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The anti-democratic and anti-social design foundations of the Euro

photo of Michel Bauwens

Michel Bauwens
7th August 2015


“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

Excerpted from an interview with Greg Palast:

“Mundell, who taught at Columbia University, won the Nobel Prize for his writings on currency, and what’s interesting is that he won the Nobel Prize for the theory of optimum currency areas, the theory that nations should join currency unions when they have similar economies. Therefore, agriculture economies should have a joint currency; he thought the US and Canada [should] have two different currencies, east-west, not Canadian-American, but the western US should have one currency with Canada, and eastern Canada and the eastern US should have one currency. In other words, he believed that a combination, like putting Germany in the same currency zone as France and Spain, would be ridiculous; it’s a violation of his core theory through which he won the Nobel Prize.

Why is this important? This is the very same guy who is the inventor, you could say, of the euro, which he called the “europa” – that there should be one single common currency for all of Europe, damn the optimum currency theory. Now why would someone suggest a currency that is exactly the opposite of everything he’s taught? I spoke to him about this, and he said that it has nothing to do with creating a good currency. It has everything to do with changing the politics of Europe. He was very, very right-wing. He is the creator of another economic theory, which wouldn’t get him the Nobel Prize; in fact, it’s called “voodoo economics,” supply-side economics. That is, the more you cut taxes, the more tax revenue you get. The more deregulation of business you get, the better your economy – and if you deregulated the banks, there would be less risk in the banking system. All of those supply-side systems, which we call “Thatcher economics,” “Reaganomics,” after Ronald Reagan, it’s all been discredited; it’s all called “voodoo economics,” and yet, that’s what the euro is. It’s an instrument of voodoo economics.

“This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state.”

By having one currency for Europe, and with it, a rule – remember, with the euro comes the rule that you cannot have more than a 3 percent deficit or 60 percent of debt compared to your gross domestic product. That means that no nation, because you don’t have your own currency, has any control over monetary policy or fiscal policy or currency exchange rates. Basically, you lose complete control of your financial system, and he said, “It gets rid of the meddling of parliaments and congresses and governments to fool around with fiscal and economic policy.” What he meant is that democracy gets in the way of good economics.

So, what happens when you get rid of democracy? He says, “That leaves government only one choice,” the only choice when there’s a crisis, as we have now. When there is a crisis, governments will eliminate labor union power, will eliminate government regulation, will privatize industry, power companies, water companies, because they’ll need to pay off their debts, and basically, the power of government and labor unions, the working class, those powers will be eliminated, and wages will fall. In order to maintain employment, governments will allow wages to fall and regulations to die.

In other words, this crisis, in Mundell’s terms, is what he had planned and what the creators of the euro had planned. Crisis is part of the euro plan, a crisis that would cause a realignment between business and labor in Europe, and that the welfare state of Europe will be destroyed, and that’s exactly what has happened. What you’re seeing now, with the collapse of the southern European economies, including Greece and Spain and Portugal, what’s happening here was part of the euro plan. This was not a mistake; this was not something that they tried to avoid. It is what they wanted to happen, a crisis that would cause a realignment of political power and the end of the European welfare state. By the way, the end of the European welfare state caused by a crisis is a quote from Mundell. That’s exactly what he told me and I have it on tape.”

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Posted in Anti-P2P, P2P Money, P2P Public Policy | 1 Comment »

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 »

Video of the day: Dmytri Kleiner on Germany’s treason scandal

photo of Stacco Troncoso

Stacco Troncoso
3rd August 2015


Activist and software developer Dmytri Kleiner gives his perspective on Germany’s treason scandal to RT International.

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Posted in Activism, Anti-P2P, Collective Intelligence, Culture & Ideas, Empire, Featured Video, Videos | No Comments »

The neoliberal background to the Greek crisis

photo of Michel Bauwens

Michel Bauwens
16th July 2015


The crushing of political choice is not a side-effect of this utopian belief system but a necessary component. Neoliberalism is inherently incompatible with democracy, as people will always rebel against the austerity and fiscal tyranny it prescribes. Something has to give, and it must be the people. This is the true road to serfdom: disinventing democracy on behalf of the elite.

