22. Lorxus Favors: An Experiment in Self-Backed Giftlike Macroeconomics

It’s been almost exactly seven years since I spent the first Favor - a placeholder copper disk hand-marked with letterform stamps - on laptop repairs, thanks to SN, over six years since the chilly December night when I completed the first investment cast to forge the first silver Favor coins, and roughly five years since I wrote up the draft explanation of the Favor economy that still lives at lorx.us/favor . I think it’s well past time to provide a more succinct explanation, as well as to talk a little bit about my process, what’s gone well, what’s gone badly, and my future plans for the Favor economy. In a future post I’ll discuss the nanoscale reserve banking aspect more, as well as giving a perspective on a strange kind of sculpture I haven’t much shared, and some case studies of Favor use.

I’ll start with an explanation of what a Favor coin is, what they represent, and how best to use them. A Favor coin is a small coin as pictured above, made out of a special kind of sterling silver that tarnishes more slowly. It’s roughly an inch across, masses about 6 grams, has a large square hole in the center, and bears a design in common with all other Favor coins - a value design on the obverse and a QR code on the reverse. They represent a claim on something permanently scarce: the elevator pitch for what they represent is that in the common sentiment that “I owe you one”, they are the ones that you literally owe; the simplest concrete version of what that means is that it represents a claim to a day of my personal time - my effort, attention, skilled labor, good will, and so on. In practice, this is still slightly too facile and too strict; for obvious reasons I don’t keep exacting account of how much time I spend with people I like towards purposes important to them, so that instead in usual use it represents the ability to claim a day’s worth of my time and effort specifically when that time and effort are relatively scarce, or to ask me to cancel a prior plan at need on some specific day. Note that this is a day’s worth of my effort, and not necessarily any given eight hours of work: depending on intensity, suitability, and timing, it could reasonably end up being cashed in for anywhere from an hour to twenty hours of my time - in the former case, some brief and high-stakes task, and in the latter case, something more like an hour of math tutoring every week for a few months. In sum, a Favor coin acknowledges some major debt of gratitude that I owe to someone which I want to be sure not to simply let fade away, and gives a fairly clear benchmark value for that gratitude; the first kind of wealth that Favors are backed by are my own scarce time and skillful effort.

As for how best to use them, the important thing is to use them at all. Be willing to accept them from others and not just me, as is my explicit intent. They aren’t jewelry: keep them moving if at all possible, and if you can’t, redeem them or sell them back to me so that I can move them along instead. The whole point of the project is to try to coordinate massively multiparty trades that would never otherwise take place, so the velocity of a Favor is of foremost importance; to date there have been 68 Favors put into circulation, enabling perhaps some 200 trades, but this is far fewer than I had hoped! Make bigger and stranger asks of your friends; use a Favor boldly as a tool that permits the otherwise impossible, not least because I’ve spent meaningful thought on how best to make the mechanism design robust.

On that note, I naturally want for people who might end up with these but who might not think themselves best served by the experiment to have an escape hatch. This is the second kind of wealth that Favors are backed by - 1/1000 of my own personal savings, whatever that might be, plus the melt value of the coin when treated as ~7 grams of pure silver. The silver itself, which as I’ll mention later is not the primary point as a store of value, nevertheless acts as a final last-ditch store of value should all else fail, though I claim that if all else has in fact failed, we probably have bigger problems to deal with.

For some slightly more esoteric aspects of Favors, I should mention both the part about legible affordances for gift economies and the part about phenomenological binding to coinness. A key aspect of the project is to be an experiment in what happens when you take some existing informal gift economy - like the casual modes of illegible exchange common to overlapping social networks - and append (for the benefit of well-liked acquaintances!) a simple affordance that adds some amount of legibility and permanency, some amount of backing, and a fixed unit of account and exchange, in a way that looks more like a market economy’s emphasis on velocity of money and slightly more careful tracking of exchanges and debts. The goal here is complex: to unlock additional trades that might never otherwise take place, to asynchronously coordinate multiparty trades as counterweighted by cycles of Favor exchanges, and to increase overall net liquidity of social exchanges; in sum, to more closely connect people already acquainted with each other and to enrich all involved in hard-to-measure ways.

Another key aspect of the project is the strong design language patterned after that of the existing coinage of nation-states. The thought here was to dodge a failure mode of other similar projects I’ve heard of, where the cheapness of the material - printer paper, say - led to a sort of psychological devaluation and lack of respect. I knew I’d need for people to treat them as actual semi-serious coinage, and that meant getting people to read them as coins - to get them to tightly phenomenologically bind the objects to the reference class of “official coinage”. I spent a while looking at dimensions of common coins that felt especially resonant when in initial design phases; similarly my choice of silver for a material, which despite being much less expensive than you might expect retains its cultural cachet as a clear second only to gold as an obvious material to make something like money out of - especially a special form of sterling silver! Likewise the design joke inherent to the form: as far as I know, no other coin has both reeded edges and square holes in the middle, aspects of coin design from very different monetary traditions and with very different intended purposes: reeded edges from Western traditions to detect illicit filing away of precious metals, and square holes from East Asian traditions to permit turning on a lathe. Neither of these are directly relevant to me, though the reeded edges are pleasant to touch and the squares are convenient for threading on a necklace - again, the main point is to get people to read them intuitively as some kind of unfamiliar coinage, which in my experience I’ve thankfully achieved. I’ve heard people understand them as anything from “anime money” to “kinda like the John Wick coins” to “weird solarpunk future tokens”. Regrettably, the QR code has put people in mind of cryptocurrency, which I’ve been only too happy to correct them on. Likewise the ornateness of the design, and the use of numbers and multilinguistic text - the aim is to get people to understand these objects as definitively coins, and not washers or scrap or jewelry.

Now for some drawbacks. Many people haven’t particularly understood the idea, rounding it off to monetizing my time, to excessively scrutinizingly tracking the balance of value in a friendship, or to some variety of weird securities fraud. As the above hopefully makes clear, the project is none of these. What’s more, many people I know have found the coins themselves delightful enough to want to keep around as trinkets, rather than actually making use of them; in principle that’d be fine but in practice it just amounts to giant amounts of deadweight on the economy that threatens some future liquidity crisis. In the same vein but less prosaically, it turns out that running your own reserve bank, without most of the affordances or measures of a properly sovereign economy, by hand… is hard, actually? Even trying to run a loose money policy to drive higher velocity of Favors means having to run many more investment casts. As a minor drawback, good investment casting are themselves pretty hard to come by, and having my pseudocurrency partially pegged to the value of a precious metal means that I have logistics difficulties when the price of silver rises - for me, it’s not an investment, but a crafting material!

Lastly, what are my plans for the future of the Favor economy? Mostly, to remain in approximately steady state for the foreseeable future; perhaps after a decade has passed I’ll look at winding the experiment down. I’ve drawn up plans for smaller change - a smaller half-Favor in silver, a tenth-Favor in brass, and a twelfth-Favor in bronze, given that a full day of time is often too large to reasonably trade around, especially for the intended purpose of intra-social group trades and asks. In the meantime, I’ve already made my business cards be sixtieth-Favors, exchangeable for eight minutes’ worth of my time and effort, but only saleable if properly authenticated with MD5 hash. Apart from that, who knows what the future brings? The Favor economy is ultimately a hobbyist experiment in alternative macroeconomics; a vision of a possible relatively pleasant future, where the scarcest thing around is a friend’s time and skilled effort. I can only keep hoping that others take up the call and instantiate more of that future, just as I once hoped they would.

 

 

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