“Localization may describe production of goods nearer to end users to reduce environmental and other external costs of globalization.

“Relocalization” is “…a strategy to build societies based on the local production of food, energy and goods, and the local development of currency, governance and culture. The main goals of Relocalization are to increase community energy security, to strengthen local economies, and to dramatically improve environmental conditions and social equity.”

Another way to consider localization is to see it as the shrinkage of distance between the point of production and the point of utilization or consumption. “It is the conversion of bits and bytes into material form as close as possible to where that form will be used. In contrast, globalization is the virtualization of experience, knowledge, and innovation so that intellectual property created can travel from anywhere to anywhere quickly, easily, at minimal cost.”

Steve Bosserman sees Localization occuring in four key domains:

1. affordable / green construction,
2. 100-mile agricultural production,
3. renewable / distributed energy generation
4. community governance / capacity building.

But an important question is: is such localization really more economically beneficial than the old model of centralized industrial production?

Kevin Carson tackles this issue in his most recent essay, Industrial Policy: New Wine in Old Bottles, from which we have been quoting liberally the last few days.

Today, we excerpt his discussion on the economic benefits of localization.

Kevin Carson:

“Leopold Kohr, in the same vein, compared local economies to harbors in a storm in their insulation from the business cycle and its extreme fluctuations of price.

Bill McKibben made the same point in Deep Economy. Most money that’s spent buying stuff from a national corporation is quickly sucked out of the local economy, while money that’s spent at local businesses circulates repeatedly in the local economy and leaks much more slowly to the outside. According to a study in Vermont, substituting local production for only ten percent of imported food would create $376 million in new economic output, including $69 million in wages at over 3600 new jobs. A similar study in Britain found the multiplier effect of ten pounds spent at a local business benefited the local economy to the tune of 25 pounds, compared to only 14 for the same amount spent at a chain store.

- The farmer buys a drink at the local pub; the pub owner gets a car tune-up at the local mechanic; the mechanic brings a shirt to the local tailor; the tailor buys some bread at the local bakery; the baker buys wheat for bread and fruit for muffins from the local farmer. When these businesses are not owned locally, money leaves the community at every transaction. (Bill McKibben, Deep Economy: The Wealth of Communities and the Durable Future (New York: Times Books, 2007), p. 165.)

Second, it would drastically increase the bargaining power of labor. Since the rise of the factory system and large-scale wage employment, capital has depended on the ability to externalize many of its reproduction functions on the non-monetized informal and household economies, and on organic social institutions like the family which were outside the cash nexus.

The household economy has allowed to function to the extent that it bears reproduction costs that would otherwise have to be internalized in wages; but it has been suppressed (as in the Enclosures) when it threatens to increase in size and importance to the point of offering a basis for independence from wage labor.”

Kevin Carson concludes:

“We are now experiencing a revolutionary shift in competitive advantage from wage labor to the informal economy, far beyond anything the propertied classes of two hundred years ago could have imagined in their worst nightmares. The rapid growth of technologies for home production in the twentieth century, based on small-scale electrically powered machinery and new forms of intensive cultivation, has radically altered the comparative efficiencies of large- and small-scale production. This was pointed out by Ralph Borsodi almost eighty years ago, but the potential of cheap desktop machine tools like the multi-machine shifts the balance even further.

We’re experiencing a singularity in which it is becoming impossible for capital to prevent a shift in the supply of an increasing proportion of the necessities of life from mass produced goods purchased with wages, to small-scale production in the informal and household sector. The upshot is likely to be something like Gupta’s “Unplugged” movement, in which the possibilities for low-cost, comfortable subsistence off the grid result in exactly the same situation, the fear of which motivated the propertied classes in carrying out the Enclosures: a situation in which the majority of people can take wage labor or leave it, if it takes it at all, the average person works only on his own terms when he needs supplemental income for luxury goods and the like, and (even if he considers supplemental income necessary in the long run for an optimal standard of living) can afford in the short run to quit work and live off his own resources for prolonged periods of time, while negotiating for employment on the most favorable terms. It will be a society in which workers, not employers, have the greater ability to walk away from the table. It will, in short, be the kind of society E. G. Wakefield lamented in the colonial world of cheap and abundant land: a society in which labor is hard to get on any terms, and almost impossible to hire at a low enough wage to produce significant profit.”

We continue our presentation of Kevin Carson’s important essay on decentralized production.

In our previous summary, Kevin argued that we are ready for a ‘distributed’ neotechnic era of organization of production, that this format has been derailed, but is about to become dominant. The first sign of this, he argues, is what we see happening in the culture industries.

