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Custodian Agreement

First version

under development...

This agreement is to be signed by the custodian of SENSORICA OVN as soon as it is ready. At this moment, the custodian is ACES/CAKE Canada. Administrators are Tiberius Brastaviceanu, Francois Bergeron.

See SENSORICA’s legal structure.

See SENSORICA’s agreements and governance.

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Table of contents

INTRODUCTION

INTERPRETATION

Open Value Network (OVN)

NRP-VAS

OVN affiliate

Exchange firm

OVNi

Nondominium

Charter

Forking a Nondominium

Value Equation

Fluid equity

Governance Equation

Commons

Pool of shareables

Resource

Project

Donations

ACCOUNT

Custodian account

Affiliate account

CONTRIBUTION

WITHDRAWALS

PAYMENT

CUSTODY SERVICES

Appointment

Ownership

Locations

Charges

Insurance

Notice of Changes

Transparency

Annex

Types of Goods

Two Types of Goods

Four Types of Goods (Ostrom & Ostrom)

Types of Ownership

Nondominium and Types of Goods

Ownership and Property Rights

Traditional Property Rights

Common Pool Resource Property Rights

Modification of Property Rights under Nondominium

Governance

Common Pool Resource Governance Best Practices

Nondominium and the Principles of Governance

Contrasting Nondominium with Other Forms of Ownership

Nondominium and the Commons

Nondominium and Cooperative Ownership

Nondominium and Collective Ownership

Nondominium and For Benefit Corporations

References


THIS AGREEMENT is made on [            ], 2014

INTRODUCTION

We have agreed to…

IT IS AGREED AS FOLLOW

INTERPRETATION

Definitions in this Agreement

Open Value Network (OVN)

 is ...

OVN model is described here: http://valuenetwork.referata.com/wiki/Main_Page

NRP-VAS

NRP stands for network resource planning. VAS stands for value accounting system.

The NRP-VAS is used by the SENSORICA OVN to keep track of resources, to plan and manage tasks and projects, to manage supply chain, customer relations, to log contributions to processes in the context of projects, to perform analysis and simulations on economic activity, to run value equations to redistribution of benefits and others.

The NRP-VAS is described here: http://valuenetwork.referata.com/wiki/NRP-VAS

OVN affiliate

OVN stands for open value network.

A OVN affiliate is an agent that contributes to economic activity within the OVN. Affiliates can be individuals or organizations of any type.

Affiliates can be active or inactive, based on their recent history of activity, decided algorithmically from the NRP-VAS, at the Project level.

Affiliates have access to the governance at the Project level and at the OVN-level based on the Governance Equation.

Exchange firm

Is a commercial entity that plays the role of interface with the market, i.e. assuming legal responsibility for products that are created by the SENSORICA OVN.

Any limited liability company can become an Exchange firm for the SENSORICA OVN by signing the Exchange firm agreement, which stipulates, among other things, that it will transfer a percentage of benefits to the Custodian to be distributed to SENSORICA’s OVN affiliates according to the Value Equation.

 

OVNi

OVNi stands for open value network infrastructure. By infrastructure we mean physical spaces (laboratories for research and development, office space, public areas, etc.), virtual spaces (website, blogs, databases, mailing lists, social media channels, etc.), including online applications for resource management and value accounting (NRP-VAS).

Nondominium

{forked from Kurt Laitner’s, original document by Tibi, 11 September 2014}

The Nondominium framework is a property regime that allows participants, also called OVN affiliates,  to pool resources by transferring ownership of their contributions to a Custodian in return for rights of use, usufruct, revenue and decision making over the entire resource pool in proportion to their relative contribution to the resource pool and its subsequent development (value contributed and value potential).  Membership in a Nondominium is open to anyone willing to sign the Nondominium Agreement and signing the Nondominium Agreement does not obligate the member to contribute. The Nondominium Agreement made up of a Charter, a Value Equation (VE) and Governance Equation (GE).

Once resources are registered in a Nondominium, all value added to them, created by using them, or resulting from their use, must be registered with the Nondominium or an appropriate exchange value (payment) provided.  Any exchange value (revenue) generated is collected by the Custodian for distribution to the members according to the Value Equation.

