Evolving Towards a Partner State in an Ethical Economy

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In the  emerging
institutional model of peer production, most visibly in the free software
industry, we can distinguish an interplay between three partners, i.e.

1) a community of contributors that create
a commons of knowledge, software or design;

2) an enterpreneurial coalition that
creates market value on top of that commons;  and

3) a set of "for-benefit institutions'
which manage the 'infrastructure of cooperation'.    

There is a clear institutional division of labour between
these three players.

The contributors create the use value that is deposited in
the shared innovation commons of knowledge, design and code.

The for-benefit institution enables and defends the general
infrastructure of cooperation which makes the project 'collectively'
sustainable. For example the Wikimedia Foundation collects the funds to support
the server space without which access to the Wikipedia would become impossible.

The enterpreneurial coalition makes the individual
contributors 'sustainable', by providing an income, and very often they provide
means for the continued existence of the for-benefit associations as well.

Can we also learn something about the politics of this new
mode of value creation, something that would be useful not just for these
particular communities, but to society in general? Is there perhaps a new model
of power and democracy co-evolving out of these new social practices, that may
be an answer to the contemporary crisis of democracy? My answer will be an
emphatic yes, and stronger yet, I will argue that we are witnessing a new model
for the state. A 'P2P' state, if you will.

Let's look at the mechanics of power and the politics of
commons-oriented peer production by looking at the three players involved in
this new institutional set-up.


1. The post-democratic logic of community

First of all, and quite amazingly, these communities are not
democracies. Why is that so? Very simply, because democracy, and the
market, and hierarchy, are modes of allocation of scarce resources. In
hierarchy, our superiors decide; in the market, prices decide; in a democracy,
"we" decide. But where resources are abundant, as they are with immaterial
knowledge, code, and design, which can be copied and shared at a marginal cost,
they are truly unnecessary.  Such
communities are truly poly-archies and the type of power that is held in them
is meritocratic, distributed, and ad hoc. Everyone can contribute without permission,
but such a priori permissionlessness is 
matched with mechanisms for 'a posteriori'  communal validation, where those with recognized expertise
and that are accepted by the community, the so-called 'maintainers' and the
'editors',  decide which
software/design patches are acceptable. These decisions require expertise, not
communal consensus. The tension between inclusiveness of participation and
selection for excellence is one that every social system must face, and that
peer production has solved in a rather elegant way. The genius of it is not
that it avoids conflict, but that is designs away 'unnecessary' conflict by
allowing for maximum human freedom compatible with the object of cooperation.
Indeed, peer production is always a 'object-oriented' cooperation, and it is
the particular object that will drive the particular form chosen for its 'peer
governance' mechanisms.

The main allocation mechanism in such project, which
replaces the market, the hierarchy and democracy,  is a 'distribution of tasks'. Unlike in the industrial
model, there is no longer a division of labor between 'jobs', and the mutual
coordination works through what scientist call 'stigmergic signalling'. Because
the work environment is designed to be totally open and transparent (this is
called 'holoptism'), every participating individual can see what is needed, or
not and decide accordingly whether to undertake his/her particular
contribution. What is remarkable with this new model is that it has achieved
capacities both for global coordination, and for the small group dynamics that
are characteristic of human tribal forms and that it does this without 'command
and control'! In fact, we can say that peer production has enabled the global
scaling of small-group dynamics.

Of course, there may be conflicts between contributors as
they are working together, and there are, but these are not decided by
authoritarian fiat, but by 'negotiated coordination'. Differences are 'trashed
out' in the forums and mailings lists and chatforums that these communities use
to coordinate their work.

The 'hierarchical' decision that remains, i.e. the decision
to accept or not a patch to the program, necessary to protect the quality and
excellence of its production, is balanced by the freedom to fork. This means
that disagreeing participants can always take the codebase with them, and
create another version, where their options would prevail. It is not a light
decision to take, but it does create a counterpower. Maintainers know that
unjust and unilateral decisions would lead to a bleeding out of the membership
and/or to a fork.


2. The relation between the community and the
enterpreneurial coalition

What is the relationship between this enterpreneurial
coalition and the commons from which they derive their value? The coalition
supports the indvidual commoners in their livelyhood, and may contribute to the
for-benefit-institution as well. For example, IBM pays salaries to the
developers/commoners contributing to the Linux pool, and it supports the
nonprofit (Linux Foundation), with subsidies. In this way, they co-produce and
sustain the commons on which their success is built.

For sure,  by
doing this they also do turn Linux into what is partly a 'corporate commons',
as explained by Doc Searls:

The Linux Journal editor
explains  that, "Linux has become an economic joint
venture of a set of companies, in the same way that Visa is an economic joint
venture of a set of financial institutions. As the Linux Foundation report
makes clear, the companies are participating for a diverse set of commercial reasons."

A Linux Foundation report on the work
on the Linux kernel makes this very clear: "over 70% of all kernel development is demonstrably done by
developers who are being paid for their work
. Over 14%
is contributed by developers who are known to be unpaid and independent, and
13% by people who may or may not be paid (unknown), so the amount done by paid
workers may be as high as 85%.  The
Linux kernel, then, is largely the product of professionals, not volunteers."

But this is not the whole story. Timothy
Lee explains that the corporatization of Linux has not changed its underlying
organisational model:

"…what matters
is the way open source projects are organized internally. In a traditional
software project, there's a project manager who decides what features the
product will have and allocates employees to work on various features. In
contrast, there's nobody directing the overall development of the Linux kernel.
Yes, Linus Torvalds and his lieutenants decide which patches will ultimately
make it into the kernel, but the Red Hat, IBM, and Novell employees who work on
the Linux kernel don't take their orders from them. They work on whatever they
(and their respective clients) think is most important, and Torvalds's only
authority is deciding whether the patches they submit are good enough to make
it into the kernel."

Clay Shirky, author of Here Comes
Everybody: The Power of Organizing Without Organisations
stresses that
companies that work with Linux, such as IBM "have given up the right to manage the projects they are paying
for, and their competitors have immediate access to everything they do. It's
not IBM's product."

This then is the point I want to
make, that even with shareholder companies allied with peer production, the
community's value creation is still at the core of the process, and that the
enterpreneurial coalition, to a substantial degree, already follows this new
logic, where the community is primary, and business secondary. In this model,
business logic has to accommodate to the social logic, it is in other words,
already an 'ethical economy'.


3. The democratic logic of the for-benefit

Peer production also rests on a sometimes costly
infrastructure of cooperation. There would be no Wikipedia without the funding
for its servers, no free software or open hardware without similar support mechanisms.

This is why open source communities have created a new
social institution: the for-benefit association.

Again, an important social innovation, because, unlike
classic non-profits or non-governmental institutions, they do not operate from
the point of view of scarcity. Classic NGO's still operate much like other
industrial institutions such as the corporation and the market state, as they
believe that resources need to marshalled and managed. By contrast, the new
for-benefits have only an active role in enabling and empowering the community
to cooperate, by provisioning its infrastructure, not by commanding its
production processes. These associations exist for the sole purpose of
'benefitting' the community of which they are the expression, and this is the
good news, they are generally managed in democratic ways. And they have to be,
because an undemocratic institution would also discourage contributions by the
community of participants.

Now, here is the kicker, how would you call an institution
that is responsible for the common good of all the participants, in this case,
not the inhabitants of a territory, but of people involved in a similar
project? I would argue that this type for for-benefit institution has a very
similar function to what we commonly assign to the state. While the state form
is always also a class institution which defends a particular arrangement of
social privilege, it can never be a simple instrument of privileged rule alone,
but needs to manage the common as well. To the degree that it is seen to do the
latter, most people would see this as an acceptable or even 'good' state form.
On the other hand, to the degree that I fails to do this, it looses legitimacy,
and is increasingly seen as a source of oppression by a minority. Generally
speaking a state reflects the balance of forces in a particular society. The
welfare state was an acceptable form because it was based on a social
compromise and on the strength of a strong labour movement, while the 'fear of
God' was instilled to the privileged layers by the existence of an alternative
state form that could have taken away the loyalty of their citizens. Once this
alternative collapsed in 1989, with the social movements in the West further
weakened by the social, political and economic choice to desindustrialize the
North since the 1980s, the welfare state slowly made place for the contemporary
corporate welfare state (sometimes called the 'market state'), which only helps
the privileged, guts social solidarity mechanisms and impoverishes the majority
of its population, and fatally weakening the middle class. Unfortunately, such
a system can have no long term legitimacy, and breaks any social contract that
can guarantee social peace. It's hard to build loyaly, on the promise of ever
increasing pain!

This means we are witnessing not just the actual death of
the social welfare state, but also the announced death and logical
impossibility of the neoliberal
corporate welfare state. We should also of course add that even the welfare
state, has become problematic. The main reason is that its social basis, the
western industrial labour class and its social movements, have become
demographic minorities, and that its mechanisms, even when they worked, would
not do much to assist the current social majority, i.e. the often freelancing
and precarious knowledge and service workers. Furthermore, the paternalistic
and bureaucratic functioning of many welfare state institutions are becoming
inacceptable to the emerging demand for personal and social autonomy, that is
one of the primary social desires of the new class of knowledge workers. Many
of the other positive social functions of the welfare state have been weakened
by neoliberal "New Labour" reforms which aimed to introduce private sector logics
in the public sector.


4. Towards a Partner State

Can we then, imagine, a new type of state? Enter the concept
of a Partner State! The Partner State, first theorized by Italian political
scientist Cosma Orsi, is a state form that enables and empowers the social
creation of value by its citizens. It protects the infrastructure of
cooperation that is the whole of society.

The Partner State can exist at any territorial level, as a
set of institutions that protect the common good, and enable the citizens to
create value. It does on a territorial scale, what the for-benefit institutions
do on a project-scale. While the for-benefit associations work for the
commoners as contributors and participants to particular projects, the Partner
State works for the citizens. This is needed because just as the Invisible Hand
of the market is a myth,  so would
an invisible hand of the commons. Commoners tend to care about 'their' commons,
not about society as a whole. That specific care for the whole, requires its own
specific set of institutions!

The good news is, such a Partner State already exists, we
have seen it in action, at least in a local embryonic form. A few years ago, we
visited the city of Brest in French Bretagne. Brest is not really a beautiful
city, though it is embedded in a most beautiful natural region and undoubtedly
has it charms. But it was bombarded in WWII and a lot of rather unattractive
social housing was built, leading to a certain amount of social 'anomie'.
Michel Briand, assistant to the Mayor, 
and his team of city workers had a brilliant idea: why not use the
virtual, to enhance physical social life in the city? The team created local
versions of Facebook, YouTube and Flickr, helped local associations develop a
online presence6, invested heavily in training, and even had a physical library
where citizens could borrow production material. One of their projects was the
revitalisation of old 'smuggling trails' in order to attract the 'trekking'
crowd. So, they decided to 'virtually enrich' the trails.

And here is where their social innovation comes in: the city
council did not do by substituting themselves to the citizenry (i.e. state
provisioning), nor did they ask the private sector to carry this out
(privatisation or public-private partnerships), no, what they did was to enable
and empower local teams of citizens, to create added value. This happened
through various forms such as the creation of picture galleries of notable
landmarks, in the form of oral history collections, etc … (even "bird taping"
was on the menu!) This then is the Partner State, namely public authorities
which create the right environment and support infrastructure so that citizens
can peer produce value, from which the whole society then benefits. It
stimulates a thriving local economy as well, as local enterpreneurs create
added market value and attract more tourists. Michel Briand and his team worked
tirelessly 'for the benefit of the citizens', enhancing  their capacity to create civic value.
Obviously, the knowledge and culture thus created constituted a vibrant
commons. If we expand this on a national and even supra-national scale, we get
a state form that practices 'commonfare', i.e. fosters the commons and the
value-creating commoners.

There are of course other examples to mention as well. The
Austrian region of Linz has declared itself a Commons Region; the city of
Naples has created "An Assistant to the Mayor on the Commons" position, and
San  Francisco city council has
created a Commission to promote the Sharing Economy.

One danger lurks here though, and this was exemplified by
the Big Society program in the UK, which uses a superficially similar language
of civic autonomy and action, but hides a completely different practice, i.e.
is based on a strategy to further weaken the welfare states and its provisions.
A partner state cannot be based on the destruction of the public infrastructure
of cooperation. This may not have been the initial intention of Philipp Blond
and his 'civil society'-oriented 
'Red Tories', but it certainly is what the David Cameron's government
put in practice. The peer production of common  value requires civic wealth and strong civic institutions!
In other words, the partner state concept 'transcends and includes' the best of
the welfare state, i.e. the social solidarity mechanisms, high educational
attainments, and a vibrant and 
publicly supported cultural life. What the British Tories did was to use
the Big Society rhetoric to attempt to further weaken  the remnants of social solidarity and throw people back to t
heir own wits without any support. There was no enabling and empowering, but
rather its opposite.

While peer production will undboudtedly also emerge as a drive for resilience in bad
times, a really thriving commons-based society requires a Partner State, i.e. a
network of democratically-run for-benefit institutions which protect the common
good on a territorial scale.


5. A value crisis of the capitalist economy

While peer production exists in relation with an
enterpreneurial coalition which creates market value on top of the commons, the
exponential rise in the creation of user value by productive publics, or
"produsers" as Axel Bruns calls them, is not without creating problems and
contradictions for the current political economy.  Indeed, it creates 
in fact a huge problem for a capitalist system, but also for workers as
we have traditionally conceived them. Markets are defined as ways to allocate
scarce resources and capitalism is in fact not just a scarcity 'allocation'
system but in reality a scarcity engineering system, which can only accumulate
capital by constantly reproducing and expanding conditions of scarcity. Where
there is no tension between supply and demand, their can be no market, and no
capital accumulation. What peer producers are doing, for now mostly in the
sphere of 'immaterial' production of knowledge, software, and design, is to
create an abundance of easily reproduced information and actionable knowledge,
that cannot be directly translated into market value, because it is not at all
scarce, but on the contrary, over-abundant. And this activity is moreover done
by knowledge workers, who are now being produced on such a massive scale, that
their over-supply also renders them into precarious workers. Hence, an
increased exodus of productive 
capacities, in the form of direct use value production, outside the
existing system of monetization, which only operates at its margins. In the
past, whenever such an exodus occurs, of slaves in the decaying Roman empire,
or of serfs in the waning Middle Ages, that is precisely time when the
conditions were set for huge and fundamental societal and economic phase

Indeed, without a core reliance of capital, commodities and
labor, it is hard to imagine a continuation of the capitalist system.

The problem of the use value creation that internet
collaboration has enabled is that it totally bypasses this normal functioning.
The normal functioning of our economic system would require that increases in
productivity are somehow rewarded and that these rewards enable consumers to
derive an income and buy products. But this is no longer happening. Facebook
and Google users create commercial value for their platforms, but only very
indirectly and they are not at all rewarded for their own value creation. Since
what they are creating is not what is commodified on the market for scarce
goods, there is no return of income for these value creators. This means that
social media platforms are exposing an important fault line in our system.

The current so-called 'knowledge economy' is therefore a
sham and a pipe dream, because abundant goods do not function well in a market
economy. For the sake of the increased precariousness that is awaiting the
world's workers, is there a way out of this conundrum? Can we restore the
broken feedback loop?


6. The prefiguration of a new social model

Strangely enough, the answer may be found in the recent
political movement that is Occupy, because along with 'peer producing their
political commons', they also exemplified new business and value practices.
These practices were in fact remarkably similar to the institutional ecology
that is already practiced in the production of free software and open hardware
communities. This is not a coincidence.

Let's look back at the workings of Occupy Wall Street at
Zuccoti Park, when it was still in operation last fall. At the center, there
was a productive public, reaching consensus through the General Assembly and
offering all kinds of templates (Mic Check, Protest Camping, Working Groups,
etc.) which, in a true open source way, could be copied and practiced by
similar communities the world over, but also modified to suit local needs (this
is called 'forking' in open source parlance). If you did not contribute, you
had no say, so engagement was and is necessary.

This community had all kinds of needs, physical needs, such
as food, shelter, health care. Did they simply resort to the market economy for
this. No, but also yes, but in a qualified way. Let me explain.

OWS set up all kinds of working groups to find solutions to
their physical needs, in other words, the economy was considered as a
provisioning system, as explained in Marvin Brown's wonderful book on
'Civilizing the Economy', and it is the 'citizens', organized in working
groups, which decide which provisioning system would be appropriate given their
ethical values. For example, the Vermont organic farmers provided free food to
the campers, cooked by volunteer chefs, but this had a negative side effect.
Indeed, the local street vendors, generally poor immigrants, did not fare too
well, with everyone getting free food, they could no longer easily sell their
wares. The answer to this drama was that the occupiers cared about the vendors,
and set up a Occupy Wall Street Vendor Project, so that funds could be raised
to buy the food from the vendors. Bingo, in one swoop, OWS created a
well-functioning ethical economy, that was both a market dynamic, but that also
functioned in harmony with the value system of the occupiers. What is crucial
here is that it was the citizens who decided on the most appropriate
provisioning system, and not exclusively the property and money owners in a
economy that is divorced from ethical values.

What can we learn from the incipient
Occupy model, if we generalize it on the level of society as a whole?

Today, we assume that value is
created in the private sphere, by for-profit companies, and let's recognize
that civil society is just a 'remainder' category, it's what we do when we come
home, exhausted after our paid work. 
This is recognized in our derivative language for civil society, where
we call them nonprofits or non-governmental. The system as a whole is managed
by a state, where the social democratic welfare state has increasingly become a
neoliberal corporate welfare state, where the gains are privatized and the
losses socialized. In other words, the state itself has become an extension of
the corporation, and is increasingly less and less a servant of the citizenry.
We can see the progress of this model in how the Troika is now imposing
slash-and-burn politics in the heart of Europe, i.e. Greece, and no longer on
weaker developing countries alone.

Occupy and open source models show us
a new possible reality, a model where the democratic civic sphere, productive
commons, and a vibrant market can co-exist for mutual benefit:

?   At the core of value creation are
various commons, where the innovations are deposited for all humanity to share
and to build on

?   These commons are enabled and
protected through nonprofit civic associations, with as national equivalent the
Partner State, which empowers and enables that social production

?   Around the commons emerges a vibrant
commons-oriented economy undertaken by different kinds of ethical companies,
whose legal structures ties them to the values and goals of the commons
communities, and not absentee and private shareholders intent of maximising
profit at any cost

Where the three circles intersect,
there are the citizens deciding on the optimal shape of their provisioning

This model can exist as a submodel
within capitalism, and partially already does so in the present system, as the
open source software business ecology. It could also become, with some
necessary hacks, the core logic of a new civilization. The Occupy movement has
not just shown us prefigurative politics, but in fact, prefigurative economics.

A separate question is of course,
"how do we get there". Part of the answer is that this will require not just
powerful social movements that advocate for social reform and transformation,
but a further transformation and maturation of the peer production model

Today, it is proto-mode of production which is
entirely inter-dependent with the system of capital. There would be no social
reproduction of the workers involved, if not for the general public
infrastructure provided by the state, but more specifically, through the income
produced by working for capitalist enterprise.

Is there any possibility to create a
really autonmous model of peer production, that could create its own cycle of
reproduction? For this, we propose two 'hacks'.

The first is the use of a new type of
license, the peer production license, which has been proposed by Dmytri
Kleiner. This sharing license proposes that all who contribute to the commons,
can also use the commons. The second hack consists of creating independent
enterpreneurial vehicles that are not for-profit companies, but ethical
companies, whose members are the commoners, and whose mission is the support of
the commons and its contributors. Following the lead of Neal Stephenson in his
fictional account in The Diamond Age, and the pioneering practice of the
cooperative network lasindias.net, we propose to call them phyles. Phyles are
mission-oriented, purpose-driven, community-supportive entities that operate in
the market, on a global scale, but work for the commons. In this way, the
social reproduction of commoners would no longer depend on the accumulation
cycle of capital, but on its own cycle of value creation and realization.
Combined with social movements and political representation, we believe this
three components would be the basis of a new social and political 'hegemony',
which would be the basic social force pushing for social transformation in the
sense of a deepening and broadening of peer production models, from the
micro-economy, to the macro-economy.


7. Towards a civilization based on economies of
scope, not scale

Following the international division of labour imposed by
globalization, the aim of the competition is to be able to produce more of a
unit, so as to drive the unit price down, and outcompete the competition.
Multinational corporations and global brands now have very complex value
chains, where various parts of a product are mass produced in different parts
of the world.

Nevertheless, the system has obvious weaknesses. One
weakness is that it drives towards monocultures, both of the agricultural type,
but also industrial monocultures such as the dependence of the Chinese coastal
economy to exports. And the latter example highlights a related second problem.
Competition drives prices relentlessly down, so, in the 1980's, the domimant
western players changed their strategy. They abandoned the costly western
workers to precarity, moved the low-profit industrial production to low wage
countries, and expanded the IP regime to extract rent and superprofits via
patents, copyrights and trademarks. As Thijs Markus writes  so eloquently about Nike in the Rick
Falkvinge blog, if you want to sell $5 shoes for $150 in the West, you better
have one heck of a repressive IP regime in place. Hence the need for SOPA/PIPA
, ACTA'S and other attempts to criminalize the right to share.

But there is of course a more fundamental problem: the whole
system of globalizing the advantages of scale fundamentally  rests on cheap global transportation
and thus, the continuous availability of superabundant fossil fuels. After the
passage of Peak Oil, and thus the end of the era of cheap oil and with still
exploding demand from the exploding BRICS countries, it is more than likely that the whole regime
will come tumbling down, not in one day of course, but gradually, though
non-linear downward jumps are to be expected as well. Punctuated equilibrium is
indeed not just a feature of biological systems, but of social systems as
well!  This means that competing
on the basis of scale, even if it is still effective today, is also ultimately
a game that loses relevance and ultimately can only be played by those who do
not care about the destruction of our planet … What game can the others play?
Consistently increasing prices for fossil fuels means that innovation and
competition have to find another outlet. Actually,  it's about inventing another game altogether.

But first, a short historical intermezzo, as this drama of
transition has been played  out
before …

While the late fifth-century Romans were still fighting for the crown of Cesar Augustus,
the Germanic 'barbarians' were already at the gate, and the Christian
communities already prefigured the values of a coming era of relocalization
based not on an economy of scale, but on an economy of scope. And what are
economies of scope? As a teaser, for now, this short definition: ""An economy
of scope exists between the production of two goods when two goods which share
a CommonCost are produced together such that the CommonCost is reduced." In
other words, something that brings down the common cost of a factor of
production, not by producing more of a unit but through shared infrastructure

But let's resume our short historical excursion.