I present the general argument, then a example that Kevin has chosen to illustrate the crisis, and that concerns the iPhone.

1. General argument

Kevin Carson:

“The unsustainability of the old corporate framework is most apparent in the culture industries. The copyright-centered business model of the old corporate dinosaurs simply cannot survive in an environment where the basic capital equipment for recording and sound editing, podcasting, software design, and desktop publishing are affordable on an individual basis, and in which bittorrent and strong encryption make copyright obsolete. The old gatekeeper corporations originally owed their power to the enormous capital outlays required to start a newspaper, a radio station or a record studio, with twentieth century technology–often amounting, at a minimum, to hundreds of thousands of dollars. The main function of the traditional corporate firm was to govern the tangible assets, hire labor to work them, and supervise the labor to make sure it was acting in the interests of the corporation. Today, in contrast, the basic item of capital equipment for desktop publishing, sound editing or podcasting is the personal computer, which is in more than half the homes in the country. The networked environment, combined with endless varieties of cheap software for creating and editing content, makes it possible for the amateur to produce output of a quality once associated with giant publishing houses and recording companies. In this environment, the only thing standing between the old information and media dinosaurs and their total collapse is their so-called “intellectual property” rights–which, once again, are becoming unenforceable.

In the information and culture industries, where the basic production equipment is affordable to all, and bottom-up networking renders management obsolete, it is likely that self-managed, cooperative production will replace the old managerial hierarchies. Music, publishing and software will be governed by peer production on the Linux model. But how is it possible to realize value from open-source production with zero cost of reproduction? The answer is suggested by the business models of Red Hat, Phish and Radiohead. Red Hat, a Linux distributor, can’t make money from ownership rights over the software itself. But it does quite well selling customer support and product customization. Phish gives the basic product, its music, away free; it makes money from concert tickets and concessions. Radiohead experimented with offering an album for free download from its website, coupled with the collection of voluntary contributions via what amounted to a glorified PayPal tip jar.

The interesting thing about Radiohead’s business model is that, because there is no physical reproduction process (the downloader burns his own CD), the overhead cost (mainly hosting and administering the website) is close to zero when spread over all the downloads. So even if the downloaders only average a buck or two per person, or even less, the revenue is essentially free and clear. Apologists for copyright like to say “you can’t compete with free.” Actually, though, there is still a significant rent entailed in the time and trouble of entering the market, even when there are no proprietary rights to the content. For the largest bestselling authors, like Stephen King, it may be worth it to offer his content at a unit price of fifty cents over production cost, even when King is selling his books for only a dollar over cost. But for the vast majority of writers and musical artists with small to medium-sized market profiles, so long as they sell their product for a modest markup over production cost, the profit to be gained by undercutting them by such a small amount simply isn’t worth the trouble. It’s only those who charge a large markup who would make it worth the competitor’s while to undercut them. As for manufacturing, the new economy that emerges from the Time of Troubles, if anything, will be more Emilia-Romagna than Emilia-Romagna itself.

Product design will be revolutionized around modular components, for durability and cheap reparability.

2. The iPhone: sabotaging repair

“Julian Sanchez’s discussion of the i-Phone is a good example of the effect of proprietary technology in reinforcing planned obsolescence.

Julian Sanchez:

(1) Some minor physical problem afflicts my portable device—the kind of thing that just happens sooner or later when you’re carting around something meant to be used on the go. In this case, the top button on my iPhone had gotten jammed in, rendering it nonfunctional and making the phone refuse to boot normally unless plugged in.

(2) I make a pro forma trip to the putative “Genius Bar” at an Apple Store out in Virginia. Naturally, they inform me that since this doesn’t appear to be the result of an internal defect, it’s not covered. But they’ll be only too happy to service/replace it for something like $250, at which price I might as well just buy a new one….

(3) I ask the guy if he has any tips if I’m going to do it myself—any advice on opening it, that sort of thing. He’s got no idea….

(4) Pulling out a couple of tiny screwdrivers, I start in on the satanic puzzlebox casing Apple locks around all its hardware. I futz with it for at least 15 minutes before cracking the top enough to get at the inner works.

(5) Once this is done, it takes approximately five seconds to execute the necessary repair by unwedging the jammed button.

I have two main problems with this. First, you’ve got what’s obviously a simple physical problem that can very probably be repaired in all of a minute flat with the right set of tools. But instead of letting their vaunted support guys give this a shot, they’re encouraging customers—many of whom presumably don’t know any better—to shell out a ludicrous amount of money to replace it and send the old one in….

