Michel Bauwens on the pitfalls of start-up culture

Our second extract from the transcript of the C-Realm Podcast Bauwens/Kleiner/Trialogue, Michel Bauwens talks about the disconnect between young idealistic developers and the business models many of them default to, unaware that there’s better options.


I’d like to start with outlining the issue, the problem around the emergence of peer production within the current neoliberal capitalist form of society and economy that we have. We now have a technology which allows us to globally scale small group dynamics, and to create huge productive communities, self-organized around the collaborative production of knowledge, code, and design. But the key issue is that we are not able to live from that, right?

The situation is that we have created communities consisting of people who are sometimes paid, sometimes volunteers, and by using open licenses, we are actually creating commonses – think about Linux, Wikipedia, Arduino, those kinds of things. But what is the problem? The problem is I can only make a living by still working for capital. So, there is an accumulation of the commons on the one side, we are effectively producing a commons, but we don’t have what Marx used to call social reproduction. We cannot create our own livelihood within that sphere. The solution that I propose is related to the work of Dmytri Kleiner – Dmytri proposed some years ago to create a peer production license. I’ll give you my interpretation of it; you can only use our commons if you reciprocate to some degree. So, instead of having a totally open commons, which allows multinationals to use our commons and reinforce the system of capital, the idea is to keep the accumulation within the sphere of the commons. Imagine that you have a community of producers, and around that you have an entrepreneurial coalition of cooperative, ethical, social, solidarity enterprise.

The idea is that you would have an immaterial commons of codes and knowledge, but then the material work, the work of working for clients and making a livelihood, would be done through co-ops. The result would be a type of open cooperative-ism, a kind of synthesis or convergence between peer production and cooperative modes of production. That’s the basic idea. I think that a number of things are happening around that, like solidarity co-ops, and other new forms of cooperative-ism.

The young people, the developers in open source or free software, the people who are in co-working centers, hacker spaces, maker spaces. When they are thinking of making a living, they think startups. They have been very influenced by this neoliberal atmosphere that has been dominant in their generation. They have a kind of generic reaction, “oh, let’s do a startup”, and then they look for venture funds. But this is a very dangerous path to take. Typically, the venture capital will ask for a controlling stake, they have the right to close down your start up whenever they feel like it, when they feel that they’re not going to make enough money. They forbid you to continue to work in the same sector after your company has failed, and you have a gag order, so you don’t even have free speech to talk about your negative experience. This is a very common experience. Don’t forget that with venture capital, only 1 out of 10 companies will actually make it, and they may be very rich, but it’s a winner-take-all system.

There is a real lack of knowledge within the young generation that there are other forms of enterprise possible. I think that the other way is also true. A lot of co-ops have been neo-liberalizing, as it were, have become competitive enterprises competing against other companies but also against other co-ops, and they don’t share their knowledge. They don’t have a commons of design or code, they privatize and patent, just like private competitive enterprise, their knowledge. They’re also not aware that there’s a new way of becoming more competitive through increased cooperation of open knowledge commons. This is the human side of it, and we need to work on the knowledge and mutual experience of these two sectors. Both are growing at the same time; after the crisis of 2008, we’ve had an explosion of the sharing economy and the peer production economy on the one side, but also a revitalization of the cooperative sector.

3 Comments Michel Bauwens on the pitfalls of start-up culture

  1. Taran Rampersad

    This was a point that I was trying to make at The University of the West Indies during a conference on innovation. Everyone was saying that they needed funding; everyone was sold on the idea that they had to get some form of venture capital to innovate.

    Certainly, innovations do better when there’s a war-chest for advertising and so on – but that innovation can easily be shifted away from the original intent by the people who are more intent on making a profit instead of changing something for something socially better.

  2. Patrick S

    Apropos this topic, here is a fun & somewhat whimsical critique of startup culture and goals on McSweeney’s: http://www.mcsweeneys.net/articles/son-its-time-we-talk-about-where-start-ups-come-from

    One thing that article made me realise is that behind the glamour of startups, there’s also a certain amount of rubbish involved – and also that it’s all too easy for startups, again VCs probably have a bit to do with this, to become fairly derivative ways to just capture attention to sell a few more ads. The protagonist’s comment towards the end of the piece written in a world-weary persona of freeing themselves from the “endless cycle of building platforms and monetizing them” does get to this quite well.

  3. Stacco Troncoso

    “All your jokes become meme-based. Some dreadlocked hacktavist named Rumble will start crashing on your couch. Finally, you’ll change your Twitter bio to simply read, “maker.” Which is when I will disown you.”

    I read it a while ago and I think it’s brilliant. Thanks for the reminder, Patrick.

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