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Archive for 'Cognitive Capitalism'

The role of the ‘on demand economy’ in post-welfare capitalism

photo of Michel Bauwens

Michel Bauwens
29th August 2015


If an higher education equivalent of Amazon or Google along the lines sketched above did come into being, it would disrupt the public university still further – only this time by means of an innovative, profit-driven, ‘sharing economy’ business operating according to a post-welfare capitalist model, just as Airbnb is currently disrupting the state regulated hotel industry, and Uber state regulated taxi companies. Increasing numbers of university workers would thus find themselves in a situation not dissimilar to that facing many cab drivers today. Instead of operating in a sector that’s accountable to state regulators, they would have little choice but to sell their cheap and easy-to-access courses to whoever’s prepared to pay for them in the ‘alternative’ education market created by platform capitalism. They too would become atomised, precarious, freelance microentrepreneurs. As such, they’d experience all the problems of deprofessionalisation, intensification and surveillance such a post-welfare capitalist economy brings.

Republished from The Uberfication of the University, by Gary Hall (Coventry University):

Talk about being careful what you wish for. A recent survey of UK vice-chancellors identifies a number of areas of innovation with the potential to transform UK higher education. Among them are ‘uses of student data analytics for personalised services’ (the number 1 innovation priority for 90% of VCs), ‘uses of technology to transform learning experiences’ (Moocs, flipped classrooms etc.), and ‘student-driven flexible study modes’, leading not least to the ‘demise of the traditional academic year’. Responding to this survey, an editorial in the Times Higher Education laments that, ‘the UK has world-leading research universities, but what it doesn’t have is a higher education equivalent of Amazon or Google, with global reach and an aggressive online strategy.’ Yet one wonders whether any of those proclaiming the merits of such disruptive innovation have stopped to consider what a higher education institution emulating the expansionist ambitions of Amazon and Google would actually mean for those currently employed in UK universities.

We can see the impact aggressive, global, for-profit technology companies have on the organisation of labour by looking at those data analytics businesses that are associated with the sharing economy. Emerging from the mid-2000s onwards, the sharing economy is a socio-economic ecosystem that supplies individuals with information that makes access to things like ridesharing and sofa surfing possible on a more efficient and expanded basis. As such, it’s often portrayed as bringing community values back into the ways in which people consume, and as helping to address environmental issues – by reducing the carbon footprint of transport, for example. However, certain aspects of the sharing economy are also helping to enact a significant societal shift. It is a shift in which state regulated service intermediaries, like hotels and taxi companies, are replaced by information and data management intermediaries such as the start-ups Airbnb (a community marketplace for renting out private lodging and other kinds of accommodation) and Uber (an app that enables passengers to use their mobile phones to connect with a taxi, rideshare or private car).

In this respect, the sharing economy is one of the ways in which neoliberalism has been able to proceed with its programme of privatisation, deregulation, and reduction to a minimum of the state, public sector and welfare, even after the financial crash of 2008-2009. For by avoiding pre-emptive government regulation, these profit-driven sharing economy businesses are operating according to what can be understood as a post-welfare model of capitalism. Here there are few legislative protections for workers, and hardly any possibilities for establishing trade unions or other means of generating the kind of solidarity capable of challenging this state of affairs. It’s a situation that often leaves those providing services for these companies without a host of workers’ rights. As Mike Bulajewski notes, the list includes ‘the right to have employers pay social security, disability and unemployment insurance taxes, the right to family and medical leave, workers’ compensation protection, sick pay, retirement benefits, profit sharing plans, protection from discrimination on the basis of race, color, religion, sex, age or national origin, or wrongful termination for becoming pregnant, or reporting sexual harassment or other types of employer wrongdoing.’

All of which goes a long way toward explaining why in the March 2015 budget the government declared it is planning to make the UK a global centre for the sharing economy. Hence also one of the other names associated with this aspect of the sharing economy: ‘platform capitalism’. Indeed, the for-profit sector of this socio-economic ecosystem is almost the neoliberal ideal. It creates a situation in which the general population not only aspires to own their own homes – the vision Margaret Thatcher sold to the British working-classes in the 1980s with the right to buy scheme – they also have the opportunity to become private capitalist entrepreneurs themselves. And in the case of Airbnb, one way they can do so is precisely by trading underutilized space in their now privately owned homes. As Airbnb’s CEO, Brian Chesky, puts it, previously ‘only businesses could be trusted… Now, that trust has been democratized – any person can act like a brand…. It means… people all over a city, in 60 seconds, can become microentrepreneurs’.

The information and data management intermediaries of the sharing economy may create jobs, then, but ‘it’s a new kind of job’, as Chesky acknowledges. He calls it a 21st century job, though really it’s closer to a 19th century Victorian job. For these for-profit companies, and the microentrepreneurs who labour for them, are operating in an open market that’s relatively free from the power of state regulators, the labour movement and trade unions, to not only put a limit on the maximum hours those employed in these new kinds of jobs work, but also to specify the minimum wage they receive, the number of days off they need, and the paid holidays and free weekends they’re entitled to.

Production and control, profit and risk, are thus not shared in this sector of the sharing economy at all. It is the networks of users who help build the platform and provide the aggregated input, data and attention value that generates a market. It’s the owners of the information and data management intermediary who take the profits generated by financializing, corporatizing and exploiting the ’sharing’ of goods and services between the users and microentrepreneurs. These owners also control the platform, software and data, deciding pricing, wage levels, work allocation, and preferred user and labourer profile.

Research on the sharing economy by McGregor, Brown and Glöss shows a certain ‘homophily’ occurs, by which it is often ‘similar “types” of people [who] provide and use these services (in terms of class, education and race)’, especially when a rating system is employed. Uber, for example, enables both customers and drivers to rate one another, and suspends drivers if their scores are not high enough. Finally, it is the microentrepreneurs (who can now be potentially ‘any person’ rather than a specific set of employees) who labour to provide services in the market created by the platform on a freelance, on demand, and frequently precarious basis; who take the risks associated with having lost their rights, benefits and protection as employees; and who, according to this research, often face ‘increased surveillance, deskilling, casualisation and intensification’ of their labour too.

Such concerns are only too easy to push to the back of our minds when we’re trying to find a cheap place to stay for a weekend break, or call a taxi to take us home from a friend’s place late at night. It’s perhaps only when we think about these information and data management intermediaries from the perspective of a worker rather than a user, and consider their potential to disrupt our own areas of employment, that the implications of the shift to a post-welfare form of capitalism they’re helping to enact are really brought home. So what is the potential affect of this transformation in the organisation of labour on higher education?

In April of this year, LinkedIn, the social networking platform for professionals, spent £1.5 billion purchasing Lynda.com, a supplier of online consumer-focused courses. Although it doesn’t address the sharing economy specifically, a report of this deal by Goldie Blumenstyk published shortly afterwards in the Chronicle of Higher Education under the title of ‘How LinkedIn’s Latest Move May Matter to Colleges’, was very quick to draw attention to some of its potential implications for higher education. Of course, with its University Pages and University Rankings Based on Career Outcomes, LinkedIn already has enough data to be able to provide the kind of detailed analysis of which institutions and courses are launching graduates into which long-term career trajectories, that no traditional university can match.

But what the Chronicle piece makes clear is that, with its immanent transition into being both a social network and an actual provider of education, such data could now be used to develop an extremely successful data and information intermediary business model for higher education – if not by LinkedIn then by some other platform capitalist company. (Academia.edu, say, which has already signed up over 22 million academics who between them have added more than 6 million papers.) Such a model would be based on providing ‘transparent’ information on a fine-grained basis to employers, students, policy-makers and governments. This information would indicate which of the courses, classes and even teachers on any such education ‘sharing economy’ platform are better at enabling students to obtain a particular degree classification or other educational credential, make the successful transition to a desirable career, reach the top of a given profession, and so achieve a high level of job satisfaction and salary.

But it doesn’t end there. The Chronicle report also tells of how LinkedIn bought a company called Bright in 2014. Bright has developed algorithms enabling it to match job positions with applicants according to their particular achievements, competencies and skill sets. And it wouldn’t be difficult for a business with the kind of data LinkedIn now has the potential to gather to do much the same for employers and students – right down to the level of their salary expectations, extracurricular activities, and ‘likes’. This business could charge a fee for doing so, just as many dating agencies make a healthy profit from introducing people with compatible personalities as deduced by algorithms. They could then charge a further fee for making this information and data available on a live basis in real time – something highly desirable in today’s ‘flexible’ economy, where many employers like to draw from a pool of zero-hours workers available ‘on tap’.

More ominous still, given that it would be able to control the platform, software, data analytics and the associated ecosystem, it’s clear that such a global platform capitalist higher education business would also have the power to decide who could be most easily seen and found in any such alternative market for education (much as Google’s does with its page ranking, the European commission having decided in April 2015 that Google has a case to answer regarding possible abuse of its dominance of search through ‘systematically’ awarding greater prominence to its own ads). Understandably, perhaps – especially following the recent fuss over MOOCs – Blumenstyk’s analysis of LinkedIn’s acquisition of Lynda.com shies away from arriving at any overly exaggerated or pessimistic conclusions as to what all this may mean for higher education and its system of certification and credentialing. Nevertheless, if a company like LinkedIn took the decision to provide this level of fine-grained data and information for its own unbundled, relatively inexpensive online courses, but not for those offered by its more expensive market competitors in the public sector, it would surely have the potential to be at least as disruptive as Coursera, Udacity, FutureLearn and co. have proven to be to date, if not considerably more so. For the kind of information about degrees and student final destinations and ability to react to market changes any traditional bricks-and-mortar university is capable of providing on its own will appear extremely unsophisticated, limited and slow to compile and deliver by comparison. And, lest the adoption by a for-profit sharing economy business of such an aggressive stance toward public universities seems unlikely, it’s worth remembering that Google maintains its dominance of search in much the same way. In the words of its chief research guru, Peter Norvig, the reason Google has a 90-95% share of the European market for search is not because it has better algorithms than Yahoo and Bing, ‘it just has more data’. Indeed, one of the great myths about neoliberalism is that it strives to create competition on an open market. As the venture capitalist Peter Thiel, co-founder of Pay-Pal and early Facebook investor, emphasizes in his book Zero to One, what neoliberal businesses actually want is to be a monopoly: to be so dominant in their area of operation that they in fact escape the competition and become a market of one.

Of course many of those who work in higher education already have contingent, precarious positions as a consequence of neoliberalism’s insistence that universities operate increasingly like businesses. According to Sally Hunt, secretary of the University and College Union (UCU), ‘more than a third of the UK’s total academic workforce is now on temporary, fixed-term contracts’, with a recent UCU survey of 2,500 casualised staff identifying a third of those in universities experiencing difficulty paying household bills, and as many as a fifth having problems finding enough money to buy food.

If an higher education equivalent of Amazon or Google along the lines sketched above did come into being, it would disrupt the public university still further – only this time by means of an innovative, profit-driven, ‘sharing economy’ business operating according to a post-welfare capitalist model, just as Airbnb is currently disrupting the state regulated hotel industry, and Uber state regulated taxi companies. Increasing numbers of university workers would thus find themselves in a situation not dissimilar to that facing many cab drivers today. Instead of operating in a sector that’s accountable to state regulators, they would have little choice but to sell their cheap and easy-to-access courses to whoever’s prepared to pay for them in the ‘alternative’ education market created by platform capitalism. They too would become atomised, precarious, freelance microentrepreneurs. As such, they’d experience all the problems of deprofessionalisation, intensification and surveillance such a post-welfare capitalist economy brings. Is that what UK vice-chancellors actually want?”

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Posted in Cognitive Capitalism, Sharing | No Comments »

Tim O’Reilly on explaining the dominance of the new on demand monopolies

photo of Michel Bauwens

Michel Bauwens
27th August 2015


Excerpted from Tim O’Reilly:

“One way to think about the new generation of on-demand companies, such as Uber, Lyft, and Airbnb, is that they are networked platforms for physical world services, which are bringing fragmented industries into the 21st century in the same way that ecommerce has transformed retail.

Let’s start by taking a closer look at the industry in which Uber and Lyft operate.

The coordination costs of the taxicab business have generally kept it local. According to the Taxicab, Limousine and ParaTransit Association, the US taxi industry consists of approximately 6,300 companies operating 171,000 taxicabs and other vehicles. More than 80% of these are small companies operating anywhere between one and 50 taxis. Only 6% of these companies have more than 100 taxicabs. Only in the largest of these companies do multiple drivers use the same taxicab, with regular shifts. 85% of taxi and limousine drivers are independent contractors. In many cases, the taxi driver pays a rental fee (typically $120/$130 per day) to the owner of the cab (who in turn pays a dispatch and branding fee to the branded dispatch service) and keeps what he or she makes after paying that daily cost. The total number of cabs is limited by government-granted licenses, sometimes called medallions.

