David de Ugarte: “The P2P mode of production works to produce software, physical objects, and all kinds of services”

On the occasion of the OuiShare Fest 2014, we were able to interview David de Ugarte, an economist, technologist and entrepreneur committed to new models of economic democracy. David is one of the most visible members of the Grupo Cooperativo de Las Indias and tells us how the group was founded and what its future plans are.

OuiShare: There is a lot of talk about Las Indias, but always there are questions when it comes time to define it. What is it, and what is it not?

Las Indias is a community which arose from the evolution of what, as far as we know, was the first conversational virtual community in a Latin-based language: Ciberpunk. In the ’90s, the cyberpunk movement went very quickly from literary to activist, and at the end of the decade, the experiment of that activism led to the need to experiment with forms of economic activity carried out on the network, which would allow us to gain autonomy as a community. From there, first, the Sociedad de las Indias Electrónicas would emerge, and then, with the creation of new cooperatives and businesses, the Grupo Cooperativo de las Indias.

OS: How does Las Indias work?

The idea of Las Indias is that it is a community with cooperative businesses, not a community of cooperatives. It seems like a subtle point, but it’s very important: the community, and we, the people who form it, have our own logic that we have to put ahead of the pure logic of development of each business or the cooperative that makes it.

So, there is a logic and a common strategy that is built among all, as peers, based on knowledge that we develop together, and not just coordination between cooperatives.

One is integrated into Las Indias… and after supporting different cooperatives and projects, after learning and sharing, if you have an idea, and you earn money with it, you end up seeing up another… or others. And that new cooperative can be with other Indianos, or with other people from your surroundings, and you can remain in the Group of Cooperatives or go out on your own. It doesn’t matter to us. A real community varies, mutates, and transforms itself as it learns new things. The important thing is that it serves everyone’s development and creates well-being in the real surroundings, among the people around us, wherever they are. Because transnationality is another fundamental element in Las Indias — we have almost as many different passports as members.

OS: You have developed the concept of “phyles,” or “community companies.” Why is it so relevant?

A community company is a business that organizes itself from and to give sustenance to, a community of people, whatever kind it may be: a family and it surroundings, a group of friends dispersed throughout the world or, a town.

A phyle is a transnational community or a network of communities that provide themselves with its own economic structure under the principle of economic democracy. That is, a phyle is somewhat wider — a network that can unite community companies, freelancers, small businesses, associations, etc. with the idea of creating real opportunities in a community or in a set of communities for their members to enter the market and earn economic autonomy.

What’s interesting is that while initially, we discovered that the experiences of the Direct Economy and virtual communities trend towards the birth of phyles, now that tendency has expanded to all manner of networks in the most diverse geographic and economic environments. From large Sufi groups like the Muridis — who come from Senegal — to Christian groups like the Focolare in Europe and Latin America, and from cooperative experiences after 15M in Spain — of which there are many, and the more interesting they are, the less publicity they get — to the new cooperativism in North America. There are proto-phyles of all of kinds giving economic sustenance to all manner of identities and communities.

My favorite? Obviously the Las Indias project, but I passionately follow other projects, such as the Aesyr phyle or the cooperative and transnational push the P2P Foundation is making.

But I’d like to also mention the literary models. I think they are significant. In the ’80s, Bruce Sterling presented us with “Chimera” and “Rhizome” in his novel “Islands in the Net” as a projection of the large-scale model of the Mondragon cooperative movement. In the ’90s, Neal Stephenson, with his “neo-Victorians” and “drumming” in “The Diamond Age” coined the term “phyle,” but kept situating himself in an imprecise future, though it was decomposed enough to feel familiar.

What do we have in this decade? Daniel Suárez in “Freedom TM” takes the leap to a world of virtual networks projected onto daily life using interactive glasses, which bring about alternative projects that seem tremendously close, if not present and known to us. The phyle, which started in literature as a cool fantasy of a great master of cyberpunk, today seems almost more like reporting than science fiction or a political utopia.

OS: The collaborative economy and communities, which OuiShare focuses on, are generating a lot of interest right now. How do you see the development of these diverse initiatives?

I think diversity indicates that, broadly speaking, we’re on the right path. It is true that several initiatives — like P2P currencies — can have ups and downs because they are being developed faster than others that should serve as their base. And it may be that this ends up, in some cases, in their being “captured” by other environments. But what we have to look at is now the general movement and what it represents: a tendency towards transcending the categories of the older generation and the last century (the nation, stockholder businesses, hierarchies, the cult of the large scale, intellectual property) towards a P2P mode of production that points towards abundance — with all that that means for decommodification — and scope as fundamental criteria.

