Ana Manzanedo and her colleague Alícia Trepat have documented a set of practices that platform coops are setting in order to solve the downside of platforms. The first outcome of these practices is to set fairness distribution of risk and value generated by the platform activity. In that sense, it is not only that assuming risk is rewarded, but also that the consequences of bad decisions or actions affect those that made them (what Taleb calls having “skin in the game”: he or she who wants a share of the benefits needs to also share some of the risks). The second outcome of the practices is that it establishes the responsibility for the care of all those involved in the platform, which means that their vulnerabilities are covered so the reproduction of the activity of the platform is assured, even beyond the nowadays generation who carries it. We could call that having “skin in the care”.

The real world examples captured by Ana and Alicia reflect the insight explained in this previous post: that solutions for communities having thick relationships do not scale for communities with thin relationships. In fact, in the first kind of communities, emerge a behavior hardly seen in the second: voluntary risk-taking for others, which Taleb calls “soul in the game”. Accordingly, it is not unusual to see voluntary care-taking for others, which we could call “soul in the care”.

The desirable governance of a Platform Coop is the one that promotes skin/soul in the game/care:

Table 1: Desirable approach for risk and care management

Communities of peers have their own ways to avoid risk and care transfer, particularly between their members. Most of the practices described by Ana and Alicia fall in at least one of the following approaches:

Table 2: Peer’s communities approaches to avoid transfer of risk and care

Platform Coops are, like the rest of the platforms, trapped by the “law of power” and by “winner-takes-it-all” dynamics. Yet, departing from the new possibilities offered by technological progress and societal change, we know where the solution might be:

a) Opening and commoning knowledge and resources as much as possible, in order to promote diversity of players and non-monopolistic (rent-free) markets: showing that Platform Coops do not maximize self-interest, and that abundance is possible through cooperation. Attracting individuals and communities with soul in the game and making them interact to create new subjectivities.

b) Making decision-making as much distributed as possible in the communities of life (clubs, neighborhoods, etc.) that are affected by the decision, and in the communities of production (i.e. foundations, coops, etc.) working in a federated way, according to their proved competences. Involving communities with skin in the game, and letting them jump in the logic of the soul in the game.

That, of course, draws a completely different network dynamics, and therefore, a different governance. Here it is my proposal to rethink Platform Cooperativism as Platform Ecoopsystems, (a sort of mix of Platform Cooperativism and Open Cooperativism).

1. Platforms should not be conceived as monolithic architectures owned and managed in a centralized way. They should be conceived as ecosystems, or we will be trapped in the same logic from which we want to escape.

The only reason why platforms are monolithic is because it is the way in which value can be easily extracted in a centralized manner. It is true that some of them offer API’s to third party developers (i.e. Facebook) as long as those development supports their extractive business models. Platform Ecoopsystems, instead, should think in terms of distributed architectures. I suspect that, too often, p2p and sharing initiatives are secretly pervaded by the darling image of the individual entrepreneur, because the tools and practices used are adapted from those of the traditional rent-seeking economy, instead of being created from scratch.

2. There is no technological obstacle to design Platforms with distributed architectures. Let’s do it in order to promote ecosystems.

Once the extractive business model motivation is removed, there is no technological reason to prefer a centralized architecture. Resources are usually already distributed, infrastructures can be distributed, and platforms themselves can be distributed. Although blockchain is the new kid on the block, torrent technologies should not be discarded.

Table 3: Key Differences in Centralized and Decentralized Systems across the layers – taken from the Platform Design Toolkit Whitepaper:

3. Platforms must be organically built as ecosystems in which sustainability is reached by a combination of federation of communities that are trusted for making certain decisions, and market coordination.

What would happen if we think of Platforms more like an Open Source Operation System (such as Ubuntu) than as an App? What are the decisions to be made?

Table 4: Approach to Platform Decisions

The key is to minimize the decisions that must be decided by voting to those decisions where scarcity is real, through:

• Opening, opening, opening.

• Designing in such a way that financial value is distributed through free-rent markets.

• Delegating decisions to trusted participants that excel in the required competencies to perform their duty.

• If a gatekeeper is unavoidable, then it should be non-profit that distribute value as in rent-free market, assuring the financial sustainability of all participants. In other words, if there is a “cut” that can be captured because of intermediation, it has to be distributed in such way that risk and care is not transferred (see – again – Ana and Alícia for IFTF on positive platforms).

