http://blog.socialsynergyweb.com/2007/06/07/on-the-need-for-business-stewardship-and-open-services/

In my opinion, I think that some reasonable, logical benchmarks could exist for how companies treat both customers and employees, and the environment, and different commons they are using, or are connected to.

What do they do with our personal data? What rights do they claim over content I post onto their sites? What choices do they give me about how I receive their services? Is it possible for me to extend or modify, re-use or give away the technologies produced by the company, in ways that are reasonable for free people, in a free society? These are just some examples. You can quibble with the details, and the precision of the language, but it’s hard to argue against the benefits of companies that help sustain the different types of commons that they rely upon…

Ok, to reorient ourselves I will respond to a quote from the original article:
“firms face an inherent conflict between value creation and value capture.”

My central concern is that we have accepted this conflict as a tautology of human interaction with no alternative.

But there is a special case in social systems that occurs when the Consumers of a good or service are the very Owners of the capital necessary for that production.

That case, which is traditionally called a Consumers’ cooperative removes that conflict to leave the participants to resolve other issues.

My vision of this is not “one member/one vote” as described on the Wikipedia page, but is instead to have votes weighted by ownership percentages. This is safe because of the way that ownership would be dynamically reallocated across time to remain in the hands of those using those goods or services, which is why I talk about “profit as user investment”.

There’s way too many propositions and different threads in your discussion to deal with. Seriously suggest that you distill comments down to single propositions of no more than a few sentences, otherwise its just not possible to respond.

This appears to me to be the same pattern described by the Nash Equilibrium or the Prisoner’s Dilemma – where an individual may choose a payoff that is not the best for the group, but is better that the worst for himself; maybe out of fear or because there wasn’t a prior arrangement that could have ensured the other party would also be bound to choose the best alternative.

The GNU General Public License is just such an agreement that utilizes Copyright to enforce the Pareto Optimal (I hope I’m using this term correctly) choice in a non-coercive manner. Owners of physical property could choose to apply an analogous treaty as a contract or private law to some joint holdings they intend to make ‘public’ in this GNU way.

It sounds as if you are saying that the capital resource earned by industry should be distributed among those that produce the goods, and not accrued by those that initiate and develop the industry.

No, sorry, that is not what I am saying. It is not those that produce that must become the owners of physical sources, it is the those that consume that must become the owners of physical sources.

When users (consumers) pay a PRICE for some good or service, they are paying for the COSTS of production that the capital Owners incurred for that round of production, and those users usually also pay an amount above COSTS which is (in a simplified manner) generally calculated as PROFIT.

PROFIT is therefore the difference between Consumer_Price and Owner_Costs, and is a rough measure of incomplete monopoly. In other words, profit is an inverse measure of competition, and is ‘balanced’ or even eliminated when it becomes an investment for the User that just paid it.

I will quote myself to fix a typo and to begin an example as Michel suggested to try to prove that it is the Consumers and NOT the Workers that must be the Owners of physical sources for us to approach a perfected economy:

Owning expensive capital with a group of other users is valuable even when none of you can operate it because you can always hire that work done – and would treat those wages as a cost of operation, but could never pay profit unless you were to pay it to yourselves.

Let’s say a worker comes to your door asking to aerate your lawn. Aerators are generally too expensive to own for just one lawn, but you need the job done, so you agree to pay the PRICE of $30.

The PRICE includes the COSTS of:
Investment: If the Owner has not yet recovered the price he paid for the machine.
Maintenance: Wear, Oil, Fuel
Wages: Whatever the worker and owner negotiate.

The PRICE also includes PROFIT for the Owner that instantly increases the moment the capital has been “paid off”.

Now, if you and a bunch of your neighbors got together to buy your OWN aerator, you would still have all the same COSTS as mentioned above which could be covered by each of you renting the machine from the collective others, but PROFIT would have no meaning, as PRICE and COSTS would be identical. Furthermore, when the machine was finally “paid off”, the rental PRICE would fall even further, as that COST would be eliminated.

Tell me, does Open-Source eliminate the kinds of income based on ‘real’ scarcity? (as opposed to the artificial scarcity you mentioned above?)

The ‘real’ scarcity that will probably never be fully eliminated, even when all Sources are finally Free, is the FUTURE work that continues to be needed.

For instance, users of Free Software would pay workers to fix bugs or add features if we could only get them connected in such a manner – a sort of “promise to pay” pot that other users wanting the same changes could add to so developer would have incentive to work on stuff they may otherwise have no interest in.

Similarly, the group user/owners of the aerator would also need someone to operate and repair the machine if they couldn’t or didn’t want to do those jobs themselves.

Thank you both for your help.

Your peer,
Patrick Anderson

“The unskilled user may always hire a skilled worker and pay those wages as a cost”

That description ostensibly fits the traditional commercial process too. Employers generally categorize wages as a cost of production. So I think you need to nail down the actual target of your argument. It sounds as if you are saying that the capital resource earned by industry should be distributed among those that produce the goods, and not accrued by those that initiate and develop the industry. This is a Political argument of the very left of the Political spectrum. (my shade of politics BTW)

Although I sympathize with the sentiment behind the following statement: “the traditional concept of profit through unnecessary restriction no longer applies.” To say that it really no longer applies, invites argument. (although I would not personally concern myself with that argument)

I understand very well the central philosophy you espouse, and the economic principles of scarcity. Tell me, does Open-Source eliminate the kinds of income based on ‘real’ scarcity? (as opposed to the artificial scarcity you mentioned above?)

