Friday, 10 July 2020

The Corona Crisis Reveals the Struggle for Our Future

by Dirk Helbing

For a long time, experts have warned of the implications of a non-sustainable world, but few have understood the implications. Today’s economic system would enter a terminal phase, before a new kind of system would raise from the ashes. For sure, the digital revolution allowed the machinery of utility maximization to reach new heights. Today’s surveillance capitalism sells our digital doubles, in other words: detailed digital copies of our lives. It became increasingly clear that we would be next. People were already talking about the value of life, which, from a market point of view, could be pretty little – considering the fact of over-population and the coming wave of robotic automation. I have warned that some have worked on systems that would autonomously decide over lives and deaths of people, based on a citizen score reflecting what their “systemic value” was claimed to be.

Then came the Corona Virus. Even though the world had been warned in advance of the next great pandemic to come, COVID-19 hit the world surprisingly unprepared. Even though it started to spread in early December 2019, there was a shortage not only of respirators, but also of disinfectants and face masks as late as April 2020. And so, many people died an early death. Some doctors took triage decisions as in war times, and old or seriously ill people did not stand good chances to be helped. Some doctors relied on “terminal care”: basically, they gave opiates and sleeping pills to patients they could not save, and put them to death.

In the past 75 years, we have perhaps never been that close to the end of civilization. The fundamental principles of civil society were at stake. From one week to the other, driven by fear, we have lost much of our human rights: the freedom of mobility, the freedom of assembly, the freedom of worship, and – some of us – even the right to live. We were all prisoners at home and could not check the validity of news. Never before did we get so much information and learned so little. Some people called for mass surveillance, for immunity certificates, for obligatory tests and (later on) for forced vaccination. We were just one millimeter away from a totalitarian state. Some countries, like Hungary, lost their democracies over these events. This could have easily happened around the world, given that we could not exercise our constitutional rights.

We have seen that a threat, which was dangerous for many lives, but not for humanity as such, was amplified by the media into a storm of fear and mass hysteria, such that it became a serious threat for our society, civilization and culture, which we have built over centuries. For sure, the economic system has been seriously damaged.

However, in this historical situation, we have made up our minds and figured out what really matters. We have realized that lives are more important than money. We have decided for solidarity. We have protected our democracy, which actually mastered the greatest challenge it had ever seen – contrary to the expectations of many. And even in times of lockdown and fear, we have not decided to give up our privacy and informational self-determination. Instead, we have promoted a new framework for the digital society – one, which is based on decentralization, values and empowerment. One, which even Google and Apple have to respect. So, we are seeing the dawn of a new society. A civilization based on respect for each other and for nature. It may take years to realize that it was a nasty virus that helped us build a more livable, more sustainable future together.

Thursday, 2 July 2020

DEMOCRATIC CAPITALISM - Why not give it a try?

By Dirk Helbing  -  (Draft version 1)

Democracy and capitalism have been struggling with each other for some time. Wouldn’t it be possible to invent a new, digitally upgraded kind of capitalism that is aligned with the values and foundations of democracies? How would such a capitalism look like? What would be its elements? In this connection, I will discuss the monetary, financial, and taxation system. I will also propose investment premiums, to allow for bottom-up projects. Last but not least, I will introduce a socio-ecological finance system, which would combine measurements of environmental impacts with new incentive systems. What I have in mind is a multi-dimensional real-time feedback system, which would allow one to manage complex systems more successfully, or even enable revolutionary self-organizing and self-regulating systems.

The failing financial system

In 2007/08, a shot was heard around the world. A real estate crisis in the USA had triggered a financial and banking crisis, which eventually turned into a crisis of real-world economics and a political crisis. In other words, more than 12 years later, we can still hear the echo of these events. Even worse, the crisis has not been resolved. Now, there are many countries with debt levels of the order of 100% of the Gross Domestic Product (GDP) or even higher. In order to allow countries to pay at least the interest rates on their debt, the central banks had to reduce them to almost zero. In some areas, there are even negative interest rates, i.e. those who make debts will get some money for it. This sounds like paradise, but an economy cannot work like this for long. It will not anymore reward the companies, which do a good job and perform well. Instead, it will reward those whose business models do not work. In many cases, these would be outdated business models that harm our planet.

Such developments did not come as a surprise. As interest rates for debts have been higher than interest rates for savings, debts increased more quickly over time. To compensate for this, new money had to be created, which in the fiat currency system of today, happens literally at the push of a button. However, as the material resources on this planet are limited, products and services would become ever more expensive. The more money existed in the system, the lower was the value of the money one saved. This phenomenon is called inflation, and it requires us to work against it. As a consequence, economic growth is required, but it makes the world economy less and less sustainable. It drives our planet closer and closer to an abyss, where systems would ultimately fail.

There were at least three factors, which made things worse. First, the dollar was currently a “petrodollar”. It was not backed by gold, but by oil. Hence, when new money was created, new oil had to be produced, which would eventually turn into CO2 and add to climate change. Hence, it was the current monetary system that had a major contribution to the so-called “climate emergency” we are now faced with.

Second, the dollar was the world’s lead currency, so all the other countries had to buy dollars in order to buy certain kinds of goods. As a consequence, all countries who bought dollars contributed to the emergency, even if they did not add to raising CO2 levels themselves.

Moreover, the lead currency system put the USA in a privileged position. They could import much more than they exported, and automatically enjoyed a higher standard of living. They could also spend more money on arms. In fact, the military spending of the USA was about as high as the military spending of all other countries on this planet together. This was needed to keep and expand the privileged position, and it resulted in many wars.

Third, some central banks are private in part. This means that, whenever a country makes debts at the central bank, a few private individuals would get incredible amounts of money. Money creation worked to their benefit, and tax payer later had to pay for the billions they could spend. These people were interested in a permanent increase of the debt level, because it created money for them. But their private interest was not aligned with public interest. If they wanted to get money, it was important that government needed money, i.e. the situation in the country had to be sufficiently bad. Eventually, it was so bad that it was claimed “quantitative easing” was needed over many years, thereby, channeling trillions of public property (such as government bonds) into the hands of a few private individuals. With increasing debt levels, companies, countries, and indebted people would increasingly be “owned” by a banking elite, some would say.

It is hard to imagine how much wealth and power could be accumulated in this way over a hundred years or more. However, no matter whether you believe in private shares in central banks or not, it is probably adequate to say that bankers control the world to a much larger extent than most people know. But how much longer would this system work?

In the end of 2019, the REPO markets got in trouble. Apparently, some banks did not trust each other anymore, and they did not lend each other money as they used to. The central banks had to jump in. They created insane amounts of money. Market indicators reached levels comparable to those before the financial crisis back in 2007/08. The oil market, too, became unstable. Shortly, oil prices even dropped below zero. It became increasingly clear that the financial system was about to fail again, and there was no possibility to save it this time, given the accumulated levels of public debts. An entirely new system would be needed.

The Chinese credit score system could potentially have replaced this monetary system. It would certainly be possible to run an economy on its basis. Say, there were a hundred thousand cars produced. Who would get one? The principle could be “just raise your hand”, and we will give cars to those with the highest credit scores, until we run out of cars. In other words, if you had a high credit score, you would get all sorts of goods and services – basically everything you wish. If you had a lower score, you would get some goods and services, but if you had a low credit score, you would have to live with what is left over. This is, what we call triage: some people would be “chosen”, some of them would be tolerated and might be lucky sometimes, but some would be doomed. There would also possibly be a score below which one could not survive.

