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A new approach to social welfare: The Community Wellbeing DAO

Updated: Jul 16, 2023

In May 2021 I was invited to write a guest piece for economic research organisation BERL for their Value and Values series. This article is reproduced below:

Sometimes it's really hard to think outside the square

The square is our current economic system and the organisational power structures (both free market and state) that we, as a society have gradually built up. The technological revolution (and in New Zealand colonisation) has, in just a few generations, caused a massive power imbalance between the three pillars of society: the free market, state and community. Many believe that the migration of power and control away from our local communities to the free market and state is the root cause of many of the problems that society is facing today from inequality through to the environmental catastrophe.

The huge amount of power and money that is currently in the hands of a few people on the west coast of America is one of the inevitable results of a capitalist system that now has the technological means to achieve global scale disintermediation and centralisation. To think that these mega organisations with deep power and control hierarchies are somehow “values driven” is somewhat farcical. It reminds me of Google's previous infamous employee code of conduct “Don’t be Evil” which ended up being parodied “ *except if it’s profitable”. Which of course sparks a wider debate: can any “for profit” organisation that separates the workers and users from the shareholders ever be genuinely “values” driven when their goal is (in fact they have a legal mandate) to create “value” (profit) for shareholders. Aren’t the “values” (posted on the walls of head office and the website) mostly used as a tool to help bring cohesion, efficiency and ultimately profit the privileged few at the top? Can there ever be genuine “values” in such an organisation?

So how can we possibly start to correct this imbalance and transition towards a society that is made up of organisations where human values such as wellbeing and resilience as their key measures of success instead of share price?

I believe that there is another approach to building genuine values based entities that have the potential to scale and make systemic change.

I believe for the first time in human history we not only have the technology and the knowledge to achieve this but we also have the motivation: our very existence as a species is at stake. There have been a number of key events in my career/life that have caused me to rethink the paradigm I was in.

The first was getting ill. In my mid 20’s I came down with what I assumed was flu but turned out to be Chronic Fatigue Syndrome that plagued me for the next 10 years of my life. That journey of ill health took me in many different directions but ultimately was a journey of learning and discovery. Many years into the illness was the discovery that human wellbeing is so much more than having basic needs met and having a physically healthy “body”. I began to appreciate the importance of the interconnectedness of the mind and body and the importance of so many other factors such as having purpose, hope, empowerment, autonomy, being in nature and having strong human relationships.

The second time I had to rethink many of my prior assumptions was when I came across a book called Reinventing Organisations. For many years I had been running a software company. We thought we were pretty radical at the time (e.g. embracing Agile, Open Source and new shiny technologies) but reflecting back on it now, we were very much operating in a traditional business paradigm (i.e. shareholder agreements, KPIs, employment contracts, power/control hierarchies etc). We, like most other businesses then and now, were essentially a hierarchically designed machine constantly trying to become more efficient. As that machine became bigger, I, as the leader, found myself not only moving further away from the parts of the business I most enjoyed but I also found myself dealing with harder and harder problems and that stress was impacting other parts of my life.

I also began to question the “why” behind it all.

Was the purpose of the company really something that had meaning? Reading “Reinventing Organisations” (I recommend this presentation as an introduction) completely changed my frame of reference. I realised that there was an alternative path, a path radically different from the one I had been taking for the previous 15 years and how we are all taught in the business world. There was a different way to create organisations that were not only truly values driven but didn’t have a power/control hierarchy, were scalable, could more easily support human wellbeing and could have genuine “organisational agility” better suited to a world or rapid change.

The third paradigm changing event in my life occurred around the same time. In 2014 I went to a conference in Queenstown called Bitcoin South where many of the international Bitcoin experts (there weren’t many at that time) converged for a three day event. I went knowing nothing about this space but after day two I realised that the decentralised technology architecture, blockchain, that underpinned Bitcoin gave us a way to build new types of system. Systems where the data and business rules are encoded in transparent, immutable and unstoppable code that no single party controls. It gave us the ability to create “self-sovereign” systems where we, as individuals, can take back control of our data, identity and rights. From that point on, decentralisation became a big part of my life.

What was even more fascinating was how this blockchain and smart contract technology started the new discipline now known as “Tokenomics” (a kind of intersection of governance and gamification). And from this emerged a new type of organisation never seen before: the Decentralised Autonomous Organisation or DAO. This is my favorite definition of a DAO:

"an open organisation that aims to most efficiently achieve a set of purpose-driven goals through the use of independent agents driven by incentive mechanisms."

Suddenly the line between an organisation, a community and an economy started to blur as did the line between a shareholder, a user or a community member. DAO tokens not only allowed permissionless, democratised ownership of DAOs but also allowed other things such as usage rights, governance and reputation tracking.

The final paradigm shifting concept I came across that brought everything together was the work done by Elinor Ostrom. Elinor was the first woman to receive the Nobel Prize in Economics. She spent many years studying “the commons” - those things that we all own together, that are neither privately owned, nor managed by the government on our behalf. Some are large scale and abstract, such as language, the air we breath, our culture. Others are local, more tangible and localised: for example a forest, a river or a community garden. The tragedy of the commons is the situation in a shared-resource system where individual users or groups, acting independently according to their own self-interest, behave contrary to the common good of all users by depleting or spoiling the shared resource through their collective action. Our current western dominated political system is sceptical of the commons, it generally takes the view that if nobody takes responsibility for something, it will inevitably be abused. So either it needs to be in private hands, or run by public institutions.

Elinor's years of research basically tried to answer a simple question: without top down regulation are there conditions under which the tragedy of the commons can be avoided. And fortunately for humanity there are. She defined the “8 Principles for Managing a Commons”. At the heart of these principles is the idea of localism. I love her quote

“There is no reason to believe that bureaucrats and politicians, no matter how well meaning, are better at solving problems than the people on the spot, who have the strongest incentive to get the solution right.”

Her work aligns with our indiginous cultures' worldview that local cooperation is what defines us evolutionarily as a species and that humanity and nature are inextricably interconnected. Veronika Meduna previously discussed these concepts in relation to Mātauranga Māori in her article on The Dig: Kaitiakitanga: Seeing Nature as your Elder.

So imagine if you could create a DAO that represented a local community - let’s say the size of East Porirua. A DAO that looked more like a local economic operating system (with its own community currency) than an organisation. Imagine if you could consider community wellbeing as a “commons” and embed Ostrom's eight principles into the design of the system. Could you create an entity optimised for community wellbeing and local values instead of profit/power for the people in control and national GDP?

Imagine also if that system could be designed to fundamentally change the relationship between the (many would argue) fragmented, bureaucratic, inefficient and disempowering welfare/charity system that has evolved to help the people in our society who are unable or unwilling to benefit from the capitalist system. Could a system be designed to give more voice, more control, more power to the “people on the spot”? Could that system also make it really easy for the people and organisations with resources and motivation to make a difference, to support and amplify locally created wellbeing initiatives?

Could you create an entity that was truly “values” driven and could that model be quickly replicated in other communities?

We at the The Wellbeing Protocol think you can, and we are going to give it a go. We believe New Zealand, in a post Covid world within our straining local and global economic systems, is a perfect time and place to make this happen. We also know that we don’t have all the answers, have to start small and it will be a journey of co-creation with the community towards our vision.

A key milestone in our journey is the release our our participatory grantmaking tool. Contact us if you would like a demo.


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