Introduction

E.F. Schumacher’s seminal work Small Is Beautiful (1973) champions the idea of smallness and localism as the way for meaningful interactions amongst humans and the technology they use. Technology is very important after all. As Ursula Le Guin (2004) puts it, “[t]echnology is the active human interface with the material world”. With this essay we wish to briefly tell a story, inspired by this creed, of an emerging phenomenon that goes beyond the limitations of time and space and may produce a more socially viable and radically democratic life.

We want to cast a radical geographer’s eye over “cosmolocalism”. Antipode has previously published an article by Hannes Gerhardt (2019) and an interview with Michel Bauwens (Gerhardt 2020) that have touched upon “cosmolocalism”. Cosmolocalism emerges from technology initiatives that are small-scale and oriented towards addressing local problems, but simultaneously engage with globally asynchronous collaborative production through digital commoning. We thus connect such a discussion with two ongoing grassroots developments: first, a cosmolocal response to the coronavirus pandemic; and, second, an ongoing effort of French and Greek communities of small-scale farmers, activists and researchers to address their local needs.

Cosmolocalism in a Nutshell

Τhe most important means of information production – i.e. computation, communications, electronic storage and sensors – have been distributed in the population of most advanced economies as well as in parts of the emerging ones (Benkler 2006). People with access to networked computers self-organise, collaborate, and produce digital commons of knowledge, software, and design. Initiatives such as the free encyclopedia Wikipedia and myriad free and open-source software projects have exemplified digital commoning (Benkler 2006; Gerhardt 2019, 2020; Kostakis 2018).

While the first wave of digital commoning included open knowledge projects, the second wave has been moving towards open design and manufacturing (Kostakis et al. 2018). Contrary to the conventional industrial paradigm and its economies of scale, the convergence of digital commons with local manufacturing machinery (from 3D printing and CNC milling machines to low-tech tools and crafts) has been developing commons-based economies of scope (Kostakis et al. 2018). Cosmolocalism describes the processes where the design is developed and improved as a global digital commons, while the manufacturing takes place locally, often through shared infrastructures and with local biophysical conditions in check (Bauwens et al. 2019). The physical manufacturing arrangement for cosmolocalism includes makerspaces, which are small-scale community manufacturing facilities providing access to local manufacturing technologies.

Unlike large-scale industrial manufacturing, cosmolocalism emphasizes applications that are small-scale, decentralised, resilient and locally controlled. Cosmolocal production cases such as L’Atelier Paysan (agricultural tools), Open Bionics (robotic and bionic hands), WikiHouse (buildings) or RepRap (3D printers) demonstrate how a technology project can leverage the digital commons to engage the global community in its development.

Two Cases of Cosmolocalism

While this essay was being written in March 2020, a multitude of small distributed initiatives were being mobilised to tackle the coronavirus pandemic. Individuals across the globe are coming together digitally to pool resources, design open source technological solutions for health problems, and fabricate them in local makerspaces and workshops. For example, people are experimenting with new ventilator designs and hacking existing ones, creating valves for ventilators which are out of stock, and designing and making face shields and respirators.

There are so many initiatives, in fact, that there are now attempts to aggregate and systematise the knowledge produced to avoid wasting resources on problems that have already been tackled and brainstorm new solutions collectively.[1] This unobstructed access to collaboration and co-creation allows thousands of engineers, makers, scientists and medical experts to offer their diverse insights and deliver a heretofore unseen volume of creative output. The necessary information and communication technologies were already available, but capitalism as a system did not facilitate the organisational structure required for such mass mobilisation. In response to the current crisis, an increasing number of people are working against and beyond the system.

Such initiatives can be considered as grassroots cosmolocal attempts to tackle the inability of the globalised capitalist arrangements for production and logistics to address any glitch in the system. We have been researching similar activity in various productive fields for a decade, from other medical applications, like 3D-printed prosthetic hands, to wind turbines and agricultural machines and tools (Giotitsas 2019; Kostakis et al. 2018).

The technology produced is unlike the equivalent market options or is entirely non-existent in the market. It is typically modular in design, versatile in materials, and as low-cost as possible to make reproduction easier (Kostakis 2019). Through our work we have identified a set of values present in the “technical codes” of such technology which can be distilled into the following themes: openness, sustainability and autonomy (Giotitsas 2019). It is these values that we believe lead to an alternative trajectory of technological development that assists the rise of a commons-based mode of production opposite the capitalist one. This “antipode” is made possible through the great capacity for collaboration and networking that its configuration offers.

