This is a detailed response to @jakintosh’s well-articulated and sound reply at Holochain for Global Cooperation.
Art, science, and FOSS, all suffer from a common problem: they’re non-rivalrous and non-excludable. In a sense, one can say that they all suffer from positive externalities. However, one need not resort to the externality argument; even in and of itself, the labor expended in the development of recipes (art, scientific endeavors, and open-source developmental work) is economically unrewarding. Or as Mises puts it:
The characteristic mark of formulas, i.e., the mental devices directing the technological procedures, is the inexhaustibility of the services they render. These services are consequently not scarce, and there is no need to economize their employment. Those considerations that resulted in the establishment of the institution of private ownership of economic goods did not refer to them. They remained outside the sphere of private property not because they are immaterial, intangible, and impalpable, but because their serviceableness cannot be exhausted.
Complementary factors of production can only be used to the extent allowed by the availability of the most scarce among them. Let us assume that the production of 1 unit of p requires the expenditure [p. 136] of 7 units of a and of 3 units of b and that neither a nor b can be used for any production other than that of p . If 49 a and 2,000 b are available, no more than 7 p can be produced. The available supply of a determines the extent of the use of b . Only a is considered an economic good; only for a are people ready to pay prices; the full price of p is allowed for 7 units of a . On the other hand b is not an economic good and no prices are allowed for it. There are quantities of b which remain unused.
https://mises.org/library/human-action-0/html/pp/702
However, the realization of this truth is often accompanied by sadness and grief, especially when one thinks of the creative genius who practices those fields. This has led to people looking for alternatives…
The obvious one, also the prevalent one, is Intellectual Property laws that treat the issue as that of a negative externality and promise creators the fruits that they rightfully deserve (of which there’re none in the market society; formulas (or recipes) aren’t scarce by any means). That aside, the fact that without the government’s enforcement of IP laws the IP industry won’t stand a chance only enjoins upon and reinforces the original argument against IP. However, the core argument remains the same: that intellectual products are inexhaustible goods and thus do not warrant an effort to privatize themselves.
Another way is that of altruistic charity. Seen from a capitalist profit-maximizing perspective, philanthropy looks utterly unattractive and is infeasible to tackle the issue at hand.
Here I propose a libertarian way to reap some (even if insignificant) fruits off of one’s labor expended in such areas that suffer inexhaustibility.
[ Note that it’s the recepie that is inexhaustible. The chef definitely is a scarce resource, so is his time. However, one must be careful at distinguishing the chef’s labor and the product of that labor: the recepie; the former being a scarce resource while the latter isn’t. ]
I’ll expound the same. Basically, in the world we live in, all economic activities (buys and sells) can be divided into two categories: those concerning scarce resource and those concerning abundant ones. Now, obviously, the latter cannot exist as there can be no monetary price for relatively abundant resources. The attempt is to produce scarce counterparts of those abundant resources. It’s not a radical idea; the NFT bubble is all about the same. Basically, where a painting can be copied and possessed for free, the thank-you token of the painting cannot; where the painting bestows upon the owner a sense of beauty, the token bestows upon him a sense of pride; where the former is abundant, the latter is scarce. Thus one can create a scarce counterpart of an abundant resource. Moreover, the element of charity vanishes from the equation; the investor buys the token but for his own selfish interests. It’s a tit-for-tat solution for an industry that suffers positive externalities.
Here I once went in-depth on how code projects might use the concept…
Here are some old snaps from a mind-mapping app I use (don’t take them too literally):
As for complexity of bigger projects, imagine a code project (like Holochain itself) with thousands of contributors and dozens of merges a day. It’s not hard to conceive of a DAO happ (powered by hREA) that keep track of the contribution of every contributor (with previlidged senior developers to supervise the same, of course). Upon the token sale, every contributor gets a sum that’s proportional to the contribution they made. Simple enough! The key, however, is that the only revenue source for the project must be the one from the token sale and the subsequent price appreciation of the tokens themselves. The tokens bought must, in no way, improve functional user-experience of the (h)app for the holder; the tokens must be sterile.
Vril, as it stands, is an ideal platform to create such tokens. Though the work on Vril hasn’t started yet, rest assured that by the end of this year it will be ready for employment in such use-cases.
Finding that citation by Mises in Human Action took hours… I hope you appreciate the effort…