The Chinese credit score is largely behavior-based. He or she who does exactly what the government demands may hope to become a “chosen” one some day. However, as this is a neo-feudalistic pyramidal scheme, there would not be a lot of them. It is clear that the Chinese credit score is more a control system than a reward system. And it will be even more so, if the production capacity of the system is re-adjusted to meet sustainability goals. This would mean to reduce production by one third (at least). You can imagine that a lot of people would be doomed. Then, the citizen score might very well decide about life and death. Given this perspective, it is high time to think about an alternative monetary and economic system, which would work for all of us, or at least for most of us, and which would also make the planet more sustainable.

Democratic Capitalism

In the past, our society was run by several different operating systems: One was culture, one was democratic law, one was capitalism, and one was based on algorithms (“code is law”). Unfortunately, these operation systems were not only incompatible in many ways – they were even often contradictory. In such a situation, these systems would not coexist for long, but they may destroy one another. It might also happen that one would eventually dominate all the others, even though it was not consistent with the legitimate foundation of our society: the constitution.

On the left, the graphic below illustrates the society we used to have. Democracy was the framework, and the economy was one institution that contributed to its well-being. Capitalism was a subroutine that was running the economy in many countries. Other spheres of society – politics, law, media, science, health, religion etc. – were run by different subroutines. While the goal function in the economy was profit, the goal function of politics should have been human dignity. Law should have established justice, the media should have been exposing the truth, science should have revealed it, the health sector should have tried to ensure human well-being, and religion should have cared about spiritual progress. However, the disruptions of the digital revolution has largely dismantled the old fabric of our society and its organization into separate spheres, which once ensured that we achieved the different goals that mattered for society. 

With the invention and spread of “surveillance capitalism”, digital technology became ubiquitous. It was not restricted to new business models, products and services. It invaded our jobs, our consumption, our spare time, our private homes, our friendship network, our thinking and our believes. It re-organized everything according to the principle of profit maximization, influence, or power (which are largely aligned).

Utility maximization took over. Everything got a price tag, and human dignity was lost on the way. Democracy was hollowed out, and turned into a subroutine. Surveillance capitalism became the new framework of society. A silent coup had happened. Most people had not noticed the coup, as it was gradual and slow enough. Politicians and courts let it happen. Democracy became increasingly a illusionary fa├žade. Human rights were in retreat, as they did not produce profits in obvious ways. As they were not represented by numbers, optimization routines ignored them. Given this, it was no wonder that hate speech and conflict took over.

Such a collapse of a once thriving society should not surprise us. One should have demanded from the very beginning that algorithms were designed for values. Constitutional and cultural values should have been built into the algorithms behind the platforms organizing our lives – those that were used in business, financial markets, social media etc. Then, a conflict between societal operating systems would have been avoided, and damage of the constitutional operating system underlying democracies would have been prevented. It did not have to happen. It happened, because some people did not want to care about environment, people and values, if it would reduce their profit. And so, the digital revolution undermined the constitution. It cannot be denied that disruptive innovators of tried to replace our societal operation system by another, digital one, and that they did not care about democratic legitimacy.

In the meantime, we have seen where this can end. Some countries have implemented totalitarian police states, based on mass surveillance, behavioral control, censorship and propaganda. The underlying algorithms can be easily transferred to other places. As time passes, it becomes increasingly clear that similar principles are taking over in Western democracies as well. Sometimes, they operate in grey zones, and most of the time, it is not known who is pulling the (digital) strings.

However, people are increasingly worried about the dystopian potentials of these technologies. They are losing trust. A new approach is needed. In the following I suggest to upgrade capitalism democratically. Capitalism’ success is largely based on fair competition, while democracy’s success is based on cooperation and collective intelligence. Marrying both systems would promote “co-epetition”, a synergetic socio-economic system that would work like a symbiotic ecosystem. In this connection, I am proposing a number of measures:

  • a better tax system
  • participatory steering boards
  • an information ecosystem
  • participatory budgeting
  • universal basic income
  • investment premiums
  • asset-backed money
  • a socio-ecological finance system

A better tax system

We are entering an age of Artificial Intelligence, where intelligent computer programs and robots increasingly do our work. However, while we have to pay massive income taxes, robots are getting away for free. This is not fair, and it cannot work for societies on the long run. It would be a serious discrimination of humans, many of whom would get unemployed and then be considered a burden of the social insurance system. Moreover, they would probably have to be alimented by fewer and fewer people. It is likely that the social insurance system would break down at some point in time.

However, what would replace income taxes? Besides value added tax (VAT), there would be transaction fees (for financial transactions at stock markets). If more money was needed, one could tax the storage and transaction of information. This would certainly lead to more environment-friendly IT business models. The current approach is not sustainable at all. The electricity share spent on digital technology is growing exponentially. A short time ago, it was about 3% of the overall energy consumption, but by the year 2030, the percentage is expected to be above 20%.

Most importantly, however, we should realize how much less taxes we would have to pay if
  • there was no inflation
  • we did not have to pay interest rates on government debts
  • we would not have to spend a lot of money on defense
  • the tax system would be simple and effective
  • administration would be digital and slim

In such a system, the taxation level would drop dramatically. In fact, if we managed to establish world peace, military spending would drop and prosperity levels would raise significantly. A Tobin tax on financial transactions is already being discussed for a long time, and in some European countries, it seems to be on the way. When the next financial crises looms, a reset of the financial system would be unavoidable. Debts will have to be forgiven. And a simplification of administration would be possible, if we had a new social contract, including basic income.

Universal basic income

With the next wave of automation, based on robots and AI, many expect dramatic changes in the job market. Some even expect mass unemployment. This is often framed as a dystopia. However, it could also be a chance to liberate humanity. Robots could do dirty, dull and dangerous work for us, and provide us with the basic goods and resources needed for our every-day life. This would allow humans to focus on social, environmental and cultural issues.

Many have proposed basic income as a means to take away the existential threats connected with the digital age. It would be the “helicopter money” that the central banks have talked about so many times, but never had the courage of doing it. Everyone would get it, so these payments would not have to be administered. This would have many benefits:
  • The benefit for producers would be that there would be stable and predictable consumption patterns, while mass unemployment would mean serious recessions and bankruptcies of many companies. 
  • The benefit for workers would be that they would have their backs free to re-orient and educate themselves for the new jobs of the digital age. 
  • The benefit for politicians would be that the social situation would be stable, while mass unemployment would trigger protests and unrests, perhaps even a revolution.

Of course, a flat income structure would be communism, which is known not to work very well. For an innovative and thriving economy, incentive systems are needed. Hence, while the basic income would be just enough to cover food, shelter, and basic needs, a job would add income for a comfortable life. For sure, there would be well-paid jobs for specialists, but ordinary people would like to contribute to society as well. So, how can this be organized?

From participatory budgeting to crowd funding for all

For some time already, a number of cities has been experimenting with participatory budgeting, which apparently was a response to the financial crisis. In these cities, citizens take part in the decision process how to spend their tax payers money. The most well-known example is perhaps the city of Barcelona. Over there, with over 600 citizen-based proposals, experiences with participatory budgeting have been very positive. Accordingly, other cities have started to copy this approach. The innovative measure has increased collective action, the effectiveness of public spending, transparency, and trust. It helps people to perceive the city to be “their city”, which comes with identity, care, and commitment.

However, we could even go a step further, by allowing citizens to run own projects. This has at least two benefits: First of all, citizens can locally contribute to the improvement of their city quarter and living conditions, in places, which political attention and economic investments would not reach. Second, citizens could earn some money for the projects they are running and engaging in.

It is important to realize that the capacity of any centralized structure is limited. Neither politics nor bosses of companies nor the military knows the exact local living conditions everywhere – and even less so can they take action everywhere. Accordingly, in a country, there are lots of “forgotten places”, which could be best upgraded by locals, if they had access to the necessary means. “Guerilla Gardening”, i.e. the distribution of seeds of colorful plants in public spaces, is a good example showing how easy it can sometimes be to turn a depressing city landscape into a colorful paradise.