But what we have to look at now is the general movement and what it represents: a tendency towards transcending the categories of the older generation and the last century

Thanks to all these movements, today, the productive world in all settings, from culture to agrarian production, and even the industrial production of an ever-wider range of objects, seems a little more like a free software community and a little less like Microsoft or a classic big business. And that is more than hopeful.

OS: Las Indias has written a fantastic book about the P2P Mode of Production. What impact will this system have?

Since the Second World War, productivity has multiplied, which drastically reduced the optimum scale of production, casting aside the state capitalism of the eastern countries first, but also threatening big businesses of the US and Europe.

During that time, the structure of communication was also transformed: we are in the transition from a decentralized world, the world of the telegraph and nations, to the model of distributed communication, the world of P2P communication.


The combination of these changes with the reduction of commercial barriers in the ’90s resulted in constant growth in commerce based mainly on the emergence of new agents on the periphery, which were smaller-scale and less capital-intensive. Among the globalization of Big Business and finance, a way was opened for a true “globalization of the small” beginning with breaking value chains and the multiplication of connectivity. The direct consequence was the greatest reduction in poverty in human history, but also a remarkable increase in inequality and economic instability.

The main cause of this counter-trend was financial capital, which did not adapt to the reduction of scale, but on the contrary, increased it still more with the help of “financialization” and “securitization,” leaving the productive system behind and regularly causing speculative bubbles. Its strategy of scale included the hardening of legislation on intellectual property, needlessly redefining the Internet through recentralizing structures (Google, Facebook, etc.), and fundamentally redoubling the pressure to capture States.

This strategy can only lead to the simultaneous destruction of the market and the State, a phenomenon we call “decomposition,” which happens in parallel with the destruction of productive capacity that brings crisis and war, which precede and accompany it.

But in parallel, with the birth and development of free software, there appeared a new way of producing and distributing whose center was not the accumulation of capital, but the accumulation of a new commons, which is to say, of abundance, in which the market eliminates rents — from intellectual property, from position, etc. — and is based on payment for work, and rewards the innovation and adaptation that enrich the commons in turn.

This is what we call the P2P mode of production, and it works to produce software, physical objects, and all kinds of services. It accumulates abundance in the form of the knowledge commons and dissipates rents with no need for central control, hierarchy or large-scale organizations.

These technologies, even if they are still a little immature, can be a valid way to confront the consequences of the financial crisis in the local productive community

And in our view, what’s extremely important day to day is that these technologies, even if they are still a little immature, can be a valid way to confront the consequences of the financial crisis in the local productive community, both in industrial microenterprises and among SMEs, from the neighborhood workshop to the component factory.

OS: Will there be a need for organizations like OuiShare or Las Indias within 10 years?

What I want and see as possible is a world with phyles, more than a world of phyles. Phyles are necessary vectors to expand this whole new economy without creating new regional differences, creating spaces of well-being and opportunities to skip over borders that are more and more damaging, both socially and economically.

Will OuiShare or Las Indias be necessary? Almost certainly.We must not fall into the individualist mystification that has sterilized the concept of the market and let it impoverish our view of the network.

The traditional Mediterranean market wasn’t just a place for buying and selling. It was also a space for political and social interaction and — this is too often forgotten — the place where teachers, poets, philosophers were found with their disciples and judges arbitrated conflicts. The market is not exclusively a monetary relationship, but above all, a social and cultural relationship based on exchange, but also on donation. There’s no market without a non-market setting, without “gratia et amore” and without “love of the Art,” since Art was technique and technology, but also the community of artisans itself.

In the same way, the network is not only the relationship that unites us with the knowledge commons through communities of purpose. The network is, above all, conversation, and therefore “clumps,” preferences, choices, networks of communities that people cross out of a desire to share and be with others. The network is made up of communities that are also spaces of affections. It’s not just a network of individuals who only relate to each other “for” something. Because of this, and because our capacity to emotionally link to others is limited by time and by our own inheritance as a species to relatively small groups, always there will be groups, clumps, real communities that are differentiated in the great space of the network.

David de Ugarte at OuiShare Fest 2014

David de Ugarte’s talk had problems with the audio, but we have added subtitles. We also recommend you read this fantastic post on the blog of Las Indias, where the same concepts are explained: Phyles and the new communitarianism

Finally, a vision of the future in another interview with David de Ugarte during OuiShare Fest:

Thank you, David!

A special thanks to Steve Herrick for the translation (http://level.interpreters.coop/)