Vision of a World without Jobs

Doug McDavid
Submitted for

Co-evolution of Future Technologies and Regional Skill-Job-Career Landscapes:
Connecting Frameworks, Theories, and Models IBM Almaden Research Center, September 27, 2011

Abstract
This paper calls attention to the changing nature of work in the 21st Century and proposes a services-based money system that is intended to release an enormous source of pent-up value creation into the economy at large. This paper also contains some cautionary thoughts about the dangers of corruption whenever economic interests are at stake.

Jobs
The political mantra of the day is “Jobs! Jobs! Jobs!”. In the U.S. political media, Republicans and Democrats attack each other over the lack of progress on the jobcreation agenda. But really, that is just soooo 20th Century! I want to consider here a world without jobs. Some may think that is less a vision than a nightmare. But such a situation represents change for the better in many important ways.

The end of the job as we know it
The typical job for most people over the last several decades involved a pre-defined, long-term, open-ended relationship between employer and employee. This prepackaged work stream comes with a job title and qualifications, compensation range and work location. In most corporations and other enterprises this description and the use of it for hiring purposes are administered by some human resources department. It seems rather obvious that the era of the “job as we know it” (JAWKI) is fast fading away. When I started my career at the end of the 1960s it was still expected that people would most likely retire after a nice long career in the same field, and most often with the same company or public sector employer. Since then the implied or expressed job-forlife pact has become very rare. Factors driving the trend toward obsolescence of the traditional job are manifold and diverse. The instability of the financial universe has penetrated through the fabric of human activity, to the point that everything seems unstable, not least the comfortable old stable JAWKI. Globalization and the power of customers combine to drive corporations to compete on price leads to a relentless need to reduce costs of employing people. Any way to increase productivity (which can be read as “reduce labor expense”) through information technology and/or robotics is very attractive. At the same time, the world has shrunk to the point that corporations have the ability to move work across the globe in a form of open-ended international arbitrage. This dual focus on cost often creates a race to the bottom, which makes things very difficult for companies and even more damaging to the JAWKI.
Copyright 2011 DougMcDavid Enterprises 1

Technology is part of the problem and part of the answer
Technology affects the JAWKI in various ways, in both detrimental and beneficial ways for work and the wellbeing of workers. Robotics and webs of information technology have simply overtaken whole categories of jobs. This follows on the myriad ways that technology has displaced previous generations of jobs for at least a couple of hundred years. Where are the buggy-whip makers? Where are the radio vacuum tube manufacturers? The nature of jobs keeps changing as value production migrates away from physical production and towards information (e.g., 3D printing puts a premium on the design rather than the resulting physical artifact). At the same time, recently created jobs have been information-saturated like never before. As the nature of work depends more and more on the brains and the knowledge of workers, those workers themselves become more able to arbitrage opportunities to optimize their interest level and compensatory regime. This puts technology and the knowledge worker in a potentially enhancing virtuous circle. This marks a glimmer of a vision of an upward spiraling world, while the JAWKI continues to decline. It is fair to say that we’re all living in the clouds. This includes cloud computing in the technical sense, with powerful computing resources at our fingertips. It also means that we increasingly inhabit clouds of information and relationships with people all over the globe. Social networking technology abounds, making it possible to interact with anyone else on the planet, 24/7. The question this raises is whether anybody is really doing anything in those networks, or just talking? That social networking has been almost totally monetized by loosely related advertising for goods and services calls in question whether a worthwhile business model lies behind all this chatter.

Service opportunities in abundance
Under the conditions outlined above it is pretty clear that organizations need approaches that combine both resilience and adaptability in order to achieve self-sustainment in the face of extreme uncertainty. Strangely enough these terms (resilience and adaptability) are often taken as synonyms. At least as used here resilience indicates the ability to withstand a shock and rebound, or snap back like a rubber band to a previous state. Adaptability, by contrast, confronts shocks and external changes by changing the organization to better suit the new situation. The dominance of the services paradigm in public and private sectors forms the foundation of alternatives to the JAWKI. The services perspective supports both resilience and adaptability. It’s not that services cannot be performed by individuals in traditional job descriptions. But those quite structured descriptions make it hard for organizations to change themselves, or adapt to changing circumstances in the marketplace, especially the more they have been optimized to a particular set of circumstances over the years. At the same time, even the desire to be resilient in the face of business setbacks can be thwarted by rigid employment structures that make it hard to scale up or down as circumstances demand.
Copyright 2011 DougMcDavid Enterprises 2

say. This implies that service providers should know their clients so well that they can perceive and even predict how their clients will want to be treated. which have already passed through the boom and bust phases of the cycle. This is a time of technologybased services that spawn widespread economic benefit – so called golden ages. which is undeniably service-oriented. for one thing. there typically emerges a prolonged period of incorporation of the technology into the fabric of society. This requires knowledge of the various specialized steps. with the pendulum of perception recently swinging strongly back to Bastiat’s position that the service is the fundamental building block of economic activity. the middle. The focus on services is highlighted by Frederic Bastiat. This knowledge saturation is further emphasized by something that I choose to call the “Oxygen Rule of Services”. operational capital appreciation. divides among multiple players. writing the mid-1800s: “The great economic law is this: Services are exchanged for services…. That is true if the painters are subcontracting to the manufacturer. and the end of economic science. but it is also true if they are employees performing the service of painting.” (Bastiat. In our current case. It also requires the knowledge of how to orchestrate these various steps to achieve the desired result. which presents the proposition that a person should treat others the way he or she would want to be treated. the painter of a chassis in an automobile manufacturing plant can be classified as a service provider. This leads to a frenzied bubble (or in our case a series of them) based on the excitement generated by the promise of the technology. IBM Research can be seen as a service provider within IBM as a computer manufacturer and software vendor. For instance. I call this the oxygen rule because it Copyright 2011 DougMcDavid Enterprises 3 .According to Carlotta Perez we are in the second half of a fifth economic long-wave since the late 18th Century. has been largely industrialized. The knowledge of the work of producing. Following the boom and bust. The current such cycle is based on information and communications technologies. Thus the predominance of knowledge-saturated services tends to break down the paradigm of the JAWKI. which is no news to anyone who has been paying attention over the last decade. In the boom phase there is growth of financial speculation narrowly focused on the technology itself. consumer electronics products. Knowledge is at the heart of the effective services approach. and as we see. have been broken down into multiple enterprises that provide specialized services to each other in complex supply networks. Whole industries. nonetheless. This rule goes beyond the so called Golden Rule. the technology (information and computing technology) itself supports the growth of knowledge work. the beginning. 1860) This seems to indicate that services-orientation is a matter of perspective. Unfortunately bubbles inevitably burst into crashes. who integrate and reintegrate for every product or client service offered and created. It is trivial. My reformulation states that the most successful service providers will be able to treat their clients as those clients would prefer to be treated. industrialization lends itself to being decomposed into constituent services. Even agriculture. very commonplace. it is. where most work was clustered in the 19th Century. such as the electronics industry. thereby creating lasting. the fifth known iteration of the long wave.

