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But notice that to do this, the system had to change, the core logic was no longer the same.

The emergence of the peer model of production, based on the non-rivalrous nature and virtually non-existent marginal cost of reproduction of digital information, and coupled with the increasing unenforceability of “intellectual property” laws, means that capital is incapable of realizing returns on ownership in the cognitive realm.

capital is becoming an a posteriori intervention in the realization of innovation, rather than a condition for its occurrence

1) The creation of non-monetary value is exponential 2) The monetization of such value is linear

What this announces is a crisis of value, most such value is ‘beyond measure’, but also essentially a crisis of accumulation of capital.

more and more positive externalizations are created from the social field

“the core logic of the emerging experience economy, operating as it does in the world of non-rival exchange, is unlikely to have capitalism as its core logic.”

This takes the form both of “intellectual property” law, as well as direct subsidies from the taxpayer to the corporate economy

crisis of realization under state capitalism to capital’s growing dependence on the state to capture value from social production and redistribute it to private corporate owners

The state capitalist system will reach a point at which, thanks to the collapse of the portion of value comprised of rents on artificial property, the base of taxable value is imploding at the very time big business most needs subsidies to stay afloat.

We live in a political economy that has it exactly backwards. We believe that our natural world is infinite, and therefore that we can have an economic system based on infinite growth. But since the material world is finite, it is based on pseudo-abundance. And then we believe that we should introduce artificial scarcities in the world of immaterial production, impeding the free flow of culture and social innovation, which is based on free cooperation, by creating the obstacle of permissions and intellectual property rents protected by the state. What we need instead is a political economy based on a true notion of scarcity in the material realm, and a realization of abundance in the immaterial realm.

Brains and bodies still need others to produce value, but the others they need are not necessarily provided by capital and its capacities to organize production.

The household and informal economies have been allowed to function to the extent that they bear reproduction costs that would otherwise have to be internalized in wages; but they have been suppressed (as in the Enclosures) when they threaten to increase in size and importance to the point of offering a basis for independence from wage labor. “

increasing untenability of property rights in the information realm

there is no more outside.

one of intensive development, to grow in the immaterial field, and this is basically what the experience economy means

Innovation is becoming social and diffuse, an emergent property of the networks

failure of artificial abundance

failure of artificial scarcity

We now have a technology which allows us to globally scale small group dynamics, and to create huge productive communities, self-organized around the collaborative production of knowledge, code, and design. But the key issue is that we are not able to live from that, right

A lot of co-ops have been neo-liberalizing, as it were, have become competitive enterprises competing against other companies but also against other co-ops, and they don’t share their knowledge

We cannot create our own livelihood within that sphere

instead of having a totally open commons, which allows multinationals to use our commons and reinforce the system of capital, the idea is to keep the accumulation within the sphere of the commons.

The result would be a type of open cooperative-ism, a kind of synthesis or convergence between peer production and cooperative modes of production

then the material work, the work of working for clients and making a livelihood, would be done through co-ops

But it hasn’t had much of a direct connection to this emerging commons movement, which shares so many of the values and  principles of the traditional cooperative movement.

There’s also a lot of peer-to-peer work going on, but it’s not very well versed around issues like cooperative organization, formal or legal forms of ownership, which are based on reciprocity and cooperation, and how to interpret the commons vision with a structure, an organizational structure and a legal structure that actually gives it economic power, market influence, and a means of connecting it to organizational forms that have durability over the long-term.

The young people, the developers in open source or free software, the people who are in co-working centers, hacker spaces, maker spaces. When they are thinking of making a living, they think startups

They have a kind of generic reaction, “oh, let’s do a startup”, and then they look for venture funds. But this is a very dangerous path to take

Typically, the venture capital will ask for a controlling stake, they have the right to close down your start up whenever they feel like it, when they feel that they’re not going to make enough money

Don’t forget that with venture capital, only 1 out of 10 companies will actually make it, and they may be very rich, but it’s a winner-take-all system

we don’t have what Marx used to call social reproduction

I would like John to talk about the solidarity co-ops, and how that integrates the notion of the commons or the common good in the very structure of the co-op

They don’t have a commons of design or code, they privatize and patent, just like private competitive enterprise, their knowledge

Cooperatives, which are basically a democratic and collective form of enterprise where members have control rights and democratically direct the operations of the co-op, have been the primary stakeholders in any given co-op – whether it’s a consumer co-op, or a credit union, or a worker co-op.

