Dangers of the Sharing Economy (2): Power to the People (Not the Platform)

by Nathan Schneider for THE NATION

It took me a while, at first, to understand. I was sharing an Airbnb apartment in Paris a few months ago with the Catalan activist (and fugitive) Enric Duran, trying to understand the details of his latest hacktivist scheme,FairCoop. The idea is to build a new global financial system for cooperatives with the help of FairCoin, a Bitcoin-like cryptocurrency. I’d spent a lot of time with cryptocurrency hackers before, but something was different about how he described his project. It was weird. He didn’t seem to be in love with his algorithms.

What should have been obvious to me eventually became clear: The interlocking organizations that would constitute FairCoop were more important to him than FairCoin’s code, which was merely an interesting component. Someday, FairCoop may no longer even need it. This represents an idol-bashing change of mindset for tech culture, away from gizmo-obsessed solutionism and toward genuine, commons-based peer production.

Normally, here’s what you run into with these new, decentralized digital-money platforms: A developer copies the open-source code from Bitcoin, then makes some tweaks to the specifications—stuff like how new virtual coins are created, how they circulate, and what additional features come built-in. There are lots of examples. These developers are generally very proud of their currency’s specs, and they tell reporters like me that if lots of people adopt it, the world will be better. Building a community is a means to this end—to building up the platform. Then, as with Bitcoin, the community falls victim to the platform’s troubles.

Such platform-centrism is a familiar story in the online economy. A company’s investors typically own the platform, and they want to extract as much value from what ends up on their servers as possible. Facebook’s goal is to get us to pour ever more personal information into its platform; whatever that does or doesn’t do for our relationships (or our revolutions) is merely a byproduct to creating value for investors.

FairCoop is one among a whole slew of new projects attempting to create a more democratic Internet, one that serves as a global commons. These projects include user-owned cooperatives, “open value” companies structured like a wiki, and forms of community-based financing. Part of what distinguishes them from mainstream tech culture is the determination to put real control and ownership in the hands of the users. When you do that, the platform becomes what it always should have been: a tool for those who use it, not a means of exploiting them.

“The most important features of this new system are not imprinted as algorithms in the code,” FairCoop’s developers have written. “Instead they will come from the human input and democratic participation of all members.”

The challenge of platform cooperativism is mostly not a technical one. Sharing-economy platforms like Uber rely on relatively simple apps. Replicating these apps can be, and has been, done. But what makes it especially hard for local taxi cooperatives to compete with Uber is the lack of access to massive, VC-style investment, which goes toward feeding users into the platform with advertising, placement deals, lobbying, and subsidies. The goal all this serves, again, is feeding the platform; Uber can’t wait to replace its drivers altogether with self-driving cars.

A platform like Uber also depends on a context—one that includes governments willing to invest in infrastructure like GPS, and investors willing to pile on money in exchange for ownership and control, and officials willing to go easy with enforcement. As much as both capitalists and cooperators love to think they operate as autonomous agents, conditions like these have a big say in which kinds of enterprises succeed and which kinds fail.

Consider Kenya, for instance, a country where cooperatives—mostly consisting of agricultural producers and credit unions—account for nearly half of the GDP. The modern cooperative movement there began as a tool for British colonialism, and continued after independence with state-organized cooperativization. Until recently, there was an entire ministry in the central government devoted solely to regulating and promoting the cooperative sector. The cooperatives themselves, meanwhile, have an array of organizations through which they coordinate their interactions with the state.

When I visited the Co-operative University College of Kenya, a whole campus for training managers of cooperatives, the school’s former principal Esther Gicheru told me, “We have a very vibrant cooperative sector here because it is surrounded by all these institutions, which support and reinforce each other.”

What would a tech industry more conducive to cooperativism look like? Tech-savvy credit unions could back worthwhile cooperative platforms. Cities might allow sharing-economy services only through worker-owned enterprises (much as Kenya mandated that its shared vans cooperativize). Perhaps inequality-generating mechanisms like venture capital would not be allowed at all, forcing investors to put their capital into enterprises where the participants are more fully in control. It’s worth remembering, too, that cooperatives themselves are not a magic fix for wealth inequality; Kenya remains a vastly unequal society. Unless cooperatives are capturing the main flows of capital from elites, they may end up doing little more than wading in the tributaries.

Online platforms can change society, but only in ways that the existing society allows. Platform cooperativism doesn’t require just new platforms; it will mean building more cooperative-oriented infrastructure. We need not just websites but also cooperative finance, legal structures, and business culture. The platforms themselves are the easy part.

Continue to read the full article – http://m.thenation.com/article/208057-5-ways-take-back-tech

1 Comment Dangers of the Sharing Economy (2): Power to the People (Not the Platform)

  1. AvatarPatrick Anderson

    “ownership in the hands of the users”

    “only through worker-owned enterprises”

    So should the users be the owners, or the workers?
    Does it matter?

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