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S YS TE MI C S Y MBIOTI C P LANETARY

ECOV ILLAG E NE TWORK

Systemic Symbiotic Planetary Ecovillage Network


P O Box 1674
Middletown, CA
95461-1674
USA

silverj6@mchsi.com

Silver J. H. Jones

Systemic Symbiotic Planetary Ecovi!age Network


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TABLE OF CONTE NTS

The state of the current economic paradigm


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Governance and economy at the centuries end
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Are our markets rea!y efficient and rational?
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What can we learn $om economic market simulations?
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The transition $om the old to the new economy
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Potential dynamics of a synergistic economy
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Examples of the lack of synergy in our economy
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Apparent themes in a synergistic economy
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Experimental microeconomies
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Private funding models for synergistic ecovi!ages
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The profit verses the nonprofit alternative
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The future of microsocieties
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References
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CH AP T E R V III
Synergistic Economics

Silver J. H. Jones
2008

Copyright © 2002 by Silver (J. H.) Jones. All rights, electronic, multimedia, and print, reserved. A publi-
cation of SSPEN - Systemic Symbiotic Planetary Ecovillage Network.
What is a synergistic economy, and how does it differ from a primarily competitive economy? We take on
this task from an inquisitive rather than an authoritative perspective. We do not believe that a truly syner-
gistic, systemic, and symbiotic economy has ever been attempted in the modern era. Would such an
economy diminish the core of power, which now exists in the hands of only a few, and distribute this
power to a much more highly distributed population? When and if such a transition occurs, what will it
look like, and how will it differ from our current competitive, for profit, and mercenary economy?
We would undoubtedly recognize such an economy if we had a chance to see it, but unfortunately we
have no examples. This means we have no alternative except to try to envision, design, simulate, and
eventually develop such an economy. This type of economy may be so new and innovative that the words
‘design’ and ‘develop’ may not be appropriate. Certainly some degree of design must be involved, but
perhaps what we really need to do is - to set up the proper circumstances to allow such an economy to
self-organize, and emerge into being in a bottom-up fashion. What would a dynamic self-organizing
economy be like? We must be prepared to learn and morph our conceptualization as the simulation takes
on its own reality. We should not totally assume at the outset, that we know what such an economic sys-
tem looks like, and exactly how it will behave.
After attempting to define a synergistic economy, we shall then turn our attention to our proposal that
‘microsocieties,’ in the form of ecovillages, can serve as ideal testing grounds for exploring synergistic
economies. The chance to explore alternative economies in smaller microsocieties and their networks, is
an extremely useful and prudent methodology. Economic models which have evolved, scaled, and sur-
vived the rugged hill climbing in the fitness landscape of the ecovillage network, will have proven their
usefulness. Having proven their adaptability in diverse circumstances, and established their robustness,
they will become viable candidates for introduction into the larger economic global network. Before any
economic system can be adopted at the global level, it must involve more than ideology, it must have been
submitted to exhaustive testing, and retesting. In the age of complexity, we can no longer afford to base
our systems on ideology alone. A cascading scale of ever more exhaustive and broader simulation and
testing, must be a core ingredient in our evaluation of alternative models for a truly synergistic econ-
omy. The current wild swings of economic and capital market cycles provide sufficient evidence that we
have not yet mastered this science and art of economy, and that we are amateurs at complexity control.

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The only truly stable economy, is one which exists in a world where no one is in need, exploited, or de-
prived. To what ever degree we fall short of this goal, we will experience semi-stable economies, subject
to continual bouts of excess and downturns. We already know that neither state, corporate, nor individual
welfare are answers to these problems. This leaves us with the need to envision an economy that provides
every individual with all the resources they need to perform at their maximum potential. We can do better,
we must do better, if we wish to survive! Just image how our society would be transformed if every indi-
vidual was performing at their maximum potential.

The state of the current economic paradigm


Before we can move forward in an attempt to envision the economy of the new century and millennium,
we must first address the current status of governance and economy. Without going to far astray from the
core of our discussion, we will attempt to briefly address many of the inadequacies we see in the current
paradigm.

Governance and economy at the centuries end


Since we are not economists, we shall rely upon the economists Bowles and Gintis for a description of the
state of perpetual tension between competing governance and economic models at the close of the twenti-
eth century [1]:
“The contending camps that emerged in the nineteenth and early twentieth centuries, advocating laissez
faire on the one hand or comprehensive state intervention on the other as the ideal form of governance,
defined the terms of institutional and policy for much of the Twentieth Century. Practically-minded peo-
ple who, by conscience or electoral constraints, had adopted less dogmatic stances in favor of seeking
solutions to social problems, never accepted the cramped intellectual quarters of this debate, but it flour-
ished in academia, as a glance at mid or even late twentieth century comparative economic systems texts
will show. The shared implicit assumptions of the otherwise polarized positions in this debate was that
either the market or the state could adequately govern the economics process. There was nothing else on
the menu, and mix and match was out of the question. But the common currency of this debate-inflated
claims on behalf of spontaneous order or social engineering-now seems archaic. Disenchanted with uto-
pias of either the left or the right, as the century drew to a close, and willing to settle for less heroic al-
ternatives, many came to believe that market failures are the rule rather than the exception and that gov-
ernments are neither sufficiently informed or sufficiently accountable to correct all market failures. Social
capital was swept to prominence not on its merits, but on the defects of its alternatives.
Those to the left of center are attracted to the social capital idea because it affirms the importance of trust,
generosity, and collective action in social problem solving, thus countering the idea that well-defined
property rights and competitive markets could so successfully harness selfish motives to public ends as to
make civic virtue unnecessary. Proponents of laissez faire are enchanted because it holds the promise that
where markets fail-in the provision of local public goods and many types of insurance for example-
neighborhoods, parent teacher associations, bowling leagues, indeed anything but the government, could
step in to do the job.
American liberals, along with social democrats and market socialists, might not have joined in had limits
of government capacity and accountability not been demonstrated in the bureaucratic arrogance and the
dashed hopes of five year plans the world over. Conservatives might have been less avid if their once ide-
alized institutions had fared better. But the Great Depression early in the past century, as well as growing
environmental concerns and rising inequalities at its close, tarnished the utopian capitalism of the text-
books. The demise of these twin illusions of our century thus cleared the intellectual stage for social capi-
tal’s entry.”
The authors go on to state that the term “social capital” has accumulated so many disparate uses that the
term community does a better job of capturing the context we wish to communicate. Community is pref-
erable because it better captures what microsocieties or ecovillages do, rather than what people own.

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Bowles and Gintis offer a number of observations about the relationship of community governance and
the current prevailing national and global institutions [2]:
Some of the market and state failures so prevalent in the last century, can be addressed by community
governance. However, this must be accomplished without relying too heavily on ‘insider-outsider’ dis-
tinctions.

• Neither the self focused interests of ‘for profit only’ capitalists, nor the unconditional altruism of social
economic liberals - properly captures the complex mix of approaches that community governance is
capable of.

