economics

One of the big, unanswered questions in our political economy today is “what constitutes value?”  Conventional economics sees value as arising from market exchange and expressed as prices. A very simple, crude definition of value.

But how, then, to account for the many kinds of value that are intangible, social or ecological in nature, and without prices – activities such as child-rearing and eldercare, ecological stewardship, online peer production, and commoning?  There is an urgent need to begin to make these forms of value explicitly visible in our political economy and culture.

Two new reports plunge into this complicated but essential topic.  The first one – discussed below -- is called “Value in the Commons Economy:  Developments in Open and Contributory Value Accounting,” The 49-page report by Michel Bauwens and Vasilis Niaros focuses on socially created value on digital networks. It was co-published yesterday by the Heinrich Boell Foundation and P2P Foundation. 

Another important report on how to reconceptualize value – an account of a three-day Commons Strategies Group workshop on this topic – will be released in a few days and presented here.

The P2P Foundation report declares that “society is shifting from a system based on value created in a market system (through labor and capital) to one which recognizes broader value streams,” such as the social and creative value generated by online communities.  The rise of these new types of value – i.e., use-value generated by commoners working outside of typical market structures – is forcing us to go beyond the simple equation of price = value.

Michel Bauwens and sociologist Adam Arvidsson call this the “value crisis” of our time.  Commons-based peer production on open platforms is enabling people to create new forms of value, such as open source software, wikis, sharing via social networks, and creative collaborations.  Yet paradoxically, only a small minority of players is able to capture and monetize this value.  Businesses like Facebook, Google and Twitter use their proprietary platforms to strictly control the terms of sharing; collect and sell massive amounts of personal data; and pay nothing to commoners who produced the value in the first place.

This is highly extractive, and not (re)generative.  So what can be done?  How could open platforms be transformed to bolster the commons and serve as a regenerative social force? 

The word “development” has long been associated with the Western project of promoting technological and economic “progress” for the world’s marginalized countries.  The thinking has been:  With enough support to build major infrastructure projects, expand private property rights, and build market regimes, the poor nations of Africa, Latin America and Asia can escape their poverty and become "modern" -- prosperous, happy consumers and entrepreneurs poised to enter a bright future driven by economic growth and technology.

That idea hasn’t worked out so well.

As climate change intensifies, the ecological implications of growth-based “development” are now alarming if not fatuous. The 2008 financial crisis exposed the sham of self-regulating “free markets” and the structural political corruption, consumer predation and wealth inequality that they tend to entail.  And culturally, people are starting to realize, even in poorer countries, that the satisfactions of mass consumerism are a mirage. A life defined by a dependency on global markets and emulation of western lifestyles is a pale substitute for a life embedded in native cultures, languages and social norms, and enlivened by working partnerships with nature and peers.

It is therefore exciting to learn that Agence Française de Développement (AFD) – the French development agency, based in Paris – is actively considering the commons as a “future cornerstone of development.”

A key voice for this shift in perspective at AFD is Chief Economist Gaël Giraud, who boldly acknowledges that “growth is no longer a panacea.”  He compares the current economic predicament to the plight of the Red Queen in Lewis Carroll’s Alice in Wonderland, who had to keep running faster and faster just to stay in the same place.  (For a short video interview with Giraud, in French, click here.  Here is an AFD webpage devoted to various commons issues.)

In a blog post outlining his views of the commons and development (and not necessarily reflecting those of AFD), Giraud cited the loss of biodiversity of species as a major reason for a strategic shift in “development” goals. “The last mass extinction phase [of five previous ones in the planet’s history] affected dinosaurs and 40% of animal species 65 million years ago,” writes Giraud. “At each of these phases, a substantial proportion of fauna was lost within a phenomenon of a massive decline of biodiversity.”

Yesterday evening, Thom Hartmann, the progressive talk show host, interviewed me on his "Conversations with Great Minds" national TV show.  The first 12-minute video segment can be seen here, and the second one here. I don't think the commons has ever had this much airtime on American (cable) television.

