Peer to Peer Economies

        [Contribution to the Reimagining Society Project hosted by ZCommunications]

I: The Economics of P2P

Peer-to-peer social processes are bottom-up processes whereby agents in a distributed network can freely engage in common pursuits, without external coercion, i.e. ‘permissionlessly’ undertake actions and relations. This requires not just ‘decentralized’ systems, but ‘distributed’ systems, through which individuals can cooperate. Distributed networks do have constraints, forms of internal coercion, that are the conditions for the group to operate, and these may be embedded in the technical infrastructure, the social norms, or legal rules. Despite these caveats, we have a remarkable social dynamic here, one that is based on voluntary participation in the creation of common goods, which are made universally available to all.

Peer-to-peer processes are emerging in literally every cranny of social life, and have been extensively documented in the 9,000+ pages of documentation at the Foundation for Peer to Peer Alternatives, and many other places on the Web.

P2P social processes more precisely engender:

1) peer production: wherever a group of peers decides to engage in the production of a common resource
2) peer governance: the means they choose to govern themselves while they engage in such a pursuit
3) peer property: the institutional and legal framework they choose to guard against the private appropriation of this common work; this usually takes the form of non-exclusionary forms of universal common property, as defined through the General Public License, some forms of Creative Commons licenses, or similar derivatives.

Peer governance combines free self-aggregation of individual skills and universally broadcast tasks, processes for communal validation of excellence within the broader pool of input, and defence mechanisms against private appropriation and sabotage. Peer governance differs from hierarchical allocation of resources, from allocation through the market, and even from democracy, as these are all mechanisms for dealing with scarce resources. Peer governance essentially aims at, and often succeeds in, making sure that no formal ‘representative group’ can take decisions separate from the community of peer producers.

These new property forms have at least three characteristics:

1)    they are aimed against the private appropriation of the commonly created value,
2)    they are aimed at creating the widest possible usage, i.e. they are universal common-property regimes,
3)    they keep sovereignty with the individual.

The third aspect is why peer property fundamentally differs from both private property and collective property. Private property is individual but exclusionary, it says, what is mine is not yours. But the state, i.e. collective property, is also exclusionary, but in another sense: it says, this is ours, but it means that you no longer have sovereignty. It is from us, regulated by a bureaucracy or representative democracy, but it is not really yours. The collective has taken over from the individual and, more often than not, coercion is involved. But the General Public License or Creative Commons licenses are different. Common property is not collective property. Using these, the individual gets full attribution, i.e. recognition of his personal property. You are freely sharing your sovereignty with others. This is especially clear in Creative Commons licensing schemes, in which the individual gets a whole gamut of options for sharing. You remain fully in control, i.e. “sovereign”, and there is no coercion involved.
It is important to note that peer production is a form of “generalized”, on non-reciprocal, exchange. It is not a gift economy, based on direct exchange or obligation. So peer production is not to be equated with cooperative production for the market: participation has to be voluntary, there is no direct reward (but many indirect rewards) in the form of monetary compensation. The process itself is participative. And the outcome is similarly free, in the sense that anyone can access and use the common resource. In reality, most peer-production projects are bound up with a smaller core group of people who may get paid and use the finances to create an infrastructure so that the peer production may occur.
If we look at peer production as a mode of production, as a process involving an input, ‘processing’ and output phase, then we can say that it requires the following:

1) Open and free raw material that can be used permissionlessly. Thus, peer production either requires the creation of such open and free raw material by the producers themselves, or materials that are in the public domain or in a commons format already;
2) The process is participatory with a design that is geared towards inclusion and a posteriori validation, not exclusion through a priori filtering of the participant;
3) The output is universally available and therefore, uses peer-property formats, or in other words: a Commons.

As the Commons-oriented output creates a new layer of open and free input for further transformation and processing, we have the requirements for social reproduction of the system, called the Circulation of the Common by Nick Dyer-Witheford (1). Looking at these three inter-related paradigms of open and free participation, and the Commons, we can then easily understand why movements striving for these conditions and social practices are arising in almost every single field of human activity.

The conditions for peer production to emerge are essentially: abundance and distribution. Abundance refers to the abundance of intellect or surplus creativity, to the capacity to own means of production with similar excess capacity. Distribution is the accessibility of such abundant resources in fine-grained implements, what Yochai Benkler has called modularity or granularity. (2) Again we could talk about the distribution of intellect, of the production infrastructure, of financial capital.

It is important to distinguish between two spheres. In one sphere, our digitally-enabled cooperation, reproduction of non-rival knowledge goods, such as software, content and open designs, takes place at marginal cost, and there is no loss by sharing, but actually a gain, through network effects. Such free cooperation can only be hindered ‘artificially’, through either legal means (intellectual property regimes) or through technical restrictions such as Digital Rights Management, which essentially hinder the social innovation that can take place. In this sphere, a non-reciprocal mode of production becomes dominant, since there is no competition for resources, and you do not lose, but gain, through giving. In the sphere of material production, where the costs of production are higher and we have rival goods, we still require regimes of exchange, or regimes of reciprocity. Notice that in a sphere of virtual abundance, where copying is trivial, there is no tension between supply and demand, and hence no market.

Post-capitalist aspects of peer to peer

Peer production, though embedded in the current political economy and essential for the survival of the cognitive forms of capitalism, is essentially post-capitalist. Essentially because it exists outside of wage dependency, outside of the control of a corporate hierarchy, and does not allocate resources according to any pricing or market mechanism.

Similarly, peer governance could be said to be post-democratic, because it is a form of governance that does not rely on representation, but in which participants directly co-decide; and because it is not limited to the political field, but can be used in any social field. Peer governance is non-representational, and it is essentially so because what the networked communication affords us is the global coordination of small groups, and therefore the peer-to-peer logic of small groups can operate with global scope. Hierarchies, the market, and even representative democracy, are all just means for allocating scarce resources, and do not apply in contexts where abundant resources are allocated directly through the social process of cooperation. However, since pure peer-to-peer logic only functions fully in the sphere of abundance, it will always have to insert itself into the forms that are responsible for the allocation of resources in the sphere of material scarcity. Peer-governance-based leadership seems to be a combination of invitational leadership, i.e. the capacity to inspire voluntary cooperation, and a posteriori arbitrage based on the reputational capital thus obtained. However, the process of production itself is an emergent property of cooperating networks.

Finally, peer property is a post-capitalist form of property, because it is non-exclusionary and creates a commons with marginal reproduction costs. There are two main forms of peer property. One is based on individual sharing of creative expression, and is dominated by the Creative Commons option, which allows an individual to determine the level of sharing. The other is applied to commons-based peer production, and takes the form of the General Public License or its derivatives or alternatives, and requires that any change to the common also belong to the common.

The hyper-productive nature of peer to peer

Pre-capitalist class societies are based on coercive extraction of surplus value and hierarchical allocation of resources. Capitalism is based on the part-real and part-fictional process of equal exchange of value. In other words, we can say that coercive societies are based on the extrinsic motivation of fear, while capitalism is based on the extrinsic motivation of self-interest.
Peer production structurally eliminates extrinsic motivation and replaces it with intrinsic motivation, or in other words, passion. It is psychologically the most potent and productive form of human motivation. In addition, the market only allows, at best, for win-win scenarios of mutual interest, but is structurally designed to ignore externalities. Corporate firms can only strive for relative quality in a competitive environment, but peer producing communities strive structurally for absolute quality. As an object-oriented sociality based on the construction of universally available common value, peer production inherently strives for positive externalities, and lacks much of the motivation for creating negative externalities for the sake of profit.

The combination of all these characteristics creates a hyper-productive mode of production, and asymmetrical competition with pure, for-profit firms relying on wage labor and closed intellectual property.

This allows us to formulate the bold hypothesis of the Law of asymmetrical competition, which states that:
1) Any for-profit company based on closed IP, faced with the competition of a peer producing community, a for-benefit association managing the infrastructure of cooperation, and an ecology of businesses based on a commons, will lose that competitive race.
(This hypothesis would explain the gains of Linux over Microsoft, the rise of Wikipedia as compared to Britannica, as being models for many other examples of asymmetrical competition.)
An entity based on innovation-impeding intellectual property, appropriation of common social value that discourages free contributions, and striving for relative quality (hence consciously substandard products), cannot in the long run survive the challenge of an open competition based on peer production. However, there is an important corollary to this first law, which explains the necessity of hybrid forms, and why peer production can be embedded within an overall capitalist context.

The corollary law is this:
2) Any peer production community, which creates a sustainable management for its infrastructure of cooperation and an ecology of businesses which can fund it, will be more competitive than a community which fails to do so.

Pure non-reciprocal production can only occur within a sphere of relative abundance, characterized by the free aggregation of human brains, ownership or easy access to computers, and socialized access to the networks, such as the internet. However, if peer production is collectively sustainable as long as it can maintain a similar level of volunteerism (offsetting departures with newcomers), it is not so for the individuals concerned. In addition it also requires a additional infrastructure of cooperation, which may have to operate on top of the internet. For example: it may need costly servers in case of success. Peer production cannot therefore fully escape the monetary sphere or its requirements, demanding hybrid formats.

We will detail this below but in short, we can observe that successful peer projects combine:

1) The freely self-aggregating community;
2) A for-benefit association, usually in the form of a nonprofit Foundation, which funds and manages the infrastructure of cooperation;
3) An ecology of businesses that practice benefit-sharing, returning part of the profit obtained from selling added value to the market, back to the commons on which their value-creation is based. Such businesses therefore fund the infrastructure of cooperation, hire many of the participants, and thereby maintain the viability and sustainability of their respective Commons.

Adaptation of cognitive capitalism to peer to peer

So far, empirical evidence suggests three emerging forms of adaptation between the sphere of peer-to-peer cooperation, and the institutional and market fields.
•    The sphere of individual sharing, think YouTube, where sharers have relatively weak links to each other, creates the Web 2.0 business model. In this model, an ethical economy of sharing, co-exists with proprietary platforms which enable and empower such sharing, in exchange for the selling of the aggregated attention
•    The sphere of commons-oriented peer production, based on stronger links between cooperators, think Linux or Wikipedia, usually combines a self-governing community, with for-benefit institutions (Apache Foundation, Wikimedia Foundation, etc…), which manage the infrastructure of collaboration, and a ecology of businesses which create scarcities around the commons, and in return support the commons from which they derive their value.
•    Finally, crowdsourcing occurs when it is the institutions themselves which attempt to create a framework, where participation can be integrated in their value chain, and this can take a wide variety of forms. This is generally the field of co-creation.

There is a mutual dependence of peer production and the market. Peer production is based on the achievements and surplus of the existing market-dominated society, and on the income that can be generated through participation in the market; on the other hand, market players are increasingly dependent and profiting from social innovation.

Because of the law of asymmetrical competition, i.e. the hyperproductive nature of peer production, corporations are driven to adapt substantially to the new practices and new players emerge that are based on an alliance with peer production. The companies that do so are more competitive than those who do not, creating a new sector of ‘netarchical capitalism’ which empowers and enables social innovation and peer production to occur. Corporations have a dual role in this, because of their contradictory nature. They have to sustain cooperation and sharing, i.e. the openness that creates value, but also have to enclose part of the value, as they are competing with others in a scarcity-based marketplace.

We must note that monetary value that is being realized by the capital players, is – in many if not most of the cases, not of the same order as the value created by the social innovation processes. The user-producers-participants are creating direct use value, videos in YouTube, knowledge and software in the case of commons-oriented projects. This use value is put in common pool, freely usable, and therefore, does not consist of scarce products for which pricing can be demanded. The sharing platforms live from selling the derivative attention created, not the use value itself. In the commons model, the abundant commons can also not be directly marketed, without the creation of additional ‘scarcities’.
What does all of this mean for the market sphere? It is now possible to create all kinds of use value without, or with only a minimal, or with only a posteriori, intervention of capital. We are dealing with post-monetary, post-capitalist modes of value creation and exchange, that are both immanent, i.e. embedded, to the market, but also transcendent to it, i.e. operating outside its boundaries. Capital is increasingly dependent, and profiting in all kinds of ways, from the positive externalities of such social innovation.

So the challenge can be described as follows: 1) we have a process of social innovation which creates mostly non-monetary value for the participants; 2) we may have an increasingly huge gap between the possibility of creating post-monetary value, and the derivative exchange values that are realized by enterprise; 3) the participants engaged in such passionate production and innovation, mostly cannot find in such processes an answer to their own sustainability.
Hence, the impossibility to realize more than just a small partial monetary value, from the point of view of most commercial players. Increasing precarity for the participants of social innovation. In other words, the current market model does not have a reverse process of redistribution for the value that is being created.

This might of course be a temporary crisis, but we do not believe it is. The reason is that the market can only indirectly and partially provide monetary compensation for processes which are not motivated by such compensation. What we need therefore are more general redistributive processes that allow society and the market to give back part of the value that is being so created.

One possibility is the further development of transitional labour market measures (protect the worker, not the job), which recognize the flexibility and mobility of contemporary careers. But this needs an important add-on development: the realization that contemporary workers are moving not just from job to job, but also from jobs to non-jobs, and that in fact, what is most useful and meaningful for them (and the market, and society) are not the paid jobs for the market, but the episodes of passionate production. It seems to me therefore that a more general measure, not linked to the job, but conceived as a repayment for, and enabler of, social innovation, is needed. The name of that general measure is most probably some form of basic income.

Likely expansion of peer production principles to material production

Peer production naturally occurs in the sphere of immaterial production. In this sphere, the access to distributed resources is relatively easy. Large sections of the population in the Western countries are educated, and can have a computer at their disposal. And the costs of reproduction are marginal.
The expansion of peer production is dependent on cultural/legal conditions. It requires open and free raw cultural material to use; participative structures to process it; and commons-based property forms to protect the results from private appropriation. Hence is a circulation of the common obtained (the concept is from Nick Dyer-Witheford), through which peer production virally expands.

However, peer production is not limited to the sphere of immaterial production. First of all, any physical production process needs to be immaterially designed, and open design is not fundamentally different from, though it is more complex than, collaborative knowledge or free software production. So, peer production can work for the design phase of physical production, provided a good infrastructure is available for such co-design. Physical resources can be shared, if they are available in a distributed format. For example: computers and their files and processing power. Cars can be pooled. Money can be pooled, as it is in P2P financial exchanges such as Zopa, or through mutual credit systems. (3) Wealth acknowledgement procedures can be the basis for the creation of complementary currencies.

Rapid tooling and prototyping, desktop manufacturing, personal fabricators and 3D printers, multi-purpose machinery and other similar developments may and will lower the threshold of participation, creating more modularity and granularity in new fields. In fact, we may observe that the same tendency to miniaturization, which led to the networked computer, is taking place in the domain of physical machinery. Given the decrease in the cost of physical capital, it becomes easy to imagine the combination of open design communities, with cooperative forms of relocalized physical production.
Such expansion is not just a natural extension of technical evolution, but has structural, and therefore political, impediments. The centralized capital formats of contemporary neoliberal anti-markets obviously impede such expansion. But even with such constraints, the scope for the expansion of peer production is significant.

Again, we will make the following caveat. In the immaterial sphere, non-reciprocal peer production is likely to become dominant. In the field of scarcity, we will see the rise of peer-informed modes of production. This means that market forms are starting to change, changing from a logic of pure capitalism (making commodities for exchange so as to increase capital) to logics in which the logic of exchange is subsumed under the logic of partnership. Think about fair trade (a market subject to peer arbitrage), social entrepreneurship (profit used to sustain social goals), base-of-the-pyramid inclusional capitalism, and the many political-social movements that aim to divorce market forms from the infinite growth logic of capitalism, such as the natural capitalism movement in the U.S.

In the last two to three years, we have witnessed the renewed emergence and rapid growth of craft communities, a maker movement, distributed desktop manufacturing through commercial platforms, and a free and open hardware movement. Open hardware is growing very fast, with companies such as Arduino and Buglabs being living exemplars and role models, and inventing their own platforms and infrastructures such as the Open Source Hardware Bank. The latter is particularly significant as it shows that open hardware producing communities, such as those around the Arduino electronic circuit boards, are creating their own business ecologies. They are combining the existing triarchical commons model (community, foundation, business), with a solution to the cost-recovery problem typical of physical production. Because of this, they are emerging as viable alternatives to the traditional corporate models and, thanks to the inherent hyperproductivity that we have argued for above, are slated to play an increasingly dominant role.

To prosper, and expand beyond the current confines in the sphere of immaterial production, more distributed infrastructures will be necessary, complementing the already existing communication infrastructures:

•    Distributed energy: this requires a move away from centralized energy production based on depletable fossil fuels, and towards a home and neighbourhood-based infrastructure producing renewable energy
•    Distributed and multiple-currency systems: meta-currency platforms will allow local and virtual (affinity-based) communities to produce exchange mechanisms that are not based on compound interest and fractional reserve banking, and can promote specialized in-community exchange, protect from globalized dislocation, and create an alternative infrastructure of inter-community and inter-individual exchange.
•    Open and distributed manufacturing: distributed capital goods with radically lower thresholds, such as those being developed today, need to be reconfigured and integrated into a vision of relocalized production, in the context of global cooperation with open-design communities

II: The Politics of P2P

P2P theory as the emancipatory possibility of the age

Our current political economy is based on a fundamental mistake. It is based on the assumption that natural resources are unlimited, and that nature is an endless sink. And this creates an artificial scarcity of potentially abundant cultural resources. This combination of quasi-abundance and quasi-scarcity destroys the biosphere and hampers the expansion of social innovation and a free culture. In a P2P-based society, this situation is reversed: the limits of natural resources are recognized, and the abundance of immaterial resources becomes the core operating principle.
The vision of P2P theory is the following:

1) the core intellectual, cultural and spiritual value is produced through non-reciprocal peer production,
2) it is surrounded by a reformed, peer-inspired sphere of material exchange,
3) it is globally managed by a peer-inspired and reformed state and governance system, a “partner state which enables and empowers the social production of value” .

Because of these characteristics, peer-to-peer can be said to be the core logic of the successor civilization, and is an answer and solution to the structural crisis of contemporary capitalism. Indeed, because an infinite-growth system is a logical and physical impossibility with a limited natural environment, the current world system is facing a structural crisis in its extensive growth. Currently consuming resources at the rate of ‘two planets’, it would need four planets if countries like China and India were to achieve equity with the current Western levels of consumption. Because of the ecological and resource crisis that this causes, the system is ultimately limited in its extensive expansion.
However, its dream of intensive development in the immaterial sphere is equally blocked, since the sphere of abundance and direct social production of value through peer production creates an exponential growth in use value, but only, say, a linear growth in the market opportunities on its margins.

The current world system is facing a similar crisis to that of the slave-based Roman Empire, which could no longer grow extensively (at some point, the cost of expansion is greater than the benefits of added productivity), but could not grow intensively either, since that would require autonomy for the slaves. Hence, the feudal system emerged, which refocused on the local, where it could become much more productive and grow ‘intensively’. Serfs, who were tied to the land, but now had families, could keep a fixed part of their production, and who were subjected to a much lighter taxation load, were substantially more productive than slaves. The domain-based lords took a substantially smaller part of the surplus. Today, extensive growth is ultimately blocked, but intensive growth in the immaterial sphere requires a substantial reconfiguration that largely transcends the current system logic.

Similarly, the current structural crisis is causing a reconfiguration of the two main classes (just as the slave owners had to become feudal lords, and the slaves serfs). At present, we are seeing the emergence of a netarchical class of capital owners, who are renouncing their dependence on the present regime of immaterial accumulation through intellectual property, in favor of a role as enablers of social participation through proprietary platforms, which cleverly combine open and closed elements so as to ensure a measure of control and profit, while knowledge workers are reconfiguring from being a class that was dissociated from the means of production to one that is no longer dissociated from its own means of production, as their brains and the networks are now their socialized means of production. (However, they are still largely dissociated from autonomous means of monetization.) It would be fair to say that, currently, peer production communities are sustainable collectively, but not individually, leading to a crisis of value and widespread precarity amongst knowledge workers.

The solution would in my opinion point in the following direction:

1) the private sector recognizes its increasing dependence on the positive externalization of social cooperation, and together with the public authorities, agrees to a new historical compromise in the form of a basic income; this allows the sphere of cooperation to thrive even more, creating market benefits
2) the sphere of the market is dissociated from infinite-growth capitalism (describing how this can be done would require a separate article, but the key would be a macro-monetary reform such as those proposed by Bernard Lietaer, associated with a new regime that extends the production of money from private banks to the social field, through open money systems)
3) the sphere of peer production creates appropriate ‘wealth acknowledgement systems’ to recognize those that sustain its existence, and systems exist that can translate that reputational wealth into income

Peer governance and democracy

As peer-to-peer technical and social infrastructures, such as sociable media and self-directed teams, are emerging to become an important, if not dominant, format for the changes induced by cognitive capitalism, the peer-to-peer relational dynamic will increasingly have political effects. (4)

As a reminder, the p2p relational dynamic arises wherever there are distributed networks, i.e. networks where agents are free to undertake actions and relationships, and where there is an absence of overt coercion so that governance modes are emerging from the bottom-up. This creates processes such as peer production, the common production of value; peer governance, i.e. the self-governance of such projects; and peer property, the auto-immune system that prevents the private appropriation of the common.

It is important to distinguish the peer governance of a multitude of small, but coordinated global groups that choose non-representational processes in which participants co-decide on the projects, from representative democracy. The latter is a decentralized form of power-sharing based on elections and representatives. Since society is not a peer group with an a priori consensus, but a decentralized structure of competing groups, representative democracy cannot be replaced by peer governance.
However, both modes will influence and accommodate to each other. Peer projects that evolve beyond a certain scale and start having to make decisions about scarce resources will probably adapt some representational mechanisms.

In fact, there are a few things that we can already say about the emerging templates of peer governance. In the sharing mode, centred on the sharing of individual expression, in which network ties are relatively weak, proprietary third-party platforms are responsible for setting design rules that have to enable sharing and to demand some form of openness that creates the value, but balanced by their need to capture that value, with the existing possibilities and mobilization power of the sharing communities acting as a counterweight. In the commons-oriented form of peer production, as seen in free software for example, we see the emergence of a triarchical model, combining a self-aggregating, ‘permission-less’ and self-governed community; with a for-benefit association (usually an NGO in the form of a Foundation) that manages the infrastructure of cooperation, and subjected to formal democratic rules; and an ecology of businesses creating market value on top of the commons, while returning some of its profit in the form of benefit sharing to the Foundation or community, thereby insuring the continuation of the Commons on which they depend. These form templates that will be increasingly used in the expanding field of social production, but are not as such applicable to the polis as a totality.
Representative and bureaucratic decision-making can and will in some places be replaced by global governance networks, which may be to a large extent self-governed, but in any case, it will and should incorporate more and more multi-stakeholder models, which strive to include as participants in decision-making all groups that could be affected by such actions. This group-based partnership model is different, but related in spirit, to individual-based peer governance, because they share an ethos of participation.

Towards a Partner State approach

Partner state policy is an approach in which the state enables and empowers user communities to create value themselves, and which also focuses on the elimination of obstacles. The fundamental change in approach is as follows. In the modern view, individuals were seen as atomized. They were believed to be in need of a social contract that delegated authority to a sovereign in order to create society, and in need of socialization by institutions that addressed them as an undifferentiated mass. In the new view, however, individuals are always-already connected with their peers, and look at institutions in this kind of peer-informed way. Institutions therefore, will have to evolve to become support ecologies, devising ways to create infrastructures of support.

Politicians become interpreters and experts, who can guide the issues emerging out of civil-society-based networks into the institutional realm. The state becomes an at least neutral (or better yet: commons-favorable) arbiter, i.e. a meta-regulator of the three realms, and retreats from the binary state/privatisation dilemma to the triarchical choice for an optimal mix between government regulation, private market freedom, and autonomous civil-society projects. A partner state recognizes that the law of asymmetric competition dictates that it has to support social innovation to it utmost ability.

An example I recently encountered was the work of the municipality of Brest in Brittany. There, the “Local Democracy” section of the city, under the leadership of Michel Briand, makes available online infrastructures, training modules, and a physical infrastructure for sharing (cameras, sound equipment, etc…), so that local individuals and groups, can create cultural and social projects on their own. For example, the Territoires SonoresT project allows the creation by the public of audio and video files to enrich custom trails, which are therefore neither produced by a private company, nor by the city itself. (5) In other words, the public authority in this case enables and empowers the direct social production of value.

The peer-to-peer dynamic, and the thinking and experimentation that it inspires, do not just present a third form for the production of social value, it also produces new forms of institutionalization and regulation, which could be fruitfully explored and/or applied.

Indeed, from civil society there emerges a new institutionalization, the commons, which is a distinct new form of regulation and property. Unlike private property, which is exclusionary, and unlike state property, in which the collective ‘expropriates’ the individual; by contrast, in the form of the commons, the individual retains his sovereignty, but has voluntarily shared it. Only the commons-based property approach recognizes knowledge’s propensity to flow everywhere, while the proprietary-property regime requires a radical fight against that natural propensity. This makes it likely that the commons-format will be adopted as the more competitive solution.

In terms of the institutionalization of these new forms of common property, Peter Barnes, in his important book Capitalism 3.0, explains how national parks and environmental commons (such as a proposed Skytrust), could be run by trusts, who have the obligation to retain all (natural) capital intact, and through a one man/one vote/one share, they would be in charge of preserving common natural resources. (6) This could become an accepted alternative to both nationalization and deregulation / privatization.

I would surmise that in a successor civilization, where peer-to-peer logic is the core logic of value creation, the commons will be the central institution that drives the meta-system, and the market will be a peer-informed sub-system that deals with the production of rival physical products, along with a pluralist economy that is augmented with a variety of reciprocity-based schemes.

A set of concrete proposals

Just as social innovation and peer production are hyperproductive and ‘competitive’ in the sphere of corporate competition, so they are also advantageous for any public authorities that adopt them in their own territorial spheres. This gives political leverage to a set of three inter-related proposals that would sustain a further expansion of peer production:

Here is my proposal for what we need as transitional measures to further stimulate social production: i.e. a set of three interlocking institutions, each with its own complementary mission and objectives:

1) Institute for the Protection and Development of the Commons
This is an institution that effectively supports the creation and maintenance of the commons by diffusing knowledge about the legal and institutional means of creating and protecting them; by creating a supportive infrastructure of cooperation that facilitates the creation of commons-oriented initiatives by those who have greater difficulties accessing such a necessary infrastructure; by maintaining relations with and supporting the operation and maintenance of the for-benefits institutions that are most often associated with commons-oriented initiatives. Example: the public support for social value creation in the French city of Brest.

2) Institute for Open Business
This institution supports the creation of market value in cooperation with the Commons, in ways that are compatible with and do not deplete commons-based value creation. Typically, this is the kind of Institution that would support open-source software businesses, open textbook publishers, etc., and support young and starting entrepreneurs who want to engage in such work. Example: the OSBR.Ca initiative in Toronto, Canada.

3) Institute for Benefit-Sharing and Commons Recognition
This institution focuses on patronage and on various forms of support that do not destroy the peer-to-peer logic of voluntary contributions. It creates a priori prizes, awards, bounties to support individuals involved in commons-based value-creation in cooperation with companies that profit from commons-created value (stimulated by the previously mentioned open-business institute); it stimulates benefit-sharing practices in those companies: it acts as a meta-regular/regulator /?/ for such practices, identifying weak spots and stimulating solutions for them; it creates a posteriori patronage arrangements for individuals with a proven record in commons-based value creation; it studies and proposes policies for the overall stimulation of commons-based value creation.

A renewed progressive policy centred on sustenance of the Commons

What does this mean for the emancipatory traditions that emerged from the industrial era? I believe it could have two positive effects:

1) a dissociation from the automatic link with bureaucratic government modalities (which does not mean that this is not appropriate in certain circumstances); proposals can be formulated that directly support the development of the Commons;
2) a dissociation from its alternative: deregulation/privatization; support for the Commons and peer production means that there is an alternative both to neoliberal privatization and to the Blairite introduction of private logics in the public sphere.

Progressive movements can thereby become informational rather than a modality of industrial society. Instead of defending the industrial status quo, they again become an offensive force (say: striving for an equity-based information society), more closely allied with open/free, participatory, commons-oriented forces and movements. These three social movements have arisen because of the need for efficient social reproduction of peer production and the common.

Open and free movements want to insure that there is raw material for free cultural production and appropriation, and to fight against the monopoly rents accorded to capital, as this now restricts innovation. They work on the input side of the equation. Participatory movements want to ensure that anybody can use his specific combination of skills to contribute to common projects, and work on lowering the technical, social and political thresholds; finally, the Commons movement works on protecting the common from private appropriation, so that its social reproduction is insured, and the circulation of the common can go on unimpeded, as it is the Commons which in turn creates new layers of open and free raw material.

These various movements come in the usual three flavors:

1) transgressive movements, such as young and old filesharers, which show that the legal regime has to be changed;
2) constructive movements, which create a framework for new types of social relationships, such as the Creative Commons movement, the free software movement, etc…;
3) reformist or radical attempts to change the institutional regime and adapt it to the new realities.

I personally believe that these movements will not create new political parties, but that these networks of networks will indeed seek political liaisons. While peer to peer is a regime that combines equality and liberty, and therefore potentially combines elements from various sides of the political spectrum, I believe the left is particularly apt to forge an alliance with the new desires and demands of these movements. It remains to be seen whether new political and cultural expressions of the emerging free culture, such as the Swedish Pirate Party, will change that expectation by creating a new kind of political force, more directly in tune with peer production communities.

There is also a connection with the environmental movement. On one side, culturally-oriented movements fight against the artificial scarcities induced by the restrictive regimes of copyright law and patent law; on the other side, the environmental movement fights against the artificial abundance created by unrestricted market logics. The removal of pseudo-abundance and pseudo-scarcity are exactly what needs to happen to make our human civilization sustainable at this stage. As has been stressed by Richard Stallman and others, the copyright and patent regimes are explicitly intended to inhibit free cooperation and cultural flow between creative humans, and are just as pernicious for the further development of humanity as biospheric destruction.

Finally, restoring the balance between a scarcity-recognizing material regime, and an abundance-recognizing immaterial regime cannot be seen as separate from the efforts of social forces to achieve greater social justice, thereby linking the new open/free, participatory and commons-oriented forces with emancipatory social movements.

There is therefore a huge potential for such a renewed movement for human emancipation to become aligned with the values of a new generation of youth, and to achieve the long-term advantage that the Republicans   have achieved in the U.S. since the 1980s.

Conclusion: What needs to be done?

Let us recall some of our points, and see how the movements that are against artificial scarcity and for sustainability intersect. We live in a political economy that has things exactly backwards. We believe that our natural world is infinite, and therefore that we can have an economic system based on infinite growth. But since the material world is finite, it is based on pseudo-abundance. And then we believe that we should introduce artificial scarcities in the world of immaterial production, impeding the free flow of culture and social innovation, which is based on free cooperation, by creating the obstacle of permissions and intellectual property rents protected by the state. What we need instead is a political economy based on a true notion of scarcity in the material realm, and a realization of abundance in the immaterial realm. Complex innovation needs creative, autonomous workers who are not impeded in their ability to share and learn from each other.

In the world of immaterial production, of software, text and design, the costs of reproduction are marginal and therefore what we see emerging is non-reciprocal peer production, in which people voluntary engage in the direct creation of use value, profiting from the resulting commons in a general way, but without specific reciprocity. In the world of material production, where we have scarcity, and costs have to be recouped, such non-reciprocity is not possible, and therefore we need modes of neutral exchange, such as the markets, or other modes of reciprocity. In the sphere of immaterial production, humanity is learning the laws of abundance, because non-rival goods gain in value through sharing. In this world, we are evolving towards non-proprietary licences, participatory modes of production, and commons-oriented property forms. Positive forms of affinity-based retribalization are emerging. But in the world of scarce material goods, a series of scarcity crises – global warming being just one of them – are brewing that are prompting the emergence of negative forms of competitive tribalization.

The logic of abundance has the potential to lead us to a reorganization of our world on a level of higher complexity, powered  principally by peer-to-peer logic. The logic of scarcity has the potential to lead us into generalized wars for resources, into a descent to a lower form of complexity, a new dark age, as was the case after the disintegration of the Roman Empire. So, the challenge is to use the emergent logic of abundance, and inject it into the world of scarcity.

Is that a realistic possibility? In the immaterial world of abundance, sharing is non-problematic, and the further emergence and expansion of non-reciprocal modes of production is very likely. “Together we know everything”, is a quite achievable ideal. In the material world of scarcity, abundance is translated into three key concepts that can change human consciousness, and therefore economic practices. The notion of ‘together we have everything’ seems not to be quite achievable, we therefore need transitional concepts. The first concept is the distribution of everything. This means that, instead of abundance, we have a slicing up of physical resources and of the physical means of production, so that individuals can become freely engaged and act. This means an economy that moves towards a vision of peer-informed market modes, such as fair trade (a market mechanism subjected to peer arbitrage of producers and consumers seen as partners), and social entrepreneurship (using profit for conscious social progress). Objective tendencies towards miniaturization of the physical means of production makes this a distinct possibility: desktop manufacturing enables individual designers; rapid manufacturing and tooling are reducing the advantages of scale of industrial production, as are personal fabricators. Social lending leads to a distribution of financial capital; and the direct social production of money through software is not far from being realized in various parts of the world (see the work of Bernard Lietaer); if scarcity does indeed create more expensive energy and raw material, a re-localisation of production is likely, and peer-informed modes of production will be enabled to a much greater extent.

The second concept is sustainability. Since an infinite-growth system cannot last indefinitely, we need to move to new market concepts as described by the thought schools of natural capitalism (David Korten, Paul Hawken, Hazel Henderson), capitalism 3.0 (Peter Barnes’ proposal to use Trusts as property forms because they legal form imposes the preservation of capital), and cradle-to-cradle design and production processes, so that no waste is generated. We need to move to a steady-state economy (Herman Daly), which is not necessarily static, but in which greater output from nature is dependent on our ability to regenerate those same resources.

The third concept is that of sufficiency or ‘plenty’. Abundance does not just have an objective side, it has a subjective side, too. In the material economy, infinite growth needs to be replaced by sufficiency, a realization that status and human happiness can no longer be dependent on infinite material accumulation and overconsumption, but will become dependent on immaterial accumulation and growth. On having enough so that we can pursue meaning and status through our identity as creative, collaborative individuals, recognized in our various peer communities.