Excerpted from George Monbiot:

“The IMF is controlled by the rich, and governs the poor on their behalf. It’s now doing to Greece what it has done to one poor nation after another, from Argentina to Zambia. Its structural adjustment programmes have forced scores of elected governments to dismantle public spending, destroying health, education and all the means by which the wretched of the earth might improve their lives.

The same programme is imposed regardless of circumstance: every country the IMF colonises must place the control of inflation ahead of other economic objectives; immediately remove barriers to trade and the flow of capital; liberalise its banking system; reduce government spending on everything bar debt repayments; and privatise assets that can be sold to foreign investors.

Using the threat of its self-fulfilling prophecy (it warns the financial markets that countries that don’t submit to its demands are doomed), it has forced governments to abandon progressive policies. Almost single-handedly, it engineered the 1997 Asian financial crisis: by forcing governments to remove capital controls, it opened currencies to attack by financial speculators. Only countries such as Malaysia and China, which refused to cave in, escaped.

Consider the European Central Bank. Like most other central banks, it enjoys “political independence”. This does not mean that it is free from politics, only that it is free from democracy. It is ruled instead by the financial sector, whose interests it is constitutionally obliged to champion through its inflation target of around 2%. Ever mindful of where power lies, it has exceeded this mandate, inflicting deflation and epic unemployment on poorer members of the eurozone.

The Maastricht treaty, establishing the European Union and the euro, was built on a lethal delusion: a belief that the ECB could provide the only common economic governance that monetary union required. It arose from an extreme version of market fundamentalism: if inflation were kept low, its authors imagined, the magic of the markets would resolve all other social and economic problems, making politics redundant. Those sober, suited, serious people, who now pronounce themselves the only adults in the room, turn out to be demented utopian fantasists, votaries of a fanatical economic cult.

Those sober, suited, serious people turn out to be demented utopian fantasists, votaries of a fanatical economic cult
All this is but a recent chapter in the long tradition of subordinating human welfare to financial power. The brutal austerity imposed on Greece is mild compared with earlier versions. Take the 19th century Irish and Indian famines, both exacerbated (in the second case caused) by the doctrine of laissez-faire, which we now know as market fundamentalism or neoliberalism.

In Ireland’s case, one eighth of the population was killed – one could almost say murdered– in the late 1840s, partly by the British refusal to distribute food, to prohibit the export of grain or provide effective poor relief. Such policies offended the holy doctrine of laissez-faire economics that nothing should stay the market’s invisible hand.

When drought struck India in 1877 and 1878, the British imperial government insisted on exporting record amounts of grain, precipitating a famine that killed millions. The Anti-Charitable Contributions Act of 1877 prohibited “at the pain of imprisonment private relief donations that potentially interfered with the market fixing of grain prices”. The only relief permitted was forced work in labour camps, in which less food was provided than to the inmates of Buchenwald. Monthly mortality in these camps in 1877 was equivalent to an annual rate of 94%.

As Karl Polanyi argued in The Great Transformation, the gold standard – the self-regulating system at the heart of laissez-faire economics – prevented governments in the 19th and early 20th centuries from raising public spending or stimulating employment. It obliged them to keep the majority poor while the rich enjoyed a gilded age. Few means of containing public discontent were available, other than sucking wealth from the colonies and promoting aggressive nationalism. This was one of the factors that contributed to the first world war. The resumption of the gold standard by many nations after the war exacerbated the Great Depression, preventing central banks from increasing the money supply and funding deficits. You might have hoped that European governments would remember the results.

Today equivalents to the gold standard – inflexible commitments to austerity – abound. In December 2011 the European Council agreed a new fiscal compact, imposing on all members of the eurozone a rule that “government budgets shall be balanced or in surplus”. This rule, which had to be transcribed into national law, would “contain an automatic correction mechanism that shall be triggered in the event of deviation.” This helps to explain the seigneurial horror with which the troika’s unelected technocrats have greeted the resurgence of democracy in Greece. Hadn’t they ensured that choice was illegal? Such diktats mean the only possible democratic outcome in Europe is now the collapse of the euro: like it or not, all else is slow-burning tyranny.

