What would a commons-centric society or civilization look like ? (Ethical Economy + Partner State + Commons)

Adding the commons institutions to the mix: Transforming societies from a national bi-institutional format (market+state) to a cosmo-local tri-institutional format (market-state + commons).

This article, a adaptation from an earlier article written in 2014 (see at bottom for the source) has two parts. 

In the first part, I analyze the ‘value crisis’ that results from the emergence of digital networks that get most of their ‘use value’ from billions of contributions, yet can only marginally generate income to get paid for their labor. I then outline three different models that are competing for dominance in the current form of society. I describe the shift towards a ‘contributory’ value regime, that may replace the ‘commodity-based’ value regime that was instituted in the West only fully in the 19th century. Although the article was written in 2014, it has not lost its pertinence, and many new authors, such as Yanis Varoufakis, have now come to many similar conclusions. Just bear in mind that the political examples date from that period.

However, I hope you also get to read the second part, which is a list of characteristics, of how the present market and state institutions change, when commons-based institutions are added to the list. They are a list of bullet points, but I hope you will let them sink in with some extra attention. So in short, this article gives you an idea of how the institutions of a society may look, once the institutions and the practices of the commons are taken seriously.

You will notice the shift from nation-state realities, to cosmo-local ‘planetary sapience’, as in a context of global overshoot, mere local, bioregional or national commons are not enough, they need to be strengthened at a translocal scale. Indeed, change at the national level is handicapped by the enormous power of transnational finance, which is no longer compensated sufficiently by nation-state power and its capacity for internal reform. We need to construct trans-local commons-based institutions that can project social power at planetary scale.

I am writing this as I’m preparing to attend the Chiang Mai Archipelago, a confederation of pop-up villages and academies, that will take place in October and November in Chiang Mai, Northern Thailand, the global capital of the world’s 34 million digital nomads and the several million of them that are engaged in the Web3 economy. The last of such events I attended, the Edge City Healdsburg event, saw one thousand people attending 17 events per day for a whole month. In Chiang Mai, we will have 6 of them concurrently. This gives an indication of the construction of a new trans-local culture, and the global construction of a new culture of collaboration at planetary scale. 

As I have argued before, cosmo-localism needs to be fully local and fully planetary at the same time, and also both fully differentialist, allowing local autonomy and differentiation, and fully universalist, in its capacity for planetary care. This transformation requires a new institutional set-up, which is what I attempt to describe in the following article.

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Part I: The Problematic: the value crisis

In the 19th century, the counter-hegemonic forces of labor focused on the democratization of the state as well as focusing on the redistribution of the surplus value created by labor. Both tasks are by no means obsolete given the evolution towards market state models which have hollowed out popular democracy, as well as the increased role of debt in human exploitation. However, what is now needed in addition, for and by 21st century social movements, is the democratization of the means of monetization. In a contributive economy, use value becomes key, and undermines mechanisms based on labor value alone; value must therefore become pluralistic and diverse, and so must monetary means; while undoubtedly, demonetization will be a good thing in many sectors under a regime of civic domination, we will also need new forms of monetization, and restore the feedback loop between value creation and value capture. As we will argue, the current value regime, which we call ‘cognitive capitalism under the emergence of netarchical capitalism’ , is unable to redistribute value in a fair way, and is creating not just a crisis of social reproduction for working people, but also a crisis of accumulation of capital. In our article, value and money regimes are placed in the context of the evolution of the overall political economy toward an increasing importance of models based on peer production. We will look at what kind of social system and policy transition that can solve this crisis of value.

Introduction

We believe there are three competing value models competing for dominance within the present political economy. One form is still dominant, but rapidly declining in importance; a second form is reaching dominance, but carries within itself the seeds of its own destruction; a third is emerging, but needs vital new policies in order to become dominant. Each model is associated with specific forms of currency dominance.

