Altruistic Economics

2004-10-16

A Positive Alternative to Capitalist Economics…

A presentation for the London Social Forum by Dr. Robin Upton

Attribution-NonCommercial-ShareAlike licence from .A Telephone Dilemma

www.altruists.org

A friend needs a long talk with you. He rings from his mobile, and asks you to call him back.

• Mobile Landline = 10p/minute• Landline Mobile = 6p/minute

Would you call back if your friend asked?If you had the mobile, would you ask to be called back?

A Telephone Dilemma.

. International Telephone Dilemma

International .

Telephone Dilemma .

Telephone Dilemmas

A friend needs a long talk with you. He rings from abroad on his mobile, and asks you to call him back.

• Mobile Landline = 160p/minute• Landline Mobile = 8p/minute

Would you call back if your friend asked?If you had the mobile, would you ask to be called back?

Telephone Dilemmas

• Friends and family do not act selfishly• .• Acting selfishly has a long-term cost• Relationships are important• Homo economicus, the independent self-maximiser is a fiction!

Altruistic Economics

Altruistic Economics

Sympathy, s = emotional proximity

Worth a small personal loss toavoid a bigger loss to a friend…

Telephone Solution

Telephone Solution

Sympathy, 0 ≤ s ≤ 1

Example 1: Indifference value of s = 6p/10p = 0.6 Example 2: Indifference value of s = 8p/160p = 0.05

A Tale of Two Systems

A Tale of Two Systems …

Everyone Is Connected !

EconomicSystem Capitalism Altruism

Expectation of Behaviour

UtterSelfishness

Love of Others

PersonalRelationships

Irrelevant Essential

Everyone Is Connected !

Friends have their own friends… leading to a Network of CareInternet Gift Economy

Internet Gift Economy

>40,000 members in>170 countrieshave exchanged>1,000,000 T’s

www.favors.org

It’s A Small World !

It’s A Small World !

Our demonstration world has only 4 People:

• Andy- A Tax Adviser• Betty- A Gardener• Coco - A Clown• Dave - A Hermit

Altruistic Economics - Numerical Example .

Altruistic EconomicsNumerical Example

Sympathy Matrix

Andy has a Sympathy of 0.4 for Betty, so

SAB=0.4

Time-backed Currency

Andy, a poor gardener, estimates that 1 hour of competent help would save him 4 hours.

In return, he offers Tax Advice:

It’s A Simple Life !

It’s A Simple Life !

ServicesRequested

ServicesOffered

Part Transactions

Part Transactions

Possible Transactions

Just match up offers and wants in the same category…

Possible Transactions

. Simple Transaction – A1, B1

Simple Transaction – A1 B1

. Transaction Evaluation – A1, B1

U0, the personal utility function, shows the self-evaluated time costs of the transaction.

U0 is irrespective of the Network of Care

Transaction Evaluation – A1,B1

. Transaction Evaluation – A1, C1

Apply the sympathy values…

0.40.25

1

1

Transaction Evaluation – A1,C1

. Altruistic Evaluation (U1)

U0, the personal utility function, shows the self-evaluated time costs of the transaction.

Altruistic Evaluation (U1)

. Altruistic Evaluation (U2)

U1, the linked utility function, incorporates the personal utility of oneself and ones friends.

1 0.25 0.15 1

Altruistic Evaluation (U2)

. Altruistic Utility Functions

U2, the doubly-linked utility function, shows that

A, B and C would like the transaction to go ahead.

Altruistic Utility Functions

. Model Modification – Limits To Sympathy

The greater the degree of enlightenment, the wider transaction benefit spreads

through the network of care.

Users can choose from a range of

increasingly altruistic functions:

Model ModificationLimits To Sympathy

• If you would spend £1 to save someone £5, does that mean you would also spend £100

to save them £500?

Non-Linear Sympathy

• There are limits to what we do for others, so we add limits to sympathy to reflect that.

• Could you spend £1M to save them £5M?

Non-Linear Sympathy

Modelling Sympathy

• Sympathy is not constant

• Gradient increases with Time Given

Gradient = 2

Gradient = 20

• People run out of sympathy & get gradually less

sympathetic

Modelling Sympathy

Multiplier = 1/s

Approximate the curve with straight lines:

Express the sympathy as

Length 5h, gradient 2, so write it (5h 2)

Length 5h, gradient 10, so write it (5h 10)

Multiplier = 1/s

. Earlier Example – A1B1

A is willing to spend 5 hours to save 10 hours for B

Hence, sympathy =5h/10h= 0.5

We will be looking at the reciprocal, 1/s, which we call the multiplier…

Lengths of Time Multipliers

Earlier Example - A1B1

Modelling of Credit

Suppose A cares for B as follows:

B gains six hours for every hour of input from A, so the transaction has a multiplier of 6.

However, he will not work any more for B, since 6<10, so that a multiplier of 6 is insufficient.

