System Reset is a feature-length documentary which explores this story of change in our economy. Shot in London, Amsterdam and Barcelona, this film is a DIF 2018 exclusive. It features some of the leading thinkers in materials, economics, the commons movement, FabLabs, digital citizenship, urban planning and architecture. Don’t miss your opportunity to see them collectively weave a picture of how our economy could operate.

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Given the material abundance made possible by the replicator, how would it be possible to maintain a system based on money, profit, and class power?

It doesn’t get much more dystopian than this: what if all distributed manufacturing technologies are enclosed by the logic of netarchical capitalism?

This is no fantasy. In their 2017 report, 3D printing: a threat to global trade, Dutch multinational ING Group analyzes the potential impact of distributed manufacturing technologies. The text below, written by Peter Frase and originally published in his blog, paints a bleak picture of how the same patterns of capitalist enclosure we’ve seen in the Internet extend to physical manufacturing. Frase develops these themes further in his book Four Futures.

Peter Frase: In the process of trying to pull together some thoughts on intellectual property, zero marginal-cost goods, immaterial labor, and the incipient transition to a rentier form of capitalism, I’ve been working out a thought experiment: a possible future society I call anti-Star Trek. Consider this a stab at a theory of posterity.

One of the intriguing things about the world of Star Trek, as Gene Roddenberry presented it in The Next Generation and subsequent series, is that it appears to be, in essence, a communist society. There is no money, everyone has access to whatever resources they need, and no-one is required to work. Liberated from the need to engage in wage labor for survival, people are free to get in spaceships and go flying around the galaxy for edification and adventure. Aliens who still believe in hoarding money and material acquisitions, like the Ferengi, are viewed as barbaric anachronisms.

The technical condition of possibility for this society is comprised of of two basic components. The first is the replicator, a technology that can make instant copies of any object with no input of human labor. The second is an apparently unlimited supply of free energy, due to anti-matter reactions or dilithium crystals or whatever. It is, in sum, a society that has overcome scarcity.

Anti-Star Trek takes these same technological premises: replicators, free energy, and a post-scarcity economy. But it casts them in a different set of social relations. Anti-Star Trek is an attempt to answer the following question:

• Given the material abundance made possible by the replicator, how would it be possible to maintain a system based on money, profit, and class power?

Economists like to say that capitalist market economies work optimally when they are used to allocate scarce goods. So how to maintain capitalism in a world where scarcity can be largely overcome? What follows is some steps toward an answer to this question.

Like industrial capitalism, the economy of anti-Star Trek rests on a specific state-enforced regime of property relations. However, the kind of property that is central to anti-Star Trek is not physical but intellectual property, as codified legally in the patent and copyright system. While contemporary defenders of intellectual property like to speak of it as though it is broadly analogous to other kinds of property, it is actually based on a quite different principle. As the (libertarian) economists Michele Boldrin and David K. Levine point out:

Intellectual property law is not about your right to control your copy of your idea – this is a right that . . . does not need a great deal of protection. What intellectual property law is really about is about your right to control my copy of your idea. This is not a right ordinarily or automatically granted to the owners of other types of property. If I produce a cup of coffee, I have the right to choose whether or not to sell it to you or drink it myself. But my property right is not an automatic right both to sell you the cup of coffee and to tell you how to drink it.

This is the quality of intellectual property law that provides an economic foundation for anti-Star Trek: the ability to tell others how to use copies of an idea that you “own”. In order to get access to a replicator, you have to buy one from a company that licenses you the right to use a replicator. (Someone can’t give you a replicator or make one with their replicator, because that would violate their license). What’s more, every time you make something with the replicator, you also need to pay a licensing fee to whoever owns the rights to that particular thing. So if the Captain Jean-Luc Picard of anti-Star Trek wanted “tea, Earl Grey, hot”, he would have to pay the company that has copyrighted the replicator pattern for hot Earl Grey tea. (Presumably some other company owns the rights to cold tea.)

This solves the problem of how to maintain for-profit capitalist enterprise, at least on the surface. Anyone who tries to supply their needs from their replicator without paying the copyright cartels would become an outlaw, like today’s online file-sharers. But if everyone is constantly being forced to pay out money in licensing fees, then they need some way of earning money, and this brings up a new problem. With replicators around, there’s no need for human labor in any kind of physical production. So what kind of jobs would exist in this economy? Here are a few possibilities.

1. The creative class. There will be a need for people to come up with new things to replicate, or new variations on old things, which can then be copyrighted and used as the basis for future licensing revenue. But this is never going to be a very large source of jobs, because the labor required to create a pattern that can be infinitely replicated is orders of magnitude less than the labor required in a physical production process in which the same object is made over and over again. What’s more, we can see in today’s world that lots of people will create and innovate on their own, without being paid for it. The capitalists of anti-Star Trek would probably find it more economical to simply pick through the ranks of unpaid creators, find new ideas that seem promising, and then buy out the creators and turn the idea into the firm’s intellectual property.
2. Lawyers. In a world where the economy is based on intellectual property, companies will constantly be suing each other for alleged infringements of each others’ copyrights and patents. This will provide employment for some significant fraction of the population, but again it’s hard to see this being enough to sustain an entire economy. Particularly because of a theme that will arise again in the next couple of points: just about anything can, in principle, be automated. It’s easy to imagine big intellectual property firms coming up with procedures for mass-filing lawsuits that rely on fewer and fewer human lawyers. On the other hand, perhaps an equilibrium will arise where every individual needs to keep a lawyer on retainer, because they can’t afford the cost of auto-lawyer software but they must still fight off lawsuits from firms attempting to win big damages for alleged infringment.
3. Marketers. As time goes on, the list of possible things you can replicate will only continue to grow, but people’s money to buy licenses–and their time to enjoy the things they replicate–will not grow fast enough to keep up. The biggest threat to any given company’s profits will not be the cost of labor or raw materials–since they don’t need much or any of those–but rather the prospect that the licenses they own will lose out in popularity to those of competitors. So there will be an unending and cut-throat competition to market one company’s intellectual properties as superior to the competition’s: Coke over Pepsi, Ford over Toyota, and so on. This should keep a small army employed in advertizing and marketing. But once again, beware the spectre of automation: advances in data mining, machine learning and artificial intelligence may lessen the amount of human labor required even in these fields.
4. Guard labor. The term “Guard Labor” is used by the economists Bowles and Jayadev to refer to:
   

   The efforts of the monitors, guards, and military personnel . . . directed not toward production, but toward the enforcement of claims arising from exchanges and the pursuit or prevention of unilateral transfers of property ownership.

   In other words, guard labor is the labor required in any society with great inequalities of wealth and power, in order to keep the poor and powerless from taking a share back from the rich and powerful. Since the whole point of anti-Star Trek is to maintain such inequalities even when they appear economically superfluous, there will obviously still be a great need for guard labor. And the additional burden of enforcing intellectual property restrictions will increase demand for such labor, since it requires careful monitoring of what was once considered private behavior. Once again, however, automation looms: robot police, anyone?

These, it seems to me, would be the main source of employment in the world of anti-Star Trek. It seems implausible, however, that this would be sufficient–the society would probably be subject to a persistent trend toward under-employment. This is particularly true given that all the sectors except (arguably) the first would be subject to pressures toward labor-saving technological innovation. What’s more, there is also another way for private companies to avoid employing workers for some of these tasks: turn them into activities that people will find pleasurable, and will thus do for free on their own time. Firms like Google are already experimenting with such strategies. The computer scientist Luis von Ahn has specialized in developing “games with a purpose”: applications that present themselves to end users as enjoyable diversions, but which also perform a useful computational task. One of von Ahn’s games asked users to identify objects in photos, and the data was then fed back into a database that was used for searching images. It doesn’t take much imagination to see how this line of research could lead toward the world of Orson Scott Card’s novel Ender’s Game, in which children remotely fight an interstellar war through what they think are video games.

Thus it seems that the main problem confronting the society of anti-Star Trek is the problem of effective demand: that is, how to ensure that people are able to earn enough money to be able to pay the licensing fees on which private profit depends. Of course, this isn’t so different from the problem that confronted industrial capitalism, but it becomes more severe as human labor is increasingly squeezed out of the system, and human beings become superfluous as elements of production, even as they remain necessary as consumers.

Ultimately, even capitalist self-interest will require some redistribution of wealth downward in order to support demand. Society reaches a state in which, as the late André Gorz put it, “the distribution of means of payment must correspond to the volume of wealth socially produced and not to the volume of work performed”. This is particularly true–indeed, it is necessarily true–of a world based on intellectual property rents rather than on value based on labor-time.

But here the class of rentier-capitalists will confront a collective action problem. In principle, it would be possible to sustain the system by taxing the profits of profitable firms and redistributing the money back to consumers–possibly as a no-strings attached guaranteed income, and possibly in return for performing some kind of meaningless make-work. But even if redistribution is desirable from the standpoint of the class as a whole, any individual company or rich person will be tempted to free-ride on the payments of others, and will therefore resist efforts to impose a redistributive tax. Of course, the government could also simply print money to give to the working class, but the resulting inflation would just be an indirect form of redistribution and would also be resisted. Finally, there is the option of funding consumption through consumer indebtedness–but this merely delays the demand crisis rather than resolving it, as residents of the present know all too well.

This all sets the stage for ongoing stagnation and crisis in the world of anti-Star Trek. And then, of course, there are the masses. Would the power of ideology be strong enough to induce people to accept the state of affairs I’ve described? Or would people start to ask why the wealth of knowledge and culture was being enclosed within restrictive laws, when “another world is possible” beyond the regime of artificial scarcity?

Originally published in Peter Frase’s blog. Republished with the author’s full permission.

Photo by JD Hancock

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Such curiosity led me to a wonderful new book by anthropologist James Suzman, Affluence without Abundance: The Disappearing World of the Bushmen. The title speaks to a timely concern: Can the history of Bushmen culture offer insights into how we of the Anthropocene might build a more sustainable, satisfying life in harmony with nature?

Writing with the emotional insight and subtlety of a novelist, Suzman indirectly explores this theme by telling the history and contemporary lives of the San – the Bushmen – of the Kalahari Desert in Africa. The history is not told as a didactic lesson, but merely as a fascinating account of how humans have organized their lives in different, more stable, and arguably happier, ways. The book is serious anthropology blended with memoir, political history, and storytelling.

After spending 25 years studying every major Bushman group, Suzman has plenty of firsthand experiences and friendships among the San to draw upon. In the process, he also makes many astute observations about anthropology’s fraught relationship to the San.  Anthropologists have often imported their colonial prejudices and modern alienation in writing about the San, sometimes projecting romanticized visions of “primitive affluence.”

Even with these caveats, it seems important to study the San and learn from them because, as Suzman puts it, “The story of southern Africa’s Bushmen encapsulates the history of modern Homo sapiens from our species’ first emergence in sub-Saharan Africa through to the agricultural revolution and beyond.”  Reconstructing the San’s 200,000-year history, Suzman explains the logic and social dynamics of the hunter-gatherer way of life — and the complications that ensued when agriculture was discovered, and more recently, from the massive disruptions that modern imperialists and market culture have inflicted.

The fate of one band of San, the Ju/’hoansi, is remarkable, writes Suzman, because the speed of their transformation “from an isolated group of closely related hunting and gathering bands to a marginalized minority struggling to survive in a rapidly changing polyglot modern state is almost without parallel in modern history.” As European settlers seized their land, forced them to give up hunting, forced them to become wage-laborers on farms, and introduced them to electricity, cars and cell phones, the Ju/’hoansi acquired “a special, if ephemeral, double perspective on the modern world – one that comes from being in one world but of another; from being part of a modern nation-state yet simultaneously excluded from full participation in it; and fro having to engage with modernity with the hands and hearts of hunter-gatherers.”

In learning more about the San, then, one can learn more about the strange, unexamined norms of modern, technological society that most of us live in.  It is fascinating to see the social protocols of sharing meat and food; the conspicuous modesty of successful hunters (because in the end their success is part of a collaboration); and the “demand sharing” initiated by kin and friends to ensure a more equal distribution of meat and satisfaction of basic needs.

The inner lives of the Ju/’hoansi suggests their very different view of the world.  “For them,” writes Suzman, “empathy with animals was not a question of focusing on an animal’s humanlike characteristics but on assuming the whole perspective of the animal.” The performance of the hunt engenders a kind of empathy for the prey, as well as a broader understanding that the cosmos ordains certain sacred roles for all of us – as prey, hunters, and food. Hunting and eating in the Kalahari connects a person with the cosmos in quite visceral ways – something that no supermarket can begin to approach.

I’m not ready to hunt my own food, but is there some way that I can see my bodily nourishment reconnected with the Earth and my peers, and not just to packaged commodities?  For now, my CSA is a good start.

The most poignant part of Affluence without Abundance is the final chapter, which describes how many San – deprived of their lands, ancestral traditions, and cultural identities – now live out dislocated lives in apartheid-founded townships that Suzman characterizes as having a “curious mix of authoritarian order and dystopian energy.”  There is deep resentment among the San about the plentitude of food even as people go hungry, and anger about the inequality of wealth and concentration of political power.  Most frightening of all may be the pervasive feelings of impermance and insecurity.  History barely matters, and the future is defined by market-based aspirations — a job, a car, a home.  The modern world has few places to carry on meaningful traditions and sacred relationships.

I was pleased to see that James Suzman has founded a group, Anthropos, https://www.anthropos.org.uk/about to “apply anthropological methods to solving contemporary social economic and development problems.”  A timely and important mission.

Photo by Dietmar Temps

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-Lewis Mumford, In the Name of Sanity

In two books, “The Book of Abundance” and “The Book of Community” and in Manifesto, Las Indias outline a model of organizing society that could start with the development of intentional communities. A new model of the economy based on the concept of abundance can be already implemented at the group level. On the other hand, the examples of group-level organizing can enrich our understanding of this desired future model. This paper uses empirical data to give some substance to the concept of abundance within an intentional community. The following is an invitation to further reflection and dreaming together. Using the stages from Dragon Dreaming method, one can consider the Utopian writings such as these by Las Indias as a stage of dreaming and the real life experiences as the stages of implementation. This analysis is a stage of celebrating and evaluation to help clarifying the goals in more practical terms.

I will use findings from my research on Acorn community to see what questions the practice raises. Communities are changing over time and their membership fluctuates, therefore it should be noted that the empirical content reflects the interviews conducted in August 2014. More details about this egalitarian community can be found in a series of three articles analyzing how Acorn’s experience can enrich the understanding of peer production model and an article on the personal experience of living in this community – see references below the text.

Making more with less

Acorn community has managed to generate more affluence thanks to sharing resources and living together. Life is cheaper there in comparison to individual living in an urban setting. In this way, communards can enjoy more with less while pursuing a meaningful work. The 42-hour labor quota includes also tasks not related to enterprise directly.

These are some examples of saving money and time thanks to collective living:

1) No one possesses one’s own car, which reduces the costs of insurance. Thanks to the skills within community, maintenance of electronics can be assured without hiring specialists.

2) Buying in bulk, dumpster diving, or exchanging products with other communities, reduces costs of food. One of the communards estimated that they spend about 1,200 dollars per person, per year on food.

3) Time is better used by mutualizing some tasks such as cooking, shopping, or declaring income for taxes.

4) By sharing tools and objects, there is less need of buying them: clothes, books, computers, kitchen tools, bikes, cars, and other stuff.

Furthermore, the communards enjoy some advantages of both city and rural living. Being surrounded by like-minded people within the community and communards from neighboring communities gives an occasion to meet people and undertake common activities. The atmosphere is different than in typical rural settings. On the other hand, they enjoy the advantages of rural living such as access to organic self-produced food, being close to nature, and no need to commute to work.

One of my interviewees reduced considerably the use of antidepressants, another one stopped drinking alcohol because they experienced less stress living in the community than in their previous lives.

The complexities of defining abundance

Las Indias defines abundance as the absence of the necessity “to work out what is produced and what not, and above all, how much access to a given product this or that person will have.” (The Book of Abundance, p.22) One of the criteria for evaluation whether a consumption choice is necessary would be its contribution to “genuine enjoyment of each.” Furthermore, trying to limit the consumption of others goes against the logic of abundance: “A life oriented to the construction of abundance, an interesting life, cannot be based on deprivation or the desire to deprive others.” (Idem, p. 71) The examples below illustrate that this definition of abundance does not take into account other aspects of produced goods. There are many nuances regarding the products: their quality, individual preferences, the environmental impact, ethical considerations, values inherent in a specific consumption pattern.

Consumption is not only about scarcity. Values are expressed by spending community money. One of Acorn’s principles in spending collective resources is that alcohol and cigarettes are bought with personal pocket money – a monthly allowance (so members can buy limited amount of these goods). An interviewee did not like the fact that once alcohol was bought with collective money to celebrate the completion of a project. Another example of this sort of reflection expressed by one of the interviewees is the proposition to count biking instead of using a car as part of labor quota. This would incite using less fuel, which is motivated by environmental considerations and not by saving money.

Food is also an issue of clashing values. Some members are vegan and the rest eats animal products. Both groups have broader reflection beyond the costs of food that are behind their choices. Vegans are motivated by the protection of animals. The carnivore camp envisions that with their diet community could gain a complete food autonomy. The community would not need to buy industrial products to replace animal products. This implies a withdrawal from the money system and the mainstream food system to counter socio-economic power relations. When aggregated, our food choices define the way the system of production is organized.

Spending collective resources to construct a new building or make similar major investment can also be a challenge to the concept of abundance. In Acorn, there were different opinions about what is the most cost-effective and the best way to construct a building. Certain individuals were more successful at getting their opinion implemented. Similar example was an investment into a machine. Some members consider machines as an additional cost with the need for maintenance that does not exceed much the gains of productivity. They are also afraid of being dependent because of the automation of work.

The definition of abundance could be also expanded to the availability of interesting work. One of the interviewees observed the scarcity of enjoyable jobs, not everyone gets to do the cool tasks such as those requiring creativity. Certainly, one could argue that if one wants to pursue some fulfilling activity, one is free to do so. However, usefulness and recognition constitutes part of work satisfaction. In Acorn, there are still some jobs that are necessary but much less attractive. For example, bringing garbage to the landfill is such a job. A person doing it found a way to make it more bearable by being accompanied by another communard. However, still this job is not the first choice. The sense of responsibility for less interesting jobs is different among members. Everyone has a different definition of what an interesting and meaningful activity is. Each activity is accompanied by an individual narrative and interpretation. For example, one of the members considered cleaning as his spiritual practice. Once more, abundance appears as something subjective.

Diverging preferences do not prevent Acorners from living together peacefully. In case of disagreements, many that I have interviewed work on themselves – trying to see the bigger picture like the advantages of staying together.

Abundance and personal development: what role is there for the community to play?

The perception of abundance evolves and can be learned or unlearned. One of the interviewees, originating from US middle class family, shared how her experiences of traveling to developing countries and living in Acorn community transformed her thinking about what one really needs in life in terms of material goods and comfort. Intentional communities in their present forms, namely with a very basic standard of living, can be venues of personal experimentation with abundance. Such an experimentation can be already undertaken in everyday life as the path of inner transformation and getting rid of compulsions that keep us in the current economic system.

If we agree that the perception of abundance is a result of inner work and learning processes, how would this translate into communal or societal practice? Let’s imagine such a situation: someone feels that to be happy, this particular thing is needed. Should the community agree and let the individual pursue it assuming that it takes time for someone to unlearn consumerist wants or rather establish conditions to re-think the want. This question is about the threshold. It is obvious that with the transformation of work, needs, conditioning and cultural context will change too.

Consumption can be chosen and changed but some consumption patterns require healing to be changed. Addictions can have many different forms that are related to consumption and patterns of behavior. Often omitted in the debates on addictions, even sugar or sweetness can be a powerful addiction leading to tooth decay, which results in the demand for dentistry (it defines what is produced). There are different theories about the causes of addictions. Bruce Anderson sees the causes of addictions in destruction of community and human connections caused by the capitalist system. Anne Wilson Schaef describes in her book “When Society Becomes an Addict” that the underlying cause of substance or behavioral addictions is the addiction to powerlessness and nonliving. Addictions serve the addicted to avoid confronting certain problems or shut down certain feelings. These are just two theories that illustrate how addictions reflect a deeper social problem rather than being an individual weakness or a matter of choice.

Acorn community’s way of dealing with addiction seems to be preventive exclusion. An interviewee mentioned that an alcoholic has been rejected in membership application. Living together with an addicted person may be challenging. It seems like this is one of the issues that communal initiatives need to study and prepare for.

The above examples illustrate defining abundance is difficult. There is no objective state of abundance. It is partly a result of inner work. The way to measure whether a community has reached the state of abundance would be to make a survey and prove that there is no frustration or lack in anybody. However, is it the aim of the society or community to never feel frustration? And if yes, what measures of working on our inner world or on our outer world would this involve?

Other articles on Acorn

Gajewska, Katarzyna (September 2016):  Egalitarian alternative to the US mainstream: study of Acorn community in Virginia, US. Bronislaw Magazine

Gajewska, Katarzyna (21 July 2016): An intentional egalitarian community as a small-scale implementation of Post-Capitalism, P2P Foundation Blog.

Gajewska, Katarzyna (10 January 2016): Case study: Creating use value while making a living in egalitarian communities. P2P Foundation Blog.

Gajewska, Katarzyna (27 December 2014): An intentional egalitarian community as a small-scale implementation of postcapitalist, peer production model of economy. Part I : Work as a spontanous, voluntary contribution. P2P Foundation Blog.

Photo by ellenm1

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A holistic understanding of modern evolutionary biology suggests that life evolves by a process of diversification and subsequent integration of diversity through collaboration (John Stewart in BioSystems, 2014). As our focus shifts from individuals and individual species as the unit of survival to the collective of life — its complex dynamic interactions and relationships — we begin to see that collaborative and symbiotic patterns and interactions are of more fundamental importance than competition as a driving force of evolution. Life’s key strategy to create conditions conducive to life is to optimize the system as a whole rather than maximizes only some parameters of the system for a few at the detriment of many (Wahl, 2016).

The patterns of evolution show a general trend of diversification and subsequent or parallel integration at a higher level of systemic complexity. This integration tends to happen predominantly through the creation of more complex organismic or social entities, primarily by collaboration and symbiosis. John Stewart suggests that this is moving us towards a ‘global entity’ (2014). Maybe this entity already exists in the life-sustaining processes of the biosphere?

