Michel Bauwens asked me to clarify how my analysis differs from Kevin Carson’s wonderful review of Doctorow’s The Makers. Even though we are discussing a fictional example- the New Work boom of, approximately 2015-2020- this is, I think a useful exercise because it allows us to think about what kinds of economic regulation might or might not be compatible with an economy of abundance.

Kevin Carsons hypothesis about of the end of the New Work boom focuses on an oversupply of capital:

“The problem with his “straining a billion bits of krill” investment model is that those hundreds of thousands and even millions of ventures, cumulatively, weren’t enough to soak up even a large fraction of all the capital lying around waiting to be invested. So the overwhelming majority of available capital still sat idle without any productive outlet. “

However an oversupply of capital is only that in relation to an insufficient demand. The reason why hundreds of thousands or even millions of ventures can not prosper is that there is insufficient demand for their products. This suggests that an economy of abundance (also a relative concept- the old industrial economy was surely an economy of abundance in relation to the old artisanal economy) needs a Keynesian regime of regulation. That is, the state or some other state-like actor must install a mechanism for the redistribution of value that guarantees a sustained demand for new products. To accomplish this entails two things. First, to redistribute the new value that is generated away from the restricted flows of corporate and financial rent that circulate among Kettlewell and his investors and to larger swats of the population (thus activating the multiplier effect !). Since the Maker boom builds on highly socialized, or even ubiquitous productivity, it seems logical that such a redistribution takes the form of some kind of guaranteed minimum income. Second, the state (or state-like actor) must guarantee a direction of market expansion that is sustainable in the future. In our present situation that would probably mean to offer incentives to channel the productivity of a new maker culture intoproviding solutions to the problem of transitioning to sustainability within energy, transport and food production systems. This would, no boubt open up new sources of demand that would be able to sustain the new economy of abundance for a long time, and after that we can go into space ! Without such a Keynesian governance, a future economy of abundance is doomed to collapse, just like the industrial economy of abundance collapsedin 1929.

in this review I try to give a theory that’s different from Kevin Carson´s on how the ´New Work´movement collapsed, or, more generally, what is needed in order to make a Maker Culture sustainable.

Cory Doctorow, The Makers, San Francisco; Tor books, 2009, pp. 416, also available at http://www.tor.com/index.php?option=com_content&view=blog&id=38507

What is a viable business model for the two-thousand-teens? What can a large, rich and half fossilized corporation with an outdated product do? In his new novel, The Makers, Cory Doctorow starts off with Kodak and Duracell, both makers of obsolete products that merge to form Kodacell. Under the leadership of dynamic ex-venture capitalist Kettelwell, endowed with the corporate version of a surfer’s good looks, Kodacell embarks on a wave of micro financing: identifying small teams of innovators across the country and providing them with the backing and managerial skills needed to take their bright ideas to market. The result is the New Work Movement, a sort of dot.com boom 3.0, but this time based on material production. Building on new radical technologies like 3 D printers; on the abundance of scrap technology available for recycling; on Open standard for designs and other kind of intellectual property and on the innate skills of a by-now wide spread ‘maker’ culture of tinkerers, recyclers and hardware hackers, the New Work movement generates a plethora of innovations- from robotic dolls (The Boogie Woogie Elmos) synchronized to team-drive a car, via multifunctional Garden Gnomes, to RFID tagging systems that help keep order, and hence, peace, in the kinds of overflowing multiperson households that have become the standard as the nuclear family has collapsed as a social as well as economic unit. We get to follow the New Work movement through the eyes of Suzanne, a silicon valley journalist who quits a by now underfunded San Jose Mercury, and moves out of the valley just before house prices implode, to become the main blogger of the movement, Tian, the business manager , and Perry and Lester two genius hardware hackers who work out of an abandoned strip mall in Florida and specialize in robotic sculptures made out of recycled techno junk, like the toast robot built from souvenir seashells or Lester’s mechanical computers. (In the end of the book, before dying form complications resulting from his St. Petersburg treatment for obesity- a cocktail of appetite-suppressing hormones, stem cells and genomic therapy and that makes his body consume 10.000 calories a day just sitting down, thus becoming a ‘fatskin’ a skinny fat person who devotes most of his energy to making up for missed sexual occasions- Lester succeeds in building an ‘ Apple clone running entirely on physical gates made out of extruded plastic skulls. It takes up an entire building out on one of the lots and when you play Pong on it, the sound of the jaws clacking is like listening to corpse beetles skeletonizing an elephant.’, ‘I think I’d like to see that,” Perry said, laughing a little‘ , p. ..). When the New Work movement collapses- we are never really told how, just that the astute Kettelwell got out in time to make a comfortable fortune- Lester and Perry are left in a Florida marked by social disintegration, gangs, urban squalor and overall pessimism (’nobody wants to make anything anymore‘). They cling on to the squatter community that once organized around their workshop as a sort of living lab for their effort to produce cheap high tech gear for he world’s growing population of homeless and squatters, and dedicate their efforts to maintaining a nostalgic, Disney-like ride that features the treasures of the now defunct New Work Movement, and that changes everyday, by means of 3 D printers and rapid prototyping, according to input supplied by users, in true peer-to-peer fashion. The ride leads them into a a number of legal battles with Disney (and Kettelwell makes a comeback inventing the long term litigation investment vehicle, a truly Schumpeterian instrument where investors provide the juice necessary to brake the back of a corporate behemoths like Disney and capture their assets), ending in the pair and their rides eventually being bough out. Lester goes to work for Disney, and Perry hits the road, working for the many self organized work crews that now spring up in the wasteland of a US in rapid decline.

