Network Society and Future Scenarios for a Collaborative Economy

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This entry is about "Network Society and Future Scenarios for a Collaborative Economy" co-authored by Vasilis Kostakis and Michel Bauwens. The scholarly book is published by Palgrave Macmillan and here you may find a draft of it.

Want to read the ebook (mobi/epub)?

You may contact the authors at kostakis.b AT gmail.com and/or michel AT p2pfoundation.net.

Preface

The aim of this book is not to provide yet another critique of capitalism but rather to contribute to the ongoing dialogue for post-capitalist construction, and to discuss how another world could be possible. We build on the idea that peer-to-peer infrastructures are gradually becoming the general conditions of work, economy, and society, considering peer production as a social advancement within capitalism but with various post-capitalistic aspects in need of protection, enforcement, stimulation and connection with progressive social movements. Using a four-scenario approach, we attempt to simplify possible outcomes and to explore relevant trajectories of the current techno-economic paradigm within and beyond capitalism. The first part of the book begins with an introduction (chapters 1 and 2) of the techno-economic paradigm shifts theory, which sees capitalism as a creative destruction process. Such a dynamic, innovation-based understanding of economic and societal development arguably allows for an integral bird's-eye-view of future scenarios (chapter 3) within and beyond the dominant system. Sharing the conviction that the globalized economy is at a critical turning point, we describe the four future scenarios; namely, netarchical capitalism, distributed capitalism, resilient communities and global Commons. Netarchical and distributed capitalism (chapters 4 and 5) are parts of the wider value mode of cognitive capitalism and form, what we call “the mixed model of neo-feudal cognitive capitalism” (chapter 6). On the other hand, the resilient communities (chapter 7) and the global Commons (chapter 8) reside in the hypothetical model of mature peer production under civic dominance. We postulate that the mature peer production communities pose a sustainable alternative to capital accumulation, that of the circulation of the Commons. Hence, we make some tentative transition proposals towards a Commons-based economy and society for the state, the market and the civic domain (chapter 9). Finally, we conclude with remarks and suggestions for future actions.

Contents

PART ONE: THEORETICAL FRAMEWORK

1. Capitalism as a creative destruction system

2. Beyond the end of history: Three competing value models

3. The P2P infrastructures: Two axes and four quadrants

PART TWO: COGNITIVE CAPITALISM

4. Netarchical capitalism

5. Distributed capitalism

6. The social dynamics of the mixed model of neo-feudal cognitive capitalism

PART THREE: THE HYPOTHETICAL MODEL OF MATURE PEER PRODUCTION: TOWARDS A COMMONS-ORIENTED ECONOMY AND SOCIETY

7. Resilient communities

8. Global Commons

9. Transition proposals towards a Commons-oriented economy and society

CONCLUSIONS

Acknowledgments

We would like to express our very great appreciation to Christos Giotitsas, Denis Postle, Katarzyna Gajewska, Helene Finidori, and Nikos Anastasopoulos for their constructive suggestions during the planning and development of this research work. In addition to this, we are particularly indebted to Vasilis Niaros for his support in the editing of the book as well as in the design of the figures. Further, we owe gratitude to Wolfgang Drechsler, Nikos Salingaros, Rainer Kattel and Carlota Perez who have been mentoring our work for years now. Moreover, we would like to extend our thanks to Ann Marie and Stacco from Guerrilla Translation! for carefully copy-editing the text; as well as to Christina Brian, Head of Politics & International Studies at Palgrave Macmillan, and Ambra Finotello, editorial assistant, for their constant support, understanding and eagerness. Also, the work of the FLOK Society, a collaborative research effort in Ecuador, has been crucial to develop transition and policy proposals towards a Commons-based knowledge society. Michel Bauwens was the research director of the FLOK society project and Vasilis Kostakis served as an external collaborator. The latter also acknowledges financial support by the 'Challenges to State Modernization in 21st Century Europe' Estonian Institutional Grant [IUT 19-13] and the 'Web 2.0 and Governance: Institutional and Normative Changes and Challenges' Estonian Research Foundation grant [ETF 8571].

We dedicate this work to all those who are building the world they want, within the confines of the world they want to transcend.


Reviews

A Critical Review by Brian Holmes

Brian Holmes:

"Thanks for this book, Michel and Vasilis. "Future Scenarios for a Collaborative Economy" is exceedingly timely and I would recommend it to anyone interested in the Commons specifically, or in political economy more generally. In response, I've written something in between a review and a letter to the authors. I address Michel because he posted it. Hopefully he will respond to a few of my comments!

I like the book, Michel, but I must also say, I'm somewhat mystified by it. I like the very sophisticated strategy that it sets out at the end for a possible transition to a society of commons-based production. I'm mystified by the rather simplistic presentation of contemporary capitalism at the beginning. What explains the gap?

