It is important to understand that while the P2P approach is opposed to the infinite growth mechanism that is capitalism, and to its exclusion of the majority of the people of the ownership of their means of production, it is in no way against markets as such. This is both because people need the freedom to engage in the kind of exchanges and transactions of their choice, and because markets can be heteregenous markets that are very egalitarian in nature. Especially, if we move to new forms of peer property, i.e. distributed stakeholder ownership models, which transcend the present separation between value creators (workers and peers and enterpreneurs) and ownership.

Below, we start with the key argument. Capitalism is, and has always been, an anti-market. This point is made by Manuel De Landa, based on the research of Fernand Braudel. Then we will review some defenses of non-capitalist markets that have free dynamics that are not opposed to p2p dynamics, by Dmytri Kleiner. In a follow-up, we will discuss transition proposals by Kevin Carson.

1. Thesis 1: Capitalism as an Anti-Market

Manuel De Landa:

“Capitalism was, from its beginnings in the Italy of the thirteenth century, always monopolistic and oligopolistic. That is to say, the power of capitalism has always been associated with large enterprises, large that is, relative to the size of the markets where they operate.

Also, it has always been associated with the ability to plan economic strategies and to control market dynamics, and therefore, with a certain degree of centralization and hierarchy. Within the limits of this presentation, I will not be able to review the historical evidence that supports this extremely important hypothesis, but allow me at least to extract some of the consequences that would follow if it turns out to be true.

First of all, if capitalism has always relied on non-competitive practices, if the prices for its commodities have never been objectively set by demand/supply dynamics, but imposed from above by powerful economic decision-makers, then capitalism and the market have always been different entities. To use a term introduced by Braudel, capitalism has always been an “antimarket”. This, of course, would seem to go against the very meaning of the word “capitalism”, regardless of whether the word is used by Karl Marx or Ronald Reagan. For both nineteenth century radicals and twentieth century conservatives, capitalism is identified with an economy driven by market forces, whether one finds this desirable or not. Today, for example, one speaks of the former Soviet Union’s “transition to a market economy”, even though what was really supposed to happen was a transition to an antimarket: to large scale enterprises, with several layers of managerial strata, in which prices are set not taken. This conceptual confusion is so entrenched that I believe the only solution is to abandon the term “capitalism” completely, and to begin speaking of markets and antimarkets and their dynamics.

This would have the added advantage that it would allow us to get rid of historical theories framed in terms of stages of progress, and to recognize the fact that antimarkets could have arisen anywhere, not just Europe, the moment the flows of goods through markets reach a certain critical level of intensity, so that organizations bent on manipulating these flows can emerge. Hence, the birth of antimarkets in Europe has absolutely nothing to do with a peculiarly European trait, such as rationality or a religious ethic of thrift. As is well known today, Europe borrowed most of its economic and accounting techniques, those techniques that are supposed to distinguish her as uniquely rational, from Islam. [7]

Many of the technological inventions that allowed her economy to take-off came from China. What needs explaining is not that antimarkets were born in Europe, but that they did not emerge in the economies of China or Islam, even though the volume of trade there was intense enough. Several historians explain this situation by invoking the repressive power of their respective states, which made large scale accumulation of capital impossible.

Finally, and before we take a look at what a synthetic, bottom-up approach to the study of economic dynamics would be like, let me meet a possible objection to these remarks: the idea that “real” capitalism did not emerge till the nineteenth century industrial revolution, and hence that it could not have arisen anywhere else where these specific conditions did not exist. To criticize this position, Fernand Braudel has also shown that the idea that capitalism goes through stages, first commercial, then industrial and finally financial, is not supported by the available historical evidence. Venice in the fourteenth century and Amsterdam in the seventeenth, to cite only two examples, already show the coexistance of the three modes of capital in interaction. Moreover, other historians have recently shown that that specific form of industrial production which we tend to identify as “truly capitalist”, that is, assembly-line mass production, was not born in economic organizations, but in military ones, beginning in France in the eighteenth century, and then in the United States in the nineteenth. It was military arsenals and armories that gave birth to these particularly oppressive control techniques of the production process, at least a hundred years before Henry Ford and his Model-T cars.

This largely ignored military component of large scale enterprises is, I believe, another good reason to replace the term “capitalism” with a neologism like “the antimarket”, since we can simply build this military component right into our definition of the term.”

Thesis 2: Markets can be Egalitarian Meshworks with P2P Dynamics

Manuel De Landa:

“There are, however, other structure-generating processes which result in decentralized assemblages of heterogeneous components. Unlike a species, an ecosystem is not controlled by a genetic program: it integrates a variety of animals and plants in a food web, interlocking them together into what has been called a “meshwork structure”. The dynamics of such meshworks are currently under intense investigation and something like their abstract diagram is beginning to emerge.

