevents you from doing the same. Clothes, for example, are a rival good. Sunlight is not a rival good, since my consumption does not prevent you from enjoying it.

For example, sharing a ‘service’ with someone does not require much trust since one's use does not affect the other as long as the rules are kept in order. And although there may be some rivalry in its use, sharing 'insurance' or 'doctor' with someone may even be beneficial. It usually doesn't matter to you as long as you continue to have access and the way in which you are served is not affected by the person with whom it is shared.

And yet, there are other goods that require a higher level of trust, such as sharing a space or working tools. In other words, sharing the store is not the same as sharing the food you buy there. 

Something similar happens in a virtual context. Sharing a library of images is a good that requires less trust than sharing work equipment. A subscription can have a very low level of rivalry if each user has his or her own plan, or a higher level of rivalry if multiple people share the same user; which by the way is cheaper.

There are different levels of trust required depending on the level of rivalry over access to that common good. The good news is that coordination can reduce rivalry (in the sense that we may clash less with each other), which allows trust to be sustained on a large scale, allowing abundance for all participants for the time being – until someone or something destroys the trust and mutualisation fragments again into smaller groups. 

So the real question would be: how can we cultivate trust on a large scale, in order to allow for greater coordination and mutualization, and make it last as long as possible?

This is where I think Web3 and the tokenization of assets is so promising. Precisely because the blockchains have integrated information verification systems. In fact, one notable value proposition of blockchains is that you don't need to trust a third party (because you have confidence that the system will notice if the agreement is broken).

In other words, blockchains are transparent ledgers; so they reveal hackers and criminals and other trust-breakers; as opposed to centralized systems, which are black boxes where malicious actors can be protected by their power relationship.

Just consider the banks and how they often fail to give a full, fair, and accurate account of their financial positions. An opacity, it should be mentioned, that triggered the 2008 financial crisis, where those responsible were bailed out and the consequences ended up absorbed by the public.
 
In contrast, Blockchain technology allows us to trust (a little bit more) since the shared infrastructure is incorruptible and cannot be modified by anyone and therefore will maintain the agreement via the public protocol regardless of any fraudulent intentions that another party might have. 

And while blockchain doesn't inherently have any way of preventing people from doing harm, different social trust incentive systems are being designed to promote open and cooperative behavior. Regenerative economies that reward the impact generated or that reward those who carry out a positive action towards the rest of the collective.

What happens when we combine the experience of cooperativism and the social and solidarity economy in the construction of agreements and spaces for mutualisation, with the technological potential of a transparent, decentralized and secure ledger?

Let's imagine a smart contract that allows sharing the use and enjoyment of a ‘private good’ as if it were a ‘club good’ or a ‘common resource’ among members of a specific group. Thanks to coordinated management, each individual can save a little on the maintenance cost (compared to what it would cost to do it independently) without significantly deteriorating the experience of accessing that resource.

In some cases, the group may have a clear number of participants and these could be co-selected by themselves (club goods), in other cases, the resource could be open to anyone who wanted to participate (common resources). 

Let's take the famous shared drill example. When the 'sharing economy' platforms became popular, the popular notion was that one is interested in access to the outcome and not the tool (i.e.. resource) needed to achieve that outcome. That is to say, what you want is the hole in the wall, not necessarily the drill. 

Let's say that the ideal number of people sharing a drill in an apartment building is 12. Thus, one person could make the resource available to mutualize (generating an in-kind contribution that could be quantified and considered 'equity' of that resource).

Initially 8 neighbors decide to mutualize that resource and a specific amount is defined as a charge for the use of the drill. The money will buy back the equity from the person who donated it in kind until the total cost has been covered. After that, the drill belongs to the group in question.

At that point the group can reduce the cost of membership or simply generate a savings account for when the drill itself stops working and requires repair. If the group grows (to about 15 people) and exceeds the 'adequate critical mass' (generating tensions due to rivalry in the use of the resource), the group could buy a second drill and separate into two groups (7 - 8 people again) or look for ways to improve coordination. Eventually, there could be 3 or more groups. Or even alliances with neighboring groups with other types of tools.

Insufficient critical mass < Adequate critical mass < Exceeded critical mass

It is important to note that, if the system tends to grow, it is likely that over time neighborhood leaders will emerge who will take on management roles; such as the role of coordinator, secretary and facilitator. Ideally, these roles of caring for the system should be recognized; and probably rewarded (either with money, kind or benefits) in proportion to the workload.

And although this already occurs informally (like with the neighbor who gives away cupcakes from time to time to maintain a sense of reciprocity), the possibility of having a more formal membership system could be used to better support the care-work roles and the costs required to keep the resources in good condition (i.e.. expenses + applied work); which would promote its sustainability over time.

Again, something similar happens in the digital world. 

Let's use the example of a video calling service. Let's say that the subscription allows the use of up to a limited number of virtual meeting rooms, which are potentially shared by a group of people with the intention of reducing the cost of individual membership.

Probably, if the rivalry of arriving at the same room at the same time is to be reduced, a coordination system will be required that allows rooms to be set aside on a collective calendar to which everyone has access.

The work necessary to create this coordination system, both on a technical level and in terms of social issues, is care-work for better management of the resource. Instead of waiting for someone's altruistic proactivity, the group could establish a support role that can focus on building the tool and accompanying the induction process so that the average member learns to be self-managed.

If the number of people exceeds the coordination capacities, then it is understood that this is the ideal critical mass and a new group is created, which will replicate the same agreement. It should be noted that the management tool is now useful for both pooling groups, and potentially for all those who come. The more people there are, the better the benefit of belonging to that infrastructure. And what's better, if the coordination tool is ‘open source’, it could benefit many groups simultaneously.

