In the meantime, the token economy has exploded, and despite its many faults and weaknesses, it has brought open and contributive accounting to the mainstream as a practice, via programmable tokens that are divided up exactly as the open source communities decide. We have moved from an economy based on capitalist enterprises, which extracted all the surplus value from the developers, to an eco-system in which contributory competency networks, prepare white papers, crowdfund through tokens, and distribute the value much more widely amongst the contributors.

While much remains to be done, this is a major milestone in showing a possible future of or work and reward systems. The two following extracts bring testimonies about how the ‘developer working class’ is looking at these advances.

The question now is, can other sections of workers, those that do not belong to the aristocracy of labor that do software work, also learn and benefit from these new systems, and a second question is, We will be working on these very questions this summer and publish a report about it.

(excerpted from): How App Tokens Changed the Life of the Developer Working Class

Richard Burton: A month of work for the protocol (Ethereum) has completely changed my life. I am free to travel the world and work on whatever I want. It is hard to overstate the mental freedom afforded by having a cash buffer and not having to work all the time to make ends meet. It has had a profound effect on my mental health and freed me up to do the best work of my life. The people who built this protocol took a chance on me and I am incredibly grateful.

Vitalik and his team gave birth to a protocol that over 7,000 people committed to. They effectively held an IPO for their protocol at the start of the project. Since then, thousands more have got involved by trading Ether, writing code, and helping the protocol to flourish.

– “Bitcoin is not just a protocol or money, it’s a new business model for Open Source Software. Prior to Bitcoin, you had to raise money, write software, distribute your product, build a business model, and work towards liquidity. Angels, VCs, salespeople and bankers guided you the entire way, through a maze of tolls and controls.”

Naval Ravikant saw this coming months before the Ether sale. The coins that protocols distribute to contributors are like shares in a company. The key difference is that these shares are not locked up by startup founders and venture capitalists.

There are a thousand nightmarish stories about startup employees not being able to afford to exercise their stock options and missing out on millions of dollars. Alex MacCaw and I wrote about this problem in 2013 after seeing many of our friends go through the stressful process of trying to borrow money to buy the stock they had earnt.

The current stock option system is totally broken. It forces people to stay at companies longer than they want to in the hope that a liquidity event is just around the corner.

App Coins are totally different from stock options. I was paid for my month’s work and I was rewarded for my belief in the protocol at an early stage. There was no cliff, no vesting schedule, no liquidation preferences, no VC ratchets, no exercise window, just coins. I helped the Ethereum team when they had no money and they rewarded me for that.

The moment I decided to move on to a freelance job, I was free to do so. I didn’t have to stick around in the hope that I would make some huge pile of money in the future.

This model is going to completely change the war for talent. If you’re a smart engineer, you can go and join a rocketship startup and work crazy hours. Alternatively, you can head over to Thailand, live cheaply, and work for App Coins.

Protocol creators need your help: They need people to write clear documentation, teachers to help people learn, designers to work on the user interfaces, customer support staff to handle the swelling inboxes, investors to raise capital, and a whole range of other talent to help them build a successful protocol. It doesn’t matter if you don’t write code—you can still contribute.

Protocols will follow the startup power law: millions will be started and only a few hundred will change the world forever.

In the future, billions of people will be working for a protocol. They will define themselves by the protocols they work for and how much they can contribute.

Protocolism might be the solution we need. It harnesses human ingenuity and distributes the benefits far and wide. It can help us build an economy for the 99%.

When a startup succeeds, a handful of people get insanely wealthy. When a protocol succeeds, thousands of people profit. In the future, the great protocols could lift millions of people out of poverty.

(excerpted from): Decentralization as a Means for Developers and other Stakeholders to Take Back Control from Centralized Platforms

Chris Dixon: Let’s look at the problems with centralized platforms. Centralized platforms follow a predictable life cycle. When they start out, they do everything they can to recruit users and 3rd-party complements like developers, businesses, and media organizations. They do this to make their services more valuable, as platforms (by definition) are systems with multi-sided network effects. As platforms move up the adoption S-curve, their power over users and 3rd parties steadily grows.

When they hit the top of the S-curve, their relationships with network participants change from positive-sum to zero-sum. The easiest way to continue growing lies in extracting data from users and competing with complements over audiences and profits. Historical examples of this are Microsoft vs Netscape, Google vs Yelp, Facebook vs Zynga, and Twitter vs its 3rd-party clients. Operating systems like iOS and Android have behaved better, although still take a healthy 30% tax, reject apps for seemingly arbitrary reasons, and subsume the functionality of 3rd-party apps at will.

For 3rd parties, this transition from cooperation to competition feels like a bait-and-switch. Over time, the best entrepreneurs, developers, and investors have become wary of building on top of centralized platforms. We now have decades of evidence that doing so will end in disappointment. In addition, users give up privacy, control of their data, and become vulnerable to security breaches. These problems with centralized platforms will likely become even more pronounced in the future.

Cryptonetworks are networks built on top of the internet that 1) use consensus mechanisms such as blockchains to maintain and update state, 2) use cryptocurrencies (coins/tokens) to incentivize consensus participants (miners/validators) and other network participants. Some cryptonetworks, such as Ethereum, are general programming platforms that can be used for almost any purpose. Other cryptonetworks are special purpose, for example Bitcoin is intended primarily for storing value, Golem for performing computations, and Filecoin for decentralized file storage.

Early internet protocols were technical specifications created by working groups or non-profit organizations that relied on the alignment of interests in the internet community to gain adoption. This method worked well during the very early stages of the internet but since the early 1990s very few new protocols have gained widespread adoption. Cryptonetworks fix these problems by providing economics incentives to developers, maintainers, and other network participants in the form of tokens. They are also much more technically robust. For example, they are able to keep state and do arbitrary transformations on that state, something past protocols could never do.

Cryptonetworks use multiple mechanisms to ensure that they stay neutral as they grow, preventing the bait-and-switch of centralized platforms. First, the contract between cryptonetworks and their participants is enforced in open source code. Second, they are kept in check through mechanisms for “voice” and “exit.” Participants are given voice through community governance, both “on chain” (via the protocol) and “off chain” (via the social structures around the protocol). Participants can exit either by leaving the network and selling their coins, or in the extreme case by forking the protocol.

In short, cryptonetworks align network participants to work together toward a common goal — the growth of the network and the appreciation of the token. This alignment is one of the main reasons Bitcoin continues to defy skeptics and flourish, even while new cryptonetworks like Ethereum have grown alongside it.

Photo by Marco Verch

The post Tokens as a Labor Model appeared first on P2P Foundation.

The article has been co-authored by Alex Pazaitis, Primavera De Filippi and Vasilis Kostakis.

Abstract: This article explores the potential of blockchain technology in enabling a new system of value that will better support the dynamics of social sharing. Our study begins with a discussion of the evolution of value perceptions in the history of economic thought. Starting with a view on value as a coordination mechanism that defines meaningful action within a certain context, we associate the price system with the establishment of capitalism and the industrial economy. We then discuss its relevance to the information economy, exhibited as the techno-economic context of the sharing economy, and identify new modalities of value creation that better reflect the social relations of sharing. Through the illustrative case of Backfeed, a new system of value is envisioned, comprising three layers: (a) production of value; (b) record of value; and (c) actualisation of value. In this framework, we discuss the solutions featured by Backfeed and describe a conceptual economic model of blockchain-based decentralised cooperation. We conclude with a tentative scenario for blockchain technology that can enable the creation of commons-oriented ecosystems in a sharing economy.

Full text available here: http://www.sciencedirect.com/science/article/pii/S0040162517307084 (find this and more publications of the P2P Lab openly accessible here).

Photo by portalgda

The post Blockchain and value systems in the sharing economy: The illustrative case of Backfeed appeared first on P2P Foundation.

Jordan Greenhall: There have been a lot of conversations about Bitcoin over the years. Is it a currency or an equity or a commodity? Is it a store of value? Is it a “settlement mechanism”? Is it not money at all, but merely an example of a decentralized application on the Blockchain? The short answer is: none of the above.

Bitcoin is a self-organizing collective intelligence. As such, what it becomes is entirely a function of what it can do — that is, it is a function of the capacity of its collective intelligence to overcome the challenges that it encounters in its environment.

In some sense, we’ve seen this sort of thing many times. Every “movement” or “scenius” (to use Brian Eno’s ingenious term for “collective genius”) is a form of self-organizing collective intelligence. The Punk Rock movement, skateboarding, Ruby on Rails. What makes Bitcoin important is that it represents a new mutation in self-organizing collective intelligence.

In order to explain what I mean by this, I’m first going to have to spend a few minutes laying out what I mean by self-organizing collective intelligence.

