The Azimuth Project
Utopia (Rev #19)

This page is part of an (blog) article in progress?, written by Nadja Kutz. To discuss this article while it’s being written, please visit the Azimuth Forum.

The below is a first draft for a game with the working title “Utopia”, it was first proposed at the randform blog post at http://www.randform.org/blog/?p=2312

It was motivated by the question: “How can one set up an investment scheme (in a game like environment) which encourages investments into ventures with from the outset low return or even no return?” It is thought as an example for the economic game project Experiments in massive multiplayer online games for economic and political change (MMOGEP). It is part of an article draft at the blog randform.

The game idea starts from the crucial point that surplusses are needed for investments. In reality and within a country one could find such a surplus in all assets which are not unconditionally needed for covering the running costs. Its a debatable point what these are, but in richer countries one can find a surplus. Or coltishly put: Schloss Neuschwanstein could a priori be liquidized. In some sense a countries surplus is an indicator of how a country florishes. If there is no surplus and if even running costs cant be covered then a country is usually considered to be bankrupt. Economic growth is usually seen as an indication for surplusses. The question what may be accounted for as a surplus is important and will be discussed in the Appendix: Surplusses and Exchange.

The second main point which enters the game concept is that in nowadays typical economies investments into ventures with no or low return are usually not taking place without regulatory interference (see eventually the article “Green-cherry picking and limits of sustainability”. This may lead to environmental problems as mentioned in sections Economic growth and limitations and Recycling run away effect.

One of the reasons for investing only in profitable ventures is of course that surplusses are usually only possible with enough profit (which is a kind of “minisurplus”) and investment is only possible with a surplus.

In a game the whole political and economical set-up can in principal be set by game rules and/or by the interaction of the participants. So apriori in a simulated toy world one can have states that are more like rural middle age states (that would then rather be accounted as an role-playing game) or states like in a nowadays modern economy. One can study how collectives built up values, how rules influence decision making etc.

In Utopia a toy state shall be organized in a different way than a nowadays state like e.g. a typical european state. The discussion about surplusses and investments will constitute an important guideline for the set-up.

Assume we have a kind of Sims game that is sort of a real life economic scenario. Could it be supplied with a different system of money distribution and storage than with the usual banking and economical scheme, in particular the system should be able to encourage investments into ventures with no return, but which are desired for technological and societal reasons? If yes – What could be possible? What can one think of?

Here – a very incomplete and rough (and probably not working) scheme as a start, which is mainly intended to encourage brainstorming about these issues rather than provide a solution.

surplusses in Utopia

first stage: determine a basic set-up in Utopia via gaming

In appendix Surplusses and Exchange it was outlined why the notion of exchange and in particular the question of what types of exchange exist is an important feature for understanding the role of machines and the survival of humans.

For the game Utopia one of the main starting points is to assure the survival of humans. This decision may imply that it is eventually necessary to cut back on certain types of exchange. Moreover it does influence the question of what a surplus is in Utopia. Note that not everybody considers the survival of humans as important. There are people who rather set the development of more capable machines or more capable human machine hybrids centerstage. The role of animals and the possible development and use of their intelligence and capabilities (see e.g. the article Animals go to war on the blog animal intelligence, the report “Free willy monkeys” in Time Magazine or ‘Apps for Apes’ at the Washington National Zoo) shall here for simplicity also be ignored.

Since in Utopia one of the main starting points shall be the survival of humans one needs to identify, what is necessary for survival, what is there and what kind of exchange is necessary. As already indicated in section Surplusses and Exchange the question of what is necessary for survival depends on the individuum, living conditions, like location, climate etc. A human needs a rather well-defined mix of food, air and light for e.g. producing vitamin D. The body has to be held between certain temperatures, it has to be moved in order to keep the muscles functional. The brain is depending on the individual more or less sensitive to stimulation (like feedback), where this may get too much (like noise etc.), the brain needs also an adequate amount of sleep etc. So like if people live in an urban situation then food (“ressource”) has to be transported to them (“exchange”) etc.

