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Essay of the Day: Peak Inequality and the Impoverishment of Society

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Michel Bauwens
31st January 2015

The conditions for a peer to peer society are being severely undermined.

* Essay: Peak Inequality: The 0.1% and the Impoverishment of Society. David DeGraw.

The excerpt below is adapted from the book, The Economics of Revolution.

The conclusion of the study about the evolution in the U.S. is clear: “the In the present economy, under current government policy, 70% of the population is now sentenced to an impoverished existence.”


The essay presents a shocking case about inequality in the U.S that has been climbing in recent years and the deteriorating conditions for the unfortunate 99%:

“The latest comprehensive look at wealth distribution data reveals that the “ultra-rich” economic top 0.01% of US households now has an all-time high 11.1% of overall wealth. The next tier, the 0.1% – 0.99% has 10.4%, and the top 1% – 0.9% has 18.3%. In total, the top 1% now has an all-time high 39.8% of wealth.”

“In the present economy, it is impossible for 70% of the working age population to earn enough income to afford basic necessities, without taking on ever-increasing levels of debt, which they will never be able to pay back because there are not enough jobs that generate the necessary income to keep up with the cost of living. For every 3.4 working age people, there is only one that can generate an income high enough to cover the cost of living without taking on debt. In total, only 20% of the overall population currently generates enough income to sustain the cost of living. As a result, poverty and declining living standards are much more prevalent throughout US society than the government and corporate media report.”

“Beyond unemployment and underemployment, the percentage of full-time working poor has grown significantly. US workers are presently producing twice as much wealth per work hour than they were in 1980. Instead of median incomes doubling since then, they have stagnated. The gap between wealth production and median income is now at an all-time high.”

To make inequality worse there is more wealth that is hidden:

“However, to get a more complete understanding of how corrupt the global economic system is, we also need to factor in wealth that is hidden from public view. Disregarding trillions of dollars in hidden wealth just because the wealthy have the ability to illegally hide it is an absolute injustice.”

and a new form of aristocracy formed:

We now live in a neo-feudal society. The evidence is undeniable. The indentured servant is now the indebted wage slave. A recent scientific study revealed that the United States government is subservient to the whim of the .01%. Political office is now merely a stepping-stone and initiation process that politicians go through to be accepted into the aristocracy.”


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Essay of the Day: Free Software and the Law

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Michel Bauwens
28th January 2015

* Article: Free software and the law. Out of the frying pan and into the fire: how shaking up intellectual property suits competition just fine. By Angela Daly. Journal of Peer Production, Issue 3, July 2013

From the Abstract:

“Free software is viewed as a revolutionary and subversive practice, and in particular has dealt a strong blow to the traditional conception of intellectual property law (although in its current form could be considered a ‘hack’ of IP rights). However, other (capitalist) areas of law have been swift to embrace free software, or at least incorporate it into its own tenets. One area in particular is that of competition (antitrust) law, which itself has long been in theoretical conflict with intellectual property, due to the restriction on competition inherent in the grant of ‘monopoly’ rights by copyrights, patents and trademarks. This contribution will examine how competition law has approached free software by examining instances in which courts have had to deal with such initiatives, for instance in the Oracle Sun Systems merger, and the implications that these decisions have on free software initiatives. The presence or absence of corporate involvement in initiatives will be an important factor in this investigation, with it being posited that true instances of ‘commons-based peer production’ can still subvert the capitalist system, including perplexing its laws beyond intellectual property.”


Posted in Copyright/IP, Featured Essay, Free Software, P2P Legal Dev. | No Comments »

Essay of the Day: The Role of Crowdsourcing for Better Governance in Fragile States

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Michel Bauwens
25th January 2015

* Report: The Role of Crowdsourcing for Better Governance in Fragile States Contexts. World Bank, 2014

From the Summary:

““[The report serves] as a primer on crowdsourcing as an information resource for development, crisis response, and post-conflict recovery, with a specific focus on governance in fragile states. Inherent in the theoretical approach is that broader, unencumbered participation in governance is an objectively positive and democratic aim, and that governments’ accountability to its citizens can be increased and poor-performance corrected, through openness and empowerment of citizens. Whether for tracking aid flows, reporting on poor government performance, or helping to organize grassroots movements, crowdsourcing has potential to change the reality of civic participation in many developing countries. The objective of this paper is to outline the theoretical justifications, key features and governance structures of crowdsourcing systems, and examine several cases in which crowdsourcing has been applied to complex issues in the developing world.”