The first form is a classic form of cognitive capitalism, based on a rentier capitalism that extracts rent from Intellectual Property, and in which financial capital dominates. A good description of this form is McKenzie Wark’s Hacker Manifesto, in which he describes the logic of vectoral capitalism, where the ‘vectors’ of communication are in the hands of mass media. This first form of cognitive capitalism was dominant in the first era of computing, where the networks were exclusively in the hands of multinational companies and centralized public channels. The second era of massively networked computing, born with the internet, has undermined the control of the vectoral class, and created a new class of controllers, that of netarchical capital, the type of capital investment that controls proprietary social media platforms, but that enables direct peer to peer communication between individuals.

The second form is therefore that of netarchical capitalism, where capital no longer controls the direct production of information and communication, but extracts value through its new role as platform intermediary. This model relies much more marginally on IP protection, but rather allows p2p communication but controls its possible monetization through the role and the ownership of the platforms for such communication. Typically, as in proprietary social media such as Facebook or Google, the front end is peer to peer, i.e. it allows p2p sociality, but the back end is controlled, the design is in the hands of the owners, as are the private data of the users, and it is the attention of the user base that is marketed through advertising. The financialization of cooperation is still the name of the game. This form is a hybrid form however, because it also allows the further growth of p2p sociality in which media exchange and production is largely available to an ever large user base.

This form thus co-exists with multiple forms of grassroots p2p production and exchange, and sees for example the emergence of more monetary diversity, in the form of more localized complementary or community-driven currencies which act as, and of a global reserve crypto-currency like Bitcoin, a shadow currency that is useful as a ‘civic’ post-Westphalian currency but at the same time exhibits the features of financial capitalism in an exacerbated fashion. Cognitive capitalism suffers from a severe ‘value crisis’, in which the logic of use value strongly emerges and grows exponentially, but in a demonetized form. The remaining monetized value rests on speculative valuation of cooperative value creation by financial markets.

The third is the hypothetical form we believe we may successfully transition to, if we succeed in rebuilding transformative social movements, and hence succeed also in transforming the state so that it can act as a Partner State which facilitates the creation of new civic infrastructures. This change is necessary because the contradiction between the emergent modes of peer production are incompatible with the continued existence of the present relations of production. In this hypothetical phase of ‘mature peer production’, the ‘crisis of value’ affecting cognitive capitalism has been solved, and a new eco-system of social currencies has emerged, along with new forms for redistribution of value.

Detailing the Second Model: The Mixed Model of Neo-feudal Cognitive Capitalism

The period since the 1990s, when civic internetworks became increasingly available to the wider population, and commons-based peer production, and other forms of networked value creation became possible, saw the birth of a mixed regime.

Through the different forms of peer production and networked value creation, use value is increasingly created independently of the private industrial and financial system, and takes place through the civic contributory form, where immaterial use value is deposited in common pools of knowledge, code and design.

In ‘pure’ peer production, which we can call a form of ‘aggregated distribution’ of labor, contributors, voluntary or paid, contribute to a common pool where the immaterial value is deposited; for-benefit associations, such as the FLOSS Foundations, enable the continued cooperation to occur; and entrepreneurial coalitions of mostly for-profit capitalist enterprise, capture the added value in the marketplace. In this model, though there is continued creation of use value in the commons, and thus, ‘an accumulation of the commons‘ based on open input, participatory processes of production, and commons-oriented output which is available to all users; capital accumulation continues through the form of labor and capital in the entrepreneurial coalitions. But an increasing amount of voluntary labor is extracted in this process. In the sharing form of networked value, characterized by social media/networking taking place over proprietary platforms, the use value is created by the social media users, but their attention is what creates a marketplace where that use value becomes extracted exchange value. In the realm of exchange value, this new form of ‘netarchical capitalism’ (the hierarchies of the network) may be interpreted as hyper-exploitation, since the use value creators go totally unrewarded in terms of exchange value, which is solely realized by the proprietary platforms. Finally, in the form of crowdsourced marketplaces, what we call ‘disaggregated distribution’ because the workers are isolated freelancers competing without collective shared IP, capital abandons the labor form and externalizes risk on the freelancers. According to preliminary research by ‘digital labor’ researcher Trebor Scholz, communicated orally, the average hourly income does not exceed 2 dollars, which is way below the U.S. Minimum wage. A typical example is the skills marketplace TaskRabbitt, where the workers cannot communicate with each other, but clients can.

