Friday, 4 April 2014

Crowdfunding critical journalism, and why it's good for democracy

(I originally wrote this for Contributoria as Crowdfunding Critical Thought, republished under Creative Commons. To republish please attribute original)

Greg Palast’s approach to investigative journalism can be summed up in one phrase: Stand up for the underdogs, and take on the fatcats. His hard-hitting reports on corporations like ExxonMobil, politicians like Bush, and shadowy institutions like vulture funds stem from an impulse to challenge those players with the power to bend the rules to their private advantage. That’s why functioning democracies need people like Palast.

Such a role faces two unique challenges though. Firstly, powerful institutions and individuals tend to hide behind walls of secrecy that extend over vast geographical space. Investigating a corporation, or a government spy programme, requires a lot of time, a lot of travel, and a lot of prying into hard-to-access information sources.
Secondly, it entails a lot of risk. People like Palast by necessity must make corporations, governments, and powerful individuals very angry, but those are also the parties that have the most ability to hire expensive legal teams to intimidate challengers. They also frequently own the media outlets, or have the most ability to buy the advertising space that media outlets rely on for income.

Therefore, not only is investigative journalism the most expensive style of journalism, but it is also the most likely to incur further liabilities once a story gets published. Providing finance to underdog investigative journalists – fronting them money to go off in search of stories – has always been a risky undertaking.

In an era when media groups are under increasing financial stress then, the position of the investigative journalist is under threat. Pressure to deliver advertising click-throughs, for example, drives online publications towards shallower stories with limited shelf-lives. I call this FMCJ, for ‘fast moving consumer journalism’. Like fast moving consumer goods, the aim is to create a high volume of low cost media product to be quickly consumed and discarded.

Rather than prioritising investigation and analysis, FMCJ journalism rewards content that draws short-term attention whilst inspiring minimal reflection. It thus has much in common with the field of marketing, with the same use of catchy taglines and graphics to churn social-media sharing. Most journalists don’t want to be marketers though. They want to do meaningful reporting that makes a lasting impact. To do this, they need new outlets for publishing, and new ways to finance themselves.

Alternative model 1: Project-based journalism crowdfunding

So where does Palast get his financing from? He draws at least part of it from the Palast Investigative Fund, a non-profit fund that individuals donate to in order to support his ongoing muckraking. In essence it’s a personal crowdfunding site, enabling him to remain independent.

Drawing on one’s readers for direct financial support has grown much easier in an age of digital communication, and established crowdfunding sites like Indiegogo have been used to this end already. For example, Peter Jukes recently raised £14 552 on Indiegogo to live tweet the UK Phone Hacking trial. Likewise, journalism startup Matter raised $140 201 on Kickstarter, allowing them to fund long-form pieces to be published on the Medium platform. Indiegogo and Kickstarter are generalist platforms for raising money, but even more interesting are those sites that offer niche services and support for journalism in particular.

Take, for example, Indie Voices, which aims to match up independent journalists in the developing world with readers – or ‘social investors’ – who wish to fund them. The Indie Voices team curates the process, only allowing media projects (including documentaries and articles) that seek to improve the media landscape in developing countries. Projects can then seek contributions in the form of donations, and, in the future, in the form of no-interest loans, low interest loans and equity investments (where funders buy ‘shares’ of ownership in a media project such as a film).

A second example is Inkshares. Unlike Indie Voices, which is explicitly political in nature, Inkshares is open to anything from science writing to children’s stories. Initially set up with the aim of creating an equity crowdfunding platform for books, Inkshares now also provides a donation-based crowdfunding platform for thoughtful long-form articles. And unlike normal publishing, the author retains the rights to the work that gets funded, which means they can also publish the material elsewhere.

Alternative model 2: Subscription-based crowdfunding

The shortcoming of sites like Indie Voices though, is that they’re really geared towards once-off projects. What if you wish to run a year-long investigation of tax havens, during which time you plan to run a series of 12 articles? Do you try raise the whole lot in one go, or run 12 separate crowdfundings?

One startup with an interesting solution for this is Beacon Reader. Rather than funding a once-off project by a particular writer, Beacon Reader is a platform for writers to collect paid subscribers who will offer an ongoing stream of support. While a normal crowfunding project only succeeds if a minimum amount of money is raised, a Beacon Reader crowdfunding campaign succeeds if a certain amount of people (normally 25-100) pledge to pay you $5 a month on an ongoing basis, in exchange for ongoing access to your stories, but also access to all the other stories on the site.

Backing a particular writer on Beacon is thus a gateway into a broader subscription to the work of the whole Beacon writer collective. It feels loosely like a kind of writers co-operative, but a competitive one in which writers have to earn their place (and a share of the resultant income stream) by securing a certain number of new subscribers (and to continue building more subscribers over time). Writers get 70% of their subscribers’ cash, and the surplus goes into a collective bonus pot to reward those whose stories receive the most recommendations, thereby incentivising consistent high quality writing.

Crucially though, the writer still owns the rights to the pieces produced, and they can be published elsewhere or sold on to media outlets to further monetise their work. This might be a great option for a writer looking to work through a big issue in small chunks, and who needs stable baseline support to cover their basic costs whilst waiting to get the pieces accepted by bigger publications.

A second attempt at a subscription model is Uncoverage, which is being set up by Israel Mirsky. Mirsky, recognising both the increasing marginalisation of investigative journalism, and professional journalists’ need for ongoing financing (‘serial funding’), is explicitly targeting the site at professional investigative journalists. Like Beacon, the goal is to establish a subscriber base for individual journalists, but unlike Beacon the ambition is also to create an ‘open, lean newsroom’ that provides a suite of key services like fact-checking, editing, legal support and technology solutions.

Alternative model 3: The ‘credit union’ approach

In the examples discussed above, the ‘crowd’ is mostly conceived of as readers who wish to financially support the quality journalism they enjoy. What if the crowd was given a closer role in the actual article production process though? That’s what Contributoria attempts to add in. When one becomes a member, you get the right to pitch articles to be funded, but also to financially support other’s articles, and to offer editorial advice to those who you’ve backed.

It thus has the feeling of a true writers’ co-operative, or perhaps a credit union for journalism in which members support each other. This very article, for example, was originally pitched on Contributoria, but in joining I got to vote for other articles I want to see, including Joel Benjamin’s guide to Freedom of Information requests, and Dom Aversano’s exploration of city soundscapes. This also gave me the right to provide input into those articles. As a user of the platform I am thus a hybrid between a receiver of funding, and giver of funding, a receiver of editorial services and giver of editorial services.

Right now though, Contributoria is in beta phase, and is free to join, which means it still hasn’t started asking members to pay dues. It will be fascinating to see how the process is managed going forward. Could it become a vibrant self-sustaining community of writers, readers and editors, or will members’ dues need to be supplemented with money from external sponsors? Another key question is how to incentivise members to devote time to checking each other’s articles. Could editors and writers team up to be funded together?