Patrick Meier discusses the findings:

“The research is grounded in the philosophy of Open-Source Governance, “which advocates an intellectual link between the principles of open-source and open-content movements, and basic democratic principles.” The report argues that “open-source governance theoretically provides more direct means to affect change than do periodic elections,” for example. According to the authors of the study, “crowdsourcing is increasingly seen as a core mechanism of a new systemic approach of governance to address the highly complex, globally interconnected and dynamic challenges of climate change, poverty, armed conflict, and other crises, in view of the frequent failures of traditional mechanisms of democracy and international diplomacy with respect to fragile state contexts.
That said, how exactly is crowdsourcing supposed to improve governance? The authors argues that “in general, ‘transparency breeds self-correcting behavior’ among all types of actors, since neither governments nor businesses or individuals want to be caught at doing something embarrassing and or illegal.” Furthermore, “since crowdsourcing is in its very essence based on universal participation, it is supporting the empowerment of people. Thus, in a pure democracy or in a status of anarchy or civil war (Haiti after the earthquake, or Libya since February 2011), there are few external limitations to its use, which is the reason why most examples are from democracies and situations of crisis.” On the other hand, an authoritarian regime will “tend to oppose and interfere with crowdsourcing, perceiving broad-based participation and citizen empowerment as threats to its very existence.”
So how can crowdsourcing improve governance in an authoritarian state? “Depending on the level of citizen-participation in a given state,” the authors argue that “crowdsourcing can potentially support governments’ and/or civil society’s efforts in informing, consulting, and collaborating, leading to empowerment of citizens, and encouraging decentralization and democrati-zation. By providing the means to localize, visualize, and publish complex, aggregated data, e.g. on a multi-layer map, and the increasing speed of genera-ting and sharing data up to real-time delivery, citizens and beneficiaries of government and donors become empowered to provide feedback and even become information providers in their own right.”

According to the study, this transformation can take place in three ways:

1) By sharing, debating and contributing to publicly available government, donor and other major actors’ databases, data can be distributed directly through customized web and mobile applications and made accessible and meaningful to citizens.

2) By providing independent platforms for ‘like-minded people’ to connect and collaborate, builds potential for the emergence of massive, internationally connected grassroots movements.

3) By establishing platforms that aggregate and compare data provided by the official actors such as governments, donors, and companies with crowdsourced primary data and feedback.

“The tracking of data by citizens increases transparency as well as pressure for better social accountability. Greater effectiveness of state and non-state actors can be achieved by using crowdsourced data and deliberations* to inform the provision of their services. While the increasing volume of data generated as well as the speed of transactions can be attractive even to fragile-state governments, the feature of citizen empowerment is often considered as serious threat (Sudan, Egypt, Syria,Venezuela etc.).” *The authors argue that this need to be done through “web-based deliberation platforms (e.g. DiscourseDB) that apply argumentative frameworks for issue-based argument instead of simple polling.”

The second part of the report includes a section on Crisis Mapping in which two real-world case studies are featured: the Ushahidi-Haiti Crisis Map & Mission4636 and the Libya Crisis Map. Other case studies include the UN’s Threat and Risk Mapping Analysis (TRMA) initiative in the Sudan, Participatory GIS and Community Forestry in Nepal; Election Monitoring in Guinea; Huduma and Open Data in Kenya; Avaaz and other emergent applications of crowd-sourcing for economic development and good governance. The third and final part of the study provides recommendations for donors on how to apply crowd-sourcing and interactive mapping for socio-economic recovery and development in fragile states.”


