P2P Foundation

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Everything written by Michel Bauwens

The sharing economy is a rent-extraction business of the highest order!

photo of Michel Bauwens

Michel Bauwens
28th May 2015

Is there a fundamental conflict at the heart of an industry that preaches collaboration but, due to being radically commercialised by venture capital money from Silicon Valley, also needs to profiteer from the goodwill of others if it’s to remain viable?

Excerpted from Izabella Kaminska:

In Paris this week, at the Ouishare Fest, the great and the good from Europe’s sharing economy have been delving deep into what it means to be running a collaborative business model within a capitalist framework. Are the two even compatible? Or is there a fundamental conflict at the heart of an industry that preaches collaboration but, due to being radically commercialised by venture capital money from Silicon Valley, also needs to profiteer from the goodwill of others if it’s to remain viable?

For the most part it’s a hypocrisy the community is trying to address. The $1bn elephant in the room — the fact some aspects of the sharing economy are becoming the very thing they set out not to be — has basically become too enormous to ignore.

It all comes down to how these web 3.0 businesses are structured. Most models focus either on leveraging networks of existing resources, capital and volunteers then charging rents for platform use or on forging platform monopolies that lock-in users so that their data can then be monetised.

For now, the uncomfortable truth is that the sharing economy is a rent-extraction business of the highest middle-man order.

The other (increasingly less) secret dirty truth, as Jeremiah Owyang, industry analyst at Crowd Companies noted in his speech at the festival on Wednesday, is that for the most part the sharing economy is owned by Silicon Valley’s 1 per cent.

While it’s definitely no secret that venture capital has been flooding into the sector, the numbers as Owyang puts it, already far outweigh the sums that flowed into the web 2.0 social media boom at this stage.

Owyang’s analysis calculates that $12.7bn has now been invested in 232 sharing economy start-ups, over the course of 653 funding events, with an average value of $10m per event. Average funding per start-up is estimated to be $54.75m. He adds that most of the money has been raised in the last year or two meaning we’re only at the beginning of what is usually a five year cycle — at the end of which VCs will want their money back.

The big unicorns in this space, car-riding apps Uber and Lyft, and room-renting site AirBnB, skew the data a lot, but even when these are removed we’re left with an average total funding of $35.9m.

Accordingly, Owyang says, if these companies are to save face, they should follow public listing strategies like those deployed by the online craft platform Etsy, which also happens to be a B corporation. Etsy offered its providers and partners with an early opportunity to buy up to five per cent of discounted stock.

As Owyang has observed in blog posts:

This was a smart move for the company, as it fosters one of the highest form of loyalty with its community: shared destiny. As Etsy performs well in the market, creators who purchased the shares benefit as well. Those creatives have already seen a 39% increase in the value of those shares since the IPO.”

But Owyang is also optimistic that capitalism will find a solution to much of the dichotomy at the heart of the space. With time, he notes, competition will force companies to improve on worker and user rights. And it’s unclear for how long being an asset-light operation will remain an advantage, especially if and when incumbents step up their game.

The view from Indy Johar, social venture specialist and founder of Project00, however, was more nuanced. Many of these companies, Johar notes, are entirely new species of corporations. If not for their intrinsic monopolistic nature and ability to”lock-in” users, many might have no value at all.

In fact, sky-high valuations are also the result of expectations that at least a number of these companies will achieve monopoly status.

In Johar’s opinion all of this creates a risk of digital serfdom in the longer run for society. If we must have these platforms he wonders whether we’d all be better off if they were classified as international institutions of the NGO variety?

Digital platforms are often described as digital real-estate, hence why what’s happening now can be equated to the discovery of a new and highly luscious frontier. But Silicon Valley’s attempt to occupy this territory, and to apply its values and standards, also represents a new type of manifest destiny.

In classic Wild West terms, claims for territorial subsets are being delineated with visual markers on a first come first get basis. Rents flow to the pioneers who can police and protect those territories (defend social claims, legal claims, competitor claims) most ruthlessly.

But is this really a sustainable and constructive approach to divvying up fresh territory?

Many of the participants at the Ouishare Fest are concerned what’s really happening is that we’re blindly and voluntarily subscribing to a new type of digital feudalism. And while this concern isn’t necessarily a new idea, what is interesting are the discussions about how to resolve the problems.

Amongst those solutions is the idea that people should take charge of their own digital footprint and online reputation. Platforms should not, in other words, make it impossible for you to leave their territory because upping and leaving means letting go of your digital reputation, verification and earned social rights.