A will put in 5 hours of work for B (because 6>2)…

Modelling of Credit

Numerical Example

• Increasing multipliers show reluctance to work altruistically as input is used up

2h 11h 22h 31h 41h 71h 101h 131h 15

Numerical Example

. Numerical Solution - SABC

4 A = 12 B

A’s evaluationB’s evaluation

12 B = 24 C.Cheapest Rate (3):

Cheapest Rate (2):

Cheapest Rate (3):

Next Rate (6):

Next Rate (4): +24B = 96 C6 A = 18 B1 A = +6 B

Numerical Solution - SABC

Multiple Path Example

A evaluates B evaluates Overall4 A = 12 B 12 B = 24 C 4A=24C6 A = 18 B 18 B = 72 C 6A=72C1 A = 6 B . 6 B = 24 C 1A=24C

4h 6

6h 12

1h 24

SABC =

Multiple Path ExampleSuppose A cares for D, who cares for C as shown below:

We know SABC =

4h 6

6h 12

1h 24

Calculate SADC =

15h 2

2h 5

3h 10

2½h 20

. Combining Alternative Paths

Combining Alternative Paths

. Keeping Track Of Work Done

A has 2 sympathies to encourage him to help C, ABC & ADC:

Combine these, by ordering the different time values by multiplier:

Now combine the two,

SAC =

15h 22h 54h 63h 106h 122½h 201h 24

Recording Work Done

. ‘Swinging’ of Relationship Credit

• Scoring would encourage people to give more

• Fairness is satisfied if, for any pair of friends, resource flow from A B is about equal to the flow from B A

A B

‘Swinging’ of Relationship Credit

. Ranking By Relationship Credit

• Work Balance can be pushed out in either direction…

A B

40h 120h 220h 420h 108h 20

SAB=

• Effect of variable multipliers is to restore the equilibrium

40h 20h20h

20h

8h

40h40h 120h 220h 420h 108h 20

SBA=40h 1 40h 1

20h 220h 420h 108h 20

20h 240h 1

Ranking By Relationship Credit

Two Systems Revisited

An F2F trading system could rank people by contribution made.

This would reward altruism by meaning that the most generous people’s requests were met more quickly...

Offers RequestsRobin Upton, +120h –40h, Skill= 8.2Computer Hardware, Statistics, Foreign Languages, Bangladesh Contacts …

Kevin Towell, +14h –3h, Skill= 8.8Computer Hardware, Motorbike repair, Shop Management, Psychology …

James Beckett, +60h –15h, Skill= 7.0Computer programming, Computer Hardware, Electronics, Internet Advice …

Mike Channel, +120h –40h, Rate= 10hHelp! My scanner doesn’t seem to work. I urgently need it to do a job on Nov. …

Mike Flex, +550h –175h, Rating= 70hCan you fix my broken Laptop? The power supply is dead, but probably…

Mable Trellis, +3h –2h, Rating= 2hMy mouse is not working properly. It keeps jumping. When I start up, it …

!!

Rewarding generosity, not selfishness, is the opposite of how capitalism works…

Computer/Hardware/Repair

Two Systems RevisitedEconomic

System Capitalism Altruism

Expectation of Behaviour

UtterSelfishness

Love of Others

PersonalRelationships Irrelevant Essential

Scoring System Encourages

Accumulation for Self

Donation to Others

Maths Zero Sum Positive SumSpiritual Evolution

Spiritual Evolution

• Is there enough to go round?

• Who is poor? Food? Shelter?

Global Altruism

• Biggest change is not physical…

Global Altruism• Altruism = love your neighbour as you love yourself …• In a globalised world, neighbours are everywhere …

Two Cycles

Two CyclesABUNDANCE

LOVE

SHARING

COOPERATION

SCARCITY

FEAR

SELFISHNESS

CONFLICT

Social

Personal

Feeling

Activity

Project Give Away

Project GiveAway• Give things thatare not importantto people who are…

• Stream things to Friends of Friends…

• Write the webaddress to spread the wordwww.altruists.org/giveaway

Friend2Friend

Friend2Friend

A decentralised F2F information-sharing layer will form the basis for a social software/trading system.

ArchitectureClient- Server P2P F2F

Interactions with…

Central server

RandomPeers Friends

Centralised? Yes Somewhat NoSecure? No Maybe Yes

Personal? No No Yes

. Friend2Friend Defining Features

Defining Features+ No abstraction from the work done+ Money can be revocable + Decentralised + No ‘command’ = No violence necessary- No ‘command’ = Unusual concept- Unfamiliar/radical = low confidence- Requires higher technology

Practical Ways To Move From Scarcity to Abundance

Practical Ways To Move from Scarcity to Abundance

• Live Altruism! Give Stuff Away www.altruists.org/Giveaway• Avoid the command economy where possible & help others use lesscentralised currency…

• Spread the word – Another world is here!

LIVE IT !!!