By the way, although subscription services tend to discourage the notion that users “share” their services.  Instead  that users “use” them via an individual non-transferable account (by riding the web's infinite resource narrative), it is worth mentioning that running the platform's servers has real energy and economic costs, so 'making the most' of each resource should be in everyone's interest; especially if that allows access to more people.

Just to underline that, in the event that a person begins to participate with a certain fraudulent motive, another member of the group can file an objection and trigger a facilitated conflict resolution process where agreements are built on behavioral changes needed; or the member is expelled from the initial group (imposing an exit tax that acts as an incentive not to do so). 

That is, the standard is to trust until someone gives reasons to stop doing so, and then sanction based on the seriousness of the matter. Sustaining trust, through coordinated co-management, benefits everyone who participates. When someone breaks trust, the consequence is losing the right to participate in that circle, and to leave a record of what happened.

Elinor Ostrom precisely considers the principle of exclusion as the first of her eight principles for sustainability in commons’ management processes. Having clearly defined boundaries is essential for mutualization; and it is precisely trust (and the willingness to coordinate) that acts as that selectively-permeable membrane that allows 'anyone' to participate as long as they behave under the group's norms. 

Now, what would happen if we took it to an organizational scale?

In my perspective, an organization could be divided into two components.

The first, the base infrastructure, is everything linked to the maintenance of operations. That is, the organizational skeleton that any group of people requires to coordinate.

Here we can find governance (i.e.. agreements on how to structure, make decisions and function), communication channels and access to information (as well as management tools), departments focused on linking with external actors (such as legal, tax , accountant, etc.) and those of internal support (such as the 'human resources' department carrying out hiring, training and/or benefits and social security programs).

These 'support' functions are necessary for every organization, and therefore they are generic. Although each organization requires implementations specific to its context, they all need the same roles (lawyer, tax professional, accountant, etc.) and work tools (messaging software, file storage, etc.). 

The second component is operations. And it is at this level where each organization executes 'the work' as such. It is this part that is usually original, since it focuses on designing the product or service that has contact with the customer.

The first component is generic for all organizations since it is based on compliance with the laws and regulations in the system where they live, while the second component is original since it is the execution of operations within those laws and regulations. The first component sets the boundaries, a frame of reference for 'how things are done', the second component is what happens within that frame of reference. 

If we take the concept of composability of open source and apply it to the design of organizational structures, we could conclude that the first component is potentially mutualizable since it represents the means of production that any person would need to be able to practice their trade. 

What would a base infrastructure shared by various groups and organizations look like?

Again, a smart contract would allow participating organizations to access these support departments and work tools, among other things, for a lower cost than what it would imply to start from scratch as an independent structure. 

Of course, it is worth highlighting the importance of information management, where each organization must be able to access the base infrastructure without putting what is private at risk. Just as when someone agrees to a doctor to be diagnosed independently of what could happen in the previous consultation with someone else. 

The organizations participating in this mutualization would establish their own co-management agreements, based on an alignment to certain principles and a resonance of common objectives, which would promote trust between them. And yet, the relationship would be with the base infrastructure like someone receiving a service from a provider.   

Imagine a base infrastructure focused on self-employed workers (independents, freelancers, gig workers), either individually or by forming collectives and work teams based on the projects that they are operating at that time. 

Each member could be part of multiple projects, communities and collectives, participating in the execution of those operations. And yet, the relationship with the base infrastructure would be individual, maintaining a certain sovereignty in the use of the means of production; and ensuring access to social security regardless of the activity of a particular project. 

Now imagine that this base infrastructure functions as a ‘shared services cooperative’ where ownership is distributed in such a way that the independent workers who depend on it are co-owners of the benefits of their coordination. Profits would be reinvested, after paying for the fixed costs and the roles that perform support services (i.e. expenses + applied work), to sustain the infrastructure for the benefit of participants over time (where a sense of reciprocity prevails).

The more workers and communities can coexist in this layer of mutualization, the greater the individual benefit for each one, which encourages the search for tolerance and respect among diversity. Instead of having employees to work on your initiative, you can simply collaborate in a peer relationship with other specialized talent; enabling a less dominant and more supportive economy.

And considering blockchain as a tool for building agreements and making the flow of resources transparent and secure, we can assume that the level of trust and the inability to manipulate the system will be higher than in its web2 version. 

Ultimately, smart contracts help us program immutable agreements. One with a lot of potential would be one where the ultimate goal of participation is to mutualize our well-being.

Creating benevolent for-profit companies that offer solutions to the market is not the only way we have to help our troubled governments in their mission to meet the basic needs of all people. One alternative is, and has always been, to create ‘commons’, where a group of people design forms of collective governance around the resources they need, simply with the goal of maintaining access to them in a sustainable way over time. 

Blockchain technology allows us, perhaps for the first time in human history, to be able to generate agreements that do not depend on a trusted third party to remain immutable and enforceable. With this new tool, we can build trust more easily by building transparent coordination systems where participants of a commons contribute up front a portion of the capital needed to carry it out, without anyone having to bear the risk alone or needing to sell part of the property indefinitely in exchange for capital flow.

Even more, thanks to the emergence of new web3-regenerative-economies, projects generating some kind of socio-environmental impact, can flourish through grants and non-refundable retroactives, without the need for property to be extracted by absent investors. When the ‘organization’ pays its debts (if there are any), the surpluses begin to be reinvested in a loop of generous abundance.

When everyone is compensated fairly and no one owns the company, the company is its own owner, which allows it to develop and evolve freely and autonomously, just like the people who make it up.

These mutualist organizations will serve as a common infrastructure, allowing access to the means of work and the abundance of the fruits of the work carried out. Commoning spaces where we learn to keep alive those systems of which we are part, and which support us all.