Under the regime of cognitive capitalism, use value creation expands exponentially, but exchange value only rises linearly, and is nearly exclusively realized by capital, giving rise to forms of hyper-exploitation. We would argue that it creates a form of hyper-neoliberalism. While in classic neoliberalism, labor income stagnates, in hyper-neoliberalism, society is deproletarianized, i.e. waged labor is increasingly replaced by isolated and mostly precarious freelancers ; more use value escapes the labor form altogether.

Under the mixed regime of cognitive capitalism in its netarchical form , networked value production grows, and has many emancipatory effects in the social field of use value creation, but this is in contradiction with the field of exchange value realization, where hyper-exploitation occurs. This is what we mean when we say that there is an increased contradiction between the proto-mode of production that is peer production, and associated forms of networked value creation; and the relations of production, which remain under the domination of financial capital.

In this new hybrid form, a sector of capital, netarchical capitalism, has liberated itself to some significant degree of the need for proprietary forms of knowledge, but it has actually increased the level of surplus value extraction. At the same time, use value escapes more and more its dependency on capital. This form of hyper-neoliberalism creates a crisis of value. First, the part of exchange-value mediated labor, diminishes compared to the role of direct use value creation, making capital increasingly superfluous and parasitical; second, the forms of value creation explode, but the continued reliance on monetized exchange value does not allow for the realization of that value by the use value producers; profits in the industrial economy, diminish as well, making the financial sector and its reliance on IP rent, the increasingly dominant power; at the same time, the power of IP rent extraction is undermined by direct use value creation. In any case, all these trends create a crisis for the accumulation of capital; the feedback loop between use value creation, and the exchange-value capture, ideally redistributed either as wages or through social payments, is broken; over-reliance on debt renders massive lending moot as a solution. Capital becomes more reliant on the externalities of social cooperation, yet fails to reward it. Financial capitalism realizes the value of social cooperation through speculative mechanisms which increase the amount of fictitious capital in the system (the fictitious capital is actually the unrealized use value that is no longer rewarded because of the value crisis). These correlated issues are examined in depth by Adam Arvidsson and Nicolai Peitersen in their book on the Ethical Economy.

We could call this value regime neo-feudal, because it relies increasingly on unpaid ‘corvee’ and creates widespread debt peonage. Finally, ownership is replaced by access, diminishing the sovereignty that comes with property, and creating dependencies through the one-sided licensing agreements in the digital sphere.

However, this regime is also clearly a mixed regime, which sees the birth of peer production modalities in all spheres of life, including that of currency creation, or in other words, the ‘peer production of money’. This phase of the ‘crisis of value’ is characterized by an increase in monetary diversity.

On the one hand, local and other communities that are affected by global imbalance and the extraction of value from their communities, attempt to create new type of defensive local currencies that protect the local flow of value. These complementary currencies come in different forms and can sometimes be quite successful, but are not able to play the role of global reserve currency or counter-power against a global deregulated financial system.

Complementary currencies such as LETS or Timebanks exponentially increase their local presence but remain a small part of the financial system as a whole. At the same time, more ambitious regional currencies are created, such as the Regiogeld in Germany, and business to business currencies, modeled after the Swiss WIR. Such initiatives are often faced with hostile public authorities, most of the time are unsupported by neutral public bodies which tolerate their existence, but sometimes can count on sympathetic local authorities. Exceptionally, in some countries, like Brazil, they are enabled and protected through national policy and even the central bank.