Democratic commons in commercial context

The diverse crowfunding platforms discussed above have a number of common themes. Firstly, they set themselves against both corporate-backed media (in developed countries) and state-backed media (in developing countries) by offering a technological means to decentralise funding, and thereby to ‘democratise journalism’.

Their claim to democratisation rests on the assertion that they both maintain independence of journalists, but also give voice to journalists that might otherwise be ignored. This message is complemented by the claim that this can be a sustainable way of financing high quality journalism (after all, a platform might be democratic, but that’s no guarantee of quality or long-term viability).

Secondly, the platforms are converging on a model of prepayment by some, for the common benefit of all. In contrast to the buyer of a magazine, who purchases content once it is produced (and thereby pays back the original financiers and publisher), the crowdfunding backer in essence prepays for material that will be developed in the future, and thereby brings production of the material into being.

That said, although the core body of funders bring an article to life, they frequently do not have exclusive access to the material, but rather subsidise the broader public who will get access to the stories too (via, for example, the articles being published elsewhere on a Creative Commons license). In essence, private individuals are holding the commons open for others to use, in much the same way as Wikipedia gets supported by donations from a small percentage of its users.

Interesting, and potentially conflicting, commercial dynamics emerge from this. We could argue that what the crowd is actually doing is shielding a writer from normal media commissioning processes – whether those are corporate or state led – maintaining the independence of the journalist to the point where an article is ready to be released into the public. In the cases where the journalist retains the rights to the article though, and the resultant piece is then sold on, we could also argue that the crowd is subsidising media companies who would otherwise have to take on the risk of commissioning work.

If this was to become widespread practice, we could begin to see a separation of journalism production from distribution. Platforms like Uncoverage might begin to serve a role analogous to a literary agent, providing a platform to develop quality journalism which is then cherrypicked by publishing outlets. We could conceivably even see the emergence of journalism ‘offtake agreements’, media companies offering advance guarantees to publish content if it gets initially funded by the crowd.

The reader as creative producer

But what kind of reader is prepared to fund articles which may then be used by the broader public or potentially even commercial media outlets? Perhaps it is a new sort of reader, seeking a more active, creative role.

The irony of our information-saturated era is that in the face of overwhelming amounts of content, people feel a sense of ‘opportunity cost’ to engaging with it, the perception that committing to reading anything must entail not reading something else which is also available. Thus, many people find themselves skimming a lot shallowly but reading very little deeply. It’s questionable whether a person browsing websites every day absorbs any more information than a person in 1897 with a single weekly newspaper.

The real question then, is how to create a society with wide access to diverse media, but one in which people actually engage with such media meaningfully. One might imagine, as a thought experiment, a giant benevolent foundation that funds all manner of amazing content, only to dump it into people’s already saturated Facebook newfeeds. True democratisation is not just about what content gets created. It’s about how people use and act on that content. Is an article about corporate fraud just another dramatic item in a stream of flickering entertainment passing by you each day, or is it actually something that might make you get out onto the streets to protest?

Creating a decentralised crowdfunding infrastructure perhaps offers one means of combining the creation of diverse content with a new means of connecting with it. People who have prepayed for content in the knowledge that they are helping to bring forth unique critical voices, are also people who wish to move past being mere passive consumers of media. Instead, they are hybrid producer-consumers with an interest in critically engaging with the content they helped bring to life. And perhaps it is in the development of this new type of participatory reader that the true democratic potential of crowdfunding lies.

Sunday, 30 March 2014

LSFA: Building a financial hackerspace in 3 phases

Over the last 5 years I’ve been working on ways to break down the oppressive wall of mystique that shrouds global finance, and to experiment with methods of 'hacking' financial systems. At first this took the form of my own ‘gonzo’ anthropological explorations of the world of derivatives trading. It has since merged into me working with campaign groups like ActionAid, MoveYourMoneyUK and the World Development Movement, and getting involved in the alternative finance community via initiatives like the Finance Innovation Lab.

In 2013, whilst writing The Heretic's Guide to Global Finance, I decided to start developing an experiential workshop series to help London's diverse array of activists, artists and alternative economists grapple with the financial sector in their midst. I decided to call this London School of Financial Activism (LSFA).

Phase 1: Seed-funding

In 2013 I ran a crowdfunding campaign to provide me with initial seedfunding to develop the idea. I raised £5014 from 168 funders. That was never going to be enough to set up LSFA in its entirety (with a website, logo, venues etc), but it has been vital in giving me some breathing room to develop the idea, as well as helping to build an initial base of supporters and press coverage. As I discussed recently at the MoneyLab conference in Amsterdam, I somewhat miscalculated the costs of the crowdfunding rewards and the time it would take to deliver, but on the upside I learned a whole lot about how to do crowdfunding (and have turned into something of an informal crowdfunding consultant to a fair amount of people since then).

Phase 2: Developing workshop content

In May 2013 my book was released, and generating publicity for the book subsequently took up a large amount of my time. The upshot of this is that I’ve been asked to do a wide range of talks and workshops off the back of it, which has both increased my experience in teaching, and has helped me to generate and test a range of workshop ideas. I’ve thus been able to develop the following list of workshops over the last several months.

Workshop Series 1: A hacker approach to demystifying global finance

I’ve been giving a range of interactive lectures on demystifying the financial sector, and the use of hacker approaches to exploring, jamming and rewiring 1) money 2) the financial intermediaries that steer money around the world and 3) the financial instruments they use to do that. This has including talks at Wilderness Festival, Edinburgh Festival and Edinburgh World Justice Festival. The next step is to turn them into experiential adventures within the physical space of the financial sector. I'm in touch with the team at Occupy London Tours who have been doing great guided tours of Mayfair, Canary Wharf and the City, and see some great potential for partnerships.

Workshop Series 2: Hot topics in financial activism

The broader workshops aimed at generally demystifying finance are ideal for opening the door to more specific and in-depth workshops on the problems of the financial sector. These include:
  1. Tax Justice: Exploring the offshore world: Offshore financial centres are an incredibly important element of the global financial system and international trade system, and are deeply intertwined in corporate operations. It's a crucial area for campaigners to engage with, and one which I have spent time actively exploring. I've worked on tax justice (for example, with ActionAid), spoke at the Action Aid tax justice conference in November, and have been forging relationships with campaigners, academics and even artists who are working in this area (for example, Paulo Cirio who started the controversial but awesome offshore company hack Loophole4All).
  2. Commodity speculations: Exploring commodity markets: We are constantly surrounded by commodities, and yet very few of us have any idea about the supply chains, giant commodity traders, and the financial players involved in them. I have worked with WDM on their commodity speculation campaign over the last few years, and I’ve also built experience investigating groups like GlencoreXstrata (see my article here for example), informally collaborating with groups like Global Witness, Greenpeace and others
  3. Dirty Detective Work: Tracing fossil fuel financing: It's becoming increasingly crucial for campaign groups to understand and challenge the investors who support major fossil fuels companies and who have entrenched interests in keeping us in the fossil fuel dark ages. That's why I've been getting involved in helping student divestment groups, giving talks at Cambridge, Oxford, Kings College London, University of East Anglia and Surrey University. I piloted a workshop on tracing fossil fuel financing at People & Planet’s Shared Planet Conference in November, and have been establishing relations with the team, and with other groups such as Market Forces Australia.
  4. Culture-Hacking: Anthropology as activism: I recently gave a talk at Sussex University Anthropology department on the concept of activist anthropology and culturehacking, using anthropological tools to gain access to and challenge powerful industries. There’s a lot of interesting work being done on financial anthropology and social studies of finance, but it all tends to be locked up in academia, rather than publicly accessible. Figures like David Graeber have raised the profile of economic anthropology as a progressive, engaged discipline, but it would be great to have a space for people to actively develop this.