 

The ownership rights granted to members are not divisible, transferable or tradable by the member.  Rights may be subject to a global decay function that erodes rights over a set time period.  This decay may be tuned to provide transfer of control over time to current stewards and prevent long term capture by inactive members.  

The permission to register further resources or value added may be withdrawn at any time through the proper exercise of governance rights granted by the Governance Equation.  Note that the excluded party is still a member of the Nondominium and continues to participate in the revenue and other forms of reward from their proportionate contributions up to the time of exclusion.  Rights of Governance are withdrawn through a sanction dimension on the governance equation that may have a decay function attached to it (*forgiveness), or that may decay naturally as governance related rights are earned by the past contributions of the member.  

 

The Nondominium Agreement may only be changed by unanimous consent of the members, and the Value and Governance Equations may not be changed retroactively (i.e. they can only changed to apply to contributions on a go-forward basis).  The Nondominium may be forked at any time by any subset of the membership (see Forking a Nondominium, below).

 

Dissolution of a Nondominium must be altruistic.  Assets may not be divided among members but must be gifted to an equivalently or more permissive (equivalently or less private) ownership structure, as appropriate to the nature of the asset (i.e. converted to a Commons, open sourced, or donated to charity).  Dissolution is subject to unanimous consent of the members.

Charter

 

The Charter for Nondominium is a statement of purpose, principals, mission, vision, goals and objectives to which the actions and decisions of members can be linked.  

The overarching purpose of a Nondominium is to develop a resource to the benefit of the members of the Nondominium and reward them in proportion to their contribution.  There is no requirement to maximize such benefit, but rather sufficiency and sustainability are the goals.  

 

In contrast with the for-profit firm the overarching purpose of Nondominium is not to maximize shareholder value but rather to optimize value created without creating or utilizing negative externalities.  In contrast with the not-for-profit charitable form the purpose is not to maximize societal benefit while avoiding commercial activities (though for a specific Nondominium this may be the mission).  In contrast with for-benefit corporation the fiduciary duty is not to maximize a specific societal benefit while being economically self sufficient, (though for a specific Nondominium this may be the mission).  In contrast with government, the goal is not to create public good, but rather to create good for the members without reducing it for non-members.

Forking a Nondominium

Based on a disagreement, or as a reaction to being excluded, a member or members may fork the Nondominium and exercise their rights to use and usufruct of the resources in the old Nondominium in a new Nondominium.  The may then exercise Governance rights they determine with a new Governance Equation and accumulating new reward rights using a new Value Equation.  The new Nondominium may make use of the old Nondominium’s dimension of Value and Governance account balances to set starting values or may set them manually by agreement of the founders of the new Nondominium.  

Under the terms of the previous Nondominium Agreement that gives them the right to fork, they also must respect the parent Nondominium’s Value Equation for all contributions prior to the fork and flow back value through to the old Nondominium based on those contributions as evaluated by the old Nondominium Agreement. New contributions in the new Nondominium will be evaluated using the new Value and Governance Equations.  

Note that portable rights are to non-rival and low subtractability resources from the old Nondominium (a fork cannot take rival goods with them) and the fork ports existing rights the members have to the entire Nondominium, not just the contributions the member has made to date.  For example an entire code base can be brought into the new Nondominium, not just the lines of code written by the members of the new Nondominium.  Other than the tribute paid to the parent Nondominium for use of the value created there, this is similar to forking an Open Source project.

Value Equation

 

The Value Equation is a mechanism for Contributory Value Accounting.  Rather than focus solely on the exchange value of outputs as determined in a market, this approach focuses on measuring and tracking contributions of value in its variety of forms.  More importantly the value equation goes beyond the tracking of contributions leading to a positive market exchange (ie value chains, results only workplaces) and looks at tracking the activities that lead to the probability of a value chain being created in the first place.  This is a blend of venture capital and market systems without the barriers and gatekeepers.  By rewarding more than the successful value chain, the value equation can be used to provide solidarity mechanisms.  Specifically it can recognize supportive ecosystem efforts that do not succeed and are not directly linked to a successful value chain, in an ecosystem that produces success along with exploratory failures.  Using the parameters available a Value Equation can be tuned to reward success and failures in a given ratio to promote more or less exploratory work.