The biologist Peter Corning, former president of the International Society for Systems Science and director of the Institute for the Study of Complex Systems, suggests that “one aspect of this more complex view of evolution is that both competition and cooperation may coexist at different levels of organization, or in different aspects related to the survival enterprise. There may be a delicately balanced interplay between these supposedly polar relationships” (Corning, 2005; p.38). He emphasizes that collaboration has been a key factor in the evolution of our own species. The socio-economic payoffs of collaboration in response to ecological pressures and opportunities among early humans have shaped the evolution of languages and cultures, both require and enable complex patterns of collaboration.

If a society is viewed merely as an aggregate of individuals who have no common interests, and no stake in the social order, then why should they care? But of society is viewed […] as an interdependent collective survival enterprise,’ then each of us has a vital, life-and-death stake in its viability and effective functioning, whether we recognize it or not.” — Peter Corning, 2005, p.392

If we want to re-design economics based on what we know about life’s strategy to create conditions conducive to life, we need to question some basic assumptions upon which the narrative underlying our current economic systems is built. The narrative of separation has predisposed us to focus on scarcity, competition, and the short-term maximization of individual benefit as the basis on which to create an economic system. Life’s evolutionary story shows that systemic abundance can be unlocked through collaboratively structured symbiotic networks that optimize the whole system so human communities and the rest of life can thrive.

We are not the masters of life’s diversity, and have the potential to become a regenerative presence in ecosystems and the biosphere.

Both collaboration and competition contribute to how life creates conditions conducive to life. The biologist Andreas Weber explains: “The biosphere is not cooperative in a simple, straight-forward way, but paradoxically cooperative. Symbiotic relationships emerge out of antagonistic, incompatible processes” (Weber, 2013: 32). Weber stresses that we have to understand how the works of the economist Adam Smith and the political economist Robert Malthus influenced Charles Darwin in his attempt to construct a theory of evolution.

Example of collaboration in leaf-cutter ants.

The limited narrative of separation, with its exclusively competition- and scarcity-focused understanding of life, is supported by outdated biological and economic theories. Weber calls this an “economic ideology of nature” and suggests that an ideologically biased perspective “reigns supreme over our understanding of human culture and world. It defines our embodied dimension (Homo sapiens as a gene-governed survival machine) as well as our social identity (Homo economicus as an egoistic maximizer of utility). The idea of universal competition unifies the two realms, the natural and the socio-economic. It validates the notion of rivalry and predatory self-interest as inexorable facts of life” (pp.25–26).

The optimization of resource-sharing and processing in order to (re)generate and share abundance and systemic health, rather than competition for scarce resources, is the basis of life’s way of doing economics! In attempting to create a life-friendly economy, we need to understand the profound implications that the emerging ‘systems view of life’ has for our undertaking. Here is a 7min video of Fritjof Capra presenting the book with explicit reference to economics.

Fritjof Capra on ‘The Systems View of Life — A Unifying Vision’, Capra & Luisi 2014 (7 minutes)

As the twenty-first century unfolds, a new scientific conception is emerging. It is a unified view that integrates, for the first time, life’s biological, cognitive, social, and economic dimensions. At the forefront of contemporary science, the universe is no longer seen as a machine composed of elementary building blocks. We have discovered that the material world, ultimately, is a network of inseparable patterns of relationships; that the planet as a whole is a living, self-regulating system. […] Evolution is no longer seen as a competitive struggle for existence, but rather a cooperative dance in which creativity and constant emergence of novelty are the driving forces. And with the new emphasis on complexity, networks, and patterns of organization, a new science of qualities is slowly emerging.” Fritjof Capra and Pier Luigi Luisi (2014b)

Integrating economy and ecology with wisdom

The evolutionary biologist and futurist Elisabet Sathouris describes how in the evolution of complex communities of diverse organisms a ‘maturation point’ is reached when the system realizes that “it is cheaper to feed your ‘enemies’ than to kill them” (personal comment). Having successfully populated six continents and diversified into the mosaic of value systems, worldviews, identities (national, cultural, ethnic, professional, political, etc.) and ways of living that make up humanity, we are now challenged to integrate this precious diversity into a globally and locally collaborative civilization acting wisely to create conditions conducive to life.

We have now reached a new tipping point where enmities are more expensive in all respects than friendly collaboration; where planetary limits of exploiting nature have been reached. It is high time for us to cross this new tipping point into our global communal maturity — an integration of the economy and ecology we have put into conflict with each other, to evolve an ecosophy.” –Elisabet Sathouris (2014)

The challenge of a fundamental re-design of how we do business, of our patterns of production and consumption, of the types of resources and energy we use, goes hand in hand with the structural redesign of our economic systems. We have to challenge economic orthodoxies and basic assumptions, and find ways to integrate multiple perspectives if we hope to redesign economies at multiple scales and learn how to manage our household with wisdom (oikos + sophia).

If our Homo sapiens sapiens wants to continue its fascinating yet so far relatively short evolutionary success story we have to evolve wise societies characterized by empathy, solidarity and collaboration. Wise cultures are regenerative and protect bio-cultural diversity as a source of wealth and resilience (Wahl, 2016).

[In the remainder of this module on Economic Design of Gaia Education’s course Design for Sustainability] we will take a closer look at the social and ecological impacts of the current economic and monetary system, and will explore why the globalized economy behaves as it does before we explore strategies for re-design and inspiring examples of best processes and practices in the transition towards sustainable and regenerative economic patterns at multiples scales. By revisiting basic assumptions about economics we can begin to integrate ecology and economy in full reconnection of the interbeing of nature and culture. We need wisdom to re-design an economic system fit for life. Here are some insights that can help us:

• The rules of our current economic and monetary system have been designed by people and we can therefore re-design them.
• We have to question the role of scarcity, competition, and the maximization of individual benefit has cornerstones of our competitive economy.
• In redesigning economic systems at local, regional and global scale we should pay special attention to how the system incentivises regenerative practices, increases bio-productivity sustainably, restores healthy ecosystem functioning, while nurturing thriving communities.
• Modern evolutionary biology transcends and includes Darwinian justifications of competition as ‘human nature’, as it acknowledges that complex patterns of collaboration have enabled the evolution of our species and the continued evolution of consciousness towards planetary awareness.
• Our ability to cooperate has shaped who we are in equal and possibly more profound ways than competitive behaviour, hence we need to re-design economic systems to establish a healthy balance between the way competition and collaboration are incentivised in the system.
• Rather than maximizing isolated parameters or the benefit of a select few, a re-design of our economic system to serve all of humanity and all life will have to optimize the health and resilience of the system as a whole (understanding humanity as nature; and the economy as a sub-system of society and nature in interconnected eco-social systems).
• The dominant narrative of separation creates a focus on scarcity, competition and individual advantage, while the emerging narrative of interbeing challenges us to create a win-win-win economy based on the understanding that it is in our enlightened self-interest to unlock shared abundances through collaboration.

AUTHOR’S NOTE: This is an excerpt from the Economic Design Dimension of Gaia Education’s online course in Design for Sustainability, which I recently revised and re-wrote on the basis of an earlier version by Jonathan Dawson (now head of economics at Schumacher College). The 400 hour on-line course offers a whole systems design approach to taking part in the transition towards thriving communities, vibrant regional economies and diverse regenerative cultures everywhere. The Economic Design Dimension starts on March 6th, and runs for 8 weeks (80 study hours). The above is a little preview of the nearly 140 pages of text, links and videos, that participants explore under the guidance of experience tutors and as part of a global community of learners. For more information take a look at the content of this on-line training for global-local change agents in economic design. Much of the material I used in authoring the curriculum content for this course is based on the years of research I did for my recently published book Designing Regenerative Cultures.

Photo by ..Gratefulhume..

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Susana, tell us about your background, how did you end up being an activist working on financial reform and P2P/Commons Dynamics?

After becoming an economist, I worked for a long time in the internet business sector, but around 2003 I decided to undertake some research on the monetary system, and out of that came a book and other published works. I did this because I felt the need to. I wanted to understand, for myself, many of the dynamics that were taking place in the world, which mainstream economics were not explaining. When you understand the monetary and financial system, everything starts to make sense.

What does abundance mean to you?

Abundance is a new economic frame in which scarcity cannot be preserved. It’s funny to speak in these terms about scarcity, but it is appropriate. Economics used to be about managing scarce resources, but scarcity has turned out to be not a condition to overcome, but the Holy Grail to access monetary wealth for some. Meanwhile, it overlooks other types of scarcity, like our capacity to pollute the air without destroying the planet.

There is no economic value without scarcity. But scarcity is dying in the highest levels of innovation, in the very heart of the digital revolution. For the first time, the evolution of the economic system is not leading to higher productivity or sales, but just the opposite.

Economic evolution is leading to goods in new formats, with new ways of production that are extremely efficient and open by their very nature. That takes them very far from the scarcity context that creates economic value, sales, and profits. We need to adapt the way of organizing production and consumption to this new frame. I think it will be for the best. In general, I think that the end of scarcity is good news.

How can we create abundance in the material sphere?

I think the key to harnessing abundance is through a different monetary and financial system. But you have to bear in mind that this new trend is coexisting with the old trend of financialization and commodification, which goes exactly in the opposite direction. The centre of both of them is the monetary and financial system: it was the financialization that brought us to where we are now. Financialization started when the USA left the gold standard behind. It is only a new, deep evolution in the monetary and financial system that can allow us to adapt to this new economic frame in such a way that we can harness it to create prosperity for the majority of the people in an environmentally sustainable way.

Can you talk about the ongoing trend towards decommodification? Where do you think it will lead, and what are its advantages and dangers? Can we have ethical markets for sustainable livelihoods existing alongside non-monetary access to resources?

Technological innovation is bringing us to different scenarios of decommodification. One of the most important ones is when a corporation takes advantage of a certain innovation to destroy an industry, in order to create a competitive advantage for itself or weaken competitors. For example: Google created Android, a free OS for devices where Google products run smoothly, and destroyed the operating system business—for portable devices at least—where Microsoft and Apple were leaders.

But there is another decommodification trend, like Wikipedia, where voluntary contributors have created an online, free, collaborative encyclopaedia that has left the other ones behind as outdated, and has made it almost impossible to sell them in the foreseeable future.

I think that the disadvantages are that we need to change the way we were organizing the economy. People can’t depend on wages to live anymore, because wages are going to disappear altogether. The advantage is that we can get organized to produce and consume in a different way. In this new economic scheme, people won’t be divided anymore between workers or consumers. In this new units of production, people will have to provide funding, or endorsement for funding, labour and demand of the products. This is how the “prosumer” figure was born.

As Susan George said, we are used to seeing how companies look for the wealthiest markets to sell their products, and for cheaper countries to produce those products—but in reality, consumers and employees are the same people, wages turn into purchasing power, and this effort doesn’t lead to any situation that is sustainable in the long term.

We see this trend of commodities becoming commons and services becoming relationships as a positive thing. But what are the macroeconomic implications?

The macroeconomics implications are clear: we are going to see a reduction in income, in general. If the scarcity disappears, the value chain collapses. Business are no longer profitable and they stop paying taxes and wages…But it is very important to notice that it is not so clear that commodities will become commons thanks to the decommodification trend. For example, Amazon created a digital platform such as Kindle, so authors could publish their work in a “do it yourself” way. This has deeply disrupted the bookshop and publishing businesses, but books have not really become commons thanks to it. Epub format for digital books existed, it was a standard format, but Amazon decided to go with a non-standard format in a closed environment where you can only read these works if you are in their platform, in their apps, or reading with their devices. This way they can show adverts of their other products to you and put cookies in your laptop, to retarget you, so they can show you their adverts also everywhere when you surf the web. Monopolies are the only way scarcity can be maintained, but this won’t lead to a situation where wealth will be distributed at all. All of these global companies use fiscal optimization techniques that allow them to pay very little in taxes.

So, how can we avoid the hollowing out of a welfare state dependent on taxable income?

In my view, some public goods or services will need to start getting funded by a direct compensation, using an alternative means of payment. The people must be able to provide solutions to public needs and have it accounted as a public contribution. For instance, Prof. Bruno Theret from the Dauphine University in Paris has published a paper about how to introduce a time tax in order to fund political action. People would have to pay a time tax, payable with some kind of time money, and they would need to earn this time money by carrying out political participation in a decentralised way, or by paying for it in conventional money through a progressive scheme (the hour would be more expensive for those whose earnings are higher). There are two objectives here: to decentralise the political action so people carry out political action directly (instead of politicians), and to partly reduce the cost of political decision in conventional currency (political parties, consultants, etc.) There are many other currency schemes that can work to get to the same results, we can talk about what kind of currency we could use. We could even use euros, but euros created in a different way. Once this is proven to have worked with pilot projects, why not fund other expenses the same way? We could start with expenses that governments never have the money to undertake, like preventive medicine. That would save conventional state money expenditures in health care, as well as saving the suffering of the people.

As a social currency analyst, what is your opinion of cryptocurrencies? What do you think of the banking sector’s attempt to enter the cryptocurrency arena, will it succeed?

My opinion of currencies based on the block-chain technology is that they are a great invention. It is really interesting to explore what we can do with them. But the core of the transformation of the money system is not the technology of the payment systems, but the way money is created, and the way we build the confidence that underlies the monetary system. So, the social contract that underlies the money system. I understand that the banking sector enters the crypto arena, as Bitcoin, particularly, is designed to make redundant the whole banking system as electronic payment channel. There is a lot at stake for banks in this move; they understood it, and they are reacting quickly. I hope, in spite of this, that some new forms of money can emerge and nurture the creation of another kind of economy focused on people’s needs and the environmental limitations we really have. My only concern about Bitcoin is about the expectations it is creating. Bitcoin can best the banking system in its function of payment system, but it is not a solution for a money creation format that is linked to society. A money creation that is linked to society and its needs is a credit system, where money is created out of credit. A type of credit that will finance productive economy and not speculative bubbles, a different way of creating money out of credit than the one the banks carry out.

Som Energía, a solar, prosumer-oriented enregy cooperative operating in Spain

Tell us more about prosumers and self-provision. It’s also interesting to talk about this in the context of the Spanish state, and the slew of anti-P2P legislation it seems to specialize in, like the solar tax.

Well, the basis is that everybody has an asset which they don’t presently use to negotiate: their demand, their capacity to buy. Demand is scarce in the capitalist context. People should use their demand not only to get better prices, as we do now, but also to negotiate and get their share of income from the production process, in order to use that income to purchase the good that is being produced.

And do you see that could work in the public sphere as well?

