Associative democracy

If money is the financial infrastructure that aggregates demand and supply signals in an exchange economy, and a non-reciprocal gifting economy has no money, what financial infrastructure can replace it?

The one that we typically already use is democracy. We often identify and organise for resources to be allocated to the ill, the unemployed, single parents and various other situations based on a collective process where we determine that situation to be important (and usually to fill a gap created by the system of exchange). We also use democratic processes to collectively identify issues with business practices, employer-employee relations, taxes, and a host of other allocation outcomes.

Democratic signalling

The vote and elections are probably the most famous democratic signalling procedures, where people raise demands of the government and the demand signals are aggregated into policy outcomes (or representatives who will themselves subsequently participate in votes for policy outcomes). In the representative system, where country-wide elections result in a parliament of representatives, the demand signals do not have to be the majority of people: swing seats, public pressure, number of seats won - all of these things can create tipping points where parliaments will start to take these demands seriously.

The other democratic signalling function is collective public deliberation. There are a host of ways in which this happens in democracies, including formal focus groups, protest groups, and politicians canvassing generalised public expectations (which might support such notions as “look after children and the elderly”). Deliberation doesn’t have a quantifying procedural step, but it brings together voices in a manner that produces pressure and outcomes.

Centralised democracy

Democracy can happen in all manner of places. It is often the overall regime-type of a state, the way in which the entire country runs. Sometimes countries are split into layers of democracy, allowing for different democratic jurisdictions to interact and even compete with each other. It can happen locally, in private businesses and community organisations, when planning protests, or among friends and family such as when deciding where to eat. However, the most dominant form of democracy at the moment is centralised state democracy, where the entire state falls under the jurisdiction of a single set of democratic institutions.

A single, central democratic institution, such as a democratic government, could pose a few issues for signalling. For a start, it is a type of bottleneck, so if information goes wrong there then it can have widespread impacts. It also might not be very good at attending to local issues, or gaining information from locals about their interests or contexts, instead focusing on very broad issues. This is part of the “dispersed knowledge” argument of some advocates of economic calculation argument (the one that says exchanges produce the most rational allocation). Democracies of this scale offer a lot of power to the winners, which can create some problematic incentives. And, of course, democracies in exchange economies have problems with parties being swayed by business donations and the imagined and real constraints of the budget.

Associative democracy

One place to turn, however, is a form of democracy known as "associative democracy". There are a few different interpretations or styles of associative democracy, and I don't think it will necessarily be fruitful to survey them all, nor to commit in detail to one particular type. Instead, I think we can draw a few basic principles from the concept of associative democracy to see how they might apply. These principles I'll call self-determined jurisdictions, non-exclusive jurisdictions, decentralised primacy, and democratic commitment. The appeal of them for our purposes is that they can offer a decentralised way of conducting democracy, while still bringing along the usefulness of democracy as a signalling mechanism.

The first one is self-determined jurisdictions. By this I just mean that people get together to form associations, and their associations decide what they have power over. Usually this will be power over something relevant. So, for example, pople from a certain area might come together to make decisions about the area they live in. Or doctors might come together to make decisions about the standards that doctors will follow. This is still pretty consistent with one of the fundamental ideas of democracy, that people have the right to rule over themselves and democratic institutions are the most appropriate way to do it, except that they get to choose what the boundaries are, whereas typically those boundaries are chosen for them by the way the world has been carved up into states. In a traditional state democracy the boundaries are both geographic and conceptual, and are often imposed from the top down (for example, the central government will define what area a local government has power over and what powers they have). In associative democracy, these boundaries come from the bottom up - straight from the people - and can be considerably varied rather than uniform.

The second one is non-exclusive jurisdictions. By this I mean that two or more associations can have power over the same thing. So there can be two doctor's associations, or two local community associations, and so on. This might sound rather confusing - what if they make contradictory decisions about the same thing? - but I don't think it's going to be important to us because of the role that these associations are going to play in a non-reciprocal economy, where they are going to be focused on resource management and not regulatory management.

The third is decentralised primacy, by which I mean that the associations hold the legitimacy for rightful rule and the more centralised institutions are just there to facilitate them. So in an associative democracy the associations are the real decision-makers, the movers and the shakers, and the central government plays a role of helping them get what they need. This is a reversal to most modern democracies, where the central government has primacy (it will always win out when two different levels of democracy clash), and often get to give and take away powers from the smaller players. In our case, because we are thinking through a particular economic framework and not a complete political framework, we don't need to think about a centralised layer.

The last one is democratic commitment. And all I mean to say here is that these associations are run democratically. The associations will have members, and the internal structure will give the members democratic power to run the association. What sort of democratic procedures should these associations have? Generally, this decision is left up to the members themselves, so different associations might have different procedures. The overall model then looks something like this: associative democracy describes the way that associations relate to legitimacy and to each other, and inside those associations can be tucked different varieties of democracy.

Associative democracy is about self-forming, diverse and overlapping democratic associations, which have a legitimate right to exercise power over their jurisdictions, as opposed to an all-encompassing centralised government that has power over everywhere and everything.

Giftmoots

I'm not raising associative democracy because I here want to make some proposition about the overall structure of politics that a state should have, but specifically as the financial infrastructure for a non-reciprocal gifting economy. There are things I want to take from associative democracy and things that I will largely ignore. The useful things I want to combine with the needs of a non-reciprocal gifting economy, and especially the idea that a non-reciprocal gifting economy needs to aggregate and coordinate resource allocation. So the idea is to propose a set of democratic associations that are focused on those two ideas. These types of associations I call giftmoots, where "moot" comes from the word that means "a democratic meeting". A giftmoot is a place where people come to democratically talk and decide about non-reciprocal gifting.

I'll elaborate on these in the next article.