This period also sees the emergence of the global reserve currency like Bitcoin, which frankly aims to create a global counter-power both the classic global financial system and state-based currencies. Bitcoin is extremely important as a signpost since it is the first global ‘post-Westphalian’ currency, based on ‘social sovereignty’, and it shows that alternative currencies can scale and can exist as a workable alternative. At the same time, the anarcho-capitalist design of the currency based on Austrian economics, in many ways exacerbates the characteristics of the neoliberal era. As a shadow commodity currency, while useful as a reserve currency that can exist outside of the control of nation-states, it also exacerbates the very social inequalities that are so characteristic of financial capitalism. It offers no fundamental solution to the value crisis affecting the global system of cognitive capitalism but is a very interesting transitional monetary system that acts as a signpost for the future. Rather than as an end, we see Bitcoin as the beginning of an evolution towards multiple cryptocurrencies, some of which will integrate different social values in their protocols.

Detailing the third Model: mature peer production under civic dominance 

Since the mixed model seems to create untenable contradictions, it becomes necessary to imagine a transition to a model where the relations of production are not in contradiction with the evolution of the mode of production. This means a system of political economy which would be based on the recognition, and rewarding, of the contributive logic at work in commons-oriented peer production.

If we look at the micro-level, we recommend the intermediation of cooperative accumulation. In today’s free software economy, open licenses enable the logic of the commons, or even technically, ‘communism’ (each contributes what he/she can, each uses what is needed), but created a paradox: ‘the more communistic the license, the more capitalistic the economy’, since it specifically allows large for-profit enterprises to realize the value of the commons in the sphere of capital accumulation. Hence, ironically, the growth of a ‘communism of capital’.

We propose to replace the non-reciprocal ‘communistic’ licenses, with socialist licenses, i.e. based on the requirement of reciprocity. Hence, the use of a peer production license, would require a contribution to the commons for its free use, at least from for-profit companies, to create a stream of exchange value to the commoners/ peer producers themselves; in addition, commoners would create their own market entities, created added market value on top of the commons, realize the surplus value themselves, and create a ethical economy around the commons, where the value of the production of rival goods would be realized. Such ethical entrepreneurial coalitions would likely enable open book accounting and open supply chains, that would coordinate the economy outside of the sphere of both planning and the market. The ethical entrepreneurial coalitions could expand the sphere of the commons by the use of commons ventures, such as in the ‘venture communist’ model proposed by Dmytri Kleiner. In this model, cooperatives in need of capital would float a bond that would allow the purchase of means of production. But these means of production would belong to the commons; in other words, the machines would be rented from the common pool, but this rent would also be redistributed to all the members of the commons. In this binary economic form, the commoners-cooperators would receive both a wage from their cooperative, but also an increasing part of the common rent. (In addition, all citizens would benefit from a basic income provided by the Partner State). Such entrepreneurial coalitions, intrinsically in solidarity with their commons, could also move to practices such as open accounting and open logistics, which would allow for widespread mutual coordination of their productive capacities, hence ushering a new third model of allocation that would be neither a market, nor a planning system, but a stigmergic coordination system. In other words, the stigmergic coordination already operating in the sphere of ‘immaterial’ production, would gradually be transferred to the sphere of ‘material’ production. To the degree that such stigmergic systems create the possibility of resource-based economic models, such spheres of the economy would be gradually demonetized and replaced by measurement systems (i.e. commodity currencies with ‘store of value’ systems would gradually disappear).

However, such changes at the level of the micro-economy would not survive a hostile capitalist market and state without necessary changes at the macro-economic level, hence the need for transition proposals, carried by a resurgent social movement that embraces the new value creation through the commons, and becomes the popular and political expression of the emerging social class of peer producers and commoners, but allied with the forces representing both waged and cooperative labor, independent commons-friendly entrepreneurs, and agricultural and service workers.

We have suggested elsewhere the creation of civic alliances of the commons, and chambers of commons enterprises, to create a local counter-hegemony, while we call for a political alliance of the commons consisting of peer production movements (such as the Pirate Parties), forces allied to natural commons (the Greens), the transformative left (Syriza) and social liberals allied to progressive entrepreneurs.