The Development of Self Organizing Collective Intelligences (SOCI)

The basic dynamics of a SOCI is as follows. It begins as some sort of attractor — some aesthetic sensibility or yearning — that is able to grab the attention and energy of some group of people. Generally one that is very vague and abstract. Some idea or notion that only makes sense to a relatively small group.

But, and this is the key move, when those people apply their attention and energy to the SOCI, this makes it more real, easier for more people to grasp and to find interesting and valuable. Therefore, more attractive to more people and their attention and energy.

Thus begins the generative loop: as the SOCI becomes more real and attracts more people it begins to encounter challenges. Maybe Impressionism is being rejected by the status quo and it needs to find some way to display itself. Maybe hand-coded HTML is too burdensome and clumsy and this SOCI needs to get easier to use.

If the SOCI has enough capacity within its collective intelligence to resolve the challenge, it “levels up” and expands its ability to attract more attention and energy. If not, then it becomes somewhat bounded (at least for the present) and begins to find the limit of “what it is”.

Different SOCI will resolve challenges through different mechanisms. Some will form relatively centralized nodes (ICANN, Rolling Stone Magazine) that will accelerate problem solving in certain areas — but at the cost of losing some of the generativity and flexibility of decentralization. Others will mutate and proliferate exploring their niche like a slime mold (Protestantism and electronic music might be a good examples here).

As the SOCI develops, the choices that it makes — the solutions that it crafts — become part of its core architecture. “Frozen accidents” in its development, these begin to shape and define its future paths, slowly accreting structure and topography as the SOCI moves from its vague, open and highly creative infancy through adolescence and finally into its mature, effective, but much less creative adulthood.

In the end, the development of a SOCI is defined by the challenges it faces, its capacity to surmount those challenges, and the consequences of its solutions on its own further development.

Bitcoin as a Self Organizing Collective Intelligences (SOCI)

Bitcoin is a SOCI. And its future will be determined precisely by the dynamic tension between the problems it faces and its capacity to solve those problems.

Over the years, Bitcoin has worked its way through a complicated childhood. It was able to attract the attention and energy of a core of developers who built software that made it possible for less technical folks to participate and apply their energy. It has been able to create online exchanges and marketplaces and then survive the collapse and redesign and collapse and redesign of these pieces of its architecture.

As it did this, it expanded its “reality” and attracted the attention and energy of more “professional” entrepreneurs and venture capitalists — whose work significantly expanded Bitcoin’s capacity (and birthed an offshoot in the form of the “blockchain” SOCI).

Over the past year and a half it has struggled mightily with its most recent challenge: governance. For most of its developmental history, Bitcoin has been defined by two different governance mechanisms. The vast majority of the work has been highly decentralized — activities like wallet construction and exchange building that is entirely done “at the edge” and with little to no governance outside of simple architectural boundaries. The remainder of the work has been handled through an ad hoc oligarchy of the “Core Developers” who have been broadly able to maintain a highly technocratic coherence.

This loose governance mechanism broke down as the collective intelligence couldn’t achieve coherence on purely technical grounds: two paths emerged that each presented valid, compelling and incompatible attraction to different sensemaking elements of the collective intelligence. The result was the exploration of what might be a fundamental feature of this kind of SOCI’s governance — a “hard fork” where doctrinal and values differences are physically formalized into two separate code bases.

So now we wait. Will the “hard fork” be the next level up for the Bitcoin SOCI and lead to an expansion of its ability to attract more intelligence? Or is this the hill that Bitcoin can’t climb and the beginning of its senescence?

Bitcoin as a new form of self-organizing collective intelligence

Lets step back and consider what the Bitcoin SOCI has already done.

Beginning with essentially no backing and no resources Bitcoin has been able to organically attract attention and energy to grow into something that includes dozens of exchanges in something like 40 different countries and a computational infrastructure that processes an astounding 14 Million PetaFLOPS.

And it has done this while innovating directly against one of the most fundamental components of our current social fabric: money. The beaches are littered with the bodies of well funded efforts to step into this space and, indeed, even a major victory like PayPal required the improbably combined genius of Peter Thiel, Elon Musk, Luke Nosek, Reid Hoffman and the rest of the much gloried PayPal Mafia simply to carve out a “nice” niche in online payments.

And the Bitcoin SOCI has done this in merely seven short years.

This is no ordinary SOCI. The deep importance of Bitcoin is that it represents the first example of an entirely new SOCI organism in our landscape. One that clearly represents a new kind of power and capability. In fact, one that might relate to our legacy forms of collective intelligence in the same way that Homo Sapiens related to Homo Neanderthalensis.

What is the essence of this new form of collective intelligence that represents so much potential? My guess is that this can really only be answered with the benefit of hindsight. But I’ll venture a guess:

1) It is intrinsically global. More to the point, it is geographically unconstrained, and, therefore able to take advantage of any attention and energy anywhere in the world.

2) It is intrinsically virtual. In other words, it is able to connect with resources anywhere with minimal lag and at minimal cost.

These two features combine to mean that in principle this new form of SOCI can attract and utilize the total collective intelligence of the human species almost instantly. While in practice this level of concentrated collective intelligence isn’t likely to happen the potential of tapping into and connecting precisely the girl in Phuket and the team in Slovenia when where and how they are needed is flat out revolutionary.

And, most importantly,

3) It solves motivation, reward and collective action problems through an architecture that is responsive to nuanced and changing value landscapes without being bottlenecked by concentrated (and, therefore, intelligence reducing) decision-makers.

This is a dense and important point that needs to be unpacked.

Consider digital SOCI like, say, WhatsApp, Facebook and Instagram. While these collective intelligences are both global and virtual, their ability to connect with, motivate and apply the attention and energy of their communities is either very narrow (you can contribute to the Instagram SOCI by uploading photos, liking and commenting them, but little more) or bottlenecked by a relatively small team of people who have exclusive power to adapt the architecture (like when the Facebook team added the ability to upload videos).

Bitcoin-like SOCI use the technical capabilities of the blockchain, crypto-tokens and smart-contracts to provide a motivational architecture that can be highly adaptive to the real needs of the SOCI without bottlenecking through some concentrated control structure. As these techniques mature, they provide this new class of SOCI with an “executive function” that has little to no agency risk and can scale without creating a bottleneck on the SOCI.

To get a better sense of what I mean here, consider Bitcoin as an extremely early prototype of how this kind of motivational architecture can work. By linking “run hashing software” with “be the source of coin creation”, Bitcoin created an invitation to value contribution at an architectural level. Anyone who could understand and act on the invitation could participate without any human agents getting in the way to bottleneck the process.

And by carefully wiring up difficulty and scarcity, Bitcoins became at least potentially appreciating assets — motivating anyone who could appreciate and act on this invitation to figure out how they could best give their value to the Bitcoin SOCI in exchange for increasingly valuable coins.

While rough and coarse-grained, this approach worked. It was flat out brilliant in incentivizing the construction and rollout of mining infrastructure, and as mentioned has delivered on a tremendous amount of creative activity.

Of course, the Bitcoin approach has known issues. High volatility, a dependence on risk seeking speculation, too much concentration in the hands of early adopters, coarse-grained focus on mining, etc. Arguably, these design elements limit the effectiveness of the SOCI to attract and deploy collective intelligence and, therefore, its overall potential.

With regard to the Bitcoin SOCI in particular, the future is uncertain. Will it overcome its governance challenges and emerge on the other side with still more collective intelligence? I honestly have no idea, I suspect it will, but these moments are always deeply uncertain.

If it does, however, it will come out the other end much stronger than it has been so far. Governance is a major challenge. If Bitcoin survives this current crisis, my bet is that the collective intelligence will focus its efforts on governance much like it has on past crises like the Mt. Gox collapse — and the result will be a much, much more capable SOCI.

The Future of Self Organizing Collective Intelligences

Regardless of the specific result of the Bitcoin experiment, we are clearly in the middle of a new era. As I discussed in The Future of Organization, a lot of smart people are currently hard at work understanding, generalizing and optimizing the deep code of these new forms of collective intelligence.

The limitations of Bitcoin’s approach to motivation and collective action are well understood and new technical layers like Ethereum’s smart contracts and Backfeed’s distributed governance system magnify the potential intelligence of this kind of SOCI at least as much as the neocortex magnified the intelligence of the mammalian brain.

I really wish the reality and importance of this new frontier were more broadly understood. My sense is that over just the next five years this new form of SOCI will go through its gestation, birthing and childhood development stages. The result will be a form of collective intelligence that is so much more capable than anything in the current environment that it will sweep away even the most powerful contemporary collective intelligences (in particular both corporations and nation states) in establishing itself as the new dominant form of collective intelligence on the Earth.

And whoever gets there first will “win” in a fashion that is rarely seen in history.

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Platform cooperatives combine a technology platform with cooperative ownership. First described by Trebor Scholz and Nathan Schneider, this approach appeals both to traditional coops looking to go digital, and startups trying to build a fairer world. For some, it’s a natural response to the co-option of the sharing economy by capitalism.