 

The Value Equation is an equation (kx+ly+mz+..) made up of a standardized, extensible set of dimensions of value (x, y, z..) along with parameters (k,l,m..) that allow the real time calculation of relative value created by members.  The founders of a Nondominium initially set the parameters (k,l,m..) to emphasize the dimensions of value they feel are important to the success of the enterprise, and these may be revised by unanimous decision.  One can visualize the creation of an instance of this equation as choosing the settings of a graphics equalizer, where you adjust the levels (parameters) associated with each frequency range (value dimensions) to change how your music sounds (the behaviors that emerge).  

 

Examples of value dimensions include *time, *attention, *participation, *contribution, *commitment, *accountability, *delivery, *alignment, *expertise, *risk, and *reputation.  The levels of value dimensions can be adjusted to support an organization’s operational reality.  As an example a retail operation might value *time more than an R&D operation, who in turn may be more results oriented (*contribution).  Value dimensions can be dependent on other value dimensions.

Fluid equity

...

Governance Equation

 

The governance equation is a mechanism to establish heterogeneous fluid governance of a Nondominium.  Governance is fluid in that behaviors and contributions determine decision making authority in real time.  Governance is heterogeneous in that different methods for determining authority can exist for each decision type identified for the Nondominium.  While there will be standardized decision types available for use, a specific Nondominium may establish their own.  The only required decision type is to establish the authority to define decision types.

 

The governance equation is a standardized, extensible set of measurable dimensions of governance.  These dimensions will have considerable if not complete overlap with those of the Value Equation.  A particular Nondominium agreement may use some or all of those dimensions, and may assign weights to them to incent the emergence of their desired organizational form.  A governance equation apportions decision making rights (authority) to individuals based on their accrued holdings of the dimensions that make up the governance equation and the weights assigned to those dimensions in proportion to other members.  An example of democratic decision making could be based solely on membership.  An example that used the value equation to determine voting rights would be a meritocracy.

 

Governance is implemented through the identification of decision types, and  the association of a governance equation to each decision type.  The primary governance equation for a decision type determines who has decision making authority.  There may be subordinate governance equations that determine who should be consulted prior to a decision (must reply), informed of a proposed decision (may reply), or merely informed of the actual outcome of the decision.  Decision types also specify the decision scope, decision mechanism, decision process, required inputs, voting rules, minimum open time, available outcomes, monitoring and compliance mechanisms and appropriate sanctions for non-compliance.

Commons

The commons is a pool of immaterial resources that are shared by SENSORICA affiliates, like documents describing R&D process, methods, protocols, designs, etc. .

Pool of shareables

The pool of shareables is a pool of material or physical resources that are shared by SENSORICA affiliates, like physical spaces, tools and equipment, consumable materials, etc.

Resource

Project

Donations

...

ACCOUNT

Custodian account

Affiliate account

CONTRIBUTION

A contribution is…

A contribution is valid only if it is recorded in SENSORICA’s NRP-VAS.

WITHDRAWALS

SENSORICA affiliates can withdraw from their account in SENSORICA’s NRP-VAS at any moment.  

PAYMENT

...

CUSTODY SERVICES

Appointment

You hereby appoint us to act as custodian of the in accordance with this Agreement and any Rules which apply to us.

Ownership 

The custodian will identify in its books that the resources in the Commons and in the Pool of Shareables belong to affiliates of SENSORICA OVN.

Locations

 how are assets managed, in virtual and physical locations, will not be moved by the custodian, the community is responsible for that, locations are recorded in the NRP-VAS.

Charges

 Custodian will charge for services...

Insurance

 We undertake that we maintain insurance in support of our custodial obligations under this Agreement including covering any loss… Evidence of such insurance coverage is available upon request. In the event that we elect to reduce, cancel or not to renew such insurance, we will give you prior written notice as follows: in the case of a reduction, we will endeavour to provide such notice at least 30 days prior to the effective date of the reduction; and in the event of a cancellation or expiration of the insurance without renewal we will provide such notice at least 30 days prior to the last day of insurance coverage. You acknowledge that any such insurance is held for our benefit and not for the benefit of SENSORICA association.

Notice of Changes

We will notify you promptly in writing if we become aware that (i) we receive notice of any claim against the assets of the SENSORICA OVN other than a claim for payment of safe custody or administration permitted by this Agreement; (ii) we otherwise fail to comply with any of the provisions of this Agreement.

