Open letter to Michel Bauwens after Ouishare

[nadia]

Dear Michel,

it was a pleasure meeting you at Ouishare fest, a fun gathering of various actors in the so-called Collaborative Consumption/ “sharing” /“New Economy” movement.

Sharing, it seems, is growing: the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25%. Airbnb alone has housed over 4 million individuals since 2008, 2.5 million of which took place in in 2012 alone [Ref]. As pointed out in this presentation by Loic Lemur, there are many reasons for the sudden surge of interest incuding the ongoing economic crisis.

Technosocial changes bring about new landscapes of opportunities and pitfalls. There are many questions to be answered with regards to the sharing economy. I enjoyed your keynote presentation as it is making a needed contribution towards clearing some of the confusion about how different entities are currently participating in the sharing economy. As well as why interaction between them is sometimes problematic. You presented a sketch of four prospective scenarios of p2p dynamics, that taken together would give an overview of what is going on in the the so called sharing economy (please correct me if I got any of it wrong)

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.

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.

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?

Am I missing something important here? I am trying to get my head around these topics and would very much appreciate help in figuring this out!

thanks again, Nadia

Photo credit for Image of Michel Bauwens presenting during Ouishare: Gayane Adourian

[alberto]

Restricting public goods => artificial scarcity

Excellent question. I was not at Ouishare and have not heard Michel’s talk, so I cannot say anything about it: but elsewhere I did hear a lot of talk about common goods. It seems to be in fashion. I think it’s the name: hey, they are “common”, so they must be sociable, friendly, they bring people together! They must be a good thing. So it does happen that people call “common goods” what are, in fact, public goods. Like Nadia, I would classify Wikipedia as a nearly pure public good,

Getting the name wrong means risking getting your policy implication wrong as well. Specifically: the whole policy problem around common goods is how to regulate access to them (this is the overarching theme of Ostrom’s Governing the commons). Viceversa, for public good access regulation is no problem at all: what makes them public is the fact that their consumption is not rivalrous – if I consume an extra unit of a public good, this does not imply that someone else has to reduce their own consumption of the same good. Ostrom’s examples are all very analog: forests (once I log one tree, no one else can log the same tree), fisheries (once I catch one fish, no one else can catch it again), aquifers (once I pumped a liter of water, it regenerates very slowly). The digital realm works by different rules: by reading a Wikipedia article, I don’t take away anyone’s possibility to do the same. If anything, the social value of a Wikipedia article grows with every perusal.

Consequence: you could try to monetize Wikipedia by putting it behind a paywall. Maybe it would be fairer towards WIkipedians. But it would definitely destroy wealth, because it would reduce the consumption of a good that does not deteriorate by consuming more of it. And since digital goods don’t deteriorate with consumption, paywalling means creating an artifical scarcity – just as Hollywood does with the files of The Simpsons. The Pirate Bay’s whole argument was that artificial scarcity ( which they view as a bad thing) is the opposite of sharing. If indeed it was suggested in a conference on the sharing economy – well, I’ll be surprised, though I do sympathize with the fairness argument.

End of the comment. If you are not familiar with the economic argument above, read on for a silly example in the tradition of 18th century economists. 

Picture an economy consisting of a single farmer that grows tomatoes. Tomato seeds are freely found in the environment, and they have price zero; so does fertile land. The economy contains an endless supply of Wikipedia articles with all possible information on the cultivation of tomatoes. The farmer divides his time between researching methods for growing more, better tomatoes and actually working the field. All the research consists on him looking up stuff on Wikipedia.

Now suppose a paywall is put around Wikipedia. The farmer has to pay (in tomatoes, for simplicity) every time he reads an article. At this point, he will be tempted to cut down on research activity: if he just grows tomatoes as he always has, he does not have to pay anything. If he is not curious or ambitious enough, he will then be content with doing just that. More realistically, he will adopt an intermediate solution, reading fewer articles than he would with the free Wikipedia (for example, only when a blight breaks out). Whatever the solution adopted, the point is this: the paywall forces the farmer and Mr. Wikipedia to share the tomatoes (so it might be fairer), but it also reduces the number of tomatoes to go around (it is less efficient). There is an efficiencly loss, as the farmer attempts to duplicate knowledge that already exists behind the paywall. The efficiency loss comes from the fact that knowledge duplication has zero cost: an economy that shares all knowledge is, all other things being equal, always more efficient than one that does not.

