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Tom Atlee on the transition from economies of scale to economies of scope

photo of Michel Bauwens

Michel Bauwens
8th March 2013


Tom Atlee of the Co-Intelligence Institute has reacted to my previous article “Evolving Towards a Partner State in an Ethical Economy“.

His reaction sheds further light on the broader cultures of human production and happiness in which the shift to “economics of scope” models is embedded.

First as a reminder, my own definition:

“My short definition of EoS is very simple and should be understandable I think: “doing more with less”; and this is mainly achieved by mutualizing infrastructures, both immaterial (open source knowledge, code, design) and material (co-working, fablabs, carsharing, idle-sourcing …); for contemporary implementations we should add: using distributed machinery in distributed workplace to allow local production in microfactories, through the process of manufacturing on demand, while achieving scope through the global immaterial cooperation on both the design of the products, the design of the machinery to produce them, and even the processes through which to make both the previous aspects (ex. the xtreme manufacturing methodology of OSE/WikiSpeed).”

Tom Atlee: writes:

“ECONOMIES OF SCALE (ground economics in “growth” – i.e., efficiently produced and monetized mass commodities which leave people hungry for more and more as they produce and consume more and more). This involves making lots of stuff at a cheap per-piece rate and getting everyone to buy it all so you make a good profit (partly to pay back the infrastructure investment required to make lots of stuff cheaply and massively). Externalize costs wherever possible, so you can continually profit while degrading society and nature wherever you deem it necessary for your business. Make things that break down so people have to buy replacements. Maintain a sense of scarcity: Make people feel inadequate (intrinsically or in contrast to others) and don’t truly satisfy their deep needs, but keep them coming back to buy temporary pseudo-satisfyers (your products and services). Get people working at jobs they may not like in order to get money to buy the stuff you make, which they often buy to counter the stress they have accumulated doing their jobs. Privatize all parts of the commons you can manage so that people have to pay you to use them. Ship things from cheap-production areas to expensive consumption areas – even if they must be shipped great distances – to improve your profits (which works as long as you can externalize the environmental and social costs of all that transformation). Design machines and create technologies to facilitate mass production, to increase per-person “productivity” and to replace expensive human labor – and thus increase profits. Set up a massive financial industry to profitably manage the movement of money and to facilitate bets on the ups and downs of the resulting out-of-equilibrium economy. Use GDP as the primary economic indicator to keep the focus on the flow of money and the growth of consumption. The “efficiency” of such economies of scale lies in the monetarily cheap per-piece rate achieved by the mass-productivity and cost-externalization in the system as a whole.

ECONOMIES OF SCOPE (ground economics in the free creative participation of everyone, in the true satisfaction of deep needs, and in the natural abundance of peer production, immateriality, community, creativity and the commons). Make only the “stuff” your community really needs to function. Focus on satisfying deep personal/interpersonal needs using primarily non-material aspects of life like spirit, learning, beauty, community, relationship, nature, activity, conversation, creativity, games, celebration, and other forms of deep enjoyment and mutual pleasure that involve little material or money. Share ideas, culture, designs and all other immaterial knowledge, resources and enjoyables freely. Set things up so that people can meet most of their material needs through sharing and gifting networks: This vastly reduces how much “stuff” they and their community need to have on hand, thereby reducing environmental impact (less material flow-through) and making up for the possibly higher per-piece cost of locally producing smaller quantities of needed “stuff”. Set things up (with, for example, guaranteed minimum income for everyone) so that people tend to do productive work that they enjoy; their productive activity then becomes part of their high quality of life, rather than a drain on it. Design machines and technology to facilitate on-demand local production and for replacement of unpleasant human labor to free people up to do what they want, thus enhancing quality of life while reducing environmental impact. Use quality of life/sustainability statistics as the main economic indicator(s) so that monetary considerations do not trump the long term (sustainable) satisfaction of deep human needs. Minimize the financial sector that does little truly productive work, freeing up resources for productive work and lessening the danger of arbitrary financial colonization or collapse. Likewise, minimize bureaucracy. The “scope” of economies of scope embraces the scope of participation and the depth, breadth and longevity of the needs met. The “efficiency” of such economies of scope lies in the lower costs (financial, social, and environmental – all!!) of reduced material consumption in the context of a refreshed sense of abundance and quality of life.”

Tom Altee further stresses the broader culture in which a shift to economies of scope is embedded:

“I like the summary of “doing more with less” (as contrasted with “making more for less”). However, I would add – and perhaps stress – that in addition to the immaterial and material dynamics of production, there is the larger CULTURE of meeting human needs more fully with less stuff, specifically, that we can build a culture where, when there are human needs that need fulfilling, we turn FIRST to immaterial (and non-monetized) sources of satisfaction.

A provocative example is the extent to which our need for food – appetites, hunger, gastronomical pleasure – are not as well served by a big meal as by a meal lovingly (and/or collectively) prepared from foods caringly grown and harvested and consciously relished in a pleasant atmosphere. Smaller amounts of food satisfy our food needs more deeply when consumed under these conditions. And that is using an intrinsically PHYSICAL (“stuff”) example. When we think of the joys of learning, playing, conversing, meditating, making love, etc., we realize how many needs we could fulfill with virtually NO material flow-through. And much or most of those needs are best filled in the context of p2p mutuality.

So, for me, “doing more with less” STARTS from a culture that assumes and supports immaterial abundance and THEN builds out from there to create material abundance with p2p production and distribution (gifting, sharing, bartering, and markets) with mindful attention to the needs and cycles of nature (and the lessons nature teaches about doing more with less).

I also note that the twin formulations in the first sentence above represent different concepts of “efficiency”. Efficiency is often posed as contrary to resilience because efficiency is often achieved by stripping out the redundancies (the fail-safe factors) that support resilience. However, it is the “making more for less” formulation that is in conflict with resilience, due to its obsession with reducing costs to increase profits. The “doing more with less”, in contrast, supports resilience because resilience is part of the “more” that a scope-based economy is DOING; well-designed redundancy (including wide participation and quality of life factors) is an aspect of producing that more-ness.”

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