digital economy – P2P Foundation https://blog.p2pfoundation.net Researching, documenting and promoting peer to peer practices Sat, 15 May 2021 16:07:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.5.14 62076519 A Q&A Session with Douglas Ruskhkoff https://blog.p2pfoundation.net/a-qa-session-with-douglas-ruskhkoff/2019/02/14 https://blog.p2pfoundation.net/a-qa-session-with-douglas-ruskhkoff/2019/02/14#respond Thu, 14 Feb 2019 17:00:00 +0000 https://blog.p2pfoundation.net/?p=74503 Douglas Rushkoff, author and host of Team Human recently held a Q&A session at Quora. Here are his answers: Will there be limits to what artificial intelligence will be able to “know” in the future? I like Michael’s answer. It reminds me of Godel’s theorem. I have a much more pedestrian view of these things.... Continue reading

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Douglas Rushkoff, author and host of Team Human recently held a Q&A session at Quora. Here are his answers:

Will there be limits to what artificial intelligence will be able to “know” in the future?

I like Michael’s answer. It reminds me of Godel’s theorem. I have a much more pedestrian view of these things. I still think of artificial intelligence more as map than territory. So it can’t know everything without being as big as everything.

But more casually, I think you’re asking what practically won’t AI be able to know. And I think AI’s won’t know what it is like to be thinking. They’ll think or calculate, but they won’t know what it feels like to be thinking or calculating. I don’t think they’ll ever be aware. (Actually, that’s another way of saying what Michael just said.)

But that’s probably an almost religious conviction – the sort of view held by physicist Lee Smolin. I think consciousness preceded life. And I don’t think it inhabits stuff like chips in the same way it inhabits us.

I think humans are uniquely capable of embracing paradox. Of sustaining ambiguity. We even like it. We don’t need to resolve things. We can watch a David Lynch movie. AI won’t be able to know what that feels like.

How should a potential job seeker adapt oneself to deal with the rise of artificial intelligence?

Something feels a little sad to me about the idea that we should adapt ourselves to deal with AI. As if we’re optimizing humans for the digital future, instead of optimizing digital technology for the future of humanity. Screw that.

But, to your strategic point, I guess I’d suggest that we start doing what only human beings can do: empathy, compassion, nature, rapport, parenting, serving as an example. We can embody values.

We can also do what humans do, which is make nature and the world less cruel. We humans can instinctively tell right from wrong, cruel from kind. We know what pain is. We can see ourselves in someone else’s situation. We can identify.

What jobs do that?

Ultimately, I think we have to remember that jobs are not part of the human condition. Jobs are an invention of the late middle ages, when small businesses were declared illegal and replaced by chartered monopolies (porto-corporations). People were no longer allowed to be in an industry. They had to work for the king’s officially chartered friend. So instead of creating and selling value, we had to become employees of someone’s company, and sell our time. That’s when people started traveling to the cities for work, it’s when the plagues started, and it’s when the wonderful rise of the middle class was quashed by the aristocracy.

So I don’t know it’s jobs we want, anyway. We want a meaningful way to create value for one another. If AIs can do everything, fine. But they are really nowhere close. Look at how much slavery and pollution are externalized by today’s industrial processes? If we were a little bit *more* labor intensive in our soil management, we might not run out of topsoil in the next 60 years. Permaculture takes human labor. So does education – unless you’re just training people for jobs, which is never what education was supposed to be about.

How can the digital economy reward people instead of extracting their value?

The fast answer: platform cooperatives. Give workers and ownership stake.

The digital economy can distribute wealth if people own the means of production. If the drivers owned Uber, they’d be in a position to profit off their labor. Right now, they are not only driving for peanuts, but training their autonomous replacements. Their every move is recorded by machine learning programs. So they’re doing R&D for a company that will fire them.

If they owned the platform, then at least they’d continue to profit off their investment of labor.

Now, I hear a lot of folks asking, what about the investors? The people who put up the billions of dollars of investment for Uber to happen? Honestly? It didn’t cost that much. The reason why Uber has to bilk its employees (sorry, “contractors”) and hurt cities is because they need to pay back investors who are expecting much greater returns than could be delivered were Uber doing normal, appropriate business. The app is not that expensive. The lobbying of cities for legal accommodations, is, but they wouldn’t need to be paying for all that if they were good corporate citizens.

Cooperatives (read Nathan Schneider’s new book) distribute value to worker-owners, rather than extracting it from the top. And just as digital tech currently enables extraction on a scale unimaginable twenty years ago, digital tech could enable distributive enterprises on a scale unimaginable twenty years ago.

In Throwing Rocks at the Google Bus, I offer “digital distributism” as the answer to our economic woes. Basically, a retrieval of medieval, p2p business practices. An economy optimized not for growth but for flow: the velocity of money through the system.

How can we best engage with people who hold opposing viewpoints?

This is a tough one, but I think we have to see them as human beings, and try to understand the fear or other emotion that is informing their position. I have a section in the book where I try to explain the emotional logic of racism – particularly of white supremacists. Or the emotional logic of former coal miners wanting to open the mines again – no matter what it means to the climate.

They’re not crazy. Or, maybe they’re a bit crazy, but they are human and coming from a recognizably human place if we try on their world view for a moment. It’s scary to do. It’s scary to realize that the American white supremacist thinks his culture – white European culture – won America. He doesn’t understand why people should be taught about ‘loser’ cultures in school – that it will only make America weaker.

Or that people really don’t see other people as human. They look at pictures of Mexican immigrants and see something less than human. But then – something unexpected happens – like when those tapes came out of the sounds of those refugee children crying – and then their impassivity is broken.

So I think the way to break through is by going deeper. It’s not logic that will arrest their intransigence. It’s human rapport. Spend time with the person. Look in their eyes. I noticed at a family holiday, that when my aunt was talking about how it’s okay to let the Syrians die, she’d always break off eye contact with me. It was as if she couldn’t be both human and inhuman at the same time. There’s a clue in there, for how to reach the “other” side. Don’t let them be the other side. Our ability to engage the other is all we really have if we want to get through.

For others, sometimes the best thing is to ignore their viewpoints. Who cares what they think? It’s what they do that matters. If we want to make “red state” people more progressive, we shouldn’t try to get them to think more progressively. Just go there, and start up some initiatives for mutual aid. Get them working again, using favor banks, credit unions, and other projects that make their own lives better by working positively for the community. Someday, they may come to realize that they are engaged in progressive, almost socialist activities.

How can we organize resistance to capitalism, technology, and fascism?

I’ve got a whole section on that in the book called Organize. I really should post highlights from it it as an excerpt, somewhere.

In short, find the others. I think it happens best locally. While resistance at scale matters, it’s really easy to fall into the same dehumanizing traps that the corporations fall into. It becomes mailing lists and website discussions ideological very quickly. Local activities – from land use and school policy to community currencies and business cooperatives – end up changing the way people think and act. Being involved directly with mutual aid or child literacy changes one’s perception of social programs and immigration.

Plus, when our activism is connected to the real world, we humans have the home field advantage. Corporations will always have the advantage in the “brand” space. Once we resort to branding for connecting to human beings, we surrender to their more propagandistic communications style and the values that go along with it.

So my main advice for organizers is to organize locally, and then network globally with other local organizers. Confront real, immediate issues. They trickle up, because the problems we’re dealing with locally are largely the results of top-down domination, laws written to protect corporations, or regulations that owe their legacies to segregation.

I’m also keen on organizing around activities, rather than ideologies. I don’t care what someone “believes in.” I care what they do. Maybe that’s some leftover Jewishness – a religion about behavior, not beliefs. But there’s some sense in this. People on the right and the left want the river clean. So let’s clean the river. I had a great talk with an in-law of mine, who is a Trump supporter but was really ticked off that the forests around his home had been clearcut. They were taken down by the landowner, because of a Virginia subsidy for renewable energy. The wood was considered renewable. Cutting down the forest was dumb and bad for the environment. My relative blamed it on the climate change enthusiasts. I’d probably blame it on corrupt or short-sighted regulation. But we agreed on the outcome, and if I lived there, we could have worked together on solutions.

Will rote jobs such as accountants and librarians be affected first by artificial intelligence?

It’s interesting, but I don’t think of accountants and librarians as having rote jobs. They may have to act like they have rote jobs. But what are accountants really for? To figure out ways to make your ledger look like it is normal and proper – but to actually find ways to hide your money from the tax man. What are librarians for? To protect the books and keep them on the shelves? No. They are there to help you figure out what you really need to know in order to accomplish a task. They are the way writers and researchers get a leg up. Make friends with a librarian, and you are almost cheating as a researcher.

So an AI accountant may not be there to create the wiggle room you need in your tax return. Especially if it’s not really yours. And an AI librarian, it may get you what you say you want, but it won’t get you what it suspects you need. It’s not on the journey with you. It’s not excited to see your eyes go wide when you see that new book for the first time.

We’ve got figure and ground reversed. None of these activities are about the pure utility value. Certainly the librarian. The librarian is there to celebrate knowledge, the dignity of learning, the passion of research. The librarian can use AI, but the AI can’t be the librarian.

So far, it’s not the rote jobs but the wealthy who are most affected by AI. They’re the ones using AIs to trade on the stock market. It’s the hedge fund guys who were first unseated by AIs, if you really want to think about it. People who are just looking for a way of gaming human systems, rather than contributing to or participating in them.

What do you think it will take for people to respect their personal privacy and human worth in the face of such seductive technology?

I often wonder that. Part of the problem is that while people are afraid to let someone else see them masturbate or eat or sleep, they don’t realize how much more dangerous it is to share seemingly meaningless meta-data. It’s not the embarrassing details of your kinks that you should be concerned about sharing. It’s the meaningless points of data that can be used by algorithms to put you in a particular statistical bucket, and then manipulate you.

Or, worse, deny your rights. In China, your social media contacts can determine your eligibility for a visa or a job. Actually, that’s becoming increasingly true in the US – whether you’re looking to be a babysitter, get a loan, or get out of prison.

As long as you’re in the majority, and don’t care about how these technologies are used against people, it may feel like none of this matters. But the minute you run afoul of the law, or lose your money to an illness, all of a sudden this data oppression starts to matter.