It is hard for those of us on the left to admit, but Margaret Thatcher saved the UK from this despotism. European monetary union, she predicted, would ensure that the poorer countries must not be bailed out, “which would devastate their inefficient economies.”

But only, it seems, for her party to supplant it with a homegrown tyranny. George Osborne’s proposed legal commitment to a budgetary surplus exceeds that of the eurozone rule. Labour’s promised budget responsibility lock, though milder, had a similar intent. In all cases governments deny themselves the possibility of change. In other words, they pledge to thwart democracy. So it has been for the past two centuries, with the exception of the 30-year Keynesian respite.

The crushing of political choice is not a side-effect of this utopian belief system but a necessary component. Neoliberalism is inherently incompatible with democracy, as people will always rebel against the austerity and fiscal tyranny it prescribes. Something has to give, and it must be the people. This is the true road to serfdom: disinventing democracy on behalf of the elite.

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Posted in Anti-P2P, Empire, P2P Hierarchy Theory, Politics | 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 »

The Corporation: Full Length Documentary

photo of Øyvind Holmstad

Øyvind Holmstad
30th April 2015


The part about the enclosure of the commons starts at 57:57.

“The Corporation is a 2003 Canadian documentary film written by Joel Bakan, and directed by Mark Achbar and Jennifer Abbott. The documentary is critical of the modern-day corporation, considering its legal status as a class of person and evaluating its behaviour towards society and the world at large as a psychiatrist might evaluate an ordinary person. This is explored through specific examples. The Corporation has been shown worldwide, on television, and via DVD, file sharing, and free download. Bakan wrote the book, The Corporation: The Pathological Pursuit of Profit and Power, during the filming of the documentary.

The documentary shows the development of the contemporary business corporation, from a legal entity that originated as a government-chartered institution meant to effect specific public functions, to the rise of the modern commercial institution entitled to most of the legal rights of a person. One theme is its assessment as a “personality”, as a result of an 1886 case in the United States Supreme Court in which a statement by Chief Justice Morrison R. Waite[nb 1] led to corporations as “persons” having the same rights as human beings, based on the Fourteenth Amendment to the United States Constitution. The film’s assessment is effected via the diagnostic criteria in the DSM-IV; Robert Hare, a University of British Columbia psychology professor and a consultant to the FBI, compares the profile of the contemporary profitable business corporation to that of a clinically-diagnosed psychopath. The documentary concentrates mostly upon North American corporations, especially those of the United States.

The film is in vignettes examining and criticizing corporate business practices. It establishes parallels between the way corporations are systematically compelled to behave and the DSM-IV’s symptoms of psychopathy, i.e. callous disregard for the feelings of other people, the incapacity to maintain human relationships, reckless disregard for the safety of others, deceitfulness (continual lying to deceive for profit), the incapacity to experience guilt, and the failure to conform to social norms and respect for the law.

Topics addressed include the Business Plot, where in 1933, the popular General Smedley Butler exposed a corporate plot against then U.S. President Franklin Roosevelt; the tragedy of the commons; Dwight D. Eisenhower’s warning people to beware of the rising military-industrial complex; economic externalities; suppression of an investigative news story about Bovine Growth Hormone on a Fox News Channel affiliate television station; the invention of the soft drink Fanta by the Coca-Cola Company due to the trade embargo on Nazi Germany; the alleged role of IBM in the Nazi holocaust (see IBM and the Holocaust); the Cochabamba protests of 2000 brought on by the privatization of Bolivia’s municipal water supply by the Bechtel Corporation; and in general themes of corporate social responsibility, the notion of limited liability, the corporation as a psychopath, and the corporation as a person.

Provoking, witty, stylish and sweepingly informative, THE CORPORATION explores the nature and spectacular rise of the dominant institution of our time. Part film and part movement, The Corporation is transforming audiences and dazzling critics with its insightful and compelling analysis. Taking its status as a legal “person” to the logical conclusion, the film puts the corporation on the psychiatrist’s couch to ask “What kind of person is it?” The Corporation includes interviews with 40 corporate insiders and critics – including Noam Chomsky, Naomi Klein, Milton Friedman, Howard Zinn, Vandana Shiva and Michael Moore – plus true confessions, case studies and strategies for change.

