I wrote this for the European Center for the Experience Economy, which just published a related contribution on the law of asymmetric competition.

Text:

We live in a political economy that has it exactly backwards.

We believe that our natural world is infinite, and therefore that we can have an economic system based on infinite growth. But since the material world is finite, it is based on pseudo-abundance.

And then we believe that we should introduce artificial scarcities in the world of immaterial production, impeding the free flow of culture and social innovation, which is based on free cooperation, by creating the obstacle of permissions and intellectual property rents protected by the state.

What we need instead is a political economy based on a true notion of scarcity in the material realm, and a realization of abundance in the immaterial realm. Complex innovation needs creative and autonomous workers that are not impeded in their ability to share and learn from each other.

In the world of immaterial production, of software, text and design, the costs of reproduction are marginal and therefore we see emerging in it non-reciprocal peer production, where people voluntary engage in the direct creation of use value, profiting from the resulting commons in a general way, but without specific reciprocity.

In the world of material production, where we have scarcity, and costs have to be recouped, such non-reciprocity is not possible, and therefore we need modes of neutral exchange such as the markets, or other modes of reciprocity.

In the sphere of immaterial production, humanity is learning the laws of abundance, because non-rival goods win in value through sharing. In this world, we are evolving towards non-proprietary licences, participatory modes of production, and commons-oriented property forms. Positive forms of affinity based retribalization are emerging.

But in the world of scarce material goods, a series of scarcity crises are brewing, global warming being just one of them, that is creating the emergence of negative forms of competitive tribalizaition.

The logic of abundance has the potential of leading us to a reorganization of our world to a level of higher complexity, moved principally by the peer to peer logic.

The logic of scarcity has the potential of leading us to generalized wars for resources, to a descent to a lower form of complexity, a new dark age as was the case after the disintegration of the Roman Empire.

So the challenge is to use the emergent logic of abundance, and inject it into the world of scarcity.

Is that a realistic possibility?

In the immaterial world of abundance, sharing is non-problematic, and the further emergence and expansion of non-reciprocal modes of production will be very likely. “Together we know everything”, is a rather achievable ideal.

In the material world of scarcity, abundance is translated into three key concepts that can change human consciousness and therefore economic practices. The notion of ‘together we have everything’ seems not quite achievable, we therefore need transitional concepts.

The first concept is the distribution of everything. This means that instead of abundance, we have a slicing up of physical resources and the physical means of production, so that individuals can freely engage and act. This means an economy that moves towards a vision of peer-informed market modes such as fair trade (a market mechanism subjected to peer arbitrage of producers and consumers seen as partners), social entrepreneurship (using profit for conscious social progress). Objective tendencies towards miniaturization of the physical means of production makes this a distinct possibility: desktop manufacturing enables individual designers; rapid manufacturing and tooling are diminishing the advantages of scale of industrial production, and so do personal fabricators. Social lending creates a distribution of financial capital; and the direct social production of money through software is not far away from being realized in various parts of the world (see the work of Bernard Lietaer); If indeed scarcity will create more expensive energy and raw material, a re-localisation of production is likely, and peer-informed modes of production will be enabled to a much greater extent.

The second concept is sustainability. Since an infinite growth system cannot last indefinitely, we need to move to new market concepts as described by the throught schools of natural capitalism (David Korten, Paul Hawken, Hazel Henderson), capitalism 3.0 (Peter Barnes’ proposal to use trust as property forms because they impose the preservation of capital), cradle to cradle design and production processes so that no waste is generated. We need to move to a steady-state economy (Herman Daly), which is not necessarily static, but where greater output from nature, is dependent on our ability to regenerate the same resources.
The third concept is that of sufficiency. Abundance has not just an objective side, it has a subjective side as well. In the material economy, infinite growth needs to be replaced by sufficiency, a realization that status and human happiness can no longer be dependent on infinite material accumulation and overconsumption, but will become dependent on immaterial accumulation and growth. Having enough so that we can pursue meaning and status through our identity as creative and collaborative individuals, recognized in our various peer communities.

And this is where the experience economy comes in! It is the agent of that shift, from a need to have, towards the higher needs to be and to experience. Only a rich experience economy can avoid a culture of frustration and sacrifice, and the repressions and unhappiness that such could entail. This experience economy however, will not just be created by commercial franchises, but there will also be the direct social production of cultural value. Businesses and peer communities, enabled and empowered by a partner state, will have to create a rich tapestry of immaterial value, and the thicker the surrounding immaterial value, the lighter our attachment to mere having will be.