Right now, people are acting as if they’re in a prison camp. They accept the trinkets of their virtual keepers, in return for the souls. It’s not that they don’t value their humanity, but they’re atomized victims experiencing something like Stockholm syndrome. It may take some real tragedies for people to recognize it’s gone too far.

As for human dignity, well, capitalism did a number on that before this digital technology came around to finish the job. Marx wrote a lot about this. Technology under capitalism led us to think of ourselves in terms of our utility value. Our productive output, rather than our essential dignity.

How can we rebuild the intermediate layers of collective intelligence and avoid a hollow top and bottom-heavy social collective?

That’s interesting. I guess you mean a “momma bear” sort of right-sized collective intelligence?

My guess would be that there’s various Dunbar numbers for social organization. (Dunbar’s number is 150 – the number of stable relationships a person can maintain). There are likely various levels of social organization that function if they’re formulated properly. So maybe we individuals organize into groups of 150, and then 150 of those can network into something else.

In Team Human, I also make a strong case for cities. There’s also a piece I did about cities vs. nation states on Medium. I understand cities as the largest ‘organic’ organization of people. They form from the bottom up, but they can serve as a pretty robust and populous layer of collective intelligence. Or at least collective interest and organization.

Additionally, collective intelligence doesn’t just move through space, but through time. Works the Torah, mathematics, and cathedrals are multi-generational projects. The collective intelligences may be small at each moment, but scale up over the centuries.

But yeah, I guess my answer is that collective intelligences are somewhat fractal, with little parts coordinating into a whole. More of a federated model, with distributed autonomy. I don’t know that individuals ever really experience themselves as part of a collective intelligence. At least not at this stage of human evolution. But I do know what it’s like to see oneself as part of a collective project.

The protocols for interaction really mean a lot. I look to organizations like Loomio, which coordinate group activity, for learnings about how to think with different size groups.

Will “platform economies” benefit cooperatist movements or be appropriated to corporatism?

Well, so far most of the big platforms are monopolies, not coops. Amazon, Facebook, Google…. And in those cases, only Google’s employees seem willing to push back on the company’s policies. By their very nature, digital platforms seem biased toward non-human entities like corporations over local, flesh-and-blood entities.

It’s hard to tell, though. In the early internet days, it felt just the opposite. These platforms were so intrinsically unfriendly to business. Most businesses eschewed the net: everyone wanted everything for free. People were sharing. It seemed to herald the end of corporatism. But of course, Barlow and other well-meaning libertarians pushed government and regulation off the net, and the large corporate players walked into the vacuum.

So the net we have now is populated and dominated by these super capital-intensive projects, and they’ve gathered enough users to become entrenched monopolies.

That said, anybody could build a Facebook or Uber today, with an almost trivial effort. None of this is as hard as it was back then. They couldn’t build an Amazon, because they have a whole lot of real-world infrastructure at this point. They’re like WalMart and UPS (logistics) in one company. Plus the could services.

Platform economies tend to favor those who scale, and scale almost infinitely. But so do growth-based capitalism, an interest-bearing currency, and an investor-rewarding tax structure. So I do see ways that platform economics can favor cooperatives, but those choosing to use digital platforms should really make sure they need them to organize their collectives. Or they at least need to organize along the principles of distributism – more like an anarcho-syndicalist network than a corporation. More like Ace hardware or Associated Press.

Are we in the midst of a cultural renaissance? How is that different from a digital revolution?

Oh, a revolution is just a turn of the cycle. One set of rulers is replaced by another. Bankers get replaced by crypto hackers or something. Rockefeller replaced by Gates. Gates by Zuckerberg. The US government by Trump.

Re-naissance means rebirth. A renaissance is the rebirth of old values in a new context. So the original Renaissance brought forward the ideals of ancient Greece and Rome – citizenship, individuality, centrality of the government, Empire. Our renaissance, the digital renaissance, has retrieved what got repressed the last time out: peer-to-peer economics, women, holism. It’s part of why we’re seeing all this medievalism. That’s the moment before the renaissance.

I think a renaissance is more hopeful, because it offers us the opportunity to retrieve essential human values, and then embed them in the digital future. It’s not simply about one kind of company ‘disrupting’ another. The game doesn’t change in that case. A renaissance changes the whole playing field.

Is it necessary to have a content creation platform in 2019?

I’m not exactly sure what you’re asking. You mean, necessary for humanity or necessary for individuals?

I’m using Medium these days as my content creation platform, and I’m glad to have a “place” where people gather to read and write and share and comment and cross-references. I like it better than I liked having my own website and then being on various people’s blog rolls. As long as Evan Williams stays on the writers’ side of the equation, it seems like a good thing. He’s even experimenting with a paywall where writers share what they’ve earned based on views and “claps.” A bit like a commons. And because it’s ad-free (and will hopefully stay that way!) it’s not subject to the same problems as a GoogleAds or Facebook.

When I first read the question, though, I thought maybe you were referring to WordPress and other content management systems through which to create writing and posts. I am still a fan of the “open web” and just serving html pages to people. But thats’ probably a sign of age. The dynamic rendering you can do effortlessly on a CMS are pretty useful – so your content will work on a phone or web browser. You don’t have to test your content on every device and browser. Who really wants to do that if they’re just making videos or writing articles? We don’t each have to know how to do everything in the process.

But it does require we *trust* the people creating the layer on which we’re publishing. Sometimes I do, and sometimes I don’t.

Finally, if you mean, does *everybody* need to be on a content creation platform of some kind? No. Not everyone needs to be a content creator. It used to be very few of us that wrote books – partly because it involved typing and a lot of work. It’s a whole lot easier to “publish” right now. But that doesn’t mean everyone should. There are many many other ways to participate meaningfully in society.

That’s part of why I’ve started thinking of Team Human as my last book. I am interested to see how else I can play – and I want get off the stage and let others get their work out there. Even the Team Human podcast is really about me using the platform I’ve developed to support the work of others.

What are the main absences in the “sociological imagination” of contemporary society?

I know people have a lot of definitions for “sociological imagination.” For me, it’s simply the way in which a person conceives of the relationship between individuals, each other, and society as a whole.

Right now, the issue I’m seeing – even from some intellectuals – is the inability to distinguish between human dignity and personal freedom. We’ve reached the zenith of individuality, and have come to imagine universal liberty as some expression of this individual liberty.

Even Constitutionally, I think it leaves out the right of assembly. That’s the First Amendment right that all these individuals have: to gather! Our current sociological imagination seems to miss that individuality and collectivism are not mutually exclusive. They’re more like yin and yang than either/or. The true expression of an individual occurs in a group. The true collective enhances the power or reach of all the individuals in it.

So I think the sociological imagination of today is confused about society itself. They’re still stuck in Maggie Thatcher’s rhetorical flourish, “there is no such thing as society.” which she didn’t even really mean that way. She was trying to adapt Hayek, and say that society is the reconciliation of a zillion bottom-up desires. More of a perfect, invisible hand, emergent market phenomenon. I don’t quite buy that, but at least she’s admitting that there’s a coordinated whole.

At my town’s meetings, I’ve heard people get up and ask, “why do we have to pay school tax if we no longer have kids in school?” Stuff like that. That’s a lack of sociological imagination. That’s part of why I wrote Team Human: to help people remember that being human is a group activity.

What is right and what is wrong for the world today?

Right and wrong? Them’s fightin’ words!

I’m reluctant to moralize, but whatever brings us together is right, whatever separates us is wrong. Yes, we’re entitled to private email and bathroom stalls, so I don’t mean to get all extreme. There’s room for both.

But when I look at right and wrong for the world today, I see people retreating from true connection with others. They do this either through strident individualism, or total conformity. It’s easy to see how individualism is a problem. And how algorithms further atomize us. We are easier targets when we’re picked off from the herd. When we have no social relationships, and look to products or ‘non-player characters’ for a feeling of satisfaction.

Totally conformist mobs – like the crowds at a fascist rally or the silent workers in a giant factory – they’re not really together, either. They’re under one banner, but each one has their own relationship to the leader or to the company. They’re not a labor union or a guild. They’re not a team working together. They’re just as atomized, afraid to speak to one another or share their doubts. They may march in lockstep, but they’re not together.

So right now, as a result of consumerism, social media, political divisiveness, and mass social programming designed to alienate us, the main “good” we can do is to help people see other people as humans. Even if they’re on the other side of some fence. Getting us to see others as “other” is an old trick. It’s what the lords and kings used to do to get peasants to fight against one another. It’s what earned them fealty.

Whenever you hear a leader telling you that the other side are rapists or cannibals, remember that it’s not really true. That’s a wrong thing for the world, today. The right thing is saying, “look at those people over there. They are just like us. These national boundaries we protect are not recognized by nature or humanity. We’re all one family. Their suffering is our suffering.”

Will Elon Musk be comfortable staying on the moon?

He will die up there if he goes. You know how hard it is to maintain a biosphere in a dome? We couldn’t even do it on earth, with two Biosphere attempts. I think a sustainable closed-terrarium for humans on inhospitable planets is a long way off – even longer than Musk’s extended life span.

Photo by gojogoj

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I Used to Argue for UBI. Then I gave a talk at Uber. https://blog.p2pfoundation.net/i-used-to-argue-for-ubi-then-i-gave-a-talk-at-uber/2018/11/26 https://blog.p2pfoundation.net/i-used-to-argue-for-ubi-then-i-gave-a-talk-at-uber/2018/11/26#comments Mon, 26 Nov 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=73544 In 2016, I was invited to Uber’s headquarters (then in San Francisco) to talk about the failings of the digital economy and what could be done about it. Silicon Valley firms are the only corporations I know that ask for private talks for free. They don’t even cover cab fare. Like Google and Facebook, Uber... Continue reading

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In 2016, I was invited to Uber’s headquarters (then in San Francisco) to talk about the failings of the digital economy and what could be done about it. Silicon Valley firms are the only corporations I know that ask for private talks for free. They don’t even cover cab fare. Like Google and Facebook, Uber figures that the chance to address their developers and executives offers intellectuals the rare privilege of influencing the digital future or, maybe more crassly, getting their books mentioned on the company blog.

For authors of business how-to books, it makes perfect sense. Who wouldn’t want to brag that Google is taking their business advice? For me, it was a little different. Throwing Rocks at the Google Bus was about the inequity embedded in the digital economy: how the growth of digital startups was draining the real economy and making it harder for people to participate in creating value, make any money, or keep up with rising rents.