A big salute to Thom for hosting this kind of material on his show. He is a rare creature on American TV and radio -- an intelligent progressive willing to give airtime to ideas from outside the Washington, D.C. echo chamber. Since the retirement of Bill Moyers, there are very few American TV personalities who actually read history, understand how it informs contemporary politics, and give sympathetic exposure to movement struggles seeking social and economic transformation. 

Since I'm sharing links, let me also share the link to my 20-minute presentation yesterday at Ralph Nader's conference, "Breaking Through Power.org" conference, which is being held this week in Washington, D.C.  My talk, "Controlling What We Own -- Defending the Commons," can be seen here at the timemark 5:35:15.

Check out the other presentations on this eight-hour video from Real News Network -- some amazing segments by folks like John Bogle, William Lerach, Ellen Brown and others focused on corporate governance, power and financial abuses.

Want an intensive introduction to the emerging “ethical economy” led by some of the most active practitioners and experts around?  Consider attending an unusual two-week study program, “Transition to Co-operative Commonwealth:  Pathways to a New Political Economy.”  It will be held from September 11 to 23, in Monte Ginezzo, Tuscany, Italy. 

The course will be hosted by Synergia, an international network of academics, social activists, practitioners and policymakers engaged in building a new political economy that is sustainable, democratic and socially just.  The course will provide a critical overview of the diverse elements of the ethical economy and the mechanisms required for its realization. 

The course will consist of lectures, workshops and site visits to leading cooperatives and commons projects in Tuscany and Emilia Romagna, home to one of the most advanced co-operative economies in the world.

Among the topics to be covered:

• Co-operative capital and social finance; alternative currencies;

• Co-op and commons-based housing and land tenure; community land trusts;

• Renewable energy; community-owned energy systems;

• Local & sustainable food systems; community supported agriculture;

Michel Bauwens recently spoke at the Harvard Berkman Center to give his big-picture analysis of the economic and social transition now underway.  The hour-long video of his talk provides a clear explanation for why peer production is flourishing and out-competing conventional business models and markets.  It’s all part of an epochal shift in how value is created, argues Bauwens.

Citing major transitions of the past – from nomadic communities to clans; from clans to class-based, pre-capitalist societies; from pre-capitalism to capitalism – Bauwens said, “We’re in a period of history in which a marginal system of value is moving to the center of value-creation.” 

For those who don't have an hour to watch the video, below, a review of Michel's key points: 

Unlike traditional leftist visions of revolution, which require a social movement to seize state power and then install another system, the emerging world of peer production is based on another vision:  build an alternative economy outside the circuits of capitalism, or at least insulated from its exploitation, and then develop its own functionalities and moral authority. 

The point is not so much to displace or smash capitalism, he said, as to make the commons the new, more compelling “attractor” for activities that create value.  Rather than try to use private labor to produce value, which is then captured by privately owned corporations and sold in markets based on artificially created scarcity, the peer production economy proposes a new model:  abundance based on an ethic of sufficiency.

Instead of allocating surplus value through the market or hierarchical systems, the peer production economy creates value through open, voluntary contributions and “massive mutual coordination,” said Bauwens.  The goal is to create commons through social systems and the sharing of resources.

On June 21, I gave a presentation to a number of staffers and others at the Agence Française de Développement in Paris outlining my vision of the commons as an alternative vision of "development."  The talk was entitled "Beyond Development:  The Commons as a New/Old Paradigm of Human Flourishing."  Here are my prepared remarks:

I am grateful to be back in your lovely city, and I am grateful for your invitation to speak today about the commons as a new vision of “development.”  As the planet reels from the slow-motion catastrophe of climate change, we are seeing the distinct limits of the prevailing paradigms of economic thought, governance, law and politics.  While collapse and catastrophe have their own lurid attraction to many, the human species – and our governments – have a duty to seriously entertain the questions:  What new structures and logics will serve us better?  How can we better meet basic human needs – not just materially, but socially and spiritually?  And can we move beyond rhetoric and general abstractions to practical, concrete actions?