Economists have known for a long time that a system of market prices is great at allocating resources within the domain of private goods (rivalrous, excludable); and, conversely, that it sucks outside that domain. The price of a private good encodes information on its optimal allocation, whereas the amount charged for accessing a public good does not, and strictly speaking, is not even a price.

[stanjourdan]

(Alternative) money matters

Interesting post that reminds me of a similar discussion with a friend after the OuiShare Fest.

I think this is where we would need an alternative currencies to make the system work. Imagine a “contributive zone” (as Stiegler suggested on saturday morning) where everything is free if you use the alternative currency (which of course would be post-scarcity-compatible – think ≠ bitcoin). People not using the currency would have to make a contribution in €/$ to access wikipedia and so on.

In the end, Wikipedia still remains free for us, but capitalist entities will have to make a monetary contribution, thus finally aknwoledge our value. Alternatively, they could join our currency system, and therefore start transitionning for real

How does it look like?

[matthias]

Yes, where commons need an enclosure

Well, I see the appeal in what you say, and I’d advocate such a solution for commons resources that are scarce by nature and thus require a contribution from those who benefit from them. For example, the community woods of a village. In such a context, the discussion about an enclosure for the commons is meaningful and relevant to prevent any sort of “tragedy of the commons”.

Yet even with the enclosure of scarce commons, the principle of commons (as I see it) still stands: Provide flatrate access to a group as large as possible without limiting the sustainability of the commons resource. In the case of digital commons (Wikipedia, free software, …), this means providing flatrate access to everyone since reproducing these commons does not cost anything. It’s basically the same discussion they had about free software years ago: Is software still free if it’s only free for non-commercial purposes? The agreement is seemingly now: no it’s not. Introducing such restrictions or similar ones (“not to be used by the military”, “not to be used by government” etc.) imposes own ethical standards on others and creates a lot of friction in practical usage that limits the potential total benefit of digital commons. For example, with CC-BY-NC-* licences, it’s really not always clear what is commercial usage and what’s not: Is it only commercial if I earn money with it? Or already when using a CC-BY-NC* illustration on a commercial website? Etc…

[dante]

“Four Scenarios for the Collaborative Economy”

Michel’s presentation at OuiShare that Nadia refers to :

http://www.youtube.com/watch?v=KMV4cqRgV6Q

What I believe the Edgeryders Social Entreprise / Community relation can be called :

http://p2pfoundation.net/Phyles

I mention Phyles ( as an intentional community commons ? ) , as I imagine they could be the “enclosed commons” Matthias refers to , with their own internal engagement dynamics and resource allocation conditionalities.

Also see Marinaleda in Spain

http://en.wikipedia.org/wiki/Marinaleda,_Spain

( worth googling for documentaries in relation to Marinaleda - this one is in french, produced by france2 YouTube )

[eimhin]

+1 Dante

Yes I agree with Dante on this one, for more info see:

http://english.lasindias.com/united-phyles/

Also bare in  mind (our own) James Wallbank’s recent Tedx talk, Sheffield, the ‘Rasperry Pi’ and what is we are setting about with the unMonastery:

https://www.youtube.com/watch?v=esf70HN7BjA

[By the way there are workshops in Dublin in August that cost €45 per person to learn how to make the Rasberry Pi plug into a theatre/event style sound-desk with your complete programming for a performance or public engagement, light and sound. They have 25 places on that workshop and it filled proper quick.]

Key productions via this kind of collaboration are enriched via a ‘learn by doing’ opportunity to innovate within communities, on the ground, and so building technologies for community use, testing, modifying, and cyclically innovating to accomodate the full spectrum of local interest.