Consequently if one wants to start out in a game with a toy copy of the present world , then it takes some work, but it is in principle possible to determine the very basic living needs (for simplicity assume the world can be frozen for the determination). First e.g. determine the necessary supply of food. I.e. here one needs e.g. to count humans together with an information about their food intake in an area and determine how much food is needed in that area. It is fairly clear how to determine this, like in war-times systems of food stamps worked often rather well. Likewise one may determine the needs for living space (space, sanitation etc.) needed based on average needs. Depending on the climate and on the size of living space, needs for heating and clothing can be likewise determined. Likewise basic infrastructure for health care and education can be determined. It would be interesting to have such a “map of basic living needs” for the real world. For Utopia it would be enough to make more or less good approximations.

Then register resources, like buildings, forests, agricultural land, mines and their details like energy needs etc. Here the usual cartography is already quite good although it not so easy to find a comprehensive tool (an example is e.g. at KarteKlimaPolitik ). The GEOPortal hosts also some maps like e.g. a map about the spread of Malaria and climate change a map about the spread of Malaria and climate change. Likewise do the same for production sites and skills of the given population then finally one ends up with a more or less realistic “Sim World”-map. Given such a Sim world map it is not easy but possible to determine a kind of “optimized basic exchange”. What is meant by this? If one has a cartography of the basic needs, the ressources and the processing (or production) sites then one can try to distribute the resources and products in such a way that exchange is minimized. For food that would e.g. mean, start with local food and import only in winter etc. But note that exchange shall include here also transport of workers. Electronic communication needs between humans should also be reduced, etc. It won’t always be possible to find a unique optimal result, but it is conjectured that one can come up with a fairly good solution. In particular one will immediately see that in some regions it would be good to have a new production or farming site in order to reduce exchange. If one has enough unemployed appropriately skilled workers for that site, one could built such a site. Eventually one could think of employing some extra “training” resources into the game etc.

This process of reorganization of distribution can be already be done in a game setting. That is people may compete in finding “better” optimization solutions for a region or for the whole set-up, while having a certain supply of reforestation measures, extra agricultural land, extra production sites, mines etc. Exchange could be measured in units of energy, further measures like extra energy needs of ressource/production sites ( remark:this may be an important ingredient, as for example the energy needs for the production of a good may depend on location and thus a bigger exchange may be in certain cases better. ), environmental friendliness of exchange (and of the involved production/ressource site) etc. could be implemented. This is a bit similar to games like “how do we best pack our car”, i.e. here one can often - but not always- tell if a solution is better than another given the criterium “use as much car space as possible”. If you have additional criteria like “put the heavy items not only on one side” (bad for curves) then things get usually more difficult.

This initial stage of the game allows to come up with a set-up, where the basic survival needs for humans are set in some way. The extra needs for exchange itself are sofar not included, but could be then included in an iterative way. Note that in such a set-up a lot of production sites and resources may stay un- or only partially used. For simplicity one could of course also choose (exemplary) regions of the worlds and confine the cartography and redistribution of basic needs to these regions, however the global picture should be kept as a goal, so in particular the basic needs for the regions need to be (made) comparable.

It would be of course interesting to compare the game solution with the actual situation and also with purely mathematical optimization procedures. That is humans often take criteria into account, which are not officially stated as such (like daddy secretely wants above all to get his lumberjack axe into the car).

second stage: luxury correction

what is a luxury correction?