In terms of currency, such a system would see the maturation of monetary biodiversity regulated by a Partner State as well as by globally networked governance models that are difficult to predict at this stage. In this model, local and regional community currencies, would co-exist with business to business credit commons that regulate exchange within the commons-based entrepreneurial coalitions; since we advocate a globalization of such production cooperatives in the forms of ‘phyles’ (as proposed by lasindias.net), ie. being the expression of global coalitions of community- and commons-supportive enterprises, these B2B currencies would scale on a global basis, like Bitcoin does today; all these currencies would exist in addition to the continuing role of a public currency managed by the Partner States. The continued use of such currencies is vital for enabling democratically controlled public policies; In addition, there would be a new type of democratically managed global reserve currency, for example one linked to energy use, to protect the global ecological balance of the global production system. These proposals are very close to the integrative model proposed by Bernard Lietaer.

Such a system would also need new forms of ‘contributory accounting’ or ‘open accounting systems’. Since the new production system would be largely organized around contributory commons, the means of distribution and exchange can no longer be solely represented by salaries and waged labor. As in the system pioneered by the open hardware sensor community Sensorica, open value accounting systems would allow contributors to log their contributions, to be peer reviewed by their colleagues, and a social charter would regulate the post-hoc redistribution of the value that was co-created by the contributors. These contributions would remain de-commodified, but the promise of fair value distribution would preclude any exploitation of free labor.

To conclude:

— At the core of the new system would be contributory civic commons where the knowledge/code/design value accumulation would take place; this sphere is a poly-archic sphere of free association where each is free to contribute, and all can benefit from the use value; thus civil society has become productive in the provisioning of use value and consists of a series of interdependent commons; the infrastructure of cooperation is managed by democratically run for-benefit associations.

— Surrounding the new commons-based civil society are the ‘ethical’ entrepreneurial coalitions; thus the private capitalist market is transformed into an ethical market sphere, run on the basis of principles of reciprocity; this sphere consists of the cooperative, social and solidarity economy allied with the commons; and regulated private enterprise that co-produces the commons.

— Enabling the commons-cooperative convergence is a new Partner State model which ‘enables and empowers social production’ through the creation of the necessary public goods and civic infrastructures, and functions in its capacity of ‘meta-governance’, i.e. it protects the stability of the macro-economic arrangement between contributory communities, for-benefit assocations, and entrepreneurial coalitions.

Part Two: The Characteristics of a Transitional P2P Regime

Finally, we outline the different features of the transition logic which should inform a transformative policy towards a P2P regime.

1. Characteristics of a society centered around mature peer production

— Civic voluntary contributors and autonomous cooperative labor create codified value through common pools; labor and civic reskilling occur through commons-oriented distributed manufacturing which places value creators at the helm of distributed manufacturing and other forms of value creation.

— Commons contributors create cooperative commons-oriented market entities that sustain the commons and their communities of contributors.

— Cooperative and other commons-friendly market entities co-create common pools but engage in the cooperative accumulation on behalf of their members; commons contributions are codified in their legal and governance structures; Entrepreneurial coalitions and phyles (structured networks of firms working around joint common pools to sustain commons-producing communities.)

— Societal mutual coordination of production through open supply chains direct the market activities.

— The commons-enabling for-benefit institutions become a core civic form for the governance of common pools; the associated market entities create solidarity mechanisma and income for the peer producers and commoners, supported by the partner state.

— The state, dominated by the civic/commons sectors, becomes a Partner State, which creates and sustains the civic infrastructure necessary to enable and empower autonomous social production.

— The market becomes a moral and ethical economy, oriented around commons production and mutual coordination, supported by the Partner State functions.

— The market sector is dominated by cooperative, commons-oriented legal, governance, and ownership forms; the remaining profit-maximizing entities are reformed to respect environmental and social externalities, including redistribution of extracted ‘commons-benefits’.

— Governance mechanisms are reformed towards commons-orientation and multistakeholder governance models; ownership models are reformed from extractive to generative models.