Fully portable digital credentials and passports in some sense are seen as the solution. How else can you take your reputation and your accumulated credit with you to another territory or platform without having to start again? How can you ensure freedom and preserve your reputation if every time you change your mind about where you want to engage in bartering or sharing online you’re going to have to start with a zero reputation score?

If all of the above sounds like a frightfully medieval problem for society, that’s probably because it really is an uncanny echo of that era in history. The only real difference now is the digital form of the landscape. The nature of the lords taking tribute payments remain the same.”


Posted in Economy and Business, Sharing | No Comments »

The ‘New Republics’ documentary: Will holomidal collective intelligence replace the pyramidal one ?

photo of Michel Bauwens

Michel Bauwens
28th May 2015

Check thenewrepublics.org for more.

Jean-Francois Noubel explains that:

“We name holomidal collective intelligence the new form of collective intelligence that emerges thanks to the Internet. Local and global, decentralized and distributed, agile, polymorphic, based on leadership, individuation, open source, integral wealth and mutualist economy, this young form of collective intelligence still lives through its infancy phase. However we can already see its huge impact on humanity where more and more people in civil society self-organize in order to address societal issues that pyramidal collective intelligence cannot address and even provokes.

Socialware and communityware serve as the keystone on which collectives can rely on, in order to self-organize and scale up, locally and remotely.

Holomidal collective intelligence will soon build advanced forms of Holopticism and augmented holopticism.”

He also explains:

“Our species evolves. We explore the reason why holomidal collective intelligence will soon become the prevailing form of collective intelligence on the planet.

We explain how holomidal collective intelligence has begun to build its own economy and technological infrastructure. We explore the R&D state of the art in the evolution of wealth technologies paving the way to a post-monetary society.

We explain how and why holomidal collective intelligence triggers a new way to understand and address reality. It thinks differently, it describes reality differently, it innovates differently. We see the same magnitude of a leap than what pyramidal intelligence did in the past when it appeared.

Thinking evolves from linear reductionist to non-linear understanding of reality (complexity and chaos theories)
Holistic, local and global, inter-related ways to apply science and technology prevail

We forecast the most groundbreaking paradigm shifts that will scale up in the next few years and why holomidal CI only can embrace them.

We develop the sociological concepts of the I in the We, and the We in the I as self-mirroring and co-evolving processes.

The movie demonstrates and concludes that none of us ever has had as much capacity to evolve and transform the world. The power to innovate, the power to evolve the I and the We, the power to invent tomorrow’s world.”

Watch the documentary trailer here:


Posted in Collective Intelligence, P2P Hierarchy Theory, Videos | No Comments »

The prospects for radical democracy (2): how Flatpack Democracy disenclosed local elections in the UK

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Michel Bauwens
27th May 2015

Excerpted from John Harris:

“A small-scale revolution that has turned local politics there, and elsewhere, on its head.

The basic aim seems both simple and benign: “Taking political power at a local level, then using it to enable people to have a greater say in the decisions that affect their lives.” But the results have been explosive: the routing of Lib Dems and Conservatives (and, of late, a solitary Ukipper) from Frome’s town council, and the arrival in power of a coalition of self-styled independents, united by the belief that democracy needs a drastic revival.

On 7 May, after four years in power, the Independents for Frome (or IfF) group took all 17 seats on Frome’s town council, with vote-shares as high as 70%, and support from people who cast their other votes for the main political parties. Moreover, the IfF idea seems to be spreading, as people add their voices to a quiet rebellion that is materialising in some very unlikely places?—?from small commuter towns in Bedfordshire to the political home of George Osborne. There are two key elements to this very English revolt: a quest to revive the often moribund town and parish authorities long squashed by county, borough and district councils, and give them a new energy and purpose; and in the places where party politics has dominated even this lowly tier of government, the shoving aside of the big parties in pursuit of new ways of doing things.

The chief theorist of flatpack democracy (the term is a reference to the idea’s basic DIY ethos) is 57-year-old Peter Macfadyen, who has lived in Frome for nearly 30 years, and has spent much of his adult life working for disability charities, as well as founding an eco-friendly local undertakers. A graduate of the south-west’s hippie counterculture who brims with can-do enthusiasm, he was one of the people who co-founded IfF at the tail-end of 2010, having been repulsed by what he had seen of the existing town council.

