Category:Economics

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This new section, in contrast with our more 'micro' oriented section on p2p business practice, takes a more macro-economic point of view.

General Theme: The Economy from a "P2P/Commons point of view". We also have a special section dedicated to the emergence of "Commons Economics as a new subdiscipline within heterodox economics. Following the work of Pat Conaty and Mike Lewis [1], the five framing elements are: Reclaiming the Commons resilience, economic democracy, the social solidarity economy and pricing externalities.

Status: ported to the encyclopedia from the Business section, first column, letter A.

Economists worth listening to, (these are my personal favourites, mb): Michael Hudson, Steve Keen.

Read: The Five Framing Conditions for a Commons-Oriented Economy, By Pat Conaty and Michael Lewis, which outlines:

  1. Resilience: Strengthening Our Capacity to Adapt
  2. Reclaiming the Commons
  3. Reinventing Democracy
  4. Constructing a Social Solidarity Economy
  5. Pricing As If People and the Planet Mattered


Contents

Introduction

Five Theses on the Advent of P2P Production

From David de Ugarte (lasindias.net):


1. "Since the ’90s, we have been living through the first steps of the transition towards a P2P production method


2. While the forefront of this transition over the last couple of decades was in the immaterial realm (content, free software, etc.), today, it’s laying the foundations of a new Industrial Revolution.


3. The ultimate origin of the crisis is the reduction of the optimal scale of production, which the financial system has not adapted to, making it the “bubble-making machine” whose consequences we’re all paying for today. If large scale is still sought after today, it’s not because it generates greater efficiency, but because the rents derived from power (and irresponsibility it gives them) compensate managers for the inefficiencies of size and let them play in a market captured by financialization.


4. The P2P production method is based on the combination of the commons and dissipation of rents, allowing for a profound redefinition of the function and the power of capital and the market and therefore of forms of cooperation, competition and the remuneration of the factors of production.


5. It’s these tools of the P2P production method which, while still young, let us begin to aspire to a new, local reindustrialization and think of alternatives to the crisis and massive unemployment, generating autonomy for local communities and laying new foundations for cohesion and well-being." (http://english.lasindias.com/five-elements-and-a-coda-to-create-an-alternative-narrative-to-the-systems-crisis/)


Characteristics of Alternative Economies

Proposed by Marvin Brown [2]:

  1. They are more concrete and local than our current global financial economy.
  2. They are more specific about wealth than the abstract measurement of GDP or even the accumulation of assets.
  3. They focus more on the provisions of everyday life, such as food, housing, clothing, health, and entertainment instead of stocks and bonds.
  4. They rely more on relationships of trust than the self-interest of disconnected individuals.
  5. They are more contextual than most traditional economic thought.
  6. They include people and the planet in their vision instead of focusing only on profit maximization.
  7. They recognize the limits of growth.
  8. They elicit the participation of all instead of only property owners.
  9. They see themselves as belonging to the earth rather than the earth belonging to them.
  10. They are part of the future, if we are to have one.

The Negative Return of Neoliberal Professions

Some myths about economics, from 'Bit Rich], a nef (UK) report on the Social Return on Professions:

  • Myth: Low paid jobs create a ladder for people to work their way up – opportunities to advance are open to all

The level of income inequality in the UK means that high earners can protect their position and that of their children by buying education, assets and advantage. The ladder that might offer a way up for those on low incomes is effectively kicked away. The only way to improve equality of opportunity and outcome is to shorten the ladder in the first place.


  • Myth: Pay differentials don’t matter, so long as we eradicate poverty

Of course poverty matters. But increasingly it is not absolute levels of poverty alone but the differences between people that contribute to social problems such as crime, ill health, poor educational attainment and addiction. In focusing so much on improving the lot of those on very low incomes, we have ignored the differentials that underpin what has become a two-tier society.


  • Myth: We need to pay high salaries to attract and retain talent in the UK

Our case studies show that high salaries don’t necessarily reflect talent. Even if they did, it is not clear that the best and brightest would be prepared to uproot their families and hike across the world for higher wages. The evidence suggests that more equal countries manage to retain their fair share of innovation and cultural capital.


  • Myth: Workers in highly paid jobs work harder

People at the bottom of the income distribution scale spend more time on domestic and caring responsibilities than their highly paid counterparts. They are also more likely to have more than one job, and for many that is the only route out of poverty. When we take this into account, it becomes clear that those who are paid less work just as much (or even more) than the better off.