When you as a customer see a branded taxicab, you are seeing the brand not of the medallion owner (who may be a small business of as little as a single cab) but of the dispatch company. Depending on the size of the city, that brand may be sublicensed to dozens or even hundreds of smaller companies. This fragmented industry provides work not just for drivers but for managers, dispatchers, maintenance workers, and bookkeepers. The TLPA estimates that the industry employs a total of 350,000 people, which works out to approximately two jobs per taxicab. Since relatively few taxicabs are “double shifted” (these are often in the largest, densest locations, where it makes sense for the companies to own the cab and hire the driver as a full time employee), that suggests that half of those employed in the industry are in secondary support roles. These are the jobs that are being replaced by the efficient new platforms. Functions like auto maintenance still have to be performed, so those jobs remain. Jobs that are lost to automation are equivalent to the kinds of losses that came to bank tellers and their managers with the introduction of the ATM.

Technology is leading to a fundamental restructuring of the taxi and limousine industry from one of a network of small firms to a network of individuals, replacing many middlemen in the taxi business with software, using the freed up resources to put more drivers on the road.

Uber and Lyft use algorithms, GPS, and smartphone apps to coordinate driver and passenger. The extraordinary soon becomes commonplace, so we forget how our first ride was a magical user experience. That magic can lead us to overlook the fact that, at bottom, Uber and Lyft provide dispatch and branding services much like existing taxi companies, only more efficiently. And like the existing taxi industry, they essentially subcontract the job of transport?—?except in this case, they subcontract to individuals rather than to smaller businesses, and take a percentage of the revenue rather than charging a daily rental fee for the use of a branded taxicab.

These firms use technology to eliminate the jobs of what used to be an enormous hierarchy of managers (or a hierarchy of individual firms acting as suppliers), replacing them with a relatively flat network managed by algorithms, network-based reputation systems, and marketplace dynamics. These firms also rely on their network of customers to police the quality of their service. Lyft even uses its network of top-rated drivers to onboard new drivers, outsourcing what once was a crucial function of management.

It’s useful to call out some specific features of the new model.

* GPS and automated dispatch technology inherently increase the supply of workers, because they make it possible for even part time workers to be successful at finding passengers and navigating even to out-of-the-way locations. There was formerly an “experience premium,” whereby experienced drivers knew the best way to reach a given destination or to avoid traffic. Now, anyone equipped with a smartphone and the right applications has that same ability. “The Knowledge,” the test required to become a London taxi driver, is famously one of the most difficult exams in the world. The Knowledge is no longer required; it has been outsourced to an app. An Uber or Lyft driver is thus an “augmented worker.”

* The reliability and ease of use of Uber and Lyft makes it much easier for passengers to get pickups in locations where taxis do not normally go, and at times when taxis are unavailable. This predictability of supply not only satisfies unmet demand but leads to increased demand. People are now more likely to travel more widely around the city, whereas before they might have avoided trips where transportation was hard to find. There are other ancillary benefits, such as the ability for passengers to be picked up regardless of race, and for some previously unemployable populations (such as the deaf) to serve as drivers.

* Unlike taxis, which must be on the road full time to earn enough to cover the driver’s daily rental fee, the “pay as you go” model allows many more drivers to work part time, leading to an ebb and flow of supply that more naturally matches demand. Drivers provide their own vehicles, earning additional income from a resource they have already paid for that is often idle, or allowing them to help pay for a resource which they are then able to use in other parts of their life. (Obviously, they incur additional costs as well, but these costs are generally less than the costs of daily taxi rental. There are many other labor issues as well; these will be the subject of a later essay.)

* Unlike taxis, which create an artificial scarcity by issuing a limited number of medallions, Uber uses market mechanisms to find the optimum number of drivers, with an algorithm that raises prices if there are not enough drivers on the road in a particular location or at a particular time. While customers initially complained, this is almost a textbook definition of a Supply and Demand Graph, which uses market forces to balance the competing desires of buyers and sellers.

More drivers means better availability for customers, and shorter wait times. Uber is betting that this will in turn lead to changes in consumer behavior, as more predictable access to low-cost transit causes more people to leave their own personal car at home, and use the service more. This in turn will allow the service to lower prices even further, which will increase demand in a virtuous circle. This is the same pattern that has driven American business since the Great Atlantic & Pacific Tea Company (A&P) pioneered the model in the early part of the 20th century.

There are concerns about whether lowering prices affects driver income. So far, there are many accusations from critics but no hard evidence that this is the case. Uber argues that greater demand will actually increase driver income. In any case, Uber is now putting its money where its mouth is and guaranteeing driver income when it lowers fares.

There are also concerns about the impact of Uber and Lyft on urban congestion. But the data on the subject is equivocal. And while the current algorithm is optimized to create shorter wait times, there is no reason it couldn’t take into account other factors that improve customer satisfaction and lower cost, such as the impact of too many drivers on congestion and wait time. Algorithmic dispatch and routing is in its early stages; to think otherwise is to believe that the evolution of Google search ended in 1998 with the invention of PageRank.

A crowdsourced rating system is far from perfect, but delivers visibly better and more consistent results than whatever management processes were performed by traditional taxi companies.

There is no absolute requirement that drivers be individuals, and the supplier networks to these platforms will continue to evolve.”

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Posted in Cognitive Capitalism, P2P Infrastructures, Sharing | No Comments »

Small Loans, Big Problems: The False Promise of Microfinance

photo of Stacco Troncoso

Stacco Troncoso
4th August 2015


mirco

We would argue that there are other winners in what Hickel calls “the microfinance game”. Corporate interests of all stripes have a vested interest in seeing millions of people drawn more deeply into the debt-based globalized money economy.

Reposted from Local Futures talks about the false promise of Micro-finance.


Ever since Bill Clinton and the World Bank enthusiastically embraced the microfinance concept in the 1990s, we at Local Futures have been skeptical of its benefits, seeing it as part of a whole package of “market solutions” to our social and environmental crises that, in the long run, make things much worse. We have pointed out that these loans often target rural populations who were not previously in debt: they represent the long arm of capitalism reaching into remote rural areas, encouraging a shift away from dependence on the land and the local community, towards competition in a resource-depleting global economy.

It has not been easy to oppose micro-credit: many well-intentioned grassroots activists have bought into the idea that giving ‘Third World’ women a loan would eradicate poverty and reduce population. This thinking was promoted with missionary zeal, and spread rapidly across the world. In trying to counter it, we have often felt like heretics. (One of the most difficult moments was when I was asked to debate Muhammad Yunus, the founder of the Grameen Bank, at the height of his popularity, on BBC radio.)