His main source of irritation was the extent to which the party politicians running it seemed walled in behind bureaucracy and protocol. Decisive proof came, he tells me, when he approached the town’s ruling Liberal Democrats on behalf of Frome’s branch of the Transition Towns movement, which seeks to respond to climate change on a local level. “I went to them and said, ‘What’s your green policy?’. And they said: ‘The park.’ I said, ‘Climate change, peak oil -what about all these things that actually matter?’ They said: ‘No, sorry?—?it’s the park.’ That and a few hanging baskets.”

While Macfadyen seethed, a parallel conversation was taking shape among a group of people including 64-year-old Mel Usher, a native of Sunderland who had settled in Frome after a long career working in and around local government. He and some of his friends were just as frustrated with the inertia of the town’s politics, but also excited by the new coalition government’s localism bill. “Previously, what town and parish councils could do was very nebulous,” he says. “What the localism bill said was, ‘You can do anything, as long as it’s legal.’ And that’s what started to drive us along – we thought we could really use it constructively.”

At an initial public meeting in the upstairs room of a town-centre pub, a collective resolution was made to put up candidates for all of the town council’s seats. “You can’t change things if you only put up a few people,” says Macfadyen. “It has to be total revolution or nothing: that was our stance.” The somewhat oxymoronic idea was to form a group of independents – in the sense that political diversity was held to be a strength, and there would be no whipping on council votes. Instead, the new group would be held together by a codified way of working that acknowledged the inevitability of disagreement, and a sense of purpose that would differentiate it from the kind of old-school independent councillors?—?“independent ratepayers”, they often used to call themselves?—?who too often turn out to be complacent timeservers.

At the local elections of May 2011, IfF candidates won 10 seats on the town council?—?including four previously held by the Lib Dems and three by the Tories, and their group thereby took control. Usher became the council leader after serving a term as the town’s mayor; Macfadyen was this week announced as his successor.

Over the last four years, despite regular tussles with a Tory-run district council still getting used to the arrival of these new upstarts, the IfF group has been very busy. On top of the annual £1m it gets from local council tax, £250,000 donated by a local philanthropist impressed by the flatpack democracy idea, has been invested in the town via a specially formed community interest company. In the face of opposition from local Conservatives convinced that austerity had to apply even at the most local level, the council has also borrowed around £750,000 to invest in buildings and land, and to boost its regeneration work. Green spaces have been spruced up and game-changing help has been given to the local credit union. The council is involved in a new renewable energy cooperative, and has put money into the setting up of a new “share shop”, as far as anyone knows, the first one in the UK, from which people can borrow everything from drills and gardening tools to children’s toys.

Macfadyen talks about all this with real passion, but he thinks the IfF group’s biggest achievements are less palpable. He enthuses about the fact that all its recent candidates, including serving councillors?—?were selected by an independent panel, a measure clearly intended to kibosh any possibility of cronyism. And he sets great store by the way the town council’s meetings are organised. “They’re infinitely friendlier now, more open. We get crowds sometimes. There are other town councils where the clerk walks in first, and the members stand, the mayor comes in behind, and they then say a prayer. The public have to write in beforehand, saying they want to speak. And it’s all just lost in some sort of Victorian past. It’s just insane. And of course, it means that if you know all the rules, you’re in control. That’s the problem.”

Last year, Macfadyen decided to pour the IfF story into a 100-page booklet called Flatpack Democracy, subtitled “A DIY guide to creating independent politics”. When the-then local government secretary Eric Pickles visited Frome in February 2015, he pronounced it the “home of localism”, bought a copy, and after having lunch with Macfadyen, insisted that he sign it.

The booklet has so far sold close to 1,000 copies, and Macfadyen is regularly in touch with similar groups of independents in such towns as Liskeard in Cornwall, Newbury in Berkshire, Bradford-on-Avon in Wiltshire, and Wells, Wedmore and Shepton Mallet, all in Somerset. Most notably, on 7 May, people who had directly followed the example set out in his text took control of two councils in very different parts of the country.

One was in Arlesey, a settlement of 5,000 people in Bedfordshire?—?just under 40 minutes by train from London?—?whose town council is now run by the Independents for Arlsey group, after they won 14 of its 15 seats. Its founders were alerted to the flatpack democracy idea via Facebook, and resolved to shake up the politics of a town that had got used to uncontested elections and a council run by old-school independents. One of the prime movers was 64-year-old Chris Gravett, who says that whereas the town’s ancien régime was “dysfunctional”, he and his colleagues are now set on starting everything from scratch. “We’ve followed the core principles in the Flatpack Democracy book pretty closely,” he says. “We took a lot of advice from it. And I must say: the results were beyond our wildest expectations.”

