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E Volving Reciprocal Relationship E Conomies
 

E Volving Reciprocal Relationship E Conomies

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This presentation examines human interaction in the virtual world created by networked communication systems, focusing on the formation of reciprocal networks of information sharing. Mauss’s theory ...

This presentation examines human interaction in the virtual world created by networked communication systems, focusing on the formation of reciprocal networks of information sharing. Mauss’s theory of ‘the gift’ is used to indicate the essentially reciprocal nature of gift giving, which creates an obligation for some form of exchange, although not by means of direct payment as expected in market relations. Free exchange of information based on reciprocal sharing has been central to the development of the Internet. Where commercial interests have come in to enforce copywriting and licensing (notably in proprietary software), Free and Open Source Software movements have sprung up with copyleft licensing to protect the right to free sharing of code and other information. In this way what is referred to as the ‘High-Tech Gift Economy’ is directly challenging its capitalist counterpart in technology development, with the development of free software designed through the co-operation of ‘techies’ across the globe competing with commercial products. The paper argues that despite limitations the world wide web of information sharing does create an environment for giving gifts of information to a global audience. It is furthermore argued that reciprocal exchange of such gifts through generalized exchange with a worldwide network requires a heightened sense of presence in the virtual gift society.

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    1. Global tools enhance local exchange through Community Currency in a Complementary “Gift” Economy
    This presentation looks at how the Internet can be used to facilitate what might be called a type of gift economy through complementary web-based currencies.

    2. Overview
    The presentation begins by looking at the role of reciprocity in ‘gift’ economies. The evolution of a ‘high tech gift economy’ operating in cyberspace is examined, followed by a look at how the Internet can also facilitate more ‘giving’ economic relations offline. We will explore the concept of ‘money’, looking particularly at the rise of community currency networks. The impact of the Internet on such currencies is observed by looking at the Community Exchange System, a web-based trading platform developed in South Africa, and now used by 150 exchanges worldwide. Mutual trust and reciprocity is essential in online Community Currency Networks. Reciprocity in both online networks and community currencies is based on a form of generalized exchange, which could result in reluctance by some to reciprocate. We will look at features that have been built into the CES to encourage online reciprocity, as well as offline efforts to build community.

    3. Reciprocal gifting
    Reciprocity is considered critical to gift exchange, according to Marcel Mauss, whose tripartite formula for “total prestation” involves the obligations to 1) give, 2) receive, and 3) repay. Reciprocity in gift giving and receiving emphasizes the relationship between giver and receiver. A gift economy can be defined as one driven by social relations, whereas a commodity economy is driven by price.

    4. Reciprocal Gift E-conomy
    Today the terms ‘giving’, the ‘gift economy’, ‘reciprocity’, and ‘relationship economics’ are featured regularly in the media, all the more in the light of the ‘conventional’ economy’s plight.

    5. “The High-Tech Gift Economy”
    The Internet has long been argued to provide the technology required for the formation of a gift economy. In 1991 Howard Rheingold described the exchange system fostered by the Internet as “a kind of gift economy where people do things for one another out of a spirit of building something between them.” Barbrook argues that the Internet was in essence constructed around the gift economy as early developers shared ideas, and that the free exchange of information has thus been firmly embedded within the technologies and social mores of cyberspace since its origin. He notes that: “[A]t the ’cutting edge’ of the emerging information society, network communities are formed through mutual obligations created by gifts of time and ideas”.

    6. Limitations of the “High-Tech Gift Economy”
    To date however the benefits of the gift economy espoused by Internet researchers have been largely virtual, exchanging gifts of knowledge, information, ideas and comments. Some basic limitations of this cyber gift-economy relate to: a) the fact that it remains largely focused on the exchange of virtual/ digital goods, b) its dependence on the ‘money-economy’, and c) its accessibility (or lack of) for a large proportion of the human race. To overcome such limitations we need to look at how the Internet impacts on the most fundamental means of exchange of everyday goods and services off(and on)line: money.