• Large city, state, and national institutions should be focused in such a manner that they allow communi-
ties, markets, and states to work in a complementary and systemic fashion.

• Poorly structured and administered institutions, markets, and states can crowd out otherwise healthy
community governance. (This is why we recommend integrating local communities into highly net-
worked communities.)

• Not all forms of property rights are equal when it comes to fostering community governance, and al-
lowing these communities to function in a complementary fashion with other communities, markets,
and states is desirable.

• In contrast to the position that small scale local efforts are regressive examples of the pre-modern era,
microsocieties (small worlds) are much more likely to increase in importance - in the new rapidly
changing high technology/information age era we are now entering.

For a number of examples which demonstrate how community governance and economics were able to
solve problems which could not be solved by either individuals acting alone, markets, or governments see
Bowles and Gintis [3].
The cutting edge of economic research today incorporates a much more vast field of disciplines than eco-
nomics did throughout most of the last century. Changing perspectives on economy are coming from
fields like alife, emergence, self-organization, complex adaptive systems, evolutionary computational
simulation, nonlinear dynamical systems, cybernetics, complexity, and chaos theory. General system the-
ory is an attempt to pull all of these disciplines together under one umbrella, in an effort to establish their
systemic relationships. Unfortunately, to even begin to explore the implications of this fascinating new
research, would require a book length discussion. We will limit ourselves here, to pointing out the most
basic differences in the functional advantages and disadvantages of markets, the state, and microsocieties.
Markets have certain advantages over governments, because of their ability to more easily utilize private
information, and to establish, administer, and enforce contracts at a relatively low cost. Markets, when
functioning properly, in a broadly distributed economy, are more efficient at rewarding good performance
and disciplining poor performance. State and federal governments have established their ability to deal
with a different category of problems. The greatest advantage government has, is its ability to legislate
and enforce rules of conduct in cases where behavior, in order to be effective, must be mandatory (exam-
ples - paying for community infrastructure, providing national defense, insurance programs such as social
security). Communities display their particular strengths in areas where the state and the markets prove
inadequate. Community governance displays its strongest attributes - in instances where highly local, ir-
regular, and dispersed private information, often hard to capture in statistics - is important in the function-
ing of the community. No one is closer to the community than the people who live in it, and this informa-
tion is often unavailable to more distant organizations. Local community can be extremely effective at
monitoring and enforcing the local behavior of its members. Communities have numerous types of infor-
mal controls that are not practically reachable by formal governance, contractual, or market forces. Trust,
reciprocity, reputation, popularity, and self-esteem are just some of the means by which community func-
tions without formal contracts. Community has a vast selection of informal psychological, sociological,

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and meme pressures that can be brought to bear on individual members to make them aware that they are
accountable for their behavior. Because of the smaller size of communities, members of communities are
much more likely to frequently encounter other community members on an ongoing basis. This promotes
both a greater sense of brotherhood/sisterhood, and a greater sense of one’s accountability. Mutual self-
monitoring in healthy communities, tends to encourage mutually beneficial win/ win behavior [4].

Are our markets really efficient and rational?


Where is the leadership from the private sector, the academic institutions, and the governments of the
world? Why is it, that they are not the ones pointing out the value of strong community. Since profes-
sional brokerage corporations and hedge funds only care about spreads and profits, they care very little
whether markets go up or down, as long as they can make money on the spread between the buy and sell
price. When individual investors, corporations, and institutional investors lose large sums of money in
down trending markets, the professional investors can make very large sums of money shorting the mar-
ket for extended periods of time ranging from a few months to years. Professional investors at brokerage
houses do this day in and day out. While individual investors prefer up-trending markets, their second
choice is stable markets. On the other hand, professional traders hate stable non-trending markets, be-
cause of the narrow spreads between the buy and sell price. It is to the advantage of professional traders
when they are able to make the markets go up, or to make them go down, rather than remain stable. From
a short-term profit perspective, a lot of money can be made this way, but there is a long-term price to be
paid for this practice. The practice of shorting the market, takes the money and capitalization away from
the corporations that need it for research and development. Shorting the stock of a few badly run compa-
nies, and then reinvesting this money in superior, better managed, and profitable companies is not a prob-
lem. The problem arises when the whole market is shorted for extended period of time, where the mini-
mal weakness in the markets that actually precipitated the problem actually grows to become a self-
fulfilling prophecy. The recent addition of large etf indexes, while never intended for this purpose, has
further increased the ease with which whole sectors of the economy can be shorted and ‘naked’ shorted.
As the capitalization is removed from the companies, their forward momentum comes to a stop. The
companies are left with no alternative except to contract, and this means laying off valuable skilled em-
ployees, cutting back, or completely stopping new research and development, closing plants, selling off
infrastructure, decreasing the utilization capacity of their plants, and in general going into a regressive,
retrograde, and devolutionary modes of operation in an attempt to stay alive. This state could be likened
to a state of corporate fasting or hibernation. Having corporations operate in a state of minimal survival,
as opposed to being in a state of maximum utilization and maximum productivity, is not in our long-term
interests. Ask yourself what is happening when research and development first slow and then come to a
standstill? Skilled staff are laid off, and well organized and highly tuned research groups assembled over
many years, are broken up and disbanded. When corporations stop spending and innovation ceases, their
products become uninteresting. Consumers stop buying their products because they have lost their jobs,
and can no longer afford discretionary spending. As the ripple effect of this process of reduced capitaliza-
tion spreads throughout the economy, the economy goes from being negentropic to entropic. Any debt the
corporations were carrying becomes magnified now, because revenues, profits, and stock prices have
shrunken while their debt remains constant. This means that the corporations debt is now a larger percent-
age of the operating capital, which results in the corporations credit ratings being lowered. Lower credit
ratings force companies to sell new debt at higher yield rates, putting even more strain on the corporations
balance sheets. At first the society as a whole stops swimming and starts treading water, if these condi-
tions become chronic rather than acute, the whole society begins to sink from its own entropic weight.
It is unfortunate that our capitalistic markets and economic systems are still running on the old west
‘boom and bust’ paradigm of the previous centuries, as if we can still afford the luxury of such an ineffi-
cient, clumsy, boot and reboot, binge and purge system. Would anyone put up with a car that runs like
this? Should an economic system that only works well two thirds, one half, or one third of the time really
be acceptable? If your refrigerator operated in this fashion all your food would spoil. If your stereo or
television worked in this manner you would take it back, and demand your money back. If your body
worked like this you would define your state of health as being ‘ill,’ and you would go to a doctor in an

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attempt to find out what was wrong with you. Strangely, we are told that if the system we are looking at is
an ‘economic system,’ then this type of behavior is totally normal and to be expected. We are told we
should expect this, accept the considerable consequences, and go about our business functioning as a
highly inefficient society.

Why are we asked to just ‘accept’ this as inevitable in an economic system, when we refuse to accept it
in so many other types of systems we live with everyday in our lives?

