Where Does Knowledge Come From? Funding Informational Commons – San Francisco 2025

[Music] Hello everybody. Thanks for being here. So my name is Barry Thru. Uh I am the executive director of Grey Area. Um we're sort of a 21st century countercultural institution that does um been around about 17 years now in San Francisco.

Um and we do antidisciplinary creative projects that uh sort of reflect on technologies impact of society. while uh centering human experience um and consciousness around those things. Um and I'm delighted to be here with Matt who I'll let explain Radical Exchange. So my name is Matt Puit. Um Radical Exchange Foundation is a nonprofit.

We started about six years ago um that does institutional experimentation and looks for different ways of setting up democratic systems, property systems and um uh ways of managing information and uh my uh I have a background in uh antitrust law with so the kind of theme of my whole career has been thinking about power concentration um and what to do about it and how it interacts with society. Um, so that's uh that's what brings us here. Yeah. And so we met actually at uh DW Webb Camp a couple of years ago. Shout out to D Web Camp.

Um, everybody fund it. Um, and both of our organizations are very interested in taking arts and culture as um, fascinating use cases for talking about new economic systems um, and how to sort of socialize some of these technologies. uh with a number of prototypes. And as we talked um you know particularly in this uh current moment where all the public funding for everything that makes it worth living in a society is being cut. um it makes it even more important to sort of really understand how these mechanisms that we're designing um uh are useful and can best support the sorts of organizations that need this need this funding.

And we're really talking, you know, it's funding is a part of it, but we're really in a a more um a deeper way talking about where knowledge production comes from and how it's supported. Um and that starts with where does innovation and knowledge production come from? um it's often framed as sort of in compet you know it's the sort of great American story right this competition results in different sorts of cultural information production and what we're here to ask today is is that actually true um by looking at some of these fundamental paradigms for how this funding occurs and suggesting some prototype projects that we're all working on that sort of um uh show some alternative ways of overcoming the um I would call the um uh differences in those paradigms. Yeah. And I think the what we what we want to suggest is that the story about what brings knowledge and information commons into the world is um is just complicated.

It's a little bit more complicated than the uh than the usual um narrative that that we have in our minds. And I think uh an important way into this is to kind of go go back to basics, go back to sort of early days of of uh information economics uh and recall some of the ideas that uh have shaped how many of us think about this. So the uh the gentleman on the right is the economist Ken Arrow. Um he uh he put forth a very interesting idea in 1962 which is basically that uh in order to incentivize information production uh you have to put barriers on information. This is things like patents and and so on.

Um and you know one of the upshots of that is that uh one of the sort of drivers of his thinking is the idea that if you need to um uh reveal an idea in order to sell it in order to make money with it then uh free markets or competitive markets cannot price it. So I think this is an interesting uh this is a very deep and interesting insight and I the one way I think about it is it's kind of like the inverse of the um of the idea that you may be familiar with if you think about Bitcoin. So one of the one of these ideas in Bitcoin is that like because it has no inherent value it can have any price. And the thing about information is like the opposite of that because it can have any value. It can have enormous value for all of society.

It can be infinitely copied and have enormous value for society. But precisely because of that, it actually cannot have any price. Markets just don't know what to do with information. So when we try to bring information to markets, we have to have barriers in some way. Um so this is like a deep economics puzzle.

All right. Now uh another important idea is uh the comes from John Kenneth Greath on the right uh who suggested that basically perfectly competitive markets don't result in innovation. Instead his idea of in of innovation was information comes from the sort of successive reorganization of monopoly like forces in society. So the canonical example of this is that uh the you know industrial companies come up you know achieve a sort of monopoly and then a sort of counterveilling force organizes on the other side which is which is labor you know or the another sort of version of a counterveilling force could be government regulation and this kind of a thing and uh Greth's idea was was that was that this is integral to understanding where information comes from this sort of successive reorganizations of um of power. Um so this uh this suggests a problem in sort of culture and uh governance.

All right. So um you can get the clicker. Uh so I think that uh uh oh thanks. I can advance your slides from back here. You just say next slide.