This is a near first in Europe, possibly a first-first. It calls for dedicated thought. @Matthias @Noemi @Nadia @James @Alberto @Michel

[dante]

A Macroeconomics of Networked Phyles ?

Nice link Eimhin. Thanks for sharing.

As to enable greater complexity, I see potential in support of shared ( open source ) intentions ,

and in facilitating “community 2 community” trade ( or reputation based gifting ) ,

using for example mutual credit units ( not necessarily restricted to man hour time –> potentially creating investment units backed by a basket of non-profit oriented pooled resources as mutual investment  ).

For example, I could see how Marinaleda ( or other agricultural phyles ) can , in their own interest, support an open source ecology http://opensourceecology.org/ experiment with land and housing, which in turn can support them in reducing their dependency and costs in euros what concerns certain forms of machinery, and reduce dependency in euros for other phyles when they need infrastructural solutions.

I could also see, to use a not for profit mutual support / investment approach, how Marinaleda can pool a certain quantity of olive oil as a form of mutual support into a diversified pool of resources converged from various productions from various phyles / intentional communities ( seen as a value network ? ) - resources that can then be re-allocated and distributed as a form of investment in the community, reducing dependency on euros, and even using the promise of contribution in resources for units of non linear exchange that can be accepted within and between communities.

One may need to understand legally what the implications for such reification may be. Possibly legally considered as “reduction coupons” ( as the coupons some shops give ? ) ? Needs to be studied in depth … 

[dante]

not for loss social investment mechanism and licenses

some further links of mutually supporting concepts , in relation to an enclosed networked commons :

basket :

http://en.wikipedia.org/wiki/Terra_(currency)

open capital :

http://p2pfoundation.net/Chris_Cook

not for loss social investment mechanism :

http://www.slideshare.net/ChrisJCook/social-investment-mechanism-12-03-09

http://www.opencapital.net/

“Open Capital is the concept of partnership finance through the sharing of risk and reward. Risk is shared through a guarantee society or clearing union, where trade credit between buyers and sellers is subject to a mutual guarantee. Revenues are shared through co-ownership of aproductive asset by the investors and investees”

License :

http://p2pfoundation.net/Non-Dominium ;

http://p2pfoundation.net/Using_Nondominion_to_Evolve_from_Local_to_Global_Commons

http://p2pfoundation.net/Peer_Production_License

The peer production license is an example of the Copyfarleft type of license, in which only other commoners, cooperatives and nonprofits can share and re-use the material, but not commercial entities intent on making profit through the commons without explicit reciprocity

http://p2pfoundation.net/Copyfarleft

As further accounting tools :

http://en.wikipedia.org/wiki/Value_network

A value network is a business analysis perspective that describes social and technical resources within and between businesses. Thenodes in a value network represent people (or roles). The nodes are connected by interactions that represent tangible and intangibledeliverables. These deliverables take the form of knowledge or other intangibles and/or financial value. Value networks exhibitinterdependence. They account for the overall worth of products and services.

http://en.wikipedia.org/wiki/Resources,_events,agents(accounting_model)

Resources, events, agents (REA) is a model of how an accounting system can be re-engineered for the computer age. REA was originally proposed in 1982 by William E. McCarthy as a generalized accounting model, and contained the concepts of resources, events and agents (McCarthy 1982).

Notes :

• the peer production license can serve as a viral element ( as GPL in software programming ), encouraging further partners in sharing the explicit reciprocity engagements.

• the units can themselves bare a license of usage - also, such units in effect should not be defined as a currency , but as a guarantee society or clearing union , in other words it is engineered as an internal accounting unit or practice between organizations that comply with the various tax laws.

• regarding software tools, in addition to what Matthias develops, it is interesting to look into software developed by Seth ( netention ) or Bob ( value networks ).

[eimhin]

What can this theory translate to in practice? ( dante :1st msg)

So much in those two comments Dante! Lets elaborate as to what this could mean in more simple terms of practice.

First of all, it appears that what you propose could form an important thread in the ‘collaborative communities’ thread. ( Pavlik Elf ) With many community oriented groups forming now there is room for massive development in this area, especially where that development enhances community cooperative development.