For this reason we’re very happy to see this article by Jason Hickel, a professor of anthropology at the London School of Economics, in the UK Guardian: The microfinance delusion: who really wins? As Hickel says, “microfinance usually makes poverty worse”, because the vast majority of microfinance loans are used to fund the purchase of consumer goods that the borrowers simply can’t afford: “they end up taking out new loans to repay the old ones, wrapping themselves in layers of debt.” Even when used to finance a small business, the most likely outcome is that the new businesses fail, which leads to “vicious cycles of over-indebtedness that drive borrowers even further into poverty.” The only winners are the lenders, many of whom charge exorbitant interest rates. Hickel concludes that “microfinance has become a socially acceptable mechanism for extracting wealth and resources from poor people.”

We would argue that there are other winners in what Hickel calls “the microfinance game”. Corporate interests of all stripes have a vested interest in seeing millions of people drawn more deeply into the debt-based globalized money economy. Interestingly, at the bottom of the webpage where Hickel’s article appears there are links to articles sponsored by the credit card giant Visa, all of them urging more “financial inclusion” in the global South – in other words, bringing more people into the economic system that corporate interests like Visa dominate. “Helping the world’s one billion unbanked women” turns out to be about how “more than 200 million women lack access to a mobile phone, meaning they’re excluded from digital banking opportunities.” Another article argues that one of the greatest challenges facing policymakers involves “providing some 2.5 billion people with access to formal financial services.”

This is propaganda, pure and simple: it is part of a drumbeat coming from think-tanks and corporate-friendly pundits that have been very effective in convincing people – including well-meaning philanthropists and activists – that the solution to global poverty requires pulling ever more people into the global economic system. That system is failing the majority even in the “wealthy” countries, while spurring rampant consumerism and unsustainable resource use worldwide.

The solutions to our many crises – including poverty – will not come from a global marketplace rigged by de-regulatory trade treaties to favor the biggest multinational corporations. They depend on preventing further deregulation of global corporations, while shifting towards more localized economies in which people can have real control over their own lives.

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Posted in Anti-P2P, Cognitive Capitalism, Culture & Ideas, Economy and Business, Empire | No Comments »

The interactive economy is not a supply chain economy

photo of Michel Bauwens

Michel Bauwens
2nd August 2015


Republished from Esko Kilpi:

“Over the past years, mobile technologies and the Internet have laid the foundation for a very small size, low-cost enterprise with the potential for managing large numbers of business relationships.

The impact of these new actors has been hard to grasp because we are used to thinking about work from a different perspective. Our thinking arises from a make-and-sell economic model. Most managers still subscribe to this and think that the core of creating value is to plan and manage a supply chain. A supply chain is a system of assets and transactions that in the end make the components of the customer offering. At the beginning of the supply chain are the raw materials and the ideas that start the sequence leading, hopefully, to a sale.

This is now being supplanted by a different paradigm; a relational, network approach enabled by new coordination technologies. The manufacturer may even be just one of the nodes in the network and the customer is not a passive consumer but an active part of the plan.

The old model companies are ill equipped for this digital transformation. Mass-production and mass media organizations are still much more prepared to talk to customers than to hear from them, not realizing that one-way communication was just a fleeting accident of technological development. It is not that customers didn’t have needs and reflections they would have liked to communicate.

We are passing through a technological discontinuity of huge proportions. The rules of competition may even be rewritten for the interactive age. The new interactive economy demands new skills: managing the supply-chain is less important than building networks and enabling trust in relations. You could perhaps call the new reversed sequence an on-demand-chain. It is the opposite of the make-and-sell model. It is a chain of relationships and links that starts from interaction with the customer and leads up to the creation of the on-demand offering. As Steve Jobs put it in a different context: “you start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you’re going to try to sell it.”

Adapting the interactive model is not as easy as identifying customer segments or a niche market because communication can no longer be confined to sales and marketing, or to the ad agency, as in the make-and-sell model. Also to talk about a “segment of one” is misleading because one-way communication changes here to true two-way dialogue. The interactive enterprise must be able to integrate its entire network around the needs of each individual customer context. The on-demand-chain means continuous on-demand learning and continuous change. Your dialogue with an individual customer will change your behavior toward her and change that customer’s behavior toward you. People develop together in interaction.

A learning relationship potentially makes the whole network smarter with every individual interaction creating network effects. Accordingly, the enterprise increases customer retention by making loyalty more convenient than non-loyalty as a result of learning. The goal is to create more value for the customer and to lower her transaction costs. This kind of relationship ensures that it is always in the customer’s self-interest to remain with the people who have developed the relationship to begin with. The main benefit for the network partners may not be financial. The most valuable thing is to have access to “community knowledge”, a common movement of thought. It means to be part of a network where learning takes place faster than somewhere else.

In the mass-market economy, the focus was to create a quality product. With increased global competition and with so many quality products around that is not enough any more. To succeed you need high-quality relationships. When customers are identified as individuals in different use contexts, the marketing process is really a joint process of solving problems. You and your customer necessarily then become cooperators. You are together trying to solve the customer’s problem in a way that both satisfies the customer and ensures a profit for you.

The relational approach is the third way to work. It is not about having a fixed job role as an employee or having tasks given to you as a contractor. The most inspiring and energizing future of work may be in solving problems and spotting opportunities in creative interaction with your customers.

The industrial make-and-sell model required expert skills. The decisive thing was your individual knowledge. Today you work more from your network than your skills. The decisive thing is your relations.”

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Posted in Cognitive Capitalism, Economy and Business, Ethical Economy | 2 Comments »

Trebor Scholz et al on Cooperative Alternatives to the Sharing Economy

photo of Michel Bauwens

Michel Bauwens
26th July 2015


This is really good panel on the necessary cooperative forms for the sharing economy:

““Given the mounting attention to the unethical labor practices in the so-called “collaborative sharing economy” with labor brokerages like Handy and Uber, what are the alternatives? Imagine for one moment that the algorithmic heart of any of these citadels of anti-unionism could be cloned and brought back to life under a different ownership model, with fair working conditions, as a humane alternative to the current model. There isn’t just one, inevitable future of work and while cooperatives are not a panacea for all the wrongs of platform capitalism, they could help to weave some ethical threads into the fabric of 21st century work.

In his introductory remarks, Trebor Scholz will discuss good digital labor and argue for what he calls platform cooperativism.

w/

* Sara Horowitz, Founder & Executive Director, Freelancers Union.
* Saket Soni, Director, National Guestworker Alliance, & New Orleans Workers’ Center for Racial Justice.
* Caroline Woolard, Artist, Co-Founder, TradeSchool and OurGoods
* Nathan Schneider, Reporter, Vice, The Nation, & The Chronicle of Higher Education.
* Douglas Rushkoff, Professor of Media Theory and Digital Economics, CUNY/Queens

Watch the video here:

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Posted in Cognitive Capitalism, Cooperatives, Ethical Economy, P2P Collaboration, P2P Infrastructures, Peer Production, Videos | No Comments »

Paul Mason on the emergence of Post-Capitalism

photo of Michel Bauwens

Michel Bauwens
21st July 2015


I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: “This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation.

