The revolution will not be monetised

David Graeber, cryptocurrency and choosing one's boundaries of economic engagement

When reading David Graeber’s wonderful book Debt: the first 5000 years, I was deeply struck by the idea that money is a type of interaction between strangers who want to transact, but who don’t have ongoing social ties, whereas debt is a far more socially meaningful relation. With a monetary transaction, two people can come to the exchange with no prior history, and afterwards can simply walk away from each other and never interact again. But creating a debt between one person and another necessarily creates a relationship that requires a future interaction (the repayment of debt). In this understanding, backed up by a wealth of anthropological evidence by Graeber, the debt relation is a foundational building block for a system of indebtedness that can form and maintain social connections,. In such a system, to ‘repay one’s debts’ to a person is to cut all social ties with them, and turn them back into a stranger - a person who exists outside of our meaningful social network.

Another key idea in Graeber’s book is that we do not have to rely on money to conduct value exchange - debt is in fact the far older relation, and use of money is just one form of the wide range of interesting exchange and resource sharing behaviours that humans engage in. This is such a powerful idea - I think the assumption that using money is the best form of value exchange, or the only credible form of value exchange in our modern world, is something that too often goes completely unchallenged.

These ideas have all sorts of interesting implications (what about all those student loans and mortgages hanging over our heads?) but I think where this understanding of money gets the most exciting is when we apply it to cryptocurrencies.

Cryptocurrencies - the purest form of money?

In the original Bitcoin white paper, Satoshi Nakomoto famously presents what has sometimes been called a ‘trustless’ system - a monetary system which removes the need for a ‘trusted third party’. I reproduce the opening lines in full:

Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. Completely non-reversible transactions are not really possible, since financial institutions cannot avoid mediating disputes. The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services. With the possibility of reversal, the need for trust spreads. Merchants must be wary of their customers, hassling them for more information than they would otherwise need.

In this, Nakomoto presents a possible view of money which I believe goes to the ultimate extreme of the ‘money as relations between strangers’ idea. Can we remove all trust and all the weird quirks of human social behaviour from money, and transact entirely as completely anonymous, digital identities? Can we sever the link between these digital identities and the unique human self, with its very human social ties, cultural mores, cognitive attitudes, nation-state membership and so on?

Humans trust, but machines don’t have to. What does that mean?

Now, since that original paper, crypto has exploded as a speculative asset and has become deeply mired in a financialised, hyper-capitalist world full of bro-y hype.

But I would argue that the radical, transformative capabilities of this new form of money are yet to be realised.

Separating the economic agent from the human being

So far, we have only been looking at one side of the coin - the monetary side. So much effort has been spent figuring out what exciting things we can build on top of cryptocurrencies - what kinds of new economic behaviours become possible when you have a form of trustless currency.

For me, the far, far more interesting side is the space that is created for non-monetary behaviours and identities. If we can essentially confine money to the space it works best - interactions between strangers (anonymous digital identities, in the crypto world) - will it make it easier to reclaim other areas of our personal and collective lives as non-monetised zones?

By making it very explicit when you are engaging in trustless monetary behaviour and when you are engaging in a higher-trust (and much more human) interaction (e.g. on-chain vs off-chain), I believe blockchain technologies will enable us to make far more deliberate, conscious choices about what we do and don’t want to monetise, not just as individuals but also as groups and communities.

DAOs can hold money, so individuals don’t have to

The idea of communities using money to interact with people outside the community, and not using money within the community isn’t a new idea, nor is it a relic from our mythic past. David Graeber covers many historical examples in his book, but there are also intentional communities existing today that create a ‘monetary boundary’ at the edge of the community, where they engage in capitalism and monetary transactions between them and the outside world as one single cohesive social unit, but within the group, relations are non-monetary and based on resource sharing.

For me this is where the excitement and promise of DAOs lie. If DAOs can give us a simple, user-friendly way to collectively draw the boundaries of our economic engagement, so that we can say as a group, this will be monetised but this will not, I believe this opens up all kinds of exciting possible experiments. What do we choose to put a price on, and what do we decide is not exchangeable for currency? How do we share resources, if we don’t engage in currency-based exchange? What new forms of social organisation will we make, or what old ones will we revive, if we hold enough power to make our own choices?

In snatching power away from centralised systems (corporations, nation-states, etc) and making decentralised, co-operative tools of organising more accessible to everyone, we create a space where these experiments can take place. Of course many current DAOs recapitulate existing finance-obsessed power relations, but the key thing that stands out for me so far is that DAOs have been successful at gathering capital (and power) - and when you have power, you have a fighting chance.

Time to put the coins back into the piggy bank, and go outside to play

It is an easy trap to see the future as overwhelmingly driven by economic behaviour - the relentless march of monetisation has permeated almost every aspect of our lives, from our health to our social connections to our most intimate relationships. Opting out from monetisation (FIRE, simple living, the slow movement, tech detoxes) has often been framed as an individual choice - that the only place we can feasibly draw a boundary of where we want to interact with money is as an individual, and that there is no other place that that boundary could be. DAOs, and our much longer human history, show us that it doesn’t have to be this way - and that you don’t have to be some kind of kooky fringe ideologue (though props to you if you are!) to act collectively and decide that we can push that economic boundary further out to the level of the group. We can reclaim our personal lives in their entirety as a space free from transactionalism.

Of course, not everyone will choose to do that, but that’s the beauty of this technology - I believe it has the potential to level the playing field and give us a much freer choice between equally credible alternatives (group economic boundary? individual economic boundary? a mix of both?), rather than the painfully rigged odds and opaque, implicit bargains that drive our decisions in the current system.

Let’s build those alternatives, and make those choices a possibility for everyone. I’ll be seeing you in our non-monetised future 👊