Workshop Series 3: Open Source Finance

Using Open Source culture as the backdrop for alternative finance is an idea I initially sketched out at a talk on open source finance I gave to the Open Data Institute. I then developed it further in the model I sketched out on my blog and in ROAR Magazine. To me, this provides a very useful framework with which to explore current alternatives to mainstream finance (which, in contrast to open source, is closed and exclusive). Here are three workshops that could fall under this broader heading:
  1. Alternative economic design: Building alternatives to mainstream finance requires a pragmatic, yet creative, design mindset. This is something I’m really keen to develop with people who have a passion for design. In August I piloted a workshop at Shambala Festival entitled 'Build your own pop-up currency', and then collaborated with Cecilia Wee and Leander Bindewald (from New Economics Foundation) on a similar workshop for the Royal College of Art. I’ve done further talks on this topic at Fierce Festival and Central St. Martins design school, and then spent a term as an assistant lecturer in the Expanded Designer course at Camberwell College of Art, getting students to explore hacker culture and alternative currency design
  2. Anthropology of alternative exchange: It’s only through exploration of alternative forms of exchange that we really get to grips with mainstream forms of exchange (which in turn form the basis for the mainstream financial system). It's an area that I've been actively exploring. It started with a big article for Aeon Magazine about monetary cultures and since then, I’ve talked on gender dynamics of Bitcoin at the London Bitcoin Expo and cultural elements of cryptocurrency at LSE sociology department.
  3. Ecological / Permacultural design principles and finance: Ecological design principles provide a great framework for thinking about building an economic system that stays within planetary boundaries. My explorations into this topic started with me writing a piece for Transition Free Press on permacultural finance. I was then invited by Schumacher College and Transition Town Totnes to give a talk on permacultural design principles and finance (and I was also recently interviewed on by 21st Century Permaculture on Shoreditch Radio about this).
  4. Building Noah’s Ark: Exploring the DNA of pension funds: Pension funds are often overlooked behemoths of the financial world, helping to define the future of our economies through their investment decisions. That’s why it’s so important to reform the way that they work, and to re-engage people with how they work. I recently completed a series of 3 articles for Guardian Sustainable Business, breaking down the problems inherent in mainstream investment, what’s keeping them in place, and potential alternatives. The basic framework I sketched out could be a great basis for an in-depth workshop in which we explore investment culture, and this can also be tied into other workshops around fossil fuel divestment

Phase 3: Building the hackerspace

Now that the outline for the initial workshops has been established, there are series of steps that need to be taken to formalise LSFA a bit more. Some that I'm currently working on include:
  1. Logo & Website: I'm in final stages of developing a new logo for LSFA, working with designer Dimitrios Stamatis (as part of a bitcoin/barter exchange). A dedicated website will be up soon
  2. Physical location: I've identified a series of potential venues, and now trying to negotiate a space. If anyone has any proposals or ideas for appropriate spaces, do let me know
  3. Company structure: I'd like to develop an experimental company structure for LSFA, so some legal advice is required
I want LSFA to go beyond simply being a place where lectures are delivered. I want it to develop into a dynamic open space where members can come and hang out, use communal facilities and work on creative projects that 1) help them understand the financial sector whilst 2) building useful tools that challenge it. We do adventurous exploration of powerful systems, develop creative, mischievous ways to jam such systems, and experiment with ways to rewire them. In essence I'd like to create a financial hackerspace.

LSFA is thus not a 'school' where people are passive receivers of training, but rather a place for active participants who wish to develop practical or conceptual experiments in financial activism (e.g. shareholder activism / activist hedge funds), arts, (e.g. films, theatre, performance art), anthropology (e.g. ethnographic research projects), education (e.g. immersive tours, phone apps, mapping projects) and alternatives (e.g. alternative currencies / P2P systems / co-operative models). The school ideally becomes a site for the ‘beta-testing’ of alternatives form of economic life.

The aim is thus both educational and practical. People get involved in creative projects as a way to learn about a system they might otherwise feel alienated from or avoid. They subsequently create products, artefacts, processes or installations that the public can interact with too. I’d also like the school to operate on Creative Commons principles, in that outputs from one cohort of participants can be used as inputs for the next cohort, who are free to build on the work of others. The idea is to create a vibrant community with a sense of communal ownerships over the work being produced.

If you'd like more information, or would like to get involved in some way, my contact details are in the right hand panel. Watch this space for updates.

Sunday, 12 January 2014

Crypto-Patriarchy: The problem of Bitcoin's male domination

(Note: This is based on a talk I first gave at London Bitcoin Expo 2013)

Imagine a scenario 10 years from now in which Bitcoin has managed to establish itself as an important global currency, supported by a myriad of Bitcoin companies, trade associations, and educational institutions. Now imagine the board meetings of those organisations. What will their demographic breakdown be? Will it resemble this, or this, or this?

It's no secret that the directorships of large FTSE 100 or S&P 500 companies are overwhelmingly dominated by men, and white men at that. This is not just due to random chance, or men's innate brilliance. This is due to our society having a lingering, systematic male bias built upon hundreds of years in which men have had the most access to job opportunities, educational opportunities, political rights, and (perhaps most importantly) cultural encouragement to actually seek those positions. This has helped men build capital, skills and to normalise the idea that they should dominate those industry sectors that command the highest market values (not to mention government positions and academia).

I clearly put a negative spin on that, but I am aware that some people (such as traditional conservatives) see nothing wrong with the idea of the overlord male figure, watching over woman and child (and society) like a sometimes-benevolent-sometimes-wrathful authoritarian god. It particularly disturbs me though, when I detect this domination seeping into areas that are supposed to be challenging traditional structures. Such as the Bitcoin community.

Crypto-patriarchy: Gender bias in Bitcoin demographics

I first started thinking about the problem of crypto-patriarchy when I was asked to speak at a the London Bitcoin Expo, which had an epic line-up of over 15 male speakers. Faced with such a blatant wall of testosterone, I contacted the organiser and asked him why this was the case. He told me that he'd tried, but couldn't find any women to speak. I sent a few emails to people deeply involved in the bitcoin scene and asked them if they knew any women involved. 'Pretty much no' was the answer.

Then I realised that all but two of the 30 people who have used bitcoin to buy my book have been male. This is in contrast to sales I've made in other alternative currencies - such as time credits and local currencies - which have included far more women.