Allow us to elaborate via an example. In the context of our research we have helped mobilise a pilot initiative in Greece that has been creating a community of farmers, designers and fabricators that helps address issues faced by the local farmers. This pilot, named Tzoumakers, has been greatly inspired by similar initiatives elsewhere, primarily by L’Atelier Paysan in France. The local community benefits from the technological prowess that the French community has achieved, which offers not only certain technological tools but also through them the commitment for regenerative agricultural practices, the communal utilisation of the tools, and an enhanced capacity to maintain and repair. At the same time, these tools are adapted to local needs and potential modifications along with local insights may be sent back to those that initially conceived them. This creates flows of knowledge and know-how but also ideas and values, whilst cultivating a sense of solidarity and conviviality.

Instead of Conclusions, a Call to Arms

We are not geographers. However, the implications of cosmolocalism for geography studies are evident. The spatial and cultural specificities of cosmolocalism need to be studied in depth. This type of study would go beyond critique and suggest a potentially unifying element for the various kindred visions that lack a structural element. The contributors (and readership) are ideally suited to the task of critically examining the cosmolocalism phenomenon and contributing to the idea of scaling-wide, in the context of an open and diverse network, instead of scaling-up.

Cosmolocal initiatives may form a global counter-power through commoning. Considering the current situation we find ourselves in as a species, where we have to haphazardly re-organise entire social structures to accommodate the appearance of a “mere” virus, not to mention climate change, it is blatantly obvious that radical change is required to tackle the massive hurdles to come. Cosmolocalism may point a way forward towards that change.

Acknowledgements

The authors acknowledge funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme (grant no. 802512). The photos were captured by Nicolas Garnier in the Tzoumakers makerspace.

Endnote

[1] Volunteers created the following editable webpage where, at the time of writing, more than 1,500 commons-based initiatives against the ongoing pandemic have been documented: https://airtable.com/shrPm5L5I76Djdu9B/tbl6pY6HtSZvSE6rJ/viwbIjyehBIoKYYt1?blocks=bipjdZOhKwkQnH1tV (last accessed 27 March 2020)

References

Bauwens M, Kostakis V and Pazaitis A (2019) Peer to Peer: The Commons Manifesto. London: University of Westminster Press

Benkler Y (2006) The Wealth of Networks: How Social Production Transforms Markets and Freedom. New Haven: Yale University Press

Gerhardt H (2019) Engaging the non-flat world: Anarchism and the promise of a post-capitalist collaborative commons. Antipode DOI:10.1111/anti.12554

Gerhardt H (2020) A commons-based peer to peer path to post-capitalism: An interview with Michel Bauwens. AntipodeOnline.org 19 February https://antipodeonline.org/2020/02/19/interview-with-michel-bauwens/ (last accessed 27 March 2020)

Giotitsas C (2019) Open Source Agriculture: Grassroots Technology in the Digital Era. Basingstoke: Palgrave Macmillan

Kostakis V (2018) In defense of digital commoning. Organization 25(6):812-818

Kostakis V (2019) How to reap the benefits of the “digital revolution”? Modularity and the commons. Halduskultuur: The Estonian Journal of Administrative Culture and Digital Governance 20(1):4-19

Kostakis V, Latoufis K, Liarokapis M and Bauwens M (2018) The convergence of digital commons with local manufacturing from a degrowth perspective: Two illustrative cases. Journal of Cleaner Production 197(2):1684-1693

Le Guin U K (2004) A rant about “technology”. http://www.ursulakleguinarchive.com/Note-Technology.html (last accessed 27 March 2020)

Schumacher E F (1973) Small is Beautiful: A Study of Economics As If People Mattered. New York: Harper & Row

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There is much hype around circular and collaborative economies over the past few years. From Davos to the European Union, everyone is eager to grab a piece of the new mode of industrial development. But what lies beneath these grand narratives?

In this 3-part short series we attempt to critically review the current discussion on the circular and collaborative economy and provide insights from some alternative trajectories.

This short series based on a workshop on circular, collaborative and distributed production designed and facilitated by Chris Giotitsas and Alex Pazaitis on the occasion of the participation of OD&M project at the 83rd Florence International Handycraft Fair, on April 24, 2019 in Florence.

Part 1: On the circular economy.

The most widely known and basic definition for a circular economy (accepted even by the European Union) entails cycles of production, ranging from repair, to maintenance, to re-use, refurbishment, and last to recycling. For this conceptualization to work, products need to be designed to fit these cycles. Meaning that we need to rethink how we design and make things. For instance, a phone may be designed so that it can be more durable, easier to repair and easier to recycle. So far so good.