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Essay of the Day: The Role of Technology in the Circular Economy

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Michel Bauwens
20th January 2015

* Paper: A systems and thermodynamics perspective on technology in the circular economy. By Crelis F. Rammelt and Phillip Crisp. real-world economics review, issue no. 68

From the Abstract:

“Several discourses on environment and sustainability are characterised by a strong confidence in the potential of technology to address, if not solve, the ecological impacts resulting from physically expanding systems of production and consumption.
The optimism is further encouraged by leading environmental engineering concepts, including cradle-to-cradle and industrial ecology, as well as broader frameworks, such as natural capitalism and the circular economy. This paper explores the viability of their promise from a biophysical perspective, which is based on insights from system dynamics and thermodynamics. Such an ecological reality check is generally ignored or underestimated in the literature on aforementioned concepts and frameworks. The paper ultimately reflects on what role society can realistically assign to technology for resolving its ecological concerns. While environmental engineering undoubtedly has something to offer, it will end up chasing its tail if the social and economic forces driving up production and consumption are not addressed.”


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Essay of the Day: Real-Time Organigraphs for Collaboration Awareness

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Michel Bauwens
19th January 2015

* Article: Real-Time Organigaphs for Collaboration Awareness. By C.J. van Aart and A.H.J. Oomes.

From the Abstract:

“Collaboration awareness, as extension to organization awareness, is knowing how organizations do work and achieve their goals. This knowledge moves on a scale from stated prescribed ways of acting (such as procedures and protocols) to informal channels of communication, teamwork and decision-making. Based on available static and dynamic data, standardized insights can be given about collaboration in emergency situation in the form of organigraphs. We argue that gaining practical collaboration awareness, next to insights in the formal structure of an organization, also informal interaction should be inspected. Informal interaction includes informal communication channels, actual decision making on the spot and multi disciplinary joint activities. We have implemented our system in the form of a web based visualization tool. This tool would have been useful in the Hercules disaster, giving insights in informal information exchange, possibly preventing fatal decisions.”


Posted in Featured Essay, P2P Collaboration, P2P Infrastructures | No Comments »

Essay of the Day: the Leukippos Platform for Cloud Collaboration in Synthetic Biology

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Michel Bauwens
17th January 2015

* Article: Leukippos: A Synthetic Biology Lab in the Cloud. By Pablo Cárdenas, Maaruthy Yelleswarapu, Sayane Shome et al. BioCoder, Issue 4, 2014

From the Abstract, by Eugenio Maria Battaglia, Gerd Moe-Behrens et al.:

“As we move deeper into the digital age, the social praxis of science undergoes fundamental changes, driven by new tools provided by information and communication technologies. Specifically, social networks and computing resources such as online cloud-based infrastructures and applications provide the necessary context for unprecedented innovations in modern science. These tools are leading to a planetary-scale connectivity among researchers and enable the organization of in silico research activities entirely through the cloud.

Research collaboration and management via the cloud will result in a drastic expansion of our problem-solving capacity, since groups of people with different backgrounds and expertise that openly gather around common interests are more likely to succeed at solving complex problems. Another advantage is that collaboration between individuals becomes possible regardless of their geographic location and background.

Here we present a novel, open-web application called Leukippos, which aims to apply these information and communication technologies to in silico synthetic biology projects. We describe both the underlying technology and organizational structure necessary for the platform’s operation. The synthetic biology software search engine, SynBioAppSelector, and the game, SynBrick, are examples of projects being developed on this platform.”