UCL researcher Lui Smyth conducted a survey of the Bitcoin community and found 95% to be male. This rings true to my experience of the London Bitcoin Expo, which felt like - to use an academic term - a 'cockfest' (echoed by Victoria Turk's observations about the event). Out of the 381 people signed up here, only around 10% are women. I used to work in financial derivatives brokering, a male-dominated world if ever there was one, but in my anecdotal experience Bitcoin seems even more male-dominated than traditional finance. And of those women that are involved, they remain hugely under-represented on the panels at Bitcoin conferences.

There are also obvious cases of bigotory towards women in the Bitcoin scene. Check out this comment by a paragon of humility on Bitcointalk: "Most [women] just don't know jack shit about bitcoins, and that's okay... they will just marry all the men who are bitcoin millionaires", followed by a picture of an abused woman with the caption 'Women deserve equal rights... and lefts' (aka left-hooks). Wow. (Update 24th Jan: For further examples of such behaviour see 'What it's like to be a women at Bitcoin Meetup' by Facebook's Arianna Simpson)

Why should we care? A rare chance to make something different

Aside from 1) the obvious issue of injustice, and 2) the fact that there's something wrong when an apparently revolutionary technology seems to receive lukewarm reception from people who make up 51% of the world's population, it's also 3) incredibly boring hanging around in scenes with only men (especially if they're the type of men who only like to hang around other men).

Furthermore, if something is not done about it, men's first-mover advantage will set in. They'll accumulate the capital and skills and set the tone of the culture. And yes, the boards of bitcoin companies will be male-dominated in 10 years time.

Bitcoin's community though, is still new, and it still has a rare opportunity to prove that it's cutting edge in every sense of the word, inclusive as well as technologically advanced (not just something that some people get very rich off... do I sound idealistic?), but to do so there needs to be reflection on barriers to inclusivity.

So what are the causes?

I wanted to get to the bottom of this, so I threw out the question above to that giant decentralised think-tank Twitter. I got a range of explanations back from people (admittedly mostly men). Let's go through some of those.

Explanation 1: Historical chance ('Guys started it, and brought their friends')

Kenny suggested that the reason was that men just happened to be the first to jump on board, and that the scene was built from that basis. He implies a kind of historical path-dependency to the process. We might construct a counterfactual history: It's plausible that if Bitcoin had been started by a group of female scientists at MIT, more women would have subsequently got involved via peer effects and role models. (Strangely enough, in all the speculations about the figure of Satoshi Nakomoto, almost nobody has suggested that she might have been a woman.)

Explanation 2: Inherent masculinity (the 'boys and their toys' explanation)

The obvious next possible explanation is that there is something intrinsic to Bitcoin that simply appeals to men. Tom here actually had a psychoanalytic explanation:

Here's another light-hearted Freudian explanation. Maybe though, there's something to this. Bitcoin evangelists frequently claim that it's an apolitical value-free protocol that doesn't exclude anyone, but perhaps there is some inherent 'male-ness' within the design, or perhaps even within the choice of imagery or language used by the original community to promote it ('the aesthetic').

The more popular theory though, is that Bitcoin is 'risky', and that it thus 'takes balls' to get involved because of its situation, being volatile and semi-illegal. One can imagine men - feeling emasculated by their desk jobs - baying for (a relatively safe) adventure, like a digital version of Fight Club, jockying for position in an ego-driven goldrush. This same myth of 'the risk-taking trader' is what spreadbetting companies exploit to sell their services, beautifully exemplified by this utterly wank video.

Finally, there's the classic "men just enjoy technology more", or "men are just more analytical". This again suggests that the reason lies not in social construction of gender roles (see Explanation 5 below), but in some intrinsic biological propensity of men to love machines, code, analysis, leadership, or pretty much anything that is also strangely correlated with also being able to make large amounts of money (yay, we naturally become rich through our inherent nature!)

Explanation 3: Female disdain for Bitcoin ('why would I want to use it?')

The flip side of the explanation that men are naturally drawn to Bitcoin, is the idea that women are repelled by it. One version of this argument is that women find it stupid or lame or juvenile, and that they have better things to do with them time than waste energy on pointless currency speculation (you find a similar argument with women and computer games). This Twitter respondent here certainly feels that way.

Contrary to the notion that somehow men are more analytical or 'rational', several woman have pointed out to me that there's not much you can really do with Bitcoin right now, and that they're sceptical of it because they're more pragmatic than men, better able to override their own egos and see through their own hype. Indeed, even the much-touted notion that Bitcoin allows you to escape the watchful eyes of the NSA carries with it a slightly egotistical belief that the NSA would somehow care what you're doing.

Explanation 4: The growing culture of anarcho-capitalist brutalism

Ok, so let's get more controversial. Tune and Eric suggested that women are repelled by Bitcoin, not because of them thinking it's stupid, but by the large numbers of libertarian/anarcho-capitalists in the scene, and the increasingly aggressive culture that surrounds it.

Don't get me wrong. I enjoy some elements of the balls-to-the-wall bravado of the libertarian ethos, and it makes for a decent self-help philosophy. But, it can also have the side-effect of attracting those who already feel empowered (or who feel entitled to power). Let's not beat around the bush: in its hardest right-wing formulations it is a philosophy for why being individually powerful relative to others is also morally right, carrying a certain brutalism, and a winner-takes-all, screw-the-weak callousness which is more likely to take root with someone already thinking in an aggressive patriarchal frame. I always sense that it naturally appeals to those who feel they are on the cusp of power that they are entitled to, but that has not yet fully come due... like 32 year old men for example.

Let's face it - Ayn Rand ain't a feminist hero. Not only did Rand state that "an ideal woman is a man-worshipper", but Randian libertarianism glorifies the myth of a Greek deity holding the world up on HIS shoulders. Later scientists actually discovered that the world held itself together - and that deities themselves were constructions built by ordinary people - but the John Galt myth persists, and being around so many people who have a belief that the world should rightfully be dominated by those who are most powerful, well-educated or aggressive enough to claw their way up the ladder, probably isn't that welcoming for say... many women, ethnic minorities, or pretty much anyone that's experienced the brunt of being on the wrong side of power historically.

(Additional note 17th January: For an example of this mentality, check out this post by a newly minted Bitcoin baron, thinly masquerading as a story of societal empowerment whilst dripping in triumphalist, patronising scorn for his girlfriend, her 'dumb friends' and the female coffee barista who is too stupid to have 'got in early' like him. Classic quote: "Unlike some of the other early ones, I fortunately — God is merciful — do not have a wife. What I have is a long-term girlfriend, and I’m under no legal obligation to spend any of my hoard to impress her dumb friends.")

(Side note: Interestingly, women are pioneers in the so-called sharing economy, which conservative Milo Yiannopoulos slated as an "emasculating, dispiriting and demotivating" realm of insipid do-gooders. Poor Milo, frightened by the thought of his manhood being threatened by people actually wanting to co-operate and share stuff.)

