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Archive for 'Cognitive Capitalism'

A New Commodity Is Born: Breast Milk

photo of David Bollier

David Bollier
6th April 2015


It’s not everyday that we get to see great masses of people alter their attitudes as a cherished act of motherhood is converted into a lucrative market. That’s what is happening these days with breast milk, as recently reported by the New York Times. Biotech firms want to capitalize on the rich therapeutic potential of breast milk by turning it into high-tech medical products that can fight infections, improve blood clotting and deal with intestinal and infectious diseases.

This keen commercial interest in acquiring breast milk – an intimate part of the human body associated with maternal love and nourishment – raises all sorts of troubling new questions.  Who will have privileged access to breast milk in the future – biotech firms backed by the deep pockets of venture capitalists, or premature babies who need the milk, especially from their own mothers?  Will the emerging big business of breast milk lead to the closing of “milk banks” that provide donated breast milk to hospitals and nursing mothers at cost (i.e., the costs of donor-screening and pasteurization)?

The rise of a new market for breast milk brings to the fore the fundamental issue of inalienability – the idea that certain things are so valued that it is not ethically appropriate to exchange them for money in the marketplace. This is a topic that is near and dear to commoners, of course, who are constantly trying to prevent and reverse market enclosures that commodify everything from water and the atmosphere to the human genome and childhood.

Years ago, I learned a lot about inalienability from Margaret Jane Radin’s book Contested Commodities:  The Trouble with Trade in Sex, Children, Body Parts and Other Things (Harvard University Press, 1996).  She argues that liberal societies have a recurrent problem caused by a philosophical conundrum:  It values freedom and individual choice, but it also values the dignity of personhood.  So what happens when our “freedom of choice” in the marketplace runs over our integrity and dignity as human beings – such as having intimate aspects of our bodies converted into market commodities?

“Conceiving of all human exchange in terms of the market metaphor,” said Radin, “creates the risk that we will become incapable of transcending that rhetoric’s presuppositions about human nature, and thus unable to inspire deeper, more humane visions of the good.”

Commodification is a worldview that implies all sorts of attitudes, behaviors and relationships toward other human beings.  If money, efficiency and individual freedom trump all else, and if all values are to be reduced to a price, launching the fiction that everything is commensurable on that single scale of value, then we start down a path toward social disintegration.  A libertarian ethos trumps ethical and social norms, which “interfere” with our “market freedoms.”

If and when the market worldview comes to redefine the value of breast milk, we will enter a new regime in which companies will be entirely free to interpose themselves between nursing mothers and needy babies, much as Nestle’s once did with its milk formula. The Times reports that one company, Prolacta, has produced a “fortifier” compound for premature babies using breast milk.  It costs about $180 an ounce, or about $10,000 for several weeks of milk for one baby.

All of this will inarguably contribute to GDP, and it may provide medical benefits for the special-needs babies who need the fortified milk.  But can neonatal hospital units really afford such a product – and will commercial demand for breast milk dry up milk banks and convert desperate or poor nursing mothers into milk machines?

And what of the inevitable social inequalities that will arise?  Mothers who can afford not to sell their milk will become socially privileged, while desperate mothers who need the money will be induced into selling their breast milk — much as jobless people with a car often turn to Uber to try to scrape by.  Free-marketeers invariably dismiss the ethical issues by retorting, “It’s their choice!”

And some liberal feminists as well.  One of the most depressing responses to the Times’ story came from Jessica Valenti, a columnist for The Guardian. The headline of her recent column:  “For-profit breast milk?  It’s her body, and it must be her choice.”  Valenti conjectures that “business involvement [could] lead to some positive changes for families who do want to use breast milk but don’t have access to it” – noting that government regulation of breast milk could help weed out tainted, unsafe milk.

She concludes, “No matter what the future holds for breast milk, though, we can’t be surprised when a market is created for something we continue to tout as near-magical. And if we value women’s bodily autonomy we’re going to have to get comfortable with the choices she makes – whether it’s breastfeeding, formula feeding, or pumping for cash.”

Valenti perfectly expresses the standard liberal view that markets are more or less benign, that regulation will work as designed, and that any individual choice must be respected. The social inequities and changing norms that will result from the marketization of a once-inalienable resource don’t even get a mention from her. “Individual autonomy” (within a corporate-dictated context) is all that matters.

But there is no obvious reason why therapeutic innovations using breast milk must be market-driven. One could imagine a large-scale commons-based trust or regional co-operatives to collect and allocate milk without all the ethical problems raised by investor-driven enterprises. Of course, the shark-filled venture capital world is usually the first to arrive on the scene of new profit opportunities, dictating its own vision of proper relationships toward “resources” (i.e., private, monetized, tradeable, profitable).  Meanwhile, the opportunities for co-operative finance, nonprofit and government leadership on this issue – though feasible – are utterly missing.

And so the profit-minded biotech world is beginning to escort mother’s breast milk onto the auction block. A new commodity is being inducted into the market dream machine of progress and innovation. The real questions ought to be what this new market will do to us as human beings and to the culture of parenting – and why there has been so little attention paid to building more humane, commons-based alternatives.

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“Sharing lies”: five lies about the Sharing Economy

photo of Mayra Rodriguez Singh

Mayra Rodriguez Singh
3rd April 2015


topicos-sharing-1200x470Putting things in context is not to let just anything happen. It is also being clear that the “hype” that’s being built with a number of lies that will inevitably lead to disappointment. These are, in my judgement, the five big ones.


Talking about the collaborative world these days is as dangerous as walking on shifting sands. Under the “sharing” and the “co-whatever,” there hides a wide minefield of concepts and phenomena mixed together. To be immersed in the world of the collaborative economy today is, often times, contradictory and surprising.

Of course, there are classifications and dictionaries that give it all order and help us explore, and neither should we forget that all this forms part of a much broader process, of which “sharing” consumption and access to resources is only one very small and superficial part, within very powerful changes and perspectives.

But putting things in context is not to let just anything happen. It is also being clear that the “hype” that’s being built with a number of lies that will inevitably lead to disappointment. These are, in my judgement, the five big ones:

  1. airbnb comunidadPlatforms are communities. That’s a lie. Whatever definition of community we use, Airbnb, Uber, Zipcar, Blablacar, and the many clones of all of them are not communities. Adhering to conditions of use doesn’t even point towards “community standards.” Let’s be honest, the large majority of collaborative consumption platforms are markets. Barter markets in some cases, non-profit markets in others, traditional labor markets in still others, and even markets of restoration… but, markets: places where transactions are made, even if some are relatively cheap and others even at zero price. They’re still markets. And a market is something completely different from a community, and the two provide experiences that are nothing alike. Or do we really think the start-up world could be expected anything other than bid us “Welcome to the Jungle?”
  2.  

  3. The “sharing economy” creates conscious consumption. That’s a lie. We’re told that it’s better to reuse than to be compulsive buyers, and that it’s time to be conscious of our consumption. And that’s true. But if the boom in the sharing economy coincides with the longest economic crisis in the history of capitalism, it’s not by chance. With the middle class seeing its buying power reduced, sharing has grown because it offers to maintain something like the standard of living of the “good years.” Travel, but stay in a stranger’s room or in a little tourist hotel outside of State regulation. Go out to eat, but to the apartment of a chef who organizes the meal, rather than to a restaurant. Go by taxi, but pay less, because the taxi driver works under the table and the car is private. Now everything’s OK again! But the argument is a fallacy. I don’t believe that consumption is more conscious if it takes advantage of people’s precariousness and the shortcuts that so many people have had to take to survive the crisis.Sure, they’ve painted it with a little amnesia, and they’ve put new labels on it to make sure it’s still cool. One of the many examples is vintage fashion, because sharing clothes with your brothers/sisters is not the same as buying it second-hand. If your jacket was once your cousin’s, you weren’t in fashion. But now, second-hand clothes and accessories have gone from being looked down on to being cool, and you can bet someone will ask you for the address or website of the store you shop at, so they can go get stuff like yours. It’s not that the obsession with buying, the famous consumerism, has disappeared. It’s simply been adapted and started valuing things that used to be seen as being “for the poor.” The longstanding flea market that people used to want to relocate now becomes an obligatory Sunday stroll. Stores that were once on hidden streets now reappear in maps of exclusive sites and are the creme de la creme.
  4.  