In Part I you adopt the theoretical framework of "long waves of capitalist development" as put forth by Kondratiev and Schumpeter, and more recently, by Freeman and Perez (Trotsky and Mandel aren't mentioned). In its most general form, the long-wave idea is that capitalist society periodically goes through major depressions, during which investment is withdrawn from production. Meanwhile inventions accumulate until such time as conditions look good, and a massive wave of technological investment lays the foundations for a new growth cycle. Right now we're in such a depression. Therefore you try to analyze the possible futures of the current "techno-economic paradigm."

There is some ambiguity here, but that's OK. On the one hand the book follows Carlota Perez, explaining that the information technology paradigm has run up against a set of internal contradictions and that a mature phase of sustained growth can only come under new political and institutional arrangements. On the other hand it hints in certain places at the emergence, in the upcoming years or decades, of an entirely new paradigm (which, according to Schumpeter or Freeman, implies a distinct set of technologies and organizational forms). And then near the end it quite strongly claims, with Marx, that capitalism must now be overcome in favor of a different system. The upshot seems to be that the new society will emerge from the old, perhaps not entirely smoothly, but not through an apocalyptic rupture either. That's realistic and desirable, in my view.

I too think some kind of new growth wave is almost inevitable, within a decade or so - and though it will probably not be on anywhere near so intensive as the postwar growth wave that so many theorists take as a norm, it could well be more extensive, reaching far more people on our densely populated planet. I also think such a new long wave does imply distinctly new technologies capable of attracting new investment; but in the absence of radical breakthroughs, the big difference is most likely to be in the political and institutional structures that govern those technologies. In other words, the current technology set is more likely to be augmented and institutionally inflected (as early mass manufacturing was by postwar Keynesian Fordism) than it is to be radically transformed (as Keynesian Fordism was radiclly transformed by the IT revolution). In other words, we are likely to get an extension and amplification of the certain aspects of the current paradigm, but under new institutional arrangements.

The problem is, Michel, you never really discuss the current techno-economic paradigm in any serious way. What you and your co-author are talking about, in Parts I and II, is a small though important field of activity, the one that can be identified with keywords such as P2P, social media, crowd-sourcing, sharing economy, etc. The best parts of the book contain significant insight into these activities, as one would expect. However, by claiming to discuss the future of the entire capitalist system and then not really doing so, you blur the issue and diminish the potential value of your work.

One can follow Manuel Castells and call the current techno-economic paradigm "Informationalism" - or better, "Neoliberal Informationalism," to give some idea of how this mode of production is governed. But Informationalism does not mean that the only significant commodity on the contemporary market is information. Nor does it signal an eclipse of industry, as you suggest in chapter 1. Instead, Neoliberal Informationalism has been based on a "lead technology" which is new kind of producer goods, namely IT in all its facets (computers, software, cables, mobile telephony, communications satellites, etc). These goods in combination with networked organizational forms are used to create transnational supply chains, constituting what is generally called "just-in-time production" or "the global factory." The characteristic companies of neoliberal informationalism are not Facebook and Google, as one would gather from your book, nor even less, recent start-ups like AirBnB or Uber. They are giant networked firms like WalMart and Apple, which have their products manufactured in China, coordinate their work forces and supply chains through sophisticated IT systems, and sell their wares on the web as well as in the store. Or they are specialized corporations like Cisco, Verizon and IBM, which furnish the hardware and software for the new mode of production, distribution and sales. All these corporations have evolved under the anti-welfare policy mix of neoliberalism, and with the resources allocated by speculative finance, which has largely replaced the central planning of national governments. Not coincidentally, finance itself is crucially enabled by IT. Computers, cable and satellite networks, transnationalism and financial governance are key aspects of the current techno-economic paradigm.

Now, it's necessary to add that older sectors, such as petroleum, steel, chemicals, automobiles, engineering, grain production, etc, remain tremendously significant for the global economy. They are not just going to disappear in the next ten or twenty years. However, the way these sectors are articulated, both internally and between each other, has effectively been transformed by IT, and that's why we can speak of Neoliberal Informationalism as a distinct techno-economic paradigm. As you and Vasilis point out, this paradigm has been predicated on low-wage precarious labor, and it has called on finance to furnish the means of consumption through the extension of credit to individuals. The debt burden of the working and middle classes has risen tremendously and now, in the overdeveloped world at least, these classes can no longer consume enough to prop up economic growth. So the system is in a deep crisis, one which cannot be resolved by simply pumping money into asset markets as various governments have been doing. That crisis is further intensified by geopolitical factors (rise of Asia) and by climate change (which has been made a lot worse by the rise of Asia). How will the global political economy reconfigure itself under these circumstances? And what can civil society do to influence the next redeployment of capital? That's what we need to know.