Posted in Featured Essay, P2P Research, P2P Science, P2P Software | No Comments »

Essay of the Day: P2P Search as an Alternative to Google

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Michel Bauwens
15th January 2015

* Article: P2P Search as an Alternative to Google: Recapturing network value through decentralized search. By Tyler Handley. Journal of Peer Production, Issue 3, July 2013

From the Abstract:

“This paper examines the intersection between Google’s desire to “database the world’s knowledge” and the many ways in which Google’s approach affects both the nature of the information users find and how they find it. The paper will argue that Google has monopolized the socially constructed nature of the World Wide Web; Benkler’s concept of social production will be used as an example of this process. Google capitalizes on the attention economy, using a combination of PageRank and personalization to dominate the search market. To do so, it must store and retain vast amounts of user data, this data being a representation of the cultural and social relations of Google users. By storing user data in “centralized” logs, Google’s approach to search opens up questions about how such sensitive data should be stored, and what the ownership of such a social ‘map’ by a private corporation means. To further establish the meaning of Google’s position this paper outlines the potential for new contrasting forms of search, that allocate more control to the user. In particular, this paper will analyze the Peer-to-Peer distributed search engine YaCy to see how it can alleviate the specific problems of various censorship and filtering that affects Google search results, and how it can address the wider issue of the private appropriation of social and cultural networks. This comparison of Google and Peer-to-Peer search will allow a clear view of the issues at stake as search is developed over the next decade, issues which will have resonating consequences on what information we receive.”


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Essay of the Day: Commons-Based Reciprocity Licenses To Advance Reciprocity for the Commons

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Michel Bauwens
27th December 2014

* Article: BETWEEN COPYLEFT AND COPYFARLEFT: ADVANCE RECIPROCITY FOR THE COMMONS. Miguel Said Vieira & Primavera De Filippi. Journal of Peerproduction,

From the Summary:

“Licensing debates abound in the “free culture” academic discussion (see, i.a., Downes, 2009; Hill, 2005; Lemos, 2010; Netpop Research, 2009; UNESCO OER Community, 2011), but we believe much of it suffers from one of two problems. First, restricting themselves to a purely technical, legalistic approach; this kind of approach is important and necessary for improving licenses, but it is not sufficient to deal with the social impacts and ramifications of such licenses. Second, adopting a dualistic and overly antagonistic approach, particularly with regard to the debate on commercial usages. This debate touches important aspects of the licensing discussions, but it frequently stalemates (due to its polarized character) before it is possible to make significant advances in deepening our knowledge about these issues, and coordinating efforts for improving the knowledge commons.

The copyfarleft licensing model is a concrete proposal related to the commercial usages debate. It suggests one way to improve on “non-commercial clauses”, arguably making them more effective in reducing negative social impacts, such as wage labour being exploited in building the commons. We believe it is an interesting contribution that mostly avoids the problems mentioned above, but also has its potential drawbacks. This position paper comments on them (as well as on some merits of this model), and proposes an alternative or complementary model that attempts to solve some of those drawbacks.”


Posted in Featured Essay, Open Standards, Peer Property | No Comments »

Essay of the Day: FabLabs, 3D-Printing and Degrowth

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Michel Bauwens
25th December 2014

* Essay: FabLabs, 3D-printing and degrowth – Democratisation and deceleration of production or a new consumptive boom producing more waste? by Charlotte Knips, Jürgen Bertling

This was a ‘Stirring’ Paper for the Degrowth Conference in Leipzig 2014


“No technology can be sustainable in itself – for it to contribute to a truly green economy in a degrowth society the attitudes and needs of the people have to be addressed as well (Grunwald 2002, Lipson 2013). Thus the technology of a decentralized production holds a twofold potential: on the one hand the risk of exploding production and consumption of easy-to-make, easy-to-throw-away gadgets and on the other hand new possibilities for sufficiency, ecological design and repair-culture.”


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Essay of the Day: Towards a Legal Framework for Crypto-Ledger Transactions

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Michel Bauwens
23rd December 2014

This is from a draft text by Primavera de Filippi which discusses, amongst other things, the legal enforceability of ‘smart contracts’:

I. Integration of Law and Computer Technology

“The marriage of law and technology in the late 20th and early 21st century can be divided into three phases.

Phase one involved digitizing information itself: taking paper and ink and storing as computer readable information. That phase is well under way: copies of cases, statutes, and regulations have been available on-line for decades in large databases, accessible at first for a fee, and now mostly for free. Yet, there is a big difference between digitized information (that can be stored and displayed on a computer) and semantically meaningful information (that can be also processed and understood by a computer).