However, considering the production and distribution networks today, that would presumably take place on a global scale. A product would be produced in one place, then purchased on the other side of the planet, then repaired or refurbished and resold somewhere else entirely. Until ultimately it is recycled for material and entering the cycle all over again. The question here, then, is: who would do the repair/ refurbishment/ recycling on that scale? As it is currently conceptualized, it is the service provider or the manufacturer that does it. How? Would manufacturers have processing facilities all over the planet, or would the products be sent to their locations thus increasing energy consumption and pollution? Doesn’t this reverse the whole point of circularity related to sustainability?  

Furthermore, how would manufacturers and service providers keep track of all these products? Apparently, it is with the help of the “Internet of Things”, by making products smart and trackable. But if we’re talking about a circular system of this complexity then this means that the “manufacturer” would need to have massive operational capacities and resources as well as tracking (or surveilling really) data to an alarming degree.

From a different perspective, if one looks at the EU reports on the issue of circular economies they will find assessments based on collected data and while there is plenty available on a state and municipal level (regarding, for instance, recycling) there is next to none when it comes to industry. That is hardly surprising. It is costs money to track and collect information and when there is no clear profit foreseen, then why would a private manufacturer do it? The idea is to incentivize industry to change their practices. Allow them to make money in a different, more sustainable way. But even then, why would they share data? And how would the protocols and processes of one huge manufacturer work with those of another. They are competitors after all and the profit of one signals the loss of another. 

So, circularity without being open source, is not really circularity. By making it so, then it would ensure interoperability for start. Meaning the products of one manufacturer would work with those of another. Open licenses and standards for parts, tools, materials as well as the sharing of all relevant information would mean that the product of one manufacturer would be possible to be repaired or maintained by whomever locally. Their materials would also be easier to locate, distribute, and reuse. However, at least for now, this seems not to be the goal.

When it comes to the circular economy, we are attempting to apply a concept on a production system that is incompatible. And the attempts so far, seem either too small or they end up being co-opted to such a degree that they lose any transformative potential.  

Part 2: On the Sharing Economy

As a global society, we are facing what could be understood as an existential dilemma with the sharing economy. As a phenomenon, the sharing economy has been increasingly gaining attention since -roughly- 2004, as it gets more and more share in the global markets. But sharing, as a practice, is not a new phenomenon. It has been present in communities since the dawn of human history. And, frankly, in our current form of economic organisation we have not always been very fond of it…. 

Those of us who have been old enough to witness a primitive type of audiovisual technology called “Digital Video Disc” (aka DVD), have often found ourselves irritated with -and simultaneously amused by- aggressive anti-piracy ads like this one. In all their ridiculousness, comparing a downloaded movie with car theft, what they were basically tackling was early forms of peer-to-peer file-sharing.  

So what has happened in less than 10 years that made sharing (esp. over the internet) from a criminal activity to the whole “sharing is caring” story? 

Apparently, the answer lies in some people making enormous amounts of money through sharing. A glimpse on the net worth of Mark Zuckerberg or the market value of tech start-ups like Uber or AirBnB nicely illustrate this. On the other hand, a closer look in their underlying infrastructures (and also their tax returns) shows that, despite profiting on sharing capacities, they are not equally interested in sharing themselves. So, to put it bluntly, what is interesting about sharing, is the sharing economy. What is less obvious is what it is about the economy that is of the interest of sharing. 

In a broader view, the economy can be described as a system that caters for the production and distribution of the means necessary for our subsistence and well-being. In the specific kind of economic system we broadly refer to as capitalism, economic affairs usually involve two main institutions: (a) private property; and (b) market exchange. The latter is fundamentally dependent on the former, and, respectively, the former rationalises the latter. This line of economic understanding also by and large underpins the definition of the sharing (or collaborative) economy from the European Union (European Commission (2016). A European Agenda for the Collaborative Economy. Available): 

“[…] the term “collaborative economy” refers to business models where activities are facilitated by collaborative platforms that create an open marketplace for the temporary usage of goods or services often provided by private individuals” 

And further it is pointed out: 

“Collaborative economy transactions generally do not involve a change of ownership and can be carried out for profit or not-for-profit” 

More or less, the understanding of sharing on behalf of the EU is reduced to the extent it can relate to these fundamental institutions of property and exchange. The focus is then placed on regulating issues evolving around these relations, concerning both things and people, including labour, liability and taxation. 