Along with the groundbreaking 145-minute theatrical version of the film, the two-disc DVD has eight hours of never-before-seen footage. In addition to two commentary tracks, deleted scenes, and Q’s-and-A’s, 165 new clips and updates are sorted “by person” and “by topic.” Get the details you want to know on the issues you care about. Then, check out the web links for follow-up research and action.”

Further reading:

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Posted in Anti-P2P, Videos | 1 Comment »

Reclaiming the ‘real’ sharing economy

photo of Rajesh Makwana

Rajesh Makwana
25th April 2015


Romantic Heart from Love Seeds
What does it actually mean ‘to share’? This might seem like an obvious question, but the concept of sharing is increasingly being debated, discussed and redefined in our modern age of rapid technological change and planetary crises.


The rise of the sharing economy in recent years has given particular impetus to this debate, in which many academics are now analysing how sharing is a conflated economical concept that has been co-opted by corporate interests. It’s interesting to observe how savvy young progressives are resisting against this trend, while many social activists and environmentalists are beginning to chart a new direction for (and entirely new understanding of) the sharing economy – not as a profit-oriented business model, but as a potentially transformative mode of social exchange and economic activity.

For example, a community-building innovator based in New York, Lee-Sean Huang, has coined the term #WeWashing to help identify and critique the abuse of terms like “sharing”, “community” and “we”, which are often debased through online technology platforms or manipulated by corporate marketing techniques. Yet these words are meaningful, writes Huang, and “reminders that we are part of something greater than ourselves. As community members and citizens, we share common bonds and common interests. We are more than consumers.” Huang therefore argues that we need to “preserve the meaning of altruistic sharing and the bonds of community beyond narrowly-defined economic transactions”.

In a similar vein, the environmental news and commentary site Grist recently published a new series on “the real sharing economy”, asserting that sharing “has been appropriated and stripped of all meaning by people trying to sell you things, much like sustainability was.” In contrast, ‘real’ sharing goes far beyond “profit-seeking smartphone apps for unregulated taxi services (Uber) and vacation rentals (Airbnb)”, and could allow “humanity as a whole to consume less, hopefully shrinking our economy’s voracious appetite for materials and energy.”

An article by Sam Bliss at Grist gives a neat overview of how sharing can help us achieve economic degrowth in consumption and production, while “maintaining quality of life, or even improving it with more social interactions and stronger community relationships”. A real sharing enterprise, he argues, is not driven by profits for shareholders but wider concerns of equity, fairness and worker participation. He also acknowledges the potential of sharing wealth and power on a bigger scale, which is the only way to decrease global inequality, achieve true social justice, or fix a broken political system dominated by vested interests.

He even goes on to cite STWR’s report that explains how, in his words, “sharing can be the idea that brings together social, economic, and ecological movements in a grand alliance. Imagine Black Lives Matter, the fossil fuel divestment crusade, and the smoldering embers of Occupy joining forces to fight for a real sharing economy.”

No doubt the divergent perspectives on economic sharing will be openly debated at the upcoming Ouishare Fest 2015 in Paris, which has a wide variety of speakers from Charles Eisenstein, Michel Bauwens and Rob Hopkins to Lisa Gansky, Arun Sundararajan and Jeremiah Owyang (as well as a panel discussion with STWR on the environmental impacts of collaborative consumption – not to be missed for anyone attending!).

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Posted in Anti-P2P, Cognitive Capitalism, Commons, Culture & Ideas, Economy and Business, Ethical Economy, Original Content, P2P Business Models, P2P Collaboration, Politics, Sharing | No Comments »

How vehicle makers are trying to lock out farmers and drivers from ownership

photo of Michel Bauwens

Michel Bauwens
24th April 2015


Excerpted from Kyle Wiens:

“JOHN Deere and General Motors want to eviscerate the notion of ownership. Sure, we pay for their vehicles. But we don’t own them. Not according to their corporate lawyers, anyway.

