Can the Commons compete with the for-profit economy?

How can the commons economy can overcome its polar opposite, the accumulative capitalist economy? Paradoxally, by creating a bridge between the two, Michel Bauwens explains in a discussion that emerged after OuiShare Fest.

A few weeks ago, Nadia El Imam from Edgeryders addressed an open letter to me that was a response to the closing keynote at the OuiShareFest in May 2013, where I presented a four-quadrant interpretation of the emerging collaborative economy, with four different value-laden models vying for supremacy but also already co-existing in the present.

Nadia’s editorial open letter contains a number of open questions, which I will try to answer paragraph by paragraph, while asking understanding for the delay, due to a very intense 14-week lecture tour, which made this kind of concentration a bit more difficult to achieve.

To begin with, Nadia writes:

You pointed out that it is not whether the entitiy is run for profit or for benefit, or whether it is managed in a centralised or decentralised manner per se that positions it as contributing to the common good, or not. In order to understand how actors are participating in the sharing economy, you made a point that one needs to determine whether they lead to use and exchange value being circulated, distributed and or extracted.
Of the questions facing the sharing economy, how to balance making meaning and the need to make money is perhaps the deepest. In my own keynote about the unMonastery I asked: ‘why so many sharers are struggling if sharing is so good?’ Did you imply a path to improve the situation is to think beyond creating livelihoods for local communities and rather in terms of achievieving economic democracy in terms of contribution to, and extraction of value from global commons?
Am I correct in understanding you would like to see a situation where both use and exchange value are circulated? If I understood correctly, you propose that this can be achieved through peer production licenses that premier ethical organisations and people (those who contribute to global commons) and charge those who extract value without sufficiently contributing to it.

Dear Nadia, in exposing the four models, I distinguish two broad social-economic models. The two left quadrants of ‘netarchical’ vs ‘distributed capitalism’, let’s call them the for-profit oriented models, with ‘for-benefit’ oriented models.

In the first two models, adaptations of contemporary capitalism, profit-maximisation, i.e. the realization of exchange value is the main aim, and use value is a means to that end; in the for-benefit model, it’s the opposite, exchange value, profit and profit-making (but not maximization) is a means to an end to create use value. My contention is that proper P2P models choose the latter, and they are based on the creation of shared common pools of value.

In these P2P models, based on free self-allocation, economic democracy exists de facto, in the choice of activity, and is based on the fact that there is no hierarchical dependency when you are not using paid labor, but contributions. In the for-profit models, there is no economic democracy in the labor relationship, and therefore, introducing it is very important, but at the same time, much more difficult to achieve, as 250 years of social struggles attest to. Nevertheless, since all firms now rely increasingly on contributive activities, they will have to take into account the norms and rules of open communities. Think of Google and IBM as quite adept in doing this.

Since all firms now rely increasingly on contributive activities, they will have to take into account the norms and rules of open communities

Creating a enclosured sphere of Commons

You hint at the major difficulty of the for-benefit models: since they do not accumulate profit, they have a harder time accumulating resources. This is where the peer production license comes in. It suggests that firms that do not contribute directly to the commons in question (the one governed by the license), or indirectly, should not use the common resource without any financial contribution. This way, exchange value would flow from the sphere of capital accumulation to the sphere of the commons, and help in generating livelihoods.

But I also propose that commoners/peer producers more directly create their own for-benefit institutions… Here is how I see it : you have the sphere of commons accumulation, with people contributing to commons of knowledge, software and design; and you have a sphere of cooperative accumulation, where members of cooperatives and similar entities, are able to grow their material means of production and livelihood.

My thesis is that peer production is so hyperproductive, as compared to the classic for-profit proprietary mode, that such cooperative entrepreneurial coalitions should be able to compete (outcompete, outcooperate), the for-profit entities.

Nadia further writes:

I think I followed till the point where you mentioned both Transition Towns and Wikipedia as examples, pointing out that while Wikipedia can be considered global commons (even though you think it’s governance is flawed as those who know the rules have more power than those who know the subject).
Because you include both wikipedia and transition towns as examples, I do not understand the differences between what you refer to as global commons and public goods. Some goods like the air, can be used by one person without this meaning less of it is available for others to use: they are non-rivalrous. Also, you couldn’t really stop others from accessing them: they are effectively non-excludable. These are public goods. Common goods, on the other hand like, rivers from which fish are sourced, are rivalrous and non-excludable. I guess Wikipedia by virtue of being information (non-rivalrous non-excludable) could be considered public goods.

Transitions Towns, though oriented towards local resilience, nevertheless cooperate on a global scale, and have created vibrant digital commons in which knowledge and experience is deposited for the benefit of all. The same goes for Wikipedia. Global commons can have their own problems and flaws in governance, as I suggested for Wikipedia.

It is not easy to make a distinction between public goods and commons goods, but I do not think the difference is the excludable/non-excludable issue. In my mind, the issue is more one of governance and ownership. Common goods are governed by their user communities, and may not have clear territorial boundaries. It is usership that qualifies you to be part of the governance and ownership mechanisms. Think of a fishing area that is managed by the community of fishermen, but we could think of as yet non-existing global Sky Trusts…

On the other hand, public goods are owned and governed by citizens, and the public authorities that represent them, in other words, by the territorial states, their subdivisions, and their inter-national cooperations. I’m sure you already know that commons are not open-access common pools that are not governed, but governed commons, as researched and explained by the Ostrom school.

We can imagine all kinds of hybrid models between public services and commons. For example, Tommasso Fattori argues for the commonification of public services and public-commons partnerships. In the case of Acqua Bene Comune in Naples, municipal water is now specifically defined as a commons, under the governance of all its users. It is a ‘social contract’ between the municipality and the user communities.

Why are public goods still necessary, in my mind, is that commons are not necessarily unselfish, and it is easy to imagine user communities that only think about their own interests, not about those of other citizens… Think of mountain communities who would deflect the water, so it would not get to the valleys. This is why we need hybrid models, in which both the rights of user communities, and the rights of other citizens, can be calibrated. About that, I strongly recommend consulting the following document.

Towards a commons-friendly counter-economy

Nadia writes:

When you put a price on public goods you are destroying wealth (if you think of it as an outcome of human activity). If you raise the price on something people will use less of it, and in the case of immaterial goods they will produce less of it as a result. Wouldn’t the p2p license idea imply that you would need to police digital commons so as to create artifical scarcity, which would in turn be destructive?

You are right about a potential pitfall of the peer production license… There is a paradox here, and I’m trying to solve it, without being sure it is the appropriate solution, though I think it should be tried. The paradox is that, “the more communistic the license, the more capitalistic the practice”.

Indeed a fully open license allows multinationals to use and build on the knowledge commons, but the paradox is then that you get “commons-producing-capitalist-enterprise” (which is a historic novelty as traditionally for-profit mechanisms where based on the enclosure of commons). This means that you have a accumulation of the commons, in the immaterial field, but no possibility to have a livelihood within the commons, thus you have to be hired as labor, and participate in the accumulation of capital.

What we are attempting to do with the peer production license is to create a new link between the commons accumulation, and cooperative accumulation. The pitfall is potential lower growth, through the limited artificial scarcity introduced by the license, but the advantage is the creation of a counter-economy that is commons-friendly because it allows the commoners to achieve economic democracy in self-owned entities. Is it the right and the ultimate solution? I don’t know, but I don’t see much other solutions on the horizon either, so consider the Peer Production License as a intervention to make people think about transition strategies and something that can be experientially verified. I don’t think we can do more at this stage.

Credit picture: © with autorisation Stefano Borghi PaternitéPartage selon les Conditions Initiales Kennisland