Only a rich experience economy can avoid a culture of frustration and sacrifice, and the repression and unhappiness that this could entail. This experience economy will, however, not just be created by commercial franchises, there will also be direct social production of cultural value. Businesses and peer communities, enabled and empowered by a partner state, will have to create a rich tapestry of immaterial value, and the thicker the surrounding layer of immaterial value of being, the weaker our attachment to mere having will be.

Scenarios for the current meltdown

How does the current meltdown/slump, which started with the financial collapse in the autumn of 2008, affect the above vision, which was elaborated before the non-linear emergence of this crisis.
There are two ways to read the crisis. The first, inspired by Carlota Perez’s work on long-term cycles, is to see the current crisis as the end of the cycle that started in 1945, first, with a 30-year high-growth phase, then, with a low-growth neoliberal phase, based on stagnating wages and debt-fuelled consumption, financed by the new Asian powers. As this model, and the immense financial bubble it created, fails irrevocably, we could expect, after a long slump that will last at least a decade, a new expansion phase of capitalism, based on green capitalism and the change in institutions brought about by the internet revolution (a process that has only happened in civil society and at institutional margins, without resulting in a new equilibrium). In such a scenario, a new social compact would be struck with the new structure of social demands created by the emergence of peer to peer, allowing it to grow from its present seed phase to a level of parity at the end of the next growth phase. If our interpretation of the impossibility of infinite growth in a finite natural system is correct, the ultimate failure of attempt to achieve green capitalism would set the stage for a phase transition, in which the peer-to-peer system would become the core of the new society, as explained in the body of our text. I have called this the high road to peer to peer, because, despite the cyclical crisis moments, the transition could still be relatively smooth, replacing the former structures at a very high level of productivity, and minimizing social pain.

There are two possible ways that this scenario could be derailed. The first is that failure by the Obama administration to structurally reform the system and break the power of the predatory financial caste so impoverishes the possibilities of the state that no means are left for implementing social policies, leading to global dislocation, and a turning by humanity towards resilient communities, using p2p-inspired models on a local scale. The second potential derailment refers to the combined effects of the structural problems of capitalism as a system, and not just to its long cycles. In this scenario, the accelerating problems involved in climate change, peak oil and resource depletion become too severe and do not allow for the generation of a new expansion phase. This element alone, which can be combined with the first one, would also lead to global dislocation, and to the resilient communities scenario, involving a ‘low road’ to peer to peer, in a context of immense social pain.

Relation to earlier Marxist scenarios of social change

All of the above can be read as an argument with earlier Marxist theories of social change. I would summarize the political attitude of the socialist movement as: workers need to take power, then change society in the direction of a new economic and political social structure. But this has never been how phase transitions from one form of civilization to another really happened.

The change from slavery to feudalism happened because some slave owners, undoubtedly under pressure, for example, from slave revolts in the context of a collapsing state infrastructure, started to turn their slaves into ‘coloni’, and an increasing number of them did so, creating the conditions for a phase transition to feudalism. This fundamental change could happen because of a congruent set of changes, among both those that produced and those that managed and profited from that production.
Change from feudalism to capitalism happened because, in the context of the crisis of feudalism after the 16th century, part of the nobility could see the superior productivity of capitalist enterprises, and funded and joined such projects, leaving behind their peers, who remained tied to the land. As the crisis intensified and the new hybrid capitalist class became dominant, political revolutions finalized the phase transition. Socialism did not have a superior mode of production that could change capitalist society from within and prepare for the phase transition.

In contrast, the hyperproductivity of peer production has already created a new class of netarchical capitalists, who invest in social production, and who are already taking power through the Obama administration. By investing in hybrid forms of peer production, they paradoxically strengthen the post-capitalist logics within capitalist society. It is the congruence between peer producers and netarchical capitalists that is driving the change, and which will eventually cause the seed form of peer production to rise to parity level, perhaps leading to the ultimate phase change. Within a declining, crisis-ridden system that is destroying the biosphere, the congruent social forces of peer producers and netarchical capitalists are creating the conditions for an ulterior phase change.

The political struggle today is to help sharing communities defend their interests and promote them with the platform owners; and to help autonomous commons-oriented peer producing communities to maintain their autonomy as they cooperate with their respective business ecologies, thereby changing the very practices of the corporations. So what is happening is that, within the old, successful new patterns are being created, and these patterns are starting to interact synergistically to form an integrated alternative set of social practices.

As this new sphere grows, it is creating a living alternative within the declining global system, forming a real alternative that can inspire the social movements still rooted in the capitalist world of labour, creating the conditions for political and social transformations of the mainstream structure of society. Such a change, if it occurs, would be congruent with what we know about phase transitions in the past.

The writer is a researcher of technology, culture and business innovation. He is a former entrepreneur and the founder of the Foundation for Peer-to-Peer Alternatives, which is based in Thailand. Bauwens works in collaboration with a global group of researchers in the exploration of peer production, governance, and property.

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