  5. fabcafeThe “sharing economy” is a new mode of production. That’s a lie. To present the P2P production as part of the “sharing economy” is to confuse things by equating ways of creating wealth that are very different and erasing what P2P really represents.P2P production is centered on the creation of the commons. That’s what transforms the nature of capital and the market. But is that the way it really is in the thousands of “Ubers” that enter the risk-capital market? Does Airbnb create anything resembling a commons? Obviously not. And to confuse things only leads to the things that matter most losing meaning. Quoting Natalia:

    Collaborative consumption is not part of the transition towards a P2P mode of production if isn’t in the framework of the development of the commons and P2P production, in the same way that consumer cooperativism does not create democracy in an economy if it is not in the framework of a cooperative industrial community.

  6.  

  7. airbnb barcelonaThe businesses of the “sharing economy” promote economic activity that displaces capitalism and promotes a new use of the city. That’s a lie. If we study the “Airbnb effect” in a city like Barcelona, we’ll see that it moves us farther away — a lot farther — from the “sharing city.” The difference between Airbnb and Hilton is not not even the difference between a business of the direct economy and a large, inefficient corporation with the strength of over-scaling. Airbnb, Uber, Blablacar and others are not behind the substitution of independent SMEs for the industrial fabric of big businesses whose decomposition is gutting the productivity of cities. In fact, as Bruce Sterling pointed out, by promoting highly centralized models, these business fit into and promote the worst of “smart cities,” deepening precariousness and taking sovereignty from people and the city as a whole. As Sterling asked, “do you think San Francisco or any big American city would let its new taxi system be run by a business located in Barcelona?”
  8.  

  9. The activity of the businesses of the “sharing economy” strengthens community bonds and helps resist the social effects of the crisis. That’s a lie. The type of human relations built by the best-known “sharing” platforms are far from creating community or establishing links that strengthen social cohesion. On the demand side, they support the economy of precariousness, shortcuts, and “anything goes,” while on the demand side, they eliminate the need for collaboration and real human relationships, replacing it with interaction through a platform. That is why, as Caro said not long ago in a chat:

    [It’s not even] enough to develop independence from centralized platforms. The simple solution to our problems of access to goods or services through sharing does not create the type of interrelationships and responsibilities that characterize the commons. Just the opposite, generally — the use of platforms in exchange exempts us from the responsibility for building relationships, for observing community needs and organizing to respond to them.

So, is the “sharing economy” bad?

car sharingNo. Absolutely not. It’s just that we must distinguish, and not accept the lies of the “hype” uncritically or in all cases. There are models of couch-surfing that really are communal, and do not create the disasters of Airbnb. There are models of car sharing that don’t try to sell themselves as an alternative mode of production and that were able to evolve from the commons to a business, and from there, be integrated into public services, helping to reduce traffic. Because in reality, the main contribution of the “sharing economy” is to transmit a culture of efficient use of durable consumer goods.

So, I think it is necessary to put the “sharing economy” in context, not to lose the critical view of the talk about their businesses, and above all, not forget that if they contribute to changes of real importance, it won’t be because they tried to be more than they really are, but by taking on a deeper perspective.

Translation by Steve Herrick from the original (in Spanish)

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Posted in Anti-P2P, Cognitive Capitalism, Crowdsourcing, Culture & Ideas, Economy and Business, Networks, Original Content, P2P Development | No Comments »

Return with Freedom and Occupy Banking

photo of Enric Duran

Enric Duran
7th March 2015


Statement #OccupyBanking #ReturnWithFreedom Enric Duran from Radi.ms on Vimeo.

We want to finance the team that is already working on the launch of the #OccupyBanking campaign with thintention of placing at the center of public debate the total lack of democracy of the European Central Bank (ECB) and large private banks who control the monetary system, and especially the creation of money. A perverse system based on debt with these institutions – who have never been voted in democratically – hijacking our sovereignty. The #OccupyBanking campaign also wants to be the spearhead for creating the conditions that allow the #ReturnWithFreedom of the activist Enric Duran.

The current crisis / fraud perpetrated by the financial and banking system in recent years has uncovered one of the problems that have long been highlighted by many activist groups: from the anti-globalization demonstrations in Seattle up until today, the effects of globalized capitalism have been exposed around the world: based on growth through pillag(pollution and destruction) and overexploitation of resources, and the use of debt as a way to subjugate people to pseudo-feudalist economic powers, a model – in view of the evidence of recent years – that has been shown to be extremely harmful to the needs and welfare of humanity and to all living beings.

In this context, in 2008 Enric Duran made public an act of conscious condemnation of this system that involved the expropriation of 492,000 euros from thirty nine financial institutions in order to:

  • Finance diverse social and cooperative projects already in existence (more info)
  • Print and disseminate three publications about the origins of the financial crisis, the main partiesresponsible, and providing alternatives to the system imposed by capitalism and nation states, giving voice to the movements formed with the intention of transforming competitiveness into cooperation, promoting the common good rather than individual benefit, and seeding initiatives based on Degrowthand the Good Living.
  • And especially to highlight and condemn the way money is created based on debt.

Prior to the trial to which Enric was summoned in February 2013, the Provincial Court rejected each and every one of the twenty witnesses that the defence had presented to illustrate that the accusations against the banking system - and especially how money is created - are a significant concern for society and fully justifiedthe actions which had been taken. With such a violation of any procedural guarantee, which certainly was intended to negate Enric’s whole argument and simply send him to jail for common crimes, completely silencingthe claims made and proven for years about all the damage that the banking system has done to the lives of the majority of the population of Europe and inded the whole world. This, together with the known connivance of the judiciary and executive together with the banks’ representatives, caused Enric Duran to reject thelegitimacy of the official trial and decide to go into hiding, where work continues today in various projects related to Integral Revolution.

After the call #ReturnWithFreedomEnric has formed a team of seven fully trusted and willing people with whom to cooperate in person, and this team can move wherever necessary to achieve its objectives.

It is time to act and we need your support!

stopWe’re going to start #OcuppyBanking, a global campaign to expose both the European Central Bank and the banking system and at the same time strengthen the effectiveness of the original action that Enric made, and thus to generate a great movement of support that makes possible his #ReturnWithFreedom. We want to plan his way to come out of hiding,meanwhile denouncing internationally the framework of the European banking system, which is condemning us to the loss of popular sovereignty and the accumulation of wealth by a privileged minority who are plundering the resources of peoples through the privatization of public services, handing theirmanagement to private entities linked to the political and financial powers.

Behind these perverse mechanisms underly a system of creating money out of nothing based on loans contracted; simply trusting that the person signing the contract will be able to give back the money in some way, and if unable to do so, is going to be sanctioned economically or politically. And what is worse, banks -private entities that defend their own interests - are the only ones with the privilege of creating money, whichmeans they have the political control of who will receive funding and how, in the same way that the ECB - even though no one has given them a popular mandate - are ordering policies affecting all the peoples of Europe.

Like the publication ‘Crisis’, published in 2008, several initiatives have exposed these issues in recent years and some have achieved some successes, such as getting the debate about the creation of money to the British Parliament this autumnNow with #OccupyBanking we are working hard to link these initiatives and to make itpossible to occupy the space in consciousness and public debate they deserve throughout Europe.

necesidadesSo this funding campaign aims to cover the costs of travel to different countriesand the accommodation of Enric Duran‘s team of seven people. We need to ensure at least the economic sustainability of the working group until September 2015, when we rethink the strategy, i.e. seven months with an average monthly expenditure of 2,400 euros, representing a total of 16,800 euros for the maintenance of all equipment.

You can support us financially for the success of this plan with the amount that you feel within your means (any input is welcome); and even if you can not contribute financially right now, we also invite you to cooperate with the dissemination of materials and / or this funding campaign, also you can be part of local support groups that are being put into operation.

It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning“.

Henry Ford (founder of the Ford Motor Company and the father of the modern assembly lines used in mass production).

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Posted in Activism, Campaigns, Cognitive Capitalism, Collective Intelligence, Commons Transition, Crowdfunding, Economy and Business, Empire, Ethical Economy, Original Content, P2P Collaboration, Politics, Videos | No Comments »

Why the Tech Elite Is Getting Behind Universal Basic Income

photo of Nathan Schneider

Nathan Schneider
24th February 2015


raining-gold

As if Silicon Valley hasn’t given us enough already, it may have to start giving us all money. The first indication I got of this came one evening last summer, when I sat in on a meet-up of virtual-currency enthusiasts at a hackerspace a few miles from the Googleplex, in Mountain View, California. After one speaker enumerated the security problems of a promising successor to Bitcoin, the economics blogger Steve Randy Waldman got up to speak about “engineering economic security.” Somewhere in his prefatory remarks he noted that he is an advocate of universal basic income—the idea that everyone should get a regular and substantial paycheck, no matter what. The currency hackers arrayed before him glanced up from their laptops at the thought of it, and afterward they didn’t look back down. Though Waldman’s talk was on an entirely different subject, basic income kept coming up during a Q&A period—the difficulties of implementing it and whether anyone would work ever again.

Around that time I had been hearing calls for basic income from more predictable sources on the East Coast—followers of the anarchist anthropologist David Graeber and the editors of the socialist magazine Jacobin, among others. The idea certainly has a leftist ring to it: an expansion of the social-welfare system to cover everyone. A hard-cash thank-you just for being alive. A way to quit the job you despise and—to take the haters’ favorite example—surf.

Basic income, it turns out, is in the peculiar class of political notions that can warm Leninist and libertarian hearts alike. Though it’s an essentially low-tech proposal, it appeals to Silicon Valley’s longing for simple, elegant algorithms to solve everything. Supporters list the possible results: It can end poverty and inequality with hardly any bureaucracy. With more money and less work to do, we might even spew less climate-disrupting carbon.

The idea of basic income has been appearing among the tech-bro elite a lot lately. Mega-investor and Netscape creator Marc Andreessen recently told New York magazine that he considers it “a very interesting idea,” and Sam Altman of the boutique incubator Y Combinator calls its implementation an “obvious conclusion.” Albert Wenger, a New York–based venture capitalist at Union Square Ventures, has been blogging about basic income since 2013. He’s worried about the clever apps his company is funding, which do things like teach languages and hail cars, displacing jobs with every download.

“We are at the beginning of the time where machines will do a lot of the things humans have traditionally done,” Wenger told me in October. “How do you avoid a massive bifurcation of society into those who have wealth and those who don’t?” He has proposed holding a basic-income experiment in the dystopian fantasyland of Detroit.

Singularity University is a kind of seminary in Silicon Valley where the metaphysical conviction that machines are, or soon will be, essentially superior to human beings is nourished among those involved in profiting from that eventuality. Last June, the institution’s co-founder and chairman, Peter Diamandis, a space-tourism executive, convened a gathering of fellow industry luminaries to discuss the conundrum of technology-driven unemployment.

“Tell me something that you think robots cannot do, and I will tell you a time frame in which they can actually do it,” a young Italian entrepreneur named Federico Pistono challenged me. Among other accomplishments, Pistono has written a book called Robots Will Steal Your Job, but That’s OK. At the Singularity meeting he was the chief proponent of basic income. He cited recent experiments in India that showed promise for combating poverty among people the tech economy has left behind. Diamandis later reported having been “amazed” by the potential.

One might not expect such enthusiasm for no-strings-attached money in a room full of libertarian-leaning investors. But for entrepreneurial sorts like these, welfare doesn’t necessarily require a welfare state. One of the attendees at the Singularity meeting was HowStuffWorks.com founder Marshall Brain, who had outlined his vision for basic income in a novella published on his website called Manna. The book tells the story of a man who loses his fast-food job to software, only to find salvation in a basic-income utopia carved out of the Australian Outback by a visionary startup CEO. There, basic income means people have the free time to tinker with the kinds of projects that might be worthy of venture capital, creating the society of rogue entrepreneurs that tech culture has in mind. Waldman refers to basic income as “VC for the people.”

Chris Hawkins, a 30-year-old investor who made his money building software that automates office work, credits Manna as an influence. On his company’s website he has taken to blogging about basic income, which he looks to as a bureaucracy killer. “Shut down government programs as you fund redistribution,” he told me. Mothball public housing, food assistance, Medicaid, and the rest, and replace them with a single check. It turns out that the tech investors promoting basic income, by and large, aren’t proposing to fund the payouts themselves; they’d prefer that the needy foot the bill for everyone else.

“The cost has to come from somewhere,” Hawkins explained, “and I think the most logical place to take it from is government-provided services.”

This kind of reasoning has started to find a constituency in Washington. The Cato Institute, Charles Koch’s think tank for corporate-friendly libertarianism, published a series of essays last August debating the pros and cons of basic income. That same week, an article appeared in the Atlantic making a “conservative case for a guaranteed basic income.” It suggested that basic income is actually a logical extension of Paul Ryan’s scheme to replace federal welfare programs with cash grants to states—the Republican Party’s latest bid to crown itself “the party of ideas.” Basic income is still not quite yet speakable in the halls of power, but Republicans may be bringing it closer than they realize.

Karl Widerquist, a professor of political philosophy at Georgetown University’s School of Foreign Service in Qatar, has been preaching basic income since he was in high school in the early 1980s. He says that we are now in the third wave of American basic-income activism. The first was during the economic crises between the world wars. The second was in the 1960s and 70s, when libertarian heroes like Milton Friedman were advocating for a negative income tax and when ensuring a minimum income for the poor was just about the only thing Martin Luther King Jr. and Richard Nixon could agree about. (Nixon’s Family Assistance Plan, which bears some resemblance to basic income, passed the House but died in the Senate.) The present wave seems to have picked up in late 2013, as the news went viral about a mounting campaign in Switzerland to put basic income to a vote. Widerquist is glad to see the renewed interest, but he’s cautious about what the libertarians and techies have in mind.

“I don’t think we want to wait for technological unemployment before having basic income,” he says. For him the plan is not about averting the next disaster—it’s about curbing the exploitation of the property system.

Riding way on the left side of the current wave of enthusiasm is Kathi Weeks. She’s a good old-fashioned-in-certain-ways feminist Marxist who made basic income a central proposal in her recent book The Problem with Work. She advocates it cautiously, however: If a basic income were too low, people wouldn’t be able to quit their jobs, but employers would still lower their wages. It could incline more businesses to act like Walmart, letting their workers scrape by on government programs while they pay a pittance. Workers might get money for nothing, but they’d also find themselves with dwindling leverage in their workplaces.

If we were to fund basic income only by gutting existing welfare, and not by taxing the rich, it would do the opposite of fixing inequality; money once reserved for the poor would end up going to those who need it less. Instead of being a formidable bulwark against poverty, a poorly funded basic-income program could produce a vast underclass more dependent on whoever cuts the checks. And as out-there as the idea can seem, Weeks’s leftist critics complain that it’s still a tweak, a reform. “It’s not going to signal the end of capitalism,” she recognizes.

Like pretty much all the shortcut solutions Silicon Valley offers, basic income would have its perks, but it isn’t enough to solve our real problems on its own. There’s still no substitute for organizing more power in more communities—the power to shape society, not just to fiddle with someone else’s app. Social Security, for instance, came to be thanks to the popular struggles of the 1930s, and it carried huge swaths of old people out of poverty. Obamacare, a set of reforms mostly written by the industry it was meant to regulate, has turned out to be a far more mixed bag.

A basic income designed by venture capitalists in Silicon Valley is more likely to reinforce their power than to strengthen the poor. But a basic income arrived at through the vision and the struggle of those who need it most would help ensure that it meets their needs first. If we’re looking for a way through the robot apocalypse, we can do better than turn to the people who are causing it.

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A world of ‘sharing and caring’ won’t begin in Davos

photo of Adam Parsons

Adam Parsons
13th February 2015


Davos

At this year’s gathering of the world’s richest and most powerful at Davos, the World Economic Forum founder has urged delegates that the motto for their 2015 meeting should besharing and caring’.