    7. Money 2:0
    The word money comes from the goddess of memory, Juno Moneta, at whose temple in Rome coins were once minted. Moneta’s name was derived from the Latin verb moneo, meaning to remind. In tracing the origin of the word money to ‘moneta’, one can argue that one of money’s chief functions is remembering. Michael Linton, founder the “LETS” (Local Employment/ Exchange Trading System) concept, defines money as “an information system we use to deploy human effort.” Seen solely as a way of keeping track of people’s exchanges, the age of electronic money presents new possibilities, with the Internet the ideal tool to manage such an information system. The word ’community’ is derived from the Latin munus, which means the gift, and cum, which means together/ among each other. Community thus literally means to give among each other. According to Greco “a community currency means that members of the group empower themselves to create their own “money,” which they agree to use among themselves.” Types of community currencies include Backed, Fiat, and Mutual Credit currencies. The Community Exchange System discussed in this paper is an example of a Mutual Credit exchange, providing a credit clearing service to members.

    8. Impact of ICTs on community currencies
    Speculation on how the Internet will impact on the future of money started in the 1990s, in both cyber and economic fields. In 1997 Rheingold expected the Internet to lead to “a radical change in the future of money, if [its] technical mechanisms are used to support the creation and maintenance of ’local currencies’.” David Rushkoff argues that all “Moneys are programmed” and believes that “[w]e are proving more likely to treat our money as software, and to write our own… alternative, net-enabled, bottom-up money systems.” Some potential impacts of the Internet on Mutual Credit currencies such as the CES include: • Reduced administrative burden of record keeping • Search engine functionalities for goods and services offered and required • Communication tools whereby members can instantly connect with others’ wants and offerings • Networking tools to build community between users • A web-based system allowing for transparency, and • Expanded geographical scope as different local exchanges can be networked in a global ,web-based trading platform.

    9. Community Exchange System
    The CES was initiated by the South African New Economics network in 2003, when it was first piloted as the Cape Town Talent Exchange. Talent exchanges quickly spread across South Africa, and the first international exchange joined in 2005. It is currently used by 150 Exchanges in 19 Countries. In 2008 the CES split from SANE, who formerly administered the Cape Town exchange. This exchange is now managed by CES administrators also responsible for the global network.


    10. How it works
    The CES home page provides links to numerous public information pages, and requires members to log in. An online application form requires full contact details and three offerings for the applicant to be considered. Beyond the login page the site can be regarded as an online ‘bank’ or ‘clearing house’ as well as providing membership lists, ‘offering’ and ‘wants’ directories, and trading statistics. By September 2009 over thirty thousand trades had taken place on the CTTE, amounting to a total of over seven million Talents exchanged. Of a total of almost 4000 members 63% had actively traded on the system. Of these traders 65% had ‘sold’, while 84% had ‘bought’ goods/ services through the exchange. It is worth noting that 25% of sellers had not bought anything, while 41% of buyers had not sold anything. Takers thus seem to outnumber givers.

    11. Mutual trust and reciprocity in (online) Community Currency Networks
    Mutual trust and reciprocity is essential for the effective circulation of goods and services using a community currency, and its lack is one of the most common factors that reduce motivation to partake. Problems arise when initial enthusiasts dedicate time and effort to provide goods for community currency, while others take from the system without giving back, or don’t trade at all. This means that credits earned cannot be redeemed due to limited offerings in the system. We will now explore the concept of reciprocity in an online environment, noting how this relates to the web-based community currency context.

    12. Generalized Exchange
    In online gifting recipients are anonymous, and direct exchange of information received often impossible. ‘Gifts’ are thus given to and received from the community as a whole, rather than an individual. A similar situation is found in community currencies where, though recipients may be known, direct exchange is still impossible (as the very purpose of an intermediate ‘currency’ is to overcome limitations of direct barter). Thus, similar to gifting in online communities, reciprocation occurs with the community rather than with an individual. This type of network-wide accounting system, in which a benefit given is reciprocated not by the recipient but by someone else in the group, is referred to as “generalized exchange”. This system of sharing is both more generous and riskier than traditional gift exchange, as an individual provides a benefit without expecting immediate reciprocation. The temptation therefore exists to gather valuable information and advice in online groups, or obtain goods and services using a community currency, without contributing anything back. If everyone succumbs to this temptation to ‘free-ride’ on others’ efforts, everyone is worse off than they might have been otherwise, leading to what may be referred to as a social dilemma whereby individually reasonable behavior (taking without giving) leads to collective disaster.

    13. Promoting reciprocity
    A variety of factors that could motivate people to reciprocate in online community networks have been cited in research on Internet exchanges. Some of these that may be considered equally applicable for exchange in community currencies, particularly those that operate online, include • Anticipated Reciprocity • Expressing Identity • Reputation • Sense of efficacy • Attachment/ Group Dynamics, and • Fulfilling a need of the community. Recognizing these core motivational factors, methods have been proposed to encourage online reciprocity through the design of appropriate features to • promote identity persistence; • ensure transparency; • provide recognition; • expand group size, and • build community.