The example of the time tax to fund political action that I just explained could be a case for it. That is, to self-provide political services by prosumer citizens. There are many ways in which people can collaborate to build means of production that will allow them to access the products and services they need. To offer the citizen the option to produce the capital for the commons (which is a way to own but without the right to sell or destroy), and be rewarded with a token that they can then use to pay for the service or product – this is going to be the key competitive advantage of a future without employment and without scarcity. People can collaborate to create solar energy plants, distributed factories, repair workshops, and almost any kind of means of production as a commons.

Is it like an economic closed circuit?

It doesn’t need to be closed. The circuits can be interconnected and the means of production can serve not only those circuits but also the market. The prosumer can fund the initiative, which they can do not only with their money but with their endorsement, too. If they can work to build it, and consume it with a self-made means of payments they have received for the work they have done to build it, such an initiative doesn’t need to fear global competitors, as the main part of their payment commitments will be paid in kind. For everything else, you should still have the market and the state, which you can also fund with a healthier form of money.

What do you mean by a healthier form of money?

I think the de-commodification trend needs to extend to the money itself. Most money is created by the banking sector out of lending. This is the commodification of uncertainty. I think uncertainty needs to be de-commodified by the self-provision of risk assumption in non-speculative projects. Credit risk needs to enter the P2P scenario, not only to provide credit in bank money as the crowdfunding platforms do, but also to create money out of lending, like banks do, for the creation of new kinds of money. This is the way many social and complementary currencies are created. It makes sense to split and spread the risk. It is not only a way of self-provision of the collaborative economy; it also brings about a much better financial system, free of systemic risk and speculative bubbles.

You’ve also examined possible scenarios for Basic Income. Do you think this should be based on fiat currency and taxation or on new money creation? How can a basic income be compatible with sustaining the provisions of a welfare state?

I see the basic income as a necessary means for a transition towards another type of system. Employment levels are never going to recover. People need to survive and basic income is a way forward. Its main advantage is that the beneficiaries of it can devote their time to building long term solutions to solve their needs, which many times won’t be achieved by getting a job, considering the jobs available. We need a different way of production and consumption but this takes time to get built. I think basic income would work if it is mainly paid in fiat or conventional currency. Basic income in complementary currency is being tested, for instance the social currency Moneda Demos, or the Universal Relative Dividend. I think this is definitely worth exploring. But where I think that complementary currencies could be of help the most is in providing a means of exchange for those new ways of production and consumption: for the self-provision of goods and services.

Continuing the conversation on Basic Income, tell us about Barcelona’s EU pilot project for Basic Income. How will it look like and what are your expectations?

The purpose of this project is to test basic income and its potential to take people out of poverty for good. Regarding the social currency project in Barcelona, the council is conducting research about its possible implementation in order to achieve the goals of the city’s government, as a tool that can serve the city’s productive model transformation increasing its sustainability, resilience and reducing its social and economic inequalities, which are among the highest in Spain and Europe.

What is your impression of the new city government a year and a half into the legislature? Do you think En Comú is really commons-oriented, although not overtly so?

I think it has been a very interesting period in which I have noticed the true aim of building bottom-up solutions with citizens. It has been a hard period, too, with some disappointments, projects that go too slow, etc. Facing reality is never an easy matter, but the important part of this is that the council is making an effort to face reality and listen to everyone. We will see if it is able to do it.

One of the things we’ve appreciated in the formation of the new citizen coalitions in Madrid, Barcelona and Valencia is the incorporation of feminism and gender representation as a basic element. The P2P/Commons movement is sometimes characterized as being too male oriented; what can we learn from the post-15M political panorama in these “Rebel Cities”, and how do you see the gender question as it pertains to the Commons?

I think gender equality is important. As I have been able to notice, it is not only that women can access some environment like politics, or the commons, which is important of course; it goes further than that. I think the determination to integrate women changes the attitude towards “the others” in general. What I mean is that it changes the way men do things, too, making everyone more open, willing to listen, understand, and follow different people. This is key in many walks of life, but specially in politics. It makes everything richer.

Finally, how do you think we can achieve a real sharing economy, or a Commons Transition, as we like to call it?

It think the weak part of the commons is that very frequently it is not a business for anyone. So, nobody is interested in funding it. This is a real hurdle for its development. The solution is to create a new kind of money that can fund the commons. Conventional money taps into the scarcity. The new money that can help build the commons taps on the abundance.

SUSANA MARTÍN BELMONTE’S BIO:

Economist with a Bachelor’s Degree in Economic Theory from the Universidad Autónoma de Madrid (1993) and a Master’s Degree in Marketing Management from ESIC (1998). She was a market analyst in the Commercial Office of the Spanish Embassy in Mexico, as part of a Spanish Institute for Foreign Trade (ICEX) program for promoting foreign trade. Her professional career has been largely devoted to the new technology sector in private business, with an international focus. In 2003, she began research on the monetary system. The resulting work was published by the Spanish publisher Icaria, entitled “Nothing is lost: a healthy alternative monetary and financial system.” Since then, she has juggled her work in economic criticism, complementary currency development and developing the Institute for Social Money (of which she is co-founder). She is currently working in a research programe, with the council of Barcelona, on social innovation related to Basic income and a local currency.

Lead image by Alternativas Económicas

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I was recently challenged by a friend around my model of abundance and put together this set of axioms that drive my thinking. I have no doubt that there are many other paths to thinking about abundance, but this is mine.

I.

1. Some portion of the universe is rivalrous. I’ll call this “energy”.
2. Some portion of the universe is anti-rivalrous. I’ll call this “information”.
3. It appears to be the case that information can have causal effect in only one direct way—by being “instantiated” in some energetic form.
4. All other causal relations in the universe are “mediated” by energy.

A very large amount of thinking could be done just with 1–4 above and they are far from certain. For our purposes, we will take them as axioms.

II.

5. The rivalrous operates under specific dynamics such as diminishing returns and entropy. The anti-rivalrous operates under very different dynamics such as accelerating returns and the network effect.
6. It appears, specifically, that the rivalrous (energy) is subject always to the second law of thermodynamics and heat death. But it does not appear that thermodynamic entropy has any direct impact on information.
7. As a consequence of these dynamics, the universe appears to consist of three different fundamental system dynamics.

7a. Those that are dominated by the dynamics of energy—these are linear systems characterized by the principle of least energy (e.g., a falling rock, a lightning bolt, a salt crystal, etc.)

7b. Those that are dominated by the dynamics of information—these are exponential systems.

7c. Those that are a mix of energetic and informational dynamics—these are dissipative structures characterized by S-curves and the principles of maximum fitness (i.e., all the laws of evolution).

III.

8. Dissipative structures are the result of energetic systems accessing and “taking advantage” of informational dynamics. All things being equal, the more a dissipative structure participates in / accesses information dynamics, the more bang for the buck it will get (the more fitness for energy input) and, therefore, the more fit it will tend to be.

8a. This is the fundamental driving the emergence of sensory cells, neural anatomy, complex neurology, etc. Each case is an example of an expansion of the capacity of dissipative structures to access and take advantage of information dynamics.

9. The emergence of novel capacities to operate in and with the “information domain” is one of the dominant structures of the arc of evolution writ large.

9a. Each such emergence appears to generate what is called a “portal pathway” in the evolutionary fitness landscape—an almost one-way ticket to a “higher order” fitness landscape. For example, the emergence of multi-cellularity was a portal pathway. While multi-cellular organisms continue to co-exist with single cell organisms—they effectively are no longer in competition with them. Similarly, the emergence of technical civilization was a portal pathway. While contemporary humans continue to co-exist with chimpanzees and lions—they effectively are no longer in competition with them.