As described in my chapter on Digital Democracy, it does not have to stay there. Hackathons, Make City Festivals, and Urban Source Urbanism have taken things big steps forward. Why shouldn’t it be possible to lift this to a professional level?

In the future, I imagine that people would engage in economic, social, environmental, and cultural projects. In some of these projects, they would take a coordinating role, in others they would contribute. Digital assistants, using augmented reality and other digital technologies, would provide supportive tools for organizing such projects (from recruiting of project staff over budget planning and organization to detailed instructions for a state-of-the-art implementation). In this way, citizen-based projects could be run on a professional or semi-professional level. Of course, it is conceivable to include experts with a special education, and city representatives as well, to achieve high standards and a coordination with other projects.

The projects would be financed by means of crowd funding. If there was enough money for crowd funding, in perspective one could even build a sports arena or develop a new medical drug using community-based funding. So, here is the idea: What if everyone got a special budget every month, which would be reserved for crowd funding. Such an “investment premium” would allow ordinary people to chip money into local projects that they consider important. This could be official projects or citizen-run projects. People could donate their investment premiums (or parts of them) to whatever seems to be good economic, social, environmental or cultural investments. Projects that manage to attract enough money for their realization would go forward. Other projects, which lack maturity or popularity, would be dropped. The competition for funding should make sure that primarily high-quality projects would be realized.

A new monetary system

How should we pay for all of this? In principle, in the same way as in the past: Let money work. However, in the future, it should work for everyone, not just very a few. We need to have the democratic equality principle in place. Everyone should have the same fair chance to benefit from the money system. In other words, we should democratize capitalism. Then, it would probably work much better for the world.

So, suppose:
  • all money would be gold-backed
  • all money would be property of The People
  • one would pay a regular basic income for everyone
  • one would pay a regular investment premium to allow for crowd funding for all
  • the basic income, investment premium and fundamental public services would be paid from a flat tax (VAT), transaction fees, a proper inheritance tax, and, if necessary, a flat tax on company revenues. Then, we would have a circular flow of money.

Should all of this not be enough, one could think about creating money with a time stamp. This would allow one to introduce “artificial ageing” of money. In other words, such money would be most valuable when handed out, but it would lose its value exponentially over time. However, the same amount of money that would be lost in this way would be newly generated for the payment of basic income and investment premiums.

In a sense, such a system would create fresh money at the bottom of society. By spending it, it would evaporate and rise to the top. Today’s money system instead creates money on the top and claims to benefit everyone through a “trickle-down effect”. Unfortunately, the trickle-down effect does not work well, as the growing inequality shows. Therefore, money concentrates in less and less hands, which eventually makes the monetary system dysfunctional (as one immediately understands by imagining that, one day in the future, all money would be in the hands of one person or company – as we know it from the game of “Monopoly”).

In principle, it should not be too difficult to create a system that works for the environment and us. “Vested interests” seem to be the main obstacle, i.e. the people who profit over-proportionally from today’s system and do not want to give up their exceptional wealth, power and privileges. However, are “vested interests” really legitimate in times of “over-population”, where millions or even billions of lives are at stake? I don’t think so.

From an ethical point of view, it is not acceptable to sacrifice one life for another one, or even for two, or more. Mathematically, this means that the value of a life is treated as “infinity”. Hence, it cannot be bought for money. That would be immoral.

From an insurance point of view, the value of a “statistical life” is not infinity, but it is officially still of the order of 6.7 million Swiss Francs [1]. Hence, from a capitalistic point of view, the value of a billionaire would correspond to the lives of about 150 ordinary people. So, why are we paying so much attention to what billionaires want, when talking about how to solve the existential problems of this planet? We should just do the right thing! Otherwise we would all be responsible for the deaths of millions or even billions of people. Who could take such responsibility?

Participatory steering boards

It is worth asking how we got into this huge existential trouble in the first place? Why could things get so bad? The following seems to be among the main contributing factors:
  • An economic system, where companies could largely do what they wanted and where profit maximization and competition were driving the economy into an unsustainable state. 
  • A system, in which over-consumption was encouraged, as it increased the main performance indicator “Gross Domestic Product per capita” (GDP per person). 
  • A system, in which non-sustainable business models were exported to developing countries in the context of “globalization”. 
  • A system, in which the maximization of profit and power got more attention than solving existential problems, particularly if this did not translate into highly profitable business models. 
  • A system, in which one could earn more money on wars and disasters than on avoiding them. 
  • A system, which was largely built on the exploitation of others and environment.

It would not have to be this way. For example, China has decided to introduce a measurement-based company score, which would reflect to what extent a company meets the expectations of the government. If the value would be too low, a company would simply be closed down. Perhaps, less drastic measures would be effective as well. Assume, for example, that companies would be judged, to what extent they contribute to achieving societal goals (not only economic, but also environmental, social, and cultural ones). Based on this, the one third best performing companies would get a large reduction in taxation, the next 33% quantile would benefit from a moderate reduction, and the remaining 33% would get no reduction in taxation. This would be a more liberal way of guiding economic activity towards satisfying the needs of humanity and the planet.

There is also a participatory, democratic approach. Specifically, I would like to argue for steering boards of companies and institutions that are composed not only of managers, but also of representatives of various groups that bring in views of people who are affected by their decisions. In other words, the steering boards should contain representatives of owners and shareholders, but also of workers, suppliers, customers, users or patients, and of local citizens as well. People representing environmental and ethical issues should be included, too. If every company would (have to) do this, products and services would fit consumer interests better, supply chains would be improved, and the environmental footprint reduced.

Would it really work? The answer is: Yes! The company Caterpillar, for example, has experimented with the above participatory approach [2]. In this way, it managed to increase not only customer satisfaction and the approval of the citizens, but also the company’s revenues.

The question is: Why is it working so well? In a sense, the answer is “collective intelligence”. By adding representatives of other affected groups, the overall business approach becomes smoother. Interfaces are created with other businesses and institutions, and with citizens and environment. The activities of different companies and institutions become more coordinated, integrated, and balanced. A similar approach, by the way, has been successfully applied for the self-control of traffic lights [3], which produces astonishing performance gains, if local traffic flow optimization is combined with a coordination between neighboring intersections.[4]

Bringing the needs of all beings into a sustainable equilibrium may be less difficult than one may think. To allow it to happen, one needs to give sufficient weight to the needs of others. In fact, game-theoretical studies have shown that giving a 40-50% weight to the utility of others will establish a high level of cooperation in many social dilemma situations, in which otherwise a “tragedy of the commons” would result. Such an approach can even dramatically increase the expected success or, as game theorists would say, the “average payoff” [5]. This is actually the reason why the principle “Love your neighbor as yourself” is so incredibly powerful.

The above principle could be the basis of a thriving, symbiotic information, innovation, production and service “ecosystem” or, as some people would say: of prosperity and peace. Additional success principles will be described in the following section.

Socio-Ecological Finance System (FIN4+)

Talking about ecosystems: have you ever wondered what makes them so surprisingly sustainable as compared to our own economy? After all, ecological systems are based on an almost perfect circular economy. There is basically no resource that is not being recycled and reused. Part of this is due to the modular, organic organization of nature. All elements are decomposable, and there is a shared genetic code with the same basic components.

Companies, in contrast, don’t favor such compatibility of their products, and they often do not pay attention to building easily decomposable and repairable products. Legal regulations to promote recycling and a circular economy have been frustratingly inefficient so far. It’s about time for an alternative approach: Empowerment instead of regulation! What would this require?