Inequality is again on the agenda (if not considered the top threat to world stability, as last year), which has prompted many critics to point out – as usual – that the solutions to inequality are unlikely to come from the global elites that are largely responsible for creating it.

Despite all the media debates and high-profile discussions there is mainly talk and no action when it comes to creating a more equal society. And the only kind of sharing that is championed by the corporate executives and world leaders at Davos is within the context of charity and big business, rather than discussing any real solutions that would require government interventions and wealth redistribution.

A new report and series of interactive infographics from Global Justice Now, formerly the World Development Movement, exposes the core myths that define the worldview of this tiny group of elites. In a refreshingly straightforward and incisive way, it demonstrates the fallacies behind their ideology that is now deeply ingrained in society and a serious obstacle to building a fairer, more sustainable world for the majority.

For example, it is not true that the ‘poor are getting richer’ in the face of soaring inequality, which is starkly illustrated in sub-Saharan Africa where there has been almost no improvement in poverty rates since 1981 (indeed, the number of people living on less than $2 has doubled over this period). As often repeated, the vast majority of the fall in global poverty since the 1990s is the result of China’s effectiveness at tackling poverty, which it famously achieved without following the prescriptions of the so-called Washington Consensus.

The reality is that while the rich have certainly got richer as a result of economic globalisation, most of the poor have remained in poverty. Believing otherwise is to conveniently overlook the devastating impacts of free market, neoliberal economic policies in many developing countries, as well as the inequalities of power that keeps poor people poor. But this is, of course, unlikely to be the chief concern at Davos where discussions revolve around a common theme: that their business practices, overseas investments, entrepreneurial talent and philanthropy are the only answer to world problems.

Another myth is that economic growth is the panacea for social ills and poverty, despite all evidence to the contrary. As the Global Justice Now report argues, growth – while important – is never enough, unless a nation’s economy is geared to sharing the benefits of growth fairly. As long as the benefits are increasingly captured by a small global elite, it is inevitable that the lives of those at the bottom of society will continue to get worse. A neat graphic illustrates a stark fact from the New Economics Foundation’s report Growth isn’t working, asking the reader to guess how much of each $100 of global economic growth has actually contributed to reducing poverty – which is an astonishing $0.60. (Equally shockingly, 95% of the proceeds of growth in the US went to the top 1% during the three years of economic recovery that followed the 2008 financial crash.)

Several of the report’s myths also simply describe how the global economic system is fundamentally skewed in favour of rich countries, which is the real reason why billions of people in poorer countries are lacking the essentials for life, such as adequate food, water and energy. So the image of Africa as poor and helpless is wrong, because the continent is one of the richest in terms of natural resources – and far more money is extracted from the region (such as through profit repatriation, debt repayments and tax evasion) than is given in aid.

The report also argues that international aid could make the world a fairer place, but only if it undergoes major reform so that it is genuinely redistributive and no longer a tool of free market policy. At present, aid is increasingly being used to support multinational corporations in their quest for profits, such as by forcing poor countries to privatise their public services. But this does not mean that overseas development assistance should be entirely scrapped as a system, as “redistributing wealth from the richest to the poorest is a necessary element of creating a fairer world – as it is in creating a fairer society.”

More ambitiously, the report suggests, we should see aid more as a system of global taxation in which it is used to help build what we might call ‘sharing societies’ in all countries. It concludes: “The funds would have to be much bigger than they currently are to create such a change, and the mentality would have to change completely. Creating a better world is not generous, especially if you have created the unfairness in the first place. What’s more aid can never be seen in isolation. Fairer trade, cancelling unjust debt, stopping climate change, tackling tax havens and securing democratic freedoms are all more important in achieving global justice.”

Such common sense is sadly not the preserve of orthodox thinking among the majority of attendees at the luxurious ski resort of Davos, where there is no hint of the poverty and hardship suffered by billions of people elsewhere in the world. As ever, it is up to campaigners and concerned citizens to challenge the myopic outlook of those elites who are concerned about growing inequality, but unwilling to embrace the necessary measures to reverse it.

Photo credit: World Economic Forum, flickr creative commons

 

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Oxfam’s latest bombshell on how unequally the world’s wealth is shared

photo of Rajesh Makwana

Rajesh Makwana
10th February 2015


davos-oxfams-shareable-graphic2-island

Twitter feeds and newspaper headlines were again dominated this morning by new statistics on growing wealth inequality, as released by Oxfam ahead of this week’s annual meeting of the World Economic Forum.

It is now customary for Oxfam to publish new research on how severe the gap between the 1% and the 99% is growing, prior to the gathering of billionaires and politicians at the Swiss ski resort of Davos. The latest research has heralded another media coup for the anti-poverty charity, demonstrating how extreme is the lack of sharing in our societies when just 80 rich people have the same wealth as the bottom half of the planet.

This is in contrast to the 85 billionaires that held the same amount of wealth last year, according to wealth data drawn from Credit Suisse that also grabbed news headlines in January 2014. (Interestingly, Forbes magazine – who publish the annual billionaires list – later contended that it was actually 67 people who own as much wealth as the poorest 3.5 billion).

Oxfam estimate that in 2014, the richest 1% of people in the world owned 48% of global wealth, leaving just 52% to be shared between the other 99% of adults on the planet. However, almost all of that 52% is owned by those in the richest 20% of the global population, leaving just 5.5% for the poorer 80% of people. If current trends continue of an increasing wealth share to the richest, the top 1% will have more wealth than the remaining 99% of people by 2017.

Oxfam’s short research brief, Wealth: Having It All and Wanting More, illustrates this staggering inequality with a series of graphs that show how the wealth share of the top 1% has continued to increase since 2010, while the bottom 99% have experienced a decline in their share of total global wealth that is set to fall significantly further over the next 5 years. The wealth of the very richest continues to expand at an inconceivable rate, typically increasing by over a billion dollars per individual between March 2013 and March 2014 – or $4 billion in the case of the Italian pharmaceuticals magnate, Stefano Pessina.

In the words of the paper’s author, senior researcher Deborah Hardoon: “The extreme wealth at the top of the distribution… is not only mind-blowing, but quite obscene when compared with how wealth is distributed to the rest of us in the world.” The main reason for this upward redistribution, according to the brief, is the entrenched cycle of wealth, power and influence that enables the super-rich to create an environment that protects and enhances their interests, particularly through government lobbying activities and campaign contributions.

The most prolific lobbying activities in the US are on budget and tax issues, which Oxfam states can directly undermine public interests where a reduction in the tax burden to companies results in less money for delivering essential public services. In other words, the billions that are spent on lobbying is increasingly moving society away from the direction of economic sharing and redistribution on behalf of the common good, a pernicious trend that is set to accelerate without a dramatic change in government policy and business practices.

The reality of extreme global inequality and the case against it has now been well made in any number of books, reports and conferences, from Thomas Piketty’s tome of analysis to the annual meeting of the IMF and World Bank last year, where the chosen theme was ‘shared prosperity’. But the need for real action from policymakers to share wealth and resources more equitably is ever urgent, especially in the midst of ongoing austerity measures, wage cuts and high unemployment in many high-income as well as low-income countries.

As STWR has often remarked, this will inevitably require government intervention, regulations and laws that guarantee fairness and equity in society, however anathema this may remain to the neoliberal rulebook still held by most of today’s politicians. Although the richest 1% had an average wealth of $2.7 million per adult in 2014, we cannot expect the members of this global elite to voluntarily share their wealth as a response to world poverty, one that is based on charity instead of justice and structural reform. Indeed as Oxfam acknowledge through their many sensible recommendations, the policy solutions for reducing inequality are plentiful and widely known. So if 2014 was the year when the need to tackle inequality went mainstream, perhaps 2015 will be the year when a call for economic justice and sharing becomes the presiding theme of political conversation.

 

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Top P2P Books You Should Have Read in 2014 (1): The return of the cooperative commonwealth

photo of Michel Bauwens

Michel Bauwens
25th January 2015


Our book of the year is Humanizing the Economy by John Restakis. See why below.. I can truthfully say it’s one of the most important books I have read in the last ten years.

