The internet and the globalization of the small

Excerpted from a talk by Natalia Fernández of

(we recommend reading the whole article)

“What has changed because of the emergence of the Internet and the logic of distributed production?”

Natalia Fernandez writes:

“In the first place, the structure of communications changes. We’re going from a decentralized world (the world of the telegraph and of nations) towards a distributed model of communication (the world of the Internet).

Without getting into detail, that new distributed structure makes scale independent from scope. A small Chinese enterprise, such as the one that created the vuvuzela, or that created the EGo, the standard for electronic cigars, can sell throughout the world. Of course, it won’t be able to meet all the demand, but hundreds of other small businesses will emerge that will meet it quickly.

So, at least in part, the opening of commercial barriers in the ’90s will backfire for neoliberalism’s corporate objectives. The result has been a constant increase in commerce based above all, in the emergence of new, smaller-scale, less capital-intensive, agents, at the periphery. It’s what is known as globalization of the small.

The direct consequence has been the greatest reduction of poverty in human history, but also a remarkable growth of inequality and a growing economic instability — why?

Capital, far from adapting to the reduction of scale, has continued increasing it, resorting to “financialization” and “securitization,” separating from the productive system, and regularly creating bubbles to put that surplus of capital in.

While commerce maintains constant growth, capital grows exponentially. We can see also how the peaks coincide with the bubbles.

From the point of view of the organization of production, what happens is that technological change is drastically reducing the efficient size of scale. But this causes a real problem for capital: the closer to individualized production we are, the less necessary it turns out to be. It begins to accumulate large funds of financial capital that can’t be directly integrated into production. Capital has fewer large projects to invest in, and starts to move more and more quickly, more sensitive to changes in opportunities, as we can see in history of international capital flows.

Its strategy of forcing scale to ensure rents, has had weighty consequences, such as the restriction on intellectual property, the unnecessary “redefinition” of the Internet to make sense of recentralizing infrastructure (Google, Facebook, etc.), and above all, it has been able to to multiply the pressure to capture the State.

That strategy can only lead to the simultaneous destruction of the market and the state, a phenomenon that we call “decomposition,” and which is parallel to the destruction of productive capacity brought about by crises and the wars that precede and accompany them.

And there’s still more.

The Internet isn’t just a communication phenomenon. With free software, whose development and spread are its product direct, a new mode of producing and distributing has appeared. Given the deficiencies of national accounting systems, we can only intuit the true impact that free software has had so far. We only know partial things, such as, for example, the value earned by countries in development through the incorporation of free software to their industries and administrations has exceeded all development aid, both public and private, sent throughout history from the central countries.

What is the production cycle of free software?

In the first place, capital, market and benefit will be completely redefined.

The center of the system is no longer the accumulation of capital, but of the “commons,” a form of capital: knowledge, universal and free access to for anyone.

What goes to market? Maintenance, customizations, private developments… and then they are set free, incorporated to the commons, and available to all.

The market of free software starts with that universal accessibility, which is to say, with the elimination of rents from intellectual property, from position, etc. The only extraordinary benefit that a developer of free software can have, which is minimal and extremely temporary, comes from having innovated and improved something. But it lasts a short time as rent. When you make something good and you release it, you’ll earn prestige, and you’ll get more orders… for a time. These are rents that extinguish themselves. As a medium, the free software market remunerates those who produce in it for the value of their work, with a little extra if they innovated enough to “make a name for themselves.”

The good news is, this cycle isn’t exclusive to free software.

First, there were other intangible goods based on knowledge, from music to novels to textbooks. But in the last three years, more and more projects that seek to build things have taken off.

Ultimately, the value of an object on the market today is mostly design, technology, engineering… all of which are also intangibles.

That’s why we no longer talk about the system of free software production, but of the P2P mode of production, and just as it serves to produce software, it serves to produce material objects and all kinds of services.

In the last three years, industrial manufacturing projects based on the possibilities of high productivity on a small scale from a technical knowledge commons have multiplied. That is: small scale of production, huge scope (because the commons is, by definition, universal).

The “Open Source Ecology” project alone is working on the design of 40 free basic industrial machines: from a wind generator to a tractor to a brick-making machine.

We think that these technologies, while still a bit green, can be a valid basis to confront the effects of the financial crisis in the traditional local productive community, that of the micro and small industrial enterprise, from neighborhood workshops to component factories.

And finally, let’s go back to the traditional communal system. Both the historical model and P2P are based in a different kind of property: the commons.

But, while in historical communities, the subjects of that property, the ones who could exploit and use it, were a concrete community of people physically united in a locality, but now:

* that possibility of use and exploitation is universal

* the work and communities who do so are not necessarily defined by their locale, in a territory, but rather on a network, as can be seen in any free software project or P2P industry

* and what each one does, what anyone provides, reverts directly to everyone through the new knowledge commons, which, by its own nature, is universal.”

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