Internet

André Gorz on the Exit from Capitalism

In an amazingly prescient essay, “The Exit From Capitalism Has Already Begun,” journalist and social philosopher André Gorz in 2007 explained how computerization and networks are causing a profound crisis in capitalism by making knowledge more shareable. He argues that shareable knowledge and culture undercuts capitalist control over the global market system as the exclusive apparatus for production and consumption (and thus our "necessary" roles as wage-earners and consumers). 

The essay, translated by Chris Turner, originally appeared in the journal EcoRev in Autumn 2007 and was reprinted in Gorz’s 2008 book Ecologica. It’s worth revisiting this essay because it so succinctly develops a theme that is now playing out, one that Jeremy Rifkin reprises and elaborates upon in his 2014 book The Zero Marginal Cost Society. 

Let’s start with the conundrum that capital faces as computerization makes it possible to produce more with less labor.  Gorz writes:

The cost of labor per unit of output is constantly diminishing and the price of products is also tending to fall. The more the quantity of labor for a given output decreases, the more the value produced per worker – productivity – has to increase if the amount of achievable profit is not to fall. We have, then, this apparent paradox: the more productivity rises, the more it has to go on rising, in order to prevent the volume of profit from diminishing. Hence the pursuit of productivity gains moves ever faster, manpower levels tend to reduce, while pressure on workers intensifies and wage levels fall, as does the overall payroll. The system is approaching an internal limit at which production and investment in production cease to be sufficiently profitable.

Over time, Gorz explains, this leads investors to turn away from the “real economy” of production, where productivity gains and profits are harder to achieve, and instead seek profit through financial speculation in "fictitious" forms of value such as debt and new types of financial instruments. The value is ficititious in the sense that loans, return on investment,  future economic growth, trust and goodwill are social intangibles that are quite unlike physical capital. They depend upon collective belief and social trust, and can evaporate overnight.

Still, it is generally easier and more profitable to invest in these (fictitious, speculative) forms of financial value than in actually producing goods and services at a time when productivity gains and profit are declining.  No wonder speculative bubbles are so attractive:  There is just too much capital is sloshing around looking for profitable investment which the real economy is less capable of delivering.  No wonder companies have so much cash on hand (from profits) that they are declining to invest. No wonder the amount of available finance capital dwarfs the real economy. Gorz noted that financial assets in 2007 stood at $160 trillion, which was three to four times global GDP – a ratio that has surely gotten more extreme in the past eight years.

Creative Commons has just issued a report documenting usage patterns of its licenses.  It’s great to learn that the number of works using CC licenses has soared since this vital (and voluntary) workaround to copyright law was introduced twelve years ago, in 2003. 

According to a new report, the State of the Commons, recently released by Creative Commons, the licenses were used on an estimated 50 million works in 2006 and on 400 million works in 2010.  By 2014, that number had climbed to 882 million CC-licensed works.  Nine million websites now use CC licenses, including major sites like YouTube, Wikipedia, Flickr, Public Library of Science, Scribd and Jamendo.  The report includes a great series of infographics  that illustrate key findings. 

For any latecomers, CC licenses are a free set of public licenses that let copyright holders of books, films, websites, music, photography and other creative works choose to make their works legally shareable.  The licenses are necessary because copyright law makes no provisions for sharing beyond a vaguely defined set of “fair use” principles.  Copyright law is mostly about automatically locking up all works in a strict envelope of private property rights.  This makes it complicated and costly to let others legally share and re-use works.

The CC licenses were invented as a solution, just as Web 2.0 was getting going.  It has functioned as a vital element of infrastructure for building commons of knowledge and creativity.  It did this by providing a sound legal basis for sharing digital content, helping to leverage the power of network-driven sharing.

Is it possible to imagine a new sort of synthesis or synergy between the emerging peer production and commons movement on the one hand, and growing, innovative elements of the co-operative and solidarity economy movements on the other? 

That was the animating question behind a two-day workshop, “Toward an Open Co-operativism,” held in August 2014 and now chronicled in a new report by UK co-operative expert Pat Conaty and me.  (Pat is a Fellow of the New Economics Foundation and a Research Associate of Co-operatives UK, and attended the workshop.) 

The workshop was convened because the commons movement and peer production share a great deal with co-operatives....but they also differ in profound ways.  Both share a deep commitment to social cooperation as a constructive social and economic force.  Yet both draw upon very different histories, cultures, identities and aspirations in formulating their visions of the future.  There is great promise in the two movements growing more closely together, but also significant barriers to that occurring.

The workshop explored this topic, as captured by the subtitle of the report:  “A New Social Economy Based on Open Platforms, Co-operative Models and the Commons,” hosted by the Commons Strategies Group in Berlin, Germany, on August 27 and 28, 2014. The workshop was supported by the Heinrich Böll Foundation, with assistance with the Charles Léopold Mayer Foundation of France. 

Below, the Introduction to the report followed by the Contents page. You can download a pdf of the full report (28 pages) here. The entire report is licensed under a Creative Commons Attribution-ShareAlike (BY-SA) 3.0 license, so feel free to re-post it.

As one of the countries hardest hit by austerity politics, Greece is also in the vanguard of experimentation to find ways beyond the crisis.  Now there is a documentary film about the growth of commons-based peer production in Greece, directed by Ilias Marmaras. "Knowledge as a common good: communities of production and sharing in Greece” is a low-budget, high-insight survey of innovative projects such as FabLab Athens, Greek hackerspaces, Frown, an organization that hosts all sorts of maker workshops and presentations, and other projects.

A beta-version website Common Knowledge, devoted to “communities of production and sharing in Greece,” explains the motivation behind the film:

“Greece is going through the sixth year of recession. Austerity policies imposed by IMF, ECB and the Greek political pro-memorandum regimes, foster an unprecedented crisis in economy, social life, politics and culture. In the previous two decades the enforcement of the neoliberal politics to the country resulted in the disintegration of the existed social networks, leaving society unprepared to face the upcoming situation.

During the last years, while large parts of the social fabric have been expelled from the state and private economy, through the social movements which emerge in the middle of the crisis, formations of physical and digