Learning and Education in the Networked Society

We are on the brink of a fundamental shift in society. As we journey towards the Networked Society we are unlocking the full potential of learning and education. Students and progressive teachers, empowered by technology, are turning established models on their heads while new skills and educational platforms are redefining our systems and institutions. 

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Jeremy Rifkin: fears of a brave new world

Will wars be fought for the control of genes in the 21st century? Jeremy Rifkin fears the worst and explains why...

"Our futurists have too narrowly defined the twenty-first century as the information age. In fact, a far more profound shift is taking place in the global economy. Computers and genes are beginning to fuse into a single powerful technological and economic force that is laying the foundation for the biotech century. Computers are increasingly being used to decipher, manage and organize the vast genetic information that is the raw resource of the new global economy. Already multinational corporations are creating giant life-science complexes from which to fashion a bio-industrial world.

There are tremendous short-term benefits—new plants and animals, new pharmaceuticals and energy sources. But it is naive to believe that these benefits come with no costs. The environmental, social and ethical implications of this science are chilling. Will the creation of cloned, chimeric and transgenic species mean the end of nature? Will the mass release of genetically engineered organisms into our biosphere mean genetic pollution and irreversible damage to the biosphere in the twenty-first century? What are the risks of making a “perfect” baby?"

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The Rebirth of Guilds “Restoring the social fabric of our communities”


This series of blogs traces the history of guilds and the modern forces driving their re-emergence: failure of industrial institutions, technology that speeds up learning, a search for intimate community and the de-evolution of power from the central state.  Further, the need for social change is discussed along with a prescription of the functions these new guilds can perform, and those they cannot.  We conclude this series with a brief discussion of how modern guilds can offer ownership of the means of social preservation to workers of the future.  


P2P and Human Happiness by Michel Bauwens

The emergence of distributed networks, defined by capacity of agents to freely determine their actions and relations, and of the internet and the social web in particular, have created a new set of technological affordances creating a broad range of open knowledge and open design communities functioning according to a ‘peer to peer’ social logic. These communities have set in motion a new set of social processes for the creation of value, which we could summarize as peer production (the ability to produce in common), peer governance (the capacity to self- organize) and peer property (the capacity to make common production universally available). The social web has created the possibility to create complex social services, and ‘productive systems’, through the global coordination and scaling of small group processes of mass participation, moving them from the periphery of social life to its very center.

The aim of this paper is to describe the characteristics of this new social process, and to see howthey are specifically related to the issue of human happiness. 



The Rise of the Micro-Multinational

The Rise of the Micro-Multinational: How Freelancers and Technology-Savvy Start-Ups Are Driving Growth, Jobs and Innovation 
By Ann Mettler and Anthony D. Williams 

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P2P Production and the coming of the Commons: transcript (unedited)

Michel Bauwens, Helsinki 28/09/2012 

Michel: “I’d like to start with some examples, because otherwise some people will think well, it is theory; maybe in thirty years something like that (will happen)… so I‘ll start with two examples. This one I like, it’s almost a P2P-exemple by the book as it were. 

The Nutrient Dense project
This is a community of people who have this very strange idea that if you put good nutrients in the soil, you will get better food. That might sounds logic for this audience, but it is just the opposite of industrial agriculture witch depletes the soil to make good food. So these people are not going to get a lot of money from the government because organic food gets only about one tenth of the subsidies of the agro-business, and I don’t think Monsanto is very interested in helping them either. So what do you do in such circumstances? What they do is mutualising their research infrastructure. This is a community of farmers and scientists who decided to do collective research. So you have a particular biotope, let’s say a particular type of soil, maybe Bhutan versus Peru, with a pretty similar biotope, they do their experiments and they share their results. I like to show this because this is a kind of knowledge that has an immediate impact on the productive capacity and life of this people. So this is not theoretical, not just ‘nice to know’, like Wikipedia This is something that has to do with the way we grow food.

The other example I’d like to show is Wikispeed. There are not many cars like that driving already, just a few, but I think this is important because the car is the emblematic product of our industrial capitalist society, right? There is nothing more typical than the car and actually you could argue that the car (symbolizes) the current or perhaps already the previous phase of our system. There are a couple of interesting things about this project. First of all it was done by about eighty people in a dozen countries in three months time. It was done without any financial capital whatsoever. They succeeded in designing a car that has a one hundred mile per gallon fuel efficiency, which is about 4,5 times of what you can find on the market from Detroit. Thy have a five star security crash rating, so you can drive the car - it works. It has a modular design, which is very interesting because industrial production under capitalism is mostly a linear process; at each stage you need a command, you need permission, you need control, and then it moves to another stage. But this is an open design project, where every module of this car can be designed separately by different people in different places in the world, so it is “massive parallel distributive development.” This is why they can do this in three months time, whereas it would take five years to do something approximately the same –if they wanted to do it, because now the fight in the US against a new law which would double the requirements from I think 23 to 56 miles per gallon, so they don’t want to do it, but if they wanted to do it, with all their capital, it would take five years. This project (Wikispeed) converged with another one, which is called open source ecology, which is an American project, based in Missouri, and they are building 54 (I think it is 54 – I’m not sure) basic machines that a modern village would need to have a modern comfortable lifestyle. They are building all these machines as an open hardware design and they have developed something called extreme manufacturing methodology, so basically all the techniques that were used are (similar?) to produce very fast software development and most of them are paid by the open source software communities, they are blind into the design. So why is this important?

Okay, let’s take a historical analogy: industrial capitalism, mass consumer based capitalism, was actually born when Henry Ford used Taylorist assemble lines, so you put different things together. So when you have a method, that’s basically when mass industrial production started. Now, this is an interesting project for different reasons. If you live in a society that is characterized by energy and resource abundance, which is what we think we have, then you compete with something that is called economies of scale. Economies of scale means that we become competitive by using more resources, by doing more of the same thing; that is how you become competitive. So in other words you use more energy, you use more materials to produce something. Now, when we are moving from an economy of abundant energy resources and abundant physical resources to a period where all these things seem to be in decline, then what we need are economies of scope. Economies of scope mean doing more with the same things. So Wikispeed by using open design, are mutualising their knowledge, so it is doing more with the same knowledge. They are not just mutualising their design, but they are also mutualising their machinery, the design of their machines. So Wikispeed is based on a micro-factory model. So in other words they scale for one, it’s manufacturing on demand, they start by making a car when somebody asks for one, they assemble it locally, it takes two or three days; it’s like a Lego system, and they use 3D printing machinery which is basically machines that allow you to print an object from a design on the computer. And by combining different 3D printing machines they make different parts of the car and can then assemble the car. But people are also collectively designing the machines, so this is very important. 

So if you know anything about history, this happened before, right? At the end of the Roman Empire… usually empires grow until a certain point and then the cost of expansion becomes more than the benefit of expansion, they start stagnating, then a tribe from the outside invades and the whole thing starts again. But in the case of the Roman Empire something different happened, which is they relocalized their economy, right? Feudalism was no longer based on a globalised Roman trade system; it was based on relocalizing the productive resources. But they used open design because they had a global open design community called the Catholic Church. And the monks worked most of the time, they travelled through Europe, they were actually working, they were farmers as well, and they were sharing all the technological advances throughout the European continent. So this is a historical example of a shift from economies of scale to economies of scope that already happened some time ago. 

I think this is a good example to show how these different things fit together. I’ll show you one more thing… Which is called Bitcoin. If you don’t know Bitcoin… Bitcoin is a peer-to-peer produced currency; I’m being paid in Bitcoin partially by my P2P Foundation Cooperative. So it’s basically a global reserve currency that has been created by a community of hackers through a cryptographic process. So it’s the first social sovereign currency–which means it is not created by the state-, it is not created by the banks- and it is globally scaled. And what is interesting is that you can now use peer-to-peer money to buy a peer-to-peer car. 

Phase Transition
So let me tell you why this is important. Imagine we are living in the sixteenth century, the time of the print revolution. So first you have Gutenberg with the print revolution, and before that, if you wanted to know “the truth”, you relied on one single Church, which everybody believed had basically the Word of God and was Truth. And most people couldn’t read the Bible. So once you had printing, people start printing the Bible, people can read the Bible, people can interpreter the Bible in different ways and they can share interpretations with other people using mobile printing devices. So in other words, there was a change in the sense what truth was and all of that, which came around this technology. And in the same way, two or three centuries before, during the Crusades the Templers who were in charge of moving the money for the Pilgrims who went to the Holey land, they invented or reinvented double book accounting. The Catholic Church started to talk about purgatory around the 11th century. So you could be a banker and charge interests without going to hell immediately. You bought indulgences, which allowed the Church to build cathedrals, and so you could be a banker, right, before that was impossible. So if you had lived in the sixteenth century you probably wouldn’t know what all these changes meant, you would have seen that you were living in interesting times, things were changing, but it would not have been clear to you what those changes meant. 

So what you had were different patterns emerging in different fields, cultural patterns, productive patterns, financial patterns… But what about if you lived in the eighteenth century? Well if you had lived in the eighteenth century, it would have been clear to you that all these patterns meant one thing: capitalism. Because all these different patterns had aggregated with each had other in a different way of creating value and distributing value and out of this came a whole new set of human institutions to organize society and economic life. So basically my claim is this: my claim is that we are now living this period where basically the generalization of the network and the horizontalisation of human relationships and especially human productive relationships that is in chaos (?) is creating distributed infrastructures, distributed practices, is creating all kinds of new patterns of solving human problems and these patterns are slowly congregating and aggregating in a new way of creating value and creating new institutions, and this is basically what I want to talk to you about today. 

So if we talk about peer-to-peer in peer-to-peer production and the Commons, which is the title of the talk… so first of all, peer-to-peer is a relational template. When you say peer to peer, basically what you are describing is a particular type of relationship. Think about working on Wikipedia or working on Linux, or working on Arduino motherboards, or working on Wikispeed. What you doing there is… individuals are contributing to a common project, right? So this is not a market exchange; this is not a hierarchical allocation and this is not a gift economy either. Because that is a misconception, that the Internet is a gift economy. In a traditional gift economy, I give you something and this creates an inequality in our relationship, therefore you feel the need to give something back; and most tribal societies are organized mainly around the notion of gifts. Most feudal societies are organized around the notion of hierarchical allocation and off course all market societies are based on market pricing and market relationships. 

But this is something different, and let me describe you the value logic of this new system. So in systems like Wikipedia, Linux and Arduino, Wikispeed… what is happening is that people are contributing to a common project. Some of these people may be volunteers; other people may be paid. In Linux for example, the open operating system, 75% of the people working on Linux are paid by private corporations. 25% are not. But it depends on the different projects; they have different balances between projects (?). But the important thing is people are contributing to a common project using new property formats, and I want to remind you that capitalism rose when we had a new property form, right? Feudalism doesn’t have private property like in capitalism. In feudalism you don’t really own the land yourself, it’s a family thing, right, it is your family lineage who owns the land, and it is a set of rights and obligations. As we move to the enclosures of the sixteenth century, the feudal lords become capitalist owners, the land is theirs and they can do with it want they want. So they chase away the farmers to bring in sheep, those farmers have no longer access to the land, they become labour and they join with capital to form a new system, right? In here, you have new-shared property formats. So if you work on an open knowledge project like Wikipedia, an open software project like Linux, you are creating a common property, right? 

So –and that is very important- the value is accumulated in a commons, a common pool that everybody can access. This is very different from the way we are doing things today. Today we think that value is created privately. Corporations pay researchers, pay labour, put copyrights or patents on innovation and sell that as a commodity on the market. In the new system I’m describing people are contributing to a common project which is universally available. And this is where the value is deposited. So in other words, we have now what I call productive publics. Civil society has become productive itself. It can create value through contributions. 

For-benefit associations
Now, the second aspect of this new modality is what I call for-benefit associations. For example Bitcoin has a Bitcoin Foundation. Linux has a Linux Foundation. The Wikipedia has a Wikimedia Foundation. What do they do? Do they command and control the productive activity of their systems? No they don’t. But what they do is, they enable the cooperation to occur by protecting the commons and protecting the cooperative infrastructure. So these for-benefit associations protect the commons, that is basically their essential role. Peer production itself is not democratic. It is based on free personal allocation of your skills and energy and time. So basically people choose whether they want to or not contribute to a commons. So this is called in scientific terms a stigmergic approach. Stigmergy is the language of the ants, and ants leave chemical trails that determine the behaviour of the other ants. So basically if you want to contribute to such a project, let’s say a Wikipedia article, you want to write something about Mahayana Buddhism, you check it out, there is no article on it, you can write one. There is an article but it misses something that you know, you can add your peace of knowledge to the project. So this is called stigmergy. So basically, the technical term that us used is holoptism, the ability to see the whole, as opposed to panoptism, which is only the top can see the whole, which is the case in our traditional institutions. The higher you go in the hierarchy, the more you can see of the system. It’s very important to name things in the right way, so when I say they are for-benefit associations, what do we think about non-profits? Non-profits is the old system. In the old system we think profit comes first and non-profit is a secondary activity. If we say non-governmental that means that government comes first and non-governmental is a secondary thing. If we are saying this is a for-benefit association, it means it is for something. It is not a secondary activity at all. 

Entrepreneurial coalition
There is a third player though, and the third player is something I call the entrepreneurial coalition. The entrepreneurial coalition is all those companies that work with a commons to add value on top of the commons to operate in the market place. So typically you have to think of a variety between abundance and scarcity, right? We learned in school that economics is about the allocation of scarce resources. So in order to do a market activity, it has to be scarce. So what can that be? By the way, the open source economy is already one sixth of GDP in the United States. 17% of the economy is driven by this type of activity. So the entrepreneurial coalition lives from the commons. A typical example would be IBM. IBM used to be a hardware company, 15 years ago they went into trouble, and essentially they transformed to a Linux consultancy company. That’s what they do. So they use Linux as their collective infrastructure they pool with other companies, and they use Linux as their raw infrastructure and they make all kinds of derivative products on top of this open source software. So they are a kind of in a contradictory position, right? Because they have to make market activities while relying on something abundant that cannot be marketed. 

This is the difficulty of what I call open business models. So open business models are always activities that try to create a sustainable living from a commons, without relying on rent, Intellectual property. So these three players… how does it work? Commoners contribute to a commons, free or paid, the for-benefit association enables and empowers the collaborative infrastructure that makes that cooperation possible and entrepreneurial coalitions create market activity which sustain the commoners. So this is the kind of function at the moment. So how does it relate to what we know as capitalism? I like to show two different value systems operating within the same sphere, right? So we have use value, we produce something because it is directly useful to somebody, or we create exchange value through commodities and money because we make money with them and hopeful it is also useful for someone. So let’s take the Linux economy as an example. 

So in the Linux economy we have a use value sphere. The use value sphere people contribute to the commons, open and free input, there is a participative process of value creation and there is a commons oriented output, which in turn creates a new layer of open and free code, knowledge and design which can be used to augment the commons. So you have an itinerary cycle within the use value sphere. I hope that you understand what I am trying to say. At the same time though, what happens is –and of course the rule is the following- some people can volunteer all the time, most of the people can volunteer some of the time, but not everyone can volunteer all the time. So there is an issue within peer production in the current society, how to make a living, how to socially reproduce yourself? So this happens today through entrepreneurial coalitions, they are classical for-profit enterprises. 

So you get your wage, labour, and you get your wage from the big company that hires you or the small company that hires you. So basically, again, if you look at the two things, you have the commons, the commoners are sustained by the entrepreneurial coalition, and the for-benefit association sustains the collective. So that is basically how it works today. Now the question is whether the system can become autonomous from this type of society that we have today or not. So why is that important? One of my arguments why we need peer production is… First there is a general argument. The general argument is: what is wrong with our society today? And in very simplistic terms, but I think they are true, two things: we believe nature is infinite. And therefore we have a system based on infinite growth within a finite natural system. That’s why we are destroying the biosphere. 

Pseudo abundance and artificial scarcity
Now, all these problems that we are creating need solutions. So you would think that humanity would freely try to find the best solutions to those problems that are created. No, because we combine pseudo abundance with artificial scarcity. We don’t want sharing to occur. So we have copyright and patents and all kind of means that make sharing and cooperation difficult. So basically we have pseudo abundance and artificial scarcity combined. This is the DNA of the current system. In the system I just described we have at least one of the two turned around. In the commons we have no artificial scarcity. Every innovation is for the whole of humanity. There is no privatisation of useful knowledge. Why is this important? I used to work for the petroleum industry a long time ago. And as you perhaps know, in the seventies we had thriving renewable energy, for example in California. We had even electric cars and they were riding already. 

I don’t know if you saw the movie ‘Who Killed the Electric Car”? where you can see the physical destruction of electric cars in the seventies. Why? Because the oil companies bought up the renewable energy companies and closed them down, and then the privatised patents were shelved for thirty years. So this is the general argument. More specifically, if you want to design as a for-profit company, how do they have to design? Not because you are evil, it is just how the system works. You have to design for scarcity, right? 

There is a lamp burning in Los Alamos, which has been burning for 103 years. Can you buy it? No, because it would be suicide for any market based company to actually sell something that is indestructible. So how do you do it? Well you do it like with the iPhone, right? You make it, so that after so many charges it breaks down, and you make the battery in such a way that you cannot change it yourself, you need soldering expertise, and even then it is very, very difficult. Then you go ton the store and they tell you it cost 100 euro to change the batteries. But for 150 you can have a new one. So this is called planned obsolescence, and it is not a bug, it is a feature, right? It is a feature of our system. Every design in a for-profit company, even if it is done for renewable energy, or whatever social good, will always happen within the scarcity paradigm, right? The market is a scarcity allocation mechanism; capitalism is a scarcity engineering mechanism. This is why Monsanto makes terminator seeds, to destroy the regenerative capacity of the earth, to make it scarce. Scarce means commodity. Then you can sell it, and maintain it. 

Now imagine if an open source community would design something. What is the incentive to have a non-optimal design in terms of sustainability? The answer is none. There are 24 open car projects and none of these 24 open source car projects says I am going to make a car that break down after five years, no. They make a car, for example the Dutch vehicle called the common car has a biodegradable skin, which you can change every three years. So this is very important, that in the new system, we have market players, yes we have market players, but they work with sustainable designs, and they are being designed within the community dynamic. IBM itself is a good example. So when IBM joined Linux –of course their first attempt was, we have 2000 workers, we’ll tell them what to do. But they found out after a few months that their internal systems couldn’t cope with the speed of development of open source software. So IBM had to adapt to the norms and regulations of the open source community of Linux. And then what happened was that they started to use a lot of these techniques internally. They have ideas jams, they have all kinds of techniques now at IBM that are actually coming from the open source community. And this is of course a typical for-profit company. I think we should go further, and I think we should autonomies peer production and the commons. How can we do that? 

Well my proposal is the following. Now open source users use something called the general public license, which basically says everybody can use the code, improve it, change it, but every change is part of the same pool. So this is a bit of a contradiction. And I am formulating it the following way: the more communistic the license, the more capitalistic the practice. Why? Because this license allow IBM and all this big companies to use the commons, and it makes a very big growth of these particular companies (possible), so it works, and most open source software developers are happy with the way it works. But I think we should change it a bit and the change I propose is the following: this is called a peer production licence, which is the following: everyone who contributes to the commons can use the commons, but if you are a for-profit company and you are using our commons and you are not contributing, then you need to pay. So why is this interesting? Because then you have exchange value coming into the commons itself. And so they advocate basically an alliance of open source communities with a new type of ethical companies; market entities, which are not for-profit. 

They can make a profit, but they are social enterprises, they are fair trade enterprises, they are B-corporations, they are trusts, they can be many different things, but the essential thing is that their mission, goal and purpose is not profit. Profit is a means and not an end. So in other words then you get a system were the commoners themselves create can their own market entities, which are structurally and inherently commons friendly. Because you know this, if you are now a company, you are legally obliged to maximise the shareholders value. So you cannot do social good, because you can be sued. So take Ben & Jerry, a very interesting progressive ice cream. What did they do when they sold it? When they sold it, they sold it to the highest bidder on the market because they had shareholders who would not accept anything else. So they could not follow their own value system because of their structure. So therefore we need to change these legal structures. 

My point of view is the following: peer-to-peer infrastructures are inevitable, they are emerging everywhere, in every field of social activity, and they are outcompeting their proprietary rivals. In any field of open source software where you have an open source software company emerging, in time, it displaces the proprietary software company. Usually what happens is that the proprietary software company starts to use open source strategies as well. So even those peer-to-peer structures are inevitable, that we have this great horizontalisation taking place of our productive capacity, so what you have is the following: you have vertical institutions, you have horizontalisation taking place, what do you get? You get diagonalization, right? You get some mutual adaptation, a mutual tension between both, and let’s say that the hierarchy factor and the commons factor can be combined in different ways. So this is basically saying the following: given the fact that the peer-to-peer structures are given, they can be controlled separately or you can get distributed control. They can have a for-profit orientation or a for-benefit orientation, in short, capitalism or the commons as a way to say the same thing. 

Four scenarios
So we have four scenarios. First is centralised control with a for-profit orientation. This is what I call netarchical capitalism –the hierarchy of the network: net-archy right? A typical example would be Facebook. I think we can underline that in Facebook you do have a lot of horizontal dynamics, people share information, meet together, create stuff together, make revolutions, all kinds of stuff… using a capitalist platform, right? So you can do many things with Facebook. But you don’t control the design, the servers are centralized by a company and the monetization of your activity is almost exclusively in the hands of the platform. This is a problem. This is actually an unsustainable alternative. The way I explain it is the following. We have now the capability to exponentially increase the creation of use value, but it is only being monetized growing linear. So the gap between our capacity to produce value and the capacity to monetize it is growing apart further and further. Furthermore, the little bit that is monetized is being monopolized. So this is the wet dream of capital, right? Free labour. All the time, and you make all the profit. But it is unsustainable. Because who is going to buy your products if you don’t pay anybody? So this is what we call a value crisis, we are creating a value crisis in our society and precarity, because more and more activities are pushed to this area, where there is no feedback-loop; the value system is blocked as it were. These are systems where 100% of the value is created by the users. What is an empty platform? Nothing. So the value is created by the users, but is not realized by the users. So we have democratized the means of production but not the means of our livelihoods. This is the basic issue with this model. 

The next model is distributed control with a for-profit orientation. Bitcoin is a typical example of what I call distributed capitalism. Bitcoin is a monetary system that is designed as a commodity. It is scarce, you have to compete for it, you have to buy it on the market place. I like Bitcoin, but it is a commodity currency. And the reason it was done is because the people who made it and who like it are usually libertarians, they are anarcho-capitalists, their ideal society is a society where everybody is free to trade and exchange without centralized control. They don’t like the banks, they don’t like the state. So Bitcoin is designed with a market point of view. So this is why it’s important, you’re intent is very important. If you design something, your values are very important. Technology is not neutral. Technology is designed. And the design of your technology says something about the world you want to enable. If you want to protect your privacy on Facebook, it is very difficult. You can do it but it is very difficult, why? Because they make it difficult. They do it in such a way that you give up. And so therefore they can sell your data, right? Facebook, with CIA-funds –they have venture capital from the CIA- and they have 800 pages on each of us, they are making a living through selling our data, this is their business model. So Bitcoin is different. But it is very important to know if you have a distributed infrastructure to know what it is for. Let’s say I want to do social lending, lend through Prosper’s Zopa, not from a bank, but from each other. I can do that with a point of view, which is: I can go to Prosper because I get more money on Prosper than I can get from a bank. So you have a unifier structure but a mindset that is pretty much a normal mindset of a utility maximizer, right? So these two are emerging, so they are few scenarios but they are also become realities, right? They are emerging right now. What about the two next ones? 

This one is also emerging big time, localised with resilience. Many of the people who think we are entering an age of resource and engine scarcity are thinking oh my god we need to protect ourselves against the decomposition of the global system. How do you do that? By relocalizing our productive capacities. And they do that with a community orientation. I don’t know if you know John Robb from Global Guerrillas, this is typical of this, and he would say very flatly: I don’t believe in politics. So it is all about lifeboat strategies. Relocalization as a survival strategy, transition tasks. And definitively for-benefit oriented, community oriented, but what is lacking for me –and this is why we have a fourth- is an orientation towards the global commons, in other words, an orientation towards deep economic and social change. 

So here we have a for-benefit attitude with a global orientation. So this is where we start thinking about the commons and peer production as a social alternative that aims to solve the deep crisis that we are facing as a planet, where we actually want to overturn this pseudo abundance / artificial scarcity thing, right? And we want to use the commons and peer production as our leverage. So basically, if I was in the sixteenth century, and I would be visionary, I would tell you: capitalism is coming. Today I would say: peer-to-peer is coming, but I am not sure exactly how it is going to turn out. Because that depends on us, right? It depends on social structure, social struggle, political mobilisation, all kinds of things that nobody controls. So our intent for the future is very important. 

And if you look at social change in the past, what I call phase transition, take the end of the Roman Empire and the end of the feudal system. So what you have is the main system is in crisis. Rome no longer expands. Can not get more slaves, slaves are becoming very expensive, cannot get more gold, so the old system no longer works, is decomposing slowly over two, three centuries, right? So you have an exodus out of the old system. The emperor start signing decrees to free the slaves, the slaves start fleeing, the Germanic tribes who are in front of the cities they want to conquer tell the slaves if you join us you’re free. So all these pressures create an exodus from slave hood to serfdom. At the same time as the clever managerial class which shifts to a local strategy, to localised feudal domains, that eventually would become feudalism. And they did this because when the Germanic tribes came in, and the state collapsed, what did they do? They turned to the Christian community. Because the Christian community had created an alternative system within the old system, right? 

So you have crisis, decomposition, exodus, and a reorientation of both the productive classes and the managerial classes into a new system of value creation and social structures. Feudalism is pretty much the same. You have the enclosures of the sixteenth century, the farmers are expelled from their land, they have no way to survive, they go to the cities as “free” labour. That’s where they find people who had converted to merchant activities and factory activities who are hiring them, creating the basis for a new system. Is it any different from what is happening today? 35% of young people between 18 and 35 are jobless on average in Europe, 50% in some countries in Europe. This is an exodus. There is a massive exodus out of the wage/labour condition. Where are these people going? They are creating peer-to-peer activities to ensure their survival. They are creating new types of companies, and I want to give one more example. It is not a big company, but I think it is a kind of typical. 

I went to Rio two or three months ago, and Rio is really an interesting city. About ten years ago the minister of culture under Lula, Gilberto Gil, a famous singer, had created 6 or 7.000 points of culture, basically xxx (?) but geared towards production, so teaching rural youth and favella youth to create film, music, photography, and eventually create enterprises out f this. So this created a very strong basis of culture in Brazil. This is just one of the companies I met and this is how they work, as an example of how people are moving to this new way of thinking, because it is first of all a change in the value system. This is an important thing, right? The Christians did not think the same as the Romans. The Romans hated work, that was for the slaves. The Christian monks loved to work because this was prefiguring the divine society, they were building the divine society on earth, right? This was their ideology. So curtocaffee (?), a small company but really interesting. First of all they use open logistics and open supply chains. So you can know where they buy the coffee, from whom and at what price. So no need for certification for fair trade, you just look and you can see that they are actually doing …? They are teaching the producers to do their own roasting, which triples their income. Secondly, they do research. They have four blends of coffee; their research is open. Any body can look at their research and improve and change their blends of coffee. When they want to expand their retail operations, they do crowd funding, they do actually as a community on Facebook ask do you want us to be there and the people are believe it or not crowd funding the rent for their expansion. So I am just trying to show you that these people are creating companies with a whole different mindset than we think a traditional entrepreneur would do, right? 

Some politics
Okay, maybe some politics. Because I believe that politics are still important, and that this new culture that is emerging is creating its own politics. In Germany we have the pirate party, in Greece we have (xxx cough), in Brazil there is a musical network that is feeding candidates for the local elections. So let me say a few words about all this. First of all: the Pirate Party. The Pirate Party is a direct expression of the free culture, sharing and producing communities on the Internet. So usually what happens when you have a new culture, first it is a subculture. As a subculture it creates its own institutions, creative commons, general public license, stuff like that, for-benefit foundations. But as it gets attacked by the established powers, it needs politics to defend itself. So even though they are not political in the beginning, the fact that they have to continue to defend themselves against jail time, create a political movement. Now the Pirate Party in Germany is the number one party amongst young people between 18 and 25 year old. If it gets 10 to 12% -this is predicted- it would mean that they are basically indispensable for any future coalition in Germany. Without Germany, any copyright extension is dead, right? So even this small factor, this small party in Germany, if it would win, it would have a major impact on how we think and legalize the sharing of innovations. I have this following idea. I call it the global coalition of the commons, and the idea is the following: the Pirate Party is the direct expression of the young, precarious free culture generation. 18 to 25 year old. They represent the digital commons. 

The Greens –the 25 up knowledge class- which has wages and pensions, represents the natural commons, that’s why they exist, to defend ecology and nature. Then we have the resurgence of new left parties pretty much everywhere in Europe. I don’t now about Finland, but in many European countries there is the re-emergence of more radical left parties, and they represent what is left of labour essentially. 

And then we have social liberals who represent social entrepreneurs. I like social entrepreneurs; I’ll tell you why: because social entrepreneurs for me represent a young generation who wants to get away from wage labour. They want to create their own value, they want to follow their own passions, and because they want to be independent they create an enterprise. That’s why they are doing it. But most of them are doing it by turning capitalism upside down. If you are a classic for-profit company, what you do is, you look at what people need, because you want to make money, then you make it. If people don’t want it, well you make them wanting it, right? You have an overproduction of cars; you make sure that people want to buy cars. But these people are different. What they want to do is solve social problems, follow their passions, so they create an enterprise because they don’t want to be an NGO that is depending on fund rising all the time, they don’t want to depend on the government, so they create enterprises for a social goal. So in other words profits become a means and not an end. The reason I like social entrepreneurs is because they actually change the productive system. They don’t do just politics, they are actually changing the logic of production. 

For example I met a young man in Paris –I’m not sure he will succeed- but I think it’s great what he is doing, he wants to create fair trade electronics. Completely redesigning the supply chain for electronics, XXX from the minerals in Congo. So he wants a total open supply chain, open logistics, ethical minds, the whole thing. This is very different from any former entrepreneurship, this is different; this is a new generation that wants to change the world through a direct intervention in the productive system, and I think this is why it is so important and that’s why I think they should be in this global coalition of the commons. So I think we have actually a potential for a majority around the notion of the commons, with the pirates, the greens, the new labour and the social entrepreneurial forces will join around a program of enabling and empowering social production to occur. So I end up, maybe with two examples. 

One more is in Greece, the potato movement. So basically at some point the farmers were unhappy and threw away 50.000 kilos of potatoes in some square in a provincial city and some people said this is really stupid; we can do something else. So what they did was create a national network of community supported agriculture where the Greek potato farmers directly deliver to the consumers, the consumers pre-buy a percentage of the production, this was the response: 17% of the potato production in Greece were consumption, it has a proven deflationary effect on the potato price, and these people can mobilize 5.000 people on public squares in provincial cities. So they are becoming a political force. 

In Brazil there is a musical network, Foro do Eixo, they are musicians from the northeast of Brazil which is a poor state, so they decided to mutualise their productive capacity, you know the studio time and that stuff, they use their own internal currency, called the credito, and they organise huge festivals which brings in external income. They are doing very well without any copyrights whatsoever. So this is a new business model, it is a social movement and they are now asked to feed candidates in the local elections. So we see the first stirrings of a political expression of this new emerging world. ` How could this world look? And I’ll conclude with that. Well, basically what I do is the following. Look at what is happening already on a micro scale within the emerging peer production in our world and imagine how it would look as a social model. So basically civil society would consist of a series of commonses as it were: digital commons, natural commons and productive commons. Digital commons what we make ourselves (in the) immaterial commons, natural commons, the sky, the oceans, we don’t create a value ourselves, we get it from the universe, and the productive commons in the sense of the commoners creating their own market entities, and own their own productive resources. So we have a productive civil society. 

The Partner State
What about the state? Well, I talk about the partner state. The partner state is not a corporate welfare state as we have today, it is not a welfare state as we used too have, it’s a state, which enables and empowers social production to take place, it creates the right infrastructure. This is very important. If you look at England, in England we have peer-to-peer conservatives in power. Remember they had a book called The Big Society, from the Red Tories, and it is basically a peer-to-peer conservative social movement. But what they believe is that you have to cut the state and then people would take care of themselves; this is the idea. Well, let me tell you, it does not work. What happened in England is a devastation of civil society? A total devastation; a drop of numbers of people active in civil society. So you do need good public infrastructures if you want this kind of social cooperation to occur. 

