Reputation rating system

[MacFall]

(Yes, this has been cross-posted by me on a buttload of forums. I'm personally interested in the responses of everyone who sees this.)

Most people who are familiar with libertarian legal theory are aware of the idea of replacing a person's government-declared "legal status" with some form of private reputation rating system, similar to today's credit rating system. This would do away with all sorts of distinctions, including "felon", "citizen", "minor", and others. It is only concerned with whether a person is capable of engaging in peaceful, voluntary and productive association with others, or not (and to what extent in some cases).

I am in favor of the strategy of "building the new society within the shell of the old", so I see no reason why we shouldn't start providing such services now. This is my own imagining of what such a system would look like. Of course, since we're talking about a free market in reputation ratings, there would be different systems, although eventually a standard would be reached. That standard would then be applied by many competing companies.

This is just a few ideas of what I think would work, and what I intend to start in my own community, in conjunction with some Agorist projects with which I intend to become involved. In particular, I am starting a barter registry which I hope will become the basis of counter-economic trade in my area.

Most of this is self-explanatory, but I have a few specific points. First, there ought to be a means of appealing one's status to a third party. I would generally support one appeal in any case where a person's rating would be lowered, but provide two in cases where the result could be a demotion to red or black status. Second, I intentionally made blue the largest category, since I think that is a good default range for people who aren't thugs.

Generally I think demotions would be made as part of a decision by an arbitor, in addition to whatever restitution is determined (or at least, they would recommend a demotion of a certain amount to the rating agencies). Promotions would happen slowly over time, by recommendation from another person of a higher rating, through periodic reviews, or by appeal.





GOLD (Special Status)

A special recognition for excellence in promoting civil order, especially in the resolution of major disputes and/or the prevention of harm against other persons and their property. Must have a "blue" or "silver" status to qualify.

SILVER (81-100 Reputation Score)

Indicates exemplary trustworthiness and politeness in all forms of association, and has no recent history of aggressive or destructive tendencies. Promotes good service and innovation in business practices. An asset to society.

BLUE (51-80 Reputation Score)

No recent history of antisocial tendencies, trustworthy in business practices. A "good neighbor".

GREEN (31-50 Reputation Score)

Baseline "safe". Not a risk to civil order, but has not demonstrated noteworthy positive traits. Exercise basic caution in association.

BROWN (11-30 Reputation Score)

Some history of antisocial tendencies, but is not necessarily a threat. Investigate before forming contracts. May be in a rehabilitation program.

RED (01-10 Reputation Score)

Has demonstrated a tendency toward aggressive and/or destructive action. Cannot be trusted. Rehabilitation possible, but difficult. A liability.

WHITE (No status/never rated)

This person's reputation may be in dispute. May also be a new customer, or a juvenile. No obvious signs of antisocial tendencies. Exercise basic caution in association.

BLACK (0 Reputation Score - Outlaw status)

Do not associate! Regard this person as an imminent threat. Do not assist in any way if possible. Persons who protect or aid such individuals may be subject to severe sanctions. May be a violent sociopath, a serial criminal, or a government agent.

[rabidfurby]

The web of trust model used in PGP would work well for something like this.

When you open an account at the First Bank of Agorism, they'd publish their "reputation" of you. For simplicity, say it's just a number from 1 to 10 that's their opinion of how trustworthy you are. 1 is "we checked that he has a pulse" and 10 is "he's been our customer for 60 years". Of course, this rating can be as complex as you want - the ratings for "pays bills late" and "molests children" would be unrelated, but it's simpler to think of it here as a single number (and there's no reason why all reputation ratings would be publicly accessible, either).

All ratings would be crytographically signed and timestamped so that it can be verified who it actually came from. If anyone wants to know whether they can trust you, they look at your reputation scores, verify the signatures, and determine if they trust you, based on who else trusts you, and how much they trust those people. This is completely decentralized and self-policing - an outlaw wouldn't have any positive ratings by any credible organization, and an organization that issued ratings for people who turned out to be untrustworthy would itself lose trust.

Something like this at a much smaller scale is done millions of times a day: credit card transactions. You swipe your card, the info is sent to Visa (or whoever), and they tell the merchant "I know this guy, he's pretty legit". The merchant hands you the crap you bought, with little more than their trust in Visa and Visa's trust in you to reassure them.

[Bill Brasky]

So, because I'd refuse to participate, I'd be a white, but since refusal is considered anti-social, which I am, I'd be a red, which would piss me off in a really fuckin bad way, and I'd end up being a black.  Probably all in a course of five minutes.  