  • Myth: The private sector is more efficient than the public sector

Work that is cheap is not necessarily work that is effective. This myth that the private sector is mor efficient has motivated the increase in competitive tendering of public services to private contractors, and has been used to justify lower unit costs (and lower wages). However, lower prices are sometimes secured at the cost of service quality, suggesting that paying higher wages could in fact be more efficient.


  • Myth: If we tax the rich, they will take their money and run

Intuitively we understand that decisions on whether to emigrate are far more complex than how much people earn. They depend on a multitude of factors – not only financial circumstances but also cultural familiarity, environment, proximity to friends and family, and quality of public services.


  • Myth: The rich contribute more to society

The rich pay proportionately less tax than the poor, and many of our tax streams such as council tax and VAT are highly regressive. The rich even give less in relative terms to charity than the poor.


  • Myth: Some jobs are more satisfying, so they require less pay

Job satisfaction is related to a number of factors. Autonomy, control in the workplace, income and status all contribute towards a sense of satisfaction and fulfilment at work. If high pay is partly intended to compensate for risk, stress and long hours then we would expect dangerous jobs to be well rewarded. Fishing is the most dangerous job in Britain, with roofers and scaffolders also high up on the danger list, and waste recycling collectors are at number 18. Yet in none of these industries are rank-and-file workers highly paid.


  • Myth: Pay always rewards underlying profitability

It is becoming increasingly apparent that there is only a weak correlation between pay and executive performance. In 2008, for example, the UK’s top companies lost almost a third of their value while the bosses of these companies enjoyed a 10 per cent leap in their basic salaries. Empirical studies have demonstrated that pay arrangements are geared towards serving the financial interests of managers, not shareholders.

What P2P/Commons economics must go beyond

Elliot Eva Bulmer:

"(i) Economism - the tendency to view events through the prism of economics, skewing society and politics away from other goals and towards a fairly abstract concept of 'growth', that might have very little to with the genuine well-being.

(ii) Consumerism - the belief that fulfilment and happiness comes through the acquisition and ownership of material goods (while ignoring the value of family, place, belonging, and an effective voice in common affairs).

(iii) Egosim - the idea that we are (and ought to be) rational egoist 'utility maximisers', for whom fulfilment of individual desires is the most central dimension of life.

(iv) Scientific positivism - the belief that the kind of science that helps explain the physical world is the only legitimate approach to all human questions, including the humanities (while ignoring, and excluding from discussion, the normative claims and ethical frameworks which should rightly shape, mould and direct our actions).

(v) Anthropocentrism - the idea that man is the measure of all things (ignoring that we have to give in eco-systems of which we are a part and on which we are utterly dependent).

(vi) Linearism - a preference for linear solutions, whether in decision-making processes or production and use processes (these need to replaced with a more cyclical approach - e.g. continual feedback in decision-making and reuse in production)."


Visualizations

Ultimate Political Economy

Source: http://steadystate.org/an-economics-fit-for-purpose-in-a-finite-world/?

Ultimate Political Economy

Map of the Solidarity Economy

Source: SolidarityNYC

Solidarity Economy visualisation

Product-Centered Local Economy vs People-Centered Local Economy

Product-centered economic development (Source)

Steve Bosserman writes:

"For some, a local economy is production-centered as represented in the graphic above. In this model, production is the starting point in the center. Examples include goat cheese (thanks to Abbe Turner and Lucky Penny Creamery for hosting our session!), lambs for meat, and CSAs. Output, whether food, water, energy, fuel, or housing and clothing, targets specific market niches among people in the outer ring (the arrows point outward). Output has the option of passing through the steps of processing, preparation, and retail along the way. The system is designed according to three organizing principles: money rules, keep your business to yourself (the brutal free enterprise system at work), and scale up at every opportunity to extract a competitive advantage."


Product-centered economic development (Source)

"The alternative local economy is people-centered, as depicted in the graphic above. In this instance the system starts with people as a market block in the center who, collectively, draw the output of the various systems to them based on satisfying a critical need in the most affordable, convenient, healthy, safe, and secure manner. In other words, people in a local area become the integrative agents who define the system and bring the elements together on their terms. This can be as simple as serving a plate of food from local sources, or as complex as manufactured components and assemblies in a major advanced energy installation made in local distributed manufacturing operations."