We are told by these very same people that make these markets, that markets are efficient and rational
mechanisms. Yet we would never accept this ‘boom and bust,’ unstable and unpredictable behavior from
any of the other systems we have in our lives - like our electrical grid, our television networks, our radio
networks, our refrigerators, televisions, radios, stoves, etc. In almost any other type of system, we would
define the same kind of behavior that we witness in the markets and the economy as ‘defective.’

What can we learn from economic market simulations?


Although computer simulation is still a relatively new scientific tool, it is already providing us with new
types of information and new perspectives that would otherwise be very difficult to obtain. The recent
application of computer simulation in economics and market trading is proving very valuable in helping
us to better understand why markets and economies behave the way they do. Artificial stock markets have
been developed in the form of computer simulations. The particular artificial stock market we have cho-
sen to examine is The Santa Fe Artificial Stock Market developed by Brian Arthur, John Holland, Blake
LeBaron, Richard Palmer, and Paul Taylor [5, 6]. Joshi and Bedau describe the simulations we are inter-
ested in examining [7]:
“The Santa Fe Artificial Stock Market [13, 4] is an agent-based artificial model in which agents continu-
ally explore and develop expectational models, buy and sell assets based on the predictions of those mod-
els that perform best, and conform or discard these models based on their performance over time. The
purpose of this paper is to classify the different types of behavior that emerge in the market as a function
of evolutionary learning rate, and to explain these emergent behaviors. We observe four different types of
behavior, which are distinguished by their effects on the volatility of prices, the complexity of strategies,
and the wealth earned by agents over time. We also show that the differences between these behaviors
may be attributed to variations in the rate at which agents revise their trading rules and the subsequent
types of rules - technical or fundamental - that emerge in the market.”
In this model each trading agent is assigned an equal quantity of money at the beginning of the simula-
tion. Each discrete time period of advance in the simulation requires every trading agents to either invest
their money in a risk-free asset or a more risky stock. Each agent over time develops and utilizes their
own market forecasting rules taking into account stock prices and dividend yield histories. Stock prices
behave in a manner similar to their behavior in the actual stock market. When demand for a stock in-
creases the price increases, and when demand diminishes the stock price falls. Agent decisions are based
upon a combination of risk-aversion and the probability of risk-reward. Depending upon the rate of turn-
over of the genetic algorithm, both fundamental and technical analysis are utilized by the agents in an ef-
fort to come up with short, medium, or long-term trading strategies. Each time the genetic algorithm is
invoked 5% of the least fit stock forecasting rules in each trading agent’s pool of rules is replaced by new
rules. Both the individual trading agent’s rule pool, and the collective pool of all of the trading agents’
combined strategies grows and matures over time. The genetic algorithm mates the most effective trading
strategies with each other, and eliminates the poorest strategies, in an effort to improve these strategies
over time. Statistics are accumulated on stock prices, stock trading volumes, the amount of accumulated
wealth of individual agents, and the activation histories of various trading strategies.
The results of these simulations produced four different kinds of evolutionary learning, which were re-
flected in four types of behavior. Each type of behavior produced different consequences. The four differ-
ent behaviors observed were compared in terms of (1) the volatility of stock prices, (2) the wealth accu-

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mulated by each of the trading agents, (3) the type and complexity of trading strategies. The four ob-
served classes of behavior are [8]:

Class I (control class) - involved no genetic algorithm evolution and no rule switching.
Since the genetic algorithm changing is never invoked, the traders must rely only upon the initial pool of
trading strategies.

This type of simulation produced:

• a low volatility in stock prices


• an approximately equal use of both fundamental and technical trading strategies
• low accumulated wealth

Class II (control class) - involved very rapid genetic algorithm evolution.


In this simulation the genetic algorithm is invoked at every time step, producing a very rapid change in
the trading strategy pools.

This second type of simulation produced:

• a low volatility in stock prices


• an almost equal use of both fundamental and technical trading strategies
• very low complexity of trading strategies
• a market that is the closest to chaotic behavior
• a high accumulation of wealth

Class III - involved slow genetic algorithm evolution and slow strategy switching.
In these simulations the time period of genetic algorithm turnover is moderate (once every 1000 - 10,000
turnovers in 300,000 cycles).

This third class of simulations produced:

• moderate price volatility


• low complexity of the trading strategies
• a higher percentage of fundamental trading strategies dominating a lower percentage of technical trad-
ing strategies
• a market which exhibited, what are often referred to as, rational and
efficient behavior
• a high accumulation of wealth

Class IV - involved fast genetic algorithm evolution and frequent strategy switching.
In these simulations the genetic algorithm turnover rate is high (once every 100 - 1,000 turnovers in
300,000 cycles).

This fourth class of simulation produced:

• volatile prices
• highly complex trading strategies
• a market where technical trading strategies dominated fundamental
strategies
• a market which could be described as deviating significantly from rational and efficient market theory,
and which produced significant bubbles and crashes

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• a low accumulated wealth

In attempting to understand the results of these simulations we should consider Class I and Class II as
controls, because they represent the extremes where no evolution, and an extremely rapid evolution took
place. Neither of these scenarios fits the type of circumstances we encounter in real trading markets. Class
I is unlike the real trading markets because the trading agents never change their strategies from their ini-
tial one, even over long time periods. Class II exhibited surprising behavior where the very rapid genetic
algorithm turnover resulted in agents choosing not to change their strategies because they simply could
not keep up with the rate at which the information changed, on an ongoing basis. Class III and Class IV
represent the closest to real world examples, and this is where we need to focus our attention. Class IV is
a moderated version of Class III, where there is rapid turnover, but the trading agents feel they have suffi-
cient time to attempt to take advantage of the changing information so as to update their trading strategies.
The authors of this study comment on the fact that the increased emphasis on technical strategies, if
enough of the agents were to adopt them, could lead to a kind of self-fulfilling prophecy, resulting in the
markets exhibiting more drastic swings (bubbles and crashes). In these simulations the trading agents do
change their strategies often, and they rely predominantly on technical trading techniques as opposed to
fundamental strategies. It is very significant that this approach produced lower overall wealth accumu-
lation, even though the agents felt that they could benefit from the information available. However, the
results, showed that their perception was incorrect. Their actual earnings, as opposed to their percep-
tions, were considerably lower than in the Class III simulations. The Class III simulations which had
only moderate genetic algorithm turnover rates produced the most rational and efficient market, and
resulted in the highest accumulated wealth for the majority of trading agents.