I took the gig. I figured it was my chance to let my audience know, in no uncertain terms, that Uber was among the worst offenders, destroying the existing taxi market not through creative destruction but via destructive destruction. They were using the power of their capital to undercut everyone, extract everything, and establish a scorched-earth monopoly. I went on quite a tirade.

To my surprise, the audience seemed to share my concerns. They’re not idiots, and the negative effects of their operations were visible everywhere they looked. Then an employee piped up with a surprising question: “What about UBI?”

Wait a minute, I thought. That’s my line.

Up until that moment, I had been an ardent supporter of universal basic income (UBI), that is, government cash payments to people whose employment would no longer be required in a digital economy. Contrary to expectations, UBI doesn’t make people lazy. Study after study shows that the added security actually enables people to take greater risks, become more entrepreneurial, or dedicate more time and energy to improving their communities.

So what’s not to like?

Shouldn’t we applaud the developers at Uber — as well as other prominent Silicon Valley titans like Facebook co-founder Chris Hughes, bond investor Bill Gross, and Y Combinator’s Sam Altman — for coming to their senses and proposing we provide money for the masses to spend? Maybe not. Because to them, UBI is really just a way for them to keep doing business as usual.

Uber’s business plan, like that of so many other digital unicorns, is based on extracting all the value from the markets it enters. This ultimately means squeezing employees, customers, and suppliers alike in the name of continued growth. When people eventually become too poor to continue working as drivers or paying for rides, UBI supplies the required cash infusion for the business to keep operating.

When it’s looked at the way a software developer would, it’s clear that UBI is really little more than a patch to a program that’s fundamentally flawed.

The real purpose of digital capitalism is to extract value from the economy and deliver it to those at the top. If consumers find a way to retain some of that value for themselves, the thinking goes, you’re doing something wrong or “leaving money on the table.”

Back in the 1500s, residents of various colonized islands developed a good business making rope and selling it to visiting ships owned by the Dutch East India Company. Sensing an opportunity, the executives of what was then the most powerful corporation the world had ever seen obtained a charter from the king to be the exclusive manufacturer of rope on the islands. Then they hired the displaced workers to do the job they’d done before. The company still spent money on rope — paying wages now instead of purchasing the rope outright — but it also controlled the trade, the means of production, and the market itself.

Walmart perfected the softer version of this model in the 20th century. Move into a town, undercut the local merchants by selling items below cost, and put everyone else out of business. Then, as sole retailer and sole employer, set the prices and wages you want. So what if your workers have to go on welfare and food stamps.

Now, digital companies are accomplishing the same thing, only faster and more completely. Instead of merely rewriting the law like colonial corporations did or utilizing the power of capital like retail conglomerates do, digital companies are using code. Amazon’s control over the retail market and increasingly the production of the goods it sells, has created an automated wealth-extraction platform that the slave drivers who ran the Dutch East India Company couldn’t have even imagined.

Of course, it all comes at a price: Digital monopolists drain all their markets at once and more completely than their analog predecessors. Soon, consumers simply can’t consume enough to keep the revenues flowing in. Even the prospect of stockpiling everyone’s data, like Facebook or Google do, begins to lose its allure if none of the people behind the data have any money to spend.

To the rescue comes UBI. The policy was once thought of as a way of taking extreme poverty off the table. In this new incarnation, however, it merely serves as a way to keep the wealthiest people (and their loyal vassals, the software developers) entrenched at the very top of the economic operating system. Because of course, the cash doled out to citizens by the government will inevitably flow to them.

Think of it: The government prints more money or perhaps — god forbid — it taxes some corporate profits, then it showers the cash down on the people so they can continue to spend. As a result, more and more capital accumulates at the top. And with that capital comes more power to dictate the terms governing human existence.

Meanwhile, UBI also obviates the need for people to consider true alternatives to living lives as passive consumers. Solutions like platform cooperatives, alternative currencies, favor banks, or employee-owned businesses, which actually threaten the status quo under which extractive monopolies have thrived, will seem unnecessary. Why bother signing up for the revolution if our bellies are full? Or just full enough?

Under the guise of compassion, UBI really just turns us from stakeholders or even citizens to mere consumers. Once the ability to create or exchange value is stripped from us, all we can do with every consumptive act is deliver more power to people who can finally, without any exaggeration, be called our corporate overlords.

No, income is nothing but a booby prize. If we’re going to get a handout, we should demand not an allowance but assets. That’s right: an ownership stake.

The wealth gap in the United States has less to do with the difference between people’s salaries than their assets. For instance, African-American families earn a little more than half the salary, on average, that white American families do. But that doesn’t account for the massive wealth gap between whites and blacks. More important to this disparity is the fact that the median wealth of white households in America is 20 times that of African-American households. Even African-Americans with decent income tend to lack the assets required to participate in savings accounts, business investments, or the stock market.

So even if an African-American child who has grown up poor gets free admission to college, they will still likely lag behind due to a lack of assets. After all, those assets are what make it possible for a white classmate to take a “gap” year to gain experience before hitting the job market or take an unpaid internship or have access to a nice apartment in Williamsburg to live in while knocking out that first young adult novel on spec, touring with a band, opening a fair trade coffee bar, or running around to hackathons. No amount of short-term entitlements substitute for real assets because once the money is spent, it’s gone — straight to the very people who already enjoy an excessive asset advantage.

Had Andrew Johnson not overturned the original reconstruction proposal for freed slaves to be given 40 acres and a mule as reparation, instead of simply allowing them to earn wage labor on former slaveowners’ lands, we might be looking at a vastly less divided America today.

Likewise, if Silicon Valley’s UBI fans really wanted to repair the economic operating system, they should be looking not to universal basic income but universal basic assets, first proposed by Institute for the Future’s Marina Gorbis. As she points out, in Denmark — where people have public access to a great portion of the nation’s resources — a person born into a poor family is just as likely to end up as wealthy as peers born into a wealthier household.

To venture capitalists seeking to guarantee their fortunes for generations, such economic equality sounds like a nightmare and unending, unnerving disruption. Why create a monopoly just to give others the opportunity to break it or, worse, turn all these painstakingly privatized assets back into a public commons?

The answer, perhaps counterintuitively, is because all those assets are actually of diminishing value to the few ultra-wealthy capitalists who have accumulated them. Return on assets for American corporations has been steadily declining for the last 75 years. It’s like a form of corporate obesity.The rich have been great at taking all the assets off the table but really bad at deploying them. They’re so bad at investing or building or doing anything that puts money back into the system that they are asking governments to do this for them — even though the corporations are the ones holding all the real assets.

Like any programmer, the people running our digital companies embrace any hack or kluge capable of keeping the program running. They don’t see the economic operating system beneath their programs, and so they are not in a position to challenge its embedded biases much less rewrite that code.

As appealing as it may sound, UBI is nothing more than a way for corporations to increase their power over us, all under the pretense of putting us on the payroll. It’s the candy that a creep offers a kid to get into the car or the raise a sleazy employer gives a staff member who they’ve sexually harassed. It’s hush money.

If the good folks of Uber or any other extractive digital enterprise really want to reprogram the economy to everyone’s advantage and guarantee a sustainable supply of wealthy customers for themselves, they should start by tweaking their own operating systems. Instead of asking the government to make up the difference for unlivable wages, what about making one’s workers the owners of the company? Instead of kicking over additional, say, 10% in tax for a government UBI fund, how about offering a 10% stake in the company to the people who supply the labor? Or another 10% to the towns and cities who supply the roads and traffic signals? Not just a kickback or tax but a stake.

Whether its proponents are cynical or simply naive, UBI is not the patch we need. A weekly handout doesn’t promote economic equality — much less empowerment. The only meaningful change we can make to the economic operating system is to distribute ownership, control, and governance of the real world to the people who live in it.

Photo by tokyoform

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dna merch: A Platform Co-op in the Making https://blog.p2pfoundation.net/dna-merch-a-platform-co-op-in-the-making/2018/09/07 https://blog.p2pfoundation.net/dna-merch-a-platform-co-op-in-the-making/2018/09/07#respond Fri, 07 Sep 2018 09:20:00 +0000 https://blog.p2pfoundation.net/?p=72583 Established in 2015, dna merch is an unconventional eco-fair clothing brand specialized in custom printed t-shirts and other promotional garments for b2b customers. We also offer a collection of classic blank and various slogan shirts via our b2c online shop and selected retailers. At the heart of our supply partner chain is a sewers cooperative... Continue reading

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Established in 2015, dna merch is an unconventional eco-fair clothing brand specialized in custom printed t-shirts and other promotional garments for b2b customers. We also offer a collection of classic blank and various slogan shirts via our b2c online shop and selected retailers.

At the heart of our supply partner chain is a sewers cooperative from Croatia. With a fixed percentage of our net sales we support garment workers in South Asia in their fights for better working and living conditions. This way, we want to create a positive impact for both workers in the alternative and in the mainstream economy.[1]

After two successful crowdfunding campaigns[2] and almost three years of business experience, we are now planning to take the next step by developing an innovative web platform which ultimately shall be collectively owned and governed by every party involved in the value chain; from the producers of the raw material all the way to the people who buy the clothes.

From platform capitalism to platform cooperativism

Never was it more obvious than today that capitalism fails to deliver on its promise of benefiting the many and not just the few. By grabbing after the internet, capitalism has given birth to business platforms that increase inequality, undermine democracy and lead to monopolies. The likes of Airbnb, Uber, Amazon and facebook are transforming our workplaces, relationships and societies and we have virtually no control over them. While nearly all aspects of our lives are being shifted online, a new and fairer model for the digital economy is needed. A promising model in that regard is co-ownership, transparency and democratic governance as promoted by an emerging number of so-called platform cooperatives. Contrary to venture capital funded platforms and their systemic flaw having to excessively extract and maximize value only for their shareholders, platform coops seek ways of including everybody who is affected by the platform’s activities in the equation.[3]

Applying the platform coop model to the buyer driven and undemocratic garment industry

How the industry works

Global fashion online sales are expected to grow massively from €415 billion in 2018 to €615 billion in 2022.[4] Approximately 75 million people are employed in the textile, clothing and footwear sector worldwide. Most of them are women. The industry is buyer driven which means that corporate giants such as H&M, Inditex, Primark or Kik usually do not own any of the factories they produce with, yet they basically control them. Their buying power lets them dictate where to produce, what to produce and at what prices. This, together with the rise of fast fashion, a business practice where the brands change their collections in very short time frames, puts enormous pressure on farmers, factory owners and workers. Supply chain transparency is another big issue.