Phase two has involved automating decision-making. Much legal informatics research to date has focused on transforming legal provisions into computer code. This is a hard project for many reasons, including the ambiguity of the human language and the need for legal norms to be flexible and fact dependent. Despite these challenges (and limitations) government institutions and businesses worldwide increasingly rely on rule-based representations of specific knowledge domains – such as health care, tax and financial regulations – for automated decision-making (see e.g. specific tools for taxation, accounting and credit-score assessment).

Phase three – which is just beginning – involves self-enforcing smart contracts. We are moving quickly towards a system where technology will not only aid in decision-making but will also be employed to enforce rules. A notable example can be found in Digital Rights Management systems which incorporate the provisions of copyright law into technological measures of protection. But technology can also implement its own technical rules, which do not reflect any underlying legal rule. In order to be legally enforceable, these rules need to be wrapped-up into a legal framework capable of making smart contracts actionable under the law. A lot of work has yet to be done in that area.

II. Smart Contracts: self-enforceability vs. legal enforceability

Smart contracts were first described by Nick Szabo in the late 1990s. He envisioned placing contracts into code that could be both “trustless” and self-enforcing, enhancing efficiency and removing ambiguity from contractual relationship. Beyond increased speed and efficiency, an important benefit of smart contracts over traditional contracts is the lack of textual ambiguity. In the long run, this might reduce the needs for canons of construction and other textual interpretation techniques — although factual ambiguity (i.e. did a real world event happen or not) will obviously remain.

Smart contracts also eliminate the need for trust amongst the parties, who can be sure that the contract will be performed exactly as agreed. Indeed, as opposed to traditional legal contracts, smart contracts are always and necessarily deterministic – i.e. all possible outcomes of the contract (including penalties for breach of contract) must be explicitly stipulated in advance — something akin to what liquidated damages clauses and letters of credit do in the paper world.

Discussion is currently very focused on the technical aspects of smart contract deployment and their implementation within a particular technological framework. Smart contract proponents claim that many contractual clauses could be made partially or fully self-executing, self-enforcing, or both. Smart contracts aim to provide security superior to traditional contract law and to reduce other transaction costs associated with contracting. Some even propose a future where self-enforcing algorithmic law would supplant traditional law.

Yet, many people forget that these applications are meant to operate in a world that is regulated by traditional rules of law. While smart contracts are increasingly able to handle complex deal logics, many kinds of transactions do – eventually – have to interface with the “real world”. It is at those “choke points” that the legal system will ultimately have a say in the context of a breach.

In this regard, one important question is to determine whether smart contracts are in fact actionable in the real world. While they can be regarded, at their core, as a written contract drafted in a computer language, it is not clear – at this date – whether their code is “legally binding” upon the parties interacting with these contracts.

This is a critical issue because the provisions of a smart-contract are self-enforceable only to the extent that they account for all possible deviations from the agreed-upon terms – e.g. by implementing a complex system of collaterals,which might considerably increase the complexity of these contracts. Were they enforceable under the law, smart-contracts could be drafted in a much simpler manner – e.g. by only incorporating a basic set of conditions into the code and subsequently relying on the legal system in order to enforce these conditions, in the event of a breach. Legal enforceability would essentially allows for only the main-case set to be handled by smart-contracts, leaving the edge-case set to be handled by the courts.

Most importantly, in many real-world situations, contracts are performed without the need to be enforced by law, as the threat of one party resorting to the legal system is sufficient for the other party to comply with the contracted terms. In order to be as effective as their traditional counterparts, smart contracts must therefore also be actionable in the real world. This might, of course, requires them to comply with all the standard formalities required for a court to enforce a contract under the law. We present here a way to extend the reach of cryptoledger-based transactions by having smart contracts render into conventional legal documents. This allows for the smart contracts (as the administration layer) to remain simple, while relying on the legal contracts (as the enforcement layer) to handle the edge cases.