The above conclusions are, for the most part, are those of Josi and Bedua, and are limited to these specific
simulations. We believe, to a large extent, these results support the conceptual analysis that we have pro-
vided in our discussion of markets.
This type of computer simulation is very valuable, and it is unfortunate that our largest supercomputer
facilities are not actively improving, expanding, and extending these studies. We very much need to con-
tinue learning from these simulations, broadening and deepening both the quantitative and qualitative
samples in our database, and expanding the number of trading agents in the simulations to better ap-
proximate real world markets. Until a much larger database is available, we are limited to conceptual con-
jectures in an attempt to extend our understanding of these results. We cannot help but wonder if part of
the reason that Class III simulations produce superior wealth accumulation, in comparison to Class IV
simulations, is because less shorting, day trading, and swing trading occurs in Class III simulations. In
Class IV simulations we would expect to see a much larger participation of opportunistic hedge fund trad-
ing (naked shorting), in addition to much more active trading on the part of professional traders. The
combination of both private and investment firm short trading, in volatile markets, with thin volumes, can
also initiate an additional side effect of triggering computerized institutional and mutual fund block trad-
ing, resulting in greater volume and price fluctuations. Institutions and mutual funds generally prefer to
take a more long term investment approach, but because of the enormous sums of money involved in
these funds wild market swings can cause the managers of these funds to move to shorter term trading
strategies, and forced selling to meet redemption demands. The results of these simulations would seem to
indicate that this trend (a transition from Class III to Class IV behavior) is a lose/lose strategy for all the
parties involved. We already know from the simulations that the wealth accumulation of the individual
trading agents is reduced by this transition. Since these simulation were too simplistic to include hedge
funds and institutional trading, we are forced to extrapolate what the effects of this transition might be.
Since hedge funds are privately held, they are not required to provide statistics on their performance. If
we can believe their own voluntary reporting, they certainly did better than individuals, institutions, and
mutual funds (tech bubble era) in our recent Class IV real world market. Mutual funds and institutional
investors probably incur less wealth accumulation during these transitions, similar to the fate of individual
long-term investors. Since hedge funds are optimized for highly technical short-term trading, they can
probably afford the most expensive technical software and the high speed supercomputers necessary to
utilize large volumes of rapidly changing data. In Class IV markets they are probably at a distinct advan-

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tage. Institutional investment funds and mutual funds are probably at a disadvantage, both from an in-
vestment point of view, and from an expense and tax perspective. Volatile markets lead mutual fund man-
agers to sector rotate their stocks more frequently than is normal. They must also sell stock more fre-
quently than they usually would, to pay for increasing redemption demands. This reduces their profit
margins by increasing operating costs, and lowers their dividend pay-outs to fund holders - triggering a
vicious cycle of even more redemption cycles.
Another aspect of these simulations that needs to be studied, is the effect large swings have on both indi-
vidual corporate capital and the collective corporate capital. These swings in the capitalization of corpora-
tions make medium, long-term capital investment, and research and development planning very difficult.
If a corporation is unable to anticipate the amount of money it will have available to plan for the future
growth of the corporation, it is at a distinct disadvantage. In large upswings corporations struggle to keep
up with being able to hire sufficient well trained staff at the rates required by their rapid growth. In rapid
downturns highly valued and experienced staff, which have the highest salaries, must be let go to reduce
expenses. If corporations need new sources of capitalization, now that they have reduced credit ratings,
they must acquire this new income by turning to the bond markets where they must issue bonds at higher
yields to attract investors. This process is much more devastating to a high technology business which
normally provides the highest rate of economic growth in the economy. Because high technology compa-
nies prefer to issue fewer bonds than the lower-tech industrial sector, when their stock price decreases,
they are much harder hit from a capitalization point of view, because the have less long-term fixed income
to fall back upon. Finally we must address all of these effects upon local, state, and federal governments.
When both corporate and individual wealth diminishes, the governments receives less income in the form
of income tax and sales tax. Yet, at the same time, increased unemployment places greater demands on the
social support systems, such as unemployment and publicly funded medical programs. Governments, at
these times would like to be able to stimulate growth again by cutting taxes, but with increased demand
upon their funds and less income to meet these demands, they must either increase taxes, lower assistance
services, or run deficits which results in a lowering of their credit ratings. Which sets off another vicious
cycle of stagnation and inefficiency.
Our overall conclusion is that Class IV type markets are lose/lose markets for almost all the participating
parties - individuals, mutual funds, institutional investors, and governments. On the other hand, Class III
type markets provide a win/win scenario where all parties seem to benefit from increased wealth accumu-
lation. Unfortunately it seems that the recent trends in our markets are steadily moving us from a Class III
to a Class IV type of world market. The deep recession referred to as the so called ‘tech bubble burst’, is
now followed by the ‘sub-prime, credit default swap, excessive leverage bubble’,which has swept around
the entire globe, and threatened the entire global financial system. We look forward to seeing if more so-
phisticated computer simulations support these conjectures.
If we are serious about achieving a long term sustainable civilization we must create and maintain mar-
kets that produce the maximum amount of accumulated wealth. Our citizens, institutions, and corpora-
tions must be able to fund our long-term investment needs. Many of the new technologies that will be
necessary to convert the worlds economies from primarily oil based economies to nonpolluting renewable
energy economies, require sustained long-term investment. Corporations constantly forced to obsessively
and defensively focus on their next quarter fiscal results, will not produce the kind of long-term research
focus that we need in the new high technology/information economy of the future.
Klos and Nooteboom [9] have studied another aspect of economic operation referred to as transaction cost
economics (TCE). Interestingly, these studies have produced results that seem to be counterintuitive in the
context of our current ‘for profit only’ Darwinian economic model. They have conducted simulations to
analyze the relative importance of both profitability and loyalty in the making and breaking of business
relationships over time. More specifically they studied the relationships of buyers and suppliers in indus-
trial intermediate-goods markets. In this study the authors have pointed out the importance of conducting
these types of studies with models that include sufficient temporal embedding. Partnerships develop over
time as the agents coevolve and co-adapt their respective competencies and degrees of trust. They have
also pointed out the importance of conducting these types of studies in a much larger network of interact-
ing agents - where reputation has a chance to feedback through the network and both buyers and suppliers

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can evaluate trust in addition to profitability. In these studies the human propensity for opportunistic/
competitive and loyal/cooperative behavior are juxtaposed. The interesting results of this study are that
over time agents decrease the importance they place on profitability, and increase the importance they
place in trust in their decision making process. These results are not entirely altruistic, because the cost,
both intellectually and physically, of constantly having to evaluate the new risks involved in switching
loyalty, to new an untested partners, is considerable over extended time periods. This study would seem to
indicate that opportunistic agents learn that systemic and cooperative relationships payoff in the long-
term. In the terminology that we have been using throughout our discussions, opportunistic/competitive
transactions produce win/lose result, which may be attractive initially, but extended experience leads to
placing greater value on win/win results.
These observations are what lead us to ask for new computer simulations to separate out what really
makes markets perform at their optimum efficiency. We must find a way to fund our technological ad-
vance which is not subject to the ‘boom and bust’ inevitability that seems to be built into the current mar-
ket paradigm. We simply can not afford to have our industry functioning at full capacity only 50 percent
of the time, as we now have with the current ‘business cycle.’