Nevertheless, the same document still cannot move away from pointing out -even if in a footnote- a certain element that is significantly different: 

“Collaborative economy services may involve some transfer of ownership of intellectual property […]” 

And I would add a hint: often without conventional market-based transactions. Earlier examinations of the phenomenon focus exactly on this dynamic, explaining those conditions that allow them to have massive economic impact. Harvard Law Professor, Yochai Benkler, more than a decade before the EU became interested in the sharing economy (Benkler, Y. 2004. Sharing Nicely: On Shareable Goods and the Emergence of Sharing as a Form of Economic Production. The Yale Law Journal, 114(2): 273-358), eloquently argues on sharing as a form of economic production and nicely summarises his position as follows (again in a footnote, yet for different reasons here): 

“I am concerned with the production of things and actions/services valued materially, throughnon-market mechanisms of social sharing […]” 

And then continues: 

“Sharing’, then, offers a less freighted name for evaluating mechanisms of social-relations-based economic production” 

The phrase “valued materially” concerns the real value of sharing, not the one expressed in financial markets or the balance sheets of Facebook’s partner advertising companies. It relates to the very human interaction of sharing stuff and our own time and capacities in things we consider meaningful, from food, shelter and rides, to knowledge, information and technology. The meaning, or value, of this interaction, contrary to the so-called sharing economy, is not guided by price signals between the people, commodities and services. It is a form of an economy, i.e. a system catering for human subsistence and well-being, based solely on social relations. And this is partly why a Harvard professor has to come up with a “less freighted name” for it, as we can all imagine the all-too-freighted name of it that any Fox News anchor would instinctively shout out based on the above definition alone. 

And here lies the real transformative dynamic of sharing as a form of economic production. It is this element that allows a group of uncoordinated software developers create better a web-server than Microsoft; or thousands of people, contributing their knowledge with no predefined structure, roles or economic incentives, create a digital encyclopedia that outgrows Britannica. But such sharing-enabled success stories typically don’t mobilise huge cash flows and don’t create “added value”, which basically entails an understanding of value stemming exclusively from selling stuff to people.  

Going back to our existential issues with sharing, our general position as societies is that we basically think of sharing as a nice thing to do, but lack the institutions to really appreciate its value for our economic system. This massively restrains the actual dynamics of sharing, which are gradually subsumed by the dominant private-property-and-market-driven system. 

There are of course great alternatives in the digital economy alone that build on this sharing capacity in a more humane and socially-minded way, from early neighbourhood tools and rides sharing platforms, to Free and Open Source Software, open design projects and Wikipedia. There is frankly as much sharing taking place on Facebook as in Wikipedia, at least on the front end. But the underlying value models and, subsequently, potential outcomes for the majority of the people involved are vastly different. 

For this we need to finally mature with regards to our issues with sharing and, eventually, make a choice for the kind of sharing for which we would design our institutions and societies. And hopefully that would be the one that would help us escape the current dead ends on the social and ecological front. 

Part 3: Needs-based design as an alternative paradigm 

Despite the serious conceptual and systemic problems described in the previous parts of this short series, it does not necessarily mean that there are no examples of true implementation for collaborative and circular practices right now. In fact, there are several technological development communities that make it happen to some significant degree. More specifically,  needs-based design and grassroots innovation as community-driven endeavours offer a serious alternative paradigm. 

In other words, communities can harness these ICT-enabled capabilities to collaboratively create technology for themselves, and promote sustainable practices based on shared values, knowledge and infrastructure. For instance, small-scale farmers in the agricultural communities of L’atelier paysan and Farm Hack, collaborate to produce tools and machines, often from recycled scrap material, suitable for their type of agriculture, which conventional market channels often fail to adequately cover. 

Yet, this type of self-construction activity is limited in simpler, frugal solutions, whereas  to address today’s challenges we need a broader engagement of design and engineering. But for a community to create complex technologies and systems, advanced skills still need to be employed, including designers, engineers and software developers. The main difference is the type of relationship they have with the community of users. This means the experts would act according to their own motives for engagement but with an explicit purpose to provide a solution which best serves the users of the technology. 

As far as the users are concerned, designers take up a specific purpose. They serve the role of guides or “Sherpas” (with reference to the ethnic group of the Himalayas that are expert mountaineers helping other groups). In that sense, the design process begins after a need within a community is made explicit. Then the designer meets with the community several times to discuss the parameters of the problem that needs solving and uses her expertise to design the solution, which is then reviewed by the community. This is an iterative process until a final artefact is produced, often through a collective process.