2014 was definitely the year of the commons – cooperative convergence. Two objective trends especially since the systemic economic crisis of 2008 are the revival of the commons, mostly driven through peer production; AND a revival of cooperatives and cooperativism, which had been subjected to a certain decline and even a neoliberal degeneration in the period since the 1980’s. What was new in 2014 is that these two sectors started talking and looking at each other. At the P2P Foundation, we call for a new synthesis in the form of open cooperativism, i.e. cooperatives which consciously and structurally co-produce commons, as pioneered by the Catalan Integral Cooperative or the Allianza Solidaria in Quito.

The best record of this, which we don’t count as a book, is the following report of a in-depth convergence conversation by leading commoners and cooperativists:

* 0. “TOWARD AN OPEN CO-OPERATIVISM. A New Social Economy Based on Open Platforms, Co-operative Models and the Commons. A Report on a Commons Strategies Group Workshop Berlin, Germany, August 27-28, 2014. By Pat Conaty and David Bollier. CSG / Boll Foundation / Foundation pour le Progres de l’Homme, 2014.

We strongly urge everyone to read this.

Our top book about the cooperative commonwealth tradition is paradoxically a book that appeared in 2010, but that strongly deserves a second life with its second print run this year. It is the marvelously well written book by John Restakis, entitled “Humanizing the Economy”, which places cooperativism in its historical tradition, and presents innovations such as solidarity cooperatives. Learn there about the cooperative tradition in Emilia-Romagna and the innovative Seikatsu movement in Japan. Since, John Restakis has developed a much stronger understanding of the commons and worked with the P2P Foundation and myself on the commons-cooperative convergence. The evidence of this lies in our P2P-Foundation published e-book on the Commons Transition, which has strong chapters by John Restakis on the convergence of the commons economy, the partner state approach, and the cooperative economy. Finally, our own book, “Network Society and Future Scenarios for a Collaborative Economy” co-authored by Vasilis Kostakis, gives a detailed vision of expectations related to this cooperative commons economy: will it fullfill its promise, of fall victim to the forces which extract its value for purely private benefit of large multinationals of netarchical capital?

1. Humanizing the Economy. Co-operatives in the Age of Capital. by John Restakis. New Society Publishers, 2010

1. 1. b eBook: COMMONS TRANSITION: POLICY PROPOSALS FOR AN OPEN KNOWLEDGE SOCIETY. By Michel Bauwens and John Restakis. P2P Foundation, 2014

* 1.1.c. Network Society and Future Scenarios for a Collaborative Economy. By Vasilis Kostakis and Michel Bauwens. Palgrave Macmillan, 2014

The second trend, the revival of the commons, produced two very important book this year, by David Bollier and Jeremy Rifkin.

David Bollier’s book is a very well written general introduction of what ‘commoning’ means for human life, comparable to these great classics like The Gift by Lewis Hyde; Jeremy Rifkin’s book may not go deep enough in the problematic transition, but gives a great historical introduction to changes in the modes of production, and why the commons is now an economic fact, destined to grow not just in the so-called ‘immaterial’ economy, but also in the physical economy, through the ‘margical cost’ effects of distributed energy and 3D printing.

* 2. Think Like a Commoner. A Short Introduction to the Life of the Commons. by David Bollier. New Society, 2014

* 2.1. The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism. by Jeremy Rifkin. Palgrave Macmillan, 2014

More good books on the Revival of Cooperativism:

* 3. Capital and the Debt Trap. Learning from Cooperatives in the Global Crisis. By Claudia Sanchez Bajo and Bruno Roelants. Palgrave MacMillan (2013)

“The recent financial crisis has had a devastating impact around the globe. Thousands of businesses have closed down and millions of jobs have been cut. Many people have lost their homes. Capital and the Debt Trap explains how key economies have fallen into a ‘debt trap’, linking the financial sphere to the real economy, and goes beyond, looking into alternatives to the constant stream of financial bubbles and shocks. Overlooked by many,cooperatives across the world have been relatively resilient throughout the crisis. Through four case studies (the transformation of a French industrial SME in crisis into a cooperative, a fishery cooperative in Mexico, the Desjardins Cooperative Group in Quebec and the Mondragon Group in the Basque country of Spain), the book explores their strategies and type of control, providing an in-depth analysis within a broader debate on wealth generation and a sustainable future.”

* 3.1 e-Book: Democratic Wealth: Building a Citizens’ Economy. Ed. by Stuart White, and Niki Sethi-Smith. openDemocracy and Politics in Spires, 2014

“Democratic Wealth’ is a collection of essays that challenges the poverty of thinking around economic policy, particularly after the 2007 financial crash. It explores the renewed interest in republicanism and suggests this as a framework to shape an economy that serves the common good. It is a selection of articles from a series published by openDemocracy and Politics in Spires, a blog run by the universities of Oxford and Cambridge.

* 3.2 eBook: Alternatives To Capitalism: Proposals For A Democratic Economy. by Robin Hahnel, Erik Olin Wright. New Left Project, 2014

“New Left Project’s new e-book, Alternatives to Capitalism: Proposals for a Democratic Economy, is now available for download.
In it the leading radical thinkers Robin Hahnel and Erik Olin Wright take on the crucial but all-too neglected question: what kind of society should we be fighting for instead of capitalism? Hahnel favours ‘participatory economics’. Wright advocates ‘real utopian socialism’. Alternatives to Capitalism puts these practical proposals through their paces in an in-depth, frank and extremely instructive debate about the central question of our time.”

* 3.3 Gary Alexander. eGaia Growing a peaceful, sustainable Earth through Communications. Published by Lighthouse Books, ISBN 0907637248 (2nd ed. 2014)

A updated second edition. See here for reviews.

* 3.4 Co-operatives in a Post-growth Era. Creating Co-operative Economics. Edited by Sonja Novkovic and Tom Webb. Fernwood Pubn. (with Zed Books), 2014

“Featuring a remarkable roster of internationally renowned critical thinkers, this book presents a feasible alternative for a more environmentally sustainable and equitable economic system. The time has never been better for cooperatives everywhere to recognize their own potential and ability to change the economic landscape.”

* 3.5 Robert Costanza and Ida Kubiszewski. Creating a Sustainable and Desirable Future: Insights from 45 Global Thought Leaders. World Scientific, 2014

“The book offers a broad, critical discussion of what a sustainable and desirable future should or can be, with chapters written by some of the world’s leading thinkers, including: Wendell Berry, Van Jones, Frances Moore Lappe, Peggy Liu, Hunter Lovins, Gus Speth, Bill McKibben, and many more.”

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A Critical Review by Brian Holmes of the “Network Society’ book by Bauwens / Kostakis

photo of Michel Bauwens

Michel Bauwens
30th December 2014


A great but critical review by Brian Holmes:

“Thanks for this book, Michel and Vasilis. “Future Scenarios for a Collaborative Economy” is exceedingly timely and I would recommend it to anyone interested in the Commons specifically, or in political economy more generally. In response, I’ve written something in between a review and a letter to the authors. I address Michel because he posted it. Hopefully he will respond to a few of my comments!

I like the book, Michel, but I must also say, I’m somewhat mystified by it. I like the very sophisticated strategy that it sets out at the end for a possible transition to a society of commons-based production. I’m mystified by the rather simplistic presentation of contemporary capitalism at the beginning. What explains the gap?

In Part I you adopt the theoretical framework of “long waves of capitalist development” as put forth by Kondratiev and Schumpeter, and more recently, by Freeman and Perez (Trotsky and Mandel aren’t mentioned). In its most general form, the long-wave idea is that capitalist society periodically goes through major depressions, during which investment is withdrawn from production. Meanwhile inventions accumulate until such time as conditions look good, and a massive wave of technological investment lays the foundations for a new growth cycle. Right now we’re in such a depression. Therefore you try to analyze the possible futures of the current “techno-economic paradigm.”