“People are not assets.” The ideas in this paper stem directly from the belief that people. on the one hand. Problems proliferate. keeping in mind the ubiquity and variation of services across industries and geographies Both the accounting and investment communities desire to value companies largely based on their knowledge capital as a future indicator of potential success. as well. and a strong relationship built on trust. Services always embody a public or front office aspect and a private. customer relationships. through some form of service (which we have seen is also defined very broadly). and experience constitute the ultimate source of value. We merely lack a direct means to turn that rather ubiquitous value-producing activity into wealth that can be monetized. and there is no immediate scarcity of people on the planet. such as brand. and intellectual capital. inventory. The accounting category of “goodwill” roughly corresponds to the market valuation of the firm after subtracting the value of tangible assets. and therefore some commensurate level of opportunity. The kind of support needed to provide any particular service depends on the nature of the service in question. The highest forms of value arise from problem-solving services. Physical services that require in-person interaction have different support needs than software-intensive services that can be delivered remotely. Of course. The ability of people to work together within a technology-rich environment that supports their interactions forms the basis for workplace wellbeing. Front and back office support structures provide capabilities to deal with issues of ubiquity of service and the level of knowledge saturation required. Abundance resonates more than scarcity in a world where the JAWKI is quickly becoming obsolete. knowledge. encompassing any and every situation that creates a desire for change.breathes the breath of life into the services relationship. such as plant and fleet. My definition of “problem” is extremely broad. on the other. back office aspect. Services support Wellbeing at work is part of the spirit that informs this paper. or resources. who congregate in organizations to make a difference in the lives of others. with their talent. Some people are trying to expand that discussion to a more rigorous accounting for the intangible value of firms. People are the source of value Perhaps the most hopeful aspect of our current global system lies in the abundance of work to be done. The universal need of every worker is to perform meaningful work. they are individuals entitled to a sense of mission and purpose in their lives. Problem-identifiers and problem-solvers are all people. As (Baker 2008) states. it also implies a challenging degree of knowledge of the client. and the problem-solvers themselves. My own professional experience with consulting-style services in recent decades supplies my primary lens for examples and perspective. There has been much discussion over the years about the value of intangibles. Mary Adams and Mike Copyright 2011 DougMcDavid Enterprises 4 . skills. in a community with others of like mind to make a difference in the world. The key ingredients in a regime of plenitude include problems that create value as they are addressed.

com/ ) They present the idea of a Knowledge Factory inside a firm or other organization. Copyright 2011 DougMcDavid Enterprises 5 . An orchestra would never assemble in a public performance the first time they met each other. So. is the process (frozen knowledge) for all the preparations required to produce (manufacture) the product that is consumed by the consumer. as a place where experimentation occurs and knowledge is recorded as it is generated.) instances of communities of passion independent from. But also think of McDonalds. An example of the latter is the ICKC community that I mentioned. The franchise business model epitomizes this approach. but what the franchisees pay the parent for.icknowledgecenter. Think of H&R Block – a franchise built around knowledgebased services that guide effective and efficient tax return preparation. improvements in the techniques for running rehearsals can enhance almost any business model and its execution. Communities of practice and passion All of the services support that I have just covered can be found or built into communities of practice inside larger organizations. whose end-user product is surely tangible. LinkedIn. aside the obvious brand advantage. Additionally. Or some people may want to think in terms of a Knowledge Studio. where what’s being franchised is the knowledge of the firm. these factors become building blocks from which are built the knowledge assets of the firm or organization. but in a manner more palatable for folks in different fields. have flourished over the past several years. work without rehearsal would be unthinkable. corporations and other formal organizations. who rehearse in order to prepare to face predictable and unpredictable circumstances. Franchises provide training and rehearsal for their franchisees whenever they roll out new services. Intangible Capital. for those who are already rehearsal-oriented. Likewise theater and sports performances are the products of endless rounds of practice and rehearsal. nature of knowledge design and creation. I can think of other analogies that might cover the same factors. A Knowledge Garden might convey the organic nature of these assets. and a web site called the Intellectual Capital Knowledge Center (ICKC – http://www. This also applies to a military. or spanning. within cyberspace (Ning. and the nurturing approach required in gardening. These combine in various ways to create the product and service offerings of the enterprise. Facebook. or studio. all services could be enhanced by consciously adding rehearsal to their services support structure. relationship capital and human capital. and even artistic. which gives emphasis to the creative. By extension. which operates on the factors of structural capital. In some fields. In their view of the Knowledge Factory. etc. Whether we think of back room support for services as factory. the ability to rehearse service performance provides a critical success factor. which currently exists as a discussion-oriented electronic community on the Ning network. lab. Or perhaps the idea of a Knowledge Lab might appeal to people of a scientific bent.Oleksak have a book. as well as for those that are not. garden.