In Part II, it's really interesting how you present a diagrammatic field of four distinct yet neighboring scenarios, divided on the one hand between distributed and centralized organization (or local and global scales), and on the other hand, between capitalist and commons-based development paths (or "for profit" and "for benefit" activities, as you also say). However, for the reasons already stated, the capitalist or for-profit side of the diagram is not very convincing. In chapters 4 and 5 we are introduced to two supposedly emergent categories. First, a corporate-scale "netarchical capitalism" where sharing and cooperative production are enabled by interfaces with closed, privately controlled backends that facilitate the harvesting of monetary value from social interaction. And second, an individual-scale "distributed capitalism" where everyone is asked to become a networked entrepreneur of him- or herself, creating their own backends for profit. Now, without a doubt these are already both realities. The first has already undergone significant expansion, partially wiping out the old media sphere with some inroads on the hobby, transport, in-person service and vacation sectors. The second has all the reality of neoliberal ideology: it is the computerized version of the entrepreneurial ideal, where everyone freely competes in an open, unregulated economic realm. But the claim that these figures represent the capitalism of tomorrow could only hold true if "we are not talking about monopoly capitalism" - which is a crucial caveat that you supply early on.

The problem is that we are talking about exactly that, Michel, just look around you. The great oligopolies that corral major sectors of the world economy, fixing prices and blocking the entry of smaller actors, are alive and despicably well in every major economic sector, including IT; and they are supported by very solid forces of the national and transnational state. To suggest that monopoly capitalism is on the way out through some force of networked nature is just plain mystifying, and that's the principal argument I have with this book.

Something else really is changing, though; and this is where the book's proposals, and more generally, those collected by the P2P Foundation over the last decade, are really worth one's attention. What's happening is an impoverishment of the former "First World," which is losing out to the newly developed countries at the same time as it starts being subjected to the environmental stresses of climate change. What one can see on the horizon is a gradual evening-out of global wages, leaving much of the former West in decaying housing with legacy appliances and amenities, while populations in the East and South rise up to a roughly similar level and then stagnate. That's already happening: and the frustration it engenders was behind the wave of protests in 2011-2013, whether in Egypt, Brazil, Russia and Turkey, or in Spain and the US. It is precisely the existence of the oligopolies and the financial elites (the famous 1%) that account for this dynamic. And we're likely to see even more intense frustration and anger as these populations have to confront the difficulties of climate change. Under these conditions, both newly unemployed people and those who have gained or retained a precarious hold on middle-class status are likely to find great attraction in what the book calls "resilient communities" and "global commons." Additionally, intellectuals with a capacity to see the dead-end future, whatever their class, will start to look for serious alternatives.

The discussion becomes tremendously interesting when the "for benefit" categories are discussed, in their local and global forms. This is the Marxian part of the book, where a change of the system itself starts to look desirable. Both the for-benefit categories are based on the generative matrix of the Commons, and I love the clarity with which you've expressed its basic principles: "It could be said that every Commons scheme basically has four interlinked components: a resource (material and/or immaterial; replenishable and/or depletable); the community which shares it (the users, administrators, producers and/or providers); the use value created through the social reproduction or preservation of these common goods; and the rules and the participatory property regimes that govern people's access to it."

At this point (Part III), the strict focus on information production is abandoned and what comes to the fore are the new possibilities presented by the maker revolution: not only 3-D printing, but all the computer-controlled tools which can use freely circulated open-source designs to create practical objects ranging from housing to automobiles. One can easily see the relevance of such productive capacities for impoverished communities, especially when they are beset by the stresses of changing climates, violent storms and soon, rising water levels. What's more, to take a page from Jeremy Rifkin's recent books, it becomes clear that with falling costs for solar and wind generation, energy production itself could potentially be decentralized and managed according to commons principles so as to build resilient communities. The combination of alternative energy sources with micro-manufacturing techniques represents a possible basis for a new form of economic growth that could cater to very large numbers of people despite, or rather because of, their inability to reach Fordist and Neoliberal levels of grotesque hyperconsumption. If the development of capitalist production during the next upswing could be influenced so as to furnish the infrastructure and toolkits of decentralized energy production and micro-manufacturing, then the next wave of growth could have many positive consequences. That's the paradigm shift that we need, and Part III makes that quite clear, bravo. The question is, how to make it happen? What are the "new institutional arrangements" that we need, and how to achieve them? Or as you and Vasilis write:

"Arguably, the issue is not to produce and consume less per se, but to develop new models of production which will work on a higher level than capitalist models. We consider it difficult to challenge the dominant system if we lack a working plan to transcend it. A post-capitalist world is bound to entail more than a mere reversal to pre-industrial times. As the TEPS theory informs us [ie, the theory of techno-economic paradigm shifts], the adaptation of current institutions and the creation of new ones take place in the deployment phase of each TEP. We claim that the times are, finally, mature enough to introduce a radical political agenda with brand new institutions, fueled by the spirit of the Commons and aiming to provide a viable global alternative to the capitalist paradigm beyond degrowth or antiglobalization rhetorics."