Explanation 5: The cultural dynamics of the technology scene

Antonie here offers this apparently self-explanatory reason for crypto-patriarchy. He's not unique in holding this viewpoint. It's frequently repeated, not just about Bitcoin, but about the entire technology sector. This is a complex issue that I cannot do justice to in a single post, but it raises the question about whether crypto-patriarchy is actually due to something intrinsic to Bitcoin, or whether it is just a localised version of a much more widespread problem of women not being culturally encouraged to get involved in technology.


It's an issue that this article addresses very well. Consider the imagery of the magazines above. Women's magazines almost never promote interest in technology as normal, whereas men's magazines always do. The key question here is whether such magazines are presenting a descriptive account of the world ("we merely reflect what women want to see"), or a normative one ("Oh, and we implicitly reinforce the idea that what we project is normal, or how things OUGHT to be").

Descriptively though, it's inaccurate that women are 'not into' technology. During the world wars, for example, historically constructed gender roles were disrupted as women took up industrial jobs (leading to a backlash after men returned home from wars). And as Alice Bell and Georgina Voss note, "Whilst programming was originally ‘woman’s work’, it morphed into a male dominated field where hiring practices actively discriminated against women, setting up the straw man of the geeky, asocial male coder".

Normatively, of course, the idea that it's not "women's natural place" to be involved in technology runs into a conflict of interest: It's strangely convenient for men that women are naturally 'not interested' in getting involved in anything associated with power, isn't it? It reminds me a bit of the apartheid history of my home country South Africa, where apparently black people 'didn't have an aptitude' for doing maths or science, so were trained to do things like, um, minimum wage mine labouring.

"Nobody's stopping you": Negative Freedom and the Moshpit Effect


When pushed about this issue, some Bitcoin enthusiasts irritatedly say "nobody's stopping women from joining". 'Nobody is stopping you' is the classic articulation of negative freedom, and its problems are best exemplified by the moshpit. Nobody is stopping you from entering the moshpit, but you're only likely to enter if you feel encouraged to, or if you feel you'll be free of victimisation and subtle disapproval. It's the same feeling a young woman feels walking past a pub full of leery men eyeing her. Nothing's stopping you entering, except that condescending projection of de-facto power the men implicitly thrive upon. 'Come in darling... if you dare'.

I personally love moshpits - and perhaps we need such spaces in society for men to vent their excess aggression - but there's no doubting that they are wired towards disenfranchising women of their place on the dance-floor. Sure, you occasionally get the punk-rocker riotgrrrl who sets out to prove that she outdo the boys, but the parameters of the social conversation are very clearly set by the male action. The stark fact is that most women will simply be barged out of the way, repelled by the sweaty oafs, and just retreat to watch the band from the outskirts.
Moshpits are a comparatively harmless example of the problems of negative freedom, limited to certain ritualistic times and places. But if the principles of the moshpit are found in what is supposed to be an inclusive global exchange system, you've got problems. I think that Bitcoin is turning into a covert form of monetary partriarchy. It may define itself against a status quo, but if you're going to challenge one power structure, don't make it at the expense of accepting another. You don't dig big government and big banks? Why then tolerate male domination?

The myth of apolitical neutrality


The comeback from the hard libertarian is likely to be that Bitcoin is an apolitical commodity, 'free from intervention', that 'everyone's free to join', that 'we're all adults', that it's neutral, and that they have no time for wishy-washy political correctness.

The average problem with the average libertarian though (and by this I mean someone who comes to such ideals not via a critical intellectual process, but because they like the sound of it), is that they're hypersensitive towards recognising overt forms of power - like the bouncer standing at the nightclub door - but have muted ability (or desire) to recognise implicit forms of power, the subtle structures of exclusion that actually do most of the work in maintaining a status quo.

They assume that in the absence of the bouncer there's a level playing field. 'There's no bouncer stopping you entering'. They fail to see that most people will be repelled from the nightclub not by the bouncer, but by things like a lack of money, or a lack of cultural access, or by the perception that they don't belong there. The Ritz doesn't even need bouncers. Those without power naturally shrink away from it. Or, in the immortal words of Withnail:


Indeed, in the context of a non-level playing field, not making an overt effort to include is just a subtle (albeit non-deliberate) form of exclusion. As Howard Zinn puts it:
" ... it is impossible to be neutral. In a world already moving in certain directions, where wealth and power are already distributed in certain ways, neutrality means accepting the way things are now."
When men say that women are just different, or just not interested, it's normally just a convenient mask for the fundamental lack of concern about whether they're included. If the discussants on this forum are to be taken seriously, it seems that women's current designated role in the Bitcoin community appears to be as cheerleaders for the men, girlfriends of Bitcoin millionaires, or singers of songs of the Bitcoin heroes (no disrespect intended towards the musicians). To my knowledge, the only site focused on Women & Bitcoin is The Bitcoin Wife, a great site, but focused mostly on the concept of women as (married) consumers.

And while I've had pushback from women in the Bitcoin scene who say most of the guys are friendly, I also question how much someone could raise an issue of discrimination before being frowned upon as an unwelcome element. This is a big problem in mainstream finance, where women often don't report discrimination for fear of being seen as 'whiners' (why do I keep thinking of Stockholm Syndrome?).

So, what should be done? Combating Bitcoin inequality

The material from this article is drawn from my talk at the London Bitcoin Expo. After my talk I was approached by a man of African descent who was working as the doorman. He thanked me for addressing the issue. My topic of gender exclusion resonated with forms of exclusion he'd experienced in his own life. He'd been standing all day watching comparatively wealthy white men talk about the earth-shattering potential of BTC.

It's important to stress though, that this problem is found throughout society, not just in Bitcoin. All sorts of groups are marginalised from the broader technology scene (for an interesting, semi-conservative take on that, see 'Silicon Chasm: The class divide on America's cutting edge'). Interestingly, one technology area that does have a more inclusive vibe is ICT4D, which explicitly defines itself by a deliberate attempt to include women and poorer communities in technologies that are otherwise prone to being the preserve of elites making themselves wealthier.

It's also important to stress though, that I'm not claiming there is a deliberate attempt on the part of men to exclude others. People with privilege are frequently prone to seeing the world as a flat, level playing field, and it takes practice for them to see the hidden barriers that others face on a day-to-day basis. So, here are a few things I personally wish the Bitcoin (and wider tech) community would implement:
  1. I wish the community would stop denying that there is a problem
  2. I wish the community would stop repeating self-serving dogma like 'women don't like tech'
  3. I wish the community would stop having all male panel discussions - no wonder women don't want to get involved if they're constantly faced with a wall of male faces
  4. I wish the community would make a collective and concerted effort to identify, build up and showcase female role models 
Similar dynamics are found when considering ethic minority youth in countries like the UK. The old successful man throws his hands in the air and says "Why don't black teenagers express any interest in a career in law?". Um, have you ever thought that maybe they don't relate to people like you, don't feel included by people like you, cannot imagine themselves being like you, and mostly view lawyers as being figures of white oppression? Developing role models is vital to developing people's desire to participate.