Ways to gain power for workers

One way for workers to turn their often poor labour conditions into good or at least better conditions, has always been by organizing in independent labour unions and subsequently force the employers to negotiate collective agreements. However, this is easier said than done because anti-union practices are widespread in the global garment industry. Even though fundamental rights to join a union and bargain collectively are guaranteed in the big brands’ code of conducts and through various certification schemes, reality on the ground often looks very different.[5] Hence, the percentage of unionised garment workers in today’s main producing countries is very low.

Another way for workers to gain collective power and a higher level of self-determination is by organizing into worker cooperatives. Here, the workers collectively share the ownership of their workplace. Consequently, their work benefits themselves and their local communities rather than just filling the pockets of external shareholders, bosses or factory owners. However, there are currently just very few garment factories operating as a worker cooperative. In the first step of the value chain though, there is already a considerable amount of smallholder cotton farmers who are organized in cooperatives, primarily because together it is easier for them to sell their product and it also allows them to reach a higher price.[6]

Revolutionizing our garment value chain by becoming a platform coop

As of today, our immediate supply chain consists of three main partners. We buy 100 percent organic cotton for our fabric via Fair&Organic from India. The Social Cooperative Humana Nova receives these fabrics and sews them into t-shirts. Printex finishes these shirts with screen prints using water based eco-colours. Counting in the employees of the small manufacturers Fair&Organic works with, the combined number of people working for these three partners is likely to be around 50 to 60. It is safe to say that at least half of them in one way or another work for us during the realisation of a certain project. We should of course not forget all the additional people involved in logistics and transportation as well as in the raw material production. The products offered on our platform/website are only possible through the combined efforts of farmers, mill workers, fabric cutters, patternmakers, sewers, truck drivers, just to scratch the surface.

Now, imagine if all these hard working people were to become co-owners of the dna merch platform.

The co-ownership model would not only allow them to raise their voices concerning issues that affect them (e.g. delivery times, labour costs/wages and working hours), it would also make them eligible to a share of the surplus revenues generated by the platform.

And now try to imagine if all the other people in the value chain will become co-owners as well, those who will be using the platform to buy t-shirts and other garments either for their own use or to source and retail. If implemented properly in a truly inclusive way, this will lead to a fully democratised value chain in which both consumers and producers are empowered likewise. The technology for them to finally meet on eye-level and practice solidarity through direct interaction and trade is available. With the dna merch platform we want to put it in practice.

But why would it be so empowering to facilitate that sort of direct interaction between consumers and workers/producers? Two popular beliefs in today’s mainstream sustainability debate are that a) consumers have the power to make globalization fair and sustainable by shopping ethically and consciously, and b) that companies, to build trust in consumers, should certify their supply chains and guarantee universal standards through the means of independent audits.

While there is absolutely no doubt that our day-to-day shopping decisions matter and can drive companies to adjust and change their policies in a progressive way, it is way too easy to put all the responsibility in the end consumer’s pocket. We think it is hardly possible to always filter all products according to their social and ecological footprint and always make a conscious and ethical decision without going crazy, especially when the majority of products are known to be produced under poor conditions. What’s most important though, is that an approach which solely relies on the consumer power tends to treat workers in the global south as passive subjects who depend on our goodwill and help. Hence, it hinders us from seeing them as people just like us and makes it harder to create relations on eye level.

Audits are problematic, too. The vast majority of them has proven to be merely a paperwork exercise and does not lead to sustainable improvements of working conditions. A study from 2016 titled “Ethical Audits and the Supply Chains of Global Corporations” concludes that audits “are ineffective tools for detecting, reporting, or correcting environmental and labour problems in supply chains [and] they reinforce existing business models and preserve the global production status quo.” As with the consumer power argument, the biggest problem with audits is the passive position that the workers are put in.

We believe that it is the people themselves who know best what needs to be improved at their workplace or their favourite product. So, equipping people with the right tools to connect directly with each other, and putting them in a position where they no longer depend on powerful and manipulating intermediaries like most of today’s corporations are, they will figure out ways that benefit all those involved. With the dna merch platform coop we are determined to set out and prove it.

Lean proof of concept: Focussing on our status-quo

With our platform we want to address three dominant problems of the garment industry, i.e. lack of fairness and democracy, non-transparent prices and supply chains that hinder buyers from making informed decisions, and the fact that there is currently no easy way for workers and consumers to directly connect with each other.

To get things going we will make use of what we already have, a transparent supply chain for t-shirts with a self-organised sewers cooperative at the core, our existing website with a lot of transparent information and a network of customers comprising of trade unions, music bands, retail shops and crowdfunding supporters. We have various functionalities planned for the platform and will add and test them step by step along the way. First, we will add options to start one’s own crowdfunding campaigns and group orders. The idea is to make it possible for bands, organizations and individuals to initiate t-shirt pre-order campaigns to collectively pre-finance the production costs. If wished, users can add a margin on top of the costs to raise money via a public campaign.

Over time, we want to extend the product portfolio and offer not just customized printing on standardized garments but also enable e.g. young fashion designers to realize their first collection through the platform.

In terms of our organizational restructuring process from a German civil law partnership towards a platform coop with a legal structure yet to define, we aim to have an established organisation by mid of 2019 with at least 5 co-owners each from our producer part and the consumer/retailer part of our value chain (e.g. 3 workers from the sewers cooperative, 2 from the print shop, 1 band, 2 crowdfunding supporters, 1 fashion designer, 1 graphic designer)

Our biggest challenges and questions

  1.       How exactly could a membership and governance structure look like in practice?
  2.       How can we convince our stakeholders to embrace the undertaking of becoming a platform coop?
  3.       What are the arguments and incentives that are valid for everybody?
  4.       Which ones differ between the various actors?
  5.       How will we ensure real participation of the coop members?
  6.       Which tools and forms of communication will we need?
  7.       How exactly will the business model look like?
  8.       Transaction fees, membership fees …
  9.       Coop shares
  10.       Sales of own collections
  11.       Consulting services for onboarding further producer partners
  12.       Commission fees for fashion designers who win contracts through the platform from other users?
  13.       How exactly can we make use of the Blockchain technology and other recent inventions that foster decentralisation?
  14.       Which tools are readily available that we can make use of?
  15.       Which impact on membership will the power imbalance in our supply chain most likely have, e.g. the fact that other than the     sewers cooperative all other partners are conventionally structured businesses?
  16.       Should co-ownership of the platform become a prerequisite for being able to access all services and functionalities of the platform?

Call to action

We need and want more people to get involved in this!

Please get in touch by briefly mentioning what aspect interests you the most and where your expertise lies. We definitely need people with a technical background, people with experience working in coops, people with knowledge of the garment industry, social media and marketing experts, organizational theorists and probably a lot more that we cannot think of right now : )

Also, please feel free to reach out if you just want to comment on the idea as such or on one of the questions and challenges mentioned above or if you would like to add another one.

We are grateful for every input and consideration that you share with us!

You can best reach us via email or you can directly comment on the document here.

Doreen & Anton

 


[1]

[2] See https://www.startnext.com/dnamerch and https://www.startnext.com/dna-merch-vol-2

[3] For more info visit https://platform.coop

[4] See https://www.shopify.com/enterprise/ecommerce-fashion-industry

[5] See e.g. http://speri.dept.shef.ac.uk/wp-content/uploads/2016/01/Global-Brief-1-Ethical-Audits-and-the-Supply-Chains-of-Global-Corporations.pdf

[6] See e.g. https://www.ica.coop/en/media/news/small-scale-farmers-achieve-a-26-higher-share-of-consumer-price-when-organized-in

 

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Essay of the Day: Disrupting Together: Challenges and opportunities for Platform Coops https://blog.p2pfoundation.net/essay-of-the-day-disrupting-together-challenges-and-opportunities-for-platform-coops/2018/09/03 https://blog.p2pfoundation.net/essay-of-the-day-disrupting-together-challenges-and-opportunities-for-platform-coops/2018/09/03#respond Mon, 03 Sep 2018 08:00:00 +0000 https://blog.p2pfoundation.net/?p=72437 The following text was written by Duncan McCann and originally published in the New Economics Foundation’s Website. Duncan McCann:  Platforms – like Uber, Deliveroo, or TaskRabbit – connect services and products with consumers. With both sides theoretically having control over the interaction, and investing in the platform to reap the rewards, the rapid spread of platforms... Continue reading

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The following text was written by Duncan McCann and originally published in the New Economics Foundation’s Website.

Duncan McCann: 

Platforms – like Uber, Deliveroo, or TaskRabbit – connect services and products with consumers. With both sides theoretically having control over the interaction, and investing in the platform to reap the rewards, the rapid spread of platforms has the potential to revolutionise capitalism. But increasing concerns over the past few years around tech monopolies and the potential erosion of workers’ rights through the gig economy have raised questions over who really holds control over the platforms, and what impact this has on workers and customers.

Platform co-operatives present a possible alternative to traditional platforms which tend towards monopoly, concentrate power and erode workers’ rights. Drawing on a cooperative lineage which spreads out ownership and control, platform co-operatives could present a brighter future. But there are barriers to the spread of platform co-ops, including challenges of raising capital, finding the right skills within the organisation, competing with Silicon Valley, and harnessing positive network effects.

This is the second of two reports exploring the potential for platform co-ops, drawing on work we undertook with support from NESTA’s ShareLab fund. The previous report, A Better Gig? focused on the concerns of both drivers and passengers engaging in the private hire gig economy in West Yorkshire, and suggested that platform co-ops could go some way to remedying these. This paper draws on these lessons to set out the main challenges to setting up platform co-ops, and suggest ways of overcoming them.