After studying the commons for nearly twenty years as an independent scholar and activist, I have come to the conclusion that the commons hold great promise in answering these questions.  But it is not a ready-made “solution” so much as a general paradigm and organizing perspective – embodied, fortunately, in thousands of instructive examples.  The commons is a lens that helps us understand what it means to be a human being in meaningful relation to other people and to the Earth.  This then becomes the standard by which we try to design our social institutions.

Talking about the commons forces us to grapple with the checkered history of “development” policy and what it reveals about global capitalism and poorer, marginalized countries.  We have long known that development objectives tend to reflect the political priorities of rich, industrialized western nations, particularly their interests in economic growth and private capital accumulation. 

Every so often I am invited to write a piece that in effect answers the question, “Why the commons?”  I invariably find new answers to that question each time that I re-engage with it.  My latest attempt is an essay, “Commoning as a Transformative Social Paradigm,” which I wrote for the Next System Project as part of its series of proposals for systemic alternatives. 

For those of you have been following the commons for a while, my essay will have a lot of familiar material.  But I also came to some new realizations about language and the commons, and why the special discourse about commoning and enclosures is so important. I won’t reproduce the entire essay – you can find it here as a pdf download or as a webpage at the Next System Project – but below I excerpt the opening paragraphs; the section on the discourse of the commons; and the conclusion.

Introduction

In facing up to the many profound crises of our time, we face a conundrum that has no easy resolution: how are we to imagine and build a radically different system while living within the constraints of an incumbent system that aggressively resists transformational change? Our challenge is not just articulating attractive alternatives, but identifying credible strategies for actualizing them.

I believe the commons—at once a paradigm, a discourse, an ethic, and a set of social practices—holds great promise in transcending this conundrum. More than a political philosophy or policy agenda, the commons is an active, living process. It is less a noun than a verb because it is primarily about the social practices of commoning—acts of mutual support, conflict, negotiation, communication and experimentation that are needed to create systems to manage shared resources. This process blends production (self provisioning), governance, culture, and personal interests into one integrated system.

This essay provides a brisk overview of the commons, commoning, and their great potential in helping build a new society. I will explain the theory of change that animates many commoners, especially as they attempt to tame capitalist markets, become stewards of natural systems, and mutualize the benefits of shared resources. The following pages describe a commons-based critique of the neoliberal economy and polity; a vision of how the commons can bring about a more ecologically sustainable, humane society; the major economic and political changes that commoners seek; and the principal means for pursuing them.

Finally, I will look speculatively at some implications of a commons-centric society for the market/state alliance that now constitutes “the system.” How would a world of commons provisioning and governance change the polity? How could it address the interconnected pathologies of relentless economic growth, concentrated corporate power, consumerism, unsustainable debt, and cascading ecological destruction?

....

For the Uncommons conference in Berlin on October 23, Michel Bauwens recently distilled his years of thinking about digital collaboration into a short text, “Ten Commandments of Peer Production and Commons Economics.”  The document describes the key pillars of “a mode of production and value creation that is free, fair and sustainable.”  I am reproducing his entire text here because I think it is so succinct and seminal.

As we have tried to show elsewhere, the emergence of Commons-Oriented Peer Production has generated the emergence of a new logic of collaboration between open productive communities who created shared resources (commons) through contributions, and those market-oriented entities that created added value on top or along these shared commons.

This article addresses the emerging practices that should inspire these entities of the 'ethical' economy. The main aim is to create new forms that go beyond the traditional corporate form and its extractive profit-maximizing practices of value extraction. Instead of extractive forms of capital, we need generative forms, that co-create value with and for the commoners.

I am using the form of commandments to explain the new practices. All of them have already emerged in various forms, but need to be generalized and integrated.

What the world and humanity, and all those beings that are affected by our activities require is a mode of production, and relations of production, that are “free, fair and sustainable” at the same time.

OPEN AND FREE

1. Thou shall practice Open Business Models based on shared knowledge

Closed business models are based on artificial scarcity. Though knowledge is a non- or anti-rival good that gains in use value the more it is shared, and though it can be shared easily and at very low marginal cost when it is in digital form, many extractive firms still use artificial scarcity to extract rents from the creation or use of digitized knowledge. Through legal repression or technological sabotage, naturally shareable goods are made artificially scarce, so that extra profits can be generated. This is particularly galling in the context of life-saving or planet-regenerating technological knowledge. The first commandment is therefore the ethical commandment of sharing what can be shared, and only creating market value from resources that are scarce and create added value on top or along these commons. Open business models are market strategies that are based on the recognition of natural abundance and the refusal to generate income and profits by making them artificially scarce.