The transition from the old to the new economy


How many ways are there to set up microsocieties and microeconomies? We just do not know. If you are
willing to look in the rear view mirror for your answers, there are many examples of how more primitive
tribal societies dealt with the problems faced by microsocieties. Perhaps there is some value in this, we
will leave it to others in the anthropology community to address this issue.

We prefer a more future oriented approach, taking advantage of all the good aspects of modern society
and replacing the bad aspects with new innovative solutions.
We already know about the three basic economic models that have been tested in the Twentieth Century -
capitalism, socialism, and communism. A capitalist economic system attempts to place economic control
in the hands of the individual citizens, and it believes that individuals must be rewarded in the economy in
proportion to their own incentive and effort. Ownership is placed in the hands of individuals. Competition
is believed to be the pathway to the best economy. Communism (as it has been implemented as opposed
to its pure form) on the other hand, relies on collective incentive, and rewards all individuals on an ap-
proximately equal basis, and ownership is supposed to be collective rather than individual. Cooperation
and collective effort is believed to be the pathway to the best economy. Socialism, in general, is some
where in between these two opposites. Ownership is shared between the state and individuals, govern-
ment, rather than the private sector plays a larger role in both society and the economy than is the case in
capitalism, and a smaller role than is the case in communism. A combined effort, and shared responsibil-
ity between the individual and the state, is thought to be the best pathway to a good economy. This is of
course an oversimplified summary, but it should suffice for our purposes here.
As the world approached the end of the Twentieth Century capitalism seems to have been the favored sys-
tem of the big three. All three systems have their advantages and weaknesses on a theoretical level,
whether all of these approaches will ever be tested in their uncorrupt pure form remains an open question.
What is not an open question, is how the world has chosen from the only examples of these implementa-
tions available. Capitalism, as it has been implemented in the European and American systems, is the un-
disputed winner. Most of the industrialized nations have adopted this approach.
Microeconomies can afford to be more experimental than the larger more inertial structures of markets,
states, and nations. They can afford to experiment with models that do not fall into any one of the big
three categories. Depending upon their inclinations and objectives, microeconomies can either adopt cer-
tain aspects from one, two, or all three of the big three, and just as easily they can reject the aspects that
do not seem to work in their particular situations. They can afford to tailor their economies to their needs
in a effort to freely improve on the existing models, or they can attempt to invent new models from
scratch. Centuries from now, one of these new models may be the predominate model, having proven it-

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self superior to capitalism. One kind of economy may work best under one set of circumstances, and an-
other type may very well work better in a very different set of circumstances. Capitalism, for better or for
worse, has been the model of the industrial revolution. It probably helped accelerate the growth of indus-
try, and at least in its later stages, improved the standard of living. Unfortunately, when capitalism is al-
lowed to operate without proper checks and balances, the lure for profit can override equally important
considerations. The demand for profit, ends up superseding good ecological practices. The excuse of re-
maining competitive, is used to shun responsibility for the consequences of unsound industrial practices.
Competition rather than synergy, has left us with a highly polluted world, and we have paid a very high
price for those profits, gained at the expense of our long-term survival. Is there a better way, and do we
still have sufficient time to find it?

Potential dynamics of a synergistic economy


We already know how a competitive economy works. Companies either attempt to find niches where
products or services offered will be valued by society, or they create products and then attempt to con-
vince society, through advertising, that these products would be of great value. Companies attempt to cre-
ate new products and services when possible, or attempt to gain market share from companies manufac-
turing the same products or offering the same services. The forecasting timescale of publicly traded com-
panies seems to be getting shorter and shorter, due to the constant need to compete in an impatient stock
market, which demands incessant quarterly profit advances. Multinational corporations answer to their
board of directors, bond, and stock holders, and not to the society as a whole. Mercenaries take over, and
dominate all aspects of the economic agenda. All companies, not under their umbrella, are seen as the
competitors. The larger society is viewed simply as another resource which must be conditioned to re-
quire and consume corporate products and services. When profit becomes the only economic theme, eco-
logical implications, social implications, and the long-term causal effects are secondary, rather than pri-
mary concerns.

Examples of the lack of synergy in our economy


In contrast to the competitive economy, let us attempt to lay out what a synergistic economy might look
like, with the full understanding that we will only truly know how such an economies dynamics congeal
after we are well into the process. We offer a few examples: Synergistic economies will still operate for
profit, but individual companies rather than competing against each other, will attempt to supplement and
complement each others products, rather than cloning products already available. Do we really need 15
companies producing cell phones, that have almost the same capabilities? Would something like five
competitors be enough? Could the other companies be freed-up to produce PDA’s, wireless multimedia
delivery devices, on demand ebook delivery devices, and cheaper satellite phones for areas where cell
phones do not reach? Would this provide more value to the society than having 15 companies essentially
cloning the same devices, and fighting for market share (2003 era - somewhat improved now with the
introduction of smart phones)? We see little innovation and product evolution taking place in this sce-
nario, which is really more of a ‘cloning economy’ than an innovative entrepreneurial economy. Is this
the most effective manner in which to utilize our manufacturing infrastructure?

The problem of competing standards is an ongoing problem in the technological ear. Witness the evolu-
tion of the, now almost extinct, modems in the 28k, 33k, and 56k transition era (2002 era). There were
two competing standards used by alternative manufacturers with each new release of a new modems, pro-
ducing addition complexity for internet providers and end users. If you bought a modem early on, before
it had been standardized, when it finally became standardized you had to purchase the same modem again
with the new standard to ensure a stable connection. A great deal of unnecessary cost and waste of raw
materials was the end result. Why did this happen? Each company held a patent and wanted to control
market share, even though there was very little difference in the performance of the two alternative de-
signs. If the two modem standards ended up performing in an equivalent manner, the two companies
should have agreed to split the research and development costs. The standard would have been decided