Now, that's not Carlota Perez talking anymore. That's a utopian Marxist strain that has affinities with Italian Autonomia, to the extent it believes that progressive use-values slumber within the technologies of capitalist exchange, and that these use-values can be liberated through the kinds of self-organization that the Internet facilitates. The question is, how to avoid making this a purely utopian thinking, as Autonomia has proven to be so far? How can commons-based peer production reach deeply into daily life? And how can it expand globally, both as a philosophy and as a set of informational tools that can take full advantage of the new decentralized energy and manufacturing toolkits? Or, to put it in strategic terms: How can civil-society actors find the opportunity, in the current depression and in the upswing that will almost inevitably follow it, to push corporate production into supplying the toolkits for a society that will finally escape the worst and most life-threatening consequences of the capitalist system?

In chapter 8, I feel that you are groping for a way to bridge the gap between two rather different things. First, the many specific micro-examples of (mainly informational) commons-based production that you do provide, in welcome detail. Second, a full-fledged economic praxis that could rival with the existing forms of Neoliberal Informationalism, which you (and the rest of us) can only imagine somewhat fuzzily. The way you approach this problem suggests that you do recognize the difficulties of overcoming the norms imposed by monopoly capitalism: after all, they are exemplified by the trajectory of Free and Open-Source Software, which has still not been broadly adopted even though the operating systems are now perfectly serviceable and perfectly free. You cite two very promising projects from what could become the next techno-economic paradigm, namely the Rep-Rap 3-D printer project and the Wikispeed automobile project, both of which are impressive and point the way toward a new articulation of social production. But it's clear that without support from either large social movements, or powerful economic actors, or more likely both, a new wave of capitalist growth will render these projects insignificant - or at least, no more significant than Free Software is currently. Traditional monopoly capital will put the breaks on Wikispeed. The coming wave of investment and development has to be bent to fit collaborative priorities. Otherwise, a no-future scenario looms.

It is in this context that you introduce the "Partner State Approach": "The PSA could be considered a cluster of policies and ideas whose fundamental mission is to empower direct social-value creation, and to focus on the protection of the Commons sphere as well as on the promotion of sustainable models of entrepreneurship and participatory politics." This is absolutely true: commons-based production requires infrastructure investments that commoners themselves cannot provide, at least, not as individuals or a members of small and fractious voluntary networks. The implication (which I don't think is anywhere clearly stated in the book) is that we need collective investments in order to stimulate forms of growth that are very different from those seen under Neoliberal Informationalism. We need a government capable of shaping an environment in which Commons-friendly investments will be possible. Yet so far, not a single state has emerged as a reliable partner. I'm curious: How do you feel about this today, Michel (and Vasilis), after the difficulties that the FLOK project encountered in Ecuador, in the attempt to generate exactly such a Partner State Approach?

The problems that our civilization faces are vast. The extension of commons-based peer production from the software to manufacturing and energy production does suggest a path forward. But support for it, in the form of something like a Partner State, can only be generated from a far broader civil-society movement than we have today. Such a movement is being called into existence by the rising awareness that the current form of development is literally a dead end. One one hand, it is important to nurture this movement (and ourselves, as parts of it) with pragmatic principles of hope, of the kind provided by experiments with Commons-based peer production. On the other, it's necessary to cultivate a very lucid of what's actually happening in society, not to paint an apocalyptic picture but just to identify the really existing obstacles. That kind of analysis is often lacking on the postmodern left. You could have used a little more Trotsky and Mandel, imho.

I think that civil-society movements have a tremendous amount to learn from experiments with peer production, and therefore, from the reflections in the last third of this book. However, I don't think any of this will go anywhere without a more realistic assessment of the forces currently in play. A broad movement needs to know both what to ask for and what to create, in view of pushing the really existing political-economic system towards a fundamental structural change. That means clearly facing the structure and power of corporate monopoly capital in its transnational form. I feel you have dispatched that issue too quickly and on that level, the book could definitely be improved. Actually, a careful read of this book has left me with the desire to rewrite parts of it, while keeping others intact - which I guess is a pretty good outcome for a book that reccomends the use of Peer Production Licenses!

Let me close this long review/letter with one more quote from Bauwens and Kostakis, a particularly astute and admirable one:

"According to Brynjolfsson and McAfee (2011) 'When the changes happen faster than expectations and/or institutions can adjust, the transition can be cataclysmic.' To avoid such a cataclysm, we arguably need political and social mobilization on the regional, national and transnational scale, with a political agenda that would transform our expectations, our economy, our infrastructures and our institutions in the vein of a Commons-oriented political economy."

I could not agree more."