Transparency

 offer transparency to SENSORICA affiliates

Annex

Types of Goods

 

Understanding goods types is essential for being able to understand the set of property rights that go with those types and hence the ability to bundle those rights appropriately.  Historically, and persisting to this day there has been an understanding of property as a dichotomy of public and private.  Ostrom and Ostrom have reframed this as a quadrant of public, private, common pool resources and toll goods.  Defining these below will allow a discussion of the bundling of ownership rights under Nondominium.

Two Types of Goods

 

“Pure private goods are both excludable (individual A can be excluded from consuming private goods unless paid for) and rivalrous (whatever individual A consumes, no one else can consume).  Public goods are both non-excludable and non-rivalrous. “ (Ostrom & Ostrom describing Samuelson)

 

Noting there is an implied quadrant made from these two dichotomies, this begs the question of how to label the other two quadrants (excludable and non-rivalrous (which Buchanan calls ‘club goods’), and non-excludable and rivalrous).

Four Types of Goods (Ostrom & Ostrom)

 

After redefining rivalrous/non-rivalrous as degrees of subtractability between subtractable and non-subtractable (ie subject to depletion through use or not), Ostrom and Ostrom go on to propose four types of goods.  Public goods (low excludability and low subtractability), private goods (high excludability and high subtractability), toll goods (high excludability, low subtractability), and common pool resources (high subtractability,  low excludability)

 

Types of Ownership

 

While goods types intersect ownership types they are not identical.  Goods types exist whether or not a property regime does.  For example a common pool resource may be owned as government property, private property, community property of no one at all (Ostrom quoting Wantrum and Bishop).  For example a public good with no one at all owning it would be consistent with Common Heritage of Mankind (high seas, space, antarctica) in the Westphalian tradition.  The more recent discussions around ‘the commons’ may fit into a public good or a common pool resource that is owned by a community or government, or no one at all.

 

Nondominium and Types of Goods

 

Nondominium is a new property regime that can be applied to any type of good at the discretion of the current owner or owner(s) by registering that good in the Nondominium.  In doing so the owner irreversibly transfers ownership of the good into the Nondominium, and may receive some of the ownership rights back through the operation of the Value and Governance Equations.  

The original use of Chris Cook’s Nondominium was to allow the development of a resource under disputed ownership, where the issue of ownership was set aside through a Nondominium agreement so that development could proceed to all parties benefits using an agreed upon (non-vetoed in his model) revenue sharing method.  

Leister and Frazier subsequently extended this to the management of Westphalian commons (Common Heritage of Mankind) such as the open ocean, antarctica and space.

Ownership and Property Rights

Traditional Property Rights

 

From the wikipedia entry on property, the current rights associated with (private) property are discussed:

 

“Depending on the nature of the property, an owner of property has the right to consume, alter, share, redefine, rent, mortgage, pawn, sell, exchange, transfer, give away or destroy it, or to exclude others from doing these things,as well as perhaps to abandon it; whereas regardless of the nature of the property, the owner thereof has the right to properly use it (as a durable, mean or factor, or whatever), or at the very least exclusively keep it”.  

 

Common Pool Resource Property Rights

 

From Ostrom and Shlager (1992) identified 5 property rights that individuals using a common pool resource might cumulatively have (noting a bias toward physical resources):

·         Access: a right to enter a defined physical property

·         Withdrawal: a right to harvest the products of a resource such as timber, water, or food for pastoral animals

·         Management: a right to regulate the use patterns of other harvesters and to transform a resource system by building improvements

·         Exclusion: a right to determine who else will have the right of access to a resource and whether that right can be transferred

·         Alienation:  a right to sell or lease any of the above four rights

 

Modification of Property Rights under Nondominium

 

Ownership is conceived as a bundle of rights over a given property.  Useful outcomes are possible by adjusting how these rights are bundled and managed.  Nondominium specifically adjusts the bundle of rights that are available to members using the value equation and governance equation using the structure of a Custodian who accepts all rights and redistributes (some of) them.  The Custodian in turn is governed by the members of the Nondominium according to the governance equation.

 

All property rights are transferred to the Custodian by the members of the Nondominium through the act of registering a resource or value added into the Nondominium.  The Custodian in return grants the members the right to use, alter/improve (add value), and to receive “rents” (more generally reward in any form) on the entire resource pool based on the value the member has contributed to the Nondominium in proportion to other members.  