Like Doctorow’s previous work the novel is a great read an quite an eye opener to future scenarios. (After all, Doctorow should know, being the founder and editor of the influential tech blog BoingBoing.com). The story is darker this time though. Maybe because his last novel, Down and Out in the Magic Kingdom (always maintaining an ironic fascination with Disney that looks like something of a geeky in-joke) was set in the distant future, and maybe because his ‘Californian Ideology’ tainted optimism has taken a understandable hit or two in recent years. ⁱ

Down and Out …. described a future economy of abundance governed by a fully functioning reputation economy, where the accumulation of Whuffie, or social recognition for one’s genuine contribution to the common cause, determined access to scarce resources. In The Makers, we are still in an abundance economy, albeit contained within a, however struggling, capitalist value form. This abundance comes from the radical oversupply of stuff produced by our present consumerist paradigm, and thrown away long before its natural obsolescence to be recycled at will. Add to this the integration between a booming Open Design movement, 3 D printers and other kinds of rapid prototyping and new computerized precision tools. As Lester answers the question ‘why build a toast robot out of sea shells?’:

‘It’s like this, engineering is all about constraint [...] but these days, there’s not much traditional constraint. I’ve got an engineers most dangerous luxury: plenty. All the computational cycles I’ll ever need, easy and rapid prototyping. Precision tools. What I’ve got here are my own constraints. I’m challenging myself, using found objects and making stuff that throws all this computational capacity at, you know, trivial problems, like car- driving Elmo clusters and seashell toaster robots’. (p. 20).

And we can see this not-so-distant future economy of abundance coming: Within the industrial economy the tendency has been long under way. Already now, productive capacity for most commoditized industrial components has been generalized to the extent of pushing profit margins close to zero ⁱⁱ Today we see how this new ability to make things is spreading out of the sweatshop districts of the South East. Driven by the share availability of techno-junk to recycle, and empowered by a booming open design movements, and new hot technologies like the rep rap 3 D printer or the Fab Lab system, hardware hacking spaces are proliferating everywhere, and we can see the beginnings of a new Maker culture that attracts (mostly) young people into a kind of neo-artisan, high tech version of material production. (But we don’t even need this scenario, Alibaba.com and a number of similar sites offer rapid access to Chinese producers willing to make and ship your designs in small series. You can pay by pay pal and even chat with their technicians via a Mandarin-English translation interface.)

As Doctorow suggests, it is just a matter of time before capital, corporate or venture, discovers this potential new boom, just as it built the dot.com boom of the 1990s on an existing hacker and new Media art culture. So, yes, we are likely to see things like Kodacell in the future. After all what else should big corporations do. If the Maker revolution that Doctorow envisions is true, then large corporations are set to loose their monopoly over material production (again, this is already happening), just as already now they are losing their power over innovation and brand.