at a high level of abstraction. practice or passion are equipped with the proper institutional and technological capabilities. to illustrate. in IBM parlance. Each practice has certain Copyright 2011 DougMcDavid Enterprises 6 . a portion of its primary work and its support structure. expensive projects.What I propose is that the community (a form of human social system) can serve as a containment vessel to incubate monetization of internal and external services. The refined (franchised) knowledge is available to be reused in subsequent engagements by downstream practitioners. Practitioners and clients come together within the domain of performance to collaborate on engagements of various kinds. The graphic below provides one view of a consulting-type services practice. Mystery of capital On several occasions during my IBM career I was able to explore the relevance of the work of Hernando De Soto (2000) to the discussion of the care and feeding of business and technical services practitioners. constitute organizations that engage with clients in large. This is a point that I will return to shortly. without further details. who rehearse and engage with clients based on this refined material. Individuals will identify and hone their value-capturing abilities through the supporting framework and capabilities provided by such communities. but only when such communities of interest. This captured knowledge also feeds into pattern recognition between the knowledge of what can be offered by the community and the recognized and characterized problems that embody what is known about the clients’ needs and desires. Practices. In Figure 1 “monetization” of the performance is shown. Figure 1 In this simplified partial architecture I emphasize the platform for collaboration that supports both front office and back office activities. Out of engagement experiences come knowledge assets that are captured by a back office function that feeds into a refinement process that I am calling “franchising”. Practitioners also prepare through rehearsal of the particular services to be delivered to clients.

when many practitioners most value time at home with their families. Service-based money At this point. Yes. to monetize an intrinsically more valuable latent asset (people’s talent and knowledge). IBM’s aspirational slogan for years was “asset-based services”. This class of money supports the idea of making a living through performance of service as opposed to making a killing through domination of markets and the life choices of others. Hint: It’s hard work. This results in a kind of degradation of the meme-pool. I would like to introduce the concept of “service-based” moneys. I will explain how such creation can be accomplished later in this paper. the dinner-out with the boss scenario has proved to be a not-so-effective reward system. security and privacy services. as mentioned earlier. garden. I know. An IBM Academy of Technology study made the point that if a market like eBay could transform a latent source of value (the dormant stuff in people’s attics and basements) into a worldwide marketplace of monetizable assets. On the other hand. and the documentation that could be relied upon to validate such ownership. This was the germ of an idea that has continued to develop along more general lines. The so-called “green dollar” work with paying clients tended strongly to take precedence over the “blue dollar” work of investing in offerings and practices. Such reward systems. it was most frequently extra work. however. and the company had a fair amount of success in this regard. Let me repeat: Servicemoney is created at the time services are performed. then surely it would be possible.g. and more powerful. created. Service-money is created at the time services are performed. He uncovered a pattern among nations that the wealth creators enjoy institutions that support clear title to property. which could be leveraged in various ways within internal corporate marketplaces. or lack thereof. as precursors to leveraging property in various ways in the commercial marketplace. The more successful practices find ways to reward knowledge capture and preparation in ways that are meaningful for the practitioner. and which forms the basis of many of the ideas presented here. etc. appeared to me and some colleagues to be quite analogous to the situations described by DeSoto as he pondered the reasons why some cultures create wealth and others languish in that regard. it seems useful to consider title to intellectual property at the practitioner level. The lack of a proper reward structure based on ownership stake for the problem-solvers provides an incentive to take a tick-box approach. enterprise architecture services. which leads to doing the minimal amount of community knowledge development work. By extension. or studio. as a practitioner deeply involved in these activities. lab. in order to maximize billable time.) Each has some responsibility for maintaining its methods and information assets of various kinds. over and above billable client work. disaster recovery services.specialized services work that it performs (e. Practitioners themselves are responsible for the work of capturing lessons learned and maintaining methods in a kind of knowledge factory. Copyright 2011 DougMcDavid Enterprises 7 .

circulating the equivalent of roughly a billion Swiss francs. Personal money A key step in the development of a form of value capture (currency. or denominator of a money consists of the set of things that can be purchased by the money. the Labour Banks of Japan (Rokin). Often called local currencies. but also cigarettes. and where fiat money is issued by a jurisdiction and is required to be accepted (by fiat). and from whom such things can be bought. all of a sudden it seems that you see that make or model everywhere you go. equity sharing. such mechanisms have been called upon to supplement or actually replace fiat money in times of stress. unit of account. Not all alternative currencies are geography based. There are many other characteristics of moneys. A point that emerges from a review of alternative currencies is that the reward. The WIR Bank exists today. where commodity money consists of something tangible (such as gold and other metals. Another way of classifying money is in terms of commodity money vs. etc. An early currency is Ithaca Hours. a complementary system in Switzerland that was created in response to the 1929 stock market crash. Fiat money manifests itself as currency (the physical legal tender – greenbacks) or as so-called bank money.). so it is that once you have become sensitized to the idea of alternative currencies. A number of geographically local currency systems are classified as "Local Exchange Trading Systems" (LETS). fiat money. Greco (2009) Alternative currencies Alternative currencies are not new. such as whether they are reserve currencies. initially to help labor and local communities in their post-war recovery. or one hour of work. where the unit is set at $10. More recently a number of local currencies and barter systems helped cushion Argentina somewhat from a major collapse of its currency. social money. or money) is consideration of the four conceptual forms of exchange characterized below: Things buy things – Symmetrical barter Things buy money – goods and services buy anything Copyright 2011 DougMcDavid Enterprises Money buys things – typical of modern economies Money buys money – AKA foreign exchange 8 . The three classical functions of money are well-known as medium of exchange. short-term credit-based. One of the longest running instances of an alternative monetary scheme is the WIR Bank. etc. private currencies. let’s review a few aspects about money in general. A commonly cited example is the airline frequent flyer miles program. goats. was established in 1950. Just as when you buy a new car. political money. and store of value. whose local currency unit is often equivalent to the dollar. you are likely to begin seeing examples in more places than you ever would have expected. have a sovereign issuing authority. Another longstanding system. The phenomenon I call attention-focused saliency applies here.Money in general At first.