Click on the image to download

Through our own research, and in particular through observing the development of a new ride-hailing app started by drivers in South Yorkshire, we have identified five areas of challenge for platform co-operatives. Firstly, platform co-ops are not attractive to traditional venture capitalists and tech investors. Platform co-ops can utilise other sources of capital (crowdfunding, co-operative banks and credit unions, or blockchain and alternative currencies) but will still never be able to match the billions raised in Silicon Valley. Secondly, co-operatives must commit long-term operational and financial commitment to building and maintaining their technology. Thirdly, coops need technology which can enable it to recruit drivers and passengers in parallel, and to distribute the profits of the business. Fourth, platform co-ops must find a way of subsidising their early entry into the market in order to build a profile for themselves. And fifth, platform co-ops must find a way to harness the virtuous cycle of positive network effects.

These challenges are difficult for platform co-operatives to overcome. In the ridehailing sector, we posit that co-operatives can be most successful in either focusing on a large city-scale project, or creating a network of federated co-ops to overcome some of the challenges. In other sectors, like cleaning and social care, the less complex tech demands mean that platform co-ops can make more of an impact. As well as developing alternative market interventions, we need to tackle the dominance of existing platforms.

We are at a crossroads. Traditional platforms seemed invincible until very recently, but regulatory battles and consumer action are changing the platform landscape. Platform cooperatives can be part of building a more equitable vision of the future. But small businesses cannot do it alone.

  1. We provide a series of recommendations to make platform co-operatives viable.
  2. We need new funding structures that can provide alternatives to the venture capital funding model.
  3. New platform co-ops must collaborate with each other and, where appropriate, form federated structures.
  4. Workers should be provided with the necessary skills training and support to establish their own co-operatives.
  5. Locally-focused commissioning from the public sector could provide a vital revenue stream to platform co-operatives.
  6. Government must enforce existing regulation robustly to ensure a level playing field for new platform co-ops.
  7. Users and consumers need to understand the impact of spending their time and money on established platforms, and be given opportunities to spend their money on ethical alternatives.

The structural challenges outlined in this report offer some of the answers as to why we have not seen more platform co-ops emerge and flourish. Platform co-ops offer us hope that we can harness the benefits of digital platforms without the harms that many of the current ones create. But their creation will require both continued experimentation and the support of policy makers both to enforce existing regulations on platforms, and create new support structures. Only by working together can we hope to create a digital economy that truly works for everyone.

 

Photo by the meanMRmustard

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Book of the Day: Everything for Everyone: The Radical Tradition that Is Shaping the Next Economy https://blog.p2pfoundation.net/book-of-the-day-everything-for-everyone-the-radical-tradition-that-is-shaping-the-next-economy/2018/08/27 https://blog.p2pfoundation.net/book-of-the-day-everything-for-everyone-the-radical-tradition-that-is-shaping-the-next-economy/2018/08/27#respond Mon, 27 Aug 2018 09:00:00 +0000 https://blog.p2pfoundation.net/?p=72392 September 2018, Nation Books. Text republished from Nathan Schneider’s website. A new feudalism is on the rise. From the internet to service and care, more and more industries expect people to live gig to gig, while monopolistic corporations feed their spoils to the rich. But as Nathan Schneider shows through years of in-depth reporting, there is... Continue reading

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September 2018, Nation Books. Text republished from Nathan Schneider’s website.

A new feudalism is on the rise. From the internet to service and care, more and more industries expect people to live gig to gig, while monopolistic corporations feed their spoils to the rich. But as Nathan Schneider shows through years of in-depth reporting, there is an alternative to the robber-baron economy hiding in plain sight; we just need to know where to look.

Cooperatives are jointly owned, democratically controlled enterprises that advance the economic, social, and cultural interests of their members. They often emerge during moments of crisis not unlike our own, putting people in charge of the workplaces, credit unions, grocery stores, healthcare, and utilities they depend on. Co-ops have helped to set the rules, and raise the bar, for the wider society.

Since the financial crash of 2008, the cooperative movement has been coming back with renewed vigor. Everything for Everyone chronicles this economic and social revolution—from taxi cooperatives that are keeping Uber and Lyft at bay, to an outspoken mayor transforming his city in the Deep South, to a fugitive building a fairer version of Bitcoin, to the rural electric co-op members who are propelling an aging system into the future. As these pioneers show, cooperative enterprise is poised to help us reclaim faith in our capacity for creative, powerful democracy.

Endorsements

Everything for Everyone lives up to its title. As Nathan Schneider documents, cooperative movements are everywhere—from Barcelona to Bologna, Nairobi to New York, Jackson, Oakland, Boulder, Detroit, and points in between. And they are struggling to bring everything in common—electricity, healthcare, tech, transportation, banks, land, food, knowledge, even whole cities. Spoiler alert: this is no paean to the neoliberal ‘gig economy’ but rather an historical and contemporary tour of the radical potential of cooperative economics to disrupt capitalism as we know it. It is a book for everyone and a book for our times: read it, share it, but don’t just talk about it. Commons for all!”

Robin D. G. Kelley, author of Freedom Dreams: The Black Radical Imagination

“People have always fought to forge economies based on cooperation and creativity, rather than domination and exclusion. But that work has never looked so urgent as it does today. Charting a wealth of renewable ideas, tools, and commitments that are poised to reinvent democracy, Schneider tackles an immense subject with precision and grace.”

Naomi Klein, author of No Is Not Enough and This Changes Everything

“The time has never been better for cooperative enterprise to change how we do business. This is a guide to how a new generation is starting to make that promise into a reality.”

Jeremy Rifkinauthor of The Zero Marginal Cost Society and lecturer at the Wharton School

Everything for Everyone proves how our vested interests are best served by addressing our common ones. In Schneider’s compelling take on the origins and future of cooperativism, working together isn’t just something we do in hard times, but the key to a future characterized by abundance and distributed prosperity. We owe ourselves, and one another, this practical wisdom.”

Douglas Rushkoff, author of Throwing Rocks at the Google Bus, professor at Queens College

“Nathan Schneider is one of our era’s foremost chroniclers of social movements. Always engaging and analytically insightful, there’s simply no one I’d trust more to guide me through the latest iteration of the longstanding, international, and utterly urgent struggle to build a more cooperative world and reclaim our common wealth.”

Astra Taylor, author of The People’s Platform

“A gifted writer, chronicling the world he and his compatriots are helping to make—spiritual, technological, and communal.”

Krista Tippett, host of On Being

Photo by HeatherKaiser

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Platform Coops: an infographic connecting cooperatives with the digital economy https://blog.p2pfoundation.net/platform-coops-connecting-cooperatives-with-the-digital-economy/2017/08/21 https://blog.p2pfoundation.net/platform-coops-connecting-cooperatives-with-the-digital-economy/2017/08/21#respond Mon, 21 Aug 2017 07:00:00 +0000 https://blog.p2pfoundation.net/?p=67183 The following infographic and texts are republished from Platform.coop’s “About” page. About Platform Coops The Internet is slipping out of ordinary users’ control. Internet technologies are transforming our workplaces, relationships, and societies. Companies like Uber, Amazon, and Facebook are capturing vital sectors of the economy such as transportation and phenomena like search and social networking.... Continue reading

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The following infographic and texts are republished from Platform.coop’s “About” page.

About Platform Coops

The Internet is slipping out of ordinary users’ control. Internet technologies are transforming our workplaces, relationships, and societies. Companies like Uber, Amazon, and Facebook are capturing vital sectors of the economy such as transportation and phenomena like search and social networking. All of us who rely on the Internet have virtually no control over the platforms that affect and inform us on a daily basis.

Platform Capitalism

The power held by these principal platform owners has allowed them to reorganize life and work to their benefit and that of their shareholders. “Free” services often come at the cost of our valuable personal information, with little recourse for users who value their privacy.

The paid work that people execute on digital platforms like Uber or Freelancer allows owners to challenge hard-won gains by 20th-century labor struggles: workers are reclassified as “independent contractors” and thus denied rights such as minimum wage protections, unemployment benefits, and collective bargaining. Platform executives argue that they are merely technology (not labor) companies; that they are intermediaries who have no responsibility for the workers who use their sites. The plush pockets of venture capitalists behind “sharing economy” apps allow them to lobby governments around the world to make room for their “innovative” practices, despite well-substantiated adverse long-term effects on workers, users, the environment and communities. At the same time, in the gaps and hollows of the digital economy, a new model follows a significantly different ethical and financial logic.

Platform Cooperativism

Platform cooperativism is a growing international movement that builds a fairer future of work. It’s about social justice and the bottom line. Rooted in democratic ownership,co-op members, technologists, unionists, and freelancers create a concrete near-future alternative to the extractive sharing economy.

Making good on the early promise of the Web to decentralize the power of apps, protocols, and websites, platform co-ops allow households with low and volatile income to benefit from the shift of labor markets to the Internet. Steering clear of the belief in one-click fixes of social problems, the model is poised to vitalize people-centered innovation by joining the rich heritage and values of co-ops with emerging Internet technologies.

Ecosystem

Countless platform co-ops and initiatives supporting them have developed rapidly over the past two years. This ecosystem challenges the practices of the “sharing economy” and the often misogynist ‘win at all costs’ culture of Silicon Valley. The cooperative platform ecosystem ranges from alternative financing models, labor brokerages for nurses, massage therapists, and cleaners, to cooperatively owned online marketplaces, and data-protection platforms for patients.

Rather than posing as the solution for the quick defeat of the extractive investor-owned model, successful platform co-ops have already and continue to make a meaningful difference in the lives of those who participate in them. It is a project that people can work on in their lifetime. Uber drivers are organizing in co-ops, designing their own taxi apps. Photographers are offering their work for fair prices on a platform where they’re in charge, and journalists are crowdfunding news portals co-owned by their readers. New decentralized networks are enabling people to share their data with each other without relying on a corporate cloud.

Examples

Here are some examples: Up & Go offers professional home services like house cleaning, (and soon childcare and dog walking) by those who are looking for assistance with laborers from local worker-owned cooperatives. Unlike extractive home-services platforms which take up to 30% of workers’ income, Up & Go charges only the 5% it needs to maintain the platform.

Similarly, the 25% fee that corporate ride-hail (taxi) platforms extract from drivers has led some drivers to create cooperative platforms across Europe and the United States. Cotabo (Bologna, Italy), ATX Coop Taxi(Austin, TX), Green Taxi Cooperative (Denver, CO), The People’s Ride (Grand Rapids, MI), and Yellow Cab Cooperative (San Francisco, CA), among others, have each provided their worker-owners the dignity of a living wage by developing their own taxi apps.

