Exchange and Transfer

This vocabulary subset looks at exchanges of resources from an independent or neutral viewpoint (not the viewpoint of one of the Agents in the exchange). For example, from one Agent's viewpoint, the exchange may be a Purchase, from the other Agent's viewpoint, it might be a Sale. From the neutral viewpoint, it is an exchange of resources, with usually at least two flows of resources, one from each direction. So for example, the seller might give some goods to the buyer, and the buyer might give some money to the seller. Or in a barter exchange, one agent might give the other some books, and the other agent might compensate with some cookies.

This differs from (for example) the Good Relations Conceptual Model, which we like and want to intertrade with. But Good Relations assumes Compensation in the form of money; the compensation itself is not a separate promise; and the actual flow events are not part of the model. (That's not a criticism. Good Relations has different goals, and a more minimal model makes sense for them.)

In ValueFlows, we want to track not only the offers and promises, but also the actual flows of resources in networks, in all directions. And we support exchanges that don't involve money as well as those that do.

We also support non-reciprocal one-way transfers, such as in a gift economy. An exchange implies at least two transfers with reciprocity.

Transfers

We want to emphasize that although ownership is the primary right transferred in the current economic system (along with renting or leasing), we seek to focus on transfers not necessarily governed by the legal context of property ownership. This puts the focus on economic coordination rather than ownership, although the vocabulary supports all existing paradigms too.

For example, perhaps some agent has many apple trees, and plans on pressing apple cider. Another agent has an apple press and agrees to exchange use of the press (a resource) for a portion of the apple cider. The use of the press involves some rights (to use the press for some period of time) and responsibilities (to not run it beyond its capacity and to clean it up before returning it), and the portion of apple cider is transferred in exchange.

Or in a library, a book can be checked out for a period of time. The agent who checks it out is responsible for caring for it and returning it on time, and can read it, or use it however they want.

Or let's say that a community has farmland and equipment held in common. The community transfers that to some farmers to use and take care of. The community also transfers seeds every year to the farmers, enough to grow the food the community needs. During the year, the harvests are distributed (transferred) to the community members for their consumption. In reciprocity, the community provides for other needs of the farmers.

Transfer vs Process

Transfers and Processes both structure "value flows", but they are conceptually and functionally different.

  • Processes create or change or transport an economic resource, whether producing goods or services, recycling, even if they create "waste" as a by-product (that can hopefully be used somewhere else).
  • Transfers do not create or change or transport an economic resource, they just put the rights and responsibilities for a resource into a different agent's hands so that the resource can be used or consumed or transfered again.

This is an important distinction as we seek to change the world, because transfer and exchange cannot move us beyond the current unsustainable and unjust system. We the people need to manage our production and creation (and waste) for human and ecological needs rather than profit.

That said, the structure in value flows is similar, allowing transfers and processes to participate seamlessly in value flows:

transfer-process

Process events as implied transfers

Process related economic events can also imply a transfer, and can thus be used in an exchange.

For example, most timebanks exchange work for credits. The work event can be part of a process that produces something for some other agent. It is also part of an exchange in the timebank. The transfer of credits on the other hand, is not part of any process that creates or transports something, it is merely the recording of one account being decremented and one account being credited.

Exchange of work also happens in open value networks, where people record work events as input to many processes, and then when income is received for outputs of that work, people receive part of that income, in exchange for their work.

Another example is when a service is created as an output of a process, where that service delivery event can be considered an implied transfer, and exchanged for some other resource.

Agreements

Various kinds of agreements between agents often define the rights and responsibilities for economic resources that are transferred. Agreements can reflect any economic paradigm, so make it possible for the Exchange and Transfer vocabulary to work equally well for capitalist businesses, transitional economic interactions, and next economy interactions.

Agreements can be of any kind and scope, from an order to a value equation to a larger blanket agreement.

ValueFlows does not define the detailed internal vocabulary for agreements, but defines optional references to an agreement when it could be useful.

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