Free money

Not « free money » as in « free beer » but free as in « free speech ». I mean « Libre money », like « Libre software ». Money made free. Goods made free so that they make people freer. What could this mean ?

Could the concept of copyleft found in the realm of software and intellectual creativity be transposed to material and rival goods so that humans get freer from their dependency on material goods and property ?

Let’s pretend I have a pencil in hand (or 10 euros). Here is my (imaginary) offer to you be : you can get this pencil if and only if :

  • after some predefined time (let’s say after 10 seconds) you must accept to give this pencil (or an equivalent pencil ?) further (not back) to anyone who asks for it and accepts some predefined conditions (the contract)
  • the most important condition this futher person/borrower must accept is to further transfer the goods along with their freedom contract once the defined delay has expired : they can’t put any additional restrictions to the freedom of people wishing to get these pencil(s)
  • maybe you will have some interest to add to it (for instance the condition may be that you must accept also giving a second pencil under these conditions after 10 seconds)

Once you get the pencil under such a contract, you are free to do anything you want with this pencil (you may draw a picture for instance). 10 seconds later, you may still keep it as your own (and keep on drawing pictures meanwhile) until someone comes to you and asks for this pencil. Then you must propose this pencil and an additional one under the conditions above. If the further person accepts these conditions, she may take this pencil (or these 2 pencils) and do the same : do anything she wishes during some time then keep doing anything she wants until someone gets the (1, 2, 3 or 4) pencil(s) under the same contract.

From now on, these pencils are made free. They are still the property of the persons who initially set them free. But, as long as the conditions of the contract are respected, they will freely flow from person to person. If there is an interest rate defined in the contract (the second pencil or 100% interest rate in the example above), then these interests are also made free and will contribute to the total amount of free rival goods in circulation. In some future, the whole population of pencils of planet earth may be made free in such a process !

You may note that this whole concept I am proposing here :

  • is rooted in the free culture of free software
  • is also rooted in the culture of giving in freedom which the economy of communion tries to promote
  • gets inspiration from the current trend of sharing stuff via the Internet, and optimize the ownership and use of material goods, including the fabulous freecycle network
  • somehow relates to the American ideal of « giving back to the community » (once you are richer) but with a twist
  • allows charitable gifts to poor people to be made less humiliating because the gift is now a loan and « officially » recognizes that the person receiving goods (the « poor » person) also receives a debt not toward the giver but toward humanity, while still giving merit to the initial loaner who « sufffers » from the « loss » of the items made free
  • is a common practice in many traditions such as master/apprentice  or teacher/student or parents/children relationships : master transfers some trade knowledge to apprentices as long as a moral obligation to further transfer this tradition/knowledge to future generations of apprentices/would-be-masters.

Now there are several practical problems with any attempt at contractualizing these practices of « giving back to the community » :

  • what if someone is materially not able to further give/transfer the good when the loan delay has expired ?
  • how to limit the risks of having malicious people exploit the system at their own profit and break the chain of freedom ?
  • are interests rate desirable or even morally acceptable ?
  • which sets of conditions would best guarantee the development of the freedom of humanity with regards to these goods ?
  • could such contracts be drafted and enforced world-wide despite borders and disparities among national laws ?
  • in order to maximize the probability that people don’t abuse the system and protect the freedom of these goods in further paying their debts, should the power of this contract mainly rely on justice (a judge may take your goods in order to pay your freedom debt) ? or on social mechanisms (such as only accepting female borrowers or borrowers who come as a group of independent but socially related people, in a way similar to some practices in the field of microcredit) ? or both ?
  • could such a system be made viable offline ? or will it necessarily rely on online trust mechanisms (identity, reputation, social networks, cryptography, …) ?
  • could such a system be made viable without a central platform ? can it work in a peer-to-peer fashion in the same way free software licences work (the only central point of failure for the GPL is the unique power of the FSF to release later versions of the GPL) ?
  • could the risk of failing borrowers (people not paying their debt further) be covered by some insurance mechanisms and agents ?

My real purpose here (beyond playing with an attractive concept) is to invent a contract which can be useful in order to augment the freedom of people to access and use goods they don’t own while still protecting (and contributing to) the freedom of further people to do so.

With your comments and contributions, maybe we could find the perfect combination of conditions a freedom loan contract should impose in order to meet the purpose above.

In further comments or posts, we/you may :

  • tell the fiction of several goods released under free loans/free debt contracts in order to explore the potential advantages and drawbacks of some combinations of conditions,
  • propose several such loans « for real » to readers in order to practically experiment and play with these concepts.