 

Exclusive use is not returned to the members but managed by the Custodian.  Non-members may be excluded by the Custodian from use of the Nondominium.  Members may be temporarily or permanently excluded from use of the Nondominium as an act of censure (based on agreed upon sanctions) or may be temporarily excluded from use of a portion of the Nondominium in the process of apportioning the use of rivalrous goods.  Management (regulation of use) is performed through the fluid governance mechanisms described below. Temporary exclusive use of a rivalrous good (for example a piece of equipment) may be subject to tolls expressed in exchange value terms.  

 

Withdrawal (including consumption) of a rivalrous good may be subject to provision of exchange value or to a system of account where credit balances must revolve.  Destruction of value follows similar logic.  Where withdrawal occurs across the boundary of the Nondominium it must be authorized by the appropriate decision making process.  Any surplus exchange value realized through internal or external withdrawal shall accrue to the membership through the operation of the Value Equation.  

 

It is worth noting that the rights to ‘keep’ or ‘abandon’ along with ‘exclude’ are the most problematic of property rights, in particular when applied artificially to non-rivalrous goods (as done by Intellectual Property Rights).  These rights are withdrawn from the system by the Custodian to encourage use and development of resources in a sustainable way in the service of human needs, and to discourage hoarding and financialization of assets.  

 

Alienation rights are modified to ensure that the Nondominium is only dissolved altruistically.

Governance

Common Pool Resource Governance Best Practices

 

Poteete, Janssen and Ostrom (2010) list the following design principles for governance of a commons:

 

1.Well Defined Boundaries: The boundaries of a resource system, as well as the set of individuals or households with rights to the resource, should be clearly defined.  The clarity of the social boundary influences incentives for cooperation.  Clarity of the boundaries of a resource system limits problems related to externalities.  Rule enforcement becomes easier when both types of boundaries are well defined.

 

2. Proportional Equivalence between Benefits and Costs: Rules-in-use should allocate benefits associated with a common-pool resource in proportion to contributions of required inputs.  Rules that respect proportionality are more widely accepted as equitable.  Perceived inequity may lead some participants to refuse to abide by rules they consider to be unfair.

 

3.  Collective-Choice Arrangements: Most individuals affected by a natural resource regime should be authorized to participate in making and modifying its rules.  This principle increases the likelihood that rules fit local circumstances, change over time to reflect local environmental and social dynamics, and are considered fair by participants.  Common-property institutions that empower local elites - rather than most local resource users - are likely to generate policies that benefit the elites disproportionately; these arrangements are not consistent with the second design principle.

 

4.  Monitoring: The individuals charged with monitoring rule adherence and resource conditions should be accountable to users.  Reliable monitoring raises confidence among users that they can operate without the fear that others are taking advantage of them.  Robust, self-organized resource regimes tend to select their own monitors.

 

5. Graduated Sanctions: Sanctions for violated rules should be graduated.  Graduated sanctions signal that infractions are noticed while allowing for misunderstandings, mistakes, and exceptional circumstances that lead to breaking.  The encourage individuals who have broken a rule to resume compliance in order to enjoy ongoing trust.

 

6.  Conflict-Resolution Mechanisms: There should be rapid, low-cost, local arenas to resolve conflicts among users or between users and officials.  Some conflicts arise because participants interpret in different ways a rule that they have jointly made.  Simple, local mechanisms that get conflicts aired immediately and produce resolutions that are generally known in the community can limit the number of conflicts that reduce trust

 

7.  Minimal Recognition of Rights: The rights of local users to make their own rules should be recognized by the national or local government.  Resource regimes that lack official recognition have operated over long periods but have had to rely almost entirely on unanimity as the rule used to change rules.  Otherwise, disgruntled participants who oppose a rule change can go to the external authorities to threaten the regime itself.  Changing rules using unanimity imposes high transaction costs and prevents a group from searching for better-matched rules a relatively lower costs.

 

8.   Nested Enterprises:  When common-pool resources are part of a larger system, governance activities should be organized in multiple nested layers.  Small-scale units can match rules to local conditions, but larger-scale institutions are also needed to govern interdependencies among smaller units.  The rules allocating water  among major branches of an irrigation system, for example, may differ from the rules used to allocate water among farmers along a single distribution channel.”

