The next long wave: what comes next after the current meltdown?

The following is a response to a contribution of Andreas Wittel on our p2p research list, an update of our previous comment on ‘peer money as solution for Sudden System Stop‘, and finally an expanded commentary on the following essay:

Badalian L., Krivorotov V., “Technological shift and the rise of a new finance system: the market-pendulum model”, European Journal of Economic and Social Systems, Vol. 21, No. 2, 2008, p. 231-264.

Here are my own thoughts, on how ‘p2p’ is connected with such a transition to a new ‘long wave of development’:

The authors continue the work on understanding ‘long waves’, pioneered by Kondratieff, continued by Schumpeter and recently summarized and updated by Carlota Perez.

The important thing is this, every long wave of appr. 50-60 years has been based on a combination of 1) a new form of energy (f.e. the UK domination = coal, the US domination = oil); 2) some radical technological innovations (no more than 3 according to the authors); 3) a new ‘hyperproductive’ way to ‘exploit the territory’; and 4) an appropriate financial system. An important insight in the latter, is that what enables growth in a first phase, becomes an unproductive burden in the second declining phase of the wave.

Each wave has been dominated by a particular great power as well. And each wave ends with a Systemic Sudden Stop (3S), like the one we are in now. In addition, since each transition needed a war, as this seems impossible and suicidal today, it will probably the global struggle against the climate change catastrophes that will mobilize the global energies.

So we have to think, what new combination is in the works now?

For energy, in the context of Peak Oil, it can only be renewable energies, like solar and wind etc… What kind of new technologies are available: essentially it will be based on the global internetworking, augmented by what it enables (bio, nano, etc..). That much is clear, but then the question is: how can we more efficiently ‘exploit the territory’.

What we will loose in terms of ‘gross power’ that we had with oil, will have to be compensated by IT-generated greater precision, in the application of that power, once we have renewables. In other words, the engine of growth will be the systematic integration of artificial and human intelligence in our productive activities.

They also say that a post-3S transition, the cost of the transition is to high for the market and requires state intervention.

So now my take on this. What global internetworking enables is open and global design communities. This means that information is no longer physically constrained, but can flow ‘anywhere’, and this is crucial, be used by local communities. Second, the same technological developments lead to more precision manufacturing, that can be done in a distributed fashion. This means again, that the cost of capital is dramatically declining and becomes affordable for the ‘periphery’. Again this empowers local communities. Finally on the energy level, distributed energy machinery can also empower the local communities. And finally there is the new financial system, and here is where the peer money movements come in, to create flows of financing right where they are needed, and not just in the unproductive casino capitalism that enriched the current oligarchy.

Each long wave is also marked by a changing of the guard in the kind of institutions and the kind of ruling elite. My expectation is that the current financial oligarchy, will be replaced by the netarchical capitalists, i.e. those that understand, enable, and ‘exploit’, the new open business models and participative modes of production.

Each wave was also based on more inclusion, for example the integration of labour in the Fordist system was much broader than in the 19th Smithian system, BUT, in the declining phase, the social contract breaks down and this is what Richard Wolff described as what happened under the neoliberal financial system.


– renewable distributed energy

– distributed manufacturing (linked to much more distributed ownership modes)

– an organic farming revolution based on high info input instead of high petrochemical input

– new stakeholder oriented global institutions

– a new elite of netarchical capitalists

– a new social contract based on broader inclusivity that will be beneficial to global open design communities

– a new financial system, based on a redesign of the monetary system, a diversity of localized and affinity-based community currencies, a new credit commons and hopefully: a basic income (nobody by the way is suggesting ‘tinkering’ on that level, it needs a radical reformation)

– a geographic shift to the periphery, i.e. East Asia as the newly dominant power of the next ascending wave

Many of the above things are strongly related to what we talk about under the name of ‘p2p’ or distribution. I don’t expect this to be dominant, but I expect that the new social contract will have to accept a major upgrade of inclusion to achieve its hyperproductive aims, while in a later stage, a phase transition may occur to a fuller p2p regime.

A crucial aspect is the combination of global open design and knowledge communities, to the more distributed modes of precision manufacturing, which because of their more distributed aspects (much lower capital requirements), are favourable to the self-aggregation of smaller businesses, which could be organized on a new basis (cooperatives, solidarity economics, etc…).

But can all this be tackled by ‘p2p alone’? Andreas Wittel doubts rightfully that this can be done.

I think it needs a combination of three movements:

– the specific p2p movement for open and free exchange of innovation (tackling artificial scarcity in innovation)

– the environmental movement, tackling the negative externalities creating biospheric destruction (i.e. fighting the pseudo-abundance on which the current system is based)

– the social justice movement (labour, agricultural, knowledge workers and precariat), fighting for inclusion and against the current oligarchic arrangements

It is the combination of these 3 social movements, and their mutual interpenetration and infusion, which can have the necessary force to obtain change and a new more favourable and inclusionary social contract, in combination with the efforts of the netarchical capitalists. This sector of capital is both friend and foe, depending on specific contexts, but I would suggest that such an alliance is crucial for success. They are going to be at the core of the next ‘accumulation engine’ (the concept used by the authors above to denote the full integrated system).

These 3 movements need each other, and need to be fused in one global effort. They can’t win without p2p, and ‘p2p’ can’t win without them.

None of the above is automatic, and the transition to a new ascending phase is complicated by the global energy and climate crisis, but it has a realistic chance of being achieved, which also depends on us, as the p2p meme is a crucial variable in the success of that transition.

2 Comments The next long wave: what comes next after the current meltdown?

  1. Pingback: P2P Foundation » Blog Archive » How parasitic investments lead to a contraction cycle

  2. Pingback: P2P Foundation » Blog Archive » Conditions for the next long wave

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