Comparison of a Global Economy and Planetary Systemic Economy

GLOBAL ECONOMY PLANETARY ECONOMY
Promotes a globalized market & absentee ownership Promotes local markets and local ownership
Puts money & corporations first Puts people, nature & communities first
Advances material & financial growth Advances spiritual , local & intellectual growth
Treats nature as a mine & dump Treats nature as co-producer & source of life
Maximizes material consumption Maximizes quality of life
Nurtures monoculture Nurtures multiculture – cultural & biological diversity
Promotes global competition & communities vs. community Promotes global cooperation & planetary consciousness
Resulting in economic exclusion & inequality Resulting in economic inclusion & security

Policy Recommendations

  1. Herman Daly's 10 Policy Principles for the Steady-State Economy
  2. Policy Proposals to Move from Quantitative to Qualitative Economic Growth. From Hazel Henderson and Fritjof Capra in their report on Qualitative Growth


An integrated set of proposals from the New Economics Institute [3] (U.S.) for a Great Transition, inspired by the work of NEF in the UK.

The sections of the report include: the Great Revaluing, the Great Redistribution, the Great Rebalancing, the Great Localization and Engagement, the Great Reskilling, the Great Economic Irrigation, and the Great Interdependence.

To read the full report go to: http://neweconomicsinstitute.org/content/nef-publications


Key Resources

See also: The Emerging Economy Wiki of the Co-Intelligence Institute. [9]

Please note we are compiling a directory of Commons-Oriented_Economists. Suggestions are very welcome!


Key Articles

See also:

Critiques of the Mainstream Economy

Basic P2P Economic Concepts

See also:

  1. Matt Cropp: P2P-Driven Decline in Transaction Costs and the Coming Micro-Ownership Revolution
  2. Introduction to Commons-centered economics. By Sam Rose, Paul Hartzog et al.
  3. Towards a Value-based Quarternary Economics. By Wim Nusselder.
  4. Jean-Francois Noubel: Economics of Flow vs Economics of Accumulation
  5. The Political Economy of Waste. Excellent study by Kevin Carson on how much of our economy is actually unproductive and non-contributive
  6. On the Necessity to Internalize Costs in a True Cost Economy: An excerpt from chapter 10 of Sacred Economics, by Charles Eistenstein.
  7. Charles Eistenstein: Money, the Self, and Negative Interest Money. From Sacred Economics, Chapter 12.
  8. Chris Cook: what is Economy 3.0?
  9. Introduction to the Eight Forms of Capital‎
  10. The Co-Belongingness of Money and Community. By Luigi Doria and Luca Fantacci.


See also:

  • Ten Peer_Production_Patterns. Stefan Meretz. Comment by Michel Bauwens: A word of caution. The text by Stefan Meretz is useful to understand the post-capitalist patterns that are inherent in peer production, however, it also abstracts from its embeddedness in present society and the way these aspects are instrumentalized by the present society and economic system, and create hybrid mechanisms of mutual adaptation. It also skirts around the central question of the self-reproduction of the means of production (however, see pattern 10 on the Germ Theory of change.

Resilient/Ecological Economics

  • Jeremy Grantham, GMO Quarterly Letter: "Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever": "The fact is that no compound growth is sustainable. If we maintain our desperate focus on growth, we will run out of everything and crash. We must substitute qualitative growth for quantitative growth."


  • Herman Daly:
  1. A Steady State Economy: A failed growth economy and a steady-state economy are not the same thing; they are the very different alternatives we face.
  2. The Thermodynamic Roots of Economics: "economists have assumed that the biophysical world is so large relative to its economic subsystem that the physical constraints are not binding. But they are always binding to some degree and become very limiting as the scale of the economy becomes large relative to the containing biophysical system.