Nevertheless, engaging in such a creative activity  and simultaneously making a living out of its is no easy task, yet it is better than the alternative. Having a community as a base of support beats deciding to engage in “social innovation” on your own. At least if we are defining social innovation as something that you make for the common good rather than a thing to make money out of. For instance, designers in the agricultural communities mentioned above, could receive funds to help farmers refurbish or redesign an existing tool, or they could crowdfund within the community for the creation of a new tool. 

Such hybrid and radical models may lead to some sustainability for the designer willing to engage in social production. In our view however, for these terms to be genuinely meaningful in terms of sustainability, openness and equity, structural changes need to take place starting from a policy level. These communities provide a certain blueprint to inform the direction which needs to be taken. 

For instance, instead of incentives for manufacturers, perhaps more focus could be placed in empowering communities to tackle parts of the extremely complex problems of circular production. Likewise, user-communities can harness favourable licences and legal tools to build on shared capacities for collaborative forms of production and distribution. Individuals like designers could also be given incentives and support to engage with these communities in a relationship that is not profit-driven but informed by mutually shared values. 

What this would look like may take many forms, especially depending on local cultures and social contexts. For instance, such a community in the US, which generally lacks serious welfare structures, means that farmers need to rely largely on themselves and each other. Designers that work with them, manage to secure limited funding through the national agriculture organisations and donors while doing also something else to secure their personal sustainability. A similar community in Europe, on the other hand, which still manages to maintain basic social welfare amidst austerity obsessions, means that designers and engineers working with the farmers can secure state funding. So the volume of the work, as well as the quality of tools and documentation can be significantly increased. 

In conclusion, collaborative and circular economies are possible. But we need, as a society, to engage with these ideas in more radical ways than it is happening at the moment.

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Game of Thrones was arguably about climate change, but the HBO series turned this narrative around by presenting a last-minute technological solution as magically saving the day, the planet, and existence. 

!!! SPOILERS AHEAD !!!

Game of Thrones was arguably about climate change. George RR Martin himself confirmed that it is indeed “a great parallel”. Perhaps that is still the case in the books (we’ll have to wait until, or if, he completes his story), because the HBO series certainly shattered this narrative.

Presumably the message here is: no need to stop our petty squabbling in the face of a cataclysmic threat looming, a last-minute solution will magically turn up. While that might be an unfair bit of criticism to place on a show that indeed specialises in human squabbling, it is yet another example of pop culture reinforcing a dangerous idea. That whatever existential peril we may face as a species, we can solve through our real-world magic: technology!

This belief that eventually technological breakthroughs solve our problems is as powerful today as ever. How could it not? In the face of a problem like planetary collapse, which would require us to completely alter the way we exist as a society, it is easier to just passively hope for that inevitable bit of tech that will save economic growth!

One might imagine that this development in the show was forced due to the creators’ desire to move onto other projects. Because up to the point where the massive problem is instantly resolved, the show seemed to be building a narrative that relied on the humans getting their act together and making radical changes to their behaviour in order to survive. Thus, the opportunity to make a point to millions of people watching was sadly lost.

From Arya Stark’s dagger to personal computers and smartphones, technological artefacts reach users who often ignore the production history of those artefacts. Who produced them? At what social and environmental cost? How was nature transformed in the place where the materials of a certain technological artefact were found? The technologically-enabled abundance that a few people experience is linked to the scarcity experienced by many.

Ecomodernism argues that the issues of scarcity and environmental degradation can be addressed by using more efficient technologies. It has been a matter of debate in political ecology and in this blog. Ecomodernism overlooks the consequences of efficiency improvements. The Jevons Paradox is a finding attributed to the 19th century economist Stanley Jevons. It illustrates how efficiency improvements can lead to an absolute increase of resource use.

For example, the invention of more efficient train engines allowed for cheaper transportation that catalyzed the industrial revolution. However, this did not reduce the rate of fossil fuel use; rather, it increased it. More efficient technologies use less energy, and thus they cost less, which often encourages us to use them more—resulting in a net increase in energy use. Although since the 1970s technological advances have been significant, both global energy use and global material use have increased threefold.

In a famous quote, prolific writer Ursula K. Leguin says

“We live in capitalism. Its power seems inescapable. So did the divine right of kings. Any human power can be resisted and changed by human beings. Resistance and change often begin in art…”.

Art, and especially science fiction and fantasy, has the power to challenge ingrained beliefs and explore radical imaginaries, which may inspire action. Sadly, however, the Game of Thrones series failed to deliver.

Vasilis Kostakis is a Professor at TalTech and a Faculty Associate at Harvard. He is coordinating the Cosmolocalism.eu project. Chris Giotitsas is a Research Fellow at TalTech and a core member of the P2P Lab.

