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.

FEEL MY POWER! RESPECT ME!
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.

MAN=MONEY/TECH/POWER/SEX/MUSCLES      WOMAN=SUBMISSIVE ANOREXIC SHOPPER

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


"JOIN IN, NOBODY'S STOPPING YOU"

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

STRAW MAN: IT'S NOT ABOUT THE BOUNCER

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:

"FREE TO THOSE WHO CAN AFFORD IT, VERY EXPENSIVE TO THOSE WHO CAN'T"

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.


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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.

Postscript...
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



Posted by Suitpossum at 13:51 0 comments
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Friday, 29 November 2013

Building Creative Commons: The Five Pillars of Open Source Finance

AHOY, THERE BE A CLOSED SYSTEM TO OPEN

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

EXPLORE THE DEEP
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.


Some things to do if you enjoyed this article...

I sometimes spend weeks writing these articles, and don't generally get paid to do it, so if you enjoyed please consider doing one or two of the following
  1. Support by buying me a virtual beer
  2. Submit to Reddit
  3. Link to the article from your own blog so your readers can see it too
Posted by Suitpossum at 15:36 0 comments
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Sunday, 6 October 2013

ATM Hacking and the Art of Hole-in-the-Wall Detournment


The Automatic Teller Machine is one the primary interfaces we have with the banking system. It's a machine of convenience, replicating what a human bank teller used to do. They're often placed next to physical bank branches, reinforcing the widespread notion that the money coming out of the wall somehow came from 'inside' the bank. Given that the majority of our money is in fact electronic, and stored in a bank's datacentre-based IT system, nowhere remotely close to the ATM, this is something of an illusion. Indeed, the ATM  can echo and reinforce much of the disconnection implicit in the broader banking system.

That said, the fact that people are constantly using ATMs makes them great venues for symbolic pranking. Maybe one could call it, like the situationists did, detournment - the art of throwing people's minds into an unexpected detour whilst they trudge through otherwise unthinking everyday practice. The hope of such a situationist prankster is to make someone reflect about the deeper meaning of economic life. Alternatively, it may be simply to have fun. What follows are some ideas and examples from the cutting edge of ATM artistry and activism (horray!).

Difficulty level 1: ATM as billboard
Plastering an ATM with stickers is a straightforward tactic for the social justice prankster. Here's an example from Rainforest Action Network activists who designed a sticker replicating the Bank of America ATM screen to protest BoAs funding of coal power. Options offered include 'Bankroll Climate Change' and 'Fund Executive Bonuses', forcing the user to reflect on the implications of the bank's continued support for a high carbon future (albeit it's possible that it also drove them into a rage at their inability to use the machine).




Difficulty level 2: ATM as street art

ATMs are economic installations, so why not use them as sites for further installation artworks? Here's one example from Jason Eppinks: He designed a magic spigot that gushes forth with whatever is inside the thing the spigot is attached to. In this case it gushes forth dollar bills (which admittedly are attached to a string).






Difficulty level 3: ATM for homemade money

If you make your own DIY money, you need your own DIY ATM. The Dutch money-artist Dadara uses Exchanghibition Bank, an outlet to dispense his hand-designed bills to members of the public. Ok, it's not quite an ATM, but it's only a matter of time before he automates it. (Dadara also lent his designs for a limited edition version of my book - check here)

Difficulty level 4: ATM as musical instrument
To do this you just get an ATM and attach it to a medium-sized pipe organ, or perhaps a synthesiser. I'm not entirely sure what the point is, but perhaps it's to give a person a audible sense of the consequences of their banking decisions. If you'd like to hear it in action, check out the video here.


Difficulty level 5: ATM as games arcade
Now we get a little bit more complex. Certain ATM designs have technical glitches that enable you to override their normal functionality. With a bit of practice you can play Angry Birds on your local Russian ATM whilst listening to Zero Day by the long-forgotten 90s hard rock band without a Wikipedia page, Nevada Beach. For more info on this, see here.



 Difficulty level 6: Build your own ATM
My greatest ever Lego creation was a Landrover I designed from scratch, equipped with a winch, engine and moving propshaft. These guys though, have used Lego to make an ATM, a technically challenging task even for Lego obsessives. The beautiful thing about this is that by it's very nature Lego is deconstructable: thus, unlike your traditional ATM which exudes a lack of trust from under its armoured exterior, this machine relies on trust, and believes in the best in people. Only a complete arsehole would try to break up another's Lego creation.




Difficulty level 7: The ATM as Robin Hood
At the 2010 Black Hat hacker conference the late great Barnaby Jack demonstrated how to 'jackspot' an ATM, using some technical wizardry to get it to spit out money in a manner reminiscent to the Doctor Who episode 'The Runaway Bride'. This is of course illegal, so if you're going to do this, please make sure the proceeds go to a worthwhile cause.

The Next Step: Alternative Currency ATMs
The potential to subvert ATMs goes beyond immediate jamming of conventional finance. There is also the opportunity to promote alternative versions of finance. For example, Bitcoin ATMs have already been designed, and I've previously suggested that I'd like to see Brixton Pound ATMs. I'm going to start working on some schematics for that (and download some DIY engineering courses at the same time). If you have any ideas for other cool ATM artworks, pranks, and (legal) hacks, please do share.


Some things to do if you enjoyed this article...