  • Sustainable Shrinkage: Envisioning a Smaller, Stronger Economy. By Ernest Callenbach. Volume 2 | Issue 4 | Page 10-15 | Aug 2011 [11]


  • Heterodox economics for sustainability:
  1. Redefining Progress ;
  2. National Accounts of Well-Being ;
  3. About Earth's Ecological Economics ;
  4. Earth Economics;
  5. Post-Autistics Economics Network;
  6. Degrowth ;
  7. New Economics Foundation ;
  8. International Society for Ecological Economics ;
  9. Footprint Network ;
  10. Cambridge Trust for New Thinking in Economics ;

Towards an Ethical Economy

  1. Appeal for Non-Hierarchic, Self-Determined, Social and Economic Alternatives, Oliver Ressler [12]
  2. Umair Haque: Towards an Ethical Economy Based on Allocative and Creative Advantage
  3. Cheyenna Weber: Moving from a Sharing Economy to a Solidarity Economy: “It’s the difference between doing something that is good and doing something that is just. It’s the difference between friends helping each other and social justice.”
  4. Marvin Brown: Civic Conversations vs. Commercial Conversations. We need to re-embed the market to civic norms, through Civic Design
  5. Open Source Ratings Are Needed To Break the Ratings Agency Oligopoly

Corporate Reform

  • Marjorie Kelly: Not Just For Profit: Emerging alternatives to the shareholder-centric model could help companies avoid ethical mishaps and contribute more to the world at large. Explores three new-style corporate designs: 1. stakeholder-owned companies; 2. mission-controlled companies; and 3. public-private hybrids.
  1. Using Corporate Governance Law to Benefit All Stakeholders. Kent Greenfield [13]
  2. Internal Transformation of Corporations. Michael Thomas and Bill Veltrop [14]
  3. Revisiting Corporate Charters. Charles Cray [15]
  4. Emergence of New Corporate Forms. Susan Mac Cormac. [16]
  5. Action Agenda for Corporate Redesign. Deborah Doane [17]


On the Economics of the Commons

  1. Circulation of the Common. Nick Dyer-Whiteford.
  2. Common Rights vs Collective Rights is an essay by Dan Sullivan in which he also explains the difference between Common Property and collective property.
  3. Can peer production make washing machines?. By Graham Seaman.
  4. Contrasting Firm Strategies for Open Standards, Open Source and Open Innovation. by Joel West. Excellent intro to the economic realities limiting true openness.


On Information Economics

  1. JP Barlow, “The Economy of Ideas: A framework for patents and copyrights in the Digital Age”, Wired 2.03 (March 1994)
  2. E Dyson , “Intellectual Value”, Wired 3.07 (July 1995)
  3. K Kelly, “The Economics of Ideas”, Wired 4.06 (June 1996)


On Open Source economics


See also:

  1. The economics of open source
  2. Open source as user innovation – von Hippel
  3. Analysis of OS Business models
  4. Allocation of resources in OS mode
  5. Open source outside software – Clay Shirky

Video:

  1. Yochai Benkler on Open Source Economics


Open and distributed manufacturing

  • How Personal Fabrication Will Change Manufacturing and the Economy. Hod Lipson & Melba Kurman, in Factory@Home, pp. 51+. It contributes to: Ecosystems of small manufacturers; Long tail niche markets; Economic emergence of underserved communities; Consumer-led product design; Scale up from one; Mass customization and crowdsourcing; Eco-conscious and subsistence-level manufacturing; Less market research, more toolkits


Miscellaneous

Key Books

  • Annotated Bibliography: New and Appropriate Economics for the 21st Century: A Survey of Critical Books, 1978-2013. By Michael Marien. Cadmus Journal, 2013. [19]

The key book is:

  1. Civilizing the Economy. Marvin T. Brown, from an economics of property to an economics of provisioning
  2. New Capitalist Manifesto. Umair Haque, for an Ethical Economy
  3. Capitalism 3.0. Peter Barnes, trusts are to the commons, what corporations are to the market
  4. The Wealth of Networks: How Social Production Transforms Markets and Freedom - by Yochai Benkler
  5. What's Mine is Yours: The Rise of Collaborative Consumption, by Rachel Botsman and Roo Rogers (Fall, HarperCollins), 2010
  6. Herman Daly. Beyond Growth: The Economics of Sustainable Development. Beacon Press, 1997
  7. Economics Unmasked: From power and greed to compassion and the common good. By Philip B. Smith & Manfred Max Neef, Green Books, 2011 [20]
  8. Alternative Economics, Alternative Societies. Oliver Ressler. Editor: New Media Center_kuda.org. Revolver - Archiv für aktuelle Kunst, Frankfurt, Germany, 2005 [21]


Recommended by John Fullerton [22]:

  1. Small is Beautiful, by E.F. Schumacher,
  2. For the Common Good, by Herman Daly and John Cobb, and
  3. The Great Work, by Thomas Berry