Second, the iPhone itself is pointlessly designed to deter self service. Sure, the large majority of users are never going to want to crack their phone open. Then again, most users probably don’t want to crack their desktops or laptops open, but we don’t expect manufacturers to go out of their way to make it difficult to do. Again, in the instance, this was 15 minutes screwing with the case for a problem that took literally seconds to fix.”

Kevin concludes:

With due respect to Sanchez, the point of deterring self-service is the price of a new phone. It’s a fairly common business model: sell printers cheap, but sell product-specific toner at an enormous monopoly markup; sell blood glucometers cheap, but charge $100 a box for the testing strips. In the old days, it was cheap electric typewriters and expensive ribbons. And of course, thanks to “intellectual property” law, it’s illegal to manufacture generic accessories for someone else’s product.”

From an essay by Ran Prieur, on “How to Save Civilization“.

In this intro, he argues that stability can be achieved only if we keep complexity, but abandon growth.

Ran Prieur:

“To save civilization, we must redefine it with a sharp knife. I’m going to separate it into two things, which have historically gone together but don’t have to: complexity and growth. Or, to be more precise, relatively high complexity and ratcheting increase, where the numbers keep getting bigger because there’s no way built into the system for them to get smaller, except collapse.

I don’t think this civilization is going to make it. But civilization in general, defined simply as a highly complex society, is almost certain to persist. In the following sections, I explain why I think so, and what we would have to do to keep it stable, instead of suffering repeated rises and falls. Stable does not mean static — nature itself is stable without being static. The future of human society, like its past, will be dynamic, but it need not be catastrophic.”

The December 2008 /January 2009 issue of the progressive Scottish magazine “Red Pepper” is dedicated to the opportunities and challenges of Obama’s victory, but also contains a special section with interviews on ‘alternatives to neoliberalism’.

Next to Leo Panitch, Robin Blackburn, Martin Ryle, Kate Soper, I’m also interviewed on the P2P Alternative.

The issue’s articles are not available online, but I have posted the draft of my conversation with Hilary Wrainwright here.

Here’s the background to this issue, explained by editor Hilary Wrainwright:

“This interview is part of an exploration into the question: ‘if not capitalism, what? ‘ It is a question posed in a very practical way by the present crisis. It’s not that capitalism is in death throes from which it cannot recover. In some, partially altered form there’s no doubt it will recover - depending on how strong are the pressures and actualities of alternatives. The point is that the crisis is leading millions of people to question the legitimacy and social viability of the economic system that has produced this mess, often they are questioning it without knowing the alternatives, or even the direction and path to or means of creating alternatives. So I’m interviewing several people who have been putting forward frameworks for an alternative mode of production/economic and political system or key elements of such, based on alternatives they perceive to be already emerging. I’m asking them how their ideas offer a different economic logic to that which has produced the present crisis and what proposals they would now make - using this moment of collapse of the old order , when it is appropriate to think boldly about the possibilities of the new - to strengthen the emergent alternatives.”

“Technocracy is a proposal for a steady-state, post-scarcity economic system. It is intended for industrialized nations with sufficient natural, technological, and human resources to produce an economic abundance.”

Technocracy is a US movement born in the previous Depression of the 1930’s, and seems to undergo a mini-revival, with a European network being launched.

One of the articles on the site gives some interesting insight on the nature of scarcity under a market system as well as on the different effects of ownership vs. usership schemes.

Here are some excerpts:

1. Scarcity under a price system

“The reason why there is inherent scarcity is not because of physical restraints in the territorial base, according to the economist, but has more to do with the consumer demand. The assumption is that all demands are equal, that for example the needs of a single mother in a favela in Saõ Paolo in Brazil, is equal to Jay Leno’s wants of a 611th Chrysler with gold plates from year 1958.

Thus, relative scarcity according to the economist will always be absolute.”

2. Ownership vs. Usership

“Ownership is by its very nature exclusive. It means that you, granted by society or by your own strength (given if you live in an area plagued by social chaos) holds a physical object, a bit of land or a privilege, and that you have the right to interfere and punish people who also are trying to use that property.

Of course, there is a gray zone between usership and ownership. Sport clubs do not for example allow people who are not members of the group use their equipment. It is therefore sane to speak about a grade-scale characterised by exclusivity. We are not implying that exclusivity is inherently bad either, even though it could be used to discriminate against people (the discrimination is inherently unacceptable if based on factors which the person herself could not affect, like ethnic origin or gender).”

