Observation and RFC: Practical Obstacles to Focus On

Previously, we kicked around the idea that it might be efficient to focus first on practical "How To?" challenges that need near-term solutions, and got some comments on this question:

What are the top one or two practical challenges you now face in-world that might be solved by some element of governance, contract enforcement or dispute resolution? The assumption would be that these solutions would be self-organized as social mechanisms, and would NOT require LL intervention in the form of new coding or enforcement.

We received some ideas, which I've paraphrased slightly and squashed a few together, and am listing here in no particular order. If I misstated your suggestion, or you have another, this is the place to say so.

* How to best moderate threads in a forum?

* How to bind apprentices and subcontractors to keeping the trade secrets of their Masters and Prime Contractors?

* How to raise capital needed to realize a new business or land development through sale of minority ownership stakes without giving up all control?

* How to provide for financial accounting and audits of accounts for those capital ventures?

* How to manage community land use in a sim without owning it all?

* How to make agreements enforceable in world?

* How to create or recognize in-world institutions that represent the rule of law and can act with authority?

* How to provide effective means of dispute resolution?

RFC:
What practical challenges would you add to this list?
How would you refine or expand any of the above?

Probably one of the most important issues in SL is that of business and the tools that will enable the economy to grow. For instance, you talk about minority interest in a firm for raising venture capital. In order to do that, we have to start thinking about tools like contracts and accounting in order to structure agreements and provide information. We obviously do not have the same societal structures in SL that we have in RL to provide for these needs.

Jon, thanks for your thoughts on needed tools for contracts and accounting.

I'm unclear what you mean re tools for contracts.
Are you thinking of tools to document agreements?
Or tools to enforce them?

I'm unclear what you are looking for when you say tools for accounting.
Something in addition to bookkeeping skills that many SL residents have?

Can you expand a bit?

Of course.... if you have a minority interest or passive stock holder, you do not have access to all of the management data. So it is very hard to know whether your investment is performing and whether the managers are doing their job well. A system of accounting and outside auditing would provide reliable information to either group. For instance, look at the tired example of Ginko, nobody knows how they are making enough income to return the ridiculous interest that they pay. Is it from legitimate source of income, or is it all a ponzi scheme? I don't know because I can't examine an income statement and a balance sheet much less an audited income statement and balance sheet. And so I don't invest in Ginko because of the high amount of risk and uncertainty I'm incurring

As for contracts, I see the lack of enforceable agreements curtailing any type of venture capital activity or any significant credit transactions without them as an enforceable agreement provides a stick in the event of a bad debtor in the case of a credit transaction.

As for the creation of either entity, I don't know. That's a much harder problem.

Here's one more for the list, Frank. A professional in SL should be able to take on apprentices and subcontractors in a partnership arrangement to complete large projects. By partnership I mean profit-splitting and asset-sharing rather than a hierarchical employer/employee arrangement.

The idea is:
1. to work with rather than against people's desire to be free of bosses in their second life.
2. to leverage the value of assets such as textures and standardized building sub-assemblies accumulated by an experienced professional who does not have time to do all the work on all jobs being offered.

Right now there's a huge risk for the senior partner who is most likely the one who brings in the work, and is most likely the one who has an inventory full of high quality standardized components from past projects (one reason why more jobs are on offer). If the senior partner gives access to components and textures in order to collaborate on a job, what prevents the junior partner from leaving the partnership, and walking away with these assets free of charge?

Ferren Xia and I discussed this a while back, and he had some suggestions, but they still needed a legal framework to protect the senior partner. So I continued as before, exchanging free stuff now and then with a few trusted friends. It's more like, 'look what I made' than a process of leveraging the value in those assets.

I'd like to think that in SL good behavior in this type of partnership would be enforced by the non legal means outlined in Order without Law, the first book on your reading list. However, I've seen blatant copiers continue in business despite the victim's entreaties to LL and the community. This seems to be a case where SL would benefit from having a body of laws available for study and adoption. By adoption I mean an individual chooses to be bound by a set of one or more laws from which standard contract language is derived, and a particular contract drawn up, agreed to and notarized, for example by Zarf's notary. I do not mean LL should surprise us one day by obliging us to agree to a revised TOS that makes those laws binding on all residents.

For enforcement all I can think of is the SL equivalent of posting a bond. Totally inadequate for my case. If somebody walks away with the assets I have in my inventory they can build crap with my name on it as creator.

Traxx, an excellent example. How to effectively bind an apprentice to the customs of apprenticeship, as her cost of obtaining invaluable training and experience under the guidance of a Master?

It challenges those who say "all we need is trust networks" to answer: "If you are so new that you have no experience, no trust established, how are you to get an apprenticeship for a skilled craft and establish trust? " A variation on "you need experience to get a job, and you need a job to get experience."

I have some ideas, but don't want to divert this issue-spotting thread.

As we spot juicy practical issues like this, why not have the person most interested in pursuing it start a separate thread focused on that narrow topic, then encourage Observers to post ideas and relevant experiences with possible SL solutions as replies? Those ideas can then be examined (politely and respectfully), assumptions challenged and further experiences presented. In the end, a hypothetical solution may emerge to be tested.

So, for example, you might start a new thread titled ""Challenge: Binding Apprentices to Keep Trade Secrets?" and in the opening message restate the challenge as you see it, requesting comments in replies. Sound like a plan?

Sounds good to me. I wasn't sure if this forum would end up being a database such as a structured repository for case studies or contract templates, so adding my thoughts in the form of replies made sense.

One caveat: experience with the Thinkers group leads me to believe that the group forums have a minute readership compared to the non group forums. And Thinkers is a very popular group that has existed in SL for over a year now. Even when discussion hosts mention the Thinkers group forum in-world we seldom get many posts. Presumably people want to make their thoughts accessible to the widest audience when they post.

Recently we've had ongoing Law Society discussions in the Poli-Sci forum, even by posters who are aware that this group forum is available. I'd recommend working with rather than against this tendancy. The original notion of the Law Society was a study and research group, so the group can be expected to produce written documents of some sort. This group forum looks like a good place to post the work-in-progress that leads to those documents. The Poli-Sci forum would continue to be the forum of choice for unstructured debate and ramblings on Law Society topics.

Jonathan Armistice wrote:



This actually brings up another aspect of law or custom that we haven't identified before: professional practices. These are accumulations of procedures, standards and knowledge, such as GAAP - Generally Accepted Accounting Principles - that form the foundation for professional disciplines. Any accountant will know how thoroughly such knowledge is codified, and how closely tied (viz. Sarbanes Oxley) such practices are to the law. Much the same type of structure exists in engineering or medicine.

In SL, there are not yet specific professional associations and accreditation. To a large extent, this is due to the lack of a legal framework that would confer benefits on the practicioners to belong to such an organization.