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upon internally within the companies, and the public and businesses involved would have been spared the
extensive cost, inconvenience, and waste of natural resources. Both companies would have been allowed
to license the patent to other co-producers of the product, thereby obtaining a proper return on their re-
search investment. This synergistic approach would have provided all the parties involved in this techno-
logical product evolution - with a much less expensive and less labor intensive result.
Lumber companies in the past have focused on the total production of lumber and paper products, at the
expense of the environment. Reforestation was of little concern as there were always new timber stocks
that could be acquired. Unfortunately they viewed their business as providing lumber, not tree farming. In
an attempt to find new timber stock, the big companies would buy up the smaller timber companies to
acquire virgin forest. The smaller companies would be put out of business, local jobs would be lost, more
clear cutting would follow, and no reforestation would be implemented. When the timber reserves were
exhausted, the large company would abandon the local community, and move on to some other part of the
world to acquire new reserves. Now if the larger lumber company had hired and retrained the employees
of the smaller ‘take over’ company to reforest the land instead of cutting timber, all parties would have
benefited. The large corporation would have had a continual supply of new forrest, and there would not
have been the expense of relocating to another part of the world. The local company employees would
have maintained their jobs, and the forest environment would have been improved. The world ecosystem
would have retained vital tree forests. Everyone would have made a profit, and one would have had a
win/win/win/win situation, instead of the win/lose/lose/lose situation resulting from pure mercenary
competition. It would seem that synergy works, without giving up anything, and provides for a much
more viable long-term sustainable ecosystem. So why has this type of Darwinian destructive behavior
become so commonplace in industrialized societies? Do you think it could have something to due with
the fact that colleges that provide MBA degrees, law degrees, and engineering degrees offer no courses
in general system theory? The leaders of corporations are taught in their business schools that the world
is a linear phenomena, and all one has to do to succeed is to focus upon linear objectives focused purely
around profit. They are taught that the world is a Darwinian jungle, and that their responsibility is to en-
sure profits for their corporations, no matter what the cost to the larger planetary society and ecosystem.
Very much the same principle could be applied to the automobile manufacturers of the world. Do we
really need ten to fifteen companies all producing functionally ‘cloned’ cars with slightly different fender
lines and features. Remove the surface differences of all these cars, and what do you have? Three basic
drive trains: the 4 cylinder entry level economy cars, the 6 cylinder mid-priced sedans, and the 8 cylinder
luxury or performance cars. Three basic passenger vehicles, the SUV’s, and trucks. All total about 6 stan-
dardized types of vehicles, which are turned into hundreds of models by applying minor variations. Fur-
thermore, they all run on the same fuel - a nonrenewable resource in the form of gasoline with estimated
reserves, if we continue using gasoline at our current pace, of no more than 20-50 years! Where is the
value in such an approach? A third of these companies could easily do the job, and then we could free-up
the others to develop other transportation alternatives, such as hybrids, alcohol, hydrogen, and electric
powered cars, which performed the same functions. This would reduced the demand for limited gasoline
resources, and in the process create tens of thousand of new jobs, supplying the alternative fuels these
new power sources would utilize. These new fuel sources would be more beneficial to the earths plane-
tary ecosystem. Smart, attractive, savvy alternative powered cars will work! So why are the big multina-
tional corporations wearing blinders, and going down the same non-innovative path? Whether synergy is
foreign to the CEO gene pool is debatable. The absence of the synergy meme in their vocabulary and
mind-set, is not. The thought that world industry could not only function cooperatively, but function at a
much higher level, while actually improving our planetary ecosystem, seems to be inconceivable to them,
and the inevitable result was Bankruptcy!

Let us briefly turn our attention to the financial markets. Even with all the different stock exchanges,
NYSE, NASDAQ, AMEX, and the more recent proliferation of the newer clone ECNS, why do we see no
fundamental differences in what they are offering the investor. They are all competing for spreads and
execution speeds, and offering very little in the way of qualitatively diverse alternatives for investing
(2003 era - somewhat improved). The over 10,000 mutual fund companies are also essentially clones of
each other, with only a few exceptions. Not a single exchange specialize in socially responsible investing.

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Try to find a mutual fund company which offers small investors a means of investing in IPOs by spread-
ing the risk over many companies. The very same lack of creativity is even more apparent in the ‘old boy
mentality’ of the bond market, which is just now waking up to on-line bond trading (2002 era), yet it re-
fuses to provide both sides of the trade (buy and sell price) like the equivalent equity markets do. Why are
their no brick and mortar, or on-line bond houses, that offer real and interesting alternative investments?
They all want to sell you the same thing, because all they are concerned about is their spreads, and how
much money they can take away from you by hiding both sides of the trade. The bond market is approxi-
mately three or four times the size of the stock market, and the derivatives market is four to five times (~
96 trillion dollars) (2002) the size of the bond market, yet to the average investor this is about as well
know and understood as a minor conspiracy theory. With all this capital, where is the innovation, creativ-
ity, adaptability, and first mover evolutionary principles of the so called ‘free markets?’ The praised inno-
vative nature of truly free markets are currently nowhere to be found. Perhaps this indicates that these
markets are not as free as we have been lead to believe, and that the dummying down of the industrialized
nations by poor education, lap dog corporate owned media, and governance which is pre-selected by cor-
porations has been quite successful in explaining why more questions like these are not being asked. It is
tragic that the vast complexity of the global macroeconomy, is reduced to little more than cloned in-
vestment mechanisms all competing for spreads and management fees! The fundamentals of the stock
markets and the world capital markets have not really changed in any fundamental way during the entire
twentieth century, with the exception of the speed of transaction, which has increased. The one exception
is direct on-line investing, which is an improvement, but it really only changes the method of investment
execution. Why do you need Morgan Stanley, Merrill Lynch, A. G. Edwards, Edward Jones, Charles
Schwab, etc. all offering the same old products. Where is the creativity? Why are non of these brokerages
offering investment mechanisms which give individuals and institutional investors innovative alternative
ways to invest. Active and passive funds, open and closed funds, indexes, spiders, ETFs, ishares - strip
them down to fundamentals, and they are all pretty much the same thing. Would you like to buy a mutual
fund that spreads your risk of investing in wind generated electricity? Would you like to buy a mutual
fund that specialized in investing in alternative energy automobiles? Not available. Ten or fifteen years
from now you may wish there had been such an alternative. Where are all the brave and bold entrepre-
neurs we hear so much about in our ‘so called’ free enterprise economy? Would you like to be able to
make long term investments in a stock exchange that did not allow hedge funds, swing trading, day trad-
ing, naked shorting, options, and futures trading - a place where you could make sound ‘real long-term
investments’ in your country. After the tech NASDAQ implosion, a lot of people were sitting in money
market funds yielding less than a one percent, after having lost half or three quarters of their investment
portfolio - they might be very interested in these types of investments, but they have nowhere to go. How
about a place where you could invest in companies, and allow them to conduct the long-term research and
development commitments so necessary for truly fundamental technological breakthroughs like nano-
technology? Ask yourself how companies can sustain long-term research in financial markets where they
can have half of their entire capitalization removed in a matter of months? The answer is self evident. Do
you think a civilization with markets and economic systems like these is going to make it to the stars?
Would you want to be out there in interstellar or intergalactic space, only to receive a recall notice that
some of the vital components of your hyperdrive spacecraft, due to poor quality research, poor product
testing, and a total focus on short term profits - is recalling these critical components!
While, in one sense, competitive free enterprise has been proven to be superior to rigid hierarchical sys-
tems, such as the old Russian and Chinese communist economies, this does not mean that they are supe-
rior to synergistic economies. Competition prevents the problems of fragility, and lack of feedback, and
the poor adaptability of state run hierarchical economies. Free enterprise economies are supposed to de-
centralize authority, yet we witness the never ending multinational merger phenomena in a effort to re-
duce competition and leverage big companies with the power to override and control local communities
and businesses by their enormous economic strength, not to mention the safety factor of ‘too large to fail’,
where you get to fail and keep the profits, and the taxpayer gets to bail you out. With all this power, and
vast resources, why do we see so little innovation and true creativity? In the car industry, gas mileage is
only improved when mandated by governments, and even then, the companies fight it through the use of
their lobbyists and selective campaign funding. Better safety standards for automobiles are usually man-

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dated by government legislation, because the corporations choose not to act without collective pressure
from citizens. Where is the creativity and innovation promised by competition? It seems that all the big
car companies are too busy comparing their sales figures with their competition to pay any attention to
true innovation, and to dedicate themselves to continually evolving their products for the benefit of all of
earths citizens.