 

Nondominium and the Principles of Governance

 

1.    Well Defined Boundaries: As a Nondominium applies to intangible as well as well bounded physical resources, boundaries are defined by whether a person has signed the Nondominium agreement.  This is considered an open and largely permeable boundary, but also very clear regarding membership boundaries.  Resource boundaries are established through a registry where resources are provided to the Nondominium explicitly.  Use value of those resources is made available to members and the use of rivalrous goods are managed by the Custodian.  Where a resource of the Nondominium is improved the modified resource is to be registered with the Nondominium.  Where an output is created using the Nondominium that output is to be registered with the Nondominium.  

2.    Proportional Equivalence between Benefits and Costs: The Value Equation tracks all dimensions of value and reward flows to members based on their relative contributions.

3.    Collective-Choice Arrangements: The governance equation apportions decision making authority to members of the Nondominium in a transparent and predictable way.  This ensures those who have a stake in the resource have a say in its use.  There is a concern that parties who have a stake in or are affected by the resource are not members or may not have added sufficient value to have standing.  This is an ongoing concern.

4.    Monitoring: All actions in a Nondominium need to be intermediated by an information system to be able to capture them and use them in the equations.  If relevant use of assets is not being captured or if value added or outputs created are not being registered then sanctions will need to apply.   These will be determined through the operation of the governance equation on given decision types.  Monitoring mechanisms will need to be created as needed.

5.    Graduated Sanctions: Sanctions will be determined through the operation of the governance equation.

6.    Conflict-Resolution Mechanisms:  Mechanisms will be determined through the operation of the governance equation.

7.    Minimal Recognition of Rights: This is an external force, and requires that Nondomium is a recognized legal form in the jurisdictions it operates in

8.    Nested Enterprises:  Nondominium is an infinitely nestable structure as Nondominiums can be members of other Nondominiums.  Actual nesting will be left as an operational choice.

 

Contrasting Nondominium with Other Forms of Ownership

 

Nondominium and the Commons

 

Nondominium is to be viewed in contrast with a Commons, which consist of resources which are not owned or not ownable, usually abundant but often depletable / subtractable without governance.  They are not excludable or are considered a fundamental human right so must allow free access.  Governance of a commons is a voluntary group process that ensures it is maintained or enhanced and not destroyed (such as air and water, or Common Heritage of Mankind (i.e. high seas, antarctica or space).  

 

Nondominium is not open access.  It is open access only to members and even then only when dealing with non-rivalrous goods.  Consumption and use of rivalrous goods must be managed by the Custodian and so cannot be considered open access.  Nondominium may refer to excludable resources, to which access can be practically limited, and which may or may not be subtractable/abundant.

 

Nondominium is not the absence of ownership, but rather a refactoring of ownership rights between the individual member and the Custodian of the Nondominium.

 

Nondominium and Cooperative Ownership

 

Cooperative ownership, based on the Rochdale principles, insists that a cooperative be governed democratically. Members may allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.  Members contribute equitably to, and democratically control, the capital of their co-operative. Investors usually receive limited compensation, if any, on capital subscribed as a condition of membership.

 

Nondominiums may be a collection of governance modalities, as each decision type within a Nondominium is associated with a Governance Equation that can be modified to approximate democracy or meritocracy or any other form.  There is no capital requirement for membership.  Capital may only be contributed as use value.  Surpluses are distributed to members per the Value Equation and the notion of retained earnings as described in cooperatives is replaced by voluntary reinvestment.

 

Nondominium and Collective Ownership

 

Nondominium is to be viewed in contrast with Collective Ownership, where property is jointly held according to an agreement, which includes member only clubs, and private property held by groups of individuals or by corporations.  

 

Nondominium ownership is indivisible and non-transferable (except altruistically).  There are no shares that can be redeemed or transferred.  There is no fiduciary duty to maximize shareholder value.  When one places property or value into a Nondominium, the member retains the beneficial ownership (the right to benefit from the value created by the property) but surrenders exclusive ownership.  Ownership rights are not redeemable from the custodian, as no ‘shares’ are issued in response to property donated or  value created through the operation of productive assets.  Use, usufruct and beneficial ownership rights are distributed to members of the nondominium by the Custodian according to the agreement.