The question is rather, can a corporate-funded New Work movement be sustainable. In the second part of the novel New Work is over, but we are never told why. At the same time Lester and Perry tinker away within a rapidly deteriorating urban wasteland where homelessness, squatting, and petty crime has become the norm, and where a growing majority of the population are excluded from the value flows of the corporate economy (sounds familiar?). The problem is off course that to the extent that material production becomes generalized, then the ability to create value comes to reside either with the ability to erect and maintain artificial monopolies, like in the case of intellectual property rights, or with the ability to organize complex flows, which is the privilege of the managerial class. Even if he never makes this point explicitly, Doctorow seems to suggest that a capitalist economy of abundance is unsustainable precisely because it tends to restrict the reach of its value flows to a privileged managerial elite, thus not only leaving everybody else without access to the goods, but also effectively undermining the kind of effective demand that could sustain New Work as an ongoing reality. In the Makers the state is absent, we don’t have a new New Deal, there is no intervention that drives this new productivity in a direction where it can address the problems connected with a transition to sustainable systems, and thus open up a plethora of new markets. And eventually it collapses for lack of demand. Instead we are left in a post-capitalistic wasteland where itinerant work crews address basic needs on a local, self-organized basis, and perhaps build the first foundations of the post-capitalist economy of abundance that Doctorow described in his previous novel, Down and Out in the Magic Kingdom. So to put itin really crass terms: a maker culture can not survive without guaranteed minimal income ! (Both books can be freely downloaded online.)

Via Keimform:

“Adrian Bowyer gave a talk at FOSDEM 2010 in Brussels about RepRap, the cool GPL licenced 3D-printer which could (partly) replicate itself. Watch the talk and learn, why personal fabrication will succeed over old industrial mass production, even in its decentralized form, and why personal fabrication will succeed in the run for creativity.”

H+ Magazine has a great article,

* From Hackerspace To Your Garage: Downloading DIY Hardware Over the Web, written by: Bryan Bishop & Surfdaddy Orca

It focuses especially on the SKDB project as an example, but offers a lot more than that, so we recommend going to the full article.

“The Social Engineering-Knowledge Database (SKDB) project provides the means for specifying dependencies and applying standards that can be shared by open source DIY makers. You don’t need to reinvent the wheel every time you begin a new project. Someone may have already done most or all of the work for whatever you are trying to do, and then released the plans on the internet. And there are many common tools and parts involved in making things. The SKDB project directly tackles the challenge of packaging and distributing these plans.

For each part in a package, there are a number of interface definitions that describe how the part can connect with other parts, even parts from other packages. Each package also lists dependencies which have to be bought or built in order to successfully carry out a project. For example, a drill press is required to make holes with a certain level of accuracy. The SKDB project downloads all of the dependencies automatically and compares them to your existing inventory, and generates instructions for your computer numerical controlled (CNC) machinery, if you have any. ”

Excerpted from Jeremy Bennett of Embecosm (open source services, tools and models to facilitate embedded software development with complex systems-on-chip). Jeremy is also an active contributor to the OpenCores project.

Dr. Jeremy Bennett:

“A modern silicon chip is typically built from silicon “intellectual property” (IP), written in a hardware description language such as Verilog or VHDL. Fabless design houses may never produce a chip themselves—one of the largest and best known is ARM in Cambridge, whose processor IP is built by other companies into one billion chips ever month. That IP costs the same amount to produce, whether it goes into one chip or one billion.

I believe open source hardware will have an important role in the computer industry in the future, just as open source software has an important role today. I hope my efforts will contribute to that success.”

Source: This article was first published in “The Ring”, the journal of the Cambridge University Computer Laboratory Ring in May 2009.