As the Roman Empire could no longer bear the costs of its
own scale and complexity and supplies of gold and slaves became gradually more
problematic, the smarter landowners started to free their slaves, but binding
them contractually to the land as 'coloni' (serfs) while on the other hand, the
increasingly taxed and bankrupted freeholders sought protection from the very
same domain holders. Thus, one side of the equation was pure and simple
localization, since the system could no longer bear the global scale of the
Empire. But the new post-Roman system also invented a new system of innovation,
based on the advantages of scope, not scale. Indeed, as the cities were
emptying out, and with it its knowledge system of urban libraries, elite home
schooling and academies; the Christians invented monasteries, as the new
agrarian knowledge centers. But the important thing is that while the physical
system localized, the Christian Church actually functioned as a global open
design community. Monks and manuscripts travelled, and with it the many
innovations of the worker-monks. While Europe initially decayed as the remnants
of the Empire crumbled, eventually, after the first European social revolution
of 97512, this new system created the seeds for the first medieval industrial
revolution. Between the 10th and the 13th century, based
on a unified culture of knowledge, Europe started once again blossoming, re-introduced
negative interest money which kept accumulation by elites in check, doubled
its population, regrew its beautiful cities many of which were run
democratically by the guild councils, and invented peer to peer universities
in Bologna in the 11th century. This first Renaissance was all
based on the economics of scope, the unified body of knowledge that European
intellectuals and artisans could build on. The guilds may have had their
secrets, but they took them with them wherever Cathedrals were built.

The same experience was reiterated in 1989, on a national
scale, in the most dire circumstances, when isolated Cuba could no longer rely
on the advantages of scale of the Soviet system. The Cuban crisis of 1989
prefigured the current world situation because they experienced their very own
Peak Oil situation when the Soviets abruptly stopped delivering oil at below
world market prices. While initially the Cubans went back to using donkeys and
the bodyweight of the population went in decline, the rulers took a number of
interesting initiatives. First, they liberated local enterpreneurship by
granting more autonomy to the local agricultural cooperatives; and second, they
mobillized the grassroots knowledge of the population, including of urban
dwellers. But thirdly and perhaps most crucially, they created a number of
agricultural institutes with the overriding goal of emulating and spreading
local innovations. Whatever the other faults of the totalitarian system in
Cuba, this open design experiment worked beyond all expectation. As documented
by Bill McKibben and a number of documentaries, Cuba now produces more
nutritious and organic food, with a fraction of fossil fuels, and this for the
same reason as the earlier example regarding the Christian Church in the
European Middle Ages: sharing knowledge created economies of scope.
Agricultural innovations could quickly spread across the country and be adopted
by everyone.

Indeed, economies of scale work well in periods of energy
'ascent', when  more and more
energy is coming online, but they work less and less in periods of energy  'descent' when the overall supply of
energy and resources are diminishing. What you need then are economies of
scope, when  you can 'scale up from
one', as with today's emerging "making on demand" infrastructure. Economies of
scope is exactly what peer production ( in its different iterations of open
knowledge, free culture, free software, open and shared designs, open hardware
and distributed manufacturing, …) is all about.

Let's recap what is wrong with the current global system,
which is entirely predicated on economies of scale, and actually in many
instances makes economies of scope illegal.

1) Our current system is based on the
belief of infinite growth and the endless availability of resources, despite
the fact that we live on a finite planet; let's call this feature, runaway

2) The current system beliefs that
innovations should be privatized and only available by permission or for a
hefty price (the IP regime), making sharing of knowledge and culture a crime;
let's call this feature, enforced 'artificial scarcity'.

Peer production methodologies are based on the exact
opposite economic and social DNA. Peer production communities believe that
knowledge is a commons, for all to share, and hence, no innovation can be
withheld from the human population as a whole. In fact, withholding a
life-saving or world-saving innovation is seen as distinctly unethical, and
this represents a true 'value inversion'. And peer production designs for
'distribution' and inclusion, i.e. small scale, even 'personal' fabrication.
Planned obsolescence which is a feature and not a bug of the current system, is
totally alien to peer production logics. In other words, sustainability is a
'feature' of open design communities, not a bug.

