Valuing contribution without a price

A community that wants to reward contribution has to answer a question markets normally answer for it: what is this worth? Where there is a price, the question is settled — badly sometimes, but settled. Where there is no price, somebody has to decide, and how they decide turns out to matter more than what they decide.

Three families of answer have been tried at scale. Each is coherent. Each fails in a different, predictable place, and knowing which failure you are choosing is most of the work.

Equal hours

Timebanking, developed by Edgar Cahn in the 1980s, values every hour identically: an hour of legal advice and an hour of driving someone to hospital both earn one time credit. Cahn's argument was explicitly moral. Market pricing already tells people that care work, neighbourly work and the work of the old and the unwell is worth little; a system that repeated that judgement would reproduce the exclusion it was meant to answer.

The design does what it was built for. Timebanks are effective at drawing in people the labour market has written off, and the equality is the reason.

Where it breaks is on scarce specialist work. If an hour of anything earns the same credit, the person whose skill took fifteen years to acquire has no reason to offer it through the timebank rather than through the market — and will not. Timebanks that grow past a certain size tend to find themselves rich in generalist hours and poor in exactly the expertise their members most need.

Negotiated prices

LETS schemes — local exchange trading systems, spreading from Comox Valley in the early 1980s — let members set their own rates and record mutual credit between them. Sardex and the Swiss WIR work on a related principle at a commercial scale: prices are whatever the two parties agree, denominated one-to-one against the national currency.

This solves the specialist problem. The surgeon and the driver charge what they charge, and the system does not pretend otherwise.

It reproduces the market's distribution instead. If your community currency mirrors national prices exactly, it redistributes nothing — its value is in credit creation and in keeping trade circulating locally, which is a real value but a different one from the one usually promised.

Assessed contribution

The third family assesses value case by case against published criteria: a committee, a review, a rubric. Most cooperatives and most open-source foundations run some version of it.

It is the most flexible and by far the most fragile. Elinor Ostrom's work on long-lived commons institutions is the essential reading here, and her design principles are unusually concrete about why. Rules have to be made by the people they bind. Monitoring has to be done by people accountable to those same people. Sanctions have to be graduated. And there has to be a cheap, local way to resolve a dispute — because the disputes are not the exception, they are the normal operation of the system.

Assessed systems fail when the assessment is opaque. Not when it is wrong: when it is wrong and unexplained. A member who can see why a decision went against them can argue. A member who cannot see the reasoning concludes the reasoning was about them.

What NODA does, and what that costs

NODA uses the third approach with two constraints borrowed from the first two.

Revenue splits are published percentages, fixed before the work rather than decided after it. This is the part that most directly answers Ostrom's first principle: the rule exists in advance and applies to everyone, so the negotiation is about whether to take the work, not about what you will be given for it afterwards.

Everything that moves is recorded in an append-only ledger. Entries are inserted and never edited or deleted — enforced by database permissions, not by policy. A correction is a new compensating entry, which means the mistake and the fix both stay visible. This is deliberately inconvenient. A ledger that can be tidied up is a ledger whose history is an opinion.

Service listings are reviewed before publication rather than after complaint. This is the expensive choice. It is slow, it creates a queue, and it puts a person in the path of everything. The alternative — publish and moderate on report — is cheaper and works until the first listing that should never have appeared, at which point the community discovers the review it thought it had was retrospective.

None of this makes the valuation correct. It makes it contestable, which is the achievable goal. The published split can be argued with because it is published. The ledger entry can be pointed at because it is still there. The reviewer can be asked why, because there was one.

The failure to watch for

The characteristic failure of contribution-based systems is not unfair valuation. It is unrecorded contribution — the work that keeps the thing running and that nobody thought to count. Coordination, mediation, the person who answers questions, the person who notices what is broken. It is disproportionately done by the same people, it is invisible to any system that measures deliverables, and the members doing it burn out and leave while the metrics say everything is healthy.

No ledger design solves this. It is a governance problem, and the only honest treatment of it is to say so, look for it deliberately, and count it when found.

References

• Cahn, E. (2004). No More Throw-Away People: The Co-Production Imperative. Essential Books.
• Ostrom, E. (1990). Governing the Commons: The Evolution of Institutions for Collective Action. Cambridge University Press.
• Ostrom, E. (2010). "Beyond Markets and States: Polycentric Governance of Complex Economic Systems." American Economic Review, 100(3).
• Seyfang, G. & Longhurst, N. (2013). "Growing green money? Mapping community currencies for sustainable development." Ecological Economics, 86.