(But please DO NOT ASK for money here. Money will not be given to you. People asking for money and not usefully contributing to this conversation may be banned as spammers.)

5 réflexions au sujet de « Free money »

  1. Siggg

    I proposed a free subway ticket to Eymeric last Sunday : free with a 100% interest price after 10 seconds. He pretended he was a fool and accepted the loan. 10 seconds later, he owed the world 2 tickets. Nobody was fool enough to further borrow any tickets from him and he kept his tickets, ready to further give them if asked so. Note that this way not an interest rate « every 10 seconds » but more like some fixed interest : you further pay the ticket plus one additional ticket whenever your start « reimbursing » your debt.

  2. Sig Auteur de l’article

    What do you mean Catherine ? Are you sort of implying that this concept is a proposal from the world of Bisounours (Care Bears) ? ;-)

  3. Anonymous

    There is one problem I see with your pencil analogy:

    Using the pencil destroys it. This is why I think you added an interest.

    To alleviate this issue you state: « you must accept to give this pencil (or an equivalent pencil ?) further »

    When the first person uses it the pencil begins ten inches long. Every person uses 1/4″ of it. What is the difference between a 10″ pencil and a 9 3/4″ pencil? Very little, so he passes it on. To the naked eye, unless placed next to each other, the pencils are equivalent. After 20 uses the pencil is 5 inches long, half of its original size, although each user passed on an equivalent product to what he received.

    This is because physical items are scarce, have real world limits. This is one amazing thing about the internet and technology, it allows for instant replication and distribution of information at next to no cost. My use of wikipedia does not degrade the product when you go to use it. Most information can be copied without harming the original proprietor of that information. This is the divide between intellectual and material. Because I too know how to edit PHP does not make your knowledge of PHP less valuable, rather it enables us to build a community with more knowledge between us than one individual has, expanding the knowledge frontier. You used the analogy of an apprentice and master, together they can build something bigger than the master can alone.

    Likewise when you try to extend the item from something small, like pencils, to something big, like a large moving truck, you have issues of maintenance (related to the degradation of the pencil.) Every 5000 miles it needs an oil change. Who shall pay for this? The person who has possession at mile 5001, 10001 and 15001? Or perhaps each user should contribute a small amount of oil each time he uses it? Then what about the tires? A person can not add a small amount of rubber to the tires. How about the users contribute a few euros to maintenance to be held by the original owner so he can change the oil and tires. Now how is this, paying a small fee to use a product, different from renting?

    I like these ideas but the problems of scarcity remains.

    To fix the depreciation problem you added the interest and interest rate but this gets messy as in all micropayment issues .

    In parts of the US when a favor is done for a stranger and it is not charity the phrase « Pay it forward » where you don’t expect anything in return, just ask that they do something for someone who needs it.

    Thank you for this post. It made me think. Sorry about how long this comment is. I appreciate your thoughts.

  4. Sig Auteur de l’article

    Hey Anonymous,

    Thanks a lot for your long and thoughtful comment ! You are perfectly right about the depreciation of material goods and the problem of scarcity it reinforces. You are also right that the wear or erosion of material goods might be a justification for an interest mechanism.

    I think « Pay it forward » is exactly the concept I would like to put under a robust and enforceable contract.

    Now we are left with several options regarding the entropic loss of value of material goods :

    1) maybe there is an acceptable and not-so-messy compensation mechanism to be designed : maybe a linear depreciation rule of some sort rather than an interest rate ? Do you think an interest or compensation mechanism would necessarily be messy ?

    2) or we set material goods aside and only focus the conversation on free money ; but even money erodes with time (inflation) !

    3) or we may accept entropy as part of the process (is entropy stronger from freedom ?) and accept that copylefted material goods naturally erode with time but it does not matter that much as, does it ? The initial loaner may accept that she can’t make humanity free from entropy after all.

    Regarding your question about the difference between renting and forward-compensating for the wear of material goods : I think that the difference from renting is that the money added along with the material good transferred is also made free in the process. In your truck example, the first loan 100% consists in a brand new truck. Then, after several transfers, it would become a lightly used truck plus some free money meant to compensate wear/erosion/entropy (99% truck plus 1% money ?). Further transfers would transform the free loan into an old used truck and much more money (a truck worth 20% of its initial value plus 80% of money) or into a well-maintained truck plus a little less money (30% truck plus 70% of money) ? Ideally, much later, the loan may consist in 100% free money with a total amount which at least equals the initial value of the truck (inflation included ?) or into a 100% brand new truck of the same value (inflation included) which was bought with the free money cumulated along loan transfers.

    What do you think ?

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