Apparent themes in a synergistic economy


If we try to look for some common themes in our examples, and in an effort to capture the major themes
of a synergistic economy, we would include the following:
• Businesses retain a sufficient degree of competition to prevent monopolies, but introduce synergistic
cooperation to assist innovation, creativity, and guarantee a broader, more diverse, and efficient utiliza-
tion of our manufacturing and service resources.

• A balanced approach between valuable competition, needless duplication, shared and distributed inno-
vation, with an emphasis on synergistic amplification rather than duplication of valuable capital, raw
materials, labor, engineering, and research resources. Amplification refers to learning to use a basic
technology or technological components in as many ways as possible, through innovation, flexible de-
sign, adaptive engineering, and marketing.

• Inventive and innovative capital markets, as opposed to the cloned and redundant current market offer-
ings.

• A balanced optimization between hierarchical and heterarchical organization of the worlds economy.

• A primary focus on the teleological goals while allowing for profits, as opposed to the current short
sighted ‘for profit only’ mercenary approach, so devastating to our planets ecology, and our civilizations
efforts toward biorapture and universe ascension.

• A dedication to endurable round trip products that can be easily serviced, easily maintained, and easily
recycled at the end of their life expectancy. Nanotechnology will be our first opportunity at 100% recy-
cling. Until then we will have to commit to our best effort with known and new innovative pre-
nanotechnology procedures. Compare this to the current ‘disposable’ (disposable where?) and ‘throw
away’ (it costs more to fix it than to discard it) mentality.

• A primary focus on research that preserves what is left of our nonrenewable resources, and efficiently
utilizes our renewable resources.

• A continual dedication to complexity and chaos control in all aspects of research, design, engineering,
production, distribution, and marketing.

• A continual dedication to a high quality of life by preserving and renewing the health and well being of
our planetary and social ecosystems.

The Ten Commandments have already been spoken for, so we shall present only nine commandments for
synergistic economies, subject to revision when we are actually engaged in the process.

Ecovillages are microsocieties with microeconomies which are scaled down experimental versions of the
larger society. They therefore present excellent opportunities to try out new and innovative approaches
without the full risk of implementing them in the society as a whole, before sufficient testing under di-

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verse circumstances has been completed. We would therefore like to suggest that ecovillages and their
networks would be an ideal place to start innovating with synergistic economies. However we have a
problem, because we do not have the quantity and quality of ecovillages we need. Therefore, we must
attempt to convince you that efforts to establish these communities should be a high priority. We need to
begin implementing these communities all over the world. We must begin by encouraging enlightened
and adventuresome citizens to come together to establish the private and public funding that will be nec-
essary to accomplish this task.

For some reason the tendency by the larger society has been to fear and shun such microsocieties, as if
they were some dangerous threat, when in fact, they can be very valuable testing grounds for new ideas.
The tendency of a few cults to form closed microcommunities, focused around single individuals, where
extensive mind control techniques are employed, has unfairly given microsocieties a bad reputation.
These examples seems to be the only examples that the media are interested in, because they never bother
to report on the exemplary microsocieties. Please forget the cults, because what we are suggesting is
very different. We are talking about democratic communities where individuals are allowed full free-
dom to come and go and participate in the larger society, and information of all types flows freely be-
tween the microcommunity and the larger society. The ecovillage network we speak of would consist of
hundreds, thousands, or millions of microsocieties - each consisting of a unique community and yet
united by a similar purpose. The obvious intent of the network is to link these, otherwise separate, com-
munities together all around the world. Both the physical and the cyber-networks would be sustained by
profuse communication with information, cultural, technological, educational, and economic exchanges.

Experimental microeconomies
A program of microeconomies in the form of ecovillages connected all over the world via a highly dis-
tributed network would seem to be just the type of testing system we will need to find out what kind of
economy works best as we proceed into the exponential complexity explosion and growth of a post-
industrial technological and information society. The degree of complexity and nonlinearity in such a so-
ciety, makes it impossible to test new systems adequately with theoretical or analytical methods alone. We
must perform many simulations, which test our models in the real world - full of nonlinear complexities.
Testing must include multiple levels of scaling, starting from local successful tests all the way up through
testing in the full ecovillage network, before these models are implemented in the full global environ-
ment.
Before we can begin testing microeconomies, we must have microsocieties. Before we can determine the
best experimental economic models for the future, we must determine how to get microsocieties funded.
Obviously there are many approaches that can be adopted, depending upon the particular circumstances
of each ecovillage development. Projected size, projected growth, available capital resources, the core
theme of the community, economic expertise, and many other factors will play a role in deciding upon the
proper method of funding for each unique experiment.

Private funding models for synergistic ecovillages


We do not propose to know all the ways to initially fund new microsocieties or ecovillages, nor shall we
attempt to list all the alternative approaches. We shall discuss only a single approach. Should the larger
county, state, and national governments embrace such microsocieties?. We think there are many convinc-
ing arguments that they should, for all the reasons we have already presented. Can we move forward de-
pendent on the participation of these larger societies? Probably not. Enlightened individuals are always
the force that moves societies forward, institutions are generally entropic, conservative, and lagging indi-
cators - running behind the cutting edge of evolution.
AN EXPANDED HOME OWNER’S ASSOCIATION MODEL