Thou shall find more information on this here at http://p2pfoundation.net/Category:Business_Models

FAIR

2. Thou shall practice Open Cooperativism

Many new more ethical and generative forms are being created, that have a higher level of harmony with the contributory commons. The key here is to choose post-corporate forms that are able to generate livelihoods for the contributing commoners.

Open cooperatives in particular would be cooperatives that share the following characteristics:

1) they are mission-oriented and have a social goal that is related to the creation of shared resources

2) they are multi-stakeholder governed, and include all those that are affected by or contributing to the particular activity

One of the great economists of the twentieth century had the misfortune of publishing his magnum opus, The Great Transformation, in 1944, months before the inauguration of a new era of postwar economic growth and consumer culture. Few people in the 1940s or 1950s wanted to hear piercing criticisms of “free markets,” let alone consider the devastating impacts that markets tend to have on social solidarity and the foundational institutions of civil society. And so for decades Polanyi remained something of a curiosity, not least because he was an unconventional academic with a keen interest in the historical and anthropological dimensions of economics. 

As the neoliberal revolution instigated by Reagan and Thatcher in the 1980 has spread, however, Polanyi has been rediscovered.  His great book – now republished with a foreword by Joseph Stiglitz – has attracted a new generation of readers. 

But how to make sense of Polanyi’s work with all that has happened in the past 70 years?  Why does he still speak so eloquently to our contemporary problems? For answers, we can be grateful that we have The Power of Market Fundamentalism:  Karl Polanyi’s Critique, written by Fred Block and Margaret R. Somers, and published last year. The book is a first-rate reinterpretation of Polanyi’s work, giving it a rich context and commentary.  Polanyi focused on the deep fallacies of economistic thinking and its failures to understand society and people as they really are. What could be more timely?

The cult of free market fundamentalism has become so normative in our times, and economics as a discipline so hidebound and insular, that reading Polanyi today is akin to walking into a stiff gust of fresh air.  We can suddenly see clear, sweeping vistas of social reality.  Instead of the mandarin, quantitative and faux-scientific presumptions of standard economics – an orthodoxy of complex illusions about “autonomous” markets – Polanyi explains how markets are in fact embedded in a complex web of social, cultural and historical realities.

So what might a commons-based economy actually look like in its broadest dimensions, and how might we achieve it?  My colleague Michel Bauwens of the P2P Foundation offers a remarkably thoughtful and detailed explanation in a just-released YouTube talk, produced by FutureSharp. It’s not really a video – just Michel’s voiceover and a simple schematic chart – but the 20-minute talk does a great job of sketching the big-picture strategies that must be pursued if we are going to invent a new type of post-capitalist economy.

Michel focuses on the importance of three specific realms that are crucial to this new vision – ecological sustainability, open knowledge and social solidarity. Each is critical as a field of action for overturning the existing logic of market capitalism. 

Fortunately, there are many promising developments in each of these realms. Many parts of the environmental movement seek to go beyond the standard “market-oriented solutions.” There is a growing body of open source-inspired projects for software code, information, design and physical production, which is now spawning new types of global sharing of information with distributed local production. And there are many advocates and initiatives for social justice and fairness in the economy, such as cooperatives and the solidarity economy movement.

The problem, says Bauwens, is that these movements do not generally connect with each other or coordinate internationally. He therefore sees the need for “meta-economic networks” to bridge these fields of action. So, for example, we need “open cooperativism” enterprises to bridge open knowledge systems and cooperatives, so that open network (or licensed) systems are not simply dominated by large corporations in the way that Google, Uber and Airbnb have done. We also need to develop an “open source circular economy” to bridge the worlds of eco-sustainability and open knowledge.  We will never address major environmental problems if the technological and product solutions are based on proprietary knowledge; open circulation of knowledge can change that.