How to craft a collaborative economy for the 99%

Faircoop _

Towards a second wave of world-changing hacks

In recent years, the collaborative economy has been growing exponentially , reaching a stage of co-dependency with the emerging new forms of the for-profit economy, which we have described in our recent book, ‘Network Society and Four Scenarios for the Collaborative Economy‘. The new ‘netarchical’ (= net-archy, the hierachy of the network) form of capital, is no longer investing in its own production through the hiring of labour, and making products that it sells on the market, but, as Google, Facebook and other platform owners show, is directly capturing profits from the free cooperation and contributions of the 99%. While it may seem a good thing for users that platforms are being built ‘for free’, or that buyers an sellers can directly connect with each other for a fee, it is also very problematic as it creates a deep value crisis, not just for the increasingly precarious workforce, but also for capitalism itself. Indeed, how can we imagine a successful capitalism, that produces products that it can no longer sell, because an increasing number of contributors are no longer paid for their value creation ? Thus today, after an increasing exodus of especially young people out of the system of paid labor for capital, the social tensions are not just between salaried labor and capital, but increasingly, between peer producers and netarchical platform owners.

The search for alternatives is on, and more and more citizens and young knowledge workers are looking to build an alternative economy where they can make a livelihood around their contributions to the shared commons that are the heart of the new economy. Obviously, this new ‘hacker’ working class has its own approaches, that are very different from the traditional labor movement, and often takes the form of ‘hacks’, i.e. subversive tweaks to the existing system which hijack a system for contrary purposes.

The most famous hack was of course the hack that created the open and shared knowledge economy itself, and which has now reached, according to the Fair Use economy report, one-sixth of GDP in the U.S. alone. This hack, by Richard Stallman and others, took the form of licenses that used the very enclosures of knowledge facilitated by Intellectual Property legislation, to free knowledge, code and design. Through the General Public License, massive commons of shared knowledge was created, creating huge economic streams around it. However, this hack has created a paradoxical effect. Indeed, the more shareable the commons, the more capitalistic the economy which is built around it. Thus the Linux economy is at least 75% commercial, and dominated by large firms such as IBM. So, in this co-dependency between netarchical capital and the commons, we have a ‘communism’ of capital, in which the use value created by the commoners creates exchange value for the private for-profit economy. Is there an alternative to this ‘liberal communism’? Is there a new hack on the horizon?

We believe there is, and this requires a new type of license, which are no longer fully shareable licenses, but licenses based on ‘stronger’ reciprocity. Thus, along with others, we have proposed ‘Commons-based Reciprocity Licenses’, which are open for use by common good institutions, nonprofits, and for-profits that contribute, but ask for license fees or other contributions from for-profits that do no contribute back to the commons. The first iteration of such a license is the ‘Peer Production License’, already in use by the P2P Foundation, Guerilla Translation, and other P2P economy entities, and which was developed by ‘venture communist’ Dmytri Kleiner.

A second great historical hack is of course the hack of currency. As an alternative to the nationally sovereign currencies whose compound interest requirements are destroying our economies, the non-interest based Bitcoin cryptocurrency was developed, which can be peer produced by participating computers (‘mining’), has an open source code, and a thriving global hacker community to support it. However, Bitcoin is also a hyper-capitalist currency, with a higher inequality coefficient than sovereign money, mmonopolized mining, and a deflationary design which leads to rent extraction of newcomers by early adopters. Hence, Bitcoin will be mostly a tool for netarchical capital as well, enriching a new elite within the hacker class. Here also, we need to hack the first hack, just as we needed to do with the GPL. Thus the initiative of fair.coop, a global network instituted by the Catalonia Integral Cooperative, in cooperation with the P2P Foundation and others, to institute the first global cryptocurrency for the commons. Fair.coop uses the rent extraction model of cryptocurrencies, by buying up a failed egalitarian bitcoin fork, called Faircoin, but gifts this currency to a global coalition of open cooperatives, i.e. cooperatives and other ethical enterprises that create positive externalities and co-produce commons, creating livelihoods for the commoners. On the basis of the increasing market value of Faircoin, a commons-supporting capital currency is created, on top of which interest mutual credit systems will be built, supported by commons-based collateral.

There are just two of the main hacks1 that are being developed to create leverage for an emerging prefigurative commons economy, and offers an alternative to the hyper-extractive netarchical model.

The first wave of hacks was radically liberal, it is time for a second wave, where the values of equity and fairness are added to the core value of freedom, liberating commons-oriented peer production from its capture by netarchical capital.

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1(At the P2P Foundation, we use Loomio software to hack hierarchical governance and are looking at new models like the Fairshares model to hack property models)

4 Comments How to craft a collaborative economy for the 99%

  1. AvatarMatthew Slater

    >On the basis of the increasing market value of Faircoin, a commons-supporting capital currency is created.
    This sounds like Faircoin hopes to increase its value through speculation more than through puttings valuable goods and services in the marketplace. This is how bitcoin went from 0 to $1200 and back to umm $400. The value of the currency should reflect the goods and services available and the velocity otherwise people can get hurt.

  2. AvatarDavid Week

    “The most famous hack was of course the hack that created the open source economy itself, and which has now reached, according to the Fair Use economy report, one-sixth of GDP in the U.S. alone. This hack, by Richard Stallman and others, took the form of licenses that used the very enclosures of knowledge facilitated by Intellectual Property legislation, to free knowledge, code and design. Through the General Public License, massive commons of shared knowledge was created, creating huge economic streams around it.”

    The Fair Use economy report has nothing to do with the GPL, which is not even mentioned in the report. The Fair Use report talks about industries dependent on fair use provisions of the US copyright act which was passed in 1976. The GPL wasn’t invented until 1989. Fair use pre-existed GPL, and underlies many uses (discussed in the paper) which do not make use of GPL.

    What percentage of the economy is actually attributable to the GPL and it’s offspring? According to this report, the total value-add of the open-source software to the European economy is 116bn euro. http://carlodaffara.conecta.it/the-economic-value-of-open-source-software/
    This includes efficiencies, so is calculated on a broader basis of value than the GDP which only counts transactions.

    The total GDP of the EU economy is 13070bn euro.
    http://en.wikipedia.org/wiki/Economy_of_the_European_Union

    Dividing one by the other is 1/112th. There may be some non-software uses of the GPL. At the same time, Daffara’s valuation of the economic contribution of open-source is more generous than the valuation method used in calculating the GDP.

    I personally think it unlikely that the open-source economy is therefore even 1% of the total economy.

  3. AvatarMichel Bauwens

    yes, the fair use economy report calculates all shared knowledge, not just GPL driven, and GPL is but one means to create a open knowledge economy; a particular problem is that such an economy, through its effiency, drives out value from its own economic sector, but makes resources available for other activites; by destroying rental income, it frees that investment. I’ve read in the past that $1m of free software replaced 64m of proprietary software.

    The faircoin will be exclusively used as an investment currency for fair and open coops and therefore will exclude speculative activity.

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