Your approach makes a lot of sense, and I indeed urge you to continue to explore this avenue, which is your unique contribution to the transition and the forms it can take. I think you have to continue to make an effort to communicate in the simplest possible way, and also work on the creation of at least a single example of concretion.

Michel

The unskilled user may always hire a skilled worker and pay those wages as a cost, but the traditional concept of profit through unnecessary restriction no longer applies.

The same is true for the physical world. Owning expensive capital with a group of other users is valuable even when none of you can operate it because you can always hire that work done – and would treat those wages as a cost of operation, but could never pay profit unless you were to pay it yourselves. This causes price to approach costs which is far less than the expense we currently pay (especially when we consider the lack of freedom those corporations impose upon us as an unneeded expense).

This applies to any industry. How much does it really COST (not the PRICE charged) to add another customer to a cell-phone network? What would be the result if the Users (consumers) of that network were the Owners of those physical sources in direct proportion to the amount they are willing to pay above costs?

But, since groups are not static, this ‘requirement’ would also need to be applied to every new user. Owners could choose to syndicate such an arrangement through a legally binding contract that they would impose upon themselves and upon all new users.

Does this make even a photon of sense, or should I just be quiet?

I think we should take open in the very broad sense: the availibility of the raw material for social cooperation to occur. To what the openness then refers depends on the specific context of an object-oriented social community. For programmers it is code, for scientists it is scientific articles. But the general public benefits indirectly when specialized communities can ameliorate the products and services in that way, and in between there are the professional amateurs, who make not make a full use of the benefits of openness, but a substantial use nevertheless.

Thank you for those definitions of Openness. The Socially-Open definition seems to go beyond the social context and deal with things like ‘underlying code’, which seems more like the Technologically-Open definition.

I think to a certain extent the concept of openness seems to have an element of ‘Political Correctness’ about it. ~ Why I say this is that, for instance the whole idea of ‘Open Source’ as a people’s phenomenon seems strange to me as most users of open-source software don’t interface with the code at all.

If you make the ‘filter’ for this type of discussion refer to what is of concern to ‘most people’ rather than an elite group like software developers, for instance, which would also be akin to the thinking of marketers or social demographers, then maybe this might be a useful filter.

Below, I’m pasting a definition on the various aspects of openness by the Open Knowledge Foundation. I think the key issue is this: if all the material is open and available to all, and infinitely copyable at marginal cost, then there is no scarcity of it, and it is hard to built a market-based business model on it, as pricing is based on the tension between supply and demand. Hence, an institution that has to operate in the market, will try to have a mixture of open and closed elements, the latter allowing it to sell the product in the marketplace. I’m not claiming that this is in itself always a bad thing, I would rather think that this has to be a transparent process and the both the communities and institutions involved have to have a literacy about their differential interests. But, if openness is really essential, and if there is a radical demand for it, then the best bet might be to built infrastructures that do not function directly in the marketplace. This is, I think, why most open communities, have nonprofit institutions in charge of their collective infrastructure. If we have to have proprietary platforms, then the issue is: what is the ethical and acceptable form of mixing openness/closeness.

I would be really very interested in your business model and your theoretical model around this, can you share this with us? Since we expect that most models will be hybrid models, this is precisely what we are looking for at the p2p foundation as well.

Here is a summary of what could be meant by openness:

“Legally Open

Knowledge is legally open if it is free of most of the standard legal restrictions and requirements. In particular it should be accessible without restriction, reproducible freely (at least for non-commercial purposes), and reusable – that is, freely incorporatable in derivative works. In short, it should fall within the bounds of one of the Creative Commons licenses.

Socially Open

Social openness consists of ensuring that a work is made available and not kept secret or mouldering on a CD at the back of the drawer. It means supporting sharing and reuse as well as collaborative working processes.

But most importantly it means an ‘open source’ approach to knowledge. That is, knowledge should be made available so that access is given to the raw, underlying data and not simply through a particular, usually limiting, interface (such as a human-only-usable web form).

This parallels the distinction with software programs, emphasized by the term open source, between access to the underlying source code and access simply to the compile version. Thus Open Knowledge in this sense can stand for access to the underlying ‘source’ rather than purely access to the ‘compiled’ end product. To illustrate consider the following examples.

For data in a database the ‘source’ form means the raw data and the ‘compiled’ form is any of the multitude of interfaces such as web query pages that can wrap that data. Providing access to the source data would be a major change – even open databases that are freely searchable rarely provide their data in source form – the only form in which it is any use to a computer.

Another example is provided by the common practice of providing a PDF version of a document rather than the original text file. This, perhaps intentionally, hinders access to the underlying text and inhibits activities such as annotation or indexing.

Technologically Open

Technological openness requires that knowledge is provided in a form and format that does not unnecessarily hinder access to humans or machines. This can be achieved by utilizing data formats and tools that are open – meaning that a full specification is publicly available and unencumbered by legal restraints, and that access and use of the formats will not require proprietary tools or products (for more information on ‘openness’ of formats see the Information Accessibility Initiative).

It also means providing the necessary documentation, structuring and presentation of data so as to ensure comprehensibility and usability. One should aim to achieve these ends not just for humans but also for computers – something that is increasingly essential in an information age.”