Another example to fit with the Marinelda scenario you depict above:

Where organic growers and producers form networks you have a basis for working and living (WOOFing) situations that allow for coordinated project development that is local community specific. In such networks there will appear ecovillage and OSE settlement projects and others like them. With the appropriate exchange systems in place this encourages a nomadic and highly practical and collaborative approach to localized distributed sustainable and ecological development that can reduce depedency on euros via the kind of coupon system you suggest. Members of participative networks being able to trade ‘digital value-tokens’ for goods and services within these networks.

On this basis a lot of time and creativity is freed up, aswell as space in which that can flourish. There is somewhere to go, food, shelter, and collaborators to move the participating phyles forward.

Mapping is Essential: what kind of spaces-can facilitate what kind of events under    what conditions? Then these spaces can host other events that would otherwise have poured value into the consumer economy. 

dante : you use the term: "not for profit mutual support / investment approach "           Is this akin to a form of equity crowd-investment ? Do you mean that a network (for example ER), finding a viable mode of production, say ‘organic shitake mushroom farming’, and the people and place to do it, could equity crowd-fund the project, therefore owning a certain amount of the ‘entity’ which translates into a reduction on the price of that good for members of the community/phyle/commons…?

If so I would like to add the use of label-creation. Like the ‘certified Organic’ label, but specifically in relation to affilitated commons oriented networks. How to go about this would be something that requires mass participation of networks sharing this vision.

[dante]

Equity Based Investment, Non Linear Transactions, Value Networks

Hi Eimhin,

yes, various subcultures can be supportive.

Indeed, forms of investment that can be equity based, not necessarily debt based.

People contributing with what they have, and not necessarily euros.

Sweat Equity is one example of a contribution, in hours of work for example.

I can imagine various phyles ( including some ecovillages, some cooperatives, open source value networks , … ) investing into each other with whatever resources they may already produce, in a “not for loss” approach ( I believe Chris Cook uses that term )

Best may be to dive into Chris Cook’s presentations ( you may already know them ) :

http://p2pfoundation.net/Chris_Cook

Video : http://www.youtube.com/watch?v=I5mgnR5lagI&gl=BE

Some slides : http://www.slideshare.net/ChrisJCook/equity-shares-a-solution-to-the-credit-crash-presentation

I also imagine an architecture where such form of mutual investment could be combined with a mutual credit exchange system, or eventually some kind of accounting solution based on units guaranteed by a basket of resources of their own production, such as the Terra suggests.

I also see great potential in converging years of experience and discussions by converging development,

including on Value Networks http://en.wikipedia.org/wiki/Value_network

http://valuenetwork.referata.com/wiki/Main_Page

accounting approaches such as REA

http://en.wikipedia.org/wiki/Resources,_events,agents(accounting_model)

https://github.com/valnet/valuenetwork/wiki/Links

and building on software development experience of Bob,

https://github.com/bhaugen

https://github.com/valnet/valuenetwork

for example this conference call gives some insights of development and usage

http://www.youtube.com/watch?v=HTYSIO16rJI

Seth , …

https://github.com/automenta/netentionjs2

http://www.netention.org/semantic-business-intelligence/

and Matthias project ( I do not know what the actual current software development reached is so far for Matthias project, but I do notice institutional recognition and support for it ):

https://edgeryders.eu/economy-app

https://edgeryders.eu/economy-app/detailed-description

 

http://economyapp.eu/

 

excerpted from pdf :

 

Winning the EU Social Innovation Prize 2013. With this new concept, we already had our first

success at winning the European Commission's “European Social Innovation Competition” of

2013.19

 

4.1 How It Works

The idea is to create a web-based software application “Economy App” that enables economic

exchange by connecting peoples' needs and offers with innovative system that we call “network

barter”. It does not need cash or credit money as intermediaries. Here's how it works ...

[dante]

Michel’s reply to Nadia’s open letter to him

http://blog.p2pfoundation.net/michel-bauwens-responds-to-nadia-el-imams-open-letter-after-the-ouishare-fest/2013/07/06