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under certain structural conditions non-price-based production is extraordinarily robust

It just is not so easy to assume that because people behave productively in one framework (the social process of peer production that is Wikipedia, free and open source software, or Digg), that you can take the same exact behavior, with the same exact set of people, and harness them to your goals by attaching a price to what previously they were doing in a social process.

giving rewards to customers can actually undermine a company’s relationship with them

There is, in fact, a massive amount of research that supports the idea that when you pay people to do something for you, they stop enjoying it, and distrust their own motivations. The mysterious something that goes away, and that “Factor X” even has a name: intrinsic motivation.

Extrinsic rewards suggest that there is actually an instrumental relationship at work, that you do the activity in order to get something else

If you pay me for it, it must be work

It’s what we would call a robust effect. It shows up in many contexts. And there’s been considerable testing to try to find out exactly why it works. A major school of thought is that there is an “Overjustification Effect.” (http://kozinets.net/archives/133)

interesting examples of an effect called crowding

Offering financial rewards for contributions to online communities basically means mixing external and intrinsic motivation.

A good example is children who are paid by their parents for mowing the family lawn. Once they expect to receive money for that task, they are only willing to do it again if they indeed receive monetary compensation. The induced unwillingness to do anything for free may also extend to other household chores.

Once ‘gold-stars’ were introduced as a symbolic reward for a certain amount of time spent practicing the instrument, the girl lost all interest in trying new, difficult pieces. Instead of aiming at improving her skills, her goal shifted towards spending time playing well-learned, easy pieces in order to receive the award (Deci with Flaste 1995)

Suddenly, she managed to follow the prescription, as her own (intrinsic) motivation was recognized and thereby reinforced.

The introduction of a monetary fine transforms the relationship between parents and teachers from a non-monetary into a monetary one

"The effects of external interventions on intrinsic motivation have been attributed to two psychological processes: (a) Impaired self-determination. When individuals perceive an external intervention to reduce their self-determination, they substitute intrinsic motivation by extrinsic control. Following Rotter (1966), the locus of control shifts from the inside to the outside of the person affected. Individuals who are forced to behave in a specific way by outside intervention, feel overjustified if they maintained their intrinsic motivation. (b) Impaired self-esteem. When an intervention from outside carries the notion that the actor's motivation is not acknowledged, his or her intrinsic motivation is effectively rejected. The person affected feels that his or her involvement and competence is not appreciated which debases its value. An intrinsically motivated person is taken away the chance to display his or her own interest and involvement in an activity when someone else offers a reward, or commands, to undertake it. As a result of impaired self-esteem, individuals reduce effort.

External interventions crowd-out intrinsic motivation if the individuals affected perceive them to be controlling

External interventions crowd-in intrinsic motivation if the individuals concerned perceive it as supportive

In that case, self-esteem is fostered, and individuals feel that they are given more freedom to act, thus enlarging self-determination

cultural categories that oppose marketplace modes of behavior (or “market logics”) with the more family-like modes of behavior of caring and sharing that we observe in close-knit communities (”community logics”)

this is labor, this is work, just do it.

When communal logics are in effect, all sorts of norms of reciprocity, sacrifice, and gift-giving come into play: this is cool, this is right, this is fun

So think about paying a kid to clean up their room, paying parishioners to go to church, paying people in a neighborhood to attend a town hall meeting, paying people to come out and vote. All these examples seem a little strange or forced. Why? Because they mix and match the communal with the market-oriented.

Payment as disincentive. In his interesting book Freakonomics, economist Steven Levitt describes some counterintuitive facts about payment. One of the most interesting is that charging people who do the wrong thing often causes them to do it more, and paying people to do the right thing causes them to do it less.

You direct people _away_ from any noble purpose you have, and instead towards grubbing for dollars

When people work for a noble purpose, they are told that their work is highly valued. When people work for $0.75/hour, they are told that their work is very low-valued

you're going to have to fight your way through labour laws and tax issues all the way to bankruptcy

Market economics. If you have open content, I can copy your content to another wiki, not pay people, and still make money. So by paying contributors, you're pricing yourself out of the market.

You don't have to pay people to do what they want to do anyways. The labour cost for leisure activities is $0. And nobody is going to work on a wiki doing things they don't want to do.

No fair system. There's simply no fair, automated and auditable way to divvy up the money

too complicated to do automatically. But if you have a subjective system -- have a human being evaluate contributions to an article and portion out payments -- it will be subject to constant challenges, endless debates, and a lot of community frustration.

Gaming the system. People are really smart. If there's money to be made, they'll figure out how to game your payment system to get more money than they actually deserve

They'll be trying to get as much money out of you as possible, and you'll be trying to give as little as you can to them

If you can't convince people that working on your project is worth their unpaid time, then there's probably something wrong with your project.

People are going to be able to sense that -- it's going to look like a cover-up, something sleazy

Donate.

Thank-you gifts

Pay bounties

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