III. Common Accord: turning smart contracts into legally enforceable contracts

CommonAccord (http://commonaccord.org) plans to “open source” and automate the drafting of legal documents by creating a global template system of codified legal texts (i.e. something akin to the Incoterms rules for commercial transactions). The goal is to make the documents so modular that much of the text disappears, leaving parties with only specific deal points and clear relationships. These relationships can be ‘rendered’ at any time into full legal documents, for verification and enforcement. Technically, this is a data-model for text, an extremely simple and expandable data-model that consists of a series of nested lists that render into texts. The texts can be improved, extended and forked by the community. As such, CommonAccord is expected to play the same role in facilitating and accelerating collaboration on legal texts as git has played for code.”

For more details on the CommonAccord data model, see: http://commonaccord.org and http://beta.commonaccord.org/wiki/Main_Page.

Examples of use cases (switch between “Document” and “Source” to see the model in action)

* Frameworks of trust: NDAs; Master Agreements
* Licenses; Contribution Agreements
* Crowd-funding (Eris Assurance contract)
* CommonAccord’s list-based template system provides a flexible, robust format for codifying and rendering legal texts from code.

This can be achieved in at least two ways:

* Manual Matching

CommonAccord’s framework can be used to produce a legal document (whose torrent/hash can be incorporated into the blockchain as a proof of existence) to tie every smart contract to a real world one. Through inheritance, CommonAccord’s data model can express any smart contract as simple nested lists that can be rendered into legal documents, according to the selected jurisdiction and circumstances. This is a manual process that requires matching the prototype of the smart contract with the specific CommonAccord template that goes along with it.

* Automated Matching

CommonAccord’s framework can be used as an API that returns matching snippets of code (both legal and technical code) whenever someone submits a request for a particular template, together with the necessary parameters requested by the template. This requires creating a database of independent ‘contract modules’ linking standardized code-snippets to their corresponding contractual provisions, which can be combined together into a collection of ‘contract-type templates’ (i.e. documents instructing how these modules can or should be incorporated into either a smart contract or a legal document).

Traditional contracts often share common “boilerplate” elements, and smart contracts are no different. CommonAccord’s inheritance system enables code reuse; this provides more convenience, as well as increased legal certainty. Many contracts will have relatively simple and easy to understand logic built on top of well-known and widely used modules. Modules could encompass basic functionality, or more advanced features such as a standard auction, escrow, or bond implementation.

The goal is to implement a modular template system which, after having been fed with specific parameters, can be rendered into both technical ‘dry’ code (i.e. self-contained code snippets) and legal ‘wet’ code (i.e. specific contractual provisions translating the code snippets into legalese) whose overall structure can be established directly through the CommonAccord template system.

Ideally, this would allow for the dynamic creation of sophisticated and highly customized smart-contracts, which are automatically rendered into a legal document enforceable between the parties.

Of course, both versions of the contract – the smart-contract, written into code, and the legal contract, written in human language – should cross-reference each other. The legal contract should include a reference to the smart-contract code (i.e. its blockchain address), whereas the smart-contract should incorporate a reference to the hash of the digitally-signed legal document, which should remain available on a decentralized storage system (which can be either public or private, according to the confidentiality rules). Those two versions may differ in certain regards. While there should be a 1:1 correspondence between the code and the specific template texts, the relationships established between these templates are uniquely defined in the code. As a result, the code version might be extremely unambiguous, but the generated legal text less so.

The question therefore arises as to which version should be relied upon in court in order to settle a dispute between the parties. Considering the current courts’ inability to understand computer code, it will most likely be the legal document. Yet, although it might be ignored at first, incorporating a reference to the smart-contract into the real-world legal contract might – in the long run – expand the opportunities for smart-contract enforcement, insofar as it might lead courts to consider the smart-contract code as evidence of how the legal contract should be effectively construed.”


Posted in Featured Essay, Open Standards, P2P Infrastructures, P2P Legal Dev. | 1 Comment »