Open 2017 is the first major UK conference to bring together this broad church of utopians, libertarians, open source advocates, trade unionists, and anarchists. Never have I heard the same words used on the same stage with such contradictory intent! “Solidarity” for me conjures up images of striking workers in the 1970s, but here it’s often used to imply community cohesion. How many other concepts are lost in translation? Do we need a new vocabulary to describe a new movement?

Open source and coops

A crazy dream…
Listening to @epilepticrabbit and @jdaviescoates on the parallels between #open and #coops … #opencoop @WeAreOpenCoop pic.twitter.com/acT1ty1Hil

— Bryan Mathers (@BryanMMathers) February 16, 2017

There’s a broad crossover between the values of the open source community and the values of the cooperative movement. Open source focuses on the process of producing and sharing code, whereas cooperatives care more about ownership and power structures. Both value transparency, both abhor hierarchy. The success of open source over the last 20 years gives hope to the cooperative movement: hope that one day, cooperative models of governance could be as widely used as open source code.

Single constituency or multi-constituency?

Cooperatives are a legal solution to a fundamental social problem: how best to distribute surplus? When we think of coops, in the UK we tend to think of consumer cooperatives, where you need to be a member to buy a product or service. These businesses usually aim to keep prices low for the customer. The other main category is producer cooperatives. Rory Ridley-Duffdescribed three types of employee owned business: trust owned (like John Lewis), direct owned, and worker cooperatives (like Suma). These often focus more on fair pay and employment security. Both of these structures prioritize one “constituency” — buyers of products, or sellers of labour.

Much rarer are the “multi-constituency” cooperatives, as described by Cliff Mills. These incorporate multiple stakeholders within their membership: consumers, producers, workers, suppliers, and the local community. While these are better suited to pursuing a common good, the risk is that by internalising tensions, they may end up stuck in a stalemate when forced to decide on issues where their members disagree. Platform cooperativism could provide an opportunity to codify group decision making practices that make multi-stakeholder coops more viable.

Scaling decision making

https://twitter.com/startuple/status/832267617784233986

There are as many decision making methods as there are organizations. Bob Cannell laid out a spectrum of options, from unanimity to anarchy: consensus, consensual, vetoes, majority voting (direct or representative), subsidiarity, and the “sorry not please” principle.

Tools like Loomio and Backfeed seek to scale group decision making, by making it easy for people to propose, vote, evaluate and reward. Common feedback from coop members was that culture was more important than the constitution or the technology. Practices like appreciative enquiry — concentrating on the positive when giving feedback — ensure that people feel their contributions are valued. This has parallels within open source and volunteer run organisations, where thanking people for their work is an important part of each interaction.

Federation: coops of coops

https://twitter.com/smcdoyle/status/832174783852924928

Are coops going to take over the world? Not unless it gets easier to start them, run them, and fund them. In terms of legal admin, it’s still harder to create your startup as a coop than to incorporate as a limited company. Running a successful coop requires different skills from top down management, and nascent coops need support in learning these culture lessons. Traditional VCs usually steer clear of coops, because they are not satisfied with “reasonable returns” — too busy unicorn hunting! Equity crowdfunding and FairShares need wider adoption to solve the funding problem, or growing coops could end up more constrained than enabled by their cooperative status.

Enspiral, Stocksy and Fairmondo are inspiring advocates of platform cooperativism, but more needs to be done to demystify their operational secret sauce. Cooperative federations seek to educate and nurture members. The Platform Cooperativism Consortium supports all platform coops, CoTechassists cooperatives in the technology sector, and AltGen encourages young people to start coops.

Open 2017 was a great place to meet people who are practising what they preach  Videos from the event are available on the website. Looking forward to next year!

Startuple is François Hoehl and Sinead Doyle. Find out more at startuple.works

Photo by Anders Adermark

The post Thoughts from Open 2017: Platform Cooperativism appeared first on P2P Foundation.

Michel Bauwens is a theorist in the emerging field of P2P theory and director and founder of the P2P Foundation, a global organisation of researchers collaborating in the exploration of peer production, governance, and property. He has authored a number of essays, including his seminal thesis, The Political Economy of Peer Production.

In the run up to the Open 2017 – Platform Co-ops conference in London, Oliver Sylvester-Bradley, from The Open Co-op explores some of Michel’s ideas.

Avoiding the exploitation of the commons and open source peer production

OSB: At The Open Co-op we believe that open source software is an essential component of the Platform co-op / solidarity economy. However, some of the developers I speak to are now less inclined to publish their code openly, since they have seen large corporations incorporate their code and go on to build multi million pound businesses… This makes me wonder if there is a need to move on from simply “open source” by creating a new licensing system, similar to the Creative Commons for artistic works, in order to ensure that developers can stipulate the ways in which their code may be used, and by whom, in order to ensure the commercial world does not exploit open source.

MB: This is of course a very valid concern. But we have to ask a few questions. First, we have to recognise that people have to make a living and free software developers, like others, can be paid for their work as employees or freelancers, independent of the ‘open’ nature of the code. 75% of Linux Core developers are paid for example, and the Fair Use Economy report calculated that one sixth of GDP and 17 million workers are making a living around shared knowledge economies. That’s not trivial.

My point is that work is a rival good, and has a price, but that knowledge is naturally abundant and thus privatising it is inherently problematic.

Which is why we propose a novel solution, one which combines both a full commitment to share knowledge, and a demand for reciprocity towards the commons in the case of commercialisation. This is what we call the ‘copyfair’ principle, and it avoids the reality of free software, which is that, ‘the more free the license, the more private the economy around it’.

To my mind, we thus continue to write shared code, but we create ethical business coalitions around it, and we re-introduce reciprocity into the private market mechanisms.  Examples of this are the practice of the FairShares Association, which has one CC non-commercial license for everyone, and a commercial license for those who pay a membership fee (this is their ‘reciprocity’ requirement).

The Peer Production License used by some publishers is another. I take this as an ethical requirement: while we all have to make a living, and I respect the freedom of everyone to use moderate IP protection as a free choice, I believe that withholding vital productive knowledge for humanity is not the right thing to do.

OSB: OK, some people get paid to write open code – others do not, but I believe for open code to flourish we need to actively encourage developers to publish openly and that is not going to continue to happen if their work gets blatantly exploited for financial gain by others.

Having read more about the PPL now I understand its structure and objectives and admire the way it aims to encourage reciprocation if a conventional capitalist business reaps financial dividends from the open source work. I also understand the valid objections to limiting the flow of ‘free knowledge’ and information.

However, I personally feel we are in a kind of battle here, to either fix, out-evolve or supersede the ‘extractive’ economy asap, if we do not want humanity to become extinct. And I do not see the elites that wield power today giving up on their vested interests any time soon so, to me it seems, we would be wise to place limits on how, and where, and in exchange for what, our work can be used.

As Nathan Schneider put it to me in a recent email:
“as long as there have been commoners, they have had to protect their commons from the greedy hands of the lords.”

We need to organise ourselves so that the ‘value’ of our work can be re-invested in our livelihoods, communities and resources. 

MB: We have to be defensive, but I think more importantly we need to organise ourselves so that the ‘value’ of our work can be re-invested in our livelihoods, communities and resources. This is why it can never be a purely defensive game, or even trying to get more of the piece of the pie, but it requires a reorganisation of our modes of production and exchange.

Our proposal at the P2P Foundation is threefold at the micro-economic stage: first, we need to build productive communities around our commons, and declare our value sovereignty; this means deciding to distribute value differently, ‘generatively’; this requires a second step, creating generative entrepreneurial coalitions, so that we are commoners adding to the commons, but also cooperators making a living. And this requires also of course building meta-networks, between them.

Obviously, this takes time, and it took capital 400 years to consolidate itself with all the institutions it needed. The problem of course, is: we don’t have that time, but perhaps, because of the acceleration of learning through mutual networks, we can achieve it in 40.

It’s clear from this, given the urgencies of climate change and ecological destruction, that we can never wait for these prefigurative processes to go on on their own. This is why we also need to ally the prefigurative forces with social movements and emancipatory political forces, and we need to infuse them with the models of the commons, and ‘liberate’ them from their exclusive reliance on private vs state.

By building such an alliance we can then also politically transform social and economic institutions and have them evolve in the direction of the prefigurative society that we are building. Free knowledge is hugely important in this context, because under capitalism, we treat rare resources as if they were infinite, and we treat abundant resources, as if they were scarce. So we destroy the planet, but withhold the knowledge necessary to solve the problems thus created.

Think of how patenting of solar and electric cars led to a 30 year stagnation of their necessary development. This is why we have to square the circle, continue to share code, but create vehicles for livelihood creation around it. We must also transform the institutions so that we can have a ‘partner state’ which can ’empower and enable personal and social autonomy’, just as the FLOSS Foundations are doing that at the micro-level. We need commons-based, commonified public institutions. Nobody said it would be easy.