    14. Identity, transparency & recognition
    A number of features have been built into the CES site relating to identity, transparency, and recognition. In terms of Identity, users are required to provide limited profile information, contact details, and a description of offerings. A new profile picture feature was recently introduced. Transparency is ensured by making trading balances for all users visible to members. Although few use this feature, many appreciate that it is there. Recognition is provided through a recommendations feature, although this is rarely used. Users are discouraged from trading with ‘bad traders’, who are eventually blocked.

    15. Group size
    Potential constraints in terms of scale and scope of a community currency include: • Not enough people • Not enough stuff • Not enough representation across the supply chain, and • Not being accepted by mainstream business. The ability of the Internet to expand the scope of community currencies, which traditionally cater for small, geographically close-knit communities, is well illustrated by the CTTE which, with its membership approaching 4000, may be considered a very large network, spread across a vast geographical area. Although the CTTE has grown rapidly, less than a third of its members have accessed their accounts in the past year. The assortment of offerings remains limited as does reach across the supply chain, and acceptance amongst mainstream businesses. Despite the benefits of increased membership, larger networks can experience challenges with community building when transactors do not know each other, and long distances must be travelled between traders. In an attempt to address such concerns and further ‘localize’ the CTTE, sub-areas were introduced. To date these sub-areas have not reached sufficient size to function independently as offerings within them are limited. It is hoped that by continuing to grow the network, and maintaining the intended emphasis on more locally based exchange, sub-areas will eventually reach the critical mass to function more independently.

    16. Building community
    Many local currencies fail because the founders neglect the development of personal contacts and one-to-one relationships. Ayley & Ayley argue that corporatization has reinforced a view of trading in which monetary exchange is seen as primary, and personal relationship, if it exists at all, is secondary. Building community becomes more complicated when the currency is web-based, with participants spread across vast distances. For this reason community building efforts must consider both online and offline contexts. In terms of Online community building efforts, the CES site built in Announcement & Group features, and also makes use of social networking platforms. Offline initiatives of the CTTE include markets, shops, as well as a paper based trading system. The CTTE has also attempted to promote inclusivity through efforts to cross the gaping Digital Divide existing in South Africa.

    17. Community building online
    A number of common interest groups were created on the CES website to facilitate networking between members. Members can also add announcements of events or other developments relevant to the exchange.

    18. Online social networks
    A Community Exchange Network group was created on Facebook in 2007. This group currently has over 800 members and is growing continuously, although actual discussion and activity in this forum remains limited. A CommunityExchange.ning group was created in 2008 and currently has about 350 members. Though smaller in size, the ning platform provides greater functionality as it links directly to CES login and registration pages, and includes a more structured discussion forum. Membership of both these networks is global, and discussions predominantly revolve around exchange of ideas and advice on setting up and running community currency networks. As membership of any one exchange remains limited, these forums have not yet been effective in building a greater sense of local community between members. Suggestions have been made in both forums for a more direct interface between the CES and social networking sites whereby, for example, latest offerings and wants can be advertised on facebook or ning, with a direct link to the CES platform to trade.

    19. Offline links
    To build community offline, the CTTE conducts monthly Talent markets, during which trade and new registrations increase notably. Members are encouraged to take initiative to organise markets, but to date this rarely happens. Following SANE’s withdrawal markets declined for some time, but were recently revived on a more regular basis. A Talent shop opened in 2005 using SANE premises. It was hoped that more would be opened by members in other areas, but this never happened, and the shop closed when premises were lost after the split with SANE. A paper based system is available for those without regular Internet access, as well as for use at markets. Trades can then be captured by those who do have Internet access and can thus act as ‘mediators’ for others who do not.