Excerpted from Paul Mason:

“Capitalism, it turns out, will not be abolished by forced-march techniques. It will be abolished by creating something more dynamic that exists, at first, almost unseen within the old system, but which will break through, reshaping the economy around new values and behaviours. I call this postcapitalism.

As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started.

Postcapitalism is possible because of three major changes information technology has brought about in the past 25 years. First, it has reduced the need for work, blurred the edges between work and free time and loosened the relationship between work and wages. The coming wave of automation, currently stalled because our social infrastructure cannot bear the consequences, will hugely diminish the amount of work needed – not just to subsist but to provide a decent life for all.

Second, information is corroding the market’s ability to form prices correctly. That is because markets are based on scarcity while information is abundant. The system’s defence mechanism is to form monopolies – the giant tech companies – on a scale not seen in the past 200 years, yet they cannot last. By building business models and share valuations based on the capture and privatisation of all socially produced information, such firms are constructing a fragile corporate edifice at odds with the most basic need of humanity, which is to use ideas freely.

Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.

Almost unnoticed, in the niches and hollows of the market system, whole swaths of economic life are beginning to move to a different rhythm. Parallel currencies, time banks, cooperatives and self-managed spaces have proliferated, barely noticed by the economics profession, and often as a direct result of the shattering of the old structures in the post-2008 crisis.

You only find this new economy if you look hard for it. In Greece, when a grassroots NGO mapped the country’s food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity – but that’s the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff. It seems a meagre and unofficial and even dangerous thing from which to craft an entire alternative to a global system, but so did money and credit in the age of Edward III.

New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.

I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: “This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation.

During and right after the second world war, economists viewed information simply as a “public good”. The US government even decreed that no profit should be made out of patents, only from the production process itself. Then we began to understand intellectual property. In 1962, Kenneth Arrow, the guru of mainstream economics, said that in a free market economy the purpose of inventing things is to create intellectual property rights. He noted: “precisely to the extent that it is successful there is an underutilisation of information.”

You can observe the truth of this in every e-business model ever constructed: monopolise and protect data, capture the free social data generated by user interaction, push commercial forces into areas of data production that were non-commercial before, mine the existing data for predictive value – always and everywhere ensuring nobody but the corporation can utilise the results.

If we restate Arrow’s principle in reverse, its revolutionary implications are obvious: if a free market economy plus intellectual property leads to the “underutilisation of information”, then an economy based on the full utilisation of information cannot tolerate the free market or absolute intellectual property rights. The business models of all our modern digital giants are designed to prevent the abundance of information.

Yet information is abundant. Information goods are freely replicable. Once a thing is made, it can be copied/pasted infinitely. A music track or the giant database you use to build an airliner has a production cost; but its cost of reproduction falls towards zero. Therefore, if the normal price mechanism of capitalism prevails over time, its price will fall towards zero, too.

For the past 25 years economics has been wrestling with this problem: all mainstream economics proceeds from a condition of scarcity, yet the most dynamic force in our modern world is abundant and, as hippy genius Stewart Brand once put it, “wants to be free”.

There is, alongside the world of monopolised information and surveillance created by corporations and governments, a different dynamic growing up around information: information as a social good, free at the point of use, incapable of being owned or exploited or priced.

In these musings, not published until the mid-20th century, Marx imagined information coming to be stored and shared in something called a “general intellect” – which was the mind of everybody on Earth connected by social knowledge, in which every upgrade benefits everybody. In short, he had imagined something close to the information economy in which we live. And, he wrote, its existence would “blow capitalism sky high”.

With the terrain changed, the old path beyond capitalism imagined by the left of the 20th century is lost.

But a different path has opened up. Collaborative production, using network technology to produce goods and services that only work when they are free, or shared, defines the route beyond the market system. It will need the state to create the framework – just as it created the framework for factory labour, sound currencies and free trade in the early 19th century. The postcapitalist sector is likely to coexist with the market sector for decades, but major change is happening.

Networks restore “granularity” to the postcapitalist project. That is, they can be the basis of a non-market system that replicates itself, which does not need to be created afresh every morning on the computer screen of a commissar.

The transition will involve the state, the market and collaborative production beyond the market. But to make it happen, the entire project of the left, from protest groups to the mainstream social democratic and liberal parties, will have to be reconfigured. In fact, once people understand the logic of the postcapitalist transition, such ideas will no longer be the property of the left – but of a much wider movement, for which we will need new labels.

Who can make this happen? In the old left project it was the industrial working class. More than 200 years ago, the radical journalist John Thelwall warned the men who built the English factories that they had created a new and dangerous form of democracy: “Every large workshop and manufactory is a sort of political society, which no act of parliament can silence, and no magistrate disperse.”

Today the whole of society is a factory. We all participate in the creation and recreation of the brands, norms and institutions that surround us. At the same time the communication grids vital for everyday work and profit are buzzing with shared knowledge and discontent. Today it is the network – like the workshop 200 years ago – that they “cannot silence or disperse”.

True, states can shut down Facebook, Twitter, even the entire internet and mobile network in times of crisis, paralysing the economy in the process. And they can store and monitor every kilobyte of information we produce. But they cannot reimpose the hierarchical, propaganda-driven and ignorant society of 50 years ago, except – as in China, North Korea or Iran – by opting out of key parts of modern life. It would be, as sociologist Manuel Castells put it, like trying to de-electrify a country.

By creating millions of networked people, financially exploited but with the whole of human intelligence one thumb-swipe away, info-capitalism has created a new agent of change in history: the educated and connected human being.

This will be more than just an economic transition. There are, of course, the parallel and urgent tasks of decarbonising the world and dealing with demographic and fiscal timebombs. But I’m concentrating on the economic transition triggered by information because, up to now, it has been sidelined. Peer-to-peer has become pigeonholed as a niche obsession for visionaries, while the “big boys” of leftwing economics get on with critiquing austerity.

In fact, on the ground in places such as Greece, resistance to austerity and the creation of “networks you can’t default on” – as one activist put it to me – go hand in hand. Above all, postcapitalism as a concept is about new forms of human behaviour that conventional economics would hardly recognise as relevant.

So how do we visualise the transition ahead? The only coherent parallel we have is the replacement of feudalism by capitalism – and thanks to the work of epidemiologists, geneticists and data analysts, we know a lot more about that transition than we did 50 years ago when it was “owned” by social science. The first thing we have to recognise is: different modes of production are structured around different things. Feudalism was an economic system structured by customs and laws about “obligation”. Capitalism was structured by something purely economic: the market. We can predict, from this, that postcapitalism – whose precondition is abundance – will not simply be a modified form of a complex market society. But we can only begin to grasp at a positive vision of what it will be like.

