II. Rule by Value Created: What Axiocracy Is

New orders need new words. Reinhart Koselleck, the great historian of concepts, showed that words like capitalism or citizen were not merely labels attached to things that already existed. They created fields of action. They gave people something to organise toward, argue about, and build. “Capitalism” was coined as an insult, around 1850, and became a neutral description of the world. “Meritocracy” was coined as satire and became an ideal. The coiner of a word does not control what it becomes. That is a reason to define it with care.

So let me be precise.

The definition

Axiocracy (axia, worth or value, and kratia, rule) is rule by value created. An organisation, network or economy is axiocratic when it has three features:

1. Decomposition. The work is broken into identifiable contributions, by people, teams and machines, so that each can be seen.
2. Ex-ante agreement. The goals, the measures of progress toward them, and the rule that turns measured value into credit are agreed before the work starts, by the people who will be measured.
3. Proportional credit. Each contribution is credited according to its measured value against those agreed goals, and the record is open to inspection and appeal.

That is the whole of it. Everything else in this series is an elaboration, a defence, or a set of guardrails.

The second feature is the one that matters most. It is the move that distinguishes Axiocracy from every previous attempt to “reward contribution.” In almost every existing system, value is judged after the fact. Axiocracy insists that the judgement be constituted before it. The measurement becomes a contract rather than a verdict.

Why “before” changes everything

Philosophers have argued for centuries about whether values can be compared at all. Ruth Chang’s answer is, I think, the strongest anchor for this whole project. Comparison is always comparison with respect to something: a “covering value.” A sonnet and a bridge cannot be ranked in the abstract. They can be ranked with respect to a purpose. Fix the purpose, and comparison becomes possible.

That is what an ex-ante agreement does. It fixes the covering value. Once a team has agreed that this is what we are trying to achieve, and this is how we will know, contributions to that goal can be compared, and the comparison can be justified to the people being compared.

John Rawls, who is usually read as the great enemy of desert, supplies the other half. Rawls rejected the idea that people deserve their natural talents. But he accepted legitimate expectations: those who do what a just system has announced it will reward are entitled to that reward. The announcement is what creates the entitlement. Axiocracy is a system built entirely around the announcement. Declare the goals, declare the measures, declare the credit rule, and then honour them.

This is also why Axiocracy makes a much smaller moral claim than meritocracy, and a much more defensible one. Meritocracy says: you are worth more. Axiocracy says: we agreed what we were trying to do, and this is how much your work moved it. Value credit is not moral worth. A person with little credit in one project is not a lesser person. The number describes a contribution to a goal, not a soul.

What Axiocracy is not

The “-ocracies” are a crowded family. Axiocracy has to be distinguished from its siblings, or it will be stretched into all of them.

It is not meritocracy. Meritocracy rewards latent merit, the estimated capacity of a person, measured by credentials and tests and frozen into status. Axiocracy rewards realised value, what a contribution actually achieved, measured against a goal the contributor helped set. Merit is a property of people. Value created is a property of work.

It is not technocracy. Technocracy, and its cousin epistocracy, gives authority to those who know. Axiocracy gives authority to prior consent. Experts may design the measurement instruments, but the goals and the weights are agreed politically, by the people affected. The political layer (what counts?) and the technical layer (how much did this move it?) are deliberately kept apart. The engineers of Technocracy Inc. in the 1930s wanted to measure everything in a single unit, energy, and to abolish politics. Axiocracy wants the opposite: plural measures, and more politics at the moment the rules are set.

It is not algocracy. “Algocracy,” the rule of algorithms, is already here. Authority is exercised every day through systems that rank, score and route people, with objectives chosen by whoever owns the system. Axiocracy uses the same machinery for the opposite purpose. The objectives are public, agreed and versioned. The code that computes credit is treated like law: readable, amendable, and appealable.

It is not holacracy. Holacracy distributes authority through roles and governance meetings. It says a great deal about who decides and almost nothing about how value is credited. Axiocracy is about the ledger.

Where the idea comes from

Axiocracy is a new word for a very old intuition, and it has more ancestors than inventors.

Aristotle’s distributive justice held that goods should be divided “according to worth,” kat’ axian. The word axia is right there. Elinor Ostrom, studying commons that had survived for centuries, found that the durable ones share a design principle: the benefits people draw are proportional to what they put in, and the rules are made and changed by those they bind. A 2010 review of the evidence found that this proportionality principle is significantly associated with commons that last.

The closest modern statement comes from a small open-hardware network in Montreal, Sensorica, which tried to run itself on contribution accounting. Its members wrote that the method for sharing benefits “must be established at the beginning of the economic process, in a transparent way. It constitutes a contract among participants.” That is the axiocratic principle almost word for word.

Axiocracy takes that intuition, which was proven in the commons, stated in the cooperatives and attempted in the networks, and proposes it as a general principle of organisation, at a moment when machines finally make it practical.

A test for any institution

The definition gives us a simple test. For any organisation you belong to, ask three questions:

• Can you see who contributed what?
• Were the goals and the measures agreed before the work started, and did you have a say?
• When the rewards were distributed, could you check how they were computed, and could you appeal?

Most institutions fail all three. Some pass one. Almost none pass all three. The distance between where we are and where we could be is the subject of the rest of this series.