In a particularly spectacular display of corporate delusion, John Deere—the world’s largest agricultural machinery maker —told the Copyright Office that farmers don’t own their tractors. Because computer code snakes through the DNA of modern tractors, farmers receive “an implied license for the life of the vehicle to operate the vehicle.”

It’s John Deere’s tractor, folks. You’re just driving it.

Several manufacturers recently submitted similar comments to the Copyright Office under an inquiry into the Digital Millennium Copyright Act. DMCA is a vast 1998 copyright law that (among other things) governs the blurry line between software and hardware. The Copyright Office, after reading the comments and holding a hearing, will decide in July which high-tech devices we can modify, hack, and repair—and decide whether John Deere’s twisted vision of ownership will become a reality.

Over the last two decades, manufacturers have used the DMCA to argue that consumers do not own the software underpinning the products they buy—things like smartphones, computers, coffeemakers, cars, and, yes, even tractors. So, Old MacDonald has a tractor, but he owns a massive barn ornament, because the manufacturer holds the rights to the programming that makes it run.

(This is an important issue for farmers: a neighbor, Kerry Adams, hasn’t been able to fix an expensive transplanter because he doesn’t have access to the diagnostic software he needs. He’s not alone: many farmers are opting for older, computer-free equipment.)

Over the last two decades, manufacturers have used the DMCA to argue that consumers do not own the software that powers the products they buy.

In recent years, some companies have even leveraged the DMCA to stop owners from modifying the programming on those products. This means you can’t strip DRM off smart kitty litter boxes, install custom software on your iPad, or alter the calibration on a tractor’s engine. Not without potentially running afoul of the DMCA.

What does any of that have to do with copyright? Owners, tinkerers, and homebrew “hackers” must copy programming so they can modify it. Product makers don’t like people messing with their stuff, so some manufacturers place digital locks over software. Breaking the lock, making the copy, and changing something could be construed as a violation of copyright law.

And that’s how manufacturers turn tinkerers into “pirates”—even if said “pirates” aren’t circulating illegal copies of anything. Makes sense, right? Yeah, not to me either.

It makes sense to John Deere: The company argues that allowing people to alter the software—even for the purpose of repair—would “make it possible for pirates, third-party developers, and less innovative competitors to free-ride off the creativity, unique expression and ingenuity of vehicle software.”

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Posted in Anti-P2P, Copyright/IP, P2P Manufacturing | No Comments »

Benkler on the Uber-ification of Services

photo of David Bollier

David Bollier
24th April 2015


Yochai Benkler

Harvard law professor Yochai Benkler gave attendees at the World Economic Forum in Davos a dire warning about future instability if the “Uber-ification of all services” continues.  In his intense six-minute talk, “Challenges of the Sharing Economy,” Benkler notes how open networks and collaborative production models have led to the “destabilization of the firm,” and ultimately threaten to bring about “the potential reorganization of the entire services sector.”

In light of this epochal shift, he declares, the critical question is: “Will [this shift] allow embedding economic production in the same kind of social solidarity trust models that we saw with the emergence of Wikipedia? Or will the externalization of risk onto the people formerly known as employees create severe disruption?”

The big challenge today, he argued, is that the social and the political have diverged, as demonstrated by the Occupy movement. And this leads to worrisome social pressures that the political system is disinclined to address.

I realize that Benkler must have been under a strict time limit — he was talking quite rapidly for this talk — but it sure would be nice to hear his proposed solutions for re-integrating the social and the political in functional ways, and how he proposes moving that agenda forward.  But at least the Davos crowd was alerted to this fundamental political challenge. Whether they will deign to recognize the issue and move beyond their adulation for the Uber, Airbnb and other lucrative forms of network monopoly is another matter.

While most people think that answers can only come from Washington, D.C. — FCC regs, antitrust law, etc. — rots of ruck on that, for all the obvious reasons.  I think the only effective solutions will come from P2P architectures and legal innovations that technically and legally stymie the consolidation of services by a single, dominant network player. Neither Congress, regulatory agencies or the courts are capable — politically or intellectually — of delivering satisfactory answers, I fear. The natural “power law” outcome of networks will ineluctably prevail unless some sort of intervention is made.  And if the answer is not going to involve social disruption, as Benkler warns, it’s high time that we begin to address challenges of legitimate, responsive, accountable governance in the network age.