I don’t mean this as a way to avoid the question: the general economic parameters of a postcapitalist society by, for example, the year 2075, can be outlined. But if such a society is structured around human liberation, not economics, unpredictable things will begin to shape it.

Today, the thing that is corroding capitalism, barely rationalised by mainstream economics, is information. Most laws concerning information define the right of corporations to hoard it and the right of states to access it, irrespective of the human rights of citizens. The equivalent of the printing press and the scientific method is information technology and its spillover into all other technologies, from genetics to healthcare to agriculture to the movies, where it is quickly reducing costs.

The modern equivalent of the long stagnation of late feudalism is the stalled take-off of the third industrial revolution, where instead of rapidly automating work out of existence, we are reduced to creating what David Graeber calls “bullshit jobs” on low pay. And many economies are stagnating.

The equivalent of the new source of free wealth? It’s not exactly wealth: it’s the “externalities” – the free stuff and wellbeing generated by networked interaction. It is the rise of non-market production, of unownable information, of peer networks and unmanaged enterprises. The internet, French economist Yann Moulier-Boutang says, is “both the ship and the ocean” when it comes to the modern equivalent of the discovery of the new world. In fact, it is the ship, the compass, the ocean and the gold.

The modern day external shocks are clear: energy depletion, climate change, ageing populations and migration. They are altering the dynamics of capitalism and making it unworkable in the long term. They have not yet had the same impact as the Black Death – but as we saw in New Orleans in 2005, it does not take the bubonic plague to destroy social order and functional infrastructure in a financially complex and impoverished society.

Once you understand the transition in this way, the need is not for a supercomputed Five Year Plan – but a project, the aim of which should be to expand those technologies, business models and behaviours that dissolve market forces, socialise knowledge, eradicate the need for work and push the economy towards abundance. I call it Project Zero – because its aims are a zero-carbon-energy system; the production of machines, products and services with zero marginal costs; and the reduction of necessary work time as close as possible to zero.

Most 20th-century leftists believed that they did not have the luxury of a managed transition: it was an article of faith for them that nothing of the coming system could exist within the old one – though the working class always attempted to create an alternative life within and “despite” capitalism. As a result, once the possibility of a Soviet-style transition disappeared, the modern left became preoccupied simply with opposing things: the privatisation of healthcare, anti-union laws, fracking – the list goes on.

If I am right, the logical focus for supporters of postcapitalism is to build alternatives within the system; to use governmental power in a radical and disruptive way; and to direct all actions towards the transition – not the defence of random elements of the old system. We have to learn what’s urgent, and what’s important, and that sometimes they do not coincide.

The power of imagination will become critical. In an information society, no thought, debate or dream is wasted – whether conceived in a tent camp, prison cell or the table football space of a startup company.

As with virtual manufacturing, in the transition to postcapitalism the work done at the design stage can reduce mistakes in the implementation stage. And the design of the postcapitalist world, as with software, can be modular. Different people can work on it in different places, at different speeds, with relative autonomy from each other. If I could summon one thing into existence for free it would be a global institution that modelled capitalism correctly: an open source model of the whole economy; official, grey and black. Every experiment run through it would enrich it; it would be open source and with as many datapoints as the most complex climate models.

The main contradiction today is between the possibility of free, abundant goods and information; and a system of monopolies, banks and governments trying to keep things private, scarce and commercial. Everything comes down to the struggle between the network and the hierarchy: between old forms of society moulded around capitalism and new forms of society that prefigure what comes next.

Is it utopian to believe we’re on the verge of an evolution beyond capitalism? We live in a world in which gay men and women can marry, and in which contraception has, within the space of 50 years, made the average working-class woman freer than the craziest libertine of the Bloomsbury era. Why do we, then, find it so hard to imagine economic freedom?

It is the elites – cut off in their dark-limo world – whose project looks as forlorn as that of the millennial sects of the 19th century. The democracy of riot squads, corrupt politicians, magnate-controlled newspapers and the surveillance state looks as phoney and fragile as East Germany did 30 years ago.

All readings of human history have to allow for the possibility of a negative outcome. It haunts us in the zombie movie, the disaster movie, in the post-apocalytic wasteland of films such as The Road or Elysium. But why should we not form a picture of the ideal life, built out of abundant information, non-hierarchical work and the dissociation of work from wages?

Millions of people are beginning to realise they have been sold a dream at odds with what reality can deliver. Their response is anger – and retreat towards national forms of capitalism that can only tear the world apart. Watching these emerge, from the pro-Grexit left factions in Syriza to the Front National and the isolationism of the American right has been like watching the nightmares we had during the Lehman Brothers crisis come true.

We need more than just a bunch of utopian dreams and small-scale horizontal projects. We need a project based on reason, evidence and testable designs, that cuts with the grain of history and is sustainable by the planet. And we need to get on with it.”

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Posted in Cognitive Capitalism, Commons Transition, P2P Subjectivity, P2P Theory | No Comments »

The Real Question of the Referendum: The Enclosure of the Greek Commons

photo of Vasilis Kostakis

Vasilis Kostakis
4th July 2015


Hand

Being a typical academic, allow me to begin with a definition: the commons is a term used to describe shared resources (such as land, water, air, culture, science, infrastructures) in which each stakeholder has an equal interest.

The devastating enclosures of the English commons, between 16th and 19th centuries, has been labeled as the “revolution of the rich against the poor” by the eminent political economist Karl Polanyi. They forced peasants into the labor market and the factories of the industrial revolution and “marked the beginning of a worldwide process of commodifying the land, ocean, and atmosphere of the earth”.

So, what is the relevance of the loss of the English commons with the imminent Greek referendum?

Much discussion has been taking place around the meaning of a question posed in a relatively technical language. To put the matter bluntly, I would like to argue that the real question of the referendum is whether Greek citizens approve or disprove the enclosure of their commons. The proposed changes in the pension, taxing, labour and insurance systems are supposedly aimed at ensuring that Greece can service its foreign debt. However, these are not the biggest perils although they fill most of the pages of the notorious document the Greeks are called to approve or disprove.

In short, on page 17, the creditors suggest that Greece irreversibly privatizes its airports, harbors, railways, water supply and sewerage companies, energy infrastructures and public power corporations, motorways, post offices, thermal springs, cultural treasures and other properties (seaside land, marinas etc). These are assets which we have inherited or jointly created and, instead of delivering them intact or even enhanced to the next generations, we are called, under the pressure of an economic collapse, to sell them off to the rich. In addition, no hybrid forms of public-private partnership are explicitly mentioned (for instance, OTE, a profitable telecommunication public-private corporation, is to be entirely privatized).