Now, it will occur anyway, but I’d like to make two scenarios, a low road to peer-to-peer and a high road to peer-to-peer. The low road to peer-to-peer is this: we have a total decomposition of society, the breakdown of public services, and people to survive, they’ll do peer-to-peer. But they’ll do peer-to-peer like at the end of the Roman Empire, right? Five centuries without roads, without cities, without ceramics. If we’ll have to, we’ll have to, right? But I think we should do our best to avoid this. And the high road is that you actually have a global coalition of the commons creating the right infrastructure so social production can occur in this way. And finally –partner state, commonses, we have the ethical market place where a new type of players that don’t have in their DNA to ignore externalities, because this is what went wrong with for-profit companies, it’s not about bad people. 

I talk about myself; I’ve been in business for 30 years, right? So I am not talking bad of anybody, I was in it, so basically you have no choice. It’s in your DNA. You have to get raw material, at as low price as you can, sell at the highest possible price and make as much profit as you can. It is in your DNA. So you have to ignore social and environmental externalities. It’s in your DNA, you have no choice. The only way to avoid it is because of pressure of the outside. So you have regulation to avoid the excesses. What I want is ethical companies which are structurally sustainable. For example the P2P Foundation coop, we have in our constitution that we have to support the commons. I don’t have a choice. If I do something wrong, I make myself illegal in terms of my own statutes, right? So we need to change civil society, we need to change the state and we need to change our market type activities. And we van change all three and actual have a sustainable society for the future of mankind. Thank you. 

(Thunderous applause)


interview with Karl Fitzgerald (podcast)

interview for the Renegade Economist radioshow on the p2p driven transformation of our productive forces, by Karl Fitzgerald:


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The $100bn Facebook question: Will capitalism survive ‘value abundance’?