Again, there are historical precedents to such value
inversions. The christian communities in the Roman Empire were not competing
with Empire, they were building their own institutions, based on a different
and alien logic. While Roman elites hated work, this was for the lowly slaves,
christian monks extolled work and tried to prefigure Eden in their earthly
Cities of God. Similarly, the French Sans-Culottes of 1789 were not competing
for feudal privileges, they abolished all of them in one single day. It would
therefore be wrong to see peer production simply as a set of 'competing'
techniques … In fact, these evolutions are happening on a different plane
altogether. They live and co-exist in the same world, but they do not really
belong to the same world-logic.

So what are the economies of scope of the new p2p age?

They come in two flavours:

1) the mutualizing of knowledge and
immaterial resources

2) the mutualizing of material productive

The first principle is easy to understand. If we lack
knowledge as individuals, and nobody can know everything,as a community, local
or virtual, it is much more likely that someone knows. Hence, the mutualizing
of knowledge and 'crowd-accelerated innovation', now already a well-known
feature of the collaborative economy. But the advantage of scope is created
when that knowledge is shared, and thus, it can be used by others. With this
social innovation, the common cost of the joint production factor that is knowledge,
is dramatically reduced. Take the example of the paradigmatic Nutrient Dense

This global community of agrarian workers and citizen
scientists is interested in experimenting with better nutrients to obtain
better quality food. Hence joint research can be carried out to test various
nutrients in various soils and climate zones, and they will instantly benefit
not just the whole participating community, but potentially, the whole of
humankind. Strategies that are based on privatizing intellectual property,
cannot obtain such advantages of scope, or at least, not at that level. Or take
the example of the urban homestead of the Dervaes family in Los Angeles, who
succeed in producing 6,000 pounds of food annually on a tiny city plot. Because
they are sharing their productivity innovation, hundreds of thousands have
already learned to improve their own lots, but imagine the speed of innovation
that would occur if they were supported by Partner State institutions, who
would support and spread such social innovations even further!

The second principle, of mutualizing physical productive
resources, is exemplified by the trend towards collaborative consumption. The
general idea is the same. Alone, I may lack a certain tool, skill, or service,
but seen from the point of view of a community, it is likely someone else has
it, and that other person could share, rent or barter it. No need to all
possess the same tool if we can access it when we need it. Hence the
proliferation of 'p2p marketplaces'.

Let's take an illustrative example: car-sharing. Car-sharing
projects can be mutualized through the intermediary of a private company which
owns the cars (fleetsharing, like ZipCar), through p2p marketplaces which link
car users to each other (RelayRides), or through nonprofits (San Francisco) or
public entities (Autolib in Paris). But they all achieve economies of scope.
According to a study cited by ZipCar, for every rented car, there are 15 fewer
owned cars on the road, but not just that carsharing members change their
behaviour and drove 31% less than when they owned a vehicle. So, in 2009 alone,
car-sharing diminished global carbon dioxide emissions by nearly half a million

Imagine similar developments in every sector of production

So, how will the new system look like, if economies of scope
become the norm and replace economies of scale as the primary driver of the
economy and social system?

We already mentioned the global open design communities, and
we suggest that it will be accompanied by a global network of microfactories,
who are producing locally, such as the ones that the open source car companies
like Local Motors and Wikispeed are proposing and which are already prefigured
by the networks of hackerspaces, Fablabs and co-working spaces.  This means we  also need global material organisations, not to produce on a
global scale, but to organize our material activities so as to minimize the
'common costs' of the various networks, and not just in terms of sharing
knowledge.  In other words, who
will play the role that  the
Catholic Church and its roaming monks played in the Middle Ages? Let's not
forget, it was not just an open design community but an effective material
organisation giving leadership to a whole continent-wide cultural sphere. Do we
have a potential p2p version of this, that can operate globally? The answer is
of course the generalization of the "phyle" as proposed previously.

The only thing left to do is to have an answer to the
crucial question: how does global governance look like in P2P civilization? How
can we transform  the global
material Empire which at present dominates world affairs for the benefit of a
few,  and replace the ineffectual
global institutions that are present inadequate to deal with global challenges?


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