Commons Economics

  1. Enrico Grazzini. The Good of Everyone. The Sharing Economy as a Way Out of the Crisis (Editori Internazionali Riuniti, 2011)
  2. Plenitude: The New Economics of True Wealth Juliet B. Schor
  3. Wolfgang Hoeschele. The [[Economics of Abundance[[: A Political Economy of Freedom, Equity, and Sustainability. Gower Publishing, 2010
  4. Sustaining the Commons. By John M. Anderies and Marco A. Janssen. Center for the Study of Institutional Diversity, 2013.[23]: " a lucid, logically presented introduction to the key concepts of Ostrom’s research"

Special Topics

Policy Prescriptions:

  1. Agenda for a New Economy: From Phantom Wealth to Real Wealth – David Korten


Abundance Economics:

  1. Plenitude: The New Economics of True Wealth – Juliet Schor
  2. Wolfgang Hoeschele. The [[Economics of Abundance[[: A Political Economy of Freedom, Equity, and Sustainability. Gower Publishing, 2010


Local Economics:

  1. Walk Out Walk On: A Learning Journey into Communities Daring to Live the Future Now - Margaret Wheatley
  2. The Transition Handbook: from oil dependency to local resilience – Robin Hopkins


Ecological/Sufficiency Economics:

  1. The Economics of Enough: How to Run the Economy as if the Future Matters. By Diane Coyle. Princeton University Press, 2011
  2. Thomas Princen. The Logic of Sufficiency. MIT Press, 2005
  3. The End of Growth. Richard Heinberg.
  4. The Third Industrial Revolution: How Lateral Power is Transforming Energy, the Economy, and the World. Jeremy Rifkin. Palgrave Macmillan. 2011

Meltdown:

  1. Steve Keen, 2011. Debunking Economics: revised and expanded edition. Zed Books, London.


Towards an Ethical Economy:

  1. Reciprocity. An Economics of Social Relations. Serge-Christophe Kolm. Cambridge University Press, 2008 [24]
  2. Macrojustice. The Political Economy of Fairness. By Serge-Christophe Kolm. Cambridge University Press, 2005 [25]
  3. Herman Daly. For the Common Good: Redirecting the Economy toward Community, the Environment, and a Sustainable Future. Beacon Press, 1994
  4. Natural Capitalism: Creating the Next Industrial Revolution – Paul Hawken

On Monetary Economics and Transformation:

  1. The Future of Money. Creating New Wealth, Work, and a Wiser World. Bernard Lietaer. Random House free pdf
  2. Local Money: How To Make It Happen In Your Community – Peter North



Historical:

  1. First Five Thousand Years of Debt, i.e. Debt: The First 5,000 Years. David Graeber. Melville House Publishing, 2011: extraordinary insights on the core role of debt in economic systems
  2. Marshall Sahlins. Stone Age Economics. Aldine, 1972

Via [26]:

  • Braudel, Fernand Civilization and Capitalism, 15th-18th Century Time. Reviewed by Alan Heston (University of Pennsylvania). [27]
  • Chaudhuri, K. N. The Trading World of Asia and the English East India Company, 1660-1760. Reviewed by Santhi Hejeebu. [28]
  • Polanyi, Karl The Great Transformation: The Political and Economic Origins of Our Time. Reviewed by Anne Mayhew (University of Tennessee). [29]
  • Le Roy Ladurie, Emmanuel The Peasants of Languedoc. Reviewed by Anne E.C. McCants (Department of History, Massachusetts Institute of Technology). [30]

Key Facts

"In 1983, the top 5 percent had 80 cents of debt for every dollar of income, while the remaining 95 percent had 60 cents for every dollar. By 2007, after decades in which an increasing share of income flowed to the top, the situation had reversed. The top 5 percent had 65 cents of debt for every dollar of income, while the remaining 95 percent had $1.40 in debt for every dollar. The situation remains skewed today." (http://www.nytimes.com/2012/05/04/opinion/inequality-debt-and-the-financial-crisis.html)


Key Initiatives

  1. Corporation 20/20: What would a corporation look like that was designed to seamlessly integrate both social and financial purpose? Corporation 20/20 is a new multi-stakeholder initiative that seeks to answer this question. Its goal is to develop and disseminate corporate designs where social purpose moves from the periphery.
  2. JAS Economics: principles for grassroots economics

Key P2P Metrics

For monitoring ecological/economic/human wellbeing progress, i.e. Alternative Measures of Human Well-Being:


  1. Inclusive Wealth - Metric
  2. Gross National Happiness
  3. Human Development Index
  4. Happy Planet Index
  5. Genuine Progress Indicator
  6. Continuum Development Index

Please note we have a special wiki section dedicated to p2p metrics and [31]]

Key Organisations

If you are into research: Put your university at the forefront of the monumental mindshift now underway in the "science" of economics. Check the Kick It Over campaign and manifesto.