So yes, can we break out of the passive negative freedom mode of "nobody's stopping you", and enter into an active positive freedom mode, which involves deliberately seeking inclusion, and deliberately building up people's capacity to act on their potential freedom? And, if this doesn't happen, think about how dreary, bloated and conservative it's going to be in 10 years time.

Sunday, 15 December 2013

Seedbombing: Applying the Principles of Permaculture to Finance

I originally wrote this article for Transition Free Press Edition 4. It's published under a Creative Commons licence (see side panel for details)

Finance, even in its most high-tech formulations, is rooted in ecological systems. A high-frequency trading hedge fund, for example, relies on electricity created by burning fossillised organic matter. It relies on employees, surviving via agricultural systems. It trades in company shares, given value by the actions of those companies’ employees using assets (like computers and telecommunications systems) that are all dependent (at some level) on mining, forestry, and other extractive industries.

The financial system has been a net drain on ecological systems though. Finance involves steering economic energy – symbolised in money – in an attempt to generate a yield over time. For example, investors may steer money via financial instruments like shares and bonds into economic activities, and attempt to extract returns in the form of dividends and interest. They aim to extract the highest short-term yield, from the minimum amount of expenditure, preferably at the lowest possible levels of risk.

Permaculture is a body of thought that attempts to build ecological dynamics into design. A permacultural designer entirely understands the idea of obtaining a yield from the earth by investing time and energy, but the key difference is that they attempt to do so without undermining ecological balance. The focus is on mutualistic integration with ecologies, acting in accordance with natural regenerative processes rather than parasitically exploiting them. So can we use permacultural principles to design financial instruments and institutions?

Cultivating long term balance
A classic example of a parasitic financial institution is a payday lender. The payday loan company is fixated with the short-term risks presented by a vulnerable borrower, and exploits that by demanding the highest possible interest rate from them. In so doing they further exhaust the community around them and increase deprivation. It’s akin to overfishing an already fragile river system, thereby further disrupting the ecological balance.

The permacultural designer, whether they are looking at fisheries or financial inclusion, will seek instead to build up the productive potential of the overall system. A permacultural financier thus looks to strengthen vulnerable borrowers, working with them to improve their credit-worthiness. The Permaculture Credit Union in Santa Fe is one such example of a regenerative financial institution. If we think in terms of economic energy, they aim to cultivate long-term energy balance, rather than extracting maximum short-term energy before collapse.

Observe and interact
But how do we get to a point of designing such systems? Anyone familiar with permaculture knows that it has 12 principles of design. The first, and perhaps most important, principle is ‘observe and interact’. Mainstream financial institutions such as large banks pay little attention to the cultural nuances of the communities they descend upon, and their designers certainly do not interact with such communities in any meaningful sense. They offer standardised products and services, no matter where they are, and in areas where these don’t work, the banks are simply not found (known as ‘financial exclusion’).

Alternative finance practitioners need to be attuned to the needs of their environment. I recently held a workshop at Shambala Festival where we explored the idea of building a pop-up currency for the duration of the festival. Several participants suggested we create something like the Brixton Pound, a local currency used for commerce in South London. The point of the Brixton Pound though, is to harness economic energy that would otherwise flow out of Brixton. The economic ecosystem of Shambala Festival, unlike Brixton, is already inherently local, so there is minimal need to introduce such a currency into that environment. To build something more interesting requires a much deeper observation of why people are at the festival (it’s not for commerce, for example), and how a different system of exchange might add a new dimension to that experience.

In anthropological terms, we might call this as ‘participant observation’, where you engage in slow observation and interaction with a particular cultural environment to experience the nuances. Through this process one can begin to get a feel for how a more integrated, inclusive, and interactive system can be built. A key problem in modern finance is just how disconnected people feel from it. Consider the average high-street bank. The people standing in the queue or using the ATM often appear utterly disconnected from the process. They often don’t know where the money comes from, or where it goes to. By contrast, a simple peer-to-peer lending platform like Abundance Generation – which allows you to lend directly to renewable energy projects – has reconnection embedded into its design.

Zones and diversity
Permaculturists are intensely interested by the flows of energy within and between different ecological zones and how to balance it. For example, in agricultural design, they’re thinking about how the household interacts with the immediate garden, and how the garden interacts with the zone of semi-wilderness beyond. They’re seeking synergies between the diverse components. This fostering of diversity is fundamental for building resilience (not having ‘all one’s eggs in one basket’), but the interrelations between diverse parts is also viewed as a source of creativity.

The mainstream financial sector is the ultimate monoculture. Not only is it not resilient, but it’s also not very creative or responsive to change. The banking sector is generally only good at one thing: extracting short-term profit whilst concentrating power in a single set of large institutions. What we rather need is something akin to an ‘open source’ financial movement, where that power is spread out to networks of smaller institutions, where access to financial services is widened, and where the means of producing financial services is extended to people who previously had little input. Local banking is one important element of this ethos, but we also catch glimpses of it in the array of niche crowdfunding platforms that have emerged, offering financing opportunities to projects that most banks would ignore.

Financial holism
At the core of permaculture is holism. Much mainstream thought encourages people to box aspects of their lives into intellectual silos, like ‘my economic life’ and ‘my political life’. That’s a terrible way to start a design process, because it ignores the inherently multifaceted nature of all our actions, and that we are always balancing various objectives and values. For example, a large national currency may be very efficient for exchange, but that very same efficiency can act to atomise individuals by weakening the ties of trust that would otherwise be required for exchange. Thus, rather than seeking to design for single, specialised and segregated uses (maximising a particular outcome), a permacultural designer seeks out holistic optimisation: For example, how does one create a currency that achieves efficiency without alienating people from one another? Can a local currency like the Bristol Pound blend the efficiency of mobile payment with the goal of energising local community exchange?

Very importantly, holism also involves integrating yourself into the design process, rather than imagining yourself as an objective outsider. Activists taking on the financial sector spend much time pitching themselves against the system, but frequently take little time to see how they personally form part of it. Have you ever wondered how the mainstream financial sector imprints itself and replicates itself in your own thoughts about exchange, and in the language you use? Much of the power of the financial system is predicated on people unconsciously deferring power to it without realising it. True holism, and the key to unveiling the hidden design principles in existing systems, is as much about observing yourself as it is about observing Canary Wharf. Think about it next time you take the note out of your wallet.

Seedbombing the Frontiers of Ecological Finance

So how does the aspiring permacultural designer start making their visions a reality in the financial sector? After all, if you're surrounded by a monoculture it's hard to seed new ideas. It's helpful in this context to take inspiration from the guerilla gardening movement, and in particular their technique of seedbombing. Seedbombing is the act of chucking compressed bundles of seeds into rigidly controlled gardens. Most of the seeds don't make it, but it's fun to try, and what's more, every now and again one actually establishes an outpost for itself.

Using this as an analogy for economic change, we need to constantly create portfolios of alternatives and throw them into society, learning from what works and what doesn't. That's how great institutions like Ecology Building Society got started - a group of people with an idea went ahead and just did it. These solutions are often small, but that's the point. We don't want to replace one monoculture with another monoculture. The ideal is to create a rich, responsive jungle of creative and resilient services, rooted into the reality of their local context.