I think, we would need a multi-dimensional real-time coordination system. Why multi-dimensional? Because nature is not controlled by a one-dimensional quantity such as money. Instead, the self-organization of an ecosystem, or our body, is based on multiple feedback loops regulating the use and distribution of water, proteins, carbon, vitamins, and minerals.

In many cases, there are symbiotic relationships. For example, plants may exchange nutrients with one another. The situation for our own body is even more spectacular, because we are actually not an individual, but an ecosystem! In our gut, there are thousands of different kinds of bacteria. This is called the “microbiome”, and it even contains more cells than our body! The bacteria in it are responsible for the decomposition of the food we eat, i.e. the powering and regeneration of our body. In addition, however, they are also an important part of our immune system. All of this would not work, if there was not a symbiotic relationship and reasonable balance in the microbiome.

What could we learn from this? How to build a bio-inspired economy? I believe, we would need multiple incentive systems, not just one kind of money. Today’s economy is based on optimization and utilitarian thinking, while nature is based on evolution. Utilitarian thinking means that everything would be compared (or made comparable) with each other, e.g. measured in money. This also calls for a seamless convertibility of different kinds of currencies and values.

Optimization is based on a one-dimensional goal function that allows to apply “>” or “<” operations to determine which solution is better. However, a precondition for this is that the system of consideration must be mapped onto a one-dimensional function, which is often a gross over-simplification. As a consequence, one can only move up or down, while a society needs to be able to do more than profit maximization. For example, it wants to simultaneously improve education, health, and environmental conditions as well. This calls for a multi-dimensional control system.

In a complex non-linear system, whatever goal function we choose, we would often find one optimum solution. However, there are often multiple solutions that reach 95% of the maximum performance, and among these solutions, there will be often solutions that perform well also from the perspective of other goal functions. We are interested in these solutions with multiple high performance, which are in a sense eliminated by classical optimization.

Therefore, I propose to introduce multiple currencies, which are not seamlessly exchangeable against each other. These currencies would, in a sense, be administered through separate bank accounts. Each currency would be defined by a particular measurement procedure. In other words, a measurement would define a new kind of currency, which could be used to establish a new kind of incentive, or just an additional feedback effect.

The “Fin4” system we have developed does exactly this. [6] It combines Internet of Things and Blockchain technology in order to turn measurements into currencies, which can then be used to create feedback effects. Such feedback effects enable the control of complex systems, or even the design of self-organizing or self-regulating complex systems, as I have discussed them before. Note here that managing complex systems would typically require multiple feedback effects, not just one.

In this way, it would be possible, for example, to separately incentivize the reuse of different kinds of resources. One could separately account for the impacts of CO2, noise, and various environmental impacts, but also positive effects such as health and education. One could reward environmental-friendly production, socially responsible management, and cultural engagement. While today, those companies often grow the fastest that save money on the protection of environment and on working conditions, a socio-ecological finance system such as “Fin4” could promote profitable production that would also generate social, environmental, and cultural benefits for our society.

By the way, having multiple currencies would dramatically expand the space of possibilities. Say, we are faced with a win-lose situation, where one person would make a lot of profit, if the interaction took place, but the other person would suffer from a loss. Such an exploitative situation could be turned into a symbiotic win-win situation, if the first person would make a compensation payment. Indeed, a currency transfer would create a profitable situation for both.

Having multiple currencies, there would be a lot more situations in which such interactions between multiple parties, which today would be lossful for some, could be turned into a symbiotic, beneficial situation for all in the future.[7] Hence, a multi-currency system could act like a catalyst, creating new opportunities, where they did not exist before. In this way, our current economy, which is based on the exploitation of nature and people, could be turned into a system that is based on the creation of new opportunities for all. It could very well be the underlying principle for a new economy, characterized by more sustainability and new participatory opportunities. It could be the formula for future prosperity and peace. Why not give it a try?

In other countries, the value could be even higher: 
Around 100.000 Dollars for a quality year of life in industrialized countries is quite normal.

Thursday, 18 June 2020

DIGITAL DEMOCRACY How to make it work?

By Dirk Helbing (Draft Version 1)

Is democracy outdated, is it broken? Many people feel the current political system will not work much longer. Suddenly, we are faced with unsustainability, mass migration, terror, climate emergency, a financial system at the verge of collapse, and “Corona emergency”. Some have suggested it is time for a data-driven digital state, and China would lead the way. Eventually, however, people have realized that this might establish a global technological totalitarianism. They understand that a data-driven and AI-controlled society could easily end in a data dictatorship, where optimization will overrule more and more freedoms. So, how to prevent that the world would eventually be run like a digitally optimized “Animal Farm”? How to upgrade democracies with digital means? Here, I suggest to build participatory platforms that support collective intelligence, and to engage in open formats such as “City Olympics”. 

A digital “benevolent dictator”?

When the book “Limits to Growth” was published in the early 1970ies, the world started to worry about its future. In the 21st century, it was suggested that some of the planetary resources needed for survival would fall short, for example, oil or water. Moreover, all simulation scenarios indicated that the world would fail to get on a sustainable path, and the economy and world’s population would collapse. We would see sky-rocketing death rates as never before.

At this time, people started to change their behavior. They avoided plastic bags, had car-free Sundays, and established environmental movements. Politically, it should have been required that, whatever we do from now on, should reduce the overall consumption of resources every year. Then, however, industry demanded: “Put all the obstacles out of our way, and we will fix the problem.” Neoliberalism, globalism, and free trade were considered to be the solution.

Instead, however, all of this increased the global resource consumption further. The lack of sustainability of the industrialized word was exported to the entire world, and so the consumption of resources multiplied worldwide and even in industrialized states. The global competition of everyone against everyone had created a “race to the bottom”, a “tragedy of the commons”, and the outcome could be billions of early deaths.

So, what should we do? It appeared natural to measure the remaining resources in the world, where they were located, and who consumed them. It also seemed plausible to control this consumption. However, for this, it would be necessary to control individual behaviors. A considerable number of people found it justified to do this, because it was a matter of life and death. It seemed necessary to “save the planet”. Humans were seen as “enemies” of the environment that we needed to survive – an enemy of their own specimen, some people said. It appeared justified to control them.

So, mass surveillance made its way. The Big Data collected would then be fed into giant AI systems, which – some day in the future - would potentially be smarter than any human on this planet. Consequently, some argued, people would have to do what this superintelligence recommends or demands, as if it was a “digital God”.

Moreover, tools (such as Sentient World) were developed to simulate the entire world. In these simulations, everyone would be represented by a digital double. You may imagine it as a “black box” learning to behave like you. This is fed with a lot of surveillance data, which would, hence, allow to generate a “digital twin” behaving – more or less – like you...

The world simulator would simulate different scenarios. The best one for the planet would be implemented. For this, however, everyone would have to contribute to realization of the plan. Everyone would have to behave as suggested. We would be manipulated by personalized information (called “big nudging”, i.e. nudging based on Big Data – personal data gained through mass surveillance). If we would not follow the recommendations, i.e. “mess with the plan”, we would be punished by negative points in their citizen score (no matter whether this is a “credit score” as in China, a “customer lifetime value” as companies in the West use it, or some other “super-score” – a one-dimensional score created from a multitude of measurements). This score would determine our value for society, and it would determine our rights and opportunities.

According to its engineers, the superintelligent system would act like a “benevolent dictator”. Do you find this plausible so far? If yes, you are probably aligned with the way of thinking of many IT experts and decision makers back in 2015. Even though the above storyline sounds kind of plausible, I would like to ask you to spot the mistakes in it. Have you found some?