Primarily, the co-op is in the service of its immediate members

What was really fascinating about the social co-ops was that, although they had members, their mission was not only to serve the members but also to provide service to the broader community

In the city of Bologna, for example, over 87% of the social services provided in that city are provided through contract with social co-ops

democratically run

much more participatory, and a much more engaged model

The difference, however, is that the structure of social co-ops is still very much around control rights, in other words, members have rights of control and decision-making within how that organization operates

And it is an incorporated legal structure that has formal recognition by the legislation of government of the state, and it has the power, through this incorporated power, to negotiate with and contract with government for the provision of these public services

In Québec they’re called Solidarity co-ops

So, the social economy, meaning organizations that have a mutual aim in their purpose, based on the principles of reciprocity, collective benefit, social benefit, is emerging as an important player for the design and delivery of public services

This, too, is in reaction to the failure of the public market for provision of services like affordable housing or health care or education services

This is a crisis in the role of the state as a provider of public services. So the question has emerged: what happens when the state fails to provide or fulfill its mandate as a provider or steward of public goods and services, and what’s the role of civil society and the social economy in response?

we have commonses of knowledge, code and design. They’re more easily created, because as a knowledge worker, if you have access to the network and some means, however meager, of subsistence, through effort and connection you can actually create knowledge. However, this is not the case if you move to direct physical production, like the open hardware movement

I originally encountered Michel after seeing some talks by Benkler and Lessig at the Wizard of OS 4, in 2006, and I wrote an essay criticizing that from a materialist perspective, it was called “The creative anti-commons and the poverty of networks”, playing on the terms that both those people used.

In hardware, we don’t see that, because you need to buy material, machines, plastic, metal.

Some people have called the open hardware community a “candy” economy, because if you’re not part of these open hardware startups, you’re basically not getting anything for your efforts

democratic foundations like the Apache foundation

They conceive of peer production, especially Benkler, as being something inherently immaterial, a form of production that can only exist in the production of immaterial wealth

From my materialist point of view, that’s not a mode of production, because a mode of production must, in the first place, reproduce its productive inputs, its capital, its labor, and whatever natural wealth it consumes

From a materialist point of view, it becomes  obvious that the entire exchange value produced in these immaterial forms would be captured by the same old owners of materialist wealth

different definition of peer production

independent producers collectively sharing a commons of productive assets

I wanted to create something like a protocol for the formation and allocation of physical goods, the same way we have TCP/IP and so forth, as a way to allocate immaterial goods

share and distribute and collectively create immaterial wealth, and become independent producers based on this collective commons.

One was the Georgist idea of using rent, economic rent, as a fundamental mutualizing source of wealth

Mutualizing unearned income

So, the unearned income, the portion of income derived from ownership of productive assets is evenly distributed

This protocol would seek to normalize that, but in a way that doesn’t require administration

typical statist communist reaction to the cooperative movement is saying that cooperatives can exclude and exploit one another

But then, as we’ve seen in history, there’s something that develops called an administrative class,  which governs over the collective of cooperatives or the socialist state, and can become just as counterproductive and often exploitive as capitalist class

So, how do we create cooperation among cooperatives, and distribution of wealth among cooperatives, without creating this administrative class?

This is why I borrowed from the work of Henry George and Silvio Gesell in created this idea of rent sharing.

This is not done administratively, this is simply done as a protocol

The idea is that if a cooperative wants an asset, like, an example is if one of the communes would like to have a tractor, then essentially the central commune is like a bond market. They float a bond, they say I want a tractor, I am willing to pay $200 a month for this tractor in rent, and other members of the cooperative can say, hey, yeah, that’s a good idea,we think that’s a really good allocation of these productive assets, so we are going to buy these bonds. The bond sale clears, the person gets the tractor, the money from the rent of the tractor goes back to clear the bonds, and  after that, whatever further money is collected through the rent on this tractor – and I don’t only mean tractors, same would be applied to buildings, to land, to any other productive assets – all this rent that’s collected is then distributed equally among all of the workers.