There is some ambiguity here, but that’s OK. On the one hand the book follows Carlota Perez, explaining that the information technology paradigm has run up against a set of internal contradictions and that a mature phase of sustained growth can only come under new political and institutional arrangements. On the other hand it hints in certain places at the emergence, in the upcoming years or decades, of an entirely new paradigm (which, according to Schumpeter or Freeman, implies a distinct set of technologies and organizational forms). And then near the end it quite strongly claims, with Marx, that capitalism must now be overcome in favor of a different system. The upshot seems to be that the new society will emerge from the old, perhaps not entirely smoothly, but not through an apocalyptic rupture either. That’s realistic and desirable, in my view.

I too think some kind of new growth wave is almost inevitable, within a decade or so – and though it will probably not be on anywhere near so intensive as the postwar growth wave that so many theorists take as a norm, it could well be more extensive, reaching far more people on our densely populated planet. I also think such a new long wave does imply distinctly new technologies capable of attracting new investment; but in the absence of radical breakthroughs, the big difference is most likely to be in the political and institutional structures that govern those technologies. In other words, the current technology set is more likely to be augmented and institutionally inflected (as early mass manufacturing was by postwar Keynesian Fordism) than it is to be radically transformed (as Keynesian Fordism was radiclly transformed by the IT revolution). In other words, we are likely to get an extension and amplification of the certain aspects of the current paradigm, but under new institutional arrangements.

The problem is, Michel, you never really discuss the current techno-economic paradigm in any serious way. What you and your co-author are talking about, in Parts I and II, is a small though important field of activity, the one that can be identified with keywords such as P2P, social media, crowd-sourcing, sharing economy, etc. The best parts of the book contain significant insight into these activities, as one would expect. However, by claiming to discuss the future of the entire capitalist system and then not really doing so, you blur the issue and diminish the potential value of your work.

One can follow Manuel Castells and call the current techno-economic paradigm “Informationalism” – or better, “Neoliberal Informationalism,” to give some idea of how this mode of production is governed. But Informationalism does not mean that the only significant commodity on the contemporary market is information. Nor does it signal an eclipse of industry, as you suggest in chapter 1. Instead, Neoliberal Informationalism has been based on a “lead technology” which is new kind of producer goods, namely IT in all its facets (computers, software, cables, mobile telephony, communications satellites, etc). These goods in combination with networked organizational forms are used to create transnational supply chains, constituting what is generally called “just-in-time production” or “the global factory.” The characteristic companies of neoliberal informationalism are not Facebook and Google, as one would gather from your book, nor even less, recent start-ups like AirBnB or Uber. They are giant networked firms like WalMart and Apple, which have their products manufactured in China, coordinate their work forces and supply chains through sophisticated IT systems, and sell their wares on the web as well as in the store. Or they are specialized corporations like Cisco, Verizon and IBM, which furnish the hardware and software for the new mode of production, distribution and sales. All these corporations have evolved under the anti-welfare policy mix of neoliberalism, and with the resources allocated by speculative finance, which has largely replaced the central planning of national governments. Not coincidentally, finance itself is crucially enabled by IT. Computers, cable and satellite networks, transnationalism and financial governance are key aspects of the current techno-economic paradigm.

Now, it’s necessary to add that older sectors, such as petroleum, steel, chemicals, automobiles, engineering, grain production, etc, remain tremendously significant for the global economy. They are not just going to disappear in the next ten or twenty years. However, the way these sectors are articulated, both internally and between each other, has effectively been transformed by IT, and that’s why we can speak of Neoliberal Informationalism as a distinct techno-economic paradigm. As you and Vasilis point out, this paradigm has been predicated on low-wage precarious labor, and it has called on finance to furnish the means of consumption through the extension of credit to individuals. The debt burden of the working and middle classes has risen tremendously and now, in the overdeveloped world at least, these classes can no longer consume enough to prop up economic growth. So the system is in a deep crisis, one which cannot be resolved by simply pumping money into asset markets as various governments have been doing. That crisis is further intensified by geopolitical factors (rise of Asia) and by climate change (which has been made a lot worse by the rise of Asia). How will the global political economy reconfigure itself under these circumstances? And what can civil society do to influence the next redeployment of capital? That’s what we need to know.
In Part II, it’s really interesting how you present a diagrammatic field of four distinct yet neighbouring scenarios, divided on the one hand between distributed and centralized organization (or local and global scales), and on the other hand, between capitalist and commons-based development paths (or “for profit” and “for benefit” activities, as you also say). However, for the reasons already stated, the capitalist or for-profit side of the diagram is not very convincing. In chapters 4 and 5 we are introduced to two supposedly emergent categories. First, a corporate-scale “netarchical capitalism” where sharing and cooperative production are enabled by interfaces with closed, privately controlled backends that facilitate the harvesting of monetary value from social interaction. And second, an individual-scale “distributed capitalism” where everyone is asked to become a networked entrepreneur of him- or herself, creating their own backends for profit. Now, without a doubt these are already both realities. The first has already undergone significant expansion, partially wiping out the old media sphere with some inroads on the hobby, transport, in-person service and vacation sectors. The second has all the reality of neoliberal ideology: it is the computerized version of the entrepreneurial ideal, where everyone freely competes in an open, unregulated economic realm. But the claim that these figures represent the capitalism of tomorrow could only hold true if “we are not talking about monopoly capitalism” – which is a crucial caveat that you supply early on.

The problem is that we are talking about exactly that, Michel, just look around you. The great oligopolies that corral major sectors of the world economy, fixing prices and blocking the entry of smaller actors, are alive and despicably well in every major economic sector, including IT; and they are supported by very solid forces of the national and transnational state. To suggest that monopoly capitalism is on the way out through some force of networked nature is just plain mystifying, and that’s the principal argument I have with this book.

Something else really is changing, though; and this is where the book’s proposals, and more generally, those collected by the P2P Foundation over the last decade, are really worth one’s attention. What’s happening is an impoverishment of the former “First World,” which is losing out to the newly developed countries at the same time as it starts being subjected to the environmental stresses of climate change. What one can see on the horizon is a gradual evening-out of global wages, leaving much of the former West in decaying housing with legacy appliances and amenities, while populations in the East and South rise up to a roughly similar level and then stagnate. That’s already happening: and the frustration it engenders was behind the wave of protests in 2011-2013, whether in Egypt, Brazil, Russia and Turkey, or in Spain and the US. It is precisely the existence of the oligopolies and the financial elites (the famous 1%) that account for this dynamic. And we’re likely to see even more intense frustration and anger as these populations have to confront the difficulties of climate change. Under these conditions, both newly unemployed people and those who have gained or retained a precarious hold on middle-class status are likely to find great attraction in what the book calls “resilient communities” and “global commons.” Additionally, intellectuals with a capacity to see the dead-end future, whatever their class, will start to look for serious alternatives.

The discussion becomes tremendously interesting when the “for benefit” categories are discussed, in their local and global forms. This is the Marxian part of the book, where a change of the system itself starts to look desirable. Both the for-benefit categories are based on the generative matrix of the Commons, and I love the clarity with which you’ve expressed its basic principles: “It could be said that every Commons scheme basically has four interlinked components: a resource (material and/or immaterial; replenishable and/or depletable); the community which shares it (the users, administrators, producers and/or providers); the use value created through the social reproduction or preservation of these common goods; and the rules and the participatory property regimes that govern people’s access to it.”

At this point (Part III), the strict focus on information production is abandoned and what comes to the fore are the new possibilities presented by the maker revolution: not only 3-D printing, but all the computer-controlled tools which can use freely circulated open-source designs to create practical objects ranging from housing to automobiles. One can easily see the relevance of such productive capacities for impoverished communities, especially when they are beset by the stresses of changing climates, violent storms and soon, rising water levels. What’s more, to take a page from Jeremy Rifkin’s recent books, it becomes clear that with falling costs for solar and wind generation, energy production itself could potentially be decentralized and managed according to commons principles so as to build resilient communities. The combination of alternative energy sources with micro-manufacturing techniques represents a possible basis for a new form of economic growth that could cater to very large numbers of people despite, or rather because of, their inability to reach Fordist and Neoliberal levels of grotesque hyperconsumption. If the development of capitalist production during the next upswing could be influenced so as to furnish the infrastructure and toolkits of decentralized energy production and micro-manufacturing, then the next wave of growth could have many positive consequences. That’s the paradigm shift that we need, and Part III makes that quite clear, bravo. The question is, how to make it happen? What are the “new institutional arrangements” that we need, and how to achieve them?

