The three forms of P2P based economics (Response to Adam Arvidsson, 1)

First part of a commentary on Adam’s essay, from which we published three excerpts earlier.

Here a typology of 3 forms of economic activity arising out of the emergence of peer production: the sharing model, the commons model, the co-creation/crowdsourcing model.


One, the sharing economy, which is primarily about sharing one’s creative expression, not geared to the production of common value directly. Such individuals or groups generally produce for their own use value and enjoyment, for the alternative recognition systems that you mention (knowledge, relationship, reputational value). Expected monetary returns are marginal to the main motivation. In this scenario, I believe that the individuals have weak links to each other, and they are happy to accept that the platforms that enable such sharing are created by others, presently by the Web 2.0 proprietary platforms. These in turn, use the aggregated attention to fund and profit from these platforms. In my opinion, it is governed by a social contract which says, from the point of view of the users: it is fine that you provide such a platform, and that you profit from it, provided our freedom to share is respected as well. Such netarchical platforms are then driven to the contradictory positioning of having to stimulate community and freedom (let’s call it the dolphin type of behavior, based on the notion of the abundance of sharing), with the fight for marketshare with other attention aggregators (let’s call it the shark type of behavior). The tendency to protect the turf through closure, as against the total freedom of movement of the users, has to be kept in balance with the kind of freedom demanded by the users, who could move away to another platform.

Two, the commons economy. Here there is a much more conscious collective construction of common value, think of Linux or Wikipedia. Such construction is only possible by forging stronger links, driven for example by the need for consensus on Wikipedia pages. Such more strongly linked communities often have their own infrastructure. Nevertheless, such communities, and the individuals involved, also tend to appreciate, under certain conditions, the involvement of commercial entities, which can strengthen the project. Such companies create derivate business strategies, based on creating relative scarcities around the common pool, in return for some kind of support for the common efforts. This is in my view the underlying social contract of this second form, i.e. the need for the profiting parties to create some kind of return flow to the commons and their communities.

Third, the crowdsourcing economy (more generally, the co-creation economy whereby for-profit entities integrate the demand and opportunity participation in their own business models and value chains). Given that both the sharing and commons oriented value creating models show that innovation is becoming social, it is normal that existing institutions, in particular the for-profit business companies, seek to integrate such social innovation in their own value chains.

What does it mean that innovation is becoming social? It means that innovation is less and less an internal affair, paid for by corporate funds and their R & D departments. It means that it is more and more an emerging quality of the networks itself, arising from the multitude of interactions within and between individuals and communities. It means that it can arise without the intervention of capital or the state, or for that matter, academia. It means, amongst other things, that the capital needed for starting an internet company has decreased by 80% in 8 years. The role of capital therefore shift to being an a priori enabler of such social innovation, such is the role and strategy of crowdsourcing, and of a posteriori captation of value, as is the case with the sharing and the commons models. Dare we say that capital is more parasitical in such context. To return to the crowdsourcing model, this is the most direct model of trying to integrate these innovation processes right in the value chain of the corporations, but it is also the one were the underlying social contract is the shakiest, because the ‘exploitation’ is the most visible. It is in this context that the value creators, the participating public, most clearly sees that the value they are creating is being used with the most little return.

We must also note that monetary value that is being realized by the capital players, is – in many if not most of the cases, not of the same order as the value created by the social innovation processes. The user-producers-participants are creating direct use value, videos in YouTube, knowledge and software in the case of commons-oriented projects. This use value is put in common pool, freely usable, and therefore, does not consist of scarce products for which pricing can be demanded. The sharing platforms live from selling the derivative attention created, not the use value itself. In the commons model, the abundant commons can also not be directly marketed, without the creation of additional ‘scarcities’. Finally, as Adam Arvidsson shows, even in crowdsourcing, the value may often not be in the product design themselves, but in other forms of value, such as branding, etc…

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