Header image: CC Chapman/Flickr (CC BY-NC-ND 2.0)

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The 5 teams have developed the following prototypes:

• MakeIT Manifattura: a set of physical installations to map values and meanings that citizens attribute to Manifattura Tabacchi in Florence (Team: Vincenzo Rizza, Christia Tsrimpa, Margherita Vacca, Riccardo De Mei, Alessandra Bonelli);
• NEST: a dynamic, creative and modular makerspace to host making and design communities across the city (Team: Sophie Defauw, Paolo Ciarfuglia, Edoardo Dalla Mutta, Elisabetta Simone, Alessandra Galli)
• Carriù: an innovative camper redesigned to bring educational services in remote areas (Team: Tommaso Scavone, Liang Shuang, Marco Berni, Zhou Min)
• Sma_Lab: a device to create and develop creative collaboration between artisans, students and makers (Team: Francesca Gianassi, Silvia Nicoli, Lu Ji, Li Meng)
• CamperJob: a camper hosting innovative labour services in remote areas (Team: Beatrice Bettini, Camilla Franchina, Alessia Macchi, Anna Eleonora Fabrizi)

The exhibition has been opened up by Cecilia Del Re (Florence City Councillor for Economic Development and Tourism), while Stefano Ciuoffo (Tuscany Region’s Councillor for Production Activities) has closed the day with the delivery of the diplomas to students.

The exhibition has also hosted a workshop on circular, collaborative and distributed production facilitated by Chris Giotitsas and Alex Pazaitis of the P2P Foundation.

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In this paper, we explore novel ways for decentralized economies to protect themselves from, and coexist with, competitive markets at a global scale utilizing decentralized technologies such as Blockchain.

Article: The Wolf and the Caribou: Coexistence of Decentralized Economies and Competitive Markets. By Andreas Freund and Danielle Stanko. J. Risk Financial Manag. 2018, 11(2), 26

Michel Bauwens: There are several interesting aspects to this article. First the authors are from Tata Industries, who are reportedly very concerned about the future of their industrial verticals and actively looking for successor systems. Second this article is very liberal in quoting the work of the P2P Foundation about the institutionalization of peer production. And third, it examines how our models fit with the emerging possibilities of the blockchain , tokens and programmable organizations, i.e. ‘Distributed Autonomous Organizations’.

However, in doing so, it also does something very problematic in our view, ie it assumes that the current wave of crypto projects conform to these generative, commons-based vision of our economy, while they clearly don’t. While current crypto-based projects are interesting new models, most of them are extractive to people and the planet, and use the commons and open source in the context of achieving value capture. Without a clear distinction between generative and extractive economic modes, we justify the worst excesses of the current crypto-based economy.

Abstract

Andreas Freund and Danielle Stanko: “Starting with BitTorrent and then Bitcoin, decentralized technologies have been on the rise over the last 15+ years, gaining significant momentum in the last 2+ years with the advent of platform ecosystems such as the Blockchain platform Ethereum. New projects have evolved from decentralized games to marketplaces to open funding models to decentralized autonomous organizations. The hype around cryptocurrency and the valuation of innovative projects drove the market cap of cryptocurrencies to over a trillion dollars at one point in 2017. These high valued technologies are now enabling something new: globally scaled and decentralized business models. Despite their valuation and the hype, these new business ecosystems are frail. This is not only because the underlying technology is rapidly evolving, but also because competitive markets see a profit opportunity in exponential cryptocurrency returns. This extracts value from these ecosystems, which could lead to their collapse, if unchecked. In this paper, we explore novel ways for decentralized economies to protect themselves from, and coexist with, competitive markets at a global scale utilizing decentralized technologies such as Blockchain.”

Excerpt

“Based on available research, decentralized socioeconomic models, also often referred to as a Decentralized Autonomous Organization (DAO) or Commons6 structure typically have three main components (Giotitsas and Ramos 2017; Filippi et al. 2007):

• Entrepreneurial Common (EC): An EC is the commercial interface with external ecosystems and gives funds it raised from selling goods and services or other activities such as investments in other ecosystems in the form of tokens to the For-Benefit Common (FBC) and receives goods & services to market and sell from the Production Common (PC) in return. This requires exchange between an EC token and Fiat and a PC token that is governed by the FBC. Tokens generally represent a unit of value as defined by the participants of a DAO, and there may be many tokens within a DAO. In addition, the EC is responsible for financial and monetary policy in the DAO since issuing a token is effectively creating a currency with all the accompanying complexities. We will discuss this in more detail when we discuss our proposals for the coexistence of decentralized economies and competitive markets;