From this research, it is becoming increasingly clear that small markets, that is, local markets without too many middlemen, embody this diagram: they allow the assemblage of human beings by interlocking complementary demands. These markets are indeed, self-organized decentralized structures: they arise spontaneously without the need for central planning. As dynamic entities they have absolutely nothing to do with an “invisible hand”, since models based on Adam Smith’s concept operate in a frictionless environment in which agents have perfect rationality and all information flows freely. Yet, by eliminating nonlinearities, these models preclude the spontaneous emergence of order, which depends crucially on friction: delays, bottlenecks, imperfect decision-making and so on.

The concept of a meshwork can be applied not only to the area of exchange, but also to that of industrial production. Jane Jacobs has created a theory of the dynamics of networks of small producers meshed together by their interdependent functions, and has collected some historical evidence to support her claims. The basic idea is that certain relatively backward cities in the past, Venice when it was still subordinated to Byzantium, or the network New York-Boston-Philadelphia when still a supply zone for the British empire, engage in what she calls, import-substitution dynamics. Because of their subordinated position, they must import most manufactured products, and export raw materials. Yet, meshworks of small producers within the city, by interlocking their skills can begin to replace those imports with local production, which can then be exchanged with other backward cities. In the process, new skills and new knowledge is generated, new products begin to be imported, which in turn, become the raw materials for a new round of import-substitution. Nonlinear computer simulations have been created of this process, and they confirm Jacobs’ intuition: a growing meshwork of skills is a necessary condition for urban morphodynamics. The meshwork as a whole is decentralized, and it does not grow by planning, but by a kind of creative drift.

Of course, this dichotomy between command hierarchies and meshworks should not be taken too rigidly: in reality, once a market grows beyond a certain size, it spontaneously generates a hierarchy of exchange, with prestige goods at the top and elementary goods, like food, at the bottom. Command structures, in turn, generate meshworks, as when hierarchical organizations created the automobile and then a meshwork of services (repair shops, gas stations, motels and so on), grew around it.

More importantly, one should not romantically identify meshworks with that which is “desirable” or “revolutionary”, since there are situations when they increase the power of hierarchies. For instance, oligopolistic competition between large firms is sometimes kept away from price wars by the system of interlocking directorates, in which representatives of large banks or insurance companies sit in the boards of directors of these oligopolies. In this case, a meshwork of hierarchies is almost equivalent to a monopoly.

And yet, however complex the interaction between hierarchies and meshworks, the distinction is real: the former create structures out of elements sorted out into homogenous ranks, the latter articulates heterogeneous elements as such, without homogenization. A bottom-up approach to economic modeling should represent institutions as varying mixtures of command and market components, perhaps in the form of combinations of negative feedback loops, which are homogenizing, and positive feedback, which generates heterogeneity.”

Thesis 3: There is a proper place for markets in a p2p transition strategy

Dmytri Kleiner (p2p research list, June 2009) on a A Proper Place for Markets:

“I believe that we must use money and markets in building the new society in the shell of the old, I do not however hold them as an ideal.

I fully believe that specialization of labour implies exchange, however exchange does not need to be money-denominated itemizedi, transactions, but can be significantly more fuzzy.

Until Capitalist social relations where imposed on society, money and markets functioned quite differently than they do today. Actual specie was rarely used in “market” transactions, even though money has existed as long as writing, it’s use was mostly limited to paying tribute and for prestige (usually imported) goods. Most other goods where either traded on account or ad-hoc, this is certainly exchange and certainly reciprocial, but the valuation was not done on each item and not denomonated in money, but rather value was attributed to the relationship, not the transaction or the item. Markets formed on periphery of communities, not at their core, to dispose of surplus.

The more distant the relationship the more formal the accounting of the transaction, ad-hoc for close relations, on account for more distant relations, and actual negotiated trade of specie or good for other goods only when there is no relationship, whith distant trading partners or the State.

It is neither neutral or natural to have markets central to communities, to have all sharing transformed into itemized transaction, but rather these social relations where imposed as a prerequisite of Capitalism, and are a symptom of the degree to which Captalism has destroyed human community, now limited only to the “Nuclear” family, and even this paltry and normalized vestige of human community is breaking down.

The uquiqity of money and markets is very much a feature of capitalism that was, like the rest of system, systimaticaly and forcefully imposed.

I agree with Kevin that Markets do not cause exploitation, but feel that the degree to which they permeate communities is a symptom of exploitation, and thus money and markets may, once again, play a vastly diminished role in the new society, once broken out of the shell of the old.”