The idea is that people earn income not only by producing things, but by owning the means of production, owning productive assets, and our society is unequal because the distribution of productive assets is unequal

This means that if you use your exact per capita share of property, no more no less than what you pay in rent and what you received in social dividend, will be equal

But if you’re not working at that time, because you’re old, or otherwise unemployed, then obviously the the productive assets that you will be using will be much less than the mean and the median, so what you’ll receive as dividend will be much more than what you pay in rent, essentially providing a basic income

venture communism doesn’t seek to control the product of the cooperatives

It doesn’t seek to limit, control, or even tell them how they should distribute it, or under what means; what they produce is entirely theirs, it’s only the collective management of the commons of productive assets

On paper this would seem to work, but the problem is that this assumes that we have capital to allocate in this way, and that is not the case for most of the world workers

how do we get to that stage?

other two being counter politics and insurrectionary finance

do we express our activism through the state, or do we try to achieve our goals by creating the alternative society outside

pre-figurative politics, versus statist politics

My materialist background tells me that when you sell your labor on the market, you have nothing more than your subsistence costs at the end of it, so where is this wealth meant to come from

I believe that the only reason that we have any extra wealth beyond subsistence is because of organized social political struggle; because we have organized in labor movements, in the co-op movement, and in other social forms

To create the space for prefiguring presupposes engagement with the state, and struggle within parliaments, and struggle within the public social forum

Instead, we should think that no, we must engage in the state in order to protect our ability to have alternative societies

We can only get rid of the state in these areas once we have alternative, distributed, cooperative means to provide those same functions

We can only eliminate the state from these areas once they actually exist, which means we actually have to build them

What I mean by insurrectionary finance is that we have to acknowledge that it’s not only forming capital and distributing capital, it’s also important how intensively we use capital

I’m not proposing that the cooperative movement needs to engage in the kind of derivative speculative madness that led to the financial crisis, but at the same time we can’t… it can’t be earn a dollar, spend a dollar

We have to find ways to create liquidity

to deal with economic cycles

they did things the organized left hasn’t been able to do, which is takeover industrial means of production

if they can take over these industrial facilities, just in order to shut them down and asset strip them, why can’t we take them over and mutualize them?

more ironic once you understand that the source of investment that Milken and his colleagues were working with were largely workers pension funds

idea of venture communism

pooling, based on the capture of unearned income

in Québec, there is a particular form of co-op that’s been developed that allows small or medium producers to pool their capital to purchase machinery and to use it jointly

The other idea I liked was trying to minimize a management class

much more lean and accountable because they are accountable to boards of directors that represent the interests of the members

I’ve run into this repeatedly among social change activists who immediately recoil at the notion of thinking about markets and capital, as part of their change agenda

I had thought previously, like so many, that economics is basically a bought discipline, and that it serves the interests of existing elites. I really had a kind of reaction against that

complete rethinking of economics

recapture the initiative around vocabulary, and vision, with respect to economics

reimagining and reinterpreting, for a popular and common good, the notion of market and capital

advocating for a vision of social change that isn’t just about politics, and isn’t just about protest, it has to be around how do we reimagine and reclaim economics

markets actually belong to communities and people

capital wasn’t just an accumulated wealth for the rich

I think what we’re potentially  talking about here is to make the social economy hyper-productive, hyper-competitive, hyper-cooperative

The paradox is that capital already knows this. Capital is investing in these peer production projects

Part of the proposal of the FLOK society project in Ecuador will be to get that strategic reorganization to make the social economy strategic

"All texts published in Situationist International may be freely reproduced, translated and edited, even without crediting the original source."

The website of the creative commons makes the following statement about it's purpose: "Creative Commons defines the spectrum of possibilities between full copyright -- all rights reserved -- and the public domain -- no rights reserved. Our licenses help you keep your copyright while inviting certain uses of your work -- a 'some rights reserved' copyright."