intrinsic personal currency. service-money. simply as human beings. subject knowledge. In recent years the volume of foreign exchange. You contain your personal money already. but rather on performance of talented and educated people. in the form of salary or contract fees. Service-based money.Table 1 • • The upper left-hand quadrant represents the classical trading scenario – where I have some beads and want corn.” The personal money I speak of arises from talent. the community level. which is more correctly characterized as debt-based money. but when I take my skills and experience into the marketplace. since it is actually a major paradigm shift in our way of thinking about money. and more to do with what you can perform in various problem-solving roles. but not so much in terms of evidence of the knowledge that you have acquired. on electronic exchanges. inheres in each of us innately. Service-based money appears as a form of capital at the personal level. You generate additional amounts with your deeds.e. When money typically comes into the picture is in the scenario where an intermediate value-carrying mechanism is introduced. This symmetry of haves and wants is what characterizes barter systems. • • Based on Table 1 I can begin to envision money that has quite different characteristics from sovereign fiat currency that is based on debt. etc. The simplest form of service-money. nor on debt such as interestbearing instruments. This contrasts with the whole mechanism of creation of fiat money. You control what you put forward to buy what you want. is based. What you offer is what you are willing to do. not on a commodity like gold. and you have corn and want beads. where some fiat money is traded for some other fiat money (dollars for euros. It has less to do with what you may have published. generally via. i. the JAWKI that we also see now are inexorably dwindling. is related to knowledge. We normally do not think of it this way. This leaves the lower left quadrant where I propose that things (goods and services) can buy money. literally trying to “buy” the main thing we are enabled to buy with them – fiat money in the form of salaries. so that I can buy corn from someone whether or not they want beads. I like to introduce this concept by saying: “You automatically have money. This is likely to be quite controversial. experience. But in point of fact. but we don’t generally think of them as “money”. it is exactly those characteristics and attributes that we each go forward into the market with. yen for pounds sterling. The next section of this paper explores an example of a scheme that allows this servicebased money to come into being. and beyond. so we trade directly. Copyright 2011 DougMcDavid Enterprises 9 . The money class proposed here. These attributes we each already have. enabled by the fact that I can sell beads to someone else for the money that I turn around and use for your corn. starting with personal money.) has become astonishingly huge. I am offering to use them to buy traditional fiat money. personal relationships and the like.

Servicemoney. The table below lists some key characteristics of the two alternative schemes to bring money into existence. the first difference with our service-money scheme is that debt-money starts out with an obligation – millions of loans have been made. and must be paid back. They seem pretty self-explanatory to me.The reason I mention debt-based money is to contrast the business as usual creation of money with a different way of creating money – that is bringing money into the economy. but I am happy to expound upon them all in the future. So. Rather than a loan that cascades down through the banking system. as human beings address issues of interest to them in a way that causes money to emerge as a result. This action precipitates down through the banking system in the form of re-lending that generates a money multiplier effect (Griffin 2010). Central banks make huge “loans” in the form of selling T-bills and such. Debt-Based Money Obligation Fosters Competition Trust Pay Back Start behind the 8-ball Credit Compounding interest Money makes money Power concentration Money fosters control Fiat Plutocratic Monolithic Created by stroke of the pen War-mongering Empowering bankers Apex consolidation Jurisdictional Service-Based Money Opportunity Fosters Cooperation Performance Pay forward Start ahead of the game Capital Compounding the interesting People make money Power dispersion Money fosters doing Consent Democratic Diverse Created by stoking human effort Peace-mongering Empowering problem solvers Broad diffusion Community of passion Table 2 So. on demand. I also mentioned that problem-solving people create much of the value in our economic systems. I am not going to write all the sentences that can be written about all the contrasting pairs of perspective points in the table above. Communities as money incubators I mentioned earlier that communities of practice and passion function as containment vessels for incubating services capital. on the other hand is born in the cradle of opportunity. why not base our wealth capture system on that foundation? The monetary and monetization system proposed here captures the value of people as they perform in service relationships from innovation to instantiation. this Copyright 2011 DougMcDavid Enterprises 10 . Debt-based money is the “normal” way that money comes into existence.

as in. say. I am more generally referring to a locality of domain of interest. etc. Figure 2 I start from a framework that provides for a cycle between capture of useful information and performance of useful work. This is not to say that the domain of interest never includes physical or jurisdictional locale. persons have the ability to reveal to the community what talents and skills they bring to the situation. The diagram below shows that a community has a store of capital (community money (CM)) while each member has a store of declared personal money (PM) and a store of CM. This is a choice for members. passion. or withdraw offers they no longer wish to perform if and when requested. The key action here is the declaration of members’ capability to perform certain activities. or field of study. from which emerges CM to both the community and the participants.alternative money starts out life as a form of capital. or the medical technology experts in Zurich. Copyright 2011 DougMcDavid Enterprises 11 . This capital is created in communities (of practice. who may be able to do many more things than they are willing to perform within the context of this particular community. and their personal estimate of the value of those capabilities. offered for exchange within the community. These talents and skills. Turning personal money into community money The key to this idea is the process of turning personal money into community money that can perform the kinds of functions that support knowledge and services development. the green entrepreneurs of Sacramento. as capital (not debt). Members each bring some estimated amount of their own PM to the performance arena. constitute manifestations of “personal money”. What follows constitutes a simplified architecture of the kind of monetization scheme that I am suggesting can be installed into communities of interest.) from the valued services performed by and within each community. When I talk about local currencies in this context I am talking about a form of local that goes beyond the geographical or jurisdictional. as members acquire new skills. and practice. This initial declaration can change over time. Within this framework. concept.