Title: Comparing Business Development Paradigms

Authors: Paul B. Hartzog, Sam Rose, Richard C. Adler

Web: The Forward Foundation http://www.forwardfound.org

License: Creative Commons Attribution Share-Alike

orginally posted at http://forwardfound.org/blog/?q=comparing-business-development-paradigms

Introduction

In a posting to http://localfoodsystems.org on Feb 04, 2010, Steve Bosserman introduced the idea of “Production Centered Local Economies”, and “People Centered Local Economies”. This article synthesizes Steve’s coining of those terms, and uses concepts developed by Sam Rose, Paul Hartzog and Richard C Adler of Forward Foundation to further explain the differences between these economies, from a business development perspective.

Product centered business supply chain development

Fig. 2

In product centered supply chain business development, when systems reveal a “power law” distribution when ranking quantity and frequency, actors tend to ignore the “tail” and focus on on the “head” of the “power law” distribution.

What is emerging? What is Collapsing?

Fig. 3

This collapsing product-centered economic development activity tends to focus on creating “employment”, attracting business who bring “jobs” to an area. Communities are focusing on preventing the collapse of an unsustainable system, and are ignoring what is *emerging*. What is emerging is represented by the green line in Fig. 3 above. We are calling this “people centered business network ecosystem development”.

“People centered” means that control of infrastructure, access, distribution, resources, and co-governance are now on the scale of the individual person. When an individual person with this empowerment reaches their individual carrying capacity to operate, they will tend to reach out to others who are operating like them, and a connection-based network will emerge. Economic development here targets individuals operating as self-employed independents who network together. Independents, small businesses, community groups, working together, with government, higher education, and larger business are the new economic driver. The more control people have an on individual scale of infrastructure, access, distribution, resources, and governance, *and* the more connectivity there is between those people,  the that more growth happens in “people centered economic development”.

When control of infrastructure, access, distribution, resources, and co-governance are now on the scale of the individual person, a new way of coopertive co-managing of existing resources, and surpluses of production tends to emerge. That new way of co-managing is known as “Resource Sharing“.

To quote from http://forwardfound.org/blog/?q=resource-sharing-grounding-21st-century-economy :

“The absolutely essential understanding to be absorbed here is that commons management (cooperative co-manageent of resources) is not primarily a technical problem but a social one and that the key ingredient in the solution is information transparency. Therefore, implementation requires a thorough grounding in both social dilemmas (Kollock) as well as technology design.”

In other words: Production centered supply chain economic development can rely on technology alone to manage systems. People centered business network ecosystem development requires the engagement of all of the people in all areas of management.  Technology can help, and it can primarily help by helping people to access and see the landscape of the systems they are participating in, who is connected to whom, and how? What are the real limits to resources you are using with others? What is actually scarce, what is actually abaundant, and what decisions can you make together with others based on that information?

It turns out that learning, tools for problem solving, and even designs and plans and software as static objects are *not* scarce. It is very easy to copy them, especially if they exist in a digital form, and it takes very little resource to store them, and make them available to others. Individual people who are making these items tend to have very little to gain by making them scarce, as they often lack the resources needed to create that artificial scarcity around designs, knowledge, software, information.  People tend to discover that there is more efficiency in sharing these creations, and working together to adapt them to immediate and long-term problems they are trying to solve (see: “Giving it away, making money” Bosserman 2008).  This sharing begets more sharing when done in a way that is equitable for the people and the systems people are part of. This sharing also opens up access to individuals to control of infrastructure, freedom of access, a plausible way towards collaborating around needed distribution, and co-governance around the sharing of resources.

Fig. 4

Fig. 4 above is a simple model of a non-linear system, where actions that are happening in the system are mapped, instead of roles. Actions are the focus, because all individuals now potentially have access to any “role” as it might have existed in production centered development. I can now be a designer, a marketer, a shop worker, etc  Co-governed systems are “mapped” as a network ecology by looking at the resources that are shared, co-governed, or already exist as a “commons”, and who the participants are. Value exchanges, and economic activity are mapped based on actions, not roles of people.   Sharing what is learned, what is created, creates a way in which many others may engage, and those people now have multiple ways in which they may engage. This creates a new engine for *exponential* economic growth that is driven by people who all have access to control, and so work together to co-manage their new-found powers of control. The engine, at it’s core, is “making, sharing, using”.

