Title: Towards Mutual Coordination Economics

Why should we pay attention to mutual coordination as a concept for the next civilization ?

MICHEL BAUWENS, OCT 15, 2023

URL = https://4thgenerationcivilization.substack.com/p/towards-mutual-coordination-economics

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I would first like to introduce the basic concept of relational grammar, which was introduced by sociologist Alan Page Fiske in Structures of Social Life. This understanding is crucial to understand the value logic of how a society allocates resources. So basically, for Fiske, there are four fundamental ways, for value to be distributed:

First is the process of ‘Communal Shareholding’. This applies whenever an individual exchanges with a whole or a totality, and gets the benefits from that totality, so if a hunter or gatherer brings back food to the family, he gets the benefits of the mutual support of the family; and when an open source developer adds code to Linux, he gets the benefit of a better Linux. These are the practices that we now understand under the name of commoning, and the institution of the ‘commons’.

The second process of value exchange is called Equality Matching, better known as the Gift Economy. This is all about giving, from one entity to another, from individual to individual, from family to family, clan to clan. Paradoxically, and this is why it is called Equality Matching, giving creates inequality; the person who gives accrues prestige and ‘credit’, and the person who receives feels in debt. Thus, the cycles of gifting.

The third way is called Authority Ranking. This is when resources are distributed according to a status hierarchy, and thus, this modality already implies some type of class society. Tributary or feudal societies would be an example of such distribution of value, you get according to your rank, but also say, linking wage levels to educational attainment.

The fourth modality is market pricing, the exchange of commodities according to criteria of equal value, exchanged at the precise moment of transaction, rather than open-ended, as in the gift economy.

It is obvious that the dominance of various modes can be historicized. Communal shareholding is the primary modality of nomadic small tribes, but equality matching is needed to keep the peace between more sedentary tribes; authority ranking becomes the primary modality when force and domination become reality: it is the logic of ‘take and redistribute’; and finally, the market becomes dominant fully dominant only in western modernity.

Kojin Karatani’s Structure of World History is the best book to get an understanding of the historical succession of these various modalities. BUT, please note that one modality doesn’t eradicate the other, it creates an overall logic in which the former dominant modalities find their place, suitably transformed. This is where institutions become important, and David Ronfeldt’s model of Tribes, Institutions, Markets and Networks is a very useful scheme for understanding this.

Michael Hudson, in The Destiny of Civilization, brings an interesting historical context to this. He claims that, once the civilizational model took root 5,000 years ago, creating a class-based, writing-based, complex urban society, there has been an enduring polarity between the state-centric easter Eurasian polarity, and the market-centric West. In the East, which includes Mesopotamia, imperial models prevailed, in which the ruling classes followed a organic model oriented around ‘harmony’, and kept the merchant classes, but especially the rentier classes, as a more minor part of their societies. This was done through redistribution techniques such as Clean Slate legislation and the Jubilee, which would periodically eliminate debt. But in Classical Greece, the rentier class took power, created a social counter-revolution, which created democracy and for example the Tribunate in Rome, permanent self-defense institutions for the people, to keep the rentier power in check. Hence, the West was marked by maritime power, the dominance of merchant property, and more democratic forms of social compromise.

In this context, it is important to understand that most often, wars are actually systemic struggles between the various elites associated with particular modes of wealth allocation, since the control of the surplus is paramount. Civilizations depend on a surplus that extract the surplus value from the farmers and the land, creating the managerial elites and funding the cities, while in modernity, the derivative surplus of industry, creates the technological and scientific class.

In this context, WWI can be seen as a struggle between the industrial nation-state model and the remaining imperial model, which collapsed (it was the end of the Ottoman and Austrian-Hungarian empires). While WWII could be seen as a struggle to manage complex industrial nation-states, pitting state-centric fascism and communism against parliamentary democracies. Fascism was defeated in 1945, and the Soviet model in 1989-91. It would not be far-fetched to see the current Ukrainian conflict as a struggle between the state-centric Russia-China axis and the market-centric Western axis; the current conflict in the Middle East pretty much shows a similar alignment. To say it somewhat cynically, it is impossible to be an oligarch in Russia and China without agreement of the state, and it is rather impossible to be President of the US without the support of oligarchic funding.