10. Portal pathways are called this because while it is certainly possible for an emergent fitness landscape to “fall apart” and transition to some other set of dynamics, it has never so far occurred that the novel capacities that unlocked the portal pathway have been entirely lost. Accordingly, any future fitness landscape takes into account these new capacities and their relatively dominant effectiveness in comparison to prior regimes.

IV.

11. An examination of a very large number of metrics including population, energy consumption, CO2 production, information production, etc. indicates that something occurred somewhere around the 15th or 16th Century in the world that represents some kind of portal pathway.
12. Per the logic of 7c and part III, the historical effectiveness of this portal pathway is that it was able to more effectively access and take advantage of information dynamics than all previous eras.
13. A very large number of human dynamics (interpersonal relationships, violence, individual psychological assumptions and habits, family and social structures, etc.) have changed under the new “rules” of this new fitness landscape.

V.

14. The hypothesis of “abundance” or a non-rivalrous economy is based upon the proposition that we are currently in the process of traversing a new portal pathway into a system that is even more able to access and take advantage of information dynamics than has been available under the 15th—20th Century regime.
15. Under the abundance hypothesis, we are near or past a tipping point between a legacy system that has been dominated by the “rivalrous attractor” and an emergent system that is dominated by an “anti-rivalrous attractor”.
16. The deep insight of this transition consists of two elements.

16a. It is possible in principle for a sufficiently mature abundant economy to provision comprehensive wellbeing for every agent in the system. More on this later.

16b. Because of the nature of information dynamics, the movement toward provisioning comprehensive wellbeing is synergistic. That is, as more people are more fulfilled, the capacity of the system to provide more fulfillment to more people increases.

Note. While the abundance hypothesis establishes a firm direction on the evolution of the system from this point forward, it is difficult to predict the timeframe associated with the amelioration of the legacy consequences of the rivalrous attractor and the rollout of accelerating wellbeing.

It is possible that the synergistic effects of abundance (16b) are ramifying which would result in “accelerating returns” and a relatively rapid acceleration from legacy systems that evolved under a dominant rivalrous regime to new systems that optimize for anti-rivalrous dynamics.

For example, given our understandings of developmental psychology we might imagine that the longer a person has been alive and adapted to the rivalrous attractor, the harder it will be for them to adapt to the anti-rivalrous attractor and the more that they will inhibit the rollout of the abundance economy.

Thus, if we imagine *only* a vector where the ability to operate with anti-rivalrous dynamics is pushing against psychological plasticity and legacy inertia, it seems likely that a comprehensive transition of the entire species could take as long as eight generations.

But, of course, while it is implausible to imagine billions of people making significant moves into an “abundance mindset” under current constraints, it is trivial to imagine new capacities that could deliver on this potential.

For example, lets imagine that in 90 years we are 1000X more capable at directly influencing neuro-cognitive states in a long-term and sustainable way.

Looking back over the last 90 years, and projecting forward accelerating change, this is a perfectly plausible hypothesis. In this circumstance, we could imagine that every human’s subjective experience of wellbeing would be largely decoupled from their actual physical environment. The presence or absence of mates, food, etc., would be as irrelevant as the actual outside temperature to an air conditioned resident of Houston, Texas. This obviously raises its own issues—but the key point is that these are entirely new and different issues. Legacy rivalrousness and legacy human developmental plasticity is no longer a driving consideration.

Photo by Barbara Gilhooly

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If we study the productive reality of the last thirty years, the changes turn out to be amazing. Among all of them, the most striking, the most unexpected, the one that most strongly contradicted the idea that the great economic systems of the twentieth century had about themselves, was not that the future would be full of computers, cellphones, and electronic equipment. That idea had already appeared in the ’40s and ’50s in science fiction and popular futurism. Nor was it globalization. The idea of a world united by free trade had been part of the Anglo-Saxon liberal ideal since the Victorian era, and from the foundation of the League of Nations, between the wars, it was part of the declared objectives of the great English-speaking powers.

No, the most shocking thing was the beginning of the end of business gigantism. From the State businesses of the USSR, to shipbuilding and metallurgy in Asturias, from Welsh mining to United Steel or the big automotive companies, the oligarchs that had been the model of “enterprise” for the contemporary industrial world, stopped hiring, collapsed, and fired tens of thousands of workers. It wasn’t just “de-localization”: the new Chinese or Vietnamese plants didn’t grow indefinitely, either. Markets like electronic products expanded year after year, and yet personnel and capital global used were reduced. It was said that the new labor-intensive industries would be services, especially services connected with the new dominant form of capital: finance. But soon, banks and insurers that employed hundreds of thousands of people at the turn of the century started to reduce personnel. Today, the great banks are on track to reduce personnel by 30% over the next decade.

What happened?

What had happened was, in fact, amazing. Following the Second World War, the United States had become the great provider to the world. When the war ended, US GDP was around half of the global GDP. Benefiting from the European need for reconstruction and from peace treaties that, while not reaching the level of humiliation of Versailles, were openly asymmetrical, big Anglo-Saxon businesses globalized at great speed speed. It was a dream come true for their shareholders. It wasn’t at all strange to economists. At the time, if Marxists, Keynsians, and neoliberals agreed on anything, it was that businesses were able to, and in fact tended to, grow indefinitely. But by the ’50s, it was already obvious that something was going wrong. In the USSR and the countries of the East European, you could always blame the arbitrariness of the political system or the mistakes of the planners. But in the USA, it was different. And yet, it was there, present and invisible, like an elephant in a high-society gala. The first to realize it was a economist called Kenneth Boulding. Boulding noted that American businesses were reaching the limit of their scale, the point at which inefficiencies due to having to manage a larger size were not compensated for by the benefits of being bigger. Looking at the America of his time, he also warned that big businesses would try compensate for their inefficiencies using their weight in the market and in the State. We were under pressure long before “too big to fail” in the crisis of 2008, but he could already tell that Big Businesses would not hesitate to use the power they had as a result of employing tens of thousands of people to get made-to-fit regulations and thinly-veiled monopolies. Business over-scaling, warned Boulding, could end up being a danger to the two main institutions of our society: state and market.

But what came next was even more surprising. Businesses bet on improving their systems and processes. They discovered that information was important—crucial—to avoid entering the phase in which inefficiencies grew exponentially. It also became obvious that a business size that was inefficient for one market became reasonably efficient for a larger market. As a result, they used all their power to promote a branch of technology that had shone only marginally in the great war: information. With this same objective, as soon as the opportunity arose, they pushed governments to reach commercial agreements and, above all, frameworks for the free movement of capital, since the industry that had scaled fastest and had begun to give alarming signs of inefficiency was finance. Meanwhile, the champion in business scale, the USSR and the whole Soviet bloc, collapsed, to the astonishment of the world, in an obvious demonstration that operating life wasn’t infinite.

A true revolution in support of the feasibility of large scales in crisis was implemented in the West. The political result was called “neoliberalism.” It basically consisted of the extension of free-trade agreements, which expanded markets geographically; financial deregulation, which allowed the rise of “financialization,” or extension of markets over time; and a series of rents and monopolies for certain businesses, which were assured by regulations, like the hardening of so-called “intellectual property.”

The technological result was known as the “IT revolution,” which is to say revolution of information technology. But it came with a surprise, following a series of apparent coincidences in the search for ways beyond the limits on efficiency imposed by the rigid hierarchical systems inherited from the previous century. At the end of the ’60s, the structure of networks that connected big university computers, which was financed by defense spending, took a distributed form. This would not have brought about a radical change if a new field, domestic information science, had not evolved towards small, completely autonomous computers, known as “PCs.” The result was the emergence in the ’90s of an immense capacity for distributed and interconnected calculation outside the fabric of business and government: the Internet.