Here are a couple of them:

  1. If you want to optimize the world, you would need to choose a goal function. Unfortunately, we don’t know, what is the right goal function for the world. There is not even a science I know of, which would tell us – on scientific grounds – what goal function to choose. Should it be profit (GDP per capita)? Should it be sustainability (if yes, how to define it)? Should it be life expectancy? Should it be happiness? Or what else should it be? 
  2. In the past years, the economic players tried to maximize profit. This, however, has brought our planet to the brink of disaster – so much so that we are now talking about a “climate emergency”. Suppose we would now tell a superintelligent to maximize sustainability. Then, it could easily happen that the system would suggest to end the lives of many people – or if it was equipped with tools for this (as the Skynet system seems to be), then it might even put some people to death. 
  3. I actually doubt that optimization is the right approach, even though “optimization” sounds like a good thing. The reason is as follows: In order to optimize, one needs a one-dimensional goal function, otherwise one cannot decide what solution is better and which one is worse. (Such decisions need “>” and “<” operations.) Hence, the complexity of the system to be optimized needs to be projected on one dimension. In many cases, this will lead to over-simplifications. In any case, once you have decided for the goal, you would push all other goals into the background, and after some time of neglecting these goals, say, 50 years later, one of them will have become an even bigger problem to solve. Therefore, in our society, we cannot afford to focus on one goal and push back all other goals, in contrast to what a company might do. For a society to thrive, one needs to pursue various goals at the same time, and find a suitable balance between these goals. That, however, requires pluralism and diversity, not global centralized optimization. We will discuss in the next chapter, how this may be done. 
  4. Even if it was the right thing to maximize a particular goal function, one would need to rely on the outcome. However, algorithms (machine learning and others) do not always converge. They may imply biases and discrimination. They may also be sensitive to the data set, to the algorithm, or even the hardware used. In many cases, there will be classification errors and spurious correlations. So, Chris Anderson’s dream, according to which Big Data would just tell us what is true or false, and what had to be done, has NOT come true. Big Data has NOT made science obsolete. In the data deluge, where there is ever more “dark” data than ever before,[1] which one may never be able to analyze, science is needed to decide what data to look at and in what ways. Note that these problems do not go away with more data. 
  5. When there is no solution for the world’s existential problems within the current system (which, therefore, cannot be found by optimization), creativity and innovation is the right approach. That is, we need to think out of the box in order to expand the solution space and find solutions outside the current system. Note, however, that innovation always challenges established ways of doing things – it challenges the system. It may not happen, if people are punished for deviations from the grand plan of a superintelligent system. Such a system may even stabilize a system of which we know that it is not going to work (at least not for everyone). Hence, controlling people and manipulating their behavior may create an even bigger problem. It can make disasters (due to lack of sustainability) inevitable, where there might otherwise be solutions. (Such solutions are not contained in the data of the past, on which the super-intelligent system runs.) 
  6. Tragically, if we do not have one centralized system optimizing the world, but different companies trying to optimize it in parallel, with different goal functions, this is not making things better. The problem is that each optimization implies constraints – it reduces freedoms to reach the optimal solution. So, when many optimization processes are happening in parallel, a lot of freedoms will be gone. Your car insurance, your health insurance, your doctor, your dentist, your employer, your electricity provider, your sustainability guide… – all of them will have demands, and some of them will probably ask you for some contradictory actions. You will become “a slave of many masters”, so to say. Compared to this, it is easier to follow the demands of one master, as in the Chinese credit score system, but this is totalitarian in nature. It always claims to be right. It cannot be questioned (while in a system with competitive demands, one can say “but X demanded something else – please sort it out with X”).

Given the above problems, in the following I will demand systems that are based on empowerment and coordination rather than control and manipulation. I will propose approaches that promote mass innovation.

In the Corona crisis, the failure of the concept of superintelligence became obvious at least for experts. The Artificial Intelligence system was confronted with situations that were kind of new to it, and so it could not handle the problem and it was not of much help. In contrast, citizens managed to find ways through the crisis, based on solidarity and “collective intelligence”. It became clear that civil society was the force and resource that future societies would have to build on. But how?

The Concept of Digital Democracy

The question is, how can we upgrade democracy with digital means – in a way that is competitive with the Chinese system? Such an upgrade would have to be built on digitally unleashing creativity, on combinatorial innovation, and on better decision-making. The first and second might be promoted by participatory approaches, such as Open Innovation, as we will see, enabling people to do things by themselves that they could not do in the past. The second and third bring us to the subject of “collective intelligence”.

“Collective intelligence” is also often called “swarm intelligence”, which is an impressive phenomenon known from the animal world. Well-known examples are flocks of birds, fish swarms, bee hives or ant colonies. “The fable of the bees” published in 1714, suggests that the economy should work like a bee hive. Even though the queen bee does not give commands and even though the activities of the hive are self-organized in a distributed way, bees maintain a highly differentiated animal society, including different kinds of “jobs”. Ant colonies are impressive as well. Even though a single ant has a brain with 250.000 neurons only, the number of neurons in an ant colony could be as big as the number of neurons in a human brain. Nevertheless, ants run an entire society in a distributed way, again with several different kinds of “jobs”. Can we learn something from the way these social animals are organized?

When it comes to bees, it is known that they send out “scouts” to scan the surrounding for food sources. They fly into different directions, explore the environment, and return. Then, they communicate their findings by means of a “bee dance”. The average direction indicates the direction of the food source they found, and the excitedness of the dance indicates the amount of food. The bystanders will evaluate the dances of many bees and then decide for the food source to exploit. The “scouts” don’t have an interest to exaggerate, because the food returned will benefit the entire bee hive. If they would lie, it would harm the entire hive. Therefore, the bees have no incentives to trick their fellow bees. Most importantly, however, there are three stages of the process: 1. The “scouts” explore the food sources independently of each other. 2. Information is shared with others. 3. The information of several “scouts” is evaluated, compared and integrated. This is the basis of the collective decision taken by the swarm.

In a sense, one could say that democracies are built on the principle of “swarm intelligence” as well. Alternatively, one speaks of the “wisdom of crowds”. When one needs to solve a problem where nobody knows the exact answer, a collective of people may often outperform the judgment of experts. The “Netflix Challenge” is a famous example for this, but there are in fact many more examples. A study at the prestigious MIT (Massachussetts Institute of Technology) has clearly demonstrated the existence of social intelligence, if a group is diverse and communication is balanced. Publications on “collective intelligence” are abundant.

However, on a population level today’s democracies use the principle of “collective intelligence” only every few years (during elections), while we could benefit from it on an everyday basis. In parliament, the “collective intelligence” principle may be used on a more regular basis, but it is often overruled by coalition agreements and party discipline. In the end, all that remains is a “yes/no” decision in parliament, where the majority wins over the minority. In the worst case, this could end with a dictatorship of the majority over minorities, as it occurs in some populist systems. (By the way, if we had an AI system, which figures out our opinions based on mass surveillance and always does whatever the majority wants, we would end in a society of “digital populism”.) In such societies, minorities would be systematically marginalized, even though most functions of our society are based on minorities: intellectuals, inventors, entrepreneurs, politicians, judges, artists, etc. One can easily imagine that such a system might turn against the people on which societies depend.

A few months after we published our paper “Build Digital Democracy” in Nature, it was claimed that Brexit was the first major casualty of “digital democracy”. This is, of course, not true. That article was using the word “digital democracy” in a very different, misleading way. There, it meant something that some people call “Facebook democracy”. As many people realized after the Cambridge Analytical scandal, Facebook can be very manipulative. Algorithms determine which opinions will spread and which ideas will never get noticed. Some people would say, it is a propaganda and censorship tool, which is disguised as a platform for the “freedom of speech”. A similar thing might apply to other Social Media as well.