Posted on  
Is Facebook really worth $100bn – and where is this value coming from? [GALLO/GETTY]
Chiang Mai, Thailand - Does Facebook exploit its users? And where is the $100bn in the company’s estimated value coming from?
This is not a new debate. It resurfaces regularly in the blogosphere and academic circles, ever since Tiziana Terranova coined the term “Free Labour” to indicate a new form of capitalist exploitation of unpaid labour – firstly referring to the viewers of classic broadcast media, and now to the new generation of social media participants on sites such as Facebook. The argument can be summarised very succinctly by the catch phrase: “If it’s free, then you are the product being sold.”
We can certainly position the users of Facebook as labourers. If labour is understood as ‘value producing activity’, then updating your status … creates Facebook’s basic commodity.”
- Christopher Land and Steffen Böhm
This term was recently relaunched in an article by University of Essex academics Christopher Land and Steffen Böhm, entitled “They are exploiting us! Why we all work for Facebook for free“. In this mini-essay, they make a very strong claim that “we can certainly position the users of Facebook as labourers. If labour is understood as ‘value producing activity’, then updating your status, liking a website, or ‘friending’ someone, creates Facebook’s basic commodity.”
This line of argument is misleading, however, because it conflates two types of value creation that were already recognised as distinct by 18th century political economists. The distinction is between use value and exchange value. For thousands of years, under conditions of non-capitalist production, the majority of the working population directly produced “use value” – either for themselves as subsistence farmers, or as tributes to the managerial class of the day. It is only under capitalism that a majority of the working population produces “exchange value” by selling their labour to firms. The difference between what we are paid and what the market pays for the products we are making is the “surplus value”.
But Facebook users are not workers producing commodities for a wage, and Facebook is not selling these commodities on a market to create surplus value.
Indeed, Facebook users are not directly creating exchange value at all, but instead communicative use value. What Facebook does is to enable this pooling of sharing and collaboration around their platform – and by enabling, framing and “controlling” that activity, they create a pool of attention. It is this pool of attention which is sold to advertisers, for an estimated $3.2bn per year, which is barely $3.79 in ad revenue per user.
We can, of course, argue that Facebook does a lot more than just selling the attention. For instance, their knowledge of our social behaviour, down to the individual level, has undoubted strategic value – for political power players and commercial firms alike. But is this surplus value really worth $100bn? That remains a speculative bet. For the moment, it’s likely that the nearly one billion users of Facebook do not find the $3.79 in ad revenue per user very exploitative, especially since they do not pay to use Facebook, and are using the website voluntarily. That said, there is a price to pay for not using Facebook, in terms of relative social isolation from their peers who are users.
Capitalism is in fact not just a scarcity ‘allocation’ system but also a scarcity engineering system.”
Engineering scarcity
What is important, however, is that Facebook is not an isolated phenomenon, but part of a much larger trend in our society: an exponential rise in the creation of use value by productive publics, or “produsers“, as Axel Bruns calls them. It is important to understand that this creates 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 also 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, there can be no market and no capital accumulation. What peer producers are doing, for now mostly producing intangible entities such as knowledge, software and design, is to create an abundance of easily reproduced information and actionable knowledge.
This cannot be directly translated into market value, because it is not at all scarce – it’s over-abundant. And this activity, moreover, is done by knowledge workers, whose ranks are steadily expanding. This over-supply threatens to make knowledge workers’ jobs precarious. Hence, an increased exodus of productive capacities, in the form of direct use value production, outside the existing system of monetisation, which only operates at its margins. In the past, whenever such an exodus occurred – of slaves in the decaying Roman Empire, or of serfs in the waning Middle Ages – that is precisely the time when conditions were set for major societal and economic changes.
Indeed, without a core reliance on capital, commodities and labour, it is hard to imagine a continuation of the capitalist system.
The problem is this: internet collaboration has enabled the creation of use value in a way that totally bypasses the normal functioning of our economic system. Normally, increases in productivity are somehow rewarded, and 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, these value creators do not receive income. Social media platforms are exposing an important fault line in our economic system.
We have to link this emerging social economy, based on sharing creative expression, with the more authentic field of commons-oriented peer production, as expressed in the open-source and “fair use” open-content economy, which oneestimate said made up one-sixth of US GDP. There is also no doubt that one of the key ingredients of China’s success so far has been the combination of the open-source – such as the country’s domestic “Shanzai” economy - together with the patent-free policies that are imposed on foreign investors. This has guaranteed an open, innovative commons for much of Chinese industry.
Even as the open-source economy becomes the default way to create software, and even as it creates companies that reach a revenue of more than $1bn, such as Red Hat, the overall effect is still deflationary. It has been estimatedthat open-source annually destroys $60bn in revenues for the proprietary sector.
Thus, the open-source economy destroys more proprietary software value than it replaces. Even as it creates an explosion of use value, its monetary value decreases.
Open-source manufacturing
The same effects occur when the shared innovation commons approach is used in physical production, where it combines an open-source approach with distributed machinery and capital allocation (using techniques such as crowd-funding and social lending platforms, like Kickstarter).
For example, the Wikispeed SGT01, a car that received a five-star security rating and can attain a fuel efficiency of 100 miles per gallon (roughly 42.5 kilometres per litre), was developed by a team of volunteers in just three months. The car is being sold for only $29,000, about a quarter of what a traditional industrial automobile firm would charge, and for which it would have needed at least five years of development and billions of dollars.
Local Motors, a rapidly growing crowd-sourced car company, claims to develop automobiles five times faster than Detroit, with 100 times less capital, but WikiSpeed has achieved even faster design and production times. The WikiSpeed car is designed for modularity, using sophisticated software development techniques (such as agile, scrum, and extreme programming), an open design, and local production by garages, using distributed manufacturing techniques.
And Arduino, an open-source electronics prototyping platform, works similarly to WikiSpeed and is driving prices down in its sector. If Marcin Jakubowsky’s Open Source Ecology project is successful, this will happen for at least 40 different types of machinery. In every field where an open-source manufacturing alternative develops – and I predict that they will be developed in every single field – there will be similar pricing and income pressures on mainstream economic models.
What will happen with capitalism given social media-based exchanges, commons-based production of software and hardware, and collaborative consumption?”
‘Collaborative consumption’
Another expression of the sharing economy is collaborative consumption. As Rachel Botsman and Lisa Gansky have demonstrated in their recent books - What’s Mine is Yours and The Mesh, respectively – there is a rapidly growing sharing economy developing through product-service systems, sharing marketplaces and collaborative lifestyles.
For example, it’s estimated that there are about 460 million homes in the developed world, and that each home has, on average, $3,000 worth of unused items available. There is clearly economic benefit to be had by using these idle resources. Much of it will not be rented, however, but swapped and bartered for free. Even the paid sharing economy will have a depressive effect on the buying of new products.
Such developments are good for the planet and good for humanity, but the larger question is: are they good for capitalism?
What will happen with capitalism given social media-based exchanges, commons-based production of software and hardware, and collaborative consumption, on an increasingly massive scale?
What happens if more and more of our time goes into producing use value – a fraction of which creates monetary value – but there is not a substantial return of income to the use value producers?
The financial crisis beginning in 2008, far from diminishing the enthusiasm for sharing and peer production, is in fact accelerating the adoption of such practices. This is not just a problem for the increasingly precarious working class, but also for capitalism itself, which is seeing its opportunities for accumulation and expansion dry up.
Not only is the world faced with a global resource crisis, it is also facing a crisis of intensive development, because value creators are increasingly income-less. The knowledge economy turns out to be a pipe dream, because what is abundant cannot sustain market dynamics.
Thus we have an exponential rise in the creation of use value, but only a linear increase in the creation of monetary value. If workers have less and less income, who can buy the commodities that are offered for sale by companies? This, in a nutshell, is the crisis of value that we are facing as humanity. It is a challenge just as big as climate change or increases in social inequality.
The meltdown of 2008 was a prefiguration of this crisis. Since the advent of neoliberalism, workers’ wages have been stagnating and purchasing power was maintained only by an over-extension of credit throughout society. This was the first phase of the knowledge economy, in which only capital had access to networks, which it used to create globally coordinated multinationals.
As the knowledge society grew in size, more and more of businesses’ value consisted of intangible, not physical, assets. The neoliberal stock market and its speculative excesses can be seen as a way to evaluate the amount of intangible value that is added to the stock’s value by human co-operation. This bubble had to burst.
The second phase of the knowledge society, in which networks are diffused throughout society and allow productive publics to be directly engaged in peer production, creates an additional layer of problems. Add to the wage stagnation and the exodus out of wage labour that peer-based use value creation causes, and we can see that the problem is not solvable within the present paradigm. Is there a solution?
There is – but that is for the next installment. The solution involves an adaptation of capitalism to peer production, but also opens up the avenues for a transcendence of capitalism.
Michel Bauwens is a theorist, writer and a founder of the P2P (Peer-to-Peer) Foundation.
Follow Michel on Twitter: @MBauwens
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.