Under capitalism, we treat rare resources as if they were infinite, and we treat abundant resources, as if they were scarce. So we destroy the planet, but withhold the knowledge necessary to solve the problems thus created. 

Can Co-ops create increased value?

OSB: I was inspired to hear you talk about the increased value that can be generated by co-ops and platform co-ops when members are all owners and value is not syphoned off, and away from the organisation, by third parties such as external investors. To me this is one of the main benefits of platform co-ops which I feel has not been adequately explained. Do you know of any real-world examples that prove this to be the case?

MB: Yes, I fully agree with that basic premise that we need platform cooperatives that are generative towards their community and commons and the resources they draw from. Cooperatives of course have a long history of proving they work and employ more people worldwide than the multinational enterprises, and we also know from studies that cooperative startups do a lot better than venture-based startups (who, for each unicorn they produce, destroy 99 other companies). This being said, platform cooperatives are very new and so it is still difficult to say with confidence how they will work. But Nathan Schneider’s Internet of Ownership site identifies more than 250 of them, and, to take just one of them,  Stocksy, a platform co-owned by professional photographers, seems to do quite well.

So, it needs to happen, and the established cooperatives and ethical and solidarity finance absolutely needs to wake up to the necessity of playing a vital supportive role. I stress another condition though, which is the concept of ‘open cooperatives’. My critique is that traditional coops end up working for their members in the competitive capitalist economy, and tend to slowly take over the practices of corporations, up to the point of being demutualised sometimes.

An open cooperative in contrast, would be multi-stakeholder, which means that a ride-hailing coop might be co-owned and governed not just by the drivers, but also by the users and other stakeholders; that it actively (through its own statutes and rules) is engaged in producing common goods (not just the platform itself, but say a commitment to open source code for example); and that it has an outlook and structure committed to achieving some social or environmental purpose.

Marjorie Kelly, in her book on the ‘Emerging Ownership Revolution’ has outlined five major characteristics of ‘generative enterprise’ that I think we should be heeding.

She writes that:

“In ownership design, there are five essential patterns that work together to create either extractive or generative design: purpose, membership, governance, capital, and networks.

• Extractive ownership has a Financial Purpose: maximizing profits. Generative ownership has a Living Purpose: creating the conditions for life.
• While corporations today have Absentee Membership, with owners disconnected from the life of enterprise, generative ownership has Rooted Membership, with ownership held in human hands.
• While extractive ownership involves Governance by Markets, with control by capital markets on autopilot, generative designs have Mission-Controlled Governance, with control by those focused on social mission.
• While extractive investments involve Casino Finance, alternative approaches involve Stakeholder Finance, where capital becomes a friend rather than a master.
• Instead of Commodity Networks, where goods are traded based solely on price, generative economic relations are supported by Ethical Networks, which offer collective support for social and ecological norms.”

I think that is an excellent summary of where we need to be heading.

Inter Co-op cooperation and decentralised, distributed currencies

OSB: Principle 6, co-operation between co-ops, seems to provide huge scope for recycling the value that is generated within the co-op community, but doesn’t seem to have been particularly effective to date. Do you have any thoughts on why that might be and how co-ops could improve inter-co-op cooperation?

Relatedly, in a recent article for oD I suggested that “Decentralised distributed currencies will change the way our economy works by re-routing flows of capital. For example, if I could earn “co-op coins” in one co-op and spend them in the next, as a co-op member I would be incentivised to do so, since I also receive a share of the profits.”

How practical do you think that idea is? And what role do you see for decentralised distributed currencies in a new, generative economy?

MB: Cooperatives that compete, with each other and other private companies, and for the benefit of their own members, have historically adapted to capitalist practices, and they had to, given that capitalist competition drives down the cost and prices of the products they need; this has made inter-cooperative cooperation difficult to achieve, with some exceptions. I don’t think it can improve in the same context. But making cooperation ‘commons-centric’ changes the logic, since such commons increase the productive capacity of participating cooperatives. This is why capital has moved massively to the platform models and why it has been such a historical mistake of the cooperative movement to have missed the boat in this shift.

I also believe distributed currencies may play a role in this shift. The way I see it is the following: cooperative commons coalitions need to declare their ‘value sovereignty’; this means that, even as they may be dependent on external capital logics, internally, they can change the mode of distribution of value according to their own value logics, using contributory accounting mechanisms. And within this context, they can express their own new value logics, using new types of currencies, like for example backfeed.cc aims to do. I recommend your readers to check out our latest report on ‘Value in the Commons’ which analyses developments in open and contributory value accounting, based on 3 in-depth case studies.

OSB: The terminology you use here is a little new to me. If I understand you correctly, you are saying that, even though a co-op may generate income in GBP, for example, they can derive their own methods of distributing value (above and beyond just the GBP) to their members and other stakeholders, using their own distributed currencies. Is that what you are saying?

MB: I am saying two things. First, coops indeed need sovereign currencies as income, which they can distribute not just as wages, but also as contributive income, according to their own rules. Second, and complementarily, they can also recognise other value than what is recognised as ‘commodity’ or market value by the external market, and create other tokens for that, which can be used in inter-cooperative networks. These tokens are similar to complementary currencies that are used locally, but in this case, we are speaking of ‘territories of value circulation’, that are not geographically determined, but exist through the network of value exchanges over the network.

OSB: I read with interest how Open value Networks present a viable model for profit sharing in which a ‘value accounting system’ computes equity in proportion to contributions automatically, removing the pain from the profit sharing process. Could that be another example of “declaring value sovereignty” you describe above?

MB: Sensorica is indeed an example of value sovereignty, and there can be other forms, and of course, that is the point of value sovereignty, that it can be diverse. Sensoria’s aim is to create a much more direct linkage between commons contribution and market income. My own preference though is to create cooperatives around the commons, as an intermediary institution.

Is the blockchain really the holy grail for distributed organisations and currencies?

OSB: backfeed.cc seems interesting, and especially powerful if it can be understood and deployed as intended, but I am not convinced that the blockchain is either required, or the best underlying infrastructure, for new forms of distributed currency. For example, the block chain goes to great lengths to anonymise transactions, so that trade made may be conducted anonymously but, as we have seen so clearly in our modern economy (and as the Prisoners’ Dilemma illustrates so well), people do not behave so well in one-time, anonymous transactions.

On the contrary, when transactions are with real people, that we grow to know, people tend to behave more co-operatively and even develop deeper, more valuable ties based on mutual aid and solidarity. Reputation seems like the key ingredient here, as opposed to anonymity. What do you think about the current obsession with basing all these types of new, distributed, organisations and systems on the blockchain? And what do you think about the idea of an alternative system, based on open identity and reputation being more suited (and potentially more valuable to) the p2p / collaborative economy?

MB: I agree with your critique. The blockchain, let’s not forget, comes from the design of the Bitcoin currency, which is an anarcho-capitalist, “austrian economics” inspired design. It represents ‘ultracapitalism’ if you will, the urge to commodify everything. It presumes atomised and isolated individuals that contract out with each other, and dislikes any collective governance. So, while I think the blockchain can be inserted in other designs that do not make these limiting assumptions about human nature and motivations, it is not absolutely necessary.

My own beef with backfeed is that it assumes human work needs incentives, but the key assumption I make is the opposite, i.e. that commons work is driven ‘intrinsically’, and so there is a danger, that incentivising may actually ‘crowd out’ commoning behaviour to replace it with competition for scarce tokens. But of course we need to experiment, and backfeed is versatile enough to allow for very different designs adapted to various communities.

Ownership is directly related to the real value of an organisation

OSB: I developed the diagram (below) during discussions with Douglas Rushkoff, which attempts to illustrate the direct relationship between ownership and “real” value of an organisation to society. How true do you think this illustration is?

MB: The graphic is fine for me, in my own language, which comes from Marjorie Kelly’s ‘Emerging Ownership Revolution’, which we discussed above, I distinguish ‘extractive’ from ‘generative’ approaches; this could be added to the graphic. For example, the VC model extracts value from human communities and natural resources, for the benefit of a minority of shareholders (example, Uber destroys the potential of ride-sharing to diminish the numbers of cars, by making drivers compete for customers); while cooperative models attempt to add value to the communities and resources they work with.

What is democracy and how can we make improve on the present, undemocratic system

OSB: You seem to be a fan of democracy, as am I, however, I’m not sure I have ever experienced it. What do you think real democracy is?

MB: I think there are two competing visions of democracy, one which is rule by the people directly, as in the Athenian model (though it was restricted to male citizens), the other is through a set of institutions which have the contrary aim of actually restraining such direct power, as documented in the book by Jennifer Tolbert Roberts, “Athens on Trial: the Anti-Democratic tradition in Western thought “.