In recent years, many Social Media have been criticized for becoming platforms promoting flame wars and hate speech, misinformation and fake news. Hence, they are often presented as proofs for the “madness of crowds”. It is then typically concluded that one should not offer The People a stronger participation in political decision-making processes. However, this conclusion is short-sighted, as the Social Media of today are not designed to promote the “Wisdom of Crowds”. They are built on the principle of the “attention economy”. That is, those who get more attention will have more influence. No wonder discussions are getting ever more noisy, more fake, and more emotional. This is what maximizes attention. It is also no wonder that Social Media have become battlefields for our minds. Often enough, one gets the impression we are in the middle of an information warfare.

The “digital democracy” I have in mind is of a very different nature. It is not about one fraction of people winning over another fraction of people. It is about learning to combine the best ideas of many minds which each other. The goal is to find better solutions – solutions that work for many, solutions that empower us. But how to do this? This goes in several steps:

  1. Information search and search for solutions.
  2. Information exchange to give the “big picture”.
  3. Integration of solution approaches
  4. Voting.

Some people call this process “Massive Open Online Deliberation” (MOODs). Let me now explain the different steps in more detail.

First, it is important that various individuals will search for relevant information on a problem and for possible solution approaches. These are analogous to the “scouts” mentioned before. In this step, it is crucial that the scouts pursue diverse approaches. It is also important that these individuals will not be manipulated, because this could reduce the solution space explored, which might prevent finding the best possible solution. Consequently, during the first step, the information platforms used should not make any recommendations, and the scouts should not communicate with each other. Otherwise, the “wisdom of crowds” effect would be undermined.

Second, the information found needs to be shared with others. In this stage, it is not important to “win against others”. Rather, the purpose of this step is to add to a “bigger picture”. When a complex problem needs to be solved, it will require the combination of many different perspectives in order to get a more or less complete picture. The information collected in the first step should add to this “big picture”. Therefore, the information of the various contributing individuals does not need to be complete. It is important, however, that the partial views will complement each other.

In the second step, the various bits of information should be well structured and put into a logical order. What follows from what? Which argument is adding further details to a particular perspective, which argument establishes a new perspective? Such different perspectives could be due to different interest groups, but not necessarily so. (Just think of a beautiful cathedral, which cannot be captured by a single photograph, but only by a collection of photographs from different perspectives.)

In other words, the arguments should be mapped out on a virtual table. For this, one might use tools such as Argument Graph. In the end, everyone should be able see all relevant arguments in a well-structured way, such that different perspectives become visible.

In the third step, well-versed representatives of the different perspectives should be invited to a round table – either a virtual or real one. In this step, the goal again is not to win against the others. Rather, the representatives of the different perspectives would have the task to work out integrated solution approaches that take on board many perspectives. If the round table does not succeed with representatives of the different perspectives, it is worth trying to work with people who are to represent perspectives that are not their own. As a result of step three, one should have several integrated solutions that satisfy various perspectives. In many cases, of course, it will be difficult to find a solution that satisfies all the different perspectives.

Hence, in step four, a decision needs to be taken for one of the integrated solutions. This would happen by voting, where typically those people would be the voters, who are concerned by the solution (i.e. people with “skin in the game”).

However, rather than deciding by majority vote, one may consider to use different voting rules. Quadratic voting, for example, allows every voter to give a certain number of points to each solution, representing the pain the solution would produce to the respective voter. The solution with the smallest number of points would be chosen, corresponding to the “minimization of pain”. A similar procedure could be applied for the “maximization of gain”. It is clear that our society urgently needs to collect experiences with various voting rules in order to see which one works best in what kind of situation.

Note that, even in step four, the overall goal is not to “win against others”, but to find a solution that works for everyone, or at least for many. The more people benefit from a solution, the greater would be the chance that society benefits as well. Of course, it is unlikely that everyone can benefit from every decision taken, but it is expected that the resulting decisions would be better in the sense that more people would benefit than when majority voting is applied. It would, moreover, be desirable to ensure that it is not always the same group of people who benefit from the decisions made, but that benefits are distributed over different interest groups in a fair way.

All in all, the above four-step process is expected to deliver solutions that will benefit more people. When averaged over many decisions and fairness considerations are taken on board, it might be even reached that everyone benefits (some from one set of decisions, others from another set). Hence, the resulting system is expected to be superior to one that is based on classical majority decisions or dictatorial decisions.

Note that the above approach is kind of similar to the way the Swiss basic democracy works, which is geared towards consensual decision-making and is using rotation principles to ensure that everyone can raise their most important issues. Also, The People can interfere with the process at any time by means of referenda. Digital technology would now allow us to implement these democratic principles in a digital platform. Such a platform would realize “democracy by design”. It could increase the efficiency of democratic processes. However, it would also be possible to support this successful system to other countries – and to companies and institutions as well. Finally, it might be possible to scale up the system in order to solve some global problems as well. Hence, you can see that “digital democracy” is not primarily about electronic voting (which many people find very concerning, because it may create possibilities to manipulate democratic elections electronically). Digital democracy is, in fact, about unleashing “collective intelligence”.

Participatory Resilience

When the world is in trouble, what we would want to have is a “resilient system”. This means, whatever disaster, crisis, shock or surprise our system experiences, it will be able to flexibly adapt and recover, and in the best case even get to a better system performance afterwards (as the principle of “anti-fragility” suggests). In other words, we need special system designs and operations for such flexibility.

The good news is that we know some of the principles that can make systems more resilient. Among them are

  1. redundancy,
  2. decentralization and modular design,
  3. local autonomy,
  4. solidarity,
  5. diversity and pluralism,
  6. distributed control,
  7. participatory approaches,
  8. local digital assistance.

Redundancy ensures that, if one system element is broken, there is still a backup system that one can rely on.

A modular system design makes sure that, if one part of the system gets in trouble, other parts can be decoupled and saved, particularly if the modules can operate autonomously locally (for some time at least). Behind this concept is the idea of creating a firewall, which will be able to keep a problem from spreading, as it would happen in a densely connected system, known as “domino effect” or “cascading effect”. Note that autonomy, or sovereignty, as some people like to call it, typically also comes with sustainability. Interestingly, “autonomy” is also one of the most important factors that matter for the happiness of people. Another one is “having good relationships with others”. This means people like to show empathy, responsibility, and solidarity, particularly in situations when others need help.

Diversity makes sure that, if one mechanism or approach fails, there are still others, which may work under the adverse conditions faced.

Participatory approaches allow people to take action locally, while first aid units are still not there. After a natural disaster, it often takes 72 hours until public help is fully operational. However, most people die within 3 days after a disaster strikes, such that public help often comes late.

Digital assistance can keep up communication by creating an ad-hoc network and empower people to help themselves, coordinate, and support each other.

Interestingly, these resilience principles question the usefulness of centralized information and control systems to master future disasters, existential threats and crises. Centralized systems tend to roll out one solution (the “best” one) everywhere, which undermines diversity. They also violate the modular design principle. And they often fail, when help is needed most. For example, when disasters strike, the regular communication network and other critical infrastructures will often break down.

Given the recommended decentralization, cities (and the regions around them!) are suitable organizational units for a resilient world. In fact, if issues are regulated locally rather than globally, one will have more degrees of freedom to find a fitting solution. It is easy to imagine that it largely restricts our freedom of decision-making and our capacity to act, if people, who live hundreds or thousands of kilometers away, are trying to interfere with our decisions. Rather than focusing on regulation, which restricts possibilities, one should focus on responsible empowerment, i.e. empowerment that cares about the impact on others and on nature. So, how to do this? How can we activate the full potential of cities and the regions around them? “Good question, next question”, some would say…

Beyond Smart Cities[2]

How can we combine smart cities with collective intelligence? How can we empower cities and citizens? How can we turn cities and regions into innovation motors? How can cities help to make the world more sustainable and resilient? These are some of the questions discussed in the following.