I sometimes spend weeks writing these articles, and don't generally get paid to do it, so if you enjoyed please consider doing one or two of the following
  1. Support by buying me a virtual beer
  2. Submit to Reddit
  3. Link to the article from your own blog so your readers can see it too
Posted by Suitpossum at 16:03 2 comments
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Saturday, 31 August 2013

Adventures in Alternative Currency


I published an epic 4200 word article on alternative currency in Aeon magazine. Take a read if you're having a lazy weekend afternoon and wish to casually reflect on the nature of economic reality. I believe that coming to basic grips with money itself is a good foundation for making further explorations into the financial system, and economic systems more generally. As I say in the article:
"The financial system exists, above all, to mediate flows of money, not to question what money is. Investment banks create financial instruments that steer money from one place to another, with built-in sub-conduits to siphon it back... To draw an analogy with computer coding, we might say that financial instruments are analogous to ‘high-level’ programming languages such as Java or Ruby: they let you string commands together in order to perform certain actions. You want to get resources from A to B over time? Well, we can program a financial instrument to do that for you... By contrast, money itself is more like a low-level programming language, very hard to see or to understand but closer to gritty reality. It’s like your computer’s machine code, interfacing with the hardware: even the experts take it for granted.
The piece has been pretty well received. I'll leave you with some Twitter recommendations, to convince you to read it. The first comes from Izabella Kaminska of FT Alphaville
Posted by Suitpossum at 18:06 0 comments
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Friday, 2 August 2013

LSFA crowdfunding update: Meet the Hedge Fund Gamblers & The Three Hackers

PICK A CARD
A few months ago I ran a campaign to seedfund a London School of Financial Activism on the crowdfunding site Indiegogo. That was a great success (here's a post I wrote about some crowdfunding tips I learned from the campaign). Then my book got released, which has since swallowed up much of my time, but now I've hired some interns (that I'm paying in alternative currencies like bitcoin, barter and Brixton Pounds), so I've now got more space to refocus back on developing the School.

I've met some awesome people over the last few months, exchanging ideas over Skype with campaigners, entrepreneurs and academics in Oz, Hong Kong, China, USA, Germany, South Africa and various other places, all informing my designs for finance campaigning courses.

In the mean time though, I wanted to share some photos of the crowdfunding rewards that came with the Indiegogo campaign, and one short video which shows one of the reward's magical secret. (More photos can be found on The Heretic's Guide Facebook Album)

The Guerilla Brokers, Junior Traders and Hardass Cityboys

HERETIC IN SOUTH AFRICA
First on the list were 18 sets of Chartered Financial Activist stickers that I sent out to the Guerilla Brokers who contributed under £10. If you see these plastered on the toilet wall of your local City pub, you know where they came from.

Then I sent 100 signed paperback copies of my book for those who opted to be Junior Traders, and 25 hardbacks for the Hardass Cityboys series (each representing one of the wards of the City of London). These books ended up all over the world, admittedly costing me a small fortune in postage fees (note to self for next crowdfunding campaign - it matters where you're posting to). Here's a photo of a mate in South Africa with his copy (Thanks Tim!)





The Hedge Fund Gamblers

Now onto the higher end rewards. Five generous individuals opted to be Hedge Fund Gamblers and as part of their package they received custom poker cards from Steve Shedden of Ivory Graphics. These cards are fit for James Bond, with non-stick coating to ensure super-fast shuffling. I've agreed to go play poker with two of the recipients of this reward, so I imagine I'm going to lose more cash on this than I made from the crowdfunding.



The Three Hackers

DADARA COVER, STIDY COVER, & THERMOCHROMIC COVER

The top rewards were 'The Three Hackers' , three hardcopies with bespoke handmade covers that went to my three top contributors. Locating the right people to design the limited edition covers took some time, but in the end I ended up with fantastic designs from:
  1. The Dutch artist Dadara, who is featured in the book for his fantastic Art as Money designs. He very kindly lent me two of his black and white money drawings
  2. The brilliant South African political cartoonist Stidy, who also happens to be my uncle. He drew a classic scene out of Moby Dick, set against the backdrop of the City of London
  3. My amazingly talented friend Jessi Baker (designer, coder, augmented reality guru, onsultant to peeps like Will.I.Am), and the textile alchemist Lauren Bowker, who designed a cover which literally changes colour as a person holds it (see video below for demonstration)


MY FRIEND CHRIS WORKS HIS PRODUCTION MAGIC

A LOOK INSIDE THE THIRD HACKER


AND NOW, the Hairdryer in Action
Ok, to fully appreciate Jessi and Lauren's cover you've got to watch the end of this video. Enjoy!



Posted by Suitpossum at 09:02 0 comments

Wednesday, 26 June 2013

Seeking #futureofmoney interns for help with gonzo finance: Will pay with alternative currency

WANTED: UNDERDOGS WITH ATTITUDE
I've got some alternative currency, and I'm willing to give it to interns who can do part-time work for me to help me with publicity for my new book on global finance. I'm going to be resuming work on the London School of Financial Activism soon too, so there are possibilities to get involved there as well.

Up for grabs: Alternative currency for alternative work
I'd like open-minded people who are keen to learn more about alternative finance. I'll be straight up with you though: Some of it is total drudge work, like trawling through a list of 100 institutions and finding email addresses for them. I have a series of discreet tasks you can volunteer for in exchange for a bounty in certain esoteric currencies I've got from selling my book. Choices include:
  1. Bitcoin: Not only is this an interesting experience to use in itself, but you get to tell people at parties that you're paid in cryptocurrency
  2. Brixton Pounds: I'd like to get at least one South London dweller to do a couple hours for Brixton Pounds
  3. Barter: This option is available for people who'd like a copy of my book in exchange for an hour or two of work

How to apply
My email is in the right-hand column, so ping me message if you're interested. I'm favourable towards slightly outsider, underdog, anarchic types. I'm not so interested in how clever you are, or what extra-curricular activities you did at school. Send me a brief description of yourself, and a (non-finance) Youtube video you particularly like (could be anything), or write a haiku about money. I can then send a list of things I'm looking to get done, and we can start a conversation.
Posted by Suitpossum at 16:51 0 comments
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