4. The kernel of a Platform Ecosystem should be a non-profit

Depending on the nature of the activity and business model, the initiators and promoters of a Platform Ecoopsystem should not be organized as a cooperative itself, but as a non-profit organization that acts as a sort of kernel of the ecosystem. It could be formed by a group of future stakeholders of the platform that distribute their contribution according to the competencies in which they are publicly recognized. This organization should a) create the initial conditions for the ecosystem flourishing and b) maintain the conditions for its sustainability as a positive platform, that compensate differently to participants according to their contribution and the stage of the project. (For instance, in the early stages, gamification might be used in order to distribute value to those that make the app/platform more viral in order to solve the chicken egg problem.

You may think that how this kernel operates is the actual key of the whole post, and maybe it is, but I prefer to just outline some intuitions about it, and maybe develop the idea in a future post, or just with a conversation in the comments of this post:

• It should release a first version of the infrastructure/platform open source software (code also could be sponsored by future stakeholders of the ecoopsystem).

• It should put in place the right mechanisms for distributing the value.

• It should organize the consultations to stakeholders.

• It should choose providers of the ecosystem, whenever that decision must be taken in a centralized way.

• It should serve as arbitrator of stakeholders’ disputes.

If value must be centralized because of some unavoidable design reason, an instantly updated and transparent accounting must be available, in which is visually clear how the value (compare with average industry) is distributed in the co-owned platform. Let the community be able to deliberate and vote periodically on how the value should be distributed.

5. Platform Ecoopsystems should leverage their two distinctive features in order to outcompete existing platforms: they do not have to create artificial scarcity, and they do not have to centralize value capture.

The ultimate competitive advantage of Platform Ecosystems is that user experience and value are not conditioned by artificial scarcity of features and services, which only purpose is to keep rent-seeking practices. In that sense, Platform Ecoopsystems do have an important business advantage, for they can better suit the needs and requirements of its users.

6. In the same way that FLOSS created their own array legal license options, Platform Ecoopsystems should create their own array of legal ownership options.

New legal agreements of property and decision-making should be explored, in order to dynamically evolve according to the needs of the Ecoopsystem. These agreements should offer different modalities of ownership and decision-making in which participants can be automatically positioned according to predefined parameters.

I have sketched here some canvases that reflect the ideas exposed above, and that could complement others toolboxes, such as Simone Cicero’s Toolkit or Platoniq’s Moving Communities Methodology.

Download the following canvases:

• The Ecoopsystem Idea Tester (draft)

• The Ecoopsystem Exploration (draft)

• The Ecoopsystem Sustainability Matrix (draft)

The post Platform Coop’s Governance (II): From Coop Platforms to Platform Ecoopsystems appeared first on P2P Foundation.

Three problems of Platform Coops

Firstly, Platform Coops do not promote enough the new interesting subjectivities and relationships responsible for the emerging collaborating, sharing, commoning and p2p dynamics that are proving to be transformational. It is precisely because they are built over the already consolidated thin self-interest-driven-relationships that rule our world since the modern era. In short, they are reinforcing those relationships by giving them new ways to exist. Think, instead, about my meeting with Ana Manzanedo. She is a Ouishare Connector in Barcelona that contacted me right after I started blogging about common matters of concern. In our first meeting we shared not only our personal whereabouts but also kind of coached/mentored each other and shared specific knowledge and ideas in order to help each other to create value in the present, and also prepare the field (invitation to a community of practices, etc.) for eventually creating open value together in the near future. It is not that we were not also looking out for our own interest, but we were both ready to give more than what we were taking, now or in the future. She is not, in that sense, the average kind of relationship I have in my business activity, but sure is the one I am looking for. Building a Platform Coops that does not promote connectors, urban entrepreneurs, open makers, technopolitical citizens or technopolitical civil servants or technopolitical representatives, (and so on) will have a much narrow impact than collectives such as Enspiral, Ouishare, Las Indias Electrónicas, etc. which have this generativity of new disrupting subjectivities (Ouishare considers itself above any other thing “an incubator of people; Las Indias offer different ways to experience with them how to live in abundance as communards; etc.) Out of its members, a Platform Coop only promotes a “responsible consumer” subjectivity using more or less the same approach as their non-peer managed rival organizations. I am in favor of such Platforms Coops in the same way I am for any kind of Coop. However, it remains obscure to me in what sense they will be able to compete and outperform non Coop Platforms. Hence the call for the intervention of governments in terms of regulatory frameworks and financial support. Yet, a strong citizenship movement would be needed for that to happen… which hardly will, if new subjectivities demanding it are not promoted. Politicians only challenge existing established interests, if ever, when taking the opportunity of getting more votes. Way more.