How about you just stay the fuck outta my business with your color coded crap, because if I see or hear one mention of colored bullshit, the price automatically doubles.  

I've seen this mentioned a whole bunch of times, from DRO ratings to real life credit ratings.  The solution is cash.  No pay, no play.  You want credit, go get it somewhere else.  You could have a stellar rating, you're still paying cash or verified 3rd party credit.  You could have a black rating, and hand me a bona-fide credit card from a third party who wires me verified payment, makes no difference to me.  

And since I know a good portion of this evaluation of people comes from a desire to determine who is a suitable tenant to rent property from you, theres more to it than credit.  Don't rent junk and take your time accepting applications.  Be creative with the terms of the rental agreement regarding return of deposit and lease breakage, so that it penalizes bad tenancy and rewards long tenancy.  Collect an extra fifty bucks per month in the first year, drop the fifty in the second year, which encourages longer stays, and return the collected 600 at the end of the second year with the provision that the place is kept in nice shape.  

But ratings systems overall are a poor indicator of anything.  If I was that interested in anybodys background, I'd just have their actual background investigated.  Because you could get a total nutjob with a "gold" background (not mentioning any names that rhyme with nutjob) or some really decent folks with no background whatsoever who just prefer not to be a part of the contemporary society.  And you could also get people who are a victim of identity theft, just like you do now, who have a rating so bad you'd need a HAZMAT suit to touch, and didn't do a damn thing to deserve it except become a victim - and that shit takes forever to fix.  People are known to exploit those good ratings of others for their own benefit in criminal ways, and as we're all beginning to see, sometimes they're more trouble than they're worth.  

[MacFall]

but since refusal is considered anti-social

No it's not; you just want to start shit

[voodoo]

but since refusal is considered anti-social

No it's not; you just want to start shit

No, Braskey's right.  If someone came to him and asked for a discount because he was a white and Braskey said, "yeah, your discount is pay twice what I was asking or go away empty handed," he'd probably get rated down.  The thing is, all of those actions are OK.

Back OT: I don't know why rating systems would standardize.  Certainly some systems would dominate in a particular market, but continuous rating entrepreneurship would be healthy.  A big bitch with current credit rating companies is their unresponsiveness to the people they rate; competition would change that.  It would also tease out the "Gold Nutjob" (Brock doesn't rhyme with nutjob, BTW).

As for arbitration, if you own the marketplace, you may decide that every contract must stipulate an arbitrator by name.  If A offers something for sale stipulating arbiter B, he's kicking a couple of bucks B's way as a retainer.  As a buyer, I may not prefer B, but agree to the contract, knowing that C (the arbiter I'm kicking a couple of bucks to) will act as my advocate both in front of B and on subsequent appeals.  Appeals are made to the arbiter B and C agree on, or the arbiter their arbitrators agree on.  B then becomes the seller's arbitrator.

As an arbitrator, I would likely charge a percentage of the contract as the retainer.  Once I gained a good reputation, I would charge a flat fee up to some contract value and then percentage past that, basically ceding the piddly crap to new or marginal arbitrators.

The top-dollar arbitrators would be members of the Bar and able to advocate for you in government courts.

[Bill Brasky]

No, I'm really not starting shit.

Thanks Brock, BTW.


I like my privacy.  Why should your desire to have a strategy or method of credit worthiness impact me?  Under your model, if I don't participate, theres a pre-conceived notion that I have some impairment.  And I certainly don't appreciate a flurry of activity being exchanged every time I buy a pair of shoes.  Or a dildo.  

I'd rather just operate under the tried-and-true methods of typical society, and mans willingness to make disparaging allegations when burned.  If I scope you out, you may have a few rudimentary black marks, or none at all.  Or you may have hundreds of angry business owners listing your name on their webz.  Bounces checks, uses stolen cards, archived video of retail theft, police reports, broken leases, repo'd cars, the whole nine yards.  

With cash transactions and a few good credit activities, or none, I may have little or no history.  

So I'd just prefer to have little or no history.  And if you're gonna treat me like damaged goods because I never fucked someone over and paid cash my whole life, then theres a significant flaw in your method.  I don't see why you're so hell bent to make a whole hierarchy of rankings within society, but I noticed its a favorite topic among some people to try to identify best-of-breed in a caste-like system when the modern market is already clearly headed in a direction of information exchange, accessible by anyone.  