MiData, a Swiss “health data cooperative,” has created a data-exchange which will securely host member-users’ medical records. By integrating this traditional health data with emerging data streams from FitBit devices and personal genomic services, MiData aims to out-compete private, for-profit data brokers and ultimately return the control and monetization of personal data to those who generate it.

As some open-source projects find it hard to pay a dedicated development team, the funding platform Gratipayprovides a free subscription-based patronage infrastructure for developers of such ventures. Gratipay provides credit-card transactions at-cost, subtracting only the processing fees from users’ subscriptions. Tools like Gratipay are at the core of the platform cooperativism ecosystem; they expedite the work of other projects.

Join Us

The Internet can be owned and governed differently. The experiments now already underway show that a global ecosystem of cooperatives and unions, in collaboration with movements such as Free and Open Source Software, can stand against the concentration of wealth and the insecurity of workers that yields Silicon Valley’s winner-takes-all economy. The “sharing economy” is more vulnerable than it appears. New alliances in support of the cooperative platform economy are gaining momentum. They include: “rebel cities,” inventive organizations, policy makers, incubators, experimenters, researchers, educators, and community-builders at the grassroots level. Co-shape our work. Support our network. Get involved.

Photo by Kit4na

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Unleashing the potential of data to transform health and care https://blog.p2pfoundation.net/unleashing-the-potential-of-data-to-transform-health-and-care/2017/07/31 https://blog.p2pfoundation.net/unleashing-the-potential-of-data-to-transform-health-and-care/2017/07/31#respond Mon, 31 Jul 2017 08:00:00 +0000 https://blog.p2pfoundation.net/?p=66804 Future Care Capital seeks a step-change in health and care and believes that a concerted effort to unleash the potential of health and care data could significantly improve outcomes for everyone in our society. This report explores how the United Kingdom (UK) might support data-driven research and innovation to transform health and care. It also... Continue reading

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Future Care Capital seeks a step-change in health and care and believes that a concerted effort to unleash the potential of health and care data could significantly improve outcomes for everyone in our society.

This report explores how the United Kingdom (UK) might support data-driven research and innovation to transform health and care. It also makes plain that, to achieve this, the UK needs to blaze a trail in the development of ‘data ethics’ to proactively build trust whilst safeguarding individuals.

Full Report – Unleashing the potential of health and care data

Executive Summary – Unleashing the potential of health and care data

In brief – our key recommendations

National context: enabling responsible data sharing and building public trust

  • Empower the Information Commissioner’s Office to tackle data-driven exploitation and discrimination to build public trust.
  • Introduce new sanctions to tackle the re-identification of data subjects from anonymous data sets, where consent, legitimate interest or contract is lacking.
  • Invest in technologies to positively impact social care services and task the Care Quality Commission with championing the digitisation agenda, including planning for a data-driven inspection regime to improve standards.
  • Streamline information governance modelling for Integrated Digital Care Records to expedite data sharing at the local level across health and care organisations.
  • Increase investment and support for data controllers to unleash health and care data in a standard and anonymised form, where there is a value in secondary analysis by third parties.
  • Expand the opportunity for data subjects to contribute health and care data to integrated records and other data sharing initiatives.

Pushing the boundaries: creating a culture of data philanthropy in a digital Britain

  • Establish a new National Health and Care Data Donor Bank, to coordinate data from the public and help improve the alignment of research to clinical need.
  • The Ministers for Digital Economy and the Third Sector, working in conjunction with the Open Data Institute and NHS Digital, business and the third sector, should develop a suite of tools to stimulate ‘data philanthropy’ in the UK.
  • Introduce a national Government programme to pilot the development of new health and care Data Cooperatives, Data Communities and Data Collaboratives to promote a culture of data philanthropy through the demonstration of tangible health and care outcomes delivered by a range of ‘trusted vehicles’.
  • The Government should explore the development of a ‘gift aid’ style scheme for health and care data, encouraging individuals to make health and care data donations to better enable research and innovation.

Establishing a health and care data advantage: investing in skills, business and infrastructure

  • Establish data-driven business clusters for new health and care enterprises backed by Government. These clusters should also offer skills training to help prepare the future workforce for the increase in demand for data-related job opportunities.
  • The Government should explore the scope to introduce tax and other incentives for businesses prepared to enter into Joint Ventures with a National Health and Care Data Donor Bank to help place future services on an affordable footing.
  • The new Chief Data Officer and National Data Guardian should be tasked by Government with contributing to the development of a strengthened and/or dedicated ‘data privacy shield’ for health and care data, applicable to any future trade negotiations outside Europe, to safeguard the public whilst improving the UK’s competitiveness.
  • The Government should support the establishment of ‘Living Labs’ to encourage innovators and entrepreneurs to develop new technologies to transform health and care outcomes. A ‘Living Lab’ could comprise of private dwellings, a residential care home and/or connected streets, and would involve the deployment of technologies associated with the Internet-of-Things.

About the Authors

Annemarie Naylor MBE is the Director of Policy and Consulting at Future Care Capital. She studied Government and Sociology at the University of Essex. For a large part of her career, Annemarie has work in public policy and economic development working with local, regional and central government.

Emily Jones is a Policy and Research Officer at Future Care Capital. She studied at the London School of Economics and Political Science where she achieved a degree in Social Policy. Emily was previously a Research Assistant at the Centre for Analysis of Social Exclusion.

Acknowledgements

We are very grateful to Dr Alison Powell for her insight and comments provided on a draft of this paper as well as for writing the Foreword. The team at Anthony Collins Solicitors LLP provided valuable legal input to inform our research. The contribution of individuals on behalf of the Leeds Care Record, Dorset Care Record, Hampshire Health Record and Connected Yorkshire has also been invaluable in the production of this report.

 

Photo by Community Eye Health

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How a Cooperative in Indonesia is Bridging the Digital Divide https://blog.p2pfoundation.net/cooperative-indonesia-bridging-digital-divide/2017/07/16 https://blog.p2pfoundation.net/cooperative-indonesia-bridging-digital-divide/2017/07/16#respond Sun, 16 Jul 2017 08:00:00 +0000 https://blog.p2pfoundation.net/?p=66587 Written by Nithin Coca and cross-posted from Shareable Indonesia is one of the world’s hottest and fastest growing digital markets. “With around 90 million Internet users and more than 281 million active mobile phone subscriptions, we can anticipate the development of the digital ecosystem in Indonesia that will lead the growth,” Shinta W. Dhanuwardoyo wrote in “Strategic... Continue reading

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Written by Nithin Coca and cross-posted from Shareable

Indonesia is one of the world’s hottest and fastest growing digital markets. “With around 90 million Internet users and more than 281 million active mobile phone subscriptions, we can anticipate the development of the digital ecosystem in Indonesia that will lead the growth,” Shinta W. Dhanuwardoyo wrote in “Strategic Review: The Indonesian Journal of Leadership, Policy and World Affairs” last year. “E-commerce has been one of the vital driving forces of Indonesia’s digital economy.”

Unfortunately, this growth has been uneven, and not all Indonesians have access to this burgeoning digital economy. Although it’s improving, only a little more than half of Indonesia’s population has regular internet access, and outside major cities, broadband access is severely limited. Smartphones — the most common method for accessing the internet in Indonesia — are almost all either manufactured abroad or domestically by international companies.

Koperasi Digital Indonesia Mandiri (KDIM), a cooperative based in the country’s capital, Jakarta, is trying to bridge this digital divide. It’s developing a locally-produced, low-end smartphone for Indonesians left out of the digital boom. It’s also building a platform for users to access services from other cooperatives on their phones.

“Unlike commercially distributed phones, this smartphone can only be obtained by becoming a member of the cooperative via its website, after which one needs to pay Rp 100,000 (US $7.48) per month for one year,” The Jakarta Post reported.

The phone had its soft-launch in late March, and will be available for all members in the coming months. We spoke with Adie Marzuki, chair of KDIM, to learn about how the organization uses the cooperative model to bring digital technologies and services to underserved Indonesians.

Can you tell us about how KDIM started, and why you decided to form a cooperative rather than a regular, for-profit company?

KDIM was initiated by two organizations, APJII [Indonesian Internet Service Providers Association] and MASTEL [Telematics Society]. We believe that we need to build inclusive economy for Indonesia. We have a very huge market here — more than 80 million smartphones users in the [Indonesian] market right now. But we still we have 60 million of our population un-served — this means that 60 million people in Indonesia have never had a smartphone. That’s why we need to have a domestic smartphone industry that serves the underserved in Indonesia — and that’s why we are creating an entry-level smartphone. They are not served by the current industry right now.

photo courtesy of KDIM

For that, the model of a cooperative makes the most sense. It is a fundamental economic system in Indonesia. We have the power of population, that’s why we built KDIM as part of an inclusive economy, so that we can leverage our numbers.

We don’t have power of capital — but we have power of the people.

What are your operating costs? How did you raise the capital to start the cooperative?

Our operating costs covered by collecting membership share from members. Membership share is a term used to refer to the contribution required for a person to become a member of the cooperative. The initial funding/equity capital [was] provided by the founding members, which consists of KDIM members of APJII and MASTEL.

Indonesia has many cooperatives. Can you tell us how you are similar, and different, from other cooperatives in the country?

We are the first Indonesian digital cooperative. There are other efforts to support the un-served people, but they are not in the digital industry — we thought that now, we need to engage all the population to emerge in the digital life, and benefit from it.

We created KDIM based on our own formulation — this is a completely new model for Indonesia. Other cooperatives in Indonesia are all in conventional businesses. We want to work with them, and we are asking the other cooperatives to follow in our way, and we are ready to serve them and give them the platform they need.

We are not trying to make our cooperative the biggest cooperative — we are offering the other cooperatives to use our platform to benefit and go to the digital era.

Once consumers become members of the cooperative, do they have to remain involved in the cooperative for as long as they’re using the phone? What do your members gain besides the phone itself, and how are they involved in KDIM?

Our members will use the phone itself as their membership tool. Members will benefit from the use of the phone as we have digital advertising system embedded in the platform. Members also gain points when they use the apps in the phone e.g. digital transaction, purchasing, and other digital activities, which are provided by the KDIM phone. Their points will be reflected in annual closing book, and members will redeem their points in rupiahs. In our annual meeting, each member will have one vote.