The website of the creative commons makes the following statement about it's purpose: "Creative Commons defines the spectrum of possibilities between full copyright -- all rights reserved -- and the public domain -- no rights reserved. Our licenses help you keep your copyright while inviting certain uses of your work -- a 'some rights reserved' copyright."

Or more specifically, who is a position to convert the use-value available in the "commons" into the exchange-value needed to acquire essential subsistence or accumulate wealth?

All texts published in Situationist International may be freely reproduced, translated and edited, even without crediting the original source

The point of the above is clear, the Creative Commons, is to help "you" (the "Producer") to keep control of "your" work. The right of the "consumer" is not mentioned, neither is the division of "producer" and "consumer" disputed.

Creative "Commons" is thus really an Anti-Commons, serving to legitimise, rather than deny, Producer-control and serving to enforce, rather than do away with, the distinction between producer and consumer

specifically providing a framework then, for "producers" to deny "consumers" the right to either create use-value or material exchange-value of the "common" stock of value in the Creative "Commons" in their own cultural production

Thus, the very problem presented by Lawrence Lessig, the problem of Producer-control, is not in anyway solved by the presented solution, the Creative Commons, so long as the producer has the exclusive right to chose the level of freedom to grant the consumer, a right which Lessig has always maintained support for

The Free Software foundation, publishers of the GPL, take a very different approach in their definition of "free," insisting on the "four freedoms:" The Freedom to use, the freedom to study, the freedom to share, and the freedom to modify.

The website of the creative commons makes the following statement about it's purpose: "Creative Commons defines the spectrum of possibilities between full copyright -- all rights reserved -- and the public domain -- no rights reserved. Our licenses help you keep your copyright while inviting certain uses of your work -- a 'some rights reserved' copyright

In all these cases what is evident is that the freedom being insisted upon is the freedom of the consumer to use and produce, not the "freedom" of the producer to control.

Moreover, proponents of free cultural must be firm in denying the right of Producer-control and denying the enforcement of distinction between producer and consumer

where a class-less community of workers ("peers") produce collaboratively within a property-less ("commons-based") society

Clearly, even Marx would agree that the ideal of Communism was commons-based peer production

the property in the commons is entirely non-rivalrous property

The use-value of this information commons is fantastic

However, if commons-based peer-production is limited exclusively to a commons made of digital property with virtual no reproduction costs then how can the use-value produced be translated into exchange-value?

Further, unless it can be converted into exchange-value, how can the peer producers be able to acquire the material needs for their own subsistence

The root of the problem of poverty does not lay in a lack of culture or information

but of direct exploitation of the producing class by the property owning classes

The source of poverty is not reproduction costs, but rather extracted economic rents, forcing the producers to accept less than the full product of their labour as their wage by denying them independent access to the means of production

So long as commons-based peer-production is applied narrowly to only an information commons, while the capitalist mode of production still dominates the production of material wealth, owners of material property, namely land and capital, will continue to capture the marginal wealth created as a result of the productivity of the information commons.

Whatever exchange value is derived from the information commons will always be captured by owners of real property, which lays outside the commons.

For Social Production to have any effect on general material wealth it has to operate within the context of a total system of goods and services, where the physical means of production and the virtual means of production are both available in the commons for peer production

For free cultural to create a valuable common stock it must destroy the privilege of the producer to control the common stock, and for this common stock to increase the real material wealth of peer producers, the commons must include real property, not just information

Interestingly, however, there is one last bastion of economic activity that proved remarkably resistant to the triumph of the market: firms, companies and, later, corporations. Think about it: market-societies, or capitalism, are synonymous with firms, companies, corporations. And yet, quite paradoxically, firms can be thought of as market-free zones. Within their realm, firms (like societies) allocate scarce resources (between different productive activities and processes). Nevertheless they do so by means of some non-price, more often than not hierarchical, mechanism!

they are the last remaining vestiges of pre-capitalist organisation within… capitalism

The miracle of the market, according to Hayek, was that it managed to signal to each what activity is best for herself and for society as a whole without first aggregating all the disparate and local pieces of knowledge that lived in the minds and subconscious of each consumer, each designer, each producer. How does this signalling happen? Hayek’s answer (borrowed from Smith) was devastatingly simple: through the movement of prices