Additionally, assignment of the lower echelons of formalized rankings is known to create a whole slew of second-tier, sub-prime, predatory credit markets.  These practices, by design, are known to produce revolving, damaging situations for the borrower and often for the sub-prime lender.  Its my long-held opinion that prime lending is already flexible enough to be profitable for both parties with some reasonable scrutiny paid towards the borrower  -  and can be adjusted on a case-by-case basis from institution to institution depending on their private lending policies.  Any sane lender should apply a thorough background check if they intend to extend hundreds of thousands of dollars in borrowed credit, rather than blindly follow a tiered credit score.  In other words, due diligence and fair lending is a simple policy that would have saved the sub-prime melt-down.  

And while we're at it, lets look at who benefits from these colored or tiered ratings.  The lender, and the borrower or customer - if said borrower/customer happens to be in the upper tier.  This is non-beneficial to the lower tiers.  In fact, its harmful.  Any logical person would not voluntarily subscribe to a service that ranks them very low.  So, you are in effect advocating the involuntary collection and warehousing of private data by a third party for the benefit of a select group, the Golds.  The current system is not much different, except you're using colors - and applying it to the whole goddamn society, not just lending.  In todays system, you can go get fucked if you're under 725.  If I was under 725, I certainly wouldn't stamp it on my friggin' forehead voluntarily.  

Now, backing up a step in the right direction, lets say your colored system exists.  I can do business with anyone I want in a free-market capitalist society, privately.  I decide to open a company called AllGold CreditCorp.  I check things the right way, and can decline anyone for any reason.  Most people might pass, unless they're the 'blacks' (LOL), all of which I would independently verify.  Depending on their income and employment history, I'll limit the amount they can borrow, and inspect the property they wish to buy.  In return for regular payments I'll bump their rating every chance I get.  

I guess in simplified terms, we can establish how wonderful or awful they are, upon application.  Once again, due diligence.  And outside these doors, they'll be just as anonymous as they wanna be - unless they fuck me over.  

As a small, privately owned, independent lender, if they default I already own the property and will lease it out, or sell it outright.  I've already approved its market value and hold the paper on it.  I reward my customers by raising their ratings - remember Gold can go no higher, and offer a basically similar service to a larger, yet verified market at my discretion - at a rate they can afford.  

Theres a sweet spot in lending that is not maximized by high tiered credit.  I'll tell you where it is, for fifty grand.  


 

[MacFall]

Wow - you really, really, really, REALLY missed the point.

There would be no demotion for not fucking someone over or paying cash. At all, ever.

This has nothing to do with profiling people as "good stock" or "bad stock". This has very little to do with good credit or bad credit. Its only concern is whether a person can be trusted not to start a fight or defraud someone.

The "gold" rating is meant to identify someone who could be trusted in dispute resolution, and has just as much to do with competence as trustworthiness.

The only sort of people who wouldn't voluntarily accept an indicator of their reputation would be outlaws or those who have serious problems in dealing peacefully with others. And I don't care whether those people want others to know that they are dangerous - if others know about it, they're going to publish the fact. And I'll thank them for it. On the other hand, if you have a good reputation, why would you object to its being well-known?

There would be no central authority issuing reputation ratings - what I suggested was a possible scale which could be utilized as a standard. It's called brainstorming. The color code is an idea of how people could have a quick reference so they know whether or not a person is safe. It would be up to every property owner to decide whether they want to check strangers for reputation indicators, or not. Most probably would, as any underground economy is going to have some measure of exclusivity. If we win, such precautions would only be taken in a limited number of scenarios.

Although as the legal order becomes established the need for showing reputation credentials would become less necessary, I don't think there would be many people without some sort of easy access to their credentials as a non-outlaw, just in case. Just as today you don't meet many drivers without an insurance card. Nobody assumes you're uninsured just because you don't tape your card to the window, but you have your insurance information just in case.

[rabidfurby]

There would be no central authority issuing reputation ratings - what I suggested was a possible scale which could be utilized as a standard.

The problem is, you still have to standardize on what the criteria is for determining reputation scores. Does paying your rent late one month count as one or two points against your score (or none?). This is why I suggested a PGP-like approach - it's obviously far from perfect, and is more complicated than you'd actually want it to be (it was designed for geeks who already grokked public-key cryptography, after all), but it's completely decentralized. It makes explicit the implicit assumption of every other model, namely that you have to trust someone in order to have trust in someone you've never met before.

[Archon]

Ian mentions Reputation systems all the time, and I do like your version, but has anyone else written about them?

I would love to read a good book about a possible reputation system, if you guys know any that go in depth...