Conditions in Greece today are not only reminiscent of those in Germany in 1933, as Prof. Sachs writes, but also of those in 16th-19th century England and Wales. Another revolution of the ultra-rich is taking place and the endgame playing out between Greece and its creditors might be only the beginning of a new global wave of enclosures.

Crisis


Vasilis Kostakis is Senior Research Fellow at the Ragnar Nurkse School of Innovation and Governance (TUT), longtime collaborator of the P2P Foundation, and member of the CommonsTransition Team.

Images: (Top) (Bottom) by OpenSource.com

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Posted in Activism, Anti-P2P, Cognitive Capitalism, Commons, Commons Transition, Economy and Business, Empire, Original Content, P2P Rights, Politics | No Comments »

OuiShare Fest Finds Itself While Lost in Transition

photo of Stacco Troncoso

Stacco Troncoso
14th June 2015


Ouife_n

Originally published in Shareable, Neal Gorenflo shares his impressions of OuiShare Fest 2015


The third annual OuiShare Fest, hosted with the theme “Lost in Transition” in Paris’ charming Cabaret Sauvage, concluded last Friday. This unique gathering of sharing economy leaders from around the world found itself in at least two ways with their latest edition.

First, the theme brought the elephant in everybody’s room to the fore – the gaping contradiction between the utopian possibilities and the hyper-capitalist realities of the sharing economy. The key dilemma that OuiShare Fest underscored is that while leading platforms like Airbnb and Uber help users create value on an unprecedented scale, they do not share ownership and governance with users and could in fact exacerbate already severe inequalities. OuiShare Fest’s programming, which is largely crowdsourced, reflected a widely held belief that platforms should share ownership and governance with those most responsible for their success — users.

Instead of withering from this heat of this contradiction, the organizers held it. A remarkable number of sessions focused or touched on this contradiction (Ann Marie of Goteo blogged this contradiction in detail). While there were sessions that featured sharp criticism of the sharing economy, most sessions explored solutions to the contradiction, like using the blockchain to share ownership and governance with millions of users.

In fact, Nick Grossman’s keynote, “Venture Capital vs. Community Capital,” was OuiShare Fest in a nutshell. He elegantly articulated the contradiction and put forward the blockchain as a key solution. As Nathan Schneider pointed out last December in his Shareable feature story, “Owning is the New Sharing,” criticism of the sharing economy has catalyzed a counter-movement to create democratic sharing economy platforms. With Nick’s help, the blockchain had its coming out party at OuiShare Fest as the people-power solution to the sharing economy’s contradictions. Everybody was talking about the blockchain from keynotes to side conversations.

Whether or not the blockchain will live up to these expectations is another question. I have my doubts as it doesn’t build durable social relations necessary for communities to go on a new, long-term commons-based developmental path. Blockchain platforms are thin, and so are the social ties. There are no shortcuts, technological or otherwise, to social change. Social change is social, and social takes time. But there’s hope, as Swarm shared its recently released Distributed Collaborative Organization at the fest, a format that combines blockchain and human management of enterprises.

The second way OuiShare Fest found itself is that it seems all grown up in its third year. Things ran more smoothly, it was amply staffed with volunteers, it had all the trimmings of a professionally run conference, yet its organization reflected OuiShare’s values. With OuiShare Fest, OuiShare the organization talks the collaboration talk and walks the collaboration walk, a rare accomplishment. The fest is run in a largely decentralized fashion.

That said, I did come away with the impression that OuiShare Fest’s format and audience may be mismatched. As CrowdCompanies’ founder Jeremiah Owyang commented on Facebook, OuiShare Fest is a community of insiders, meaning it convenes the actors within the sharing economy, not the general public. To mature further, OuiShare Fest may need to create a better balance between keynotes and collaboration. FAB10, the gathering of FabLab leaders, might be a model to emulate. It’s really two events — a symposium for insiders and a festival for the public.

This model would make more sense for us at Shareable. As someone who reads about the sharing economy nearly every day, I didn’t learn much from the formal programming. It would have been great for newbies, however. OuiShare Fest would be more useful to us as an opportunity to convene stakeholders in the Sharing Cities Network. While I was delighted to give an update to a packed house on sharing cities with Nils Roemen of Sharing City Nijmegen and Harmen van Sprung of Sharing City Amersterdam, the three of us would have preferred to use this rare time together to push our work forward. I heard similar things from other attendees.

Thankfully, none of this diluted the best part of OuiShare Fest, the community spirit that brings out the best in attendees. Simone Cicero of Sharitories described the OuiShare Fest as “TED hugs Burning Man.” Like Burning Man, the fest gives attendees the opportunity to try on a new way to be in the world and relate to others.

As such, I had many encounters that exemplified the spirit of sharing, generosity, and love at OuiShare Fest. For example, on day one, Julie Da Vara and Valentine Philipponneau of JeLoueMonCampingCar, a camper van sharing platform, gave me a box of canales, Bordeaux-style cupcakes that are sinfully delicious. Johanna Steuth of Wirfel gave me a compliment card with the inscription, “For your passion for commons, communities and creating places for sharing. I like to see you there!” Ronald van den Hoff, Marielle Sijgers, and Vincent Ariens of Seats2Meet treated a bunch of us including Jen Billock of Couchsurfing and Christian Iaione of LabGov to dinner at a classic Parisian café across from the opera house. My friends Laurel and Quitterie of BioHacking Safari invited me to a lovely dinner of modern Sicilian food at DJoon. Chelsea Rustrum of It’s a Shareable Life and I livened up things at Mangopay’s party by dragging everyone onto the dance floor. Entrepreneur Daniel Goldman treated me, Tom Llewellyn, Chelsea, Benita Matofska, and her team at People Who Share to late night karaoke. And at the conference-ending OuiShare Love party, David We and I went below the surface in a conversation that revealed a similar need to connect authentically with others. It was the perfect way to end the fest – feeling totally accepted for who I am and we are, warts and all, ready to take OuiShare love out into the world.

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Posted in Activism, Cognitive Capitalism, Commons, Conferences, Culture & Ideas, Ethical Economy, Events, Guest Post, P2P Development, Sharing | No Comments »

Hacking Financial Markets For the Common Good…?

photo of Guy James

Guy James
11th June 2015


Being involved with FairCoop has piqued my interest in the direct use of finance for activist means, and reading Brett Scott’s excellent “The Heretic’s Guide to Global Finance: Hacking the Future of Money”I have become aware of various attempts to do just that. Whereas FairCoop (and the related cryptocurrency Faircoin) seek to establish a parallel financial ecosystem based around social justice and fair trade, there are other projects attempting to ‘hack’ the mainstream financial system in order to use it as a means to increase equality in the world rather than, as generally seems to be the case on looking around me, to substantially decrease it.

