(the following may be a useful summary restatement of an issue that we have discussed here quite a few times)

A key issue is how a mode of production that is successful in the creation of ‘immaterial value’ is co-dependent and can co-exist with the sphere of material value creation.

The problem can be described as follows:

Immaterial production deals with non-rival or even anti-rival goods that can be produced through the self-assemblage of interconnected brains, the result of which can then be made ‘universally available’. This works without any problem for software and what is generally called ‘content’.

But, what about immaterial value that is intrinsically interconnected to physical products, which are often ‘rival’ and in any case need systematic cost-recovery mechanisms? Any physical production of course has design aspects which can be produced through peer production, i.e. through open design communities that make their innovations universally accessible, just as software or content is.

But where as non-rival production is compatible with the non-reciprocal mode of peer production (i.e. voluntary participation), this will usually not be the case for physical production, and therefore, at this stage, reciprocal or market-based mechanisms are needed. Of course, it is theoretically possible to assume that material goods be produced and used according to ‘communist’ principle, but I believe this is not the order of the day in the short term, and perhaps not even in the long term, because of our newfound sensitivity to the limitations of our natural world.

We therefore need to imagine mechanisms that combine:

1) non-reciprocal peer production of designs for immaterial production

2) a separate system for physical production that relies, cooperates and supports open design communities

Eric von Hippel has already described the emergence of such processes of built-only capitalism in his book, Democratizing Innovation and the P2P Foundation monitors this emergence closely as well .

The relation between such corporate entities, and the open design communities could be ideally modeled on the benefit-sharing practices that are characteristic of businesses operating around the Linux commons. Better yet, we can imagine different formal governance models for such entities, such as cooperatives.

We are now at the phase of emergence of peer production, and even more so at the level of open design communities, but nevertheless, this is the key issue of social transformation. Any transformation to the dominance of a dual format that combines open design communities with a more just and equitable format for physical production will be depending, not just on political and social struggles and the social balance of power, but also on a number of objective trends. We believe that the same trends which have led to the distribution of computer power, are starting to manifest themselves as a general characteristic of the means of production. We believe that economies of scale will be replaced by economies of scope through the hyper-productivity of the collective learning derivative of open design communities. Just as the cost of energy and raw materials may be expected to rise, so may the cost of capital goods be expected to diminish dramatically in the coming decades, giving rise to the development of cheaper and modular production machinery, that can co-exist with both globalized coordination and relocalized production.

This will mean that the self-assemblage of immaterial resources can be matched by self-assemblage of physical production resources, but nevertheless, at this stage, we see a dual regime as inevitable because of the issues of cost-recovery in the physical sphere.

It is important to consider the mutual interdependence of the immaterial and material spheres of production, not only in a hypothetical future of reorganization of the mode of production, but today, through the already existing interplay between peer production and capitalism.

Peer production is a mode of voluntary contribution that is dependent on the existing surplus of the current political economy. It is only viable because the current system has created sufficient interstices where people can operate outside of the commodity and wage logic, but only as an ‘aspect of their lives’.

But the opposite is just as true: innovation is becoming increasingly social, a function of the general intellect, an emergent property of the networks of cooperation in which most of us (and not just in western countries) are increasingly inserted. This means that capitalism is increasingly dependent on the value creation and innovation that are the positive externalities of social cooperation.

It is the complex interplay between peer producers, physical production actors, and metagovernance organized under the auspices of collective authorities that I have discussed in detail yesterday.