Also conducting business and economics as if the planet and people mattered:


Key People

Our favourite economists, list compiled by Michel Bauwens:

Today:

  1. Steve Keen, for ongoing analysis of the causes of the meltdown of 2008
  2. Michael Hudson, for the ongoing critique of the debt-driven economy
  3. Roberto Verzola, point man on the key issue of abundance vs. scarcity
  4. Herman Daly, on what is needed for a steady-state economy
  5. Hazel Henderson, for her work on the transition to a green economy


Yesterday:

  1. Ernst Schumacher: his 1973 book Small Is Beautiful: a study of economics as if people mattered is among the 100 most influential books published since World War II


See also our list of Commons-Oriented Economists


Key Podcasts

Key Videos

  1. Thomas Greco on the History of Money and Debt

Key Visualizations

  1. the New Economy mindmap
  2. a really superb introduction to the new economy in prezi by Arthur Brock: http://prezi.com/xmzld_-wayho/new-economy-new-wealth/


Comparative Table: The Logic of the Market versus the Logic of the Commons

Market Commons
Focus

What can I sell?Exchange value

What do we need?Use value

Core beliefs Scarcity Plenty
Homo oeconomicus Homo cooperans
It's about resources (allocation). It's about us.
Governance Market-State Polycentric / Peer-to-Peer Governance
Decision making hierarchical horizontal
Command (Power, Law, Violence) Consensus, Free Cooperation, self-organization
Social relationships Centralization of power (monopoly)

Decentralization of power(autonomy)

Property Possession
Access to rival resources Limited by boundaries & rules defined by owner Limited by boundaries & rules defined by usergroups
Access to nonrival resources Made scarce (to ensure profitability) Open access (to ensure social equity)
Use rights Granted by owner Co-decided by user groups
Dominant strategy Out-compete Out-cooperate
Results
For the resources

ErosionEnclosure

Conservation Reproduction & Multiplication

For the people Exlusion & Participation Inclusion & Emancipation

Citations

Neither the great political and financial power structures of the world, nor the specialization-blinded professionals, nor the population in general realize that...it is now highly feasible to take care of everybody on earth at a “higher standard of living than any have ever known”. It no longer has to be you or me. Selfishness is unnecessary and henceforth unrationalizable as mandated by survival. War is obsolete.

- R. Buckminster Fuller (Source: Critical Path, R. Buckminster Fuller, St. Martin's Press, 1981, Introduction, xxv)

Long Citations

See also: More Citations on P2P Economics,

for:

  1. On the Need for Treating Natural and Knowledge Commons Differently
  2. Obtaining Economic Advantage through Serving and Sharing
  3. Social Commerce and the Intention Economy
  4. Replacing Modes of Production


Towards a world of abundant immaterial resources and scarce profits

"Typically the new companies don’t take the profits of the old companies; they make the profits of the old companies go away. You end up having to shift from operating in a position of scarce resources and abundant profits to a world of abundant resources and scarce profits. And the design of businesses and organizations in that second world is very different from that first world."

- Clay Shirky [32]


The disappearing legitimacy of capitalism

"You know, there really is not much of a justification of capitalism anymore. The system is supposed to improve the conditions of the poor, thus making inequalities acceptable. It is no longer the case. It is supposed to produce greater security. It is no longer the case. It is supposed to sustain democracy. It is no longer the case. All the classic positive justifications are gone. Moral arguments are all that is left: working is good, one has to pay one’s debts – and there is no other way. We have reached a point where these two arguments are leading to the system’s self-destruction. The ship is sinking because of an overload of work and debt."