Secondly, (and this is connected with the first problem), in this model the capture of value generated in the network is still centralized. We want that those that add value and risk something in the platform are affected by the eventual downsides or upsides. The fact that a Coop Platform does it in a more ethical way, and that it redistributes the value afterwards does not change the fact that it keeps disempowering non-owners of the cooperative. Non-owners may consider that they are, to more or less degree, in the flow of value distribution, but not in its generation nor in its governance. The straightforward approach is to use new technologies based on blockchain (or other even more interesting technologies) in order to make distribution fair, keeping the self-interest motivated actors in the game. But if we design a Platform in which every aspect of the relationship must be translated into an algorithm and coded as a smart contract, then again we are consolidating and making fresh room for the already existing subjectivities. Even more, that will erode the real face-to-face trust thick relationships that may exist. A completely different thing is to use blockchain technologies for doing boring accounting that has to be done in a p2p organization based on thick relationships, or between p2p organizations linked by thick relationships. As in the centralized case, a decentralized architecture based on thin relationships could be, in the best of the cases, a transitory step to something much more interesting, once the limitations of the model are reached and new opportunities are explored.

The third problem is that the Platform Coops, in order to compete in the market with regular platforms, may need to transfer risk or care to some of their stakeholders. The reason why most of the regular platforms thrive is because they avoid granting the usual benefits (care) that workers get in the traditional economy (pension, social security, paid vacations, etc.), and additionally, force workers to carry most of the risks (accidents, illness, etc.). Unless clients are aware and concerned about workers’ conditions — which is an emerging but not yet a game-changing trend — the market will make more competitive those platforms that cut costs that way, not to mention that most of them are fueled with big investor’s money in order to keep litigating with authorities and workers, and operating under financial losses for years. In order to survive and keep their share of the market, Coop Platforms may be tempted to practice the less aggressive practices of risk and care transfer to workers as a way of surviving.

In the second part of this post, I will explore operational responses to these problems.

The post Platform Coops’ Governance (I): Challenges appeared first on P2P Foundation.

Traditional anti-capitalism focused on the ownership of the means of production, yet the modern capitalist doesn’t even want to own the means of production, they want to own the very right to produce. To control the ideas required to produce and simply charge rents for these ideas.

This short text by Dmytri Kleiner was originally published in his mailing list back in 2011. It’s still as relevant now as it was back then.

Dmytri Kleiner: In the meantime, I’d like to reflect a little on Evgeny Morozov’s keynote at #28c3 this morning.

The topic was Surveillance Enabling Technologies. Long story short, Telecoms, Tech Firms, and Governments are developing and deploying systems to control and monitor their citizens online communications, and even selling this technology to governments that are widely considered to be authoritarian. It’s this last bit that I want to expand upon a little.

As Evgeny mentioned, as did others asking questions from the audience, this can not be understood as a few unscrupulous firms making sinister deals with foreign powers to profit from the suppression of dissidents and activists. For this most part these firms are not designing and building surveillance technologies at the behest of the likes of Iran and Syria, but as result driven by law enforcement in western states. And what’s more, they are required by laws passed by western states to build-in the very backdoors and interception features that surveillance systems depend on. It’s hard to blame the companies for building in features that the law requires them to build in.

Expressing outrage that enemies of the US and it’s allies are using the technology being developed by the west also seems misplaced, and rests on regressive exceptionalist view that privileges western states as being somehow noble enough to be trusted with the ability to survey their citizens, but not sinister foreign powers.

Though certain firms are clearly beyond the pale in their eagerness to promote their freedom-denying technology. This overall view that these firms or some foreign powers are to blame was largely rejected by Morozov and by the commentators from the #28c3 audience. The blame for increased interception of communications and technological surveillance is best place at the feet of western governments, whose laws, law enforcement agencies and military-industrial corporate lobbies are the real movers and shakers pushing for more and more control and monitoring of civilian populations.

Promotors of such mass surveillance systems claim to be defending civilization itself, from the usual array of boogeymen, including terrorists, and child pornographers, but make no mistake, their real target is freedom itself.

These systems are part of the process of destroying peer-to-peer communications, to eliminate the mesh topologies from modern communication platforms and restructure them as star topologies, and the major reason for this is not to hunt deviants or insurgents, but rather to control the consumer, and protect Capitalist privilege and profits.

In The Telekommunist Manifesto, as well as other texts, I discuss that fact that Capitalism and Peer-to-peer systems are not compatible, that Capitalism depends on the ability of platform owners to control user data and interaction, in order to monetize it. Such control is a prerequisite of receiving financial capital from investors, who understand very well that there are no profits, or more accurately rents, to be had from free networks, and thus insist on control to ensure a return their investments.