After I wrote this article I went to Totnes to talk on the topic at an event organised by Transition Town Totnes, Schumacher Colllege and Totnes REconomy Project. You can see the video below. I also discovered the Financial Permaculture Institute and Perennial Solutions which have looked at this topic before, so check them out too. Cheers

Friday, 29 November 2013

Building Creative Commons: The Five Pillars of Open Source Finance

This is an article about Open Source Finance. It's an idea I first sketched out at a talk I gave at the Open Data Institute in London. By 'Open Source Finance', I don't just mean open source software programmes. Rather, I'm referring to something much deeper and broader. It's a way of framing an overall change we might want to see in the financial system. To illustrate this, I set up an analogy between computer systems and economic systems, and I then explore what financial 'code' might be. I then sketch out the five pillars that could underpin an open finance movement.

Computer systems as economies
Computer systems are great metaphors for economic systems. That's because, in a sense, a computer is a microcosm of our economy, albeit one that is a lot more predictable and controllable. Economies, at some basic level, are based upon people using energy to extract useful stuff from the earth, using tools, procedures, systems of rules and labour to activate the earth's productive potential. Likewise, computer systems rely on taking inputs of energy (the computer plugged into the electricity grid) and combining it with software code (a kind of abstraction of human organisation), in order to activate the assemblage of physical hardware (signifying a latent productive potential) towards productive tasks, when willed to do so by a user of the computer.

We constantly interact with computers, but most people in the world do not perceive themselves as programmers of computers. They mostly perceive themselves as users of computers that others have programmed. And even if they wanted to dig deeper, they'd find that much of the software they use is proprietary, locked up in secretive, opaque, even obfuscated formations. Windows looks like a friendly interface, but you cannot see what it does, or how it does it. It's a useful intermediary interface between you and the inner workings of your computer, but it's also a hard-shelled barrier.

The Financial Status Quo: Power concentrated in intermediaries

Software code is the organising rule system that steers energy into activating hardware towards particular ends. So, extending this as an analogy, what might financial 'code' look like? A financial system, in a basic sense, is supposed to arrange for surplus resources (extracted from the earth), to be redistributed (in the form of money) via financial instruments (often created by financial intermediaries like banks and funds), into new economic production activities ('investments'), in exchange for a return over time.

Here, for example, is a rough financial circuit: A person manages to earn a surplus of money (a symbolic claim on real things in the world), which they deposit into a pension fund, which in turns invests in shares and bonds (which are conduits to the real world assets of a corporation), which in turn return dividends and interest over time back to the pension fund, and finally back to the person.

Shares and bonds are extractive financial conduits that plug into a corporate structure, but if you look for how they are coded, you'd discover they are built from legal documents that are informed by regulations, acts of parliament, and social norms. They are supported by IT systems and all manner of payments systems and auxiliary services.

But it takes more than clearly-worded documentation to be able to create financial instruments. The core means of financial production, by which we mean the things that allow people to produce financial services (or build financial instruments), includes having access to networks of investors and companies, having access to specialist knowledge of financial techniques, and having access to information. It's these elements that banks and other financial intermediaries really compete over: They battle to monopolise relationships, monopolise information, and to monopolise specialist knowledge of financial techniques.

And indeed, that's why production of financial services mostly occurs within the towering concrete skycrapers of the 'financial sector', spinners of the webs of the code that is mostly unknown to most people. We have very little direct access to the means of financial production ourselves, very little say in how financial institutions choose to steer money in society, and very little ability to monitor them.

We have, in essence, a situation of concentration of power in financial intermediaries, who in turn reinforce and seek to preserve that power structure. And while I may be happy to accept a concentration of power in small specialist industries like Swiss watchmaking, a concentration of power in the system responsible for redistributing human society's collective resources into new investments is not a good thing. It's systematically breaking our planetary hardware by steering money into destructive activities, whilst helping to fuel a culture of bland individualistic materialism in increasingly atomised communities.

Opening access, reconnecting emotion, liberating creativity

The Open Source movement started with software - and in particular with the concept of copyleft and free licensing - but the principles extend far past software. At core, Open Source is a philosophy of access: access to the underlying code of a system, access to the means of producing that code, access to usage rights of the resultant products that might be created with such code, and (in keeping with the viral quality of copyleft) access to using those products as the means to produce new things. Perhaps the ethos is best illustrated with the example of Wikipedia. Wikipedia has:
  1. A production process that encourages participation and a sense of common ownership: We can contribute to Wikipedia. In other words, it explicitly gives us access to the means of production
  2. A distribution process that encourages widespread access to usage rights, rather than limited access: If you have an internet connection you can access the articles. We might call this a commons
  3. An accountability model that offers the ability to monitor and contest changes: An open production process is also one that is more transparent. You can change articles, but people can monitor and contest your changes
  4. A community built around it that maintains the ethic of collaboration and continued commitment to open access. It's more than just isolated individuals, it's a culture with a (roughly) common sense of purpose
  5. Open source code that can be accessed and altered if the current incarnation of Wikipedia doesn't suit all your needs. Look, for example, at RationalWiki and SikhiWiki
You can thus take on five conceptually separate, but mutualistic roles: Producer, consumer, validator, community member, or (competitive or complementary) breakaway. And these same five elements can underpin a future system of Open Source Finance. I'm framing this as an overall change we might want to see in the financial system, but perhaps we are already seeing it happening. So let's look briefly at each pillar in turn.

Pillar 1: Access to the means of financial production

Very few of us perceive ourselves as offering financial services when we deposit our money in banks. Mostly we perceive ourselves as passive recipients of services. Put another way, we frequently don’t imagine we have the capability to produce financial services, even though the entire financial system is foundationally constructed from the actions of small-scale players depositing money into banks and funds, buying the products of companies that receive loans, and culturally validating the money system that the banks uphold. Let’s look though, at a few examples of prototypes that are breaking this down:
  1. Peer-to-peer finance models: If you decide to lend money to your friend, you directly perceive yourself as offering them a service. P2P finance platforms extend that concept far beyond your circle of close contacts, so that you can directly offer a financial service to someone who needs it. In essence, such platforms offer you access to an active, direct role in producing financial services, rather than an indirect, passive one.
  2. There are many interesting examples of actual open source financial software aimed at helping to fulfil the overall mission of an open source financial system. Check out Mifos and Cyclos, and Hamlets (developed by Community Forge's Matthew Slater and others), all of which are designed to help people set up their own financial institutions
  3. Alternative currencies: There’s a reason why the broader public are suddenly interested in understanding Bitcoin. It’s a currency that people have produced themselves. As a member of the Bitcoin community, I am much more aware of my role in upholding – or producing – the system, than I am when using normal money, which I had no conscious role in producing. The scope to invent your own currency goes far beyond crypto-currencies though: local currencies, time-banks, and mutual credit systems are emerging all over
  4. The Open Bank Project is trying to open up banks to third party apps that would allow a depositor to have much greater customisability of their bank account. It's not aimed at bypassing banks in the way that P2P is, but it's seeking to create an environment where an ecosystem of alternative systems can plug into the underlying infrastructure provided by banks