— The Partner State model renews public service provision, solidarity mechanisms and social care through the commonification of public services and public-commons partnerships.

— Social redistribution takes place through basic income provisions and reduction of necessary labor participation to create conditions for civic contributions and a contributory economy

2. Characteristics of a Partner State

— The State becomes a Partner State, which aims to enable and empower autonomous social production, which it also regulates in the context of common good concerns.

— The State strives for maximal openness and transparency.

— The State systematizes participation, deliberation, and real-time consultation with the citizens.

— The social logic moves from ownership-centric to citizen-centric.

— The state is de-bureaucratized through the commonification of public services and public-commons partnerships.

— Public service jobs are considered as a common pool resource and participation is extended to the whole population.

— Representative democracy is extended through participatory mechanisms (participatory legislation, participatory budgeting, etc..).

— Representative democracy is extended through online and offline deliberation mechanisms.

— Representative democracy is extended through liquid voting (real-time democratic consultations and procedures, coupled to proxy voting mechanisms.).

— Taxation of productive labor, entrepreneurship and ethical investing is minimized; taxation of the production of social and environmental goods is minimized; taxation of speculative unproductive investments is augmented; taxation on unproductive rental income is augmented; taxation of negative social and environmental externalities is augmented..

— The State sustains civic commons-oriented infrastructures and ethical commons-oriented market players.

— The State reforms the traditional corporate sector to minimize social and environmental externalities.

— The state engages in debt-free public monetary creation and supports a structure of specialized complementary currencies.

3. Characteristics of the Ethical Economy sector

— Creation of a commons and common good oriented social / ethical / civic /solidarity economy.

— Ethical market players coalesce around commons of productive knowledge, eventually using peer production and commons-oriented licenses to support the social-economic sector.

— Ethical market players integrate common good concerns and user-driven and worker-driven multi-stakeholder in their governance models.

— Ethical market players move from extractive to generative forms of ownership; open, commons-oriented ethical company formats are privileged.

— Ethical market players practice open book accounting and open supply chains to augment non-market coordination of production.

— Ethical market players create a territorial and sectoral network of Chamber of Commons associations to define their common needs and goals and interface with civil society, commoners and the partner state.

— With the help from the Partner-State, ethical market players create support structures for open commercialization, which maintain and sustain the commons.

— Ethical market players interconnect with global productive commons communities (open design communities) and with global productive associations (phyles) which project ethical market power on a global scale.

— The ethical market players adopt a specific maximum wage differential.

— The mainstream commercial sector is reformed to minimize negative social and environmental externalities; incentives are provided that aim for a convergence between the corporate and solidarity economy.

— Hybrid economic forms, like fair trade, social entrepreneurship, B-Corporations are encouraged to obtain such convergence.

— Distributed microfactories for (g)localized manufacturing on demand are created and supported, in order to satisfy local needs for basic goods and machinery.

— Institutes for the support of productive knowledge are created on a territorial and sectoral basis.

— Education is aligned to the co-creation of productive knowledge in support of the social economy and the open commons of productive knowledge.

4. Characteristics of the Commons Sector

— Creation of commons infrastructures for both immaterial and material goods; society is seen as a series of interlocking commons, that are supported by an ethical market economy and a Partner State that protects the common good and creates supportive civic infrastructures.

— Local and sectoral commons create civil alliances of the commons to interface with the Chamber of the Commons and the Partner State.

— Interlocking for-benefit associations (Knowledge Commons Foundations) enable and protect the various commons.

— Solidarity Coops form public-commons partnerships in alliance with the Partner State and the Ethical Economy sector represented by the Chamber of Commons.

— Natural commons are managed by public-commons partnership and based on civic membership in Commons Trusts.

Source:

This article is a reprint from the Journal of Peerproduction, http://peerproduction.net/issues/issue-4-value-and-currency/invited-comments/towards-the-democratization-of-the-means-of-monetization/, originally entitled: Towards the Democratization of the Means of Monetization: The Three Competing Value Models Present Within Cognitive Capitalism.