can form the basis (denominators) of the reward structure. you start to see them everywhere. This value is added to the community store of its internal money. whether the beneficiary is the community itself or some client of some kind cannot be overstated. once successfully completed. cash bonus. say. so do these community and personal stores of value (capital). As these projects accumulate. The team also estimates the value anticipated as part of this project by each participant. discourse. with proportional allocations into each participant’s account. A community of practice within a consulting-type enterprise can be denominated in utilization credits. People involved in problem recognition and description work should be eligible to participate in the value generated for the community by the project. bovine veterinary practice. and rehearsal scenarios. An example would be a club of motorcycle aficionados that arranges for its members to offer each other 20% discounts on each other’s products and services in their day jobs. These things include personal rewards or mentoring by other members of the community. the work can commence. I’ll suggest that this deserves another application of the idea of attention-focused saliency – once you understand about local moneys. An example would be the development of a service offering of. Community money may be based on discounts of various types. The people who perform the work of problem-articulation (problem finders) should be appropriately recognized. assignments. Each person who wants to participate in such work makes a bid. That discount is a form of money. and each person’s contribution. Another example would be a piece of client work. The team itself agrees to the initial value profile of the work – in other words.. etc. need to be adjusted. Copyright 2011 DougMcDavid Enterprises 12 . along with the problem-solving members of the team. As the project progresses there are likely to be points where both the profile of the work and the concomitant value profile. As rewards of local capital accumulate in the accounts of people in the community. what they anticipate value of this project to the community. case studies. The rewards mentioned above consist of whatever people value in the community and are agreed on by the leadership. complete with methods. where practitioners can bargain for each other’s time with utilization offsets. all the persons involved negotiate a final evaluation of the value produced by the project. A key factor in the success of any community monetization program is the extent to which it encourages membership retention and participation. Community members then are able to use their respective shares of community money to buy things of value in the context of the community. this recognition and tangible value provide positive feedback that is increasingly hard to walk away from. such as introducing a coordinated feeding and inoculation regime on a dairy farm in Illinois. by a community. Such valued items as reputation. which rewards participation in the community. At the end of the work. travel. Once this is agreed to. The value of the work of articulating the problem or opportunity behind the project.Personal money transforms into community money through performance of projects that produce validated value as viewed by the community.

Perhaps this is in the form of dollars or other fiat money. ski instructor and ski patrol certifications. yen. The mechanism I have described so far does not automatically create dollars (or euros. Another way to “liberate” community service-money into the wider world is through merchants of goods and services who have enough of an interest to accept the community’s money. to all sorts of winter gear. equipment improvement. to all-terrain vehicles. Figure 3 The first way to introduce fiat money into a community is by including a client. all being transacted via some combination of fiat and local money. Such a community might assume for itself problems such as advocacy of lift-safety inspections. As practice or passion communities develop good merchant and client relationships. at least. service-money needs liquidity features to make it possible to do various pragmatic things in the marketplace. or perhaps it is in the form of community money.Turning community money into fiat money Although it starts as capital that is retained by the community as well as its individual members. we might expect to see such relationships spread from equipment vendors. Other processes are needed in order to externalize community money from the community into the wider monetary domain. etc. rubles. and it may be that merchants can find other relationships in the skiing marketplace to spend that cash in return (manufacturers. These activities might provide enough value to skiing-oriented merchants that the merchants agree to offer discounts in return for community cash. Consider a community of enthusiasm for the sport of skiing. perhaps. The Catalyst Copyright 2011 DougMcDavid Enterprises 13 . where the merchant access to community service-money helps give them credibility among skiing-oriented folk). As the value of the community currency grows over time. and even to real estate in ski resorts. etc. For the merchant this is a good promotion mechanism. they have the potential to evolve into multi-sided enterprises in their own right.). who reaps some benefit from the community and its members. This may be in any form that is acceptable to the community.

As communities and their surrounding ecosystems of clients and merchants become more prosperous. This is likely to stimulate some mechanisms for creating investment instruments for participation by community insiders and outsiders. Once that happens. Lest this raise eyebrows because of recent experience with exotic derivative (collateralized debt obligations. In each of these cases the multi-sided business attracts counterparties who do business with each other using the platform provided the business in question. One safeguard is automatic. This is a stronger base than many other derivatives. The skiing-oriented example shows the community playing the role of such a multi-sided enterprise. investors may wish to participate in that prosperity. and with fiat moneys. Think of an on-line stock broker.). community currencies can be freely exchanged with each other.Code (Evans and Schmalensee 2007) explores this business model. including buying each other’s services using their own and each other’s currencies. there can be trading among these communities. since the performance of human beings underlies such derivatives. Once there is a critical mass of communities using service-money schemes. there are safeguards that can be built into the scheme. Markets and investments based on community money We anticipate that this new institutional complex will not really take off and have the impact it can on society until robust market clearing services emerge. which is essentially an attractor of like-minded people who come to a physical or virtual “place” do business with each other. credit default swaps. etc. either because of their interest in community subject matter. a speed-dating service provider. or simply because of the prosperity. or swap meet host. Figure 4 We can envision further elaboration of this theme as communities of monetized service provision become more deeply entrenched in the economy. Copyright 2011 DougMcDavid Enterprises 14 .

This kind of institution includes markets. Moneyrelated institutions include such things as interest-bearing loans.g. negotiation histories and outcome evaluations. Service-money imposes similar limits compared to the era of easy credit. etc. The organizational meaning refers to entities like banks. Additionally. structured negotiation. and service to clients. such as capital formation. The ability to create and use service-money integrates a number of institutional forms. Finally. but rather capital formation. Service-money supports the institution of legitimate peripheral participation in organizations. Sarbanes Oxley. IBM. individuals. That is.’ How can this be? How can a region facing such immediate resource limits produce [such] … diverse abundance? The answer is limits – and the feedback and adaptation triggered by limits. the Smithsonian. which is blocked and diverted by the forest canopy. Out of necessity. free coinage.such as default swaps and tranches of aggregated sub-prime mortgage loans. the scheme would benefit from a strict rule that enforces transparency on communities that participate in such investment schemes. such private work is ineligible for inclusion in investment vehicles. … But this first impression was wrong. hospitals. firms. nearly every tropical rainforest – has thin soil virtually devoid of minerals. but rather appreciation in the value of communities themselves. The forest floor is generally starved of sunlight and often of water. or the Institute for the Future. Rather. communities must disclose their performance records. while communities may start out with work done behind the scenes. states) whose interactions are mediated and governed by social norms. The Costa Rican rainforest – in fact. To be included in investment instruments and portfolios. The authors. but unlimited potential to create diversity of services in idiosyncratic niches. New members enter into a community by involving themselves in nonCopyright 2011 DougMcDavid Enterprises 15 . fractional reserves. which studies the complex interaction of various economic entities (e. etc. including participants. rainforests deliver resources to their populations ‘just in time. a corporate CEO and a dedicated environmentalist visited and studied the rain forest of Costa Rica in search of just such a metaphor. To unstick our thinking about the nature of needed institutions in this second half of Perez’s long wave. scarcity of resources gives rise to a rich proliferation of life forms and interactions. generally accepted accounting practices. universities. the sense used here denotes important features of organizations or societies. this use of the term “institutions” is not the more commonly used organizational meaning. It is immediately captured by fungi that tear it apart and deliver its nutrients straight to living things. prisons. algorithms. And fallen vegetation seldom accumulates on the ground long enough to create humus to enrich the soil. This meaning is closer to the way the term is used by institutional economics (North 2005). none of this involves loans and debt. the rainforest looked rich in resources. so the emphasis is not on risk. Institution building At this point I should mention that service-money serves as an engine for institution building.” In this counterintuitive perception. auctions. demurrage. They write: “From our bird’s-eye view [parachuting in]. forms and rules that shape the way things are done. it helps to turn to What We Learned in the Rainforest (Kiuchi & Shireman 2002). To be clear.