Originally published in bollier.org

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

Ongoing Commodification of the Commons

photo of Øyvind Holmstad

Øyvind Holmstad
15th April 2015


By Stefeun. Original article at Doomstead Diner here.

Reverse Engineer kindly invited me (1) to develop here one of the comments I posted on Gail Tverberg’s blog Our Finite World. It was a link to a very good article by Cory Morningstar on her blog “The Art of Annihilation”(2).

To summarize it, she says that the non-governmental organizations, and especially the environmental activists, are in fact working for Big Corp, voluntarily or not.

In this purpose, the capitalism is trying to find new resources, as standard/traditional ones are depleting.

Here’s an excerpt from the prologue:

“(…)

It’s ironic because the divestment campaign will result (succeed) in a colossal injection of money shifting over to the very portfolios heavily invested in, thus dependent upon, the intense commodification and privatization of Earth’s last remaining forests (via REDD), water, etc. (environmental “markets“). This tour de force will be executed with cunning precision under the guise of environmental stewardship and “internalising negative externalities through appropriate pricing.”

The commodification of the commons will represent the greatest, and most cunning, coup d’état in the history of corporate dominance – a fait accompli extraordinaire of unparalleled scale, with unparalleled repercussions for humanity and all life.

Further, it matters little whether or not the money is moved from direct investments in fossil fuel corporations to so-called “socially responsible investments.” The fact of the matter is, all corporations on the planet (thus all investments on the planet) do and will continue to require massive amounts of energies (including fossil fuels) in order to continue to grow and expand ad infinitum – as required by the industrialized capitalist economic system.

The windmills and solar panels serve as the beautiful (marketing) imagery, yet they are somewhat illusory – the veneer for the commodification of the commons, which is the fundamental objective of Wall Street, the very advisers of the divestment campaign.

(…)”

Then I started looking at it in a broader view, and realized that in fact our whole economy is actually about, and based on, Commodification of the Commons.

Indeed:

– the Primary sector (agriculture, forestry, fishing and mining) takes what is “given by Nature” (i.e. for free), and exchanges it for claims on whatever has been given a price (i.e. money).

– then the Secondary sector (manufacturing) turns it into refined or consumer goods or tools, and the Tertiary sector (services) helps dispatch the stuff and information.

The cost we take into account is only the amount of energy spent for the extraction, the transformation or the distribution(3). The “real” cost of a given product is therefore the total energy embodied in it. Apart from heating or cooling it, which obviously uses thermal energy, most of the embedded energy is mechanical energy (= Work) used to move it. Wether this work is hours of human labor or barrels of oil or kWh consumed by a machine only matters for the order of magnitude.

The material itself is counted zero (!!).

Both material and energy are considered infinite (!!!).

Each and every single operation is using energy and generating waste (entropy).

The waste isn’t taken into accout and “the economy” considers that either Nature, or the Society as a whole, should take in charge the burden of recycling it or making it disappear no matter how.

The size of the dustbin must be infinite too!.

Of course most of this waste doesn’t just disappear, as it cannot quickly reintegrate the natural cycles. It isn’t manually or mechanically recycled either, even when possible, because doing it requires energy (often more than the valuable output could buy) and therefore is accounted as a net cost nobody wants to take in charge (as an example, look how successful the carbon-tax is).

This process is transforming the Earth into a huge garbage dump.

Back to the main point, what we call “the economy” is thus a process of appropriation, which first step consists in taking hold of something that primarily doesn’t belong to anybody, for a private profit(4).

We’re stealing from our environment, and in return vomit rubbish that cannot be reused neither by humans nor by Nature, unless spending huge amounts of energy or waiting several years, if not millenia. Steve Ludlum says that what we proudly call “wealth-production” is in reality an organized destruction of our real capital, that cannot be recreated. There’s no substitute, and what is gone, … is gone forever(5). The economy is a component of the natural environment, not the other way round.