During my last lecture tour in the US, I was particularly challenged by my host and co-organizer of the tour, Daniel Arraya, about my ‘neo-feudal’ scenario, which expects any P2P society to be much more localized but connected globally through open design communities.

Daniel called this vision ‘romantic’ and anti-global, based on ignoring the strong trends towards continuing globalization.

Here then is an effort to explain why I came to this conclusion as a likely current and future trend.

First of all I would like to stress that my scenario is not an either/or scenario, i.e. a form of localization that is in some way totally opposed to globalization.

However, I think that classic globalization, of the kind we have seen since 1989, is not sustainable.

First of all, it was based on the integration into world capitalism of ‘new’ areas, such as Eastern Europe and China, a process well under way and that is not ‘infinite’.

More seriously, it was based on cheap transportation based on cheap energy, and on cheap labour (again Chinese and East-European). Because of Peak Oil, any strategy that is based on cheap energy and cheap transportation is doomed to be valid only for a short time; and cheap labour is undermined by the very success and maturation of the integration process.

All of these trends ‘objectively’ threaten globalization as we know it.

More seriously however is the problem of global warming and the carbon footprint of current processes of industrialization, most simply put, we no longer have the global resources that would allow countries like China and India to reach current Western levels. We have reached, or are reaching, or will soon reach, a crisis of ‘extensive’ globalization. New forms of globalization may be possible, but no longer on that same basis. I expect that is we recover from the current crisis, we will see a resurgence of regional blocs, and more inter-regional trade within Asia, within Latin-America, etc.. and less ‘between the continents’.

Peak Credit, the current meltdown of the financial system, will also severely curtail the flow of excess money to ‘emerging countries’ and they will have to rely more on ‘internal’ resources.
These are all ‘negative’ trends making current globalization unsustainable.

There are also long-term technological trends that make localization more interesting as a strategy.
In my opinion, the trend is towards a ‘miniaturization’ of the means of production. Physical capital goods are becoming smaller, more decentralized and distributed. Therefore, barriers to entry by smaller players are going down, giving opportunities for more localized production using cheaper and more versatile machinery.

Think of rapid tooling and manufacturing, desktop manufacturing and mail order machining, up to personal fabrication and 3D printing as all pointing to the same direction. Parallell post Peak-Credit developments towards social lending and mutual credit, have a similar effect on the availability of more distributed finance.

Finally the emergence of open and share design communities, of open and free hardware combined with ‘built-only capitalism’, which have a different logic regarding the type of machinery that can and will be developed, will go in the direction of more modular, granular manufacturing.

We should also be sensitive to cultural changes, not just ‘negatively’ in a rise of protectionist feelings and measures, but also positively as a desire to eat more local foods, to buy more locally produced products, even the growing use of local and regional currencies which keep more of the economic flows within certain regions. As far as I can ascertain this is a strong and growing trend that is noticeable in many western countries, and perhaps even outside of it.

Therefore, even as some aspects of globalization may continue, there will be parallel with it a growth of localization, and to the degree that the first one enters into more serious crisis for the combination of reasons cite above, this will strengthen the need for more localized alternatives.

I want to stress that this is not a romantic, nor a regressive or ‘survivalist’ vision. The kind of localization that I foresee, is not just a retreat to the local, but a positive choice to combine more local physicial production, with global interconnectedness, with global tinkering and open design communities.

The physical production can be more local, but the global intellectual,c ultural and scientific exchange that has become possible through global internet infrastructures, is not going to disappear, and is a lot more sustainable than the current form of physical globalization.

For those new to P2P Theory, the basic essay I recommend is still the one at CTheory.

But the main, book-length, manuscript, is P2P and Human Evolution, which exists in various iterations which had been downloaded about 30,000 times when I checked it last time around 6 month ago.

The first, and shortest, essay version of it, was written for Integral World, the site dedicated to a critical evaluation of Ken Wilber and Integral Theory, maintained by the wonderful Frank Visser.

It is quite different from the later versions because it was written explicitely for the integral community.

Frank just wrote me that: Your P2P essay on Integral World has rocketed to the top of the charts.

He wondered if I had any explanation for this ’sudden’ success. I haven’t, beyond the fact that there is a general increase in the interest of the ideas of the P2P Foundation.

In any case, for those interested in more, I have compiled a list of my essays that are available online in various places, and may deal with more specific subject areas, such as politics and spirituality.

You can find it here.

Commons advocate David Bollier attended one of my lectures recently, in Amherst, Massachusetts, and made a great summary with commentary of my presentation, which I think is very readable and does justice to what I said. It’s great to have an audience like David, who readily understands what I’m trying to convey.