Pillar 2: Widespread distribution
Financial intermediaries like banks and funds serve as powerful gatekeepers to access to financing. To some extent this is a valid role - much like a publisher or music label will attempt to only publish books or music that they believe are high quality enough - but on the other hand, this leads to excessive power vested in the intermediaries, and systematic bias in what gets to survive. When combined with a lack of democratic accountability on the part of the intermediaries, you can have whole societies held hostage to the (arbitrary) whims, prejudices and interests of such intermediaries. Expanding access to financial services is thus a big front in the battle for financial democratisation. In addition to more traditional means to building financial inclusion - such as credit unions and microfinance - here are two areas to look at:

  • Crowdfunding: In the dominant financial system, you have to suck up to a single set of gatekeepers to get financing, hoping they won’t exclude you. Crowdfunding though, has expanded access to receiving financial services to a whole host of people who previously wouldn’t have access, such as artists, small-scale filmmakers, activists, and entrepreneurs with no track record. Crowdfunding can serve as a micro redistribution system in society, offering people a direct way to transfer wealth to areas that traditional welfare systems might neglect
  • Mobile banking: This is a big area, with important implications for international development and ICT4D. Check out innovations like M-Pesa in Kenya, a technology to use mobile phones as proto-bank accounts. This in itself doesn’t necessarily guarantee inclusion, but it expands potential access to the system to people that most banks ignore

Pillar 3: The ability to monitor
Do you know where the money in the big banks goes? No, of course not. They don’t publish it, under the guise of commercial secrecy and confidentiality. It’s like they want to have their cake and eat it: “We’ll act as intermediaries on your behalf, but don’t ever ask for any accountability”. And what about the money in your pension fund? Also very little accountability. The intermediary system is incredibly opaque, but attempts to make it more transparent are emerging. Here are some examples:

  • Triodos Bank and Charity Bank are examples of banks that publish exactly what projects they lend to. This gives you the ability to hold them to account in a way that no other bank will allow you to do
  • Corporations are vehicles for extracting value out of assets and then distributing that value via financial instruments to shareholders and creditors. Corporate structures though, including those used by banks themselves, have reached a level of complexity approaching pure obsfucation. There can be no democratic accountability when you can’t even see who owns what, and how the money flows. Groups like OpenCorporates and Open Oil though, are offering new open data tools to shine a light on the shadowy world of tax havens, ownership structures and contracts
  • Embedded in peer-to-peer models is a new model of accountability too. When people are treated as mere account numbers with credit scores by banks, the people in return feel little accountability towards the banks. On the other hand, if an individual has directly placed trust in me, I feel much more compelled to respect that

Pillar 4: An ethos of non-prescriptive DIY collaboration
At the heart of open source movements is a deep DIY ethos. This is in part about the sheer joy of producing things, but also about asserting individual power over institutionalised arrangements and pre-established officialdom. Alongside this, and deeply tied to the DIY ethos, is the search to remove individual alienation: You are not a cog in a wheel, producing stuff you don't have a stake in, in order to consume stuff that you don't know the origins of. Unalienated labour includes the right to produce where you feel most capable or excited. 

This ethos of individual responsibility and creativity stands in contrast to the traditional passive frame of finance that is frequently found on both the Right and Left of the political spectrum. Indeed, the debates around 'socially useful finance' are seldom about reducing the alienation of people from their financial lives. They're mostly about turning the existing financial sector into a slightly more benign dictatorship. The essence of DIY though, is to band together, not via the enforced hierarchy of the corporation or bureaucracy, but as part of a likeminded community of individuals creatively offering services to each other. So let's take a look at a few examples of this

  1. BrewDog's 'Equity for Punks' share offering is probably only going to attract beer-lovers, but that's the point - you get together as a group who has a mutual appreciation for a project, and you finance it, and then when you're drinking the beer you'll know you helped make it happen in a small way 
  2. Community shares offer local groups the ability to finance projects that are meaningful to them in a local area. Here's one for a solar co-operative, a pub, and a ferry boat service in Bristol
  3. We've already discussed how crowdfunding platforms open access to finance to people excluded from it, but they do this by offering would-be crowdfunders the chance to support things that excite them. I don't have much cash, so I'm not in a position to actively finance people, but in my Indiegogo profile you can see I make an effort helping to publicise campaigns that I want to receive financing

Pillar 5: The right to fork

The right to dissent is a crucial component of a democratic society. But for dissent to be effective, it has to be informed and constructive, rather than reactive and regressive. There is much dissent towards the current financial system, but while people are free to voice their displeasure, they find it very difficult to actually act on their displeasure. We may loathe the smug banking oligopoly, but we're frequently compelled to use them.

Furthermore, much dissent doesn't have a clear vision of what alternative is sought. This is partially due to the fact that access to financial 'source code' is so limited. It's hard to articulate ideas about what's wrong when one cannot articulate how the current system operates. Most financial knowledge is held in proprietary formulations and obscure jargon-laden language within the financial sector, and this needs to change. It's for this reason that I'm building the London School of Financial Activism, so ordinary people can explore the layers of financial code, from the deepest layer - the money itself - and then on to the institutions, instruments and networks that move it around.

Beyond access to this source code though, we need the ability to act on it. A core principle of OpenSource movements is the Right to Fork. This is the ability to take preexisting code, and to modify it or use it as the basis for your own. The Right to Fork is both a check on power, but also a force for diversity and creativity.

In the mainstream financial system though, there are extensive blocks on the right to fork, many of them actively enforced by financial regulators. They won't allow new banks to start, and apply inappropriate regulation to small, new financial technologies. The battle for the right to fork therefore, is one that has to also be fought at the regulatory level. That's why we need initiatives like the Disruptive Finance Policy program.

The Right to Fork needs to be instilled into the design of any alternatives to mainstream finance too though. I don't want to replace a world where I'm forced to use national fiat currencies with one in which I'm forced to use Bitcoin. The point is to create meaningful options for people. (To the credit of the original designers of Bitcoin, the right to fork has indeed been built in, and there has been significant use of the original Bitcoin sourcecode to create other cryptocurrencies, albeit it takes more to create a currency than merely deploying new code).

Ahoy! We set sail for the Open seas

We may be in the early phase of a slow-moving revolution, which will only be perceptible in hindsight. As projects within these five pillars emerge, the infrastructure, norms and cultural acceptance for more connected, creative, open financial system may begin to emerge and coalesce into reality.

I hope this article has been of use to you, whether you're looking to design actual open source finance platforms, programs and free software, or pioneer a new element of open access and open data, or whether you're just keen to help beta-test new ideas as they get released. The financial sector is a big heavy conglomerate that is a perfect challenge for the adventurous pirate-meets-hacker-meets-activist-meets-entrepreneur. Please do tell me about anything you're up to, and, in the spirit of Open Source, please do leave suggested amendments to this article in the comments section. I'll try patch them into the next version of this.