The Internet, as it exists now, is an existential threat to capitalist regimes, not only does it allow individual users and groups to collectively share information that reveals the cosy relationship between governments and rent seeking corporate lobbies, more importantly it allows new forms of commerce that blur the distinction of producer and consumer, and allow users to produce and share in new ways, such fluidity of interactions puts downward pressure of profits as people share amongst themselves and “cut out the middleman,” as commerce becomes disintermediated.

This threat is of particular concern with regard to intellectual property, which can be digitized and sent across computer networks. This is bad news for western economies who more and more aim to make their profits by owning ideas and designs, while letting others actually make things. Traditional anti-capitalism focused on the ownership of the means of production, yet the modern capitalist doesn’t even want to own the means of production, they want to own the very right to produce. To control the ideas required to produce and simply charge rents for these ideas.

Capitalism thus depends on the elimination of peer-to-peer systems by replacing, freedom-enabling mesh topologies, with freedom-denying star topologies. Recent communication history illustrates this quite clearly, with Venture Capital funding Web 2.0s capture of all communications, replacing earlier and far more scalable p2p applications, and the military-industrial fueled enclosure of cyberspace is just another part of this.

Evgeny Morozov suggests that we act and get the media and our political representatives to take notice and lead an outcry against this rapidly increasing lock-down of our online platforms, yet this requires that our media and our politicians will rally against capitalism, since it’s not just a few rogue firms or states driving this development, but rather the requirements of our class structure.

At the bottom of it, Capitalism, as a system based on hierarchy, privilege and exploitation, can not create a free network, anymore than it can create a free society. If there is a way out this, it’s unlikely to be governments and popular news organisations that help us. Our only chance is to develop new ways of producing and sharing, and find ways to build communication platforms that do not depend on capitalist finance.

If we do not find ways to replace capitalist finance it is not only the internet as we know it that we will lose, but the chance the remake society in its image.

Photo by carious.photography

The post Is capitalism compatible with free P2P Systems? appeared first on P2P Foundation.

The first problem I encounter is pervasive in all the writing out there on the sharing/collaborative economy and p2p theory: the lack of a clear and operational definition of what a peer is and what a community is. The truth is that we may need a “taxonomy” of peers and communities, since we call peers and communities in a wide range of different realities.

How do we recognize someone as a peer? I can be tempted, as we do often colloquially,  to define my peer in terms of characteristics of the person (i.e. same hierarchical position, same knowledge, same skills, same values, etc.). But homogeneity is not what we find in peer relationships out there. Actually, we find more value in diversity. A peer is better understood not as someone that is like you, but as someone that you like. And if we think about organizations, as someone you would like to do things with.

This points out important consequences: a peer can only be defined as long as it has a peer; and what makes possible to call them peers is the existence of a certain kind of relationship. In this relationship, both feel comfortable with the idea of being peers, and this reciprocity can only be maintained as long as they both agree on which terms the idea of being peers is established. Therefore, the key aspect of the relationship is reciprocity in the agency of the parts.

The word agency comes from Latin agere that means “to do, to act in such way that has an effect”.  Amy and John will be peers as long as they can define together what constitute their “peerness”, and this is the primary agency that regulates the rest of agencies once they recognize each other as peers. What makes them peers is that they are able to define what kind of reciprocity makes them peers, and consequently, what effect it has in what they can or cannot do because of this relationship. All human groups exist because they accept a list of dos and don’ts. But groups of peers can co-create them. Since doing is what constitute the very essence of a peer-to-peer relationship, that relationship will be freely established in terms that both parts will be capable to do more or different things thanks to it. A p2p organization empowers both parts through reciprocity. This way, the eventual common characteristics of the peers that form a p2p organization are not the reason that made them peers, but the consequence of being peers. But “peer” and “community” are buzz-words nowadays. For instance, there are plenty of communities in which participants are called peers but they are not. People join them and accept the “peer” label just because they get some value from being there, and no cost for being called “peers”.

This leads us to the core of the problem. In order to give stability to relationships, people need trust; a reasonable confidence in what we can expect from others to behave.  We know from the sociological tradition that there are two kind of ties to build trust. The first kind are ties established through mechanisms of socialization and emotional engagement, while the second are ties established through the assumption that others will act according to rational and self-interest calculations. The first characterizes traditional communities, the second is the one that has shaped our modern societies. The first shapes communities that are protecting and comforting but also stiffly and rigid; the second shapes communities that are liberating and innovative but also alienating. Communities and societies present, at the end, a combination of the two types of ties, but our current economic system is based mainly in the second type, and they are dramatically corroding the first type. Some authors hypothesize that the tension between the two is provoking the emergence of collaboration. Others, just the simple collapse of our current societies, and we should not take collaboration for granted unless we work on it.