The dream of building “good cities” is old1. Since the 20th century, there have been many attempts to create, develop or shape cities, sometimes even from scratch. Examples range from gigantic modernistic approaches known from Brasilia and Chandigarh, to more radical, but theoretical concepts aimed at changing society and engineering social order, such as Ecotopia or the Venus project. Recent developments are driven by the planetary trend towards urbanization, mass migration, and the need for sustainability. New visions of a global urban future were developed, such as “Sustainable”, “Eco”, or “Resilient” Cities, typically based on a top-down approach to the design of urban habitats.

Cities created from scratch heavily depend on massive private investments, for example, Songdo in South Korea or Lavasa in India. Despite ambitious goals and many technological innovations, their long-term success cannot be taken for granted, as they are often conceived by urban planners without the participation of people who later live in these cities. Such projects are typically implemented without much feedback from citizens. This makes it difficult to meet their needs. In fact, some of these cities have ended as “ghost cities”.

In the wake of the digital revolution, data-driven approaches promised to overcome these problems. “Smart cities”, “smart nations,” and even a “smarter planet” were proposed. Various big IT companies decided to invest huge amounts of money into platforms designed to run the “cities of the future”. Fueled by the upcoming Internet of Things, cities would be covered with plenty of sensors to automate them and thereby turn them into a technology-driven “paradise.” So far, however, these expectations have not been met.2 Why?

Geoffrey West points out that cities cannot be run like companies.3 A company is oriented at maximizing profit, i.e. a single quantity, while a city must balance a lot of different goals and interests. This tends to make companies efficient, but vulnerable to mistakes. Cities are often less efficient, but more resilient. Driven by diverse interests, cities naturally do not put all eggs in one basket. This is why cities typically live longer than businesses, kingdoms, empires, and nation states.4

Importantly, cities are not just giant supply chains. They are also not huge entertainment parks, in which citizens consume premanufactured experiences. Instead, they are places of experimentation, learning, social interaction, creativity, innovation, and participation. Cities are places, in which diverse talents and perspectives come together, and collective intelligence emerges. Quality of life results, when many kinds of people can pursue their interests and unfold their talents while these activities inspire and catalyse each other. In other words, cities partly self-organize, based on a co-evolutionary dynamics.5,6

While rapid urbanization comes with many problems, such as the overuse of resources, climate change and inequality,5 cities become ever more important, as they are motors of innovation.3,5 Presently, more than half of humanity lives in cities, and the urban population is expected to increase to 68% by 2050. To meet the social, economic, and ecological challenges, innovation must be further accelerated, as the UN Agenda 2030 Sustainable Development Goals stress.

Given the digital revolution and the sustainability challenges, we now have to re-invent the way cities and human settlements are built and operated, and how cities can contribute to the solutions of humanity’s present and future existential problems. In the past, we had primarily two ways of addressing such issues:

(1) nation-states (and their organization in the United Nations) and

(2) global corporations.

Both have not managed to deliver the necessary solutions on time, e.g. to problems such as climate change and lack of sustainability. Therefore, we propose a third way of addressing global problems: through networks of smarter cities, which enhance the

  • classical, technology-driven smart city concept (smart cities 1.0)
  • by collective intelligence (smart cities 2.0),
  • by co-creation (smart cities 3.0), and
  • by design for values (namely, constitutional and cultural ones) (smart cities 4.0).7

So, how to unleash the urban innovation engine to the benefit of citizens, societies, and the world?

City Olympics

“City Olympics” or “City Challenges” or “City Cups” could boost innovation on the level of cities and regions and across cities, involving all stakeholders. They would be national, international or even global competitions to find innovative solutions to important challenges. Competitive disciplines could, for example, be

  • to reduce climate change,
  • to increase energy efficiency,
  • to reduce the consumption of resources,
  • to improve sustainability,
  • to enhance resilience,
  • to promote fairness, solidarity and peace, and
  • to develop organizational frameworks that empower cities and citizens to be innovative, take collective action, and make effective contributions to achieving local and global goals.

Increasing the role of cities and regions as drivers of innovation would allow innovative solutions and initiatives to be taken in a bottom-up way. All stakeholders and interested circles would be encouraged to contribute to City Challenges. Politicians would mobilize the society and call for everyone’s engagement. Scientists and engineers would invent new solutions. Of course, citizens would also be invited to participate, e.g. through Citizen Science. Media would continuously feature the various projects, the efforts, and progress made. Companies would try to sell better products and services, thereby promoting practical implementations.

Overall, this effort would create a positive, playful and forward-looking spirit and collective action, which could largely promote the transformation towards a sustainable digital society. In the short time available (remember that the UN wants to accomplish the sustainability goals by around 2030), the ecological transformation of our society can only succeed if the majority of our society is taken on board, and if everyone can participate and benefit.

The resulting solutions would be evaluated and “best of” lists created for the different disciplines of the City Challenge. Accordingly, prizes would be handed out to the winners. However, as the creation of these solutions would be publicly funded, they would be a public good, i.e. Open Source (for example, under a Creative Commons license). This will allow that any city can take and implement any of the solutions developed. In other words, any city can potentially benefit from all the innovations made by other cities. Moreover, big business, small and medium-size enterprises, spin-off companies, scientific institutions, NGOs, and citizen initiatives could take any of these solutions, combine them with each other and develop them further. This would create a lively, participatory information and innovation ecosystem, where everyone with good ideas and solutions can add something to a public city platform benefiting cities, citizens, and society.

We are actually not that far from such solutions. Berlin, for example, has recently organized a “Make City” festival. Suppose, such festivals would take place in many cities in a synchronized way, and that there would be more reporting and more participation. Further assume that the solutions would be evaluated and shared, and that there was an alternation of competitive and cooperative phases, as suggested above. Then, we could truly identify the best ideas in the world, and combine them with each other, thereby promoting the emergence of a global collective intelligence.

The proposed approach combines some of the greatest success principles we know of:

  • competition (capitalism),
  • collaboration (social systems),
  • collective intelligence (democracies),
  • experimentation and selection of superior solutions (evolution, meritocratic cultures), and
  • intelligent design (using AI and other suitable methods).

The proposed approach also pushes for a new paradigm of globalisation, which one may call “glocalisation”. It would be based on

  • thinking global,
  • acting local (and diverse),
  • experimentation,
  • learning from each other, and
  • helping each other.

The approach would be scalable. It would be more diverse and less vulnerable to disruptions than today’s attempted global governance approaches. It would, furthermore, promote innovation and collective intelligence, while being compatible with privacy, freedom, participation, democracy, and a high quality of life. If cities would open up and engage in co-creation and sharing, they would quickly become more innovative and efficient. This brings us to the next subject.

Open Everything, Making, and Citizen Science

In recent years, we have seen the spread of new ways of addressing problems – both local and global. We are seeing new solutions to problems that politics and capitalism could not fix. These solutions are often based on the engagement of citizens and on contributions by the civil society. Such contributions are various and often useful and effective, particularly in many locations, whose problems have not been noticed and addressed by business and politics, because they are too particular and too remote.

These new solutions have often been based on open approaches, ranging from Open Access over Open Data and Open Source to Open Innovation. Such approaches have been able to catalyze massive public engagement. Think of the thousands of hackathons in the past years. In the “We vs. Virus Hackathon”, for example, 40.000 people have been mobilized to work on solutions of all kinds. However, public institutions still need to learn, how to integrate the power of collective action into public policies.