is as a way to hedge the fiat economy. which is supposed to be an altruistic act of doing work on behalf of the community. rather than debt. in the limit. A monetary scheme. aloof from the reason for being of the community. Another institutional benefit of this scheme. If you do. There are often anti-rewards for “give back”. even leaders and managers. with the underlying purposes and projects of the community. Finally. This realigns all participants. and creates a technology-enabled alternative to the formal learning of pre-packaged subject matter in colleges and universities. and then graduate into richer and more complex interactions. This will require a different mindset for venture capitalists. If not. not. Once upon a time. and bubble-to-bust scenarios. It takes significant effort to create and deliver services innovations. This was lost as business schools began to train and credential the general-purpose manager. rather than standing aside as general-purpose managers. I mentioned earlier the problem of fouling the meme pool by gaming the system that is supposed to care for intellectual capital. From a management perspective it appears that institutions encouraged by service money and communities of practice may help to address the issue raised in The Puritan Gift (Hopper & Hopper 2007). to avoid managerial (or institutiondesigner) malpractice. fat cats. Either you perform or not. it should be designed with precautions. Debt-based moneys bring obligations that invite default. as they probe for the most effective communities in the management of the service-money they themselves create. In the typical Copyright 2011 DougMcDavid Enterprises 16 . This provides a kind of performance-based stability and safety net independent of high flyers. it should provide a kind of venture capital playground. managers were produced by growing up through their whole career within the enterprises they came to lead. The Hopper brothers contrast the era that they call the Golden Age of American Management (1920-1970) with the age of “management by the cult of so-called experts”. supported by consultant experts in this general-purpose field of study. which will allow their currencies to attain liquidity in ever larger market domains. There is a specific moral hazard that afflicts the capture of valuable knowledge within a community of practice. This serves as a form of apprenticeship. where they learn about how things are done in that community. We need a set of tests to assure that we are not walking blindly into ethical quagmires or irreconcilable inconsistencies. Institutional dangers Because this entire systemic proposal has the potential to catalyze pervasive social change. as it penetrates society at large. and economy based on human performance. is immune to default. new capital is created. when by far the greater reward comes to work that is paid for by clients. marketplace. where investors can turn for opportunities to find and support up-and-coming socially focused entrepreneurs.critical community activities. as the service-money economy proposed here grows and thrives. This pathological detachment is combatted in our scheme by the need to perform services within communities of service in order to realize any value proposition. The issue will involve nurturing such communities into greater transparency and public exposure.

for instance. The institution of endowing companies with the ability to limit individual liability is a moral hazard on its face. common sense. This creates temptation to hold back knowledge for personal advantage. this should raise red flags as an ethical hybrid – enforced largesse provided by those that can least afford to be generous. when no one feels responsibility to keep costs to the procedures that truly serve the needs of patients. The two. Debt money in general presents the moral hazard of borrowing and spending now. Copyright 2011 DougMcDavid Enterprises 17 . I propose that ownership provides an antidote to the moral hazard of shortchanging the community. Antidotes Jane Jacobs (1992) provides a fascinating set of moral precepts in her Systems of Survival. systems emerged after removal of seemingly universal precepts (courage. perseverance. while creating a financial burden for someone in the future. if followed go a long way to immunize commercial behavior. how this drives up the whole health care system. you begin to see moral hazards everywhere. Once again we have a situation of attention-focused saliency – once you start thinking about moral hazards. etc. Jacobs claims that the moral precepts in these two systems were discovered and refined through in an extensive literature scan that reviewed terms and concepts that people regard as moral or ethical behavior.“voluntary” knowledge capture regime. Arson results from temptations engendered by excessive property insurance. sometimes with the special operative condition of “too big to fail”. rather incompatible.). at the expense of focus on the best interests of the client. Insurance is intrinsically in the business of moral hazard. Cost-plus pricing schemes lead to the hazard of driving excess cost into the business. where losses can be laid off on someone else’s doorstep. As we will see. This information advantage allows one party to shift risks inappropriately onto other parties. open opportunities for risky bets. which. It is clear. Bailouts. while gaming the system with tick-box responses. Moral hazards have to do with asymmetrical information that gives unfair advantage to one party in an agreement. by shifting the burden of taking risk onto some other parties. These ethical systems arise from the two major ways of getting by in the world for human beings – the takers and the traders. The billable hour in services engagements encourages the fraudulent practice of padding time billed. because this increases both revenue and profit. a hardworking but powerless person on the front lines is required (coerced by compensation or promotional retardation) to share or give back to the practice in the form of experience captured in methods and other information assets. judgment. This leads to the canonical bailout hazard. competence.

