Do we need p2p to help markets deal with complexity, or does p2p get us beyond markets?

John Robb launched the following debate:

“Modern economic systems were first organized by bureaucracy and scientific management. The limits of the complexity it could organize was limited, as we saw with the USSR/China. Next, we’ve seen market/bureaucratic hybrids develop (the US/China model). Those hit the limit recently, as we saw in the latest series of market malfunctions. Markets — hub and spoke networks — just can’t handle the complexity of the modern economy. What’s next after this model fails? P2P economic networks. Only way to scale way beyond where we are now in terms of complexity. However, to participate, you need to be a peer.”

Some responses:

Franz Naharda: I don’t agree. Nobody and nothing can handle the complexity of the networks that global monetisation created. That’s why we need to turn the other way, localize economy and globalize shared knowledge.

John Robb: I agree. That’s hopefully what I’m saying in the above. My contention is that a P2P network, where local peers connect loosely can replace a broken bureaucratic and market allocation system.

Franz Nahrada Yes but its a multidimensional change – it needs re-installment of the commons, limits to money, a different technology, a shift in reconstruction of local infrastructures and so on.

Fabio Barone: Let’s see if I can phrase this. I agree with all what you both are saying. But let’s go an inch deeper. Wouldn’t we still want trains? Architectural wonders? Were the Inca “local” in their reach, reigning over vast stretches of South America? While I have no doubts about “local” primarily, what are your views on where we want to go? My view is that bioregional (rather than local) would be a first “contraction” after the global frenzy and madness. But I see those as seeds for a global eco-civilization – something p2p as “mode of organization” would be paramount for.

Michel Bauwens: Do markets always have to be hub and spoke networkrs, can we have p2p markets? It also misses the important point that emerging peer production has a core of non-market mechanisms, with markets operating around the commons where the knowledge, code or design is deposited; moreover, I believe that the mutual coordination and stigmergy that is characteristic of immaterial production projects, will expand to material production through open supply chains and open book management, further diminishing the relative part of market dynamics.

Chris Cook: Not only is it quite possible and straightforward to achieve networked and dis-intermediated markets, at a time that risk capital is in increasingly short supply IT IS IN THE INTEREST OF THE RISK INTERMEDIARIES THEMSELVES to make the transition to service provision because their requirement for capital is limited to operating costs, since market price risk is with the end users.

In fact, since 2008 that is precisely what we have seen as risk intermediary banks have sold a new generation of quasi-equity funds (ETFs; Index Funds, ETPs, REITs etc etc) where the market price risk is with the investors.

What this flood of dollars into equities, precious metals and commodities – ie anything but dollars – achieved was to inflate correlated bubbles to the benefit of producers and companies.

So in a cosmic irony we have seen risk averse investors – NOT the speculators who get the blame, and who only ever cause short term spikes in price, downwards OR upwards – causing the very inflation they aimed to avoid, and exposing themselves to market price risk they were blithely unaware they were taking.

These bubbles will end, and the markets will then move to the next ‘adjacent possible’ which is completely dis-intermediated ‘Peer to Peer’ and ‘Peer to Asset’ markets where credit risk as well as market price risk are dis-intermediated.

The structures and instruments which enable this transition pre-date the banking system,and are already in use, albeit not widely appreciated.”

(source)

1 Comment Do we need p2p to help markets deal with complexity, or does p2p get us beyond markets?

  1. AvatarApostolis Xekoukoulotakis

    I cant see complexity as a necessary part of the economy, rather as a consequence of a failing system.

    P2P means equal participation to the economy. In that regard, it can not exist without having equal knowledge to information, technologies and capital.
    So the open source movement is necessary for p2p to work but it is not enough. Equal access to capital is required.

    p2p needs not be local but now it is. the P2P movement has to find a way to scale trust globally.

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