This concerns crowd-sourced approaches of all kinds: crowd sourcing, crowd-based sensing, and crowd funding, for example. Citizen science has been another remarkable recent development, which has been able to address complex problems that machine learning could not tackle alone. In the meantime, citizen science and machine learning are combined, thereby nicely illustrating human-machine symbiosis and augmented intelligence.

Another pillar of this movement are Fablabs and Maker Spaces as well as Gov Labs (government labs). Fablabs and Maker Spaces provide technology and machines such as 3D printers, which allow ordinary citizens to generate their own tools and products. Such capacities can be extremely valuable during crises and disasters, particularly if they have autonomous energy supply (e.g. based on solar power). Fablabs can produce tools needed for survival, when supply chains are interrupted or if delivery would take too long. The United States was even so excited about the perspective that it wanted to become “A Nation of Makers”.

In a sense, City Olympics would build on all these exciting recent developments, and take them to the next level. Over a period of several months, such approaches would be used to craft innovative solutions that could benefit cities, regions, or even the entire world. I firmly believe the success principles of the information age will be co-* principles such as

  • co-learning,
  • co-creation,
  • combinatorial innovation,
  • co-ordination,
  • co-operation,
  • co-evolution, and
  • collective intelligence.

This holds, in particular, as the use of digital goods and services is not as competitive and exclusive as it applies to most material resources. Sharing information can have a benefit for many, while a material good can typically be used only by one person at a time. Why don’t we use this particular benefit of the information age, when the existential pressure of unsustainable economies is so big that a lot of people are in a danger of dying early? For example, why don’t we have a public data set of the world’s resources and materials flows (i.e. logistics), such that everyone could make an effort to improve supply chains and promote a circular economy? We have access to all sorts of stock market data, but we don’t have access to the data needed to organize our survival. This appears pretty irresponsible to me!

Last but not least, I must stress that living in a thriving society, in an age of peace and prosperity, is not just about having access to material resources. There are also a lot of “immaterial things” that matter, for example, social capital such as trust, reputation, solidarity, etc. I would, therefore, like to promote the idea of creating a “Culturepedia” or, as some people would say, running a “cultural genome project”. The idea is as follows: Every culture is made up of all sorts of traditions and success principles, many of which have been invented to cope with particular problems. We should collect and document these specific practices and success principles, how they work, and what they are good for – namely, in a special Wikipedia.

By making these mechanisms explicit and by describing also the side effects and interaction effects (e.g. with solution approaches of other cultures), it would be possible to use them more consciously. Such a Culturepedia could certainly help us to solve current problems, by applying and combining the best solutions and success principles for the local setting at hand.

A Culturepedia would also enable us to build “social guides”, i.e. personal digital assistants that make other cultures better understandable and help us to deal with them (like a “cultural adapter”). Altogether, social and cultural diversity can be a great asset. A similar observation has been made for biological diversity, which we have learned to protect. So, why fight against other cultures? We should rather learn to make better use of the social and cultural diversity the world is offering us!

Open Source Urbanism

Cities are the places where the engagement of citizens can have the greatest impact. The most livable cities manage to create opportunities to unfold the talents of many different people and cultures and to catalyse fruitful interactions among them. Opportunities for participation and co-creation are key for success.

Alexandros Washburn8 said about the design process of New York City that he could not control anything, but influence everything; successful urban design requires the right combination of top-down and bottom-up involvement. It is therefore essential that urban development involves all stakeholders including citizens. Vauban, a quarter of the city of Freiburg, Germany, is a good example for this. The city council encouraged the citizens to actively participate in land-use planning and city budgeting.

Sustainability and new energy-saving technologies were a primary focus of the planning strategy. In two new districts (Rieselfeld and Vauban), self-built and community architecture was created, which led to urban environments conceived and designed by future inhabitants according to their own vision. Now, Freiburg counts as benchmark city. Its concepts of sustainable urban planning and community participation are widely used by other cities all over the world.

So far, most urban planning professionals do not pay much attention to a long-term involvement of citizens in urban development. With the ubiquity of information and communication technologies, our cities are getting smarter, but not automatically more inclusive, just, and democratic.

The application of open source principles to the co-creation of urban environments could overcome these problems by supporting active participation, technological pluralism and diversity. Thereby, it would also avoid technological lock-ins and dead-ends. The open source movement, which started with opening software (see the example of GitHub) now promotes the co-production of open content (Wikipedia, OpenStreetMap), open hardware (3D-printer RepRap), and even open architecture (WikiHouse). Open Source Urbanism would be the next logical step of this open source trend.

In 2011, Saskia Sassen wrote: “I see in Open Source a DNA that resonates strongly with how people make the city theirs or urbanize what might be an individual initiative. And yet, it stays so far away from the city. I think that it will require making. We need to push this urbanizing of technologies to strengthen horizontal practices and initiatives.”4

Yochai Benkler argues that open source projects indicate the beginning of a social, technological, organizational and economic transformation of the society towards a new mode of production.9 This new mode, called commons-based peer production, is a collective activity of volunteers, usually coordinated via the Internet, producing free-to-use knowledge. Open Source Urbanism, as a new way of urban development, would therefore build on concepts such as Open Innovation and Commons-Based Peer Production.

In fact, citizens are keen to be not just consumers, but co-producers of their urban habitats. Some of them already experiment with open-sourcing urban design by collecting, improving, and sharing their Do-It-Yourself design blueprints and manuals on the Internet. The maker movement as well promotes community-driven design, prototyping, and fabrication to solve local and global challenges by improving lives in local communities around the planet.

Such examples are presently still too dispersed, and, therefore, not yet able to shift cities effectively towards more inclusive urban development on a global scale. For this, one would need a socio-technical platform to consolidate and strengthen the nascent movement. Such a platform could promote the exchange of best practices and solutions to frequently occurring problems. The results would be a digital commons designed to satisfy the citizens’ needs10.

All in all, Open Source Urbanism could take our cities and societies to a new level. In particular, the approach could help to create better living conditions in developing countries, refugee camps, and regions suffering from war and disaster. It could, however, also help to improve the quality of living in local city quarters around the world.

References (to be complemented)

1. Sennett, R. Building and Dwelling: Ethics for the City. (Farrar, Straus and Giroux, 2018).

2. Hugel, S. & Hoare, T. Disrupting cities through technology, Wilton Park. (2016).

3. West, G. Scale: The Universal Laws of Growth, Innovation, Sustainability, and the Pace of Life in Organisms, Cities, Economies, and Companies. (Penguin, 2017).

4. Sassen, S. Open Source Urbanism. Domus (2011). Available at: (Accessed: 16th November 2016)

5. Bettencourt, L. M. A. & West, G. A unified theory of urban living. Nature 467, 912–913 (2010).

6. Batty, M. Cities and complexity: understanding cities with cellular automata, agent-based models, and fractals. (The MIT press, 2007).

7. Barber, B. R. If mayors ruled the world: Dysfunctional nations, rising cities. (Yale University Press, 2013).

8. Washburn, A. The nature of urban design: A New York perspective on resilience. (Island Press, 2013).

9. Benkler, Y. Freedom in the Commons: Towards a Political Economy of Information. Duke Law J. 52, 1245–1276 (2003).

10. Schrijver, L. in Handbook of Ethics, Values, and Technological Design: Sources, Theory, Values and Application Domains (eds. van den Hoven, J., Vermaas, P. E. & van de Poel, I.) 589–611 (Springer Netherlands, 2015). doi:10.1007/978-94-007-6970-0_22

[1] the data volume generated doubles in less than a year, i.e. in one year we are producing more data than in all the years before in human history

[2] This and the following sections contain materials from the joint manuscript “Open Source Urbanism: Beyond Smart Cities” that Sergei Zhilin and I have written some time ago, see