It works. It just takes a second and if I don't drop it on the stage. Uh so um the idea that Barry and I have been have been talking about is that uh you can sort of when we ask like whereformational goods come from like what what sort of pulls them into the world what different what forces sort of pull new knowledge into the world. Uh one of them is uh monopoly legal barriers and consolidation. This is kind of you know comes relates to the sort of arrow idea.

uh the you know whe when uh when firms have uh massive monopoly power they get a lot of money and they can reinvest it in innovation you can have Bell Labs things like that you can have massive you know government public uh uh investment in uh in in innovation and and knowledge that's like another version of sort of pouring monopoly power into into uh into knowledge um uh another sort of force is like sort of objectification of knowledge So in other words, if we can if we can take our knowledge and we can figure out how to embody it in a product, a discrete movable product that can be brought to a market. This is one way of kind of getting information to it. It's sort of like an implicit barrier around the the fruits of the information that allows you to sort of bring that to market. And this of course this is what art does with object uh with concepts embodies them in some things to have some market dynamics around it. And it's also what uh you know NFTTS are as a funding mechanism in general as a way to package things into some sort of object and take uh that otherwise would not be subject to these kind of like uh market affordances and make it possible.

Yeah. And and and markets markets depend on this. Markets are like very market this is what markets do well. They deal they deal with the situation well when people have discrete things that they're trading or they're exchanging for money. And when you have when when the value is embodied in discrete things like markets kind of work.

Um uh and the other sort of way of bringing knowledge into the world is through like ethos. So uh you know the the idea of uh the sort of open culture right which is which is which we're all you know which we all know and love. Like it turns out that if people uh sort of get this and understand that the uh that the information that they produce and the knowledge they create can have massive good for the world. People give it away. People are um uh people are actually intrinsically motivated to contribute to the uh the knowledge commons and this has been an very important force in pulling more knowledge and information into the world.

Um but there are very interesting and sort of like almost like unstable interactions between these different forces. So um and what one way of thinking about this is is this. It's like suppose that we're motivated by the open uh ethos. Uh we're we're we're contributing knowledge to the world um in you know in an open source way or something like that. So right now we're we're we're not participating in a market.

we're creating lots of good for the world. um but we might not be getting any uh any money or any funding back for ourel right so people in this situation have you know become incentivized to try to move to one of the other sort of phases one of the other sort of modes so if you're if you're producing open knowledge then you start thinking well can I can I embody this in something can I bring is there some way that I can take what I'm doing and like bring it to a market so that I can get some funding right um so there's this sort of idea of objectification and then you get into more of a market situation But then in a perfectly competitive market situation, now nobody's making any money anymore. Now the surplus is gone, right? And people want to get out of that situation too. So when people get into a perfect market situation, people start thinking, how can I defend my how can I build my moat?

How can I defend my position in my market? How can I make this more look more like a monopoly? Then you get into more uh monopoly uh type situations. And then when you get into monopoly type situations, then the rest of society becomes incentivized to form counter uh counter monopolies. So the idea the idea is that that we want to sort of put out there is that there's this sort of flux between these things.

We're always sort of moving between these different uh modes. And when we think about the different like ideologies that are out there in in in the world that we all travel in there, you know, there's this sort of uh there's a sort of I don't know crypto associated sort of like ideas that are associated with markets and biology and things like that which are sort of and sort of inspired by idea that the we you know this that we can go a long way with objectification. We can go a long way with forming cryptographic barriers and sort of objectifying the fruits of our knowledge and bringing them to markets. And if we do this enough, we can even, you know, prevent ourselves from falling into the monopoly situation. We can have counter force to states and things like that.

Um there are also uh you know plenty of forces out there which we're all familiar with which are trying to use the monopolithing which are trying to you know strengthen state power to to uh um uh you know to to to deal with the the some of the big problems that we we find ourselves in. Um, Radical Exchange has has always been really interested in coming up with new hybrids or sort of like moving between these different modes and blending these different modes of of of bringing information into the world in u in new ways. Sure. Um, and us as well. I mean the other point I would make on sort of the dynamics between this now that's of course on everyone's mind is like what's going on with AI how it uh one way you know one way to protect some of these economics are things like patents um another way could be modeling a bunch of information and controlling access to it um and there's some value ad there so I don't you know this is not a sort of good or bad situation but it is one mechanism to kind of use these dynamics from commons to some sort of monopoly access to information is to like embody this stuff in a controlled model.