In the first stage a basic set-up was determined which assured the immediate survival of humans in the respective regions. It is clear that there will be a quite divergent distribution than in the underlying real set-up. For very poor regions there will be more assets in such a set-up than in the real world, likewise in a rich region a lot of infrastructure and assets may be unused. In the second set-up additional needs like higher education, community and cultural infrastructure, higher integrated consumer goods (like dish washers), transport for private use, more living space, etc. are to be implemented. Note that the education of engineers, physicians, school teachers and qualified personel to maintain (rebuilt) the given infrastructure is rather accounted for as basic education. Likewise the training of teachers for this education shall be accounted for as basic education, although it is traditionally counted as “higher education”. This is because this education is necessary to maintain the basic set-up. At this place birthrate adjustments have to be made. In the first stage the basic needs for a “living population” of humans were determined. If one wants to keep the (relatively) steady state then birthrates have to be kept approximately at replacement level. One “soft” birthcontrol could be implemented by e.g. reducing extra-allowances for old age depending on the number of extra childs above replacement level. Or in other words extra-childs would need to voluntarily make up for these missing extra allowances of their parents. So possible extra allowances for old age need also to be taken into account. Other influences on birthrates like reduction of TV and alcohol consume for families with many childs could of course also be implemented.

The “luxury distribution” may be locally different (has to be negotiated) and could even encompass “unjust” distribution, like that some local people/organisations may obtain more luxury. This could be e.g. determined in polls or via gaming.

Note that in some sense the distinction between basic living needs and luxury corrections provides some kind of valuation for “usefulness”. That is for example the usefulness of work can be evaluated according to wether this work is necessary for assuring the basic living needs or rather for luxury corrections and if for which kind of luxury corrections.

Assets versus monetary exchange

It is important to mention that most basic needs and to a great part also luxury corrections are refering to “assets”. That is housing, food, local transportation, consumer goods, knowledge access, work etc. can be apriori distributed and exchanged directly without any monetary exchange. However direct exchange is usually more difficult then exchange via money transfer.

A main conjecture which enters the game draft is that for removing bad poverty and hunger basic living needs need to be offered in abundance. That is there need to be always a half-way clean and safe place to live, food, health care and clothing and have-way decent communication means (libraries, public transportation etc.) available for everybody and these should probably be better kept out of a “market”. In particular it is also conjectured that the socalled “basic income” for everybody would not work everywhere in a way as people think it would and this will probably be connected with the question of an abundance of basic living needs.

If one would for example choose a certain wealthy enough city (i.e. assume there is no hunger, free health care and enough shelter for all inhabitants in this city) as a game region. Let the majority of appartments be rented out. Then a starting point for a game could be for example the status quo. I.e. the luxury corrections are “made” in such a way that a current real situation is “attained”, or simply put: one starts with a given real wealthy free market situation. If everybody would be now eligible to a basic income then it is very much to expect that in particular prices for food, energy and especially living costs might go up at least after a while because bodies who provide living spaces, energy and food could make (and get!) more extra money. I.e. it is very much to expect that a devaluation of the basic income would take place.

As a successful example for the introduction of a basic income often the example of Omitara and Otjivero is cited. Here in the years 2008 and 2009 a small basic income (in reduced form until 2011) was distributed in the settlement of Omitara and Otjivero which has according to wikipedia about 1200 inhabitants. The author has sofar found no detailed publicly available study on the project, but suspects that a lot of the inhabitants of the settlements had some rather secure living space, that a lot of the settlers did their own farming and that the settlers energy needs were rather humble. So in this project the preconditions seem to be quite different from the conditions in the above mentioned example of a city, where people live in rented appartments, need more energy for transport and can’t grow their own food etc.