The revolution of scale

The Internet brought profound changes in the division of labor, which overlapped with the ongoing reduction of optimal scales, and changed the social results expected from delocalization, the first trend in globalization.

In the ’90s, when the “end of history” seemed go hand in hand with the consolidation of a new string of industrial technology giants (Microsoft, Apple, etc.), free software, which had been a subculture until then, built the first versions of Linux. Linux is the “steam engine” of the world that is emerging: the first expression of a new way of producing and, at the same time, a tool to transform the productive system. Over the next twenty years, free software would come to be the greatest transfer of knowledge and value in the contemporary era, equivalent to several times all foreign aid to development sent from developed countries to those on the periphery since WWII.

Free software is a universal public good and, in an era in which information infrastructure is a fundamental part of any productive investment, a free form of capital. Free capital drove an even greater reduction in the optimum scale of production. But it also helped make value chains of the physical goods with strong technological component distributed. Globalization and delocalization had broken the links in value creation in thousands of products throughout the world, especially in the less-developed nations of the Pacific basin, but all those chains were re-centralized in the US, and to a lesser extent, in Japan, Germany and other central countries, where big corporations (from Apple to Nike) branded, designed, marketed, and hoarded the benefits of intellectual property. The possibility of free software was key for many of those chains to “insource” in countries like China, and produce all the elements, including those of greater value added.

The immediate result was prodigious economic development, the greatest reduction in extreme poverty in the history of humanity, the greatest increase in real wages in the history of China, and the appearance of new global centers of innovation and production in coastal cities. These cities play by a new set of rules that, not surprisingly, include an extreme relaxation of intellectual property, an accelerated reduction of scales, and production chains systems and assembly systems that allow a formidable increase in scope, which is to say, the variety of things produced.

The Direct Economy

As all these changes were set in motion in Asia, in Europe, the free software model was expanding into a whole spectrum of sectors. Soon, groups would appear that replicate the mode of production based on the commons (“the P2P mode of production“) in all kinds of immaterial content—design, books, music, video—and increasingly, in the world of advanced services—finance, consultancy—and industrial products—drinks, specialized machinery, robots, etc.

But while the “P2P mode of production” is a fascinating path for a transition from capitalism to abundance, its direct impact—how many people live directly from the commons—is relatively small. As in Asia, Europe, and the US, structural change will begin in an intermediate space that is also based on the digital commons: the Direct Economy.

The Direct Economy is all those small groups of friends—and therefore, a basically egalitarian organization—that design a product that generally incorporates software and free knowledge into itself or its process of creation, sell it in advance on a  crowdfunding platform (making bank financing or “shareholders” unnecessary), produce it in short runs of a few thousands in a factory, whether in China or on the side of their house, and use the proceeds to improve the design or create a new product.
The Direct Economy is bar owners who invest 10,000 euros in equipment and begin to produce beer 100 liters at a time, or a few tens of thousands of euros and gain capacity to prepare almost 1,500 liters every 12 hours in continuous production—and then go on to bottle and begin distributing nearby and in networks of beer artisanal lovers.  And of course, they will have more varieties than the big brewery in their are, higher quality, and a better quality/price ratio.

The Direct Economy is the academy or the high school that installs a MOOC or Moodle to be able offer its students services over the summer, independent app developers, the role-playing bookstore that buys a 3D printer and starts selling their own figurines, or the children’s clothes store that starts designing and producing their own strollers, toys, or maternity bags.

All of them are small-scale producers making things that, until recently, only big businesses or institutions were able to make. All of them have more scope than the scale model. All of them, at some point in the process, use free software and knowledge, which reduces their capital needs even further. All of them take advantage of the Internet to reach providers and customers for low costs—for example, by being able to reach very geographically dispersed niches or find very specialized providers. Most will not have to resort to banks or investors to finance themselves, but rather, will use pre-sale and donation systems on the network to raise money. And some of them use the “commodification” of the manufacturing industry and its flexible production chains for the process.

As for internal organizing, we’re generally looking at models that are much “flatter” and more democratic than conventional businesses. While traditional businesses are autocracies, or at best aristocracies based on hierarchical command and responsibility, the large majority of projects in the Direct Economy are “ad-hocracies,” in which the needs of the moment shape teams and responsibilities. This even happens in cases where big businesses decide to take a gamble on creating a spin-off and competing in a new field. Instead of an org chart, there are task maps. Rather than “participation in management,” there emerges the type of energy that characterizes any group of friends that make something “spontaneously.” If the legal process wasn’t still so arduous, if it didn’t require notaries and endless paperwork, we would say that the natural way to the Direct Economy is worker cooperativism.

Conclusion

But none of this is as important as the broader meaning of the Direct Economy to people’s possibilities in life. In Wage Labor and Capital, one of his more accessible works, Marx explained the trap in the narrative that exalts social mobility and equality of opportunities: wages can’t become capital. Or, rather, couldn’t… and it’s true that it continues to be unable to in a good part of the world and in many branches of industry. But we’re seeing something that is historically shocking—the reduction to zero of the cost of an especially valuable part of capital, which materializes directly knowledge (free software, free designs, etc.). And above all we see, almost day by day, how the optimum size of production, sector by sector, approaches or reaches the community dimension.

The possibility for the real community, the one based on interpersonal relationships and affections, to be an efficient productive unit is something radically new, and its potential to empower is far from having been developed. This means that we are lucky enough to live in a historical moment when it would seem that the whole history of technology, with all its social and political challenges, has coalesced to put us within reach of the possibility of developing ourselves in a new way and contributing autonomy to our community.

Today we have an opportunity that previous generations did not: to transform production into something done, and enjoyed, among peers. We can make work a time that is not walled off from life itself, which capitalism revealingly calls “time off.” That’s the ultimate meaning of producing in common today. That’s the immediate course of every emancipatory action. The starting point.

Translated by Steve Herrick from the original (in Spanish)

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From the Shownotes to the Podcast

Frederick Malouf. “I would not be wrong in saying that Michel is the founder of peer-to-peer research in the modern age, and I have to say it is privilege to interview him on models that best organise the commons. In this money age, I admit it is hard to leverage solely reputation platforms to gift sustainable quality, but the P2P Foundation is an incalculable resource to demonstrate the incredible empowerment that exchanging quality can be, and the way that people overcome the disempowering nature of money to achieve that. You can find out more at P2PFoundation.net. Live the dream. :)”

About the Interviewer

Frederick has always been an outcast, but never a follower. Such a foundation lead him to study architecture, the philosophy of art, which grounded him in applying critical thinking, not be enveloped in the academia of this. Never content to be stuck in an office and not practice the art of architecture, the perpetual traveller left Australia with borrowed money to Europe. Spending everything in 4 months, he stayed away for 7 years, seeing 33 countries over 3 continents and sailing across the Atlantic twice. A huge head-on collision in Mexico while making his way hitch-hiking to Brazil brought him home to recover.

After completing his masters in design, he fell into radio as a volunteer as the only outlet to broadcast his autonomous ideas, using the platform to learn why being sustainable wasn’t cool. This brought about his discovery that the only platform that values unlimited quality creation in the most sustainable way is gifting. His current program Theqse (The Quality Status Economy), is his platform for discussing the empowerment of gifting to achieve self-awareness, which he expresses playing ambient music during drive time.

He is now working with gifters worldwide to connect them together as one powerful force to change the world.

Find more of his work here: http://theqse.tumblr.com

Lead image by Unchalika Bauwens

The post Michel Bauwens on Reputation and its role in the Commons appeared first on P2P Foundation.