What’s your current membership base, and what are your medium-to-long-term goals? What kind of impact would you like KPIM to have on the country’s technology sector?

Currently we have 25,000 members. Of those, 5,000 of are directly, KDIM members, and the rest are from other cooperatives. Our medium-term goals are to invite lots of other cooperatives to benefit from our platform, while still allowing them to use their own cooperative brand. We will give white label B2B services to other cooperatives while we also inviting more members to join. Our long-term goal is to have our own digital industry ecosystem, which will serve all the 49 percent digitally un-served sector of society.

We are hoping our business model will inspire other tech players to be more inclusive and eventually close Indonesian digital divide. We haven’t officially launched yet, and we are aiming for an official launch of our phone in May, probably before the start of Ramadan.

Photo by AdamCohn

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The Human Economy: Creating Decent Livelihoods In Digital Capitalism https://blog.p2pfoundation.net/human-economy-creating-decent-livelihoods-digital-capitalism/2017/06/20 https://blog.p2pfoundation.net/human-economy-creating-decent-livelihoods-digital-capitalism/2017/06/20#comments Tue, 20 Jun 2017 08:00:00 +0000 https://blog.p2pfoundation.net/?p=65973 To our knowledge, this is the first time that a social-democratic thinker tries to think together, both how to deal with capitalism, and how to deal with the commons, so this thought and policy exercise is to be applauded, and makes a lot of sense. The only caveat from the P2P Foundation point of view... Continue reading

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To our knowledge, this is the first time that a social-democratic thinker tries to think together, both how to deal with capitalism, and how to deal with the commons, so this thought and policy exercise is to be applauded, and makes a lot of sense.

The only caveat from the P2P Foundation point of view is that, it still assumes that capitalism is the only system that creates value, but counter-balanced by investments of the state in the human economy. What is still lacking is an understanding of how the commons itself is a value creation engine, that needs to be recognized.

See our own approach via our report: Value in the Commons Economy.

And without further ado, here is …

Marc Saxer:

Ever since the Second Industrial Revolution petered out, global capitalism has faced a demand crisis. If you think that all we need now is to stop austerity and spend our way out of the crisis, think again. Over the past few decades, developed economies were kept alive through artificially created demand. The inflation of the 1970s, the public debt of the 1980s, the private debt of the 1990s and the quantitative easing of the 2000s were all strategies to inject future resources for present consumption. Even if the dystopian vision of a world without work does not come true, workers’ waning consumer power can no longer fuel growth. This means progressive hopes for a Keynesian revival or a return to Fordism are misguided.

Progressives must find new answers to the challenges posed by the digital revolution. In a global economy, rejecting technological innovation is not an option. But the new technologies should also be embraced in their own right: the automation of dirty, dangerous, physically demanding tasks is set to improve workplace safety and satisfaction.

Yet, digital capitalism is ripe with potentially fatal contradictions. Mass un- and underemployment could aggravate the demand problem to a point where the world economy implodes. If digital automation continues to threaten the security and dignity of the majority population, the current revolt against globalism will only be a small foretaste of what is to come.

What we need is a new development model for the digital age. Front and centre of this new model must be the need to create decent livelihoods. Our best chance to create decent livelihoods in the digital age is the Human Economy.

The Human Economy is composed of two interwoven economies. The digital capitalist economy, which generates the surplus needed to remunerate work for the common good. And the human commons, which creates the consumption demand needed to keep the digital capitalist economy going.

Decent jobs: Make the workforce fit for the digital economy

In the digital economy, entrepreneurs will hire humans to perform new tasks. Human work also continues to be in demand in the service industries, from tourism to entertainment, from design to fashion, from food to arts and crafts and from research to development. To realise this potential for decent human jobs, the skills of the workforce will have to be permanently upgraded.

Decent livelihoods: Remunerate work for the human commons

The human economy needs to be built around the recognition of human contributions to the common good. Millions of livelihoods could be generated in the human commons, from health services to elderly care, from child raising to education, from providing security to generating knowledge. However, many of these tasks, which are beneficial for society, do not generate enough income in the capitalist economy. In order to create decent livelihoods, remuneration mechanisms for these tasks must be created.

Five policies to bring about the Human Economy

  1. Level the playing field for human work. Under fair conditions, there is still a need for humans to work together with Artificial Intelligence, robots, and algorithms. By shifting the tax burden from labour to capital, the playing field can be levelled for human workers. We need to explore how robots and data can be taxed with the aim of delaying the rationalization of work until new livelihoods are created.
  2. Invest in full capabilities for all. Humans excel at communication and social interaction, creativity and innovation, experience and judgement, leadership and foresight, flexibility and learning. Harnessing these talents is the industrial policy of the Human Economy. To fully explore human talents, our education systems need to be fundamentally overhauled. To allow for the necessary public investment in public goods, the austerity paradigm must be reversed.
  3. Boost consumption demand through basic income. The debate over the best way to boost consumption demand has sparked the first political battle of the digital age. The opposing camps in the debate over basic income run counter to the left-right formation characteristic of the industrial society. On one side, Silicon Valley techies who seek to boost consumption demand, Davos billionaires who fear the coming of the pitchforks, neoliberals who want to cut back the welfare state, corruption fighters who seek to cut out the middleman, and Marxists who dream of the end of alienating work in the leisure society; on the other, unions who defend their role in collective bargaining, socialists who smell a Trojan horse to do away with social security, economists who warn against moral hazard and social justice advocates who fear social exclusion. As the debate shows, the usefulness of basic income schemes will depend on their design, and many alternative approaches are being introduced. The Institute for the Future calls for Universal Basic Assets, e.g. entitlements to open source assets such as housing, healthcare, education and financial security. Yanis Varoufakis calls for a Universal Basic Dividend, financed by a Commons Capital Depository.
  4. Distribute sources of wealth more evenly. If robots replace humans, then the question is: who owns the robots? In an economy where capital increasingly replaces labour, capital ownership needs to be democratized. Richard Freeman suggests a ‘workers share’ could spread the ownership of companies amongst employees to make them less dependent on wage income. An alternative can be Sovereign Investment Funds which could re-socialise capital returns.
  5. Remunerate socially beneficial work. If the digital capitalist economy fails to create enough jobs, the state needs to play the role of employer of last resort. This economic necessity may become politically useful. In the vertigo of change, more effort is required to strengthen social cohesion. The state can encourage such contributions to the common good by remunerating them.

The social democratic path to the human economy

Creating decent livelihoods in the digital age will require massive investment in public goods. Generating the revenue to pay for these investments is not an easy political task. While the rich too often find ways to dodge taxes, the poor cannot afford to pay them. The middle classes, feeling abused by the “self-serving elites” and the “entitled poor,” are in open revolt. This is the political reason why the tax burden must be shifted from labour to capital.

In the political economy of today, however, the proposed policy shifts will certainly be an uphill battle. Whether the political economy of digital capitalism will be more conducive for the Human Economy is an open question. On the one hand, distributed technologies and the networked economy have the potential to democratize the means of production. On the other hand, the unprecedented concentration of power in the hands of digital platform companies like Google, Facebook and Amazon points to the opposite direction.

The bizarre alliance around basic income schemes indicates a window of opportunity. Digital capitalism is reshuffling political fortunes, and progressives should go out of their way to build coalitions around the need to boost demand. After half a century of supply-side economics and cost-cutting politics, putting incomes back into the centre of economic thinking is an opportunity progressives must not miss.

Building the Human Economy is not a technical task, but the outcome of political struggles. Only a broad societal coalition will be able to implement the necessary policy shifts. To build this transformative alliance, we need a platform onto which as many communities as possible can come together. This platform cannot be a smorgasbord of policies, but a narrative which explains how we can make the digital transformation work for everyone.

What could this narrative sound like? Amidst the conflicts over sovereignty, identity and distribution transformation, we need to strengthen the foundations of solidarity among all members of the society. This can only be done through a new social contract for the digital society. This social contract needs to be brokered around a compromise between all stakeholders.

The Human Economy offers such an inclusive compromise. In essence, it transcends the conflict between capital and labour by making human capital the engine of the economy. For capital, the Human Economy offers a solution to the existential threat of collapsing consumption demand. For the working population, the threat of mass unemployment is mitigated through decent livelihoods. And for political decision makers, the looming threat of social unrest is relieved.

The social democratic path to development, in other words, creates the necessary demand to sustain the digital economy, the social security people need to embrace permanent change, the political stability required for the implementation of disruptive reforms. The social contract for the digital society, in a nutshell, is to provide full capabilities to everyone who is willing to contribute to the common good.

About Marc Saxer

Marc Saxer is Director of the Friedrich-Ebert-Stiftung India office.

 

 


Originally published on socialeurope.eu

Photo by fumi

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The silver lining of anti-globalism might be the creation of a true digital economy https://blog.p2pfoundation.net/the-silver-lining-of-anti-globalism-might-be-the-creation-of-a-true-digital-economy/2017/03/07 https://blog.p2pfoundation.net/the-silver-lining-of-anti-globalism-might-be-the-creation-of-a-true-digital-economy/2017/03/07#comments Tue, 07 Mar 2017 09:00:00 +0000 https://blog.p2pfoundation.net/?p=64173 The folks at Davos this week are trying to behave as if everything is normal. Sure, England is Brexiting from Europe and the United States appears to be retreating from the global stage altogether. But somehow the word from Switzerland is that a mix of the right interest rates, investment strategies, and business optimism will... Continue reading

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The folks at Davos this week are trying to behave as if everything is normal. Sure, England is Brexiting from Europe and the United States appears to be retreating from the global stage altogether. But somehow the word from Switzerland is that a mix of the right interest rates, investment strategies, and business optimism will keep free trade and globalization on course and safe from this boorish surge of populism.

They’re missing the point. The rise of nationalist sentiments are not the cause of the economic shift underway, but a result of it. The real force energizing these changes is digital. While the digital economy has accelerated and amplified many of the mechanisms investors and corporations use to grow their capital, it has left most people with less money and less opportunity. This latest burst of fear stemming from that lack of opportunity is coming in the form of nationalism, and even protectionism, but it also could offer us a fleeting but real chance to turn our digital economy toward the needs of people instead of finance itself.