    20. Bridging the digital divide
    Although the CES is essentially a web-based platform, among its creators’ primary objectives was to reform the monetary system in a way that would benefit those lacking access to the Internet. In South Africa this currently comprises about 90% of the population. In an attempt to bridge the digital divide SANE embarked on a project to take the CES to disadvantaged communities, targeting three areas that were intended to serve as pilots for a much broader roll out. Residents of these communities attended New Economics courses explaining the principles of the Talent Exchange. Local market days were organized, and offices were established where administrators entered offerings and trades into the system, and members could browse the site. Donor funding for these initiatives was obtained through SANE, but could not be sustained after the split, resulting in a decline of activities in these areas. Without further funding and support, offices closed down and markets were abandoned. The hope that community members would take over the initiative for organizing their own markets and opening a shop was never realized. Without own access to the Internet, the majority of new members could no longer participate in the exchange. Despite these difficulties a few traders in these areas who have Internet access continue to act as mediators for others, and hope to stimulate more interest in the system. Residents of Khayelitsha recently started a food garden for which they obtained inputs through the Talent Exchange, and intend to sell produce for Talents. Having grown up with the spirit of ‘Ubuntu’ (meaning a person is a person through others), they believe such a relationship-centered system can form an important buffer against economic hardship.

    21. Conclusion
    In 2004 anarchist Peter LambornWilson expressed concern that the Internet’s true potential for transforming economies was not being reached: “I want to see somebody set up a barter network where I could trade poetry for turnips. Or not even poetry--lawn cutting, whatever. I want to see the Internet used to spread the Ithaca dollar system around America so that every community could start using alternative labor dollars. It is not happening. And so I wonder, why isn’t it happening?” (LambornWilson, 2004). I would argue that today, through the CES and similar systems arising around the world, this is starting to happen.
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    E Volving Reciprocal Relationship E Conomies E Volving Reciprocal Relationship E Conomies Presentation Transcript