Um, and so the blend between these things, we both with other partners have been working on a series of sort of prototype projects to to address this um in a number of ways that we'll just go over very briefly in our time left. Um, and if anyone wants to talk more about them, we can uh after the show. Um the first is this sort of data trust or uh data agent model. Um start with that. Yeah.

So well and just to follow one more point to follow from the last slide is I think it's I think it's really helpful to think of these different things not so much as like teams that people are on but as just different you know phases that society keeps passing through. So you know if you if you have a monopoly for too long you're going to get a problem. If you have sort of a a a a dominant market kind of situation for too long, you're going to get a problem and people are going to start thinking about how you know how to move society forward into a new modality. So the uh the idea of like of of data bargaining is something that I have uh been working on for years and years and years. We're doing a pilot right now with um uh with OpenMind uh which is a open source software company that builds uh federated learning tools.

And what we're doing is we're thinking about how to build uh we're thinking about how to build tools and systems that would enable things like trade associations to build uh federated learning networks between their members for example um and enable them to sort of serve as a single bargaining agent for uh for the value of that uh of their information in the market. See, for example, you could imagine a network of uh local news organizations uh around the around the country. uh they would support themselves better if instead of making individual deals with uh AI tool builders, they were able to consolidate their the value of everything they produce and uh negotiate through a single agent um for the value of the information production that's going on in local news networks. Um uh the value that that might have to the AI marketplace. Um, and for us, we're dealing with this a little bit through data trusts.

Um, there's a Filecoin Foundation for the decentralized web um, project that we're running called transfer data trust that deals uh, artists can be sort of self-s sovereign owners of their work and identity and create collectives. And I think that this forming of collectives in the system is one way to sort of do the balance between this sort of monopolistic and market and open source dynamics. Um, another way is infrastructure for these sovereign identity layers. um briefly, you know, for cultural organizations that have to reach an audience, this fragmenting of social media uh into federated different sorts of federated systems has created kind of a problem, an organizational load of trying to react to how to reach audiences. Um one way a missing infrastructural layer for that is something like an identity layer or a single sign on layer where um we'll wrap up very quickly um where organizations can create sort of loose affiliations.

I mean what uh this draws off some of the old web concepts from the early web if you know that. Um but instead of a single organization having to enter into sort of monopoly dynamics, if you have affiliations of organizations that have this infrastructure layer, they can they can um address that a little more. And the third sort of project that we're working on um together also with our friends at Serpentine Arts Technologies in London is this uh partial common ownership model um which is kind of a tokenized model that separates the it separates the um tradable sort of art market market dynamics portion uh from a collective stewardship uh portion um along with a tax um that uh increases the efficacy of the market dynamics around these sorts of art and cultural objects as a as well as supporting a community. Yeah, that's great. And and just very quickly, another thing that Barry and I are have been uh have been working on which we'd love to talk to anybody about is um we we're starting to think about the idea of uh nonprofit consolidation.

So if you think if you think about the role that nonprofits play in the world, nonprofits understand that the interaction with the nonprofits understand they're creating informationational value that's very valuable to the world and that it's kind of immeasurable and it's very and it doesn't really work with markets and if you have mark if you introduce too many market incentives you distort what you're producing for the world. People who lead nonprofits understand this. The problem is that um uh nonprofits there are there's no profit. There's no profit. That's right.

And and f first of all and second of all, uh we we end up fragmented. There are all these forces that sort of fragment nonprofits in in the world for example, it's easy to raise money by like spinning up a tiny new project, right? Everybody finds that very exciting. Funders love that. Uh it's harder to raise money for ongoing durable institutions.

Uh that's a fragmenting force. Another fragmenting force is that nonprofits don't do mergers and acquisitions. Why don't they do mergers and acquisitions? Frankly, it's because those of us who lead nonprofits enjoy doing it and we don't get a payout for merging, right? So, this is an this is an interesting uh thing.

And so by, you know, by kind of, and this is a good example of how sort of tending towards some sort of consolidation, something that some kind of power acrruel that looks a little bit more monopolistic between nonprofits, we could potentially make nonprofits better able to do their work, better able to um hold their own in a um you know, incentive driven, money driven world. Thank you. [Music]