Since in a free market the abundance of a submarket can usually only be reached via a monopoly situation (or eventually via an overabundance of the whole market) it is not to be expected that basic needs can in general be offered with abundance. So one would probably need to cover basic living needs via regulations, like one would need to offer free public housing/shelter with sufficient energy allowances, free food and clothings, free local transport, free community services like libraries etc. without connection to a market, before one could think about basic incomes.

a.s.o. to be continued

Regulations and their mathematical implementation

The relevance of mathematical subtleties like in the implementation of taxations or insurance fees is often under (and rarely over-) estimated in political decision making. That is for example a “course grain” income taxation scheme with “steps” (discontinuites)(like e.g. it seems is currently envisaged ??? in the latest Greek Tax Regulations or see also the regulations within the german health care insurance scheme (for more information please see http://www.randform.org/blog/?p=4799are petition)) have rather dramatic consequences for the individual and it is to be expected that alone these “step” - models (versus a smoother models) may have rather dramatic consequences in terms of infringement, workarounds and public acceptance. Such schemes can be rather easily tested in a game-like environment and eventual strategies could be studied. Here a small scale multiplayer online game would actually probably suffice to test how a “step” in a taxation scheme leads to “workarounds”.

Likewise the implementation of strategies to impose a lower taxation on income from rents versus a higher taxation of income within productive economic sectors can be tested rather straightforwardly within already existing MMOG game environments.

In this context and the dicussion of a basic income the discussion about a negative income tax is noteworthy.

third stage (optional): transition from a real to a new set-up

In this set-up strategies of how a real set-up could be changed into a set-up from the second stage can be developped.

distribution of surplusses

Starting from the crucial point that surplusses are needed for investments, lets assume there exists a certain amount of surplus. In the game that surplus is just a fixed start amount of extra money. In reality and within a country one could find such a surplus in all assets which are not unconditionally needed for covering the running costs. Its a debatable point what these are, but in richer countries one can find a surplus. Or coltishly put: Schloss Neuschwanstein could a priori be liquidized. In some sense a countries surplus is an indicator of how a country florishes. If there is no surplus and if even running costs cant be covered a country is usually considered to be bankrupt.

Now a surplus could be in total centrally distributed by a government. However similar real life experiments like in a centrally planned economy showed that this was economically less successful. Nevertheless it is meanwhile also rather undisputed that governments or other societal institutions should be able to exert an influence on the distribution of surplusses.

Hence lets e.g. assume that the given surplus is evenly distributed among the participants (in order to give the most democratic chance of investment and in order to mitigate the problem of lazy riches).

Impose the rule that any personal surplus has to be spend within a short time span into various (short and long term) investments (so money has to be invested). The investments have to promise “benefits” that is either one can collect benificiary points (being e.g. issued by societal institutions prior to investment) for investments into ventures with low or no return or one can collect money returns. For the work which is related to the distribution of the surplus each participant gets a “wage” which can be used for one’s own consumption. The wage is dependend on the success of the investments. If an investment yields no return or no beneficiary points or worse if even the investment is lost then the participant is “punished”. E.g. in the worst case that is if the whole surplus is lost then the participant is punished with “getting no wage from surplus”. The actual size and dependency of the wage with respect to the earned returns and/or beneficiary points is thus an important parameter.

All made returns and beneficiary points enter the personal surplus and have to be reinvested. A venture may store collected investment and eventually issue interests until the needed lump sum is collected that would accomodate for the storage effect of banks.

It may be also be good to allow only for investments which are not ones own investments. This would e.g. encourage long-term investments, since the surplus could anyways not be spend on ones own projects and thus accomodate at least partially for the intermediation function of banks.

Note that the distribution of beneficiary points is also an important parameter. (please see also this randform post about assigning values) In particular beneficiary points may be distributed to such different things as newcomer bands, extraordinary social activities/aid or very special research projects etc., where of course the ability to judge about the issues in charge will have to play a role.

With this concept one can eventually tackle also other aspects which aren’t yet formulated, like eventually a different role of jobs: http://www.randform.org/blog/?p=2635 (i.e. people are more paid the more unpleasant, strenous, dangerous etc. the job is, here one should eventually also include the notion of the “usefulness” of jobs) and a different approach to patents. This will be explained in a little bit more detail in the sequel.