Peerness’ reciprocity is the obvious way to prevent relationships from being stiffing or alienating. This way, you may find egalitarian intentional communities with thick ties (which members share a roof and livelihood) or the community of torrent users with thin ties (which members hardly know each other), that they do not feel trapped or alienated by their communities.

So, then, what is a community? Traditionally, community is understood as a group of people that share something in common, but also, as the very conditions for sharing that in common in the first place. If peers share an agreement of what they want to do together, (and at the end, members of communities come and go!), then we better understand community as the set of institutions that builds the confidence/trust for doing things together.

We are ready to see a taxonomy of paradigmatic communities in the economic world:

Taxonomy of Communities

We see four kind of different communities for which we do not have a name, but their paradigmatic examples are clear: a family business, a corporation, a kibbutz, and a consumers’ cooperative. They are “not peers with thick ties”, “not peers with thin ties”, “peers with thick ties”, and “peers with thin ties”. You may think, “and what about my peer colleagues in my department”? Well, you tell me. How are your relationships? Like members of a family? Like members of a corporation? Like members of a kibbutz? Or like members of a consumer coop?

Until now, each kind of community faced different limitations. For the sake of simplicity (I will refine this in my next post), let’s say that those communities based on “thick ties” had a limit of scale, being the Dunbar number their limit to growth without loosing their thick ties. Although they have the strong commitment of its members, they never had the critical mass to face big investments for major operations in order to compete with bigger organizations. On the other hand, communities based on “thin ties” have flourished and gained an outstanding influence, at the cost of the alienation of its members. Despite all their efforts for developing strong cultures (sic) and aligned missions and visions, and so on, Gallup found that “71% of American workers are “not engaged” or “actively disengaged” in their work, meaning they are emotionally disconnected from their workplaces and are less likely to be productive”.

Traditional Limits

But technological development has changed and is still dramatically changing the economy through:

– A reduction of the optimal scales of production

– A reduction of transaction costs

What it is interesting is that the reduction of the optimal scales of production and transaction costs are affecting the four kind of communities very differently. The traditional “commitment-scale” trade off is vanishing, and this is the true cornerstone of what we call the collaborative economy:

New opportunities

So yes, we can look back to the book’s insights and agree with:

1. Centralized platforms’ business models are old wine in new wineskins, being the wineskins the new business models for rent-seeking.

2. Centralized platforms disempower its users, so they can capture all the value.

But then others deserve to be analyzed further:

3. Centralized platforms fake trust environments

Well, yes and no. They disguise as much as they can thin ties’ trust with the appearance of thick ties’ trust. But they deliver a trust environment; otherwise they would not exist.

And others become problematic, because they clearly do not apply to all Coop-Platforms…

4. The time for Coop Platforms may have arrived

5. Coop-Platforms can offer what centralized ones are pretending -but are not able- to deliver

 …because they depend on the particular architecture of each coop-platform:

 6. However, decentralization does not imply equality.

7. New decentralized architectures need to be designed to be counteranti-disintermediationist

And at the end, most of the Coop- Platforms discussed in the book are not designed to be counteranti-disintermediationist. This way, value will still be captured in a centralized way despite:

8. Platforms are us: community is what gives value

For instance, it is true that Coop-Platforms as Fairmondo, (which by the way, is a company that I LOVE), have set mechanisms for returning value to society, which leaves its community out of the equation:

The usual justification is that some Coop-Platforms articulate community and society through special boards, because:

9. Coop Platforms are not as much for autonomy and independence as for multi-stakeholder interdependence.

And… we really must stop here. What is the role of the community in an multi-stakeholder interdependence scheme? I am afraid we cannot discuss multi-stakeholder interdependence if we do not look first at the “governance” of each kind of community that we described before. Otherwise, how could we rightly understand interdependence with other stakeholders?

This will be the object of discussion of my next post.

Photo by antonychammond

The post On Platform Coops: what the heck is a peer? And a community? appeared first on P2P Foundation.

Brilliant explanation by Dmytri Kleiner on the ‘transvestment‘ approach, i.e. how to transfer value from the system of capital to the system of peer production.

Kleiner explains for example why federated systems, depending on servers and investments, can’t compete with centralized technologies, because they cost money as they grow, but true ‘end to end’ systems grow in resources as they add users, with their existing resources.

Learn also why we need, ‘counter-anti-disintermediation’.

Watch the video here:

Photo by transmediale

The post “You can’t code away their wealth”: Dmytri Kleiner explains why the construction of P2P alternatives is conflictual appeared first on P2P Foundation.