- David Graeber [33]


The new logic of post-growth economies

"The post peak-oil age will be based on organisational principles that correspond to the steady state phase of mature ecosystems. As Howard Odum has summed it up: - "During growth, emphasis is on competition, and large differences in economic and energetic welfare develop; competitive exclusion, instability, poverty, and unequal wealth are characteristic. During steady state, competition is controlled and eliminated, being replaced with regulatory systems, high division and diversity of labour, uniform energy distributions, little change, and growth only for replacement purposes. Love of stable-system quality replaces love of net gain. Religious ethics adopt something closer to that of those primitive peoples that were formerly dominant in zones of the world with cultures based on the steady energy flows from the sun. Socialistic ideals about distribution are more consistent with steady state than growth." (Odum 1974) In preparation for this coming world situation it would be wise to evaluate how resilience was maintained in pre-industrial societies before their violent incorporation to the evolving euro-centric global order."

- John Earls [34]


Bill McKibben on the Carbon Bubble

"The oil companies, private and state-owned, have current reserves on the books equivalent to 2,795 gigatons -- five times more than we can ever safely burn. It has to stay in the ground. Put another way, in ecological terms it would be extremely prudent to write off $20 trillion worth of those reserves. In economic terms, of course, it would be a disaster, first and foremost for shareholders and executives of companies like ExxonMobil (and people in places like Venezuela). If you run an oil company, this sort of write-off is the disastrous future staring you in the face as soon as climate change is taken as seriously as it should be, and that’s far scarier than drought and flood. It’s why you’ll do anything -- including fund an endless campaigns of lies -- to avoid coming to terms with its reality."

- Bill McKibben [35]


Competing 'on top' of the Commons

"One of the best ways to stimulate competition, innovation and lower prices is for participants in a market to honor the commons (a shared pool of resources, a minimal set of safety or performance standards) and then to compete "on top" of the commons. Instead of being able to reap easy profits from monopoly control over something everyone needs -- say, a computer operating system like Windows -- a company must work harder to "add value" in more specialized ways."


- David Bollier [36]


The Sharing Economy should be distinguished from the Monetary Economy

"... the quest for self-determination and meaningful and memorable experiences ultimately will hinge on people's understanding that they are not merely consuming a product, but that they are actually participating in a meaningful social process not guided by an extrinsic logic (profit), something that rather has intrinsic, or 'sovereign' value. I don't believe that these two can be fused into one

- Eric Kluitenberg, iDC archive [37]


Market Logic vs. Network Logic

"The philosophy that undergirds exchange also contrasts sharply across forms. In markets the standard strategy is to drive the hardest possible bargain in the immediate exchange. In networks, the preferred option is often one of creating indebtedness and reliance over the long haul. Each approach thus devalues the other: prosperous market traders would be viewed as petty and untrustworthy shysters in networks, while successful participants in networks who carried those practices into competitive markets would be viewed as foolish and naive... In a market context, it is clear to everyone concerned when a debt has been discharged, but such matters and not nearly as obvious in networks."

- Walter Powell - "Niether Market Nor Hierarchy: Network Forms of Organization" 1990


From Profit-Maximization and Market-Orientation to Mission-Focused

Profit maximizing limits access to knowledge, by limiting it to paying customers. If anyone thinks this is just a side-effect of today's market incentives, then we can put the situation differently: Profit maximizing doesn't always limit access to knowledge, but is always ready to do so if it pays better. This proposition has a darker corollary: Profit maximizing doesn't always favor untruth, but is always ready to do so if it would pay better. ... Instead of hypnotically granting the primacy of markets in all sectors, as if there were no exceptions, we should remember that many organizations compromise profits or relinquish revenues in order to foster their missions, and that we all benefit from their dedication. Which institutions and sectors ought to do so, and how should we protect and support them to pursue their missions? Instead of smothering these questions for offending the religion of markets, we should open them for wider discussion.

- Peter Suber [38]


Markets without Money

"Money is a very important and useful medium of exchange for high-value, tangible products. For small-value, intangible products, the costs tend to exceed the value of the transactions—especially when you add in the overhead associated with making payments at a distance. Fortunately, human beings are clever. We’ve begun to find a variety of substitutes for money that work better."

- Tim Lee [39]


Monetization vs. Community value creation

"When you try and "monetize your users", you accept the almost obscene assumption that people are meant to be pimped out, sold to the highest bidder, resources to be slashed, burned, and exploited. But that's not how the edgeconomy works. Businesses need what connected consumers have to give more than connected consumers need what businesses have to sell.