Costs for development

Nowadays the risk to develop a new idea or technology is usually mostly carried by one or few entrepreneurs who may then eventually need to demand high license fees for patents or need to crossfinance their technology in order to get their development costs reimbursed. However the development of an idea could be seen as a “venture” from the onset on. Please read also the section tracing intellectual properties(tip). In the game this could be realized for example by supplying such a venture with beneficiary innovation Utopia-points. In such a way for example two companies could more or less (the “more or less” is of course a not so easy point) fairly share development costs, instead of having the patents “the-winner-takes-it-all-principle”. The beneficiary innovation points could eventually come partially from government surplusses (substituting somewhat innovation subventions), an industries innovation pool (everybody may profit from that innovation) and individuals a.s.o. ). One could eventually think about distributing extra points if an innovation is “useful” according to the games set-up. This will be explained later on. The question of how much the “innovation points” should be coupled to the overall economy may be subject to an investigation within the game.

If one regards the development of an idea as a “venture” from the onset on then this means that the development costs of innovative products are fully covered prior to finalization and distribution (this could eventually be done stepwise).

In the case of patents the development costs of products are usually reimbursed after finalization. If the costs are reimbursed after the finalization of a product/technology then the new technology may eventually only be utilizable if one pays licencing/patent fees and if one observes complicated patent laws. This may hamper innovation (there are clear examples where patent issues block/ed the development of new technology, like for example new MPEG standards).

Furthering technological development prior to finalization leads to the question of how to evaluate the development process. In particular it may appear that such an approach automatically implies that the development has to be laid open. But this need not be the case. The evaluation of the development and the corresponding payments may be tuned according to needs and circumstances. That is for example a company may decide to develop a medication against some illness completely clandestine. Clandestine development however somewhat implies that financing this kind of developments may be a high risk investment, because an investor has no intermediate control on how the development costs are spent. On the other hand the gains can be eventually be bigger due to the effect of knowledge accumulation. Observe also that having eventually multiple developments in parallel allows for a comparision.

Observe also that in a lot of patent cases the actual idea and/or the basic outline of the technology that is the invention itself is not reimbursed. That is the actual inventors of a technology often enough benefit barely or are completely left out from their own innovation. However if an idea is strong enough to suggest further development then such an idea should be reimbursed adequately. Here one can again adjust the reimbursement according to how original (that is approximately how many people had the same idea at the same time), how useful and how developped the idea was. An inventor should have also some rights on pursuing further development of an idea.

Usefulness

As pointed out above the development of an innovation could be made via beneficiary innovation points. These points are thus distributed according to the criteria of the corresponding point distributors (like individuals, industry innovation funds etc.) One could eventually think also about distributing extra points if an innovation is “useful” according to the games set-up.

In the case of medicine a similar approach is used in the project health impact fund. In this project:

“Financed mainly by governments, the HIF would offer pharmaceutical firms the option to be rewarded according to a new product’s health impact, if they agree to sell it at cost.

That is here companies generate surplusses only, if their product prooves to be “useful”. The “usefulness” of a medicine is comparatively easy to determine, in particular there is a societal agreement that “staying healthy” is a common good or is “useful,” respectively.

The valuation which is implictly connected with the set up of the first two stages of the game allows to extend this approach also to areas, where societal consense is less easy to find. That is innovations which foster the basic set-up rather than luxury set-ups could be supplied with extra points prior to development and then -depending on success- also after development.

Such a mechanism could also help to prevent the dissemination of potentially health-impairing, dangerous or risky innovations. That is in the patent model companies may feel more or less forced to push through technologies, which may turn out to be dangerous in retrospective or at a final stage of development. This is because -as already said- companies usually need to get their development costs reimbursed.

The fact that companies usually need to get their development costs reimbursed may thus also by the way impair the scope of the health impact fund.


The safety of the basic set-up of the first stage has to be ensured, this can be done by mostly decoupling these needs from the market, like via state-owned housing, farm adoptions etc. Eventually one could think about reducing pensions as corrective measure for fertility above replacement level. The goal is to find a stable game solution.