etc. which in turn requires investment for productive purposes. Its precepts include the expectation that the military and civil service are expected to adhere to tradition (whereas commerce puts a premium on inventiveness). This requires honesty by parties to agreements and respect for the contracts that ensue. academia. Commercial endeavors require participants to compete among themselves for business. Animals and plants do not trade for a living. The relationships in commerce require parties to collaborate easily with strangers and aliens.Table 3 The two sets of precepts are summarized in Table 3. The government guardians “dispense largesse”. The guardian regime is based on occupying and defending territory (intellectual as well as physical). The key to the bifurcation here is trade. On the one hand. Many humans and all other living systems fall into the taker. The mechanism of accomplishing the provision of items of comfort is to come to voluntary agreements. a precept for commerce is pursuit of efficiency in an industrious and thrifty manner. The guardian syndrome encompasses politics and government. but when commercial relations break down and require some force between parties. Humans are the only ones who have the second survival system – commerce. and neither do all humans. which is to say redistribution of wealth from some parts of society to other parts. the military. this should come from guardians. from which a living is gathered (not traded). or guardian mode. On the other hand business needs to be open to inventiveness and novelty in enterprising initiatives. religion. Copyright 2011 DougMcDavid Enterprises 18 . The basic mindset of the commercial syndrome is to promote comfort and convenience on the part of customers and clients. Key to that orientation is to keep an optimistic attitude that encourages win/win behavior. or trade. although an honest attitude and binding contracts encourage commercial participants to sometimes dissent for the sake of the task.

there is systemic corruption whenever government gets into the business of business. This does not present a temptation for theft. Jacobs ”. This is a form of systemic corruption. and hostile takeovers. when business essentially “buys” government officials. leveraged buyouts.. since it is not easily separated from its rightful owners by force or guile. conglomerates. When projects are seen as abundant opportunities. Business practices that have come to seem normal in various eras we can now see as transplants of guardian aggrandizement ethics into situations such as mergers and acquisitions. The scheme proposed here partially avoids this issue because it is so oriented to cooperation rather than competition. She goes so far as to label such mix-ups as “monstrous moral hybrids”. which now has become so pervasive that much of our global economic system depends upon. although an honest attitude and binding contracts encourage commercial participants to sometimes dissent for the sake of the task. sooner or later insurance in guardian hands converts to largesse”. Applying the antidotes We are now in a position to consider the issue of how service-money applies Jacobs’s commercial precepts as antidotes to moral hazards. In a general sense. Jacobs stresses the need to honor voluntary agreements. The voluntary agreement institution thoroughly permeates the community structures that will be spawned by our scheme. Our scheme encourages negotiation and renegotiations throughout the process of setting up and performing the performances within projects that give rise to the monetary resources generated by Copyright 2011 DougMcDavid Enterprises 19 . voluntary agreements will be thoroughly scrutinized with benign intent. but the participants themselves should leave forceful intermediation to guardians. it is easy to keep an optimistic attitude that encourages win/win behavior. Likewise. Because the processes for turning personal money into community money and then into fiat money or other exchanges requires transparency. The way we think about that in service-money communities is that problem finders and problem solvers continually dwell on the problems of the community itself or its clients. “and any significant breach of a syndrome’s integrity … causes some normal virtues to convert to vices…” when they are transplanted to the opposite culture. More importantly.The main point of Jacobs’s analysis of the guardian and commerce syndromes is that when they get mixed up and confused. The relationships in commerce require parties to collaborate easily with strangers and aliens. With respect to the earlier point that insurance in general inhabits the universe of moral hazard. monopolies. the wealth accumulated by communities and their participants is in the form of capital held within the community structure. big societal problems emerge. in order to turn problems into wealth-creating solution projects. Commercial interests exist to promote comfort and convenience on the part of customers and clients.. Commercial endeavors require participants to compete among themselves for business. there is more system corruption from the transplantation of incompatible values.

Everyone can at least talk to each other. Plaxo are also ubiquitous. Communications capabilities including Skype. and already provide some primitive support for communities of interest and practice. At the same time. LinkedIn. As we discussed earlier. the precept to pursue efficiency relates strongly to her statements that business should be conducted in an industrious and thrifty manner. and puts powerful computing resources within the reach of everyone via products like Amazon Web Services and Microsoft Azure. share screens and videos. and new ones every day. profligate inefficiency. for instance) is that they are already rather viral in nature. as well as ready-made avenues for expressing creative dissent throughout the process. I’ll just mention a few points here. I have in mind that the IT industry is pretty far along into the era of the mash-up. including monetization. etc. Jacobs presents two sets of precepts that represent an essential dynamic tension – a yinyang dichotomy. are so cheap as to be miniscule considerations for services support platforms. GoToMeeting. Ning. which is exactly what the members of communities of practice and passion do – they invest their time in activities that they regard as worthwhile. Systems integration When I say a systems integration project.communities. These two sets are basically efficiency and inventiveness. The technology is generally already in existence to provide the support that is needed for collaboration platforms. since novel knowledge and uses of knowledge to solve problems constitutes the core of their value proposition. technologies that can be integrated (mashed up) continue to proliferate. so that a whole generation of developers takes integration fully in stride. General purpose computing and communication technologies form the foundation for the virtualization of the service-money support system. Social networking sites such as Facebook. A key factor in mash-ups involving some of these established players (a plug-in app for Ning. Feasibility While I have called this world the without job as we know it a “vision”. With service-money they generate rewards for this behavior as a matter of course. I do believe this is eminently practical and possible. communities will fail to generate their desired results if they take the opposite path of slothful. On the one hand. without going into major technology architecture discussions. This provides a platform for easy collaboration. In practice. This is intrinsic to service-money generators. and also see each other. Jacobs tells us that commercial endeavors need to be open to inventiveness and novelty. Copyright 2011 DougMcDavid Enterprises 20 . the need is here now. The issue is primarily twofold: systems integration and social system evolution. At the same time. Cloud computing is quickly becoming the development and hosting environment of choice. so that add-on service-money software can spread painlessly and widely through established channels. This in turn requires investment for productive purposes.