Don’t get me wrong. I’m all for prosperous businesses, digital and otherwise. But I’ve also witnessed with horror over the past 20 years as the potential for widespread, bottom-up prosperity unleashed by digital technology have been surrendered to the priorities of extractive global capitalism. This is not the way it was supposed to go, at least not according to me and my cyberpunk friends of the late ’80s.

Back then, the emergence of low-cost computers and networking appeared to augur a peer-to-peer, fluid, and more open economic landscape, one where we all step off the industrial-age, punch-the-clock treadmill and work in our own time, collaboratively, on creative pursuits, from home, in our underwear. Instead, we’re getting an exacerbation of some of extractive corporatism’s worst effects: joblessness, disenfranchisement, wealth disparity, corporate lethargy, artificial growth, and financialization.

Why aren’t we getting new, digitally enabled forms of community currency, worker-owned businesses, networked cooperatives, and peer-to-peer marketplaces? It turns out it is not because they don’t work; it’s simply because there are entrenched powers and limited visions preventing their rise. They find it hard to see digital technology as anything other than an investment opportunity. A company is not a provider of goods or services, but a “disruptor” capable of overturning an existing marketplace and generating 100x returns to the early shareholders. It doesn’t matter what the company does, if anything, after that.

So young developers in their dorm rooms may come up with a great idea for a revenue-generating and largely beneficial application. But then, almost automatically, they rush to find angel investors or venture capitalists to back their ideas. Along with the infusion of capital come unrealistically high valuations and unrefusable demands to “pivot” away from whatever the company may have once sought to accomplish. Instead, the company must focus on how to hit a 100x “home run,” usually by disrupting an existing marketplace and establishing the sort of temporary monopoly that convinces a new round of investors to buy the shares of the last ones.

Silicon Valley may trumpet its innovation bona fides, but this is a very old way of doing business, which digital technology should have rendered obsolete instead of amplifying. But most business leaders, bankers, and even economists tend to accept venture capitalism as a pre-existing condition of nature. It is not. The rules of capitalism were invented by human beings, at particular moments in history, with particular goals and agendas. It’s like a computer program, with accumulated lines of code written by developers throughout history with specific functions in mind. By refusing to acknowledge this, we end up incapable of getting beneath the surface. We end up transacting, and living, at the mercy of a system—of a medium, really.

In fact, there are precedents to the digitally distributed economy so many of still imagine. And they are often characterized by a retreat from international ambitions and restored focus on the power of local, circulatory economics.

The last example of this happening on a grand scale was back in the late Middle Ages, just after the expansionism of the Crusades. As European soldiers returned home, they brought with them many innovations from the Arab world. One of them was the bazaar, or what became known as the market. It was a local economic innovation that turned market activity into a bottom-up, generative, and local affair. Former peasants began to trade the goods they made with one another, instead of simply paying up to the lords. They also imported the idea for market moneys that were good just for one day—like poker chips, except representing a loaf of bread or pound of grain—and optimized for priming transactions. And they began to get wealthy.

Threatened by the rise of a middle class, the aristocracy and monarchs “innovated” against the former peasants. They made market moneys illegal, and forced merchants to borrow from the central treasury, at interest. That allowed the wealthy to make money simply by controlling currency, while also setting in motion the growth trap we’re caught in today. The monarchs also restricted entrance to particular industries by issuing “monopoly charters” to their favorite businesses, in return for a stake in the profits.

So, as I’ve tried to show in my book Throwing Rocks at the Google Bus, from which the chart above is taken, the hands-on economy of the artisanal market was overtaken by the more extractive rules of early industrialism. Workers were disconnected from the value they created and paid by the hour instead. In this light, industrialism and mechanization were just ways to remove human beings from the value chain.

That’s the economy we’ve been living in for the past 600-or-so years. The growth mandate was great for colonial powers looking to expand into new territories. As long as there were new people to enslave and resources to extract, capital could grow. But by the end of World War II, those people and places started to push back. Could we finally give up the global expansionist agenda of late medieval capitalism, and revisit an economic model that didn’t require the sort of growth that was proving impossible to maintain?

Now, digital technology should have been able to retrieve the values of pre-industrialism, and realize them in new ways. The human-to-human contact of the local marketplace is retrieved by the personalization of our digital networks. Market currencies can be retrieved by blockchains or even simpler authentication methods. Web-enabled cottage industries should thrive with their newfound equal footing and distributive power. Meanwhile, the commons and crowdfunding—enclosed and regulated out of existence during the corporate industrial era—find new life in an age whose foundational technologies are based in sharing processing cycles.

But by the early 90s, the cyberpunks’ human-centered vision of a networked marketplace was replaced by another vision of digital business, the one espoused by the libertarian early editors of Wired magazine and the corporate-sponsored futurists of Cambridge, Massachusetts. They looked at digital technology and saw the salvation of the securities markets and the infinitely expanding global economy. The stock market had crashed in 1987, along with the bursting of the biotech bubble. But now digital technology was to restore the NASDAQ to its former glory, and beyond. Indeed, just when it looked like we had reached the limits of the physical world to supply us with more opportunities for growth, it seemed we had discovered a virtual world from which to extract still more value. This new digital economy would augur a “long boom” of economic growth: a digitally amplified, speculative economy that could literally expand forever.

To do that, however, technologies with the potential to distribute value throughout their marketplaces and generate long-term sustainable revenue streams are instead converted into powerfully extractive versions of themselves. Amazon, for one ready example, could have developed itself into a value-creating marketplace like eBay. Instead, it adopted a scorched earth approach to its markets. Amazon chose the book industry as its initial beachhead not because of Jeff Bezos love of reading, but because it was a no-growth, highly inefficient market, ripe for domination. Amazon’s purpose is not to make authors and publishers wealthier, but to use its capital to undercut existing players, establish a monopoly, and then used that monopoly to “pivot” into other “verticals.” It’s the same extractive model utilized by 20th-century behemoths like Walmart, except the total domination of a market occurs even more quickly.

Uber, likewise, could have developed a thriving taxi marketplace by letting local companies and drivers maintain their autonomy on the platform or, alternatively, allowing drivers to earn shares proportionate to the miles they’ve driven. At least that way, once robots replace the human drivers, they would still get some revenue from the platform they helped build with their labor. But that’s not Uber’s goal. The company is still on the chartered monopolist’s script. Only in this case, instead of using the King’s law to maintain their status, they use code. They can’t see that having wealthy customers and employees is actually good for the long-term health of their businesses because they’re trapped in an early colonial mindset that sees markets as territories to conquer, resources to extract, and people to enslave.

Reinforcing all this is a shareholder mentality obsessed with growth and a tax code that favors capital gains over real earnings. No wonder companies focus on stock price, IPOs, and acquisition over real, taxable revenues. Most digital companies’ shares are their only true product.

So instead of moving to the last column of the chart—digital distributism—we have ended up stuck in the third: a digitally amplified version of the same old global industrialism. Digital industrialism is characterized more by the destruction of value and its conversion into share price than the creation of value and its distribution to the stakeholders who made it possible. Digital industrialism exacerbates the imbalance between the traditional factors of production – land, labor, and capital, giving voice only to the needs of the venture capitalists and their mindless pursuit of growth.

But it’s working too well for its own good. These corporations are great at extracting capital from the markets they enter but really bad at deploying it. Corporate profit over size has been declining steadily for decades, now. They grow obese and lose the ability to innovate. So, Google becomes Alphabet, a “holding company” that buys and sells technology companies because it can no longer innovate, itself. Facebook’s biggest moves are not technology developments but acquisitions. Digital industrialism turns its biggest players into vacuum cleaners that suck out the value, and maybe park it in share price or, worse, overseas—but don’t know how to distribute it or even put it to work.

That’s because they’re trapped trying to run 21st-century digital businesses on a 13th-century printing-press-era operating system. The real problem with the digital economy as it is currently constituted is not the digital, but the economics.

The nationalism and protectionism of today’s anti-globalists may be based in jingoism and xenophobia, but it could also—at least temporarily—create the boundary conditions necessary for something more like local, circulatory economic activity to take root. Such boundaries, like closing borders or enacting harsh import tariffs, don’t just prevent the leak of jobs overseas. They discourage businesses from thinking of their markets as global, much less infinite. The markets in which they operate are decidedly finite.

This forces them to stop thinking of themselves as simply sucking up all the cash in a particular territory and then moving on to the next. They must develop local economies that are capable of renewing themselves and delivering ongoing revenue. Instead of earning 10 dollars once, businesses must figure out how to earn the same dollar 10 times. That means promoting not the extraction of capital from a market, but the velocity of money through a market. What goes around comes around.

With any luck, businesses will take a cue from those who already operate this way, such as the US Steelworkers Union. Faced with the declining stock market of 2007, the steelworkers were looking for alternative investments for their pension fund. Instead of outsourcing their funds to S&P index funds, they got the fantastically circular idea to invest in construction projects that hired steelworkers. They invested in a project that not only earned them equity but paid them back their investment as wages.

Such strategies are actually more consonant with digital networks, which circulate information in a distributed fashion and share resources more easily than they hoard them. They are not infinitely expanding; they are bounded and self-sustaining. But they are really difficult to execute in an economic environment characterized by rapid growth startups and infinitely scaling corporate growth. The real world doesn’t scale.

A momentary withdrawal from that game forced by anti-globalist protectionist policies may actually allow for some digital distributism to gain traction. It will force us to remember that an economy doesn’t require global scale or growth to function; it simply needs people with skills, people with needs, and a means of exchange. The finance ministers and corporate chiefs attending Davos—as well as the decisions they make—are inconsequential to this activity. Their effort to salvage the global economy is really just an effort to keep us back in the third column of the chart, the digital industrialism that extracts value from people by evermore technologically creative means.

In contrast, a genuinely distributed economy requires those on the ground to develop strategies for economic and social viability from the bottom up. Don’t be surprised to see labor cooperatives, commons-based approaches to resource management, and even local currencies emerge to fill in where federal action falls short. While these mechanisms may not have worked convincingly before, digital technologies may just lend us the decentralized methods of accounting and authentication we lacked in the Middle Ages.

Whether we like it or not, it’s again time to return from the Crusades, and try a second time to build a new economy here at home.


Cross-posted from Fast Company

Photo by kalieye

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