Or as you and Vasilis write:

“Arguably, the issue is not to produce and consume less per se, but to develop new models of production which will work on a higher level than capitalist models. We consider it difficult to challenge the dominant system if we lack a working plan to transcend it. A post-capitalist world is bound to entail more than a mere reversal to pre-industrial times. As the TEPS theory informs us [ie, the theory of techno-economic paradigm shifts], the adaptation of current institutions and the creation of new ones take place in the deployment phase of each TEP. We claim that the times are, finally, mature enough to introduce a radical political agenda with brand new institutions, fueled by the spirit of the Commons and aiming to provide a viable global alternative to the capitalist paradigm beyond degrowth or antiglobalization rhetorics.”

Now, that’s not Carlota Perez talking anymore. That’s a utopian Marxist strain that has affinities with Italian Autonomia, to the extent it believes that progressive use-values slumber within the technologies of capitalist exchange, and that these use-values can be liberated through the kinds of self-organization that the Internet facilitates. The question is, how to avoid making this a purely utopian thinking, as Autonomia has proven to be so far? How can commons-based peer production reach deeply into daily life? And how can it expand globally, both as a philosophy and as a set of informational tools that can take full advantage of the new decentralized energy and manufacturing toolkits? Or, to put it in strategic terms: How can civil-society actors find the opportunity, in the current depression and in the upswing that will almost inevitably follow it, to push corporate production into supplying the toolkits for a society that will finally escape the worst and most life-threatening consequences of the capitalist system?

In chapter 8, I feel that you are groping for a way to bridge the gap between two rather different things. First, the many specific micro-examples of (mainly informational) commons-based production that you do provide, in welcome detail. Second, a full-fledged economic praxis that could rival with the existing forms of Neoliberal Informationalism, which you (and the rest of us) can only imagine somewhat fuzzily. The way you approach this problem suggests that you do recognize the difficulties of overcoming the norms imposed by monopoly capitalism: after all, they are exemplified by the trajectory of Free and Open-Source Software, which has still not been broadly adopted even though the operating systems are now perfectly serviceable and perfectly free. You cite two very promising projects from what could become the next techno-economic paradigm, namely the Rep-Rap 3-D printer project and the Wikispeed automobile project, both of which are impressive and point the way toward a new articulation of social production. But it’s clear that without support from either large social movements, or powerful economic actors, or more likely both, a new wave of capitalist growth will render these projects insignificant – or at least, no more significant than Free Software is currently. Traditional monopoly capital will put the breaks on Wikispeed. The coming wave of investment and development has to be bent to fit collaborative priorities. Otherwise, a no-future scenario looms.
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It is in this context that you introduce the “Partner State Approach”: “The PSA could be considered a cluster of policies and ideas whose fundamental mission is to empower direct social-value creation, and to focus on the protection of the Commons sphere as well as on the promotion of sustainable models of entrepreneurship and participatory politics.” This is absolutely true: commons-based production requires infrastructure investments that commoners themselves cannot provide, at least, not as individuals or a members of small and fractious voluntary networks. The implication (which I don’t think is anywhere clearly stated in the book) is that we need collective investments in order to stimulate forms of growth that are very different from those seen under Neoliberal Informationalism. We need a government capable of shaping an environment in which Commons-friendly investments will be possible. Yet so far, not a single state has emerged as a reliable partner. I’m curious: How do you feel about this today, Michel (and Vasilis), after the difficulties that the FLOK project encountered in Ecuador, in the attempt to generate exactly such a Partner State Approach?

The problems that our civilization faces are vast. The extension of commons-based peer production from the software to manufacturing and energy production does suggest a path forward. But support for it, in the form of something like a Partner State, can only be generated from a far broader civil-society movement than we have today. Such a movement is being called into existence by the rising awareness that the current form of development is literally a dead end. On one hand, it is important to nurture this movement (and ourselves, as parts of it) with pragmatic principles of hope, of the kind provided by experiments with Commons-based peer production. On the other, it’s necessary to cultivate a very lucid of what’s actually happening in society, not to paint an apocalyptic picture but just to identify the really existing obstacles. That kind of analysis is often lacking on the postmodern left. You could have used a little more Trotsky and Mandel, imho.

I think that civil-society movements have a tremendous amount to learn from experiments with peer production, and therefore, from the reflections in the last third of this book. However, I don’t think any of this will go anywhere without a more realistic assessment of the forces currently in play. A broad movement needs to know both what to ask for and what to create, in view of pushing the really existing political-economic system towards a fundamental structural change. That means clearly facing the structure and power of corporate monopoly capital in its transnational form. I feel you have dispatched that issue too quickly and on that level, the book could definitely be improved. Actually, a careful read of this book has left me with the desire to rewrite parts of it, while keeping others intact – which I guess is a pretty good outcome for a book that reccomends the use of Peer Production Licenses!

Let me close this long review/letter with one more quote from Bauwens and Kostakis, a particularly astute and admirable one:

“According to Brynjolfsson and McAfee (2011) ‘When the changes happen faster than expectations and/or institutions can adjust, the transition can be cataclysmic.’ To avoid such a cataclysm, we arguably need political and social mobilization on the regional, national and transnational scale, with a political agenda that would transform our expectations, our economy, our infrastructures and our institutions in the vein of a Commons-oriented political economy.”

I could not agree more.”

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The Real Trouble with Disruption

photo of Nathan Schneider

Nathan Schneider
28th November 2014


disrupt

Young wannabes doing their thing at a Techcrunch Disrupt conference in 2012. Photo via Flickr user JD Lasica

At the Powell Street BART station in San Francisco, ads for Oakley sunglasses are everywhere. “Disruptive by design,” they declare—or, rather, #DESRUPTIVEBYDESIGN. Behind those words are gray images of blueprints and lasers and factories with big bolts like in Charlie Chaplin’s spoof Modern Times. Fittingly, the campaign is a collaboration with Wired, the foremost media enterprise devoted to the worship of all things new. In the Silicon Valley lexicon, disruption is such an overused incantation that it’s almost dull. Now even sunglasses can do it.

The truth, however, is that disruption is not boring at all. It impacts people’s lives every day—though much more often the lives of vulnerable working people, rather than those of the complacent fat cats all this talk of “disruption” is supposed to threaten. We need to be a lot more careful about how we throw that word around and, much more importantly, how we actually disrupt.

Jill Lepore’s recent essay in The New Yorker, “The Disruption Machine,” offers an important intervention. She questions the economic logic of the gospel of disruption being taught at business schools and startup accelerators—that forever disrupting the way of things means endless innovation, growth and progress. Lepore points out that this worldview overlooks the great bulk of the economy that rests on relative stability and rather marginal improvements. Compared to them, disruption is a bit of a sideshow. Even in tech.

A good way to start thinking about disruption is by asking questions like this: Who is being disrupted most? And who really benefits? 25-year-old startup CEOs—the people we hear talking about disruption the most these days—come and go. Some of them will manage to make a living on the basis of their disruptive ideas, and a few will get very rich, but most will end up going through cycles of boom and bust, disrupting themselves until they wind up working for someone else. The venture capitalists who fund them, and who so eagerly egg on their disruptive talk, hedge their bets and diversify their portfolios and will probably end up with plenty of money no matter what.

The most serious disruption of our economy in recent memory, the 2008 financial crash, is a particularly troubling example of this pattern. What caused the crisis? A financial industry gone recklessly amok, disruptively innovating complex instruments like derivatives and new ways of packaging mortgage-backed securities without regard for the consequences. Who suffered those consequences? Some well-paid bankers were laid off, but millions of people across the United States lost their homes, their jobs, or both.