In Buckfastleigh in Devon (population: 3,326), the Buckfastleigh Independents group have followed a similar path. “This isn’t an affluent community,” says the town’s new deputy mayor, Pam Barrett. “It’s a working-class town that’s been suffering from a real loss of services.” Fired up by the possibilities of localism and their experience of fighting?—?successfully?—?to keep open a library and swimming pool, she and other residents resolved to stand for town council seats that had not been contested for “20 or more years”. One of the catalysts, she says, was a box of 10 copies of the Flatpack Democracy booklet, which was brought in by one of her colleagues. “It was articulating what we were already thinking,” she says, “and it helped us take a lot of shortcuts.” On 7 May, they took nine of 12 seats, and started running the show.

In other places, highly motivated groups of independents have achieved similar feats without any knowledge of the flatpack democracy idea, suggesting that what has happened in Frome and elsewhere might be part of a general political wave. A good example is Alderley Edge in Cheshire, a very affluent village that sits at one end of the Tatton constituency, held since 2001 by George Osborne. Until 7 May, its town council was solidly Tory, but dissent was brewing?—?a result of such controversies as the council’s plan to replace long-established allotments with a car park.

On election day, the Conservatives lost all nine of the parish council’s seats to a new group called Alderley Edge First, which also took the village’s one seat on Cheshire East council. Though the people responsible were not aware of developments in the West Country, their thinking is much the same: as one newly elected councillor, Mike Dudley-Jones, tells me, “our basic mantra is that there is no place for mainstream party politics at this level”.

Amid the IfF group’s jubilation, one key question springs to mind. Now that they hold all the seats on the town council, there have been local murmurings about whether the absence of any official opposition will turn out to be a good thing. But throw this point at the town council’s prime movers and the answers that come back voice two contrasting arguments: a belief in IfF’s democratic ideals, and critique of the arrogant kind of rule perpetrated by a system in which whatever the opposition says, if one party has the numbers, it can freely impose its will on everybody else.

“This is actually much healthier,” insists Macfadyen. “This group of 17 people has within it a range of views. If there’d been a majority, even of one, for one of the main parties, I’d be worried. Because, as we’re now seeing at Westminster, they’d go out and say, ‘Sod the lot of you, we’re going to do what we want.’ You know?—?12 seats more than everyone else and they’re bringing back fox hunting. We couldn’t do that, because we have such a wide range of people.”

“Most of the traditional parties draw their candidates from a very limited pool,” says Mel Usher, “whereas we put an advert in the paper and said, ‘Come along.’ All you needed was a telephone number and an email address, and one side of A4 paper saying what you wanted to do for Frome. They were then selected by an independent group of people. And they were genuinely independent.”

The outgoing leader of the People’s Republic of Frome cracks a smile. “The only time I tried to interfere, they told me to fuck off,” he says. “Which was good.”


Posted in Commons Transition, P2P Governance, P2P Hierarchy Theory, Peer Production, Politics | 1 Comment »

Towards a regenerative capitalism ?

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Michel Bauwens
27th May 2015

There is a bit of a contradiction in this approach, which calls us to go beyond the capitalism-socialism dichotomy, but then offers capitalism, albeit regenerative, as a solution.

Excerpted from Jo Cofino:

“John Fullerton, says that society’s economic worldview has relied on breaking complex systems down into simpler parts in order to understand and manage them.

For example, this traditional economic view might view automobile manufacturing separately from the mineral mining, petroleum production and workers on which it relies. Moreover, this view might also not acknowledge the impact that automobile manufacturing has on the environment, politics and economics of an area. Holism, on the other hand, would view the entire chain of cause and effect that leads to – and away from – automobile manufacturing.

The Capital Institute report, titled Regenerative Capitalism, emphasizes that the world economic system is closely related to, and dependent upon, the environment. “The failure of modern economic theory to acknowledge this reality has had profound consequences, not the least of which is global climate change,” it says.

According to the Capital Institute, the consequences of this economic worldview are vast and far reaching, encompassing a host of challenges that range from climate change to political instability.