My focus is on the first model. The problem is that after 200 years of the second model, the primary areas of our life, like school and work, are not democratic, and so the basic problem is that we expect democratic behaviour from people (citizens / residents) who have basically never exercised it. This is one reason I favour the commons model, because it is based on self-governing communities, so it is a training school for democracy like no other.

OSB: When you say ‘the commons model’ what exactly do you mean? Where can we see a commons model acting as “a training ground for democracy like no other”?

MB: I follow the traditional definition of the commons, i.e. a shared resource, managed by a community according to its own norms. There are plenty of physical commons in the Global South, i.e. 85% of Africans still depend on them, less so in the West, but there are in fact more than we think. In Galicia, Spain, one third of the land is still commons and run by commons associations. But today, we see the explosion of digital commons (shared knowledge resources are the basis of one sixth of GDP in the US economy), and urban commons. There has been a tenfold increase of citizen initiatives in Flanders in the last ten years, and a similar exponential explosion in the Netherlands, and many of these initiatives involve creating commons as part of their practice. Guy Standing’s book on the precariat, has documented the deep linkage of precarious workers with networks characterised by commons.

I do not believe a complex society can solely run on direct democracy, and it is not realistic to demand of people to be involved with everything.

The innovation of peer production moreover, which is now actively pursued in the Italian model promoted by LabGovand LabSus, is the realisation that not everybody has to decide on everything, we simply have no time to be involved in everything at the personal level, but to give privileged space to the already engaged citizens, with the appropriate control mechanisms by other stakeholders, including ‘society’ as a whole.

OSB: So do you favour liquid democracy, or any kind of delegative democracy?

MB: I favour a mixture, which needs to be experimented with. I do not believe a complex society can solely run on direct democracy, and it is not realistic to demand of people to be involved with everything. Thus we need to build new layers of deliberative democracy and participation, on top of improved representative democracies, which can also include new lottery systems for such presentation, as for example presented in Melenchon’s proposal for a newConstituent Assembly and 6th Republic in France.

Right now, we (the human race) are at the cusp of combining the old representative model, which is no longer functioning for different reasons, and an added layer of experimental more direct democratic models. See also what is happening in Voralberg, the Austrian region, with civic councils for examples; or the Bologna Regulation in Italian cities, which gives citizens direct policy power to instantiate commons governance projects.

I think the essence is now experimentation, and different regions/countries/cities might opt for different contextual mixes of collective decision-making. Of course, I am also very aware of potential counter-tendencies with an authoritarian capitalism under the leadership of right-wing radicals such as the Trump-ian forces. It’s going to be a context between the two models, while we know the status-quo is no longer functioning.

OSB: Since members of co-ops and platform co-ops get to vote on everything and anything by which they are affected, a society populated by a multitude of co-ops might provide an alternative system of governance.

A co-op of co-ops could perform organisational duties at any scale whilst ensuring democratic governance by pushing decisions down to the lowest possible levels. What do you think about the possibility of a completely new system of democracy, like the above, superseding the existing system?

MB: I think we should be wary of uniform systems, since, if anything goes wrong with it, there is no backup. This was the argument of Rosa Luxemburg against the abolition in Russia of the parliament (during the Russian Revolution), she realised that if anything went wrong with the worker councils, there would be no other power able to create a balance, and she was proven right. The model you describe is being experimented in Rojava I believe.

But the cooperative model has its limits in my view, in that it easily functions as private property or ‘worker capitalism’, in relation to the rest of society. This is why I stress the model of open cooperatives, in which coops are also directly aligned with the production of common good, in the form of ‘commons’, through their own statutory obligations. In general, I favour a pluri-form model of democracy, in which cooperative democracy has its place, along with others, to make sure there is institutional diversity.

OSB: So, would I be right in saying you think that the most practical way to expand democracy is for citizens to propose solutions and organise around areas of shared interest (or physical or digital commons), to make their voices known and to influence our existing ‘representative democracies’ in the hopes that our representatives make better decisions?

Democracy has to be first of all a practice that is integrated in our lives, not something just like an election, which is like electing which elite is going to govern us.

MB: No that is not entirely correct. On the one hand, democracy has to be first of all a practice that is integrated in our lives, not something just like an election, which is like electing which elite is going to govern us (election = elite, both words have the same roots, and the greeks saw elections as the aristocratic principle and the lottery as the democratic principle); the commons, defined as shared resources that are governed by communities according to their own rules and norms, are a good way to achieve this, i.e. as we learn and work, we practice democracy.

Representative democracy needs to exist to cover wider territorial and functional units, but we are at the threshold where mere representation is no longer enough, and so this is the time to augment it with new techniques, to be experimented with, and this may involve participatory, deliberative, liquid feedback type, lotteries etc.

 John Heron explains well what chance of change I believe we can achieve, he once wrote:

“There seem to be at least four degrees of cultural development, rooted in degrees of moral insight:

1. autocratic cultures which define rights in a limited and oppressive way and there are no rights of political participation;
2. narrow democratic cultures which practice political participation through representation, but have no or very limited participation of people in decision-making in all other realms, such as research, religion, education, industry etc.;
3. wider democratic cultures which practice both political participation and varying degrees of wider kinds of participation;
4. commons p2p cultures in a libertarian and abundance-oriented global network with equipotential rights of participation of everyone in every field of human endeavour.”

Heron adds that “These four degrees could be stated in terms of the relations between hierarchy, co-operation and autonomy.

1. Hierarchy defines, controls and constrains co-operation and autonomy;
2. Hierarchy empowers a measure of co-operation and autonomy in the political sphere only;
3. Hierarchy empowers a measure of co-operation and autonomy in the political sphere and in varying degrees in other spheres;
4. The sole role of hierarchy is in its spontaneous emergence in the initiation and continuous flowering of autonomy-in-co-operation in all spheres of human endeavour”

Visions of the future

OSB: Finally, I’d like to ask about your vision. We are often exposed to the vision of a world full of hate and extremism and scarcity but rarely hear about a positive alternative. If you were in charge, what changes would you make to help speed up the transition to a collaborative, generative, sustainable, economy?

MB: I have a rather tragic vision for change, i.e. change happens when we must. At this stage where we have a world civilisation which is based on extraction, where social inequalities lead to authoritarian right wing populism and the planet is endangered in all kinds of ways, humanity will do what it has always done, i.e. create popular and spiritual movements that aim to limit extraction and discipline the extractors.  Mark Whitaker, who has done a 3,000 year comparative review of how civilisations react to meltdowns shows a pattern. This means going to a system that stabilises social unrest. This is where peer to peer dynamics come in today, and that needs massive mutualisation ( = pooling, = commons) of physical and knowledge resources.

Thus any successor system will need to comprise revived commons as a way to drastically reduce the material footprint.

If the medieval monks mutualised knowledge and infrastructure through monasteries and feudalism re-localised production, so today we have free software / open design, the sharing / access based economy to mutualise idle resources and recycle / upcycle and distribute local manufacturing based on demand, to relocalise.

You know the analogy of imaginal cells in the caterpillar; the cells who identify with the caterpillar are in panic, because the system is dying, but the cells who identify with the butterfly and carry its DNA know that it is a transition. Similarly today, we see seed forms emerging to solve the systemic crises, and the P2P Foundation is dedicated to observing them, analysing them and to think through where this can lead us, and be a catalyst for that change.

OSB: That’s a great analogy. The Open Co-op has similar objectives and we will be discussing all of the above themes at Open 2017 in London In February. Thank you for your time and all your thoughts Michel, you are an inspiration and the P2P Foundation is an amazing resource for the anyone interested in the transition to a more equitable, sustainable society.

This post was originally published on OpenDemocracy.net. 

The post Representation is no longer enough – A Q&A with Michel Bauwens appeared first on P2P Foundation.

But how, then, to account for the many kinds of value that are intangible, social or ecological in nature, and without prices – activities such as child-rearing and eldercare, ecological stewardship, online peer production, and commoning?  There is an urgent need to begin to make these forms of value explicitly visible in our political economy and culture.

Two new reports plunge into this complicated but essential topic.  The first one – discussed below — is called “Value in the Commons Economy:  Developments in Open and Contributory Value Accounting,” The 49-page report by Michel Bauwens and Vasilis Niaros focuses on socially created value on digital networks. It was co-published yesterday by the Heinrich Böll Foundation and P2P Foundation.

Another important report on how to reconceptualize value – an account of a three-day Commons Strategies Group workshop on this topic – will be released in a few days and presented here.

The P2P Foundation report declares that “society is shifting from a system based on value created in a market system (through labor and capital) to one which recognizes broader value streams,” such as the social and creative value generated by online communities.  The rise of these new types of value – i.e., use-value generated by commoners working outside of typical market structures – is forcing us to go beyond the simple equation of price = value.