• Production Common (PC): A p2p group that produces goods and services collaboratively based on the purpose of the ecosystem as established in the FBC. A participant’s contributions are valued in PC tokens which can be exchanged to EC tokens or other tokens through an exchange utility, as detailed out in one of our four proposals below. Assets created in this common are held in common by the FBC with claims rights by the contributors based on their value contribution to the asset in order to enable a fair sharing of value generated both commercially and through reputation;

• For-Benefit Common (FBC): The FBC is the governance common that is responsible for setting the DAO vision and impact goals, sets consensus rules and incentives for the DAO commons, sets the exchange rules for the EC and PC Tokens within the commons and externally to other ecosystem tokens and fiat, sets the ownership/membership and sharing rules for the DAO commons, defines and enforces reputation also in relation to non-DAO reputation measurement and management models, sets collaboration and giving rules with internal and external entities, and acts as the interface to not-for-benefit entities etc.

This three-zone model is designed to

• Insulate the economically vulnerable FBC and PC from extractive external markets through the EC commons by limiting token exchanges between the common markets that have direct interfaces to competitive markets.

• Enable social impact results through the FBC without a strong dependency on market results. The FBC decides the use of funds coming from the EC. As a result it is independent of “shareholder value” as defined by external and extractive markets; therefore it is accountable to the PC and EC participants.

• Allows the EC to focus on raising funds for both the FBC and PC either through selling products and services or raising funds for future products and services and social impact efforts.

• Enables the PC to focus on core competencies to create new products and services aligned with the overall DAO values independent of the EC.

It is worth noting that decentralized economies as described above typically have three characteristics in common (Commons Transition Primer 2018, Commons-Based Peer Production Directory 2018, 2017):

• Open Value Accounting: An accounting system that allows one to record not only tangible assets and assess their value in a unit of value measure, but also to record tangible and intangible value contributions from participants to an asset and subsequent value translation into a unit of value measure such as a token in a decentralized socioeconomic model;

• Decentralized Commons Market: A decentralized marketplace for the free exchange of assets and services governed by business rules established by a governing commons through participant consensus. The decentralized marketplace is transparent and has verifiable and marketplace transactions. In order to motivate participation in a decentralized commons market (DCM), a DCM has an incentive model for both tangible and intangible value contributions and open asset ownership representation through a set of defined unit of value measures such as tokens. The rules for DAO membership and voting are normally based on consensus processes;

• DCM Reciprocity: Reciprocity in this context means that the return on investment beyond a certain value7 is capped but not frozen by requiring reciprocity contributions to the DCM in the form of tangible or intangible value contributions that equal or exceed returns. Example: For a return of a 100 token investment in a DCM asset beyond say 10 tokens, an actor needs to make a value contribution after applying an exchange rate of token to utility token quantifiably equivalent to 1 utility or 1 reputation token for every token earned beyond 10 tokens.

As we will see below, this is in stark contrast to competitive markets.

Central to making the three zoned model operate is effective governance. There is an evolving literature on the governance of decentralized markets discussing issues and challenges creating inefficiencies and potentially additional costs as well as benefits and efficiencies.” (http://www.mdpi.com/1911-8074/11/2/26/htm)

Photo by reynermedia

The post Essay of the Day: Coexistence of Decentralized Economies and Competitive Markets appeared first on P2P Foundation.

Summary

Chris Giotitsas and Jose Ramos: “The basic features of DG-ML are based on the conjunction of open source / open design production logics at the global scale, which are coupled with local-network production at a regional scale. Traditionally corporate enterprises have solely owned the intellectual property (IP) they employ in the production of goods. They source the materials for the goods through national or global supply chains. They manufacture those goods using economies of scale in a set number of manufacturing centres, whereupon those finished goods are delivered nationally or globally. DG-ML is an inversion of this production logic. First of all, the IP is open, whether open source or creative commons or copyfair,3 so it can be used by anyone. Secondly, manufacturing and production can be done independently of the IP, by any community or enterprise around the world that wants to. The democratization of increasingly powerful precision manufacturing technologies, such as 3D printers, laser cutters, CNC routers and automated systems / robots potentiate this. This does not follow the logic of economies of scale (yet), rather it is focused on producing value for a critical reference group (CRG), a community who require such goods. Thirdly, distribution is localized to the CRG, or affiliates of the CRG.

