Before turning to the related insights of Kevin Carson, I would like to recall what I wrote about the topic in my book manuscript, back in 2005:

“A second important aspect is de-institutionalization. In premodernity, knowledge is transmitted through tradition, through initiation by experienced masters to those who are validated to participate in the chain mostly through birth. In modernity, as we said, validation and the legitimation of knowledge is processed through institutions. It is assumed that the autonomous individual needs socialization, ‘disciplining’, through such institutions. Knowledge has to be mediated. Thus, whether a news item is trustworthy is determined largely by its source, say the Wall Street Journal, or the Encyclopedia Brittanica, who are supposed to have formal methodologies and expertise. P2P processes are de-institutionalized, in the sense that it is the collective itself which validates the knowledge.

Please note my semantic difficulty here. Indeed, it can be argued that P2P is just another form of institution, another institutional framework, in the sense of a self-perpetuating organizational format. And that would be correct: P2P processes are not structureless, but most often flexible structures that follow internally generated rules. In previous social forms, institutions got detached from the functions and objectives they had to play, became ‘autonomous’. In turn because of the class structure of society, and the need to maintain domination, and because of ‘bureaucratization’ and self-interest of the institutional leaderships, those institutions turn ‘against society’ and even against their own functions and objectives. Such institutions become a factor of alienation. It is this type of institutionalization that is potentially overcome by P2P processes. The mediating layer between participation and the result of that participation, is much thinner, dependent on protocol rather controlled by hierarchy.

A good example of P2P principles at work can be found in the complex of solutions instituted by the University of Openness. UO is a set of free-form ‘universities’, where anyone who wants to learn or to share his expertise can form teams with the explicit purpose of collective learning. There are no entry exams and no final exams. The constitution of teams is not determined by any prior disciplinary categorization. The library of UO is distributed, i.e. all participating individuals can contribute their own books to a collective distributed library . The categorization of the books is explicitly ‘anti-systemic’, i.e. any individual can build his own personal ontologies of information, and semantic web principles are set to work to uncover similarities between the various categorizations.”

Here ends what I wrote in 2005.

However, observing closely how real peer production operates, how it interacts with companies and has created nonprofit foundations to manage the infrastructure of cooperation, I was tempted to actually acknowledge that peer to peer dynamics were related to processes of institutionalization.

My analysis did make a distinction between alienated institutions and the new forms of governance, but lacked an adequate concept to ‘name’ that difference.

To relieve me of my doubt, and confirm the original intuition, I turn to Chapter Fifteen of Kevin Carson’s draft book on organizational theory, where he differentiates between institutions and non-institutional systems. This distinction solves my dilemma, and we can now see that peer production creates non-institutional systems. They do survive the individual, but do not turn ‘against’ the participating individuals, as classic institutions do.

Here’s Kevin Carson:

“The difference between an institution and other organizations is that an institution is unaccountable to those who make it up, and has a purpose independent of those who serve it. It also has “a leadership that differentiates itself from those who make up the organization,” with the leaders viewing their own function “as being to manipulate, threaten, induce, or coerce the group members into subordinating their personal interests and promoting organizational purposes.”

On the other hand,

[i]n noninstitutional systems, the organization tends to be little more than a convenience, an informal tool of cooperation that helps each one of us to further our interests through the group. The organization has no independent purposes of its own, but represents only the composite of our personal objectives. The organization does not control us, for there is no division of purpose–and thus, no conflict–between personal and group purposes. The group is but a reflection of the interests of those within it: it has no independent identity or other organizational interests that could preempt our own. If the group has any leadership, it tends to be temporary and informal….

Shaffer’s typology of organizations resembles that of Paul Goodman. The more differentiated the hierarchy and the more formalized its procedures, and the more members feel the necessity of going through “proper channels” to exert nominal control over the organization, the more likely that it has become an institution. Like Goodman, he contrasts the early university system, which was a cooperative arrangement between students or teachers to pursue their own purposes, to the bureaucratic universities of the present day with their boards of directors representing institutional interests entirely separate from students and faculty.

Shaffer distinguishes what he calls “member-oriented and member-controlled” organizations from institutions, “whose objectives interfere with personal purposes and generate conflict in society.”

The natural order of things is for organizations to be formed by voluntary association and cooperation, between individuals pursuing their own interests. Institutions predominate only when the state erects entry barriers to such self-organization, diverts resources to institutions, and otherwise crowds out self-organization, so that the range of alternatives is restricted and people are artificially dependent on institutions. In short, the large, hierarchical, managerial organization is the result of privilege.”