The idea of spontaneous order comes from the Scottish Enlightenment, and in particular David Hume who, famously, argued against Thomas Hobbes’ assumption that, without some Leviathan ruling over us (keeping us “all in awe”), we would end up in a hideous State of Nature in which life would be “nasty, brutish and short”

Hume’s counter-argument was that, in the absence of a system of centralised command, conventions emerge that minimise conflict and organise social activities (including production) in a manner that is most conducive to the Good Life

Hayek’s argument was predicated upon the premise that knowledge is always ‘local’ and all attempts to aggregate it are bound to fail. The world, in his eyes, is too complex for its essence to be distilled in some central node; e.g. the state.

The idea here is that, through this ever-evolving process, people’s capacities, talents and ideas are given the best chance possible to develop and produce synergies that promote the Common Good. It is as if an invisible hand guides Valve’s individual members to decisions that both unleash each person’s potential and serve the company’s collective interest (which does not necessarily coincide with profit maximisation).

Valve differs in that it insists that its employees allocate 100% of their time on projects of their choosing

In contrast, Smith and Hayek concentrate their analysis on a single passion: the passion for profit-making

Hume also believed in a variety of signals, as opposed to Hayek’s exclusive reliance on price signalling

One which, instead of price signals, is based on the signals Valve employees emit to one another by selecting how to allocate their labour time, a decision that is bound up with where to wheel their tables to (i.e. whom to work with and on what)

He pointed out simply and convincingly that the cost of subcontracting a good or service, through some market, may be much larger than the cost of producing that good or service internally. He attributed this difference to transactions costs and explained that they were due to the costs of bargaining (with contractors), of enforcing incomplete contracts (whose incompleteness is due to the fact that some activities and qualities cannot be fully described in a written contract), of imperfect monitoring and asymmetrically distributed information, of keeping trade secrets… secret, etc. In short, contractual obligations can never be perfectly stipulated or enforced, especially when information is scarce and unequally distributed, and this gives rise to transaction costs which can become debilitating unless joint production takes place within the hierarchically structured firm. Optimal corporation size corresponds, in Coase’s scheme of things, to a ‘point’ where the net marginal cost of contracting out a service or good (including transaction costs) tends to zero 

As Coase et al explained in the previous section, the whole point about a corporation is that its internal organisation cannot turn on price signals (for if it could, it would not exist as a corporation but would, instead, contract out all the goods and services internally produced)

Each employee chooses (a) her partners (or team with which she wants to work) and (b) how much time she wants to devote to various competing projects. In making this decision, each Valve employee takes into account not only the attractiveness of projects and teams competing for their time but, also, the decisions of others.

Hume thought that humans are prone to all sorts of incommensurable passions (e.g. the passion for a video game, the passion for chocolate, the passion for social justice) the pursuit of which leads to many different types of conventions that, eventually, make up our jointly produced spontaneous order

Valve is, at least in one way, more radical than a traditional co-operative firm. Co-ops are companies whose ownership is shared equally among its members. Nonetheless, co-ops are usually hierarchical organisations. Democratic perhaps, but hierarchical nonetheless. Managers may be selected through some democratic or consultative process involving members but, once selected, they delegate and command their ‘underlings’ in a manner not at all dissimilar to a standard corporation. At Valve, by contrast, each person manages herself while teams operate on the basis of voluntarism, with collective activities regulated and coordinated spontaneously via the operations of the time allocation-based spontaneous order mechanism described above.

In contrast, co-ops and Valve feature peer-based systems for determining the distribution of a firm’s surplus among employees.

There is one important aspect of Valve that I did not focus on: the link between its horizontal management structure and its ‘vertical’ ownership structure. Valve is a private company owned mostly by few individuals. In that sense, it is an enlightened oligarchy: an oligarchy in that it is owned by a few and enlightened in that those few are not using their property rights to boss people around. The question arises: what happens to the alternative spontaneous order within Valve if some or all of the owners decide to sell up?