I recently had a sort of vision of what could be possible when I recalled seeing a timelapse video of Dubai growing out of the desert nothingness into a large city within just over a decade. This is evidently due to two things: oil and capital investment and speculation in oil. Whatever one thinks of Dubai, when looked at on the macro level this kind of growth has a miraculous quality to it, showing that there is nothing humanity cannot accomplish when we really put our minds (and our money) to it. Imagine the same kind of breakneck growth being applied to putting solar panels on roofs, switching cars to renewable energy, converting the armies of the world to disaster relief outfits, building solar desalination plants and hydroponic vertical farms, regenerating cities like Detroit which have been abandoned by traditional capitalism… yes all of this at present is ‘pie in the sky’ idealism, yet all of this is becoming more and more of a necessity.

Can it be that the power to really transform our planet lies right in the ‘belly of the beast’, in the financial system? For too long activists have turned away and self-righteously chosen to demonise this power. Any Jungian knows that when one turns away from a great dark power, it has the distinct tendency to devour one – and this is of course what is happening. We need to shine a light on the system, and as Brett Scott suggests, infiltrate it – here’s an excerpt from his book:

DAS KAPITAL LLP: GOING LONG THE REVOLUTION WITH MARX’S HEDGE FUND

In 2011 the Guardian blogger Joris Luyendijk quoted me as saying ‘Karl Marx would have made a fantastic hedge fund manager.’ It predictably caused howls of outrage in the comments section, but I never meant it in a literal sense. I was suggesting that the best hedge fund managers are characterised by a certain disruptive tendency, an ability to cut through herds of conventional investors. This is not to romanticise hedge funds, but deploying money into a situation is similar to making a statement of belief- if your money goes against the herd, it’s a bit like saying ‘up yours’ to them. There are even hedge funds that set themselves up as ‘corporate raiders’ or ‘activist funds’ that deliberately challenge company management.
[…]

Activating the Financial Drag Queens

[…]Why isn’t there an Amnesty International LLP, gradually buying up stakes in companies with poor human rights records, demanding accountability while using the dividends to fund the dissent? For many NGOs, part of the answer is lack of funds, and the rest is ideological opposition to the idea. The financial system though, like the internet, is a networked technology of power which can be used in unusual ways. If you feel authorities and large corporates are dominating the internet with patents, firewalls and intellectual property lawsuits, you don’t turn off the wireless, you get creative. Who’s to say that we can’t wear the garb of a notorious financial institution in a heretical fashion.

A friend of mine who worked for 12 years in an investment bank had an idea of starting a hedge fund that would attempt to extract money from the oil sector and redirect it to the renewable energy sector. It’s interesting in principle, but incredibly hard to execute in reality. It’s important to take these ideas with a pinch of salt. Perhaps the point of an activist hedge fund is not actually to work in a conventional sense, but rather to create publicity, to learn, and to act as a subversive ‘drag queen’ joker bending the rules. On the other hand, so few people have experimented with the idea of creating subversive hedge funds that it’s hard to know what the potential might be. The only way of finding out if the dynamics of trading can be harnessed in a positive way is to experiment boldly. There is nothing to lose … except money.

He gives some examples of existing hedge funds which go against the grain:

Well-known examples include:

  • The Children’s Investment Fund: A fund started by Chris Hohn. In 2012 it launched a campaign against Coal India’s directors, suing them for breaching fiduciary duty (aka ignoring shareholders). They have an attached charity which receives a portion of the firm’s profits.
  • Greenlight Capital: A fund run by a poker-playing manager called David Einhorn which publicly bets against firms, much to their annoyance.
  • Carl Icahn: A corporate raider famed for terrorising corporate management teams. He views himself as a predator on a mission to destroy complacent CEOs: On his website,icahnreport.com, he quotes himself as saying ‘A lot of people die fighting tyranny. The least I can do is vote against it.’
  • Dan Loeb: A hedge fund manager infamous for buying stakes in companies and then writing incendiary letters of withering scorn to the company management teams.
  • Others, such as Pirate Capital, have been less successful, but are based on similar principles. Could it be that the mindset of a hedge fund manager can be strikingly similar to that of a campaigner? Certainly, the belief systems of hedge fund managers are expressed in financial direct action, albeit mostly for their own gain. Could campaigners battle it out in this realm too, by setting up truly activist hedge funds?

Looking into these funds gives a sense of what might be possible, although as Scott notes, the main raison d’etre of most of them does seem to be to enrich themselves, albeit by going about it in an unconventional way. However it does show that the financial world is not necessarily the ‘black box’ or ‘old boys’ club’ that many activists seem to believe it to be (of course many parts of it do indeed answer to those descriptions).

The Robin Hood Minor Asset Fund has already been featured on this blog and it might be this fund which is the pioneer for a new way of interacting with financial markets for social justice. The fund is set up as a cooperative which anyone, for the modest layout of €30 to become a member plus €30 for their first share in the coop, can join. All members have voting rights and can choose to share with commons-oriented projects any dividend they receive from the activities of the cooperative on the stock markets. This is a way of directly using the power of financial markets to empower the commons.

Other more overtly activist groups have been developing interactions with the financial world, such as Platform London and their Take The Money And Run event, designed to showcase how big fossil fuel and financial corporations attempt to ‘artwash’ themselves by sponsoring galleries and other artistic events.

Can we imagine a ‘Stock Market of the Commons’ in a decade’s time? Free trade hedge funds? Scores of activist shareholders insisting that companies do the right thing by the planet and ALL its people, not just privileged elites?

“The possible has been tried, we need to try the impossible”, as the great Sun Ra used to say…

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Richard Stallman on “Intellectual Property”

photo of Guy James

Guy James
30th May 2015


I know Stallman is not everyone’s cup of tea but he does have a way of breaking down apparently complex issues so that they can be easily understood. And once you have read his opinions about so-called ‘Intellectual Property’, you may start to wonder how we ever came to lump together three disparate concepts under one heading (hint: it benefits large corporations):

It has become fashionable to toss copyright, patents, and trademarks—three separate and different entities involving three separate and different sets of laws—plus a dozen other laws into one pot and call it “intellectual property”. The distorting and confusing term did not become common by accident. Companies that gain from the confusion promoted it. The clearest way out of the confusion is to reject the term entirely.

Read more here: ‘Did You Say “Intellectual Property”? It’s a Seductive Mirage’

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Posted in Activism, Cognitive Capitalism, Copyright/IP, Open Access | No Comments »