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So our favorite model, which makes no assumptions about governance or institutional assistance, is the
private ownership model. In America there are privately held land developments in which there is private
ownership of individual properties, but shared ownership of communal facilities. Each individual or fam-
ily owns the title to their individual piece of land and home, but in addition to this private ownership, they
belong to a home owner’s association. This association is an elected entity which manages, to some ex-
tent, the combined private and communal ownership of the development. Individuals agree to pay a home
owner’s association fee every year, to cover the cost of maintaining the communal infrastructure. Each
individual plot owner is responsible for the cost of maintaining their individual property. Individuals are
free to sell their individual plots at any time, but the new owners must agree to be subject to the laws of
the home owner’s association, and agree to pay the fee’s to maintain the communal property. Some of
these associations rely upon the county to provide roads, sewage, and water, while others provide these
services from within their own infrastructure. Those that have public roads are not gated communities,
and those that have private roads are usually gated communities. Individual plots of land not yet sold to
individuals, are held in collective ownership by the original investors until they are sold to the communi-
ties members, or by the home owner’s association. Once all of the plots of land are sold, the original land
purchasers may have no more ownership in the development, unless they are also individual plot or home
owners.
Now the existing models for these types of developments are not very controversial or experimental.
Many of these communities are retirement developments. Others are centered around country clubs, with
golf courses and other recreational facilities. Some are focused on greater privacy and security. Many of
the existing models do not have intentional social community, or internal economies which are separate
from the larger surrounding communities. They are currently intended to provide only an alternative liv-
ing arrangement, and have little incentive to explore more advanced or experimental forms of community.
However, we feel that this model can be expanded to provide an excellent example for setting up micro-
societies or ecovillages which incorporate a much more progressive, innovative, and experimental ap-
proach. We see no inherent reason why such communities can not develop their own internal experimen-
tal communities, governance, and economies in new and innovative fashions, going far beyond the cur-
rent limited motivations already in existence.
We feel that this type of model is one of the most appropriate ones for setting up microsocieties, because
it provides a good balance between the freedom and responsibility of individual ownership, and the con-
siderable advantages of communal ownership of the larger infrastructure. How much does this existing
model need to be modified to incorporate an internal economy? Probably not that much. Another slightly
different approach to individual ownership would be to require the individual owners, if they wished to
sell their plot, to sell them back to the home owners association. This might work better for the kind of
communities that we are trying to explore - communities established around narrower and more special-
ized intentional themes. For instance, communities that wanted to attract a highly technological citizenry,
or a community centered around the performing arts, where certain educational requirements or talents
would be a prerequisite.
In the existing models, maintenance of the existing infrastructure is payed for by the home owners asso-
ciation dues. In most cases the cost is shared equally by all the existing plot/home owners, if the lots are
of equal size. Normal operating expenses can be okayed by the association manager, or a vote by the
board of directors. A yearly budget is presented to the home owners each year, and may or may not re-
quire a vote by the full community. Yearly budgets, extensive new infrastructure expenditures, or very
costly expenditures may require a vote of the full community. Board members are usually elected by a
democratic voting process, at predetermined intervals.

One could design a community so that it allowed for two types of citizens, those that choose to both live
and work in the community, and another group who only chose to live in the community an find employ-
ment in the external economy, outside the ecovillage. We will only discuss ecovillages where citizens

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choose to both live and work within the community. We can think of a number of ways in which the
communal aspects of ownership can be modified to include the addition of an internal economy:
• All of the internal economy could be held communally. All costs to build and create the economy would
be shared in common, and all profits above and beyond operating costs and salaries, would be shared in
common. Salaries would be arbitrated between the employees and the elected association board, or
some agency appointed by them for this purpose. Employees would have the right to form associations
to represent their economic interests.

• A certain portion of the land could be set aside for businesses, and community members who wanted to
build businesses in the community could also opt to purchase, lease, or rent these business locations.
The profits from these businesses would belong to the individual, or group of individuals, who estab-
lished and ran these businesses.

• Some form of joint ownership between individuals and the collective association could also be another
approach, each sharing a portion of the research and development expenses, operating expenses, and
profits.

• Some communities might even want a more open economy that allowed people or groups from outside
the community to operate businesses within their communities. Contractual agreements between the
individual businesses and the home owners associations would be used to handle the legal terms of the
agreement between the two parties.

• Microcommunities could also choose a model where the internal community actually provided eco-
nomic products and services to the larger external community.

• For ecovillages that focused the largest portion of their economy around the internet, all of the new
forms of experimental virtual economies (yet to be determined, and to hard to classify at this juncture)
could also be considered.

• Natural trading partners for ecovillage community economies would be other ecovillage communities,
since they share a common philosophy.

Obviously determining which of these alternatives would work best for a given ecovillage, would depend
on:

• the relative size of the community in relationship to the external community


• the total capital available to the community
• on the internal skills of its citizens
• on the geology and types of resources available internally to the community

It is also very likely that as the community grew, different models might be more appropriate at different
stages of growth. A number of circumstances could trigger such a change - a drastic change in the growth
rate of the community, changing economic circumstances, or a severe change in climate.

The profit verses the nonprofit alternative


Ecovillages in many nations would have the opportunity to incorporate in various fashions, and to organ-
ize under a nonprofit status if they felt this best served their needs. All alternatives should be explored
before a new group of founding ecovillage citizens committed to a final decision. It is essential to search
out and seek the advice of communities that have already been through this process, and learn from their

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experience. Hopefully someday there will be books that assist people is setting up such communities.
Something that must be taken into consideration by the founding members, is how to ensure the long-term
preservation of the community. Some form of trust should be used to ensure that the original intent and
the ongoing implementation of the community cannot be reversed, or taken over by the surrounding pri-
vate sector, city, country, or state governments.

The future of microsocieties


We hope that our discussion of the need for, and the advantages of, microsocieties has created sufficient
interest in this subject that some of you, with your friends, and with your neighbors will begin to take the
needed steps to rebalance and redirect the course of our society and our ecosphere. We firmly believe that
microsocieties should play a fundamental role in this restructuring. Whether this will be done early on in a
voluntary manner, or initiated only as the result of a major collapse of the current government and eco-
nomic structures in the post ecological disaster era of our future - is the real question before us. We be-
lieve the first alternative is proactive and offers our civilization the greatest chance for continuing sur-
vival, and the possibility of the attainment of long-term sustainable civilization. The second alternative is
reactive, and is likely to result only after the failure of the established system. This second approach is
regressive, and can lead only to our having to rebuild and relive a history we have already completed,
thereby placing our civilization at a distinct disadvantage - by hundreds, if not thousands of years, in
comparison to other advancing civilizations in our parent galaxy.
We shall leave you with a comments of the economists Bowles and Gintis on the importance of commu-
nity governance in our near future [10]:
“Far from being an anachronism, community governance appears likely to assume more rather than less
importance in the future. The reason is that the types of problems that communities solve, and which re-
sist governmental and market solutions, arise when individuals interact in ways that cannot be regulated
by complete contracts or by external fiat due to the complexity of the interactions or the private or unveri-
fiable nature of the information concerning the relevant transactions. These interactions arise increasingly
in modern economies, as information intensive team production replaces assembly lines and other tech-
nologies more readily handled by contract or fiat and as difficult to measure services usurp the preeminent
role, as both outputs and inputs, once played by measurable quantities like kilowatts of power and tons of
steel. In an economy increasingly based on qualities rather than quantities, the superior governance capa-
bilities of communities are likely to be manifested in increasing reliance on the kinds of multilateral
monitoring and risk sharing exemplified above.”

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References
1. Bowles, Samuel and Gintis, Herbert. Social Capital and Community Governance, 2000, pp. 2-3.
(http://www.santafe.edu/sfi/publications/Working-Papers/01-01-003.pdf)
2. Bowles, Samuel and Gintis, Herbert. Social Capital and Community Governance, 2000, p. 4.
(http://www.santafe.edu/sfi/publications/Working-Papers/01-01-003.pdf)
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