 

Nondominium is only excludable based on whether or not a party is willing to sign the  Nondominium Agreement, not on any other basis.  In particular no capital requirements exist for membership.

Nondominium and For Benefit Corporations

 

In an article for Harvard Business Review (2011/11) Heerad Sabeti outlines the key characteristics of for-benefit forms:

·         Primary Characteristics

o        Embedded Purpose: A commitment to mission is in the organizations DNA.  Fiduciary duty is to purpose.

o        Earned Income: Sales of goods and services generate most of the income

·         Secondary Characteristics

o        Inclusive Ownership: Ownership rights are allocated among stakeholders in accordance with their contributions

o        Stakeholder Governance: Decision rights regarding information and control are distributed among stakeholder constituencies

o        Fair Compensation: Employees and other stakeholders are compensated in proportion to their contributions

o        Reasonable Returns: Limitations on investment returns protect the organization’s ability to achieve its mission

o        Social and Environmental Responsibility: Social and environmental performance is constantly improved throughout the stakeholder network

o        Transparency: Social, environmental, and financial performance and impact are fully and accurately assessed and reported

o        Protected assets: social purpose assets are preserved upon dissolution, conversion, or ownership transfer”

 

This description of for-benefit is highly aligned with the Nondominium concept.  The points of difference would be in the embedded purpose, where Nondominium does not have restrictions on what this should be, whereas notions of for-benefit are of it solving a social ill.  If unemployment, underemployment, and lack of workplace engagement are considered social ills the perhaps the two forms are not so far apart.  

 

On the points of earned income and related reasonable returns, a Nondominium is free to accept donations or to sell its goods or services, but it is proposed that taking capital in return for equity or control will be against the interests of the Nondominium.   If this is permitted to skew value equations or governance equations, it subjects the network to the possibility of capture by financial interests.  Debt issued against productive assets (see Kleiner and Bauwens (2014)) being paid back on an ‘as used’ basis with no interest may be acceptable.  The point here is that extraction of rents by financial capital is to be disallowed.   All returns or surpluses are to be distributed to the membership using the value equation.   The membership or a portion thereof may choose to reinvest this exchange value in the form of productive assets and this shall be recognized as a further contribution to the Nondominium as it is used.  In such a way financial assets may be used to provide productive assets and may attract a return for its use value through the normal operation of the value equation.  Whether or not such use value of assets should be a part of the governance equation is left to an operational Nondominium to decide.

References

 

http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/2009/ostrom_lecture.pdf Elinor Ostrom, “Polycentric Governance of Complex Economic Systems”, American Economic Review 100 (June 2010), 1-33

 

Samuelson, Paul (1954), “the Pure theory of Public expenditure,” Review of Economics and Statistics, 36, 387–389.

 

Ostrom, Vincent and Elinor Ostrom (1977), “Public Goods and Public choices,” in E.S. Savas ed.), Alternatives for Delivering Public Services: Toward Improved Performance,

Boulder, co : Westview Press, 7–49

 

Poteete, Jansen, and Ostrom (2010), “Working Together, Collective Action, the Commons, and Multiple Methods in Practice”, Princton Press

 

http://p2pfoundation.net/Nondominium

 

Ishan Shapiro, Chris Cook, “Nondominium”, http://notthisbody.com/nondominium.com/wp/ 

 

http://en.wikipedia.org/wiki/Property

 

http://en.wikipedia.org/wiki/Rochdale_Principles

 

Valnora Leister and Mark Frazier, “From Local to Global Commons, Applying Ostroms Key Principles for Sustainable Governance”, http://www.earthsystemgovernance.org/lund2012/LC2012-paper94.pdf 

 

Michel Bauwens, “Toward the Democratization of the Means of Monetization”

http://d3n8a8pro7vhmx.cloudfront.net/lnevancouver2013/pages/51/attachments/original/1383671086/ValueModels.pdf?1383671086

 

Chris Cook, “Nondominium, the Caspian Solution,”

http://www.atimes.com/atimes/Global_Economy/MI24Dj01.html

 

Michel Bauwens, Dmitry Kleiner “Cooperativism, peer production and community venture funds for the commons”, http://guerrillatranslation.com/2014/01/28/towards-a-material-commons/