DG-ML is not just the advent of new technologies that can be simply strapped on to the neoliberal globalization machine. DG-ML in fact represents the instantiation and operationalization of a new economic system that draws from an emerging worldview. Drawing from relationships and experiences with people involved in DG-ML, we believe it represents a substantive cultural shift in the orientation of material producers/consumers. It rejects the way in which industrialization has decontextualized inputs and outputs and associated externalities. It is thus allied to the vision for building circular economies, the idea being that the production materials used in a DG-ML process are sourced as locally as possible, with waste outputs utilized as inputs elsewhere, eliminating unnecessary supply chain associated costs and impacts. It is also connected to calls for a post-growth economic model, sustaining livelihoods based on measures of wellbeing rather than corporate / economic growth.10 It is interwoven with the open source movement, a vision for a digital commons where the legacy of human creativity is shareable. It draws from a planetary imaginary where local development work is responsive to the planetary challenges we face.11 It is in fact part of a movement to create an alternative globalization,12 and an expression of an emergent worldview: global ecological integrity versus overshoot, peer worker solidarity versus national competition, value pluralism versus the monoculture of GDP.”

Excerpts

From the conclusion: “These two cases provide a window into an emerging economic model that we are just beginning to understand. The cases demonstrate the peer production of shared value and common resources. However, unlike the open software movement, the mode of co-production within these cases are highly localized, members are collaboratively prototyping, designing and experimenting with machinery. These cases can be considered to be prefigurative, they are potential indicators of things to come. The logic of peer production has hit an important threshold, it is now instantiated through physical / material production. Yet the cases also demonstrate growing pains. For Farm Hack questions still remain concerning their financial viability and the challenges of sustaining the producing communities. Is a weak for-benefit organisation enough to facilitate the healthy growth of their network of peer producers? For L’Atelier Paysans, there are less problems with financing the operation, but more questions about how an entrepreneurial coalition is activated. Looking ahead, what might we take away from these case studies that may allow us to see the faint future outlines of an alternative political economy? The emergence of the network form and the logic of commoning embodied in DG-ML practices as demonstrated in these case studies, provide us with some of the seeds from which to begin to imagine an alternative future for political economy. DG-ML challenges the logic of zero sum competition, which is at the heart of our nationally based (and globally connected) capitalist systems. In the current system we are used to national governments supporting national industries to compete globally, win market share and take the lead in technology and innovation. The DG-ML model is part of the birth of a globally cooperative system, the design innovations from one community in one part of the world can be used and adapted for a community in a wholly different part of the world. Instead of systems of competitive advantage and capturing of market share, technological adaptation is community-based and meant to sustain the livelihoods of critical reference groups. While there is theoretical scope for larger industrial scale DG-ML which is able to produce for regional markets (cities of 4-20 million people for example), the examples in this report show a commitment to the adaptation of design and technology for local critical reference groups, rather than competitive marketing strategies.

This then can also help us to reconsider the role of the state with respect to industry and material production. If DG-ML helps regions to rupture from the zero-sum logic of competition, states may develop policies in which support is given to both scales of the DG-ML coproduction system – global and local. At the scale of the global, national policy can orient knowledge production to be open in a way that potentiates industry in material production society-wide and indeed worldwide. At the scale of the local state policy can support communities and local regions in bootstrapping enterprises and productive communities that can instantiate the potential and value of DG-ML processes, through participatory action research processes. This has been referred to as a partner state model.24Finally, because DG-ML is growing from within the dominant capitalist economy, it is important that the value of a global design commons is not simply captured by capitalist industry as a way to lower its operational costs, without having to reciprocate by entering into the coproduction of the commons. It’s important, therefore, to begin to consider how to create virtuous cycles in the value exchanges between different actors in the global DG-ML meta-system. Some ideas in this vein have may be the development of copyfair licences (commons-based reciprocity license),25 useful for trans-nationalizing a generative circulation of value across commons based initiatives – a form of Dzopen cooperativismdz,26 and through which the capitalist / corporate sector would need to concretely reciprocate into if it wants to draw upon it in the first place. This would conceivably require new global institutions that would be able to provide legal and administrative power in supporting, enacting and protecting an open cooperativist regime of knowledge and value exchange. The potential for DG-ML is to liberate the human heritage of knowledge and design, so that communities and people anywhere have the full array of technologies and capabilities to address their living economic and ecological challenges. If we want to accelerate the human capability to enact sustainable development strategies across the world, the right to global designs and concrete support for building local livelihoods are fundamental pillars. The case studied presented here provide hope grounded in practice. Building on these courageous pioneering efforts will be the next challenge.”

Visualization

Comparison of Traditional vs DGML-based peer production

(CRG refers to: critical reference group)

• Images courtesy of L’Atelier Paysan.
• Download the full report here: A New Model of Production for a New Economy.

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