Michel Bauwens and sociologist Adam Arvidsson call this the “value crisis” of our time.  Commons-based peer production on open platforms is enabling people to create new forms of value, such as open source software, wikis, sharing via social networks, and creative collaborations.  Yet paradoxically, only a small minority of players is able to capture and monetize this value.  Businesses like Facebook, Google and Twitter use their proprietary platforms to strictly control the terms of sharing; collect and sell massive amounts of personal data; and pay nothing to commoners who produced the value in the first place.

This is highly extractive, and not (re)generative.  So what can be done?  How could open platforms be transformed to bolster the commons and serve as a regenerative social force?

The P2P Foundation report is a welcome splash of clarity on a topic that is often obscured by deceptive terms like the “sharing economy” and mystifications about the structural realities of digital cooperation.

The Bauwens/Niaros report starts with a section analyzing the theoretical nature of the “value crisis” we are experiencing, before moving on to three powerful case studies of alternative value-systems pioneered by the Enspiral network, Sensorica and Backfeed.  The report concludes with a series of policy recommendations for changing the economic and political infrastructure.

The Value Crisis

The real roots of the “value crisis” stem from the fact that “contemporary capitalist value-practices are no longer able to determine what value is,” write Bauwens and Niaros.  Stock market valuations are notoriously unable to attribute a reliable (financial) value to a company because so much value resides in social intangibles – the goodwill of consumers, brand reputations, and social sharing.  Stock analysts can try to add up the resale value of factory buildings, equipment and office furniture, but there is no reliable, consensus method for assigning a value to all the social beliefs and activities that make a company valuable.

Such a delicious irony!  Contemporary capitalism loves that it can freely appropriate software code, personal data, user-generated information, videos, etc. – a shareable cultural abundance that the world has never seen before.  Yet investors have great difficulty in monetizing and commodifying this value.  It is hard to make abundant social value artificially scarce and therefore saleable.

So we have the spectacle of commoners having trouble protecting the use-value that they create, which businesses are aggressively trying to channel into extractive market production and consumption.  (“Extractive” because companies want this value for free, and don’t want to reward the social communities.)  And yet even with their great extractive powers (lots of capital, copyright laws, terms of service contracts, etc.), large companies are finding that it is difficult to develop reliable flows of profit.

Toward Value Sovereignty

The focus of the P2P Foundation report is how to move from an extractive digital economy to a regenerative one.  Hence the focus on how three digital communities are trying to protect their “value practices” and create a “value sovereignty” beyond the pressures of capitalist markets.  These communities are trying to achieve a “reverse co-optation” by generating value flows from the old economy to the new, and by developing new value-accounting systems to properly honor social contributions.

One such project is Enspiral, a highly participatory, mission-driven coalition of entrepreneurs and other entities, many of them based in New Zealand.  “Enspiral calls itself an ‘open cooperative’ because of its commitment to both the production of commons and an orientation to the common good,” write Bauwens and Niaros. One of its innovations is the use of “capped returns,” which puts a limit on how much an investor in the Enspiral infrastructure can receive in return.  As the report notes:

….the shares issued by a company would be coupled by a matching call option which would require the repurchase of the shares at an agreed upon price.  Once all shares have been repurchased by the company, it will be free to reinvest all future profits to its social mission. Through this mechanism, external and potentially extractive capital is ‘subsumed’ and disciplined to become ‘cooperative capital.’”

Sensorica is an open collaborative network that is experimenting with new ways to combine commons and market forms.  It has an elaborate “value accounting system” for keeping track of its members’ contributions to market-based projects. This system is then used to allocate revenues in proportion to each member’s role. Is Sensorica a new kind of (market-driven) co-op or a new type of (mission-based) commons?  Maybe a hybrid.

A third case study looks at Backfeed, a production community that relies on the blockchain ledger as an infrastructure for decentralized production.  Backfeed is more of an aggregation of individuals working together to sell to markets, than a commons.  Still, the cooperative organizational structure has the potential for making it capable of acting as a “value sovereign” community. Many others are exploring how the blockchain might enable cooperative control over a community’s resources, whether for sale in the market or for internal use-value.

Policy Recommendations

The P2P Foundation report concludes with a series of policy recommendations that would help protect the kinds of value regimes described in the case studies.  It proposes open cooperatives to create new types of livelihoods and the use of “reciprocity-based licensing” to protect against value capture by capitalist enterprises and foster solidarity among generative coalitions.  The report also calls for open supply chains and common network resource planning to help promote an open source “circular economy”(e.g., “design global, manufacture local”).

Bauwens and Niaros envision new sorts of political collaboration to provide a counter-power to the old economy and advocacy for peer production communities.  Local “chambers of commons” and “commons-oriented entrepreneurial associations” are needed, not to mention new forms of transnational collaboration, they urge.

At a time when the political left has trouble moving beyond Keynesian economic models and the management of neoliberalism’s many crises, Bauwens and Niaros point to some new models of commons-based peer production that could help transform the terms of engagement.

The post How to Move from an Extractive to a Generative Economy? appeared first on P2P Foundation.

In this context, Castells in The rise of the network society develops an analytical distinction of the term ‘information’ and ‘informational’, suggesting that there are similar implications for the ‘information/informational economy’ as well. He protrudes that ‘information’ next to society merely emphasises the importance of the former in the latter, whereas information in its broader sense, has been an important element in the development of all societies. On the contrary, the term ‘informational’ points out to ‘the attribute of a specific form of social organization in which information generation, processing, and transmission become the fundamental sources of productivity and power because of new technological conditions’.

Putting the focus on value, in what way are things different in the information age? Adam Smith offers one of the first comprehensive theories for value early in the industrial transition, defining the value of any commodity in exchange as ‘equal to the quantity of labour which it enables him to purchase or command’. With information as ‘the fundamental source of productivity and power’ how are the relations of ‘purchase and command’ changing?

There is widespread scholarly dissent regarding the transformation of work and the nature of labour in the information economy. Consequently, the relevance of the labour theory of value has largely been dismissed in more contemporary views, which make a case for alternative approaches. Wealth creation in the information economy, as opposed to classical views, is increasingly dependent on socialised and networked productive processes. The individual ‘toil and trouble’ in which one gets into in order to produce any commodity, which Smith identifies as its real price of commodities, is thereby becoming more and more difficult to identify and assess. Furthermore, the increasing importance of affect has been claimed to form the basis for a new conception of value, as labour becomes immaterial, that is, more qualitative and ever more complex, both in individual and collective terms. Value is increasingly created in collective cooperative processes by a multitude of diverse actors and is thus less susceptible to control and measure in terms of labour.

The immeasurability of value, apart from a rejection of the classical theory of value, also constitutes to a strong challenge for the conventional practices of management and accounting. This is coupled with the increasing importance of financial markets in the information economy, where the produced ‘value beyond measure’, as Hardt & Negri put it, is associated with an accounting system based on solely sentimental criteria. Thus, even though value is created by collaborative social relationships, it is by and large directly channelled to financial markets, which are affective than rational.

Nevertheless, it is argued that from a Marxist point of view the labour theory of value remains relevant. In the first chapter of The Capital, Marx holds that in capitalist production there are two processes of labour identified: First, concrete labour, which produces use values and represents ‘the everlasting Nature-imposed condition of human existence’. Second, abstract labour that creates the value of commodities. The activity of internet users could thereby be viewed as labour that produces informational content, which is then commodified and exchanged by media advertisers. At the same time they constitute to the audience for advertising, while their attention as a commodity is actually measurable in terms of aggregated time of social labour.

From another perspective, informational content alone does not possess any exchange value, as it is non-rivalrous and it can be reproduced at negligible cost and time. Hence, the produced information does not classify as a commodity but rather as a universal commons, embodying use values. Subsequently, social media companies employ labour to exploit this information and provide services, thus creating exchange value. Marx himself unveils this antagonistic relation of use value and exchange value in capitalist production. The first serves the collective social interest, whereas the second the individual private objectives. This relation is further eradicated in the context of information, due to its non-rivalry form. Consequently, exchange value is only possible to be imposed on information through artificial scarcity and enclosure of the information commons. Therefore, the price extracted from information can be better understood as a form of monopoly rent.

Towards a new measure of value

What can we conclude from the previous section in relation to Marx’s theory of value and, in fact, labour theory in value in general? Firstly, the claim that new forms of social production are surfacing in the information economy which cannot be encapsulated by the labour theory of value, is in principle correct. However, as long as those new forms become monetised in any manner, they still fall within the reach of Marx’s theory of value. Secondly, the Marxian theory of value can be understood as an integration of the preceding theories of value in the framework of his critique on the capitalist mode of production. The rationale provided by the Smithian or the Ricardian labour theory or value are arguably neither rejected nor contradicted by Marx’s analysis; rather they are interpreted in context. From this perspective, since we are living in a capitalist system, the Marxian theory of value will remain relevant.