As background, he refers to the slideshare presentation.

David Bollier:

“One of the great gifts of distributed networks is their ability to give people their own agency and choice. People can undertake all sorts of activities without permission from “gatekeepers” or institutions. They can just do things themselves. On the Internet, everyone’s talents matter, said Bauwens. He quoted Jorge Ferrer and his “theory of equipotentiality,” that “people [in a p2p environment] would experience others as equals in the sense of their being both superior and inferior to themselves in varying skills and areas of endeavor (intellectually, emotionally, artistically, mechanically, interpersonally, and so forth), but with none of those skills being absolutely higher or better than others…”

This is the general vision of p2p that Bauwens outlined: a bracing vision indeed! Skeptics can clearly raises many legitimate questions, some that have possible answers, and others that only time can resolve. But Bauwens’ vision of the p2p future has the virtue of explaining many existing trends in online commons that otherwise don’t make much sense within the neoliberal economic paradigm.”

Ch 2. The Ethical Economy is Already Here:

This chapter analyses a number of pertinent contemporary phenomena, like knowledge and brand management, the problem of ‘intangibles’ and the increasing recourse to user led innovation and other forms of Open Business, to argue that, at least in this cutting edge manifestations, the contemporary information economy is no longer ‘capitalist’ in the strict sense of that term . Instead corporations depend ever more on a different economy, an ‘ethical economy’ that depends on a different value logic. In this ‘ethical economy’ what creates value is not primarily investments of scarce productive resources (like labour and machines) but the ability to construct durable and significant social relations: strong links in a world of abundant weak links. Ethics in this sense creates value in three ways: by reducing the complexity of hyper-complex global value chains; by attracting ‘free labour’ from actors external to the firm, like consumers and other stakeholders and by offering an immaterial extra that sets of products form competitors with virtually indistinguishable offers of price and quality. In conclusion, the chapter suggests that the current financial crisis can be traced to an inability to correctly value the presence of such ethical values within the monetary economy.

Download it at www.ethicaleconomy.com

Book: Douglas Schuler. Liberating Voices: A Pattern Language for Communication Revolution. MIT Press, 2008

We continue and conclude our treatment of the book about patterns for social liberation, with a second excerpt on Public Domain Characters, provided by the author Douglas Schuler.

Douglas Schuler:

“Public Domain Characters (John Thomas and Douglas Schuler) is discussed in terms of a shared project. It builds on some of the insights of David Bollier’s pattern, by asserting that certain core factors of humankind’s legacy should not be killed off by unchecked “market forces.” Insofar as our stories represent aspects of our real and imagined selves, from all epochs and regions, when our characters go extinct — or are commandeered by corporations, parts of our collective soul becomes extinct as well. Again, as with the other patterns, this pattern begins with its number, title, introductory graphic (not required), and problem statement.

Problem:

Stories are an ancient and still powerful technique for people to create and share knowledge across temporal and geographical boundaries. Stories may be conceptualized as having three major dimensions: character, plot, and environment. Traditionally societies have used and shared all of these dimensions. Today, in an effort to make the rich and powerful yet richer and more powerful, the natural processes of creating, sharing, and building on stories have been subverted into a process of claiming the world of stories as private property. This limits artistic creativity and stunts the growth of collective wisdom.

This book concentrates on communication as a crucial arena in the battle for equality and justice. Communication is key to any collective enterprise, and it is for that reason that we invite you to the communication revolution that is already yours to win. Our only request is that you acknowledge and take seriously your role as an active participant. This is a diffuse and distributed movement. It needs leaders and followers, and people in this work frequently shift in and out of both roles. Everybody is needed in this struggle as we work to liberate the voices, and the thoughts and actions, of people around the world as humankind lurches warily and ill prepared into the uncertainties of the century that has just begun.”

References and Links

Alexander, Christoper Ishikawa, Sara and Silverstein, Murray (1977). A Pattern Language: Towns, Buildings, Construction. New York, NY: Oxford University Press.

Knowledge Socialization (Undated). Prototypes. http://www.research.ibm.com/knowsoc/prototypes_index.html Schuler, Douglas (2008). Liberating Voices: A Pattern Language for Communication Revolution. Cambridge, MA: MIT Press.

See also the links:

* Public Sphere Project, http://www.publicsphereproject.org/

* Liberating Voices! A Pattern Language for Communication Revolution (project), http://www.publicsphereproject.org/patterns/

* Liberating Voices! A Pattern Language for Communication Revolution (book), http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=11601