This system, proposed by Simon de la Rouviere, proposes incentivizing patronage through collectibles which can accrue social and financial capital. In this model, projects seeking patrons would issue a limited number of collectible tokens. Holders of these tokens would provide ongoing funding for the project through Harberger taxation. If the tokens become more valuable—for instance because the project becomes higher-profile—they could earn a profit by selling their token to another buyer.
Ownership could be tracked and published in a leaderboard or public sponsorship “slots” like on a program at the symphony or a wall on a building. Social status associated with ownership could then drive the price.
It’s interesting to think about the effect of the tax rate in this context. If I set the rate to 1%/mo, then a patron comfortable with paying $5/mo would need to set their purchase price to $500, which seems awfully high. The creator would capture little of the gains. If I set it to 100%/mo, then a patron comfortable with paying $5/mo could very cheaply lose the asset to someone willing to pay only an incrementally higher monthly fee. So the patron doesn’t particularly benefit from long-term growth of the asset. Or, to put it another way, the asset has poor (negative) investment efficiency: they’re taxed on the full amount by which they anticipate the asset might increase.
Say we’re at 50%/mo, and I’m willing to sponsor at $10/mo. If someone else is willing to sponsor at $10.01/mo, they pay me $20. But of course maybe I had to buy the asset from someone who was willing to sponsor at $9.99/mo, whom I paid $19.98. My profit is $0.02.
It would only really make sense for me to create scarcity of this kind for high-value slots, like a big sponsorship acknowledgment. But I think the dynamics of my sponsors are such that I’m better off with a handful of $1k/year sponsors than a complex arrangement for a small number of $10k/year sponsors.
Boy does this arrangement create a dramatically different vibe from something like Patreon. In basically all ways, it seems worse.
First off, is injecting profit motive into sponsorship really a good idea? Prestige motive, sure. But profit motive is so legible. And the nature of the mechanism requires that the current owner’s price be published, which makes it even more legible than writing “Silver Tier ($50k+)” in a symphony program.
If someone’s been sponsoring me a long time, they can be bought out by someone who values the sponsorship slot more than they did. Sponsorship can change hands constantly, in fact. This makes it difficult to build up a sense of community and gratitude.
Simon de la Rouviere, Patronage As An Asset Class —
By encapsulating patronage into a virtual, tradable collectible asset that follows a self-assessed pricing scheme (COST/Harberger Tax), many people would be able to support their favourite projects, earn status, & earn potential profit. This would open a new market for supporting projects not necessarily covered by existing corporations, non-profits or nation states.