and process standards. to bootstrap service-money into existence. such as smart phones. Bitcoin and others.alive. there will be endless challenges from a social system perspective. From another perspective we do see some very big things being done. Crowdsourcing services like Kickstarter and Innocentive combine reward structures with problem-solving. based on the social innovations we’ve been discussing. a promising environment leads to some tentative experimentation. in the form of ontologies. as local monetization addresses local community needs for service support. For purposes of stimulating imagination. including advanced text analytics. As far as I know. I thought I would mention a few possible steps in the evolution of social systems. RFIDs. Truly semantic technologies have gained traction in various specialized fields. One or a handful of friendly communities adopt early forms of servicemoney. beginning with all-purpose environments like Second Life. Within the virtual world environments a whole variety of moneys and exchanges have come and gone. If there is such a source. I would appreciate being informed. even with all of this capability and activity. Technology-based alternative money schemes already exist. controlled vocabularies. when you look at their Facebook pages and Twitter hashtags. as exemplified by the Arab Spring and Occupy everything. These start with robust reputation systems that feature the Copyright 2011 DougMcDavid Enterprises 21 .Earlier I complained about the seeming superficiality in social networking sites – information conveyed. In the beginning (now). such as franchising service methods and performance platforms. etc. because I think I know some things that can be done with it! Social system evolution In addition to the affordances touched on above. will provide service communities with powerful tools to support pattern matching between problem descriptions and capabilities offered by practitioners within communities of practice. there is not currently anywhere to go to find the package of service-supporting capabilities discussed here. including such enterprising endeavors as gold farming for virtual world gaming platforms. there are announcements and pictures and commentary. All of this is still further empowered through the ability to be connected to and through various mobile hardware devices. but also more businesslike products like ProtoSphere and Avaya web. Avatar-based virtual world technologies provide a special kind of platform that exists by virtue of bundling various features of computing and communications in attractive and compelling 3-dimensional rendering environments. but not so much of the robust collaboration required to bring people together for sustained problem-solving efforts. but no work being actually being done. smart cards. such as PayPal. Coupon redemption services such as Groupon are currently enjoying a surge of popularity. Various virtual workspaces have been around for several years. but are not particularly supportive of deep collaboration. Mashing such capabilities. Initially they stay within themselves. Still.

which become quite well-funded. Merchants become local currency exchange (LokEx?) centers. Copyright 2011 DougMcDavid Enterprises 22 . This situation sets up a vast universe of opportunities for monetization via service-money. In a somewhat dubious move. To begin. This parallels attempts to bolster corporate social responsibility programs through enhanced reward structures. in an era when the “job as we know it” has lost its place of primacy in so many parts of the economy. which then quickly spread to museums and theater companies that have been increasingly cash-strapped and dependent on volunteer labor for years. since lobbying is awash in money looking for ways to make an impact that puts their clients in a good light. As the reputation of service-money spreads.strengths and abilities of performers and practitioners. Tax compliance will need to be incorporate. The quantity and quality of this value source dwarfs in comparison the success of eBay and its ilk as markets for marginal commodities. political campaign workers form communities of issue wonks where they begin to generate “Politicos”. the currency of grass roots movements. exchanging various currencies. given what we know about moral hazards and “monstrous hybrids”. I touched briefly on a variety of forces and economic conditions that are driving this trend in the workplace. and competing to be the most accommodating to various forms of business that are attracted to do business in the vivid marketplaces thus provided. in order to placate these authorities. Artist colonies and writer programs (both physically local as well as virtual) adopt programs. I outlined some rather obvious points about the changing nature of work. relatively untapped value pool of knowledge-based activities that indisputably create value but languish for lack of a market to capture that value. if not especially life-changing. I claim that there is an enormous. The tax authorities sniff around the edges of a few organizations as more serious volume of value production begin to cause more serious buzz in the press and the blogosphere. There is some adoption of tangible rewards that are life-enhancing. at the same time as consultancies and other for-profit services organizations pick up the beat. Other volunteer charities and local jurisdictions start to get on board. more and more communities adopt (and adapt) service-money systems for their own purposes. Lobbying groups fund themselves through local currencies (lokal?). I only hope that this proves to be a helpful and meaningful contribution to the discussion about how it might be possible to create upward spirals of wellbeing and wealth in regional localities as well as within the virtual localities that are now possible with the near-ubiquitous distance-erasing technologies that we have at our disposal. Conclusions I’m afraid that I have forced you readers through a long journey to get to this point.

In this case I believe that good money will drive out bad. In order for this concept to reach its potential. and eventually merchants and a whole potential ecosystem of value exchangers. and the contributions of community members are rewarded for intellectual performances of problem solving on behalf of the community and its related partners of all types. Baker. we will see a reversal of Gresham’s Law. RJ. A new form of money – service-money – performs the role of catalyst in this services ecosystem. I expect that as society evolves in the 21st century. this paper took a glancing look at the feasibility of service communities capitalized via service-money. relationships. Finally. which states that bad money drives out good money. fully support the front office instances of engagement with customers.We have seen that service-oriented communities of practice and passion enable back office activities to achieve effective offering development. I characterized the back office services support operation as largely a knowledge factory (garden. I positioned service-money as a form of capital that problem finders and solvers literally create in the crucible of service performance by communities. clients. USA. In an attempt to deal with these dangers head-on. We began to foresee that the basic service-money system described here could lead to serious institution building and evolution. ABS-CLIO. USA. studio) where collaboration can occur. But only with a tremendous amount of work. with the ability to evolve along with communities and their members as they mature and become increasingly adept at performing to the potential of their talent. led to consideration of the potential dangers involved as such social innovations gather strength. Further tentative thoughts applied the antidote framework to the system of creating service-money. Hoboken. this paper took some halting first steps toward a framework for antidotes. and experience. John Wiley & Sons. (2010) Intangible Capital: Putting knowledge to work in the 21st-centure organization. Work. knowledge. drawing on examples of existing technological affordances and a gauzy futuristic scenario to invoke images of how it might emerge over the coming months and years. as service-money based on talented people performing services will put debt-money out of business. Copyright 2011 DougMcDavid Enterprises 23 . Santa Barbara. This paper touched on that issue briefly. Servicemoney exhibits various levels of intensity and seriousness. CA. leaning heavily on the work of Jane Jacobs on the moral syndrome of commerce as the trade-oriented system of human survival. it needs to achieve a significant level of integration with other economic systems and structures. leaving many details to be filled in. M & M Oleksak. Not jobs. References Adams. NJ. This. (2008) Mind over matter: Why intellectual capital is the chief source of wealth. lab. in turn. LLC.

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