    • Association of Internet Researchers Milwaukee, Wisconsin October 2009 Global tools enhance local exchange through Community Currency in a Complementary “Gift” Economy Liezl Coetzee University of Stellenbosch South Africa
    • Overview
      • Reciprocal Gift E-conomy
        • “ The High-Tech Gift Economy”
        • Money 2:0
        • Community Exchange System
      • Mutual trust and reciprocity in (online) Community Currency Networks
        • Generalized Exchange
        • Features to encourage online reciprocity
        • Building community offline
      • Conclusion
    • Reciprocal gifting
      • Mauss’s Tripartite formula for ‘total prestation’ – obligation to:
        • Give
        • Receive
        • Repay
      • Reciprocity in gifting emphasizes relationship between giver and receiver
      • “ Gift economy”
        • Driven by social relations
      • Commodity economy
        • Driven by price
      vs
    • Reciprocal Gift E-conomy
    • “The High-Tech Gift Economy”
      • “ [A]t the 'cutting edge' of the emerging information society, money-commodity relations play a secondary role to those created by a really existing form of anarcho-communism… In the absence of states or markets to mediate social bonds, network communities are instead formed through the mutual obligations created by gifts of time and ideas” (Barbrook, 1998:5).
      “ a kind of gift economy where people do things for one another out of a spirit of building something between them, rather than a spreadsheet-calculated quid pro quo. ” (Rheingold, 1991)
    • Limitations of the “High-Tech Gift Economy”
      • Focused on exchange of virtual, digital goods/ information
      • Continued dependence on the ‘money’ economy
      • Accessibility across the digital divide
    • Money 2:0
      • Money as memory
        • Juno Moneta – goddess of memory
        • Moneta from moneo = remind/ remember
        • Money = ‘information system’
      • Community Currency
        • “ Community” =
          • ‘ munus’ (gift) +
          • ‘ cum’ (together/ among each other)
      “ a community currency means that members of the group empower themselves to create their own “money,” which they agree to use in paying for purchases made among themselves. ” (Greco, 2001: 14)
      • Types of community currencies:
        • Backed,
        • Fiat.
        • Mutual Credit
    • Impact of ICTs on community currencies
      • Potential impacts on Mutual Credit currencies:
        • Reduced administrative burden
        • Search engine functionalities
        • Communication tools
        • Networking tools
        • A web-based system allows for transparency
        • Expanding geographical scope
      “ a radical change in the future of money, if [its] technical mechanisms are used to support the creation and maintenance of 'local currencies' – a medium of exchange that many communities around the world are beginning to experiment with.” (Rheingold,. 1997) “ Moneys are programmed” “ [w]e are proving more likely to treat our money as software, and to write our own… alternative, net-enabled, bottom-up money systems ” (Rushkoff, 2009)
    • Community Exchange System
      • Initiated by SANE (South African New Economics) network
      • Piloted in Cape Town in 2003
      • Cape Town Talent Exchange
      • Talent exchanges spread across SA
      • First international exchange (Australian LETS group) joined in 2005
      • Currently used by 150 Exchanges in 19 Countries
      • CES split from SANE in 2008
    • How it works
    • Mutual trust and reciprocity in (online) Community Currency Networks
      • Some take from the system without giving back, or don’t trade at all.
      • Initial enthusiasts dedicate time and effort to provide goods for community currency.
      • Credits earned cannot be redeemed due to limited offerings in system.
    • Generalized Exchange
      • Online gifting
        • Anonymous recipients
        • Direct exchange impossible
        • Give to the community
        • Receive from the community
      • Community currencies
        • Known & unknown recipients
        • Direct exchange impossible
        • Give to the community
        • Receive from the community
      • Generalized exchange (Ekeh, 1974)
        • Network-wide accounting system
        • Benefit given is reciprocated not by recipient but by someone else in the group
        • More generous & riskier than direct reciprocation – no guarantee of immediate return
        • Temptation to free-ride on others’ efforts could lead to social dilemma (individually reasonable behaviour leads to collective disaster.
    • Promoting reciprocity
      • Motivation for giving:
        • Anticipated Reciprocity
        • Expressing Identity
        • Reputation
        • Sense of efficacy
        • Attachment/ Group Dynamics, and
        • Fulfilling a need of the community.
      • Methods to encourage (online) reciprocity:
        • Promote identity persistence
        • Ensure transparency
        • Provide recognition
        • Expand group size, and
        • Build community.
    • CES Online features
      • Identity
        • Limited profile information
        • Contact details
        • Description of offerings
        • New profile pic feature
      • Recognition
        • Recommendations feature
        • Rarely used
        • Users discouraged from trading with ‘bad traders’
        • Bad traders blocked.
      • Transparency
        • Trading balances for all users visible to members
        • Few use this feature but many appreciate that it is there.
    • Group size
      • Potential constraints i.t.o. scale and scope of a community exchange network:
        • Failure to achieve critical size of the participant base
        • Too narrow an assortment of goods and services offered
        • Failure to attract participants from all levels of the supply chain (production/ distribution circuit), and
        • Failure to gain wide acceptance among the mainstream business community.
      • Internet expands scope
      • Larger groups complicate community building
        • Transactors do not know each other
        • Long distances to travel between traders & to markets.
      • CTTE sub-areas
        • Aim to encourage more local focus
        • Have not reached sufficient size to function independently as offerings within sub-areas are limited.
    • Building community
      • Online
        • Group & Announcement features
        • Social networks
      • Offline
        • Markets
        • Shops
        • Slips
      • Across the Digital Divide…
    • Groups & Announcements
    • Online social networks
      • Facebook
        • Community Exchange Network group created in 2007
        • Current membership 836
      • Ning
        • http://communityexchange.ning.com/ created in 2008
        • Current membership 347
      • Membership global
      • Forum for general discussion/ ideas exchange
      • Limited local networking
      • Interface between FB/ Ning & CES site proposed in discussions
    • Offline links
      • Markets
        • Talent markets held ~monthly
        • Trade & new registrations notably increase during markets
        • Members to take initiative to organise own markets
      • Shops
        • Talent shop opened in October 2005
        • SANE premises
        • Hoped more would open but none have
        • Shop closed after split with SANE – lost premises
      • Slips
        • Paper based system available for those without regular Internet, and use at markets.
        • Trades captured by those with access – ‘mediators’
    • Bridging the digital divide
      • CES aims to reform monetary system to benefit those lacking Internet access
        • 90% of SA population – no access
      • Pilot social outreach programme targeted 3 areas
        • Harare in Khayelitsha; Delft; Masipumalele
        • New economics courses held
        • Opened offices & held markets in each community
        • Donor funding through SANE
        • Activities declined after SANE split
        • Mobile platform – potential to increase access, though at present few have suitable phones/ know how to use it
      • Still interest in concept
        • Some with Internet mediate for others
        • Residents starting a food garden
          • Obtain inputs through Talent Exchange
          • Aim to sell produce for Talents
        • CES likened to ‘Ubuntu’ philosophy of communal support & sharing
      • “ I want to see somebody set up a barter network where I could trade poetry for turnips. Or not even poetry--lawn cutting, whatever. I want to see the Internet used to spread the Ithaca dollar system around America so that every community could start using alternative labor dollars. It is not happening. And so I wonder, why isn't it happening?” (LambornWilson, 2004).
      Conclusion