For example, the current capitalist system has created extreme levels of inequality, the report says. This, in turn, has led to a host of ills, including worker abuse, sexism, economic stagnation and more. It could even be considered partly responsible for the rise of terrorism around the world, the report claims. In other words, this inequality has become a threat to the very system that is creating it. Without radical change, the report warns, “the current mainstream capitalist system is under existential threat”.

What is needed now, the Capital Institute argues, is a new systems-based mindset built around the idea of a regenerative economy, “which recognizes that the proper functioning of complex wholes, like an economy, cannot be understood without the ongoing, dynamic relationships among parts that give rise to greater wholes”.

In practice, this might lead to close analysis of supply chains, investigations of the effects of water use, circular economy initiatives, community economic development work or a host of other sustainability efforts.

While some people associate holistic thinking with mystics or hippies, the worldview is borne out in ways that are measurable, precise and empirical. “Universal principles and patterns of systemic health and development actually do exist, and are known to guide behavior in living systems from bacteria to human beings,” the report says.

Holism also can be used to study “nonliving systems from hurricanes to transportation systems and the internet; and societal systems including monetary systems”. Not surprisingly, the theory underlies other scientific and social tools, such as system theory and chaos theory.

This holistic approach flies in the face of a great deal of long-held beliefs. For example, while decision makers usually focus on finding a single ‘right’ answer, holism focuses on finding balanced answers that address seemingly contradictory goals like efficiency and resilience, collaboration and competition, and diversity and coherence. Taken from this perspective, holism wouldn’t approach global economics from a capitalism-or-socialism perspective, but rather from a capitalism-and-socialism perspective.

The report emphasizes the importance of innovation and adaptability over rigid structures and belief systems. It also embraces diversity, suggesting that, instead of trying to find a globalized one-size-fits-all approach to change, it is vital to recognize that each community consists of a “mosaic of peoples, traditions, beliefs, and institutions uniquely shaped by long term pressures of geology, human history, culture, local environment, and changing human needs”.

Ultimately, the report argues, a holistic perspective emphasizes that we are all connected to one another and to the planet, and therefore need to recognize that damaging any part of that web could end up harming every other part.

In business terms, what would this sort of revolutionary shift in business look like? The Capital Institute, which presented a white paper at Yale University’s Center for Business and the Environment on Tuesday, says innovators and entrepreneurs around the world are already responsible for thousands of sustainability initiatives and movements that are helping to re-imagine capitalism, such as social enterprises, B Corps, impact investing, slow food and localism.

The report says that, while some critics view these as “disconnected feel-good activities outside the mainstream capitalist system”, they are, in fact, “in alignment with the regenerative economy framework”. Collectively, it claims, “these forces provide living proof that a new regenerative economy is emergent”.

Beyond movements of change, the institute points to a number of individual initiatives that show how the world could change for the better. For example, Mexico’s Grupo Ecologico has worked to fund impoverished small farmers and ranchers, giving them the economic freedom to preserve and regenerate their own land.

Similarly, Australia’s Bendigo Community Bank splits its net income with local community enterprises. It directs a portion of community branch earnings toward grant making, giving local leaders the opportunity to become active players in their communities.

Community development is also a primary concern for Chicago’s Manufacturing Renaissance, which is forging unusual partnerships among government, labour unions, educators, the private sector, and civil society to create programs that support the region’s advanced manufacturing sectors.

Fullerton says there is great potential ahead if society can change its collective mindset: “This is a monumental challenge that holds the promise of uniting our generation in a shared purpose. We now have a more rigorous understanding of what makes human networks healthy – this alone constitutes an amazing opportunity. It is time to act. Our actions, now, will most certainly define the nobility of our lives and our legacy. This is the great work of our time.”


Posted in Ethical Economy | No Comments »

Michel Bauwens presents P2P to the French Senate

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Michel Bauwens
26th May 2015

For the: “colloque revenu de base au Sénat

This ten-minute French-language video was made on the request of Arnaud Delepine, and Jean-Eric Hyafil of the Centre d’Economie de la Sorbonne, for the benefit of a colloqium which took place in the French Senate on May 19th and which discussed the topic of the basic income.


Posted in Original Content, P2P Governance, Politics, Videos | 3 Comments »

Gar Alperovitz on Democratic Planning, the Market and the State

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Michel Bauwens
25th May 2015

Gar Alperovitz, cooperativist and advocate of the Next System Project, is interviewed by Geoff Gilbert:

“* You consistently return to economic planning as necessary for any system seeking stability, for both the entire economy and for communities. Can you explain our current system of backdoor corporate planning?