From this standpoint, it appears that the best possible development in the Marxian theory of value is to reach to appoint where it will be made obsolete by a radical change in the productive relations beyond capitalism. Indeed, the case of commons-based peer production unseal a political economy which goes beyond the Marxian framework of critique and negate the conventional canons of value altogether. As it has been first observed in the realm of the Free/Open Source Software and in projects such as the free encyclopaedia Wikipedia, it is indigenous to the information economy and encapsulates its transformative dynamics. It is about a new mode of production, different from private for-profit or public state-owned production. Its product does not possess exchange value for markets but rather use value for a community of users/producers. Those are organised in spontaneous productive structures, beyond hierarchy and central coordination and make use of common property regimes to make use value freely accessible. In other words, commons-based peer production celebrates a genuinely sharing economy, in a rather different use of the term from the one purported by the Silicon Valley giants.

So if the value production has fundamentally transformed in the information economy, what is holding back this mode of production to establish its political economy? We suggest that this transformative process can be observed in three interrelated levels: (a) production of value; (b) record of value; and (c) actuation of value.

The first level has already been discussed, with emerging modes of value creation already established in the information economy. On this level it is already made apparent that the produced use value is not measurable in terms of labour time, while the intrinsic value of the products is not associated with the cost of production, since this is almost negligible. At the core we identify an ecosystem of diverse communities of contributors, which are simultaneously users and producers. As the nature of their produce is non-rival, production for exchange is no more relevant and gives way to production for sharing of use values.

The second level is associated with the method used to track and record the produced value, which to a large extent reflects the wider logic of the established economic system. Following the view of Werner Sombart, scientific accounting identified by the double-entry system had played a vital role in unleashing and stimulating the business activities of the economic system, which he is said to have first called capitalism. Double-entry bookkeeping, before its first systematic representation by Luca Pacioli in 1494, had been developed as a practice of merchants in Venice of 14th and 15th century. Much like modern practices that gave eminence to the information economy, bookkeeping has been indigenous to the practice of exchange, which together with the division of labour carve the bedrock of the capitalist mode of production, that is, as Marx puts it, ‘production for exchange’. Likewise, elsewhere (1, 2) it has been argued that the blockchain is the first native digital medium for value.

The transition from the Industrial Economy to the Information Economy

Finally, the third level, concerns the actuation of the produced value. In industrial capitalism the products of labour in production for exchange are transformed into commodities and their value is represented in money through price mechanisms. Similarly, the same process can be observed in our contemporary information economy, which one could perhaps better describe as information capitalism. Even though production of value is socialised, it can only be actualised through enclosure and appropriation. Labour time remains relevant in the production of value, in the sense that people are still working to produce goods and services, while, even though productivity varies in different levels of technology or different tasks and positions, there is definitely some type of relation of labour time and output. Nevertheless, value is then again only measurable, tracked and redistributed through a price mechanism that assigns the actualised value with a money equivalent. Particularly in the case of the so-called sharing economy, even though business giants, such as Facebook and Google, shift away from direct production and instead allow and enable decentralised peer-to-peer operations, the monetisation of the produced value takes place on a central proprietary level.

A more inclusive accounting system would allow the assessment and measurement of value to stream from a process of decentralised consensus and participatory evaluations of a variety of contributions. These two elements complement each other to enable effective evaluation and reward of qualitative different contributions and support decentralised governance. Furthermore, recent cases like Backfeed, propose a token-based economic model, which could tentatively integrate the political economy of this mode of production, providing the final level of value actuation. It envisions a system composed by the circulation of information commons in a sharing market economy. An ecosystem fuelled by a multiplicity of diverse digital tokens coupled with reputational rewards, representing a variety of value systems, while consumption shifts away from utility towards participation and cooperation.

Based on the paper titled: ‘Blockchain and Value Creation in the Information and Sharing Economy: The Case of Backfeed’, by Pazaitis, A., De Filippi, P. & Kostakis, V. (under review). 

Photo by Internet Archive Book Images

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As “death star platforms” such as Airbnb and Uber continue their pursuit of global domination, an alternative is rising in its wake.

Platform cooperatives, which share the value they create with the users they depend on, are on the rise. As Shareable co-founder Neal Gorenflo writes in How Platform Co-ops Can Beat Death Stars Like Uber to Create a Real Sharing Economy, “Platform coops combine a cooperative business structure with an online platform to deliver a real-world service.”

Gorenflo asks, “What if Uber was owned and governed by its drivers? What if Airbnb was owned and governed by its hosts?” We don’t have to wait to find out. A growing number of platform cooperatives are making their presence known on a global scale. Below are just 11 platform co-ops that are changing the way people organize, run businesses, create value, and share the wealth. There are many more.

1. Fairmondo

Fairmondo is a digital, co-operative version of eBay, where sellers on the platform are also its owners. Launched by Felix Weth in Germany in 2013, the platform is, as Chelsea Rustrum writes, “rooted in an ethos of open source, open innovation, and a commons-based society. It has funded itself through a series of successful crowdfunding campaigns that have raised hundreds of thousands of Euros in member equity.”

To scale globally, the Fairmondo team plans to create an international network of country-based co-ops feeding into the Fairmondo platform.

2. Stocksy

Stocksy is a stock photo site where contributing photographers are also owners. A “highly curated collection” of royalty-free stock photos, the platform is a cooperative that believes in creative integrity, fair profit sharing, co-ownership, and every voice being heard. It’s a new twist on traditional co-ops. As they state on the website, “Think more artist respect and support, and less patchouli.”

Contributing Stocksy photographers receive 50% of a Standard License Purchase and 75% of an Extended License Purchase. Every Stocksy contributor receives a share of the company.

3. Backfeed

Backfeed is a platform to create platform cooperatives, all powered by the blockchain. Backfeed bills itself as, “a social operating system for decentralized organizations.” It enables massive, open-source collaboration without central coordination. Using a blockchain-based operating system, the Israeli company’s infrastructure comprises decentralized management tools, equity-sharing schemes, crowdsourcing mechanisms, and instruments for the collaborative evaluation and curation of content.

With a goal to enable the bootstrapping of decentralized organizations on top of the blockchain as easily as deploying a website, Backfeed can fuel a variety of ventures, including “decentralized journalism, insurance, ride-sharing applications and any other enterprise that would benefit from the decentralized, indirect coordination of large groups of individuals.”

4. Juno

Photo: Nancy Xu (CC-BY)

A ridesharing company that is taking on Uber, Juno has reserved 50% of its equity for platform drivers. The company is being built by an experienced team of startup veterans, including founder Talmon Marco, who sold his messaging app Viber to Rakuten for $900 million, and is well-funded with backing coming from Viber founders rather than outside VCs.

The New York City-based startup, which recently launched service in the Big Apple, is reportedly only taking a 10% commission of each ride (Uber takes 20-35%), and is giving drivers the option to be contractors or employees (if they want to be exclusive to Juno).

5. Union Taxi

Union Taxi in Denver, Colorado, a driver-owned taxi cooperative, represents a growing trend. Drivers are increasingly organizing taxi cooperatives for better pay and working conditions than what traditional taxi companies and Uber can offer. They also must compete successfully. Union Taxi appears to be doing both. They offer a convenient service with e-hailing (like Uber) and driver ownership and control of the business.

CWA (Communications Workers of America) Local 7777 helped the drivers form the cooperative and plays an ongoing support role. By driving for Union, cab drivers cut their car lease rate by two-thirds. As Lisa Bolton, president of the union told Shareable, “By far, the biggest advantage was the lease rate.” This enabled drivers to work less, “which gives them more time at home. They were taking home a lot more of their money that they were making, and everybody was contributing the same amount to the business.”

PDX Yellow Cab is a similar taxi cooperative in Portland, Oregon, where Somali cab drivers broke away from traditional cab companies to form their own—the first major Somali-owned business in Portland. Union Cab Cooperative in Portland is also fairly new (pictured above), though neither cooperative offer e-hailing yet.

6. VTC Cab

After Uber cut fares across Paris, some of its drivers created a competing service, VTC Cab. Modeled after Uber, the ride-sharing platform aims to give drivers more control over their business and provide passengers an opportunity to support a French company.

As the app’s founder, Mohammed Radi, told the Verge, “We want to re-establish and regain our rights over Uber. Uber is not representative of our community… They are a technology company which has no connection with the world of transportation. So they treat human beings like a number — you know, like a figure on a computer. And being a number, as a driver, it’s a very bad feeling.”

7. Modo

Modo is a Vancouver-based consumer car sharing co-op. Launched in 1997, with just two cars and 16 members, Modo has grown to 16,000 members and a fleet of over 500 sports cars, sedans, trucks, SUVs, vans and hybrids—all available to share at $4/hour through a smartphone app and website. Member-owners are shareholding members of the co-op which means they get a vote as well as the best rates for carsharing.