Viewing a system through the lens of actions, and having access to transparent information, gives you a view into ever-more emerging ways in which you can adapt previously-shared solutions towards emerging problems. Each adaptation of solutions to problems refines the quality of solutions available for future problem solving. This generates wealth in the ecosystem, and so is accurately described as a “wealth generating ecology”.

E5 has written a interesting report on open green tech transfer, and its financing models:

* Climate Justice as Business Case: Innovative Business Models for the Transfers of Climate-Friendly Technologies. By Hans Schuhmacher, with support from Julio Lambing et al. European Business Council for Sustainable Energy. Preliminary English version. 06 December 2009

Please note: This paper is licensed under the CC license but it is preliminary and will soon be replaced by a fully authorized version.

1. The different models

The Open Hardware Transfer Strategy Model

* Concise definition: Analogous to Open Source Software, Open Hardware is a community-based development instrument for technologies. A viral GPL (General Public License) facilitates implementation and further development of technologies.

7. Publicly funded tenders for bounty hunters: An agency, set up by the United Nations, should identify climate-relevant problems and publish solutions under a GPL license. Such a system could be funded by emissions taxes.

4. More Information

* Examples for existing Open Hardware projects, databases and communities: http://www.e5.org/modules.php?op=modload&name=PagEd&file=index&topic_id=0&page_id=57

* A Creative-Commons license suitable for Technology Cooperation: Attribution – Noncommercial – Share-alike. at http://creativecommons.org/licenses/by-nc-sa/3.0/

* Ghosh, R.: Study on the Economic Impact of Open Source Software on Innovation and the Competitiveness of the Information and Communication Technologies (ICT) Secor in the EU (FLOSSImpact), UNU-Merit 2006. S.90

Chris Anderson visited the plant and has new details about this landmark project.

However, before you get too enthusiastic, also read the debunking article by Joel Johnson, here. The essential thesis is that all these distributed manufacturing efforts are all still in the hobbyist sphere, while in real manufacturing, it’s still ‘business as usual’.

Excerpt from Chris Anderson:

“Local Motors, the first open source car company to reach production. Step inside and the office reveals itself as a mind-blowing example of the power of micro-factories.

Local Motors has just 10 full-time employees (that number will grow to more than 50 as it opens build centers, the first of which will be in Phoenix), holds almost no inventory, and purchases components and prepares kits only after buyers have made a down payment and reserved a build date.”

Joel’s counterpoint:

It’s great that hobbyists can make ever more complex items, sell them on the internet, and have a small business. But the same process used by Aliph to manufacturer Bluetooth headsets (and bear in mind it takes 80 people just to coordinate this!) is exactly the same outsourcing process used by Apple to make iPhones. But the difference between an Apple or a Sony versus a Brickarms or a Local Motors is vast, both in ancillary services offered like warrantees or technical support, to the only metric by which any industrial revolution can be measured: profit.

After describing in detail each attribute that a open hardware license should have, each being a specific decision to be made by the open hardware vendor and community, Matt from the Liquidware Antipasto blog concludes that there is still no useful open hardware license:

(The excerpt below is part of a series introducing a Open Source Hardware Economics book the author is writing.)

“Attributes are not clear cut, and they are not all created equal. Some are not enforceable, because it would be impossible to determine, practically speaking, whether someone is violating that term. Other attributes are simply not enforceable because they may be inconsistent with government permissible activity. Violating the terms may be punishable by imprisonment, or fines, or a slap on the wrist depending on your jurisdiction and the severity of the penalty. Strictly speaking, in the US, it is only “illegal” to violate trademark, copyright, and patent law.

It is the author’s opinion that none of the current “open source” licenses properly covers “open source hardware” to a sufficient quality standard to be used in a widespread way. Instead, most of the open source hardware licenses in wide use today are merely repurposed open source software licenses! This is a serious problem.”

There’s a new page on Open Source Ecology’s wiki describing the Open Source Induction Furnace project, a blog post about RepTab, a self-replicating, Open Source Torch Table, and also some initial steps to the Open Source Multimachine (with lathe, mill and drill functions).

P.S.: Open Source Ecology’s  web and DNS servers have been having some problems for the last few weeks. Fortunately, they have migrated to new servers at Oregon State University Open Source Lab (OSUOSL), so that everything should be back online now.