A bailout arrived for the banks, and soon they rehired most of those who’d been laid off and kept—or even increased—their stratospheric executive bonuses. For people in other sectors who were able to get back to work, it was generally to lower-paying jobs. Foreclosed homes in many communities were acquired by big companies on behalf of Wall Street, rather than being bought back by individuals and families who lived in them. That disruption, in the end, only helped the fat cats.

No matter who causes a disruption—or, in some respects, even what kind of disruption it is—those who are best prepared to take advantage of it are the ones who win out. In 2008, the banks had lobbyists and PACs and their own former co-workers at the highest levels of government. The people left homeless or jobless, meanwhile, had little recourse but silence and a misplaced sense of shame. Disruption, then, tends to make our rampant inequality even worse.

Another kind of disruption is that of a resistance movement. We all watched, often with surprise and dismay, what happened in the wake of the 2011 uprising in Egypt. The initial pro-democracy wave created a massive disruption and forced a ruler from power. But the democratic forces were fairly marginal in Egyptian society, and that was just about the last we heard from them. Soon, the Muslim Brotherhood took power, having joined the protests only reluctantly. The group won elections not because its members sparked the unrest, but because for decades they had been building formidable networks throughout the population. Before long, they were crushed by the military, a vast apparatus fueled by billions of dollars in aid from the United States. Once again, entrenched power prevailed over the agents of disruption, and those who’ve suffered most have been working class Egyptians.

Disruption is essential, and a fact of life. This is a world rife with injustice and cruel inertia, and we should definitely explore creative ways of resisting those tendencies. We should be in the streets protesting when we need to, and we should be creating new kinds of organizations that push the boundaries set by old ones. But disruption, in and of itself, isn’t necessarily a good thing unless those who are most vulnerable in society are poised to benefit.

There are ways communities can make that happen, or at least make it more likely. They can build strong, disciplined coalitions. They can organize workers and develop habits of self-reliance. An important recent conference in Jackson, Mississippi, for instance, focused on building resilient cooperative enterprises in black communities, which were especially hard-hit by the 2008 crisis. African Americans in the South know this lesson well. Decades earlier, the civil rights movement turned its disruptions into victories because of tight-knit networks like churches and the Student Nonviolent Coordinating Committee.

Disruption is not a word we should use lightly, or cynically, or in order to sell more eyewear. It is not a mere business model. Perhaps it should be treated more like a swear word, in the sense of being especially potent and rather seldom used. We draw our swear words from sexuality and religion—important things that can have dire consequences. Disruption is important and dire, too, and it’s time we talked about it that way.


Originally published in VICE

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The coming financial crisis: a harbinger of world renewal?

photo of Rajesh Makwana

Rajesh Makwana
28th November 2014


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As the prospect of global financial crisis beckons once again, will our elected leaders finally accept the need for an entirely new economic approach that breaks away from the primacy of growth and profit – or will their hand be forced by a resurgence of mass public protest?


A full six years after the global financial crisis, not only have governments failed to rethink the way we organise our economic systems, but politicians across the world have pressed forward with an obsolete political agenda that has paved the way for yet more financial chaos. The failure of our elected representatives to adopt a just and sustainable alternative to neoliberal capitalism has also set the scene for years of increased hardship and popular unrest that will inevitably follow any future economic crash.

The very real prospect of a repeat of the 2008 meltdown is now widely accepted in the mainstream media, and the many possible factors that could trigger it are readily discussed in policy circles. As the International Monetary Fund makes plain in its latestWorld Economic Outlook report, for example, the risk of a worldwide recession is of particular concern – especially as the Holy Grail of achieving respectable levels of economic growth is becoming ever more elusive.

Of particular concern is the Eurozone where five countries, including Spain and Italy, are already experiencing economic deflation. All eyes are currently on Germany, which is teetering on the brink of recession as its economic activity continues to contract over consecutive months. The implications for the Eurozone as a whole if Germany enters a contractionary cycle will be far-reaching, since Germany is widely regarded as the main engine for growth in Europe and often props-up neighbouring states when they experience financial hardship. The overarching concern is that this entire currency block could soon succumb to a deflationary spiral, which would plunge it back into a full blown Euro crisis.

The expansion of the shadow banking industry, especially in Europe, has also been flagged by senior officials within the banking industry and the IMF as a threat to global financial stability. This shrouded sector of finance is far less regulated than mainstream banking, partly because they make use of tax havens and complex speculative instruments. Assets managed by investment funds operating within this sector, which include hedge funds, have risen by 30% in the past two years alone.

Global debt and other tipping points

Mounting levels of debt, largely fuelled by historically low interest rates that encourage excessive borrowing, are another potential cause of future crisis. According to the latest Geneva Report, global debt has reached a staggering $158.8 trillion, which sets a new debt-to-GDP record. China has been the real engine driving this indebtedness – their external debt has risen by 50% in the last year alone, making them particularly vulnerable to financial crisis at a time when their economic growth rate is also stagnating.

The impact of debt will, of course, be most keenly felt in developing countries. According to the Jubilee Debt Campaign, reckless lending to a set of 43 developing countries has surged by 60% since 2009 – raising the prospect of a new debt crisis in the developing world. Undoubtedly, this will leave many governments with crippling debt repayments over the next decade, which will further thwart government efforts to reduce poverty and provide essential public services.

As James Medway of the New Economic Foundation explains, the real problem arises when high levels of debt (as are currently evident across the globe) combine with low rates of growth, which will almost certainly decline further in the period ahead. If there is not enough economic growth to repay these debts with interest, then the entire system will inevitably come to a grinding halt.

On top of this already lethal cocktail of stagnant growth, excessive debt and burgeoning speculative activity, we can also add the recent drop in oil prices, which will have dramatic implications for oil exporting countries. Venezuela, Iran and Russia, for example, are all heavily dependent on their income from this commodity to finance government spending or maintain the strength of their currency. And these economic concerns do not even take into account the financial impact of Ebola, the economic consequences of ISIS in Iraq and Syria, or the cost of climate change if we fail to reverse our current trajectory of inaction.

From any angle, the world financial outlook can only be regarded as rapidly deteriorating, and this starkly reflects how little policymakers have done to address the root causes of the 2008 crisis. Instead of dramatically overhauling the global economy and safeguarding the needs of the majority, governments have chosen to resuscitate a discredited economic ideology that preaches more of the same deregulatory, consumption-driven, austerity-backed neoliberalism. As the social and environmental impacts of the ongoing economic crisis become ever more apparent, how long will concerned citizens be willing to tolerate a political elite that is largely self-serving and neglects the needs of ordinary people?

The road towards system change

Despite the palpable frustration being expressed everywhere since the current cycle of public protest began, our leaders have failed to listen to the voice of the people, preferring instead to continue pandering to the same corporate interests they are so closely allied with. Consequently, the top 1% of the world’s population are richer now than they were before the financial crisis and this tiny minority own almost half of all available wealth. Meanwhile, half the world’s population now share a mere 1% of the world’s combined wealth, a staggering 2 billion people remain undernourished, and global income inequality has returned to 1820 levels.

There can be little doubt that we are entering a prolonged period of economic hardship, which will be accompanied by a steady escalation in public protest as large swathes of ordinary people join activists and civil society organisations in calling for social justice, environmental stewardship and true democracy. As is happening right now in Hong Kong and London’s Parliament Square, it will be in iconic public spaces that these citizens will make their demands and thereby gain mainstream media attention and support from within the wider populace.

If governments across the world intend to avoid the inevitability of economic upheaval, social unrest and public protest, they need to finally accept that the existing economic model is wholly responsible for the current crisis. At the very least, any solution will require a decisive break away from the myopic pursuit of economic growth, the maximisation of corporate profit, and the relentless promotion of consumerist values. As campaigners have long been demanding in response to the convergence of crises we face, we urgently need a new economic paradigm – one in which wealth, power and resources are shared more equitably and sustainably within nations and internationally.

Will politicians make these changes willingly and in accordance with the many sane alternatives that are widely discussed among progressives? A transformative shift in public policy is certainly not on the cards any time soon. But with prolonged financial crises on the horizon and public protest intensifying across the globe, it will remain impossible for governments to ignore the voice of the people indefinitely.

Photo credit: wsilver - flickr creative commons

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