8. Timefounder

Timefounder is a “fair and elegant equity split system where you will love to wake up and work on projects you will end up owning with the rest of the team members.” The app allows founders to be fair with the people who invest time in a project and allows experts to invest time in projects and get future shares or others benefits. Based in Barcelona, the Timefounder team aims to “enable collaboration with fair equity split.”

9. Enspiral

Enspiral is a collective of social enterprises and freelancers that makes, uses, and distributes free apps for decision making and budgeting. Based in New Zealand, the platform, which is self-described as a “sort of a ‘DIY’ social enterprise support network,” has a goal to help their organization, as well as other organizations and movements, run democratically. As the website states, “If you’re an independent, entrepreneurial person with a deep commitment to service and social change and want to discover your own way to have an impact alongside like-minded people, Enspiral is fertile ground.”

10. Tapazz

Tapazz is a peer to peer carsharing co-op in Belgium. A recognized cooperative company, it enables shareholders who believe in the company’s social mission (to ensure a sustainable mobility society) to participate in its growth. Shareholders can invest, produce and create a transparent structure to ensure sustainable mobility. As an added bonus, Tapazz “offers space for co-creating and collaboration, so it really is a business of everyone.”

11. Peerby

Peerby is a Dutch neighbor-to-neighbor goods sharing platform. The company recently raised $2.2 million from users in a recent crowdfunding campaign, which makes users the majority shareholder class.

A certified B corp, Peerby plans to use the funds, which surpasses the total venture capital dollars the startup raised previously and makes it one of the most successful international crowdfunding campaigns ever, for product development and international expansion of a new business model named Peerby Go, with a specific focus on the UK and North America.

What are your favorite platform co-ops? Please share in the comments.

Cross-posted from Shareable.net and authored by Cat Johnson

The post 11 Platform Cooperatives Creating a Real Sharing Economy appeared first on P2P Foundation.

“It’s this whole idea of do-ocracy that we talk about,” says Francesca Pick, OuiShare Connector and Chair of the upcoming OuiShare Fest. “We want people to be able to go forward and do something—to take leadership and let others follow them.”

In OuiShare, a leader can pop up anywhere on any project. The organization embraces dynamic hierarchies where hierarchical relationships exist, but these leadership roles are dependent on a project, situation, or time, not fixed.

“An issue with hierarchy is that once in place, they are very hard to change or get rid of,” explains Pick. “We try to distribute leadership, but we are for leadership. People want to talk about self-organization and say, ‘You don’t need a leader.’ In OuiShare, we do need leaders—people who are willing to take on responsibilities—but we can have many of them and they can lead different areas and jump between different roles.”

OuiShare Fest 2016 will host 200 sessions in seven different spaces.

Within the organization, OuiShare experiments with different ways of organizing, thinking, and collaborating. A key element is a willingness of community members, and the organization at-large, to experiment with new ways of being—to put into practice theories about how we might collaboratively create a healthy, just communities.

For the past three years, OuiShare has hosted OuiShare Fest at Cabaret Sauvage in Paris. The four-day event is a gathering of international thought-leaders, change-makers and doers, brought together to share ideas, challenges, experiences, projects and more. The idea is to learn from presenters and other participants, and think critically about trends and emerging ideas in the global culture of solutions activists.

At last year’s event one of the hot topics was blockchain. Conversations about the technology and how it could be used in arenas and platforms other than financial, flourished. In particular, how it could help create collaborative autonomous organizations that aren’t controlled by any one person.

As Pick writes in Decentralizing (Part of) OuiShare with Blockchain: Experiment 1:

Blockchain is most known today for its applications in the world of finance. But its proliferation has also sparked the development of a growing ecosystem of infrastructures and tools that build on top of the blockchain or decentralized protocols, for example Uber-like ridesharing app La’Zooz, digital art attribution platform Ascribe.io as well as Swarm and Backfeed, both tools for distributed, collaborative organization.

To experiment with ways the technology could help address numerous challenges related to decision-making, transparency, governance and value distribution, OuiShare put blockchain technology into practice. UsingBackfeed, a “social operating system for blockchain-based applications,” they decentralized part of OuiShare Fest by using the tool to help create the festival program. Using Backfeed, they hoped to improve the sourcing of the best content from the community and make it easier for the members to contribute to the project and get recognized for the value they provide.

“What’s really important to us,” says Pick, “is that Backfeed is a tool that can enable technological decentralization, which is one level of decentralization…There’s so much growth in the area of finance, but it’s not limited to finance. There are so many other things you can decentralize.”

True to its reputation for experimentation and critical thinking, the OuiShare team launched the experiment with an open mind.

“I went into this experiment definitely not assuming that this is the thing that’s going to change everything and it’s going to solve all these questions we’ve had about value distribution, and people contributing, and being volunteers, and being paid,” says Pick. “My aim was to see what the potential of blockchain is, how could it be used, and to debunk the myths and the hype and utopian stories that are being told…There are very few people who have been applying it so that’s why we wanted to give it a try.”

The result of the Backfeed experiment, says Pick, is that they had some interesting results very fast, but they hit a wall in terms of how far they can go with it. The experiment brought to light the need for a reliable tool designed to meet their own needs, and they learned that decentralizing a project is easier said than done.

The theme for this year’s OuiShare Fest is After the Gold Rush. It’s a nod to the fact that the sharing economy, like the California Gold Rush of the 1800s, appears to be benefiting not everyone, as idealists hoped, but a handful of stakeholders in mega-companies. As Pick writes:

Now we can only look back fondly at those early times of abounding, and possibly naive, excitement and hope for these new models. For now, it appears only few are benefitting from the abundance of value that has been created by communities and entrepreneurs worldwide – few organizations that are starting to look suspiciously similar to those they were disrupting – or worse? The gold rush was not profitable for many who set out on the initial journey. And the biggest sacks of gold are going to those providing the picks, shovels and infrastructure, those fueling the gold rush itself.

Now on the other side of the sharing economy gold rush, OuiShare is calling for action and to mobilize and build from where we are now. The extreme examples, created by mega-platforms including Airbnb and Uber, helped identify questions that need to be asked and problems that need to be addressed.

“Last year was, we’re lost, we’re criticizing, we’re having critical discussion,” says Pick of last year’s Lost in Translation theme. “Now, it’s about action. After the Gold Rush is about having the realization that this happened, but it’s passed…[and] there are all these people that have mobilized all these resources to come to this place, in a metaphorical sense. They learned all these things and they’re ready to do stuff, now we actually need to build something new from what we have.” Pick adds with a laugh, “The gold rush got us to move our ass so now we can actually do something.”

The theme of this year’s OuiShare Fest is After the Gold Rush.

The 2016 OuiShare Fest comprises 200 sessions in seven spaces, dozens of speakers from around the world, including Shareable’s Organizing Director Tom Llewellyn who will lead a workshop about Sharing Cities, and 15 satellite events. One of the key topics to be discussed at After the Gold Rush is the future of work. The fest promises to play host to countless conversations about ownership models, the new workforce, the freelance economy, worker cooperatives and platform coops, organizational transformation, new forms of governance, purpose-driven businesses and organizations, and blockchain.

“We’re trying to have a critical view of all those things,” says Pick. “It’s a spectrum of different types of organizations that are being experimented with. We’re really trying to understand the differences and not saying that everyone should be a cooperative in a sort of ideological way, or everyone should be a social entrepreneur and have a company. We’re trying to just look at the spectrum.”

New at Ouishare Fest this year is Fest Forward, a three-day accelerator for collaborative, open source projects with high social impact. Growing out of innovation community POC21 and the OuiShare Awards, Fest Forward is replacing competition with an opportunity to collaborate and be action-oriented. The goal is to help projects overcome challenges in areas such as product design, business models or scalability by giving them a customized program and pairing them with mentors.

As OuiShare continues to grow and evolve, and OuiShare Fest thrives as an international gathering of new economy changemakers, the organization is always looking for new ways to empower individuals and communities around the world.

Moving forward Pick is working on open sourcing OuiShare Fest by creating a tool to document how they organize, create and run the festival, so other teams can do the same thing. The goal is to empower others and encourage the growth and evolution of OuiShare Fests and related events in cities around the world.

With a new tagline: Exploring the Edges, OuiShare Fest hopes to catalyze new ways of thinking and acting in regards to the economy, society and ourselves.

“There’s a process that happens in society,” says Pick, “that new ideas appear at the edges then they move into the center. Once they’re in the center, they’re no longer new and there are all these new ideas that are coming from the edge into the center. The purpose of the fest, and of OuiShare overall, is to take those ideas from the edges, to find them and find the people, and to bring those to the center so they can be brought into society overall. It’s a perpetual process.”

Written by Cat Johnson for Shareable.org

The post After the Gold Rush: OuiShare Fest 2016 Embraces Action and Experimentation appeared first on P2P Foundation.