In “Radical Markets”, Eric Posner and Glen Weyl propose a system of universal, permanent second-price “Vickrey Auctions” of land as a mechanism for price discovery on the utility of property and the taxation of the ongoing ownership of that value with a “Harberger Tax” as the means of funding a just, redistributive, state. They call this the “Vickrey Commons”.
Critics of the Vickrey Commons proposal tend to focus on the fact that everywhere is always for sale to the highest bidder rather than the fact that the accompanying tax is intended to ensure socially productive use of property and to securely fund social welfare. From a cypherpunk or cryptocurrency point of view however, the intrusion of the state into property relations is inherently unjust and distortive of social relations. We will return to the redistributive element of the Vickrey Commons later, but for the moment it is its capacity for driving price discovery and productive use that I wish to focus on.
Vickrey Auctions are often used by states to privatise radio frequencies in the electromagnetic spectrum. Extending this to the visible spectrum, to colour, would be the stuff of satire. But below the state level we do see the inefficient allocation and exploitation of colour and other aesthetic properties in the artworld. We can tackle this using the intelligence of markets and simulated property rights on the blockchain.
Let us first make individual colours, shapes, line and surface qualities and other aesthetic properties representable as non-fungible tokens on the blockchain. These can then be sold. The right to use those properties can then be sold by the owners as fungible tokens.
Compositions of these tokens can then be represented in turn by a secondary layer of non-fungible tokens and usage rights for those expressed by their own higher layer of non-fungible tokens.
This process can be repeated until concrete instances of the expression of asthetic properties are expressed by composing non-fungible tokens from different layers into a non-fungible token that can be treated as unique or, alternatively, editioned using a final layer of fungible tokens.
If we use the Ethereum blockchain for this, the system can be represented as a stack of ERC-721, ERC-1633, ERC-20, and ERC-998 smart contracts.
In the absence of rent or taxes, the owners of non-fungible aesthetic properties can make money by selling those tokens or by releasing and/or re-purchasing fungible tokens that represent them. The optimal strategies for this are outside the scope of this essay, but do involve reacting to demand at different levels for fundamental and derived/composed properties in a timely manner.
Returning to the redistributive aspect of the Vickrey Commons, we can (pre-)sell the fundamental aesthetic properties to one or more foundations that exist to profit from them in order to redisttibute those profits to deserving artistic and/or social causes. It is possible to imagine various ways of structuring those foundations as smart contracts or their payment(s) as domain-specific tokens, although introducing a Tokenized Aesthetic Vickrey Commons currency coin risks the introduction of a central bank-like entity into the system.
Where the foundations’ revenue must go to the authors of works using those properties, this is possible to enforce simply on-chain although avoiding the sybil problem and other issues with on-chain redistribution is much less simple. Where we wish to enforce more complex relations between the work and the foundation we will need aesthetic comparison games, which can be completed onchain but are much more expensive than a simple token check. Where the foundations’ missions are more arbitrary, controls begin to look more like human organization than enforcement through code.
It is not possible to exclude duplicate token contracts on a given blockchain without support for doing so at the protocol level, and in the general case it is impossible across blockchains without protocol support for a cross-chain proof-of-precedence protocol. It is even easier to simply not use these tokens. Why, then would anyone use them?
Anchoring a singular source of these properties through first-mover and network effects may be sufficient to make it authoritative for anyone who wishes to use them. The use of these tokens is then a means of establishing price and authenticity, which if we squint hard is to say it is a means to establish value.
Further objections to this translate neatly into objections to the artworld and schemes to reform or replace it.