Every area you look at, either tax or regulation or loans or loan guarantees or combinations of those strategies bolster or don’t bolster certain directions in the economy. So the idea that we have a free market in the economy and that there is open competition is absolutely absurd. If you look at the oil industry, for example, it’s supported by special tax programs that give it a particular direction.

The way it’s organized, lobbyists have found ways to get these programs out of the government. As you know I worked in both houses of Congress at one point. The way in which the lobby system works — this is very well known and most people close to the political process just take it for granted.

* What would democratic planning look like?

You are going to have to have national economic planning for the big areas — for example, energy, climate impact, transportation. Right now we let the free market control where the major air transport goes. What that means is a city like Cincinnati loses its transportation, then it loses its business. The same thing is going to happen to Cleveland, which is ridiculously inefficient, as well as inhumane. A planning system needs to begin to coordinate that.

* How can we do this?

Partly we need to build up local experience through participatory budgeting and planning. That is a whole area for activists to work on.

We also need a theory of how to do it at the national level. Making it explicit — for example, if we want to deal with climate change, saying here are all of the implications captured in an economic plan. Similarly, if we want to stabilize communities, and so on. And then we should debate it back and forth.

* Given our country’s size, the region becomes an important political unit in your work. Can you explain this?

Most people haven’t faced this question or wanted to face it. The country is almost obviously too big for the government to be a genuinely democratic institution — it’s almost 3,000 miles from corner-to-corner with 318 million people.

Now, most states are too small, economically. The most logical solution is something bigger than a state and smaller than a continent — a region. Most European societies are radically smaller than the United States. You could drop Germany into Montana. Large scale gives control to elites — and to money and media. So, at some point, any serious model that wants to be democratic is going to have to decentralize where decisions are made. California, New York, Texas could probably do it on their own — they are regional scale units. That’s a whole set of questions that have to be put on the agenda.

* In your writing on democratic planning, you often confront the tension between the need for action and its centralizing tendencies, and participatory democracy and the decentralization needed to make it a reality. How can this apparent contradiction be overcome?

First, you have to have inclusive units that include everybody — community models, not just worker-ownership models.

The second piece is using both planning and markets. Using Cleveland and the Evergreen Cooperatives as an example, you’ll see that the big institutions — hospitals and universities — both of which have a lot of public money, buy from worker-owned companies that are embedded in the community structure. That’s a planning system, using the purchasing power of these institutions, a lot of which is public money — Medicare, Medicaid — to help stabilize companies that are owned by the community and workers. It’s not just a free market system.

* How can markets be used?

You want some sort of mix of planning and markets, because you want to challenge the planning systems, which can get rigid. If you take this model to the national level, then the government, using just one example, would support mass transit and high-speed rail as one element of its transportation system. That would mean there are a lot of public contracts to build that. They could purchase the goods from worker and community-owned companies. You could have several of them that are quasi-competitive, so that the planning system can be efficient.

* What are the basic types of alternative political-economic models that could achieve this?

Most of the models have an element of worker-ownership in them. It’s not the only thing, but it does change the ownership of capital. I think it’s a mistake to say that’s the only element — I don’t agree with some theorists who think that the system is going to be just adding up worker-owned companies.

Another model is a city-ownership model. For instance, in Boulder, Colorado, they have municipalized a private electricity utility. So that’s a different strategy that emphasizes a community model at the city level. Now, you can put both together — I believe in a pluralist system that will include several different models.

A third model is neighborhoods. It’s particularly important for the United States, where neighborhoods are often organized around race. The work we’ve done in Cleveland is a combination of neighborhood ownership and worker ownership.

* And you write about the problems that come with economic entities that achieve scale, even if they are worker-owned.

When you get to the larger scale and economies of scale become available, even worker coops develop power relationships because they have to. If somebody else is in the game who can cut costs by polluting, even good guys in the coop will lose their jobs and their company if the other group is able to undercut them. Especially, if you invest in new equipment that can lower your cost, if somebody else does that in another company, you must do the same thing, otherwise you will be out of business. They have to grow; they have a growth dynamic, as well as a cost cutting dynamic, built into the model. So when you get to significant scale — and that changes in different industries — worker coops, in a market economy, have very similar forces operating against them that any company in a private economy has.

* How can problems of scale be overcome?

First I want to say that worker coops make sense on a smaller scale and are doable.