Let's put that a little more formally. Monetization is ugly because it blinds us to the truth that value must flow in many directions. That's the essence of edge strategy, in fact."

- Umair Haque [40]


The New Social Capitalism

"Capitalism takes a narrow view of human nature, assuming that people are one dimensional beings concerned only with the pursuit of maximum profit. The concept of the free market, as generally understood, is based on this one- dimensional human being. Mainstream freemarket theory postulates that you are contributing to the society and the world in the best possible manner if you just concentrate on getting the most for yourself. [...] The presence of our multi- dimensional personalities means that not every business should be bound to serve the single objective of profit maximization"

= Muhammad Yunus [41]


Why Localization is Inevitable in a Resource-scarce World

"It is an article of faith that global trade will be an ever-growing presence in the world. Yet this belief rests on shaky foundations. Global trade depends on cheap, long-distance freight transportation. Freight costs will rise with climate change, the end of cheap oil, and policies to mitigate these two challenges.

At first, the increase in freight costs will be bad news for developed and developing nations alike but, as adjustments in the patterns of trade occur, the result is likely to be decreased outsourcing with more manufacturing and food production jobs in North America and the European Union. The pattern of trade will change as increasing transportation costs outweigh traditional sources of comparative advantage, such as lower wages. The new geography of trade will not result from policy or treaties but from the impact of changing environmental conditions due to the growth of the human economy. ... Many goods will be manufactured closer to where they are consumed, as supply chains become more regional and local."

- Fred Curtis, David Ehrenfeld [42]


Scaling Up From One Through Personal Fabrication Ecosystems

Scale up from one: Regular people and small manufacturing companies that lack investment capital will be able to set up low investment, “start small and scale up as it goes” businesses. Thanks to the low-cost Internet virtual storefronts, and the low cost of small-scale manufacturing for prototypes and custom goods, new companies can get started on a shoestring budget, yet sell their wares or services to niche, global marketplaces.

- Hod Lipson & Melba Kurman [43]

Short Citations

  • An economic system that requires 'demand' to be stimulated is skewed to begin with. I d say, we should stimulate production to make sure it meets needs. - Frank Vanaerschot [44]
  • Speculators may do no harm as bubbles on a steady stream of enterprise. But the situation is serious when enterprise becomes the bubble on a whirlpool of speculation. - John Maynard Keynes [45]
  • Our First Curve economy is dominated by hierarchical organizations focused on managing costs. In the Second Curve economy, business models focus on creating networks and value webs. [46]
  • When costs of participation are low enough, any motivation may be sufficient to lead to a contribution.- Michael Feldstein [47]
  • Peer production is viable when: 1. capital costs (needed for production) fall far enough and 2. coordination costs fall far enough. Cheap computing and communication reduce both of these exponentially, so peer production becomes inevitable. - Anomalous Presumption [48]
  • Working together as equals. Profiting from each others success. These two ideas represent a surprisingly radical redefinition of work. - Bernie DeKoven [49]
  • We genuinely believe that radical sharing is a win-win for everyone. Expanding markets create new opportunities. - Tim Bray, Sun Microsystems [50]
  • The best people (to solve any given problem) don't work for your organization. A corollary to this: if you don't have the best people working for you, you will fail. Use transparency and the marketplace to find the best people located outside your organization. - John Robb [51]
  • Post-industrial modernization brings a fundamental shift in economic strategies, from maximizing material standards of living to maximizing well-being through life style changes. The "quality of experience" replaces the quantity of commodoties, as the prime criterion for making a good living - Alan Moore [52]
  • The Implicit Goal of Attention Economy is: to tightly intertwine everyone at the level of mind. But that involves individuals seeking, obtaining and/or paying attention. - Michael Goldhaber [53]
  • the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits. - Kevin Kelly [54]
  • The peer producers are their own consumers. They get a better product by tapping into the knowledge pool. And they get a product that exactly fits their needs because they help design it. - Eric Schonfeld [55]
  • In this new world, if it doesn’t spread, it’s dead. And those companies which seek to prohibit the manipulation and circulation of their content will find themselves cut off from the mechanisms which generate value in this new media economy. - Henry Jenkins [56]
  • The crisis we are now living through is essentially a value crisis, where . . . exchange value no longer adequately reflects use value, or, to put it in less cryptic terms, there is a general sensation that a lot of the real values that circulate in our economy cannot be adequately represented. - Adam Arvidsson [57]

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