Such a “steal & waste” system can work as long as sufficient resource is available for all, and requires only a reasonable effort (i.e. low energy cost) for its extraction. Not to mention the rate of waste-production that must remain low, and with high level of recyclability. In other words, the human population density and the technological level must both be very low, in order to acheive something in which equilibriums are evolving slowly enough to resemble a “steady-state”(6).

As soon as a risk of scarcity appears, the rules of property prevail and there’s a fight over the resource (arable land, fresh water, mineral ores, fossil fuels as required in bigger quantities to compensate the depletion, etc..).

These property laws are being reinforced and are becoming overwhelmingly important as we’re approaching the limits. Once the resource is depleted in a given place, we must take over areas where it is still available.It started with “this land is mine” (colonization), continued with “this subsoil is mine” (oil-wars), “this water is mine”, etc…

By the way, the ownership is progressively shifted from public to corporate (while debt flows in opposite direction), see e.g. landgrabbing(7). Big Corp is more flexible than Nations, thus better adapted to changing environmental & economic conditions.

Then, because of diminishing returns and finiteness of the planet, it becomes increasingly difficult to find new land to conquer, good seams to work, oil-fields to take over. Therefore, in an attempt to catch up with the loss of usual resource, Big Corp is currently expanding its property claims onto patents on the living, rights on species(8), intellectual property, information (big data), etc…

All these examples of new resources, enlarging the pool of valuable ones (IOW the reckless race for privatization of whatever-can-be), are aiming to compensate the decline of traditional ones, if not feed the mandatory growth.

Beyond the likely irreversible changes triggered and the increase in savage destruction caused by this process, the main problem here is that the laws of diminishing returns also apply to the energy, most of it being fossil fuels for which we don’t have any substitute nor expandable source.

So, in the end of the day, finding new “fields to mine” is pointless (not to mention dangerous), since we won’t have the sufficient energy to exploit them.

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PS about the economic system: IMHO, capitalism is undeniably speeding up the whole process, especially when financialized, but I’m not sure that another system would have given a better result in the long run, unless it would have considered that a- the resource is finite (the only net input in our system is the energy from the sun, all the rest is -or should be- recycled), b- taken into account the waste management (entropy production), and c- deeply questioned the property rules (to promote cooperation and avoid wealth concentration).

Unfortunately, such a no-growth system is an utopia, because Life is a succession of unexpected shortages, and the winner is always the one who burns most energy, according to the MEP principle (Maximum Entropy Production, aka 3rd Law of Thermodynamics, acc.to F.Roddier/R.Dewar), or the simpler MPP (Maximum Power Principle, as described by Jay Hanson in http://dieoff.org/).

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Footnotes:

(1): I discovered Our Finite World by end of 2013, that was a few months after I decided to jump off the industrial workforce because I had less and less understanding of how it worked and what I was doing there. I had already grasped parts of the story here and there, but Gail sort of opened my eyes and helped me connect many dots by clearly explaining the interactions within our complex system, which should always be considered as a whole and not studied as independant parts.
(3): I don’t consider here the financial costs. After all, capital and debt are claims on amounts of energy that has been or will (never) be consumed elsewhere.
Note that I’m talking about cost, not price. The price is a result of power struggle, and can be lower than cost in some -temporary- cases (e.g. barrel of oil today).
(4): Michael Parenti, in “Against Empire”, states it as follows:
“The essence of capitalism is to turn nature into commodities and commodities into capital. The live green earth is transformed into dead gold bricks, with luxury items for the few and toxic slag heaps for the many. The glittering mansion overlooks a vast sprawl of shanty towns, wherein a desperate, demoralized humanity is kept in line with drugs, television, and armed force.”
See http://www.goodreads.com/work/quotes/695226-against-empire ; also quoted in Cory Morningstar’s article linked at (2)
(5): I assume that most of the DD readers know Steve Ludlum better than I do (many articles and podcasts available here on the Diner).
(6): Gail Tverberg explains why a steady state isn’t realistic: http://ourfiniteworld.com/?s=steady+state
(8): speaks for itself: http://www.speciesbanking.com/
The mother-site is… drumroll here…: http://www.ecosystemmarketplace.com/
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