But notice that both states and markets are institutions that are based on extraction of the surplus, in a rival manner, through growth and conquest. This matters in a situation of ecological overshoot and increased rivalry for ever scarcer resources. At least since the 16th century, world-systems historians have noticed the existence of a war and hegemony cycle; depending on the calculations, these are estimated to occur every 100 years or so. In this scenario, hegemons rise, become dominant, weaken and fall. At the end of such a cycle, the competition between the descending and rising power, creates the conditions of all-out war. The last time this happened was World War II. It ended with US dominance and a new world order based on ‘weak multilateralism’, on a social contract between capital and labor in the West. But the cost was a neo-colonial model in the Global South, and a unsustainable hockey-stick rise in resource use. The last war also ended with the use of nuclear weapons, which could literally end human life on the planet.

In the current ‘late’ or ‘post’ neoliberal model, we have reached a situation where we have a inter-state model, but where weakened nation-states are highly subjected to the dominance of transnational finance; certainly in the ‘Western’ part of the world, change at the nation-state level, which used to occur every 25-30 years through what Karl Polanyi calls the lib-lab cycle, bringing to power in alternation more market or more socially-oriented alliances, has been paralyzed. As the danger of hegemonic war increases, internal tensions are rising without relief in sight.

It is in this context that mutual coordination economics emerges as a potential ‘solution’. What do we mean? So remember, 5,000 years ago, a great bifurcation occurred from kinship-based tribal organization, to market and state-based civilizational models. My argument is that we are reaching a similar bifurcation point, in which neither market nor state based logics and institutions are sufficient. Instead, we need massive cosmo-local coordination mechanisms that can operate in a distributed fashion. Think of it in the shorter term as well: the 19th cy was the century of free markets, ‘laisser-faire laisser-aller’; it was based on peace in Europe, colonization abroad, the dominion of capital over labor; although it achieved substantial technological and social progress (labor income was five times what it was a century earlier), it did end in WWI and disorganized post-war economies. The free market was blamed, and state-centric solutions became so attractive, that the totalitarian alternatives of fascism and communist became hugely popular, but it quickly transpired that the total state was as catastrophic as the total market, and it ended in the great Keynesian compromise after WWII. That cycle ended in the great systemic crisis of 2008.

What is emerging now however, is entirely different. With the invention of digital networks, which were democratized by the browser and the Web in 1993, we created a global infrastructure for mutual signaling. While this is of course not a return to kin-ship based gifting and commoning, it has created first of all an open source economy, in which knowledge commons create new economic sectors, which represented one-sixth of the US workforce in 2011 already. That open source economy was quickly used to create the new dominance of what I have called netarchical capital, and what Yanis Varoufakis has called cloud capital, and a model of rentier-based techno-feudalism. Then, in 2008, as a response to the crisis, we saw a tenfold increase in urban commons in just a decade, creating new urban provisioning systems that are centered around commons-based infrastructures. Finally, we have seen the emergence of a trans-local crypto-economy.

All these forces have been building an infrastructure of mutual signaling, open ecosystems that are based on holoptism, i.e. the visibility of all transactions from anywhere in the network. While incorporating market incentives and practices, and taking into account the state-based jurisdictional order, this emergence can not be reduced to the simple dichotomy of market and state, because they function around a commons of common code, and a commons of joint cooperation protocols, that are independent of any single commercial or state player.

So what if the 21st century was actually a century not of state or market dominance, but of distributed global infrastructures, and translocal or transnational ‘cosmo-local principles’ of human organization. What if, distributed infrastructures are gradually developing practices that are ‘functionally equivalent’ to the practices and institutions formerly carried out by markets and states? I will explain this in the next article, but here I want to speculate on potential class dynamics that are behind such a potential transition.

Consider this:

Five thousand years ago, the Mesopotamian temple civilizations in charge of irrigation and rice developed writing to manage the in and out flow of value in these institutions, creating a writing elite that would become the managerial class for craft-agrarian civilization, creating the conditions for imperial domination.

Five hundred years ago, after the invention of print, and because of the special conditions of weak empire and free cities co-managed by guilds, more independent merchant guilds emerged, and these proto-capitalist forces gradually created a world to their image, the capitalist world of capital-nation-state

Today, a new elite based on the language of code, which possesses their own means of production (digital computers) and powerful digital commons, but NOT the networks needed to link them together, and behaving much as the craft guilds of yore, are attempting to create a world in their image, creating independent infrastructures of mutual coordination, independent of the control of Big State and Big Capital.

At the same time, the crisis of the global system is such, that powerful movements of relocalization have emerged. What if a merger of these Somewheres and Everywheres, where the jurisdictional alliance needed to obtain systemic change, and a new 5,000 year bifurcation ? Stay tuned for my next article explaining more in detail the cosmo-local hypothesis.

Resources to know more:

Understanding the relational grammar of value exchange:

Historicizing the modes of value exchange: