Peer production, the market, and the state

Christophe Lestavel has sent us a number of questions and challenges, about how peer production will affect both the private sector and the state. His questions are in French, but I’ve summarized them in English.

Comment l’open source (ou P2P), en faisant baisser le cout general de
l’infrastructure (au sens le plus large, on pourrait parler d’enablers en
anglais, un reseau telecom ou de electricity distribution pourrait rentrer
dans cette categorie) permet de stimuler la creation de valeur, Ã la fois
d’usage (sans copyright) et valeur economique (couple au copyright ) ?

What is the economic role of open source and peer production ?

As Christophe Lestavel rightly points out the use of open source substantially if not radically brings down the cost of infrastructure for companies. In this sense, it is one of the typical externalities which has regularly fuelled the capitalist economy. The value is thus creates is in the form of savings. But peer production also creates new knowledge and use value, which in turn can be used directly as an externality in for-profit production. In general, peer production takes the form of use value, embedded in a new kind of peer property modes, which cannot simply or directly be appropriated by companies. But it can certainly be indirectly appropriated. In general, for-profit companies will adopt derivative strategies. It is much less clear for me how it can directly create economy value through copyrights, though you can argue that if companies can use open source technology for non-core technologies, that allows them to focus on their core products which can take the form of copyrighted property. However, in general, I would take the view that peer production undermines the prevalence of copyright as an economic strategy. The current form of copyright in fact slows down innovation, and in this sense again peer production is a boon for capitalism by showing more effective ways of knowledge exchange.

All of this does not mean that peer production does not challenge in substantial ways the current political economy. It is created through free cooperation outside the realm of corporate hierarchy and does not allocate resources through pricing mechanisms. Its created use value is not directly monetisable. So the fact remains, that though embedded and immanent in the system, it still represents a non-capitalist mode of production. Though it definitely helps the economy, there is an enormous imbalance between what peer production offers the system, and what it gets in return, it has to survive in the interstices of the system. This is why a basic income makes a lot of sense. It is a way for the business community to repay the use of these cultural externalities, while insuring that peer-based innovation, the most effective one there is and vastly superior to corporate-based innovation, can continue to function properly and create value for society as a whole.

2- Dans un capitalisme toujours plus financier ( = entreprises possedees
par des fonds et gerees (indirectement) par des gestionnaires de fond avec
une position moyenne de qques mois) favorisant les arbitrage a court terme
et bloquant les projets a long terms (car risque et gourmand en cash),
comment le P2P peut emerger comme la seule forme (apres la chute du
capitalisme d’Etat ou au format sovietique) de generer des projets a long
terme ?

P2P as the only way of maintaining long term innovation and research, after the collapse of the state-supported research and the short-termism of business-oriented research.

I completely agree with this suggestion by Christophe, and it is one more reason to support peer production.

3- Cette performance (point 2) du P2P ne va t’elle pas faire regresser
définitivement la sphere d’intervention de l’Etat?

Is peer production going to diminish the role of the state?

Peer production, as it expands, is first of all going to reduce the sphere of commoditization and of the private economy, by creating a civil society based mode of production, governance and property, but at the same time as I’m arguing above, it will stimulate the capitalistic part of the economy. It may also help to transform the market space away from biosphere-destroying and inequality-creating financial capitalism.

Will it have a similar effect on the state? I believe that in most circumstances today, central planning is felt to be less effective than private enterprise, but not in all. A strengthening of civil society and peer production might actually have the effect of strengthening the role of the state in cases where public or collective management is the better solution. But it will also introduce new forms of peer governance which represent an alternative of the state form. For example, Peter Barnes, whom we’ve presented in this blog before, shows in my opinion convincingly that the state (and its politicians) is not always the best actor to manage common assets, beholden as they are to private interests in order to get elected (he cites the sell-off of national park assets in the U.S.). In such an environment, it might be a viable alternative to institute trusts, which directly represent civil society on a one citizen, one share basis. As peer production and civil society strengthens it will strive to change the role of the state, away from its subsumption to private interests, and towards being an arbiter between the market and civil society in a fair and balanced manner. Furthermore, peer-based governance modes, such as multi-stakeholdership, will profoundly remodel the state as we know it today. Peer modes will similarly affect the market. I use fair trade as an example. Fair trade is an attempt to have a market that functions outside of pure power relationships, by negotiating with the producers about their demands for dignified social reproduction; it then goes to the market and “negotiates” with the market, finding that a substantial number of consumers is ready to pay a little more in order to have a fair exchange relationship with the producers. To me this is a clear partnership-driven, thus P2P-inspired market reform, which though marginal today, should and could take a more important place in the future.

In conclusion: the answer to the question is complex. Peer production will both weaken and strengthen the private economy, and will both weaken and strengthen the state.

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