One way to address scale is to build a culture of community that internalizes externalities, through, for example, community-wide ownership. That is to say, a community-wide ownership system can decide to pollute, but it pollutes itself. So it must make the choice of what to do. Whereas a company, worker owned or not, may like to not pollute, but if it pollutes, it’s polluting the community, not just itself, and it might do that because of cost competition.

* How can some of these different ownership models begin to be implemented right now?

I think we are going to see a lot of this. We’re already seeing activity at the city government level. Several city governments — New York, Madison — are beginning to pick up on supporting worker ownership. Some states — Vermont and Ohio — have supported worker-owned companies. That’s a step forward.

* How can local government be used as a resource for this type of change?

It’s not just funding. People don’t realize, a worker-owned coop is a “business.” In the United States, there are enormous subsidies and laws and national government policies in support of business. For progressives and people on the left, the light bulb needs to come on that almost all of this could be used for worker businesses.

For example, with the Cleveland model, once the city officials realized they wanted to help, they could begin to use all of the existing tools for this direction. And the mayor often looks good if he or she does this. People are often in opposition and they don’t realize there are a lot of opportunities in government where politicians would look very good if they helped.

* And what about the role for anchor institutions, like with the Cleveland Model?

The other strategy is big institutions that have a lot of money in them and can’t move — like hospitals and universities. Medicare and Medicaid, educational money, etc. They buy a huge amount of goods and services. They can be requested, or pressed, or organized to help support these new directions. That’s what’s going on in Cleveland, of course. In many cities, actually, but Cleveland has done the most dramatic work.”


Posted in Commons Transition, Economy and Business, P2P Governance, P2P Public Policy | No Comments »

A Crowd Expedition interview on P2P at the Ouishare Fest 2015

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Michel Bauwens
25th May 2015

A huge thank you to Martijn Arets of Crowd Expedition for doing this interview with me that elicited lots of detailed and even personal details about the experience of the P2P Foundation and the transformation of our society and its challenges.

Perhaps my favourite video to date!!

Watch it here:


Posted in P2P Theory, Peer Production, Videos | 1 Comment »

Are there true sharing entreprises ?

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Michel Bauwens
24th May 2015

When evaluating platforms claiming to be a part of the “sharing economy”, it is important to look at why they were set up, how they are organized, and who they are intended to benefit. Those that implement a logic of collaboration, sharing and distributed power at each of these levels, stand to offer a compelling vehicle for change and force us to take seriously the transformational power of the ‘true’ sharing economy.

Julia Dreher and Francesca Pick give a number of examples in an article critiquing the ‘verticalist’ sharing economy:

“Some critics have argued that the sharing economy can only ever be parasitic to capitalism because those who do not already have private property to share are by default excluded from it.[4] Such arguments are premised on a narrow understanding of “sharing” limited to the direct exchange of goods or services of equal value. Platforms like Couchsurfing call into question such criticisms and allow us to think about sharing in a broader sense.

Couchsurfing is the perfect example of a rhizomatic structure that allows users to move beyond a traditional, transactional mode of sharing. On Couchsurfing you can “surf” a couch even if you don’t have one to offer. If you can’t host, you might still offer your time to show someone around who is visiting your town. Collaboration is based on a much broader sense of exchange, tied more to notions of redistribution. Those who can offer something, offer it. Those who are in need can accept that offer but that doesn’t mean that they are obliged to give back something of the same value to the same person. Collaboration is distributed across the network and follows a rather circular logic. If you don’t have the same goods to offer back, you might offer something else to someone else. Eventually what goes around comes around and everyone is satisfied. This circular logic is essential to rhizomatic structures. Deleuze and Guatarri describe the network as a system of shortcuts and detours, which is what we can observe with Couchsurfing: rather than a “straight and direct” exchange of goods of the same value, we can see horizontal interactions between different participants of the network.

Numerous other examples of heterarchical organizations abound. CoWheels Car Club is a car sharing platform in the UK that runs as a not-for-profit social enterprise, where all surplus generated is reinvested back into the organisation to help fulfill its social mission of reducing car ownership and its negative effects on the environment. An example that takes collaboration one step further is Loconomics, a local peer-to-peer service marketplace from San Francisco, which is cooperatively owned by the freelancers who provide the services on the platform. A similar model is implemented by Guerrilla Translation, a P2P translation collective and cooperative from Spain that offers the same services as a translation agency.

Fairmondo, a German startup, offers a slightly different approach to participating in “the sharing economy”. Fairmondo is an Amazon-like online marketplace, owned and governed by its users, who are also its shareholders. An even more extreme example of such a distributed marketplace is the decentralized transportation system known as La Zooz. La Zooz eliminates ownership of the platform altogether by using an algorithm that runs by itself on the servers of each individual participant of the network. By running on the “Blockchain” (the technology underlying Bitcoin), La Zooz is able to operate as a decentralized, autonomous organization.”


Posted in Cooperatives, Peer Property, Sharing | No Comments »

The Ubiquitous Commons: a legal and technical toolkit for a user-controlled data commons ?

photo of Michel Bauwens

Michel Bauwens
23rd May 2015

Excerpted from Maija Palmer:

“Could a system be created that gave back some control to individuals? An international group of researchers led by Salvatore Iaconesi, a lecturer at the La Sapienza university in Rome, and Oriana Persico, a communication scientist, is trying to create a legal and technical toolkit that would allow people to do just that.

The concept, called Ubiquitous Commons (UC), would insert a layer between individuals and Facebook that specifies how a users’ details can be used. For example, when a user types an “I love kittens” post on Facebook and presses “send” the message would be intercepted by the UC platform and encrypted before it reaches Facebook. They would be asked to specify how their data might be used — perhaps for scientific purposes, but not commercial ones, for example.

The back end of the system would log the user’s instructions to a “blockchain” or electronic public ledger. The data could only be decrypted and accessed by organisations that fit the set criteria.

“There is a real inequality of power between individuals and companies when it comes to data,” says Mr Iaconesi. “When you configure your privacy policy on Facebook, not many people realise that you are configuring your privacy policy towards other people, not towards Facebook. They can see it all.

“UC would apply not just to social networks such as Facebook, but the whole internet of things — smart fridges and [activity monitoring devices].”

People would also be able to place controls over the personal physiological data that wearable devices might generate. You could allow your health data to be seen by a doctor, for example, but not by an employer or insurance company. If it were adopted, UC would change fundamentally the balance of power of data between consumers and companies.

Last month the Ubiquitous Commons group was showing the technology to Italian farmers, who have become concerned that collection of crop data is being monopolised by large food groups such as Monsanto.
Previous attempts to create social media platforms that put users in control of their data have not taken off. The Diaspora project, created in 2009 as a Facebook alternative that put individuals in control of their information, and Ello, a social network set up in 2014 with a promise never to sell users’ data to advertisers or other third parties, have not gained ground against Facebook.


Posted in Commons, P2P Legal Dev. | No Comments »

Off-grid solar systems increasingly viable for low-income communities

photo of Michel Bauwens

Michel Bauwens
23rd May 2015

Excerpted from the ‘GE Look Ahead’ series:

““First has been the improvement of efficiency of LEDs of 10,000% in the past 13 years,” says Russell Sturm, ?head of Climate Change Advisory at the International Finance Corporation (IFC), part of the World Bank Group. “Batteries have improved 90% with the whole revolution around lithium and it’s been a similar trajectory for photovoltaic cells.”

These dramatic cost reductions have led to a quadrupling of installations of solar home systems worldwide between 2002 and 2014—from 1.3m to 5.1m. Bangladesh is a global leader in the field, with more than 2.4m systems installed.

For homes, power sources range from simple solar lamps and solar home kits to microgrids, with several houses in a village connected to a group of solar panels.

“What’s exciting is it’s going to be incremental,” says Shuaib Siddiqui, director of the energy portfolio at Acumen, a nonprofit venture fund with investments in solar and off-grid power companies. “It completely changes the way we think about utilities and power distribution for this income segment.”

Technology is also playing a role. Mobile phones and sensors, for example, have enabled the use of “pay-as-you-go” models to serve remote communities. Customers pay the fee using their mobile phone; if they miss their payments, the system can be shut off remotely. Remote sensors can also monitor changes in demand, allowing companies to send out engineers to repair the system when an unusual drop in demand is identified—or to add solar panels to the microgrid when the system has reached its full capacity.

The above developments are opening new opportunities for governments to push for universal energy access. India, for example, is now betting on solar technology to bring energy to every household by 2019. Meanwhile, as part of its Power Africa initiative, the US is engaged in a $2.8m Off-Grid Energy Challenge to promote innovations that can scale up off-grid energy technologies.”


Posted in P2P Energy | No Comments »