Fair warning: I am not an economics blogger. But I read a bunch of them on the regular (Matt Yglesias, Joe Weisenthal, better known as @TheStalwart, Ezra Klein and Wonkblong in general, Ryan Avent and The Economist in general, and Free Exchange in particular - you get the picture). Caveat emptor.
If you are a theatrical bent and you are at all engaged with social media, then you may have noticed HowlRound on Twitter, talking up voting for Culture Coin, their Business Unusual contest entry (side note to ArtsFwd: this is 2013 - frames are dead, dead, dead, please stop using them). I encourage you to read the proposal, a heartfelt plea for new thinking on connecting resources with users and rewarding sweat with "sweat equity." I am wholly on board with the premise that there are underutilized resources in the arts sector, that there are dark resources, latent abilities, spaces, or resources that have not been tapped into, and that nearly everyone in the arts sector is underpaid. It's an open question what direction exactly Culture Coin is going to take on tackling these issues. However, all of this talk about creating a digital distributed transnational currency reminds me of that other digital transnational invented currency, Bitcoin, which can lead to some productive thinking about what Culture Coin should not be.
You may have heard of Bitcoin. It's been in the news recently because its value went nuts, which led to all kinds of snarky econoblogger fun. If you haven't heard, Bitcoin is a digital, anonymous, cryptographically secure, peer-to-peer currency based on hard money theories of value (which is influenced by a school of thought called monetarism), namely that scarcity and durability create value. If you have libertarian friends, ask them about gold. You will get a wonky earful about intrinsic value and you will understand what Bitcoin wants to be (it's all wrong, of course - theatre makers, of all people, should understand that value is a shared collective phenomenon that is not always stable). Bitcoin is, essentially, digital gold. Gold has desirable qualities in a physical currency: it doesn't rust; there's a limited supply of it; historically, everybody wants it. Bitcoin, like gold, is limited in its supply. There will only ever be 21 million Bitcoins in the world. Bitcoins must be mined in order to go into circulation (being "mined" involves your computer doing a complex set of number crunching, kind of like SETI@home or Folding@home, but with less societal value). And finally, Bitcoin can be converted to other currencies at a floating market value, in addition to being useful (that's a strong word, but let's be generous) for purchasing goods and services directly (for the record, despite all the techo-utopian enthusiasm behind Bitcoin, the bulk of the goods purchased with it at this point are drugs and guns - turns out libertarians aren't the only ones interested in a cryptographically secure anonymous transnational digital currency).
It's easy to see the similarities between Bitcoin and Culture Coin, which aims to be a peer-to-peer digital currency as well. However, those similarities end pretty quickly. For example, the value basis of the Culture Coin is the exact inversion of Bitcoin. The basis for "mining" Culture Coins is sweat, i.e. labor, which is essentially infinite, and the money supply is unconstrained. This begs the question: how does labor create capital? When you perform labor in the real economy, you receive wages out of an existing stock of available money, you don't create that money out of thin air in that moment. Libertarians and Bitcoin enthusiasts don't like fiat money because governments can increase the money supply (i.e. print money) to change the value of that money, pretty much at will. Fiat money means that it is always possible for a sovereign to make more money with their magic "Because I said so!" (this is also why no sovereign nation with its own currency can go bankrupt - tell your Republican friends). But that doesn't mean the money created would be worth anything, just ask Zimbabwe (231,000,000% per day!). Culture Coin, if it were truly to be implemented as a currency, is the most extreme version of fiat money ever, where labor itself creates new money, rather than getting rewarded with existing money. There is no precedent for that whatsoever, it's essentially alchemy. If the user base grows and Culture Coin catches on in this scenario, value will disappear the instant it is "created" because the more successful Culture Coin is at convincing people to put in sweat and be paid in coin, the less each individual coin will be worth, undercutting the very purpose of the project: fair compensation.
Bitcoin is also meant to mimic gold in that it intends to be a resource that is left to the collective use of those who adopt it. In other words, there is no central bank of Bitcoin. As a form of specie, it simply is what it is and it doesn't need anyone standing behind it to have value (we've seen that this is not true, of course, but that's the theory). The Culture Coin project has an altruistic motive at heart, fair compensation for market participants, that requires active management of the currency to meet its philosophical goals. Some of these ideas can't be found in the contest entry, but they do show up on Twitter. One in particular catches the eye:
Culture Coin gets co-created & democratically run by—ALL—artists & culture makers. Read/Vote it up @artsfwd goo.gl/PGRCF #newplay
— HowlRound.com (@HowlRound) May 22, 2013
Culture Coin would again be the exact opposite of Bitcoin: instead of having no central bank, its central bank will be every user of the currency. Culture Coin plans to have all users collectively act together and democratically decide on conversion rates and fair compensation for your sweat. You can search for days on whatever search engine suits you and you will not find anyone who has ever attempted anything like that. Digital direct democracy, in and of itself, has yet to succeed or be effectively implemented by its own biggest proponents. No one has ever attempted direct democractic control of a central bank. Ever.We have seen what happens when amateurs help run major financial institutions, though and it looks a lot like the Great Depression. Setting aside major questions about standards of fairness and the workability of the currency, this is a giant governance headache. Huge amounts of resources and time will be needed to work out the theory on this, produce actionable ideas, run the experiments necessary to implement those ideas, learn from those experiments, and then finally convince someone to actually accept a Culture Coin as a form of payment from someone they don't know. Creating a currency is hard work.
This is all pretty theoretical, so let me put it into more concrete terms. Let's say I volunteer with several local theatres in DC, doing lighting or whatever they had to hand, and let's say I did that for long enough, that I could use some of the Culture Coins I'd built up to rent a space in Germany (transnational!) for a week for a cross-cultural project I'd been kicking around (something like these examples came up in the Twitter conversation, which I should storify, but haven't yet). That's great! But . . . the people who own that space in Germany have to pay rent. In euro. How does giving them some Culture Coins help them make rent? It doesn't . . . unless you can turn a Culture Coin into euro. But there is already a way for me to labor for a certain amount of time, receive currency in return for that labor (from an already accepted store of value), and then use that wage to pay for goods and services to realize my dream idea; all without creating a parallel economy or a new currency.
What this all boils down to is that Culture Coin is actually still an inchoate nascent idea and it will take some time to develop. To me, it is pretty clear though that it shouldn't develop into a true currency and that even one second spent thinking of it that way is time better spent doing something. To me, there is something far more interesting lurking at the heart of the project than a digital currency. Remember that the impetus for Culture Coin, beyond the fair compensation thing, is the desire to uncover and connect resources, including latent resources, with those who are interested in using them. Fair compensation doesn't actually have anything to do with connecting users with resources. It would be nice to be fairly compensated, but that's a problem with not having enough capital, something that inventing a new currency won't solve. But this resource problem? That can be solved. Indeed, Fractured Atlas has already made a run at part of this problem with their Spaces project. In keeping with the commons ethos, I think the best thing HowlRound can do, would be to leverage that contest reward into a partnership with someone who is already working on part of their problem and extend the work of both.
I moved to Washington, DC in order to get plugged into a vibrant theatre community that was large enough to be doing interesting work and taking serious risks, but small enough to welcome in a complete stranger. I have a couple of projects that I would love to self-produce, but I'm still new to the community (and disconnected from it by my production gig - I think sometimes that I will get deeper into the theatre, only when I step away from running shows). I don't hang around with a coterie of actors. I don't know anyone with a blackbox theatre. I don't know where to go to get the kind of booth you might find in a diner for my set. If HowlRound can put together a web platform that helps me find all of these disparate parts and pieces and use them to put on a show, they will have done me and the entire theatre community a huge service, even if I have to spend my own money to do it. Culture Coin is worth supporting for that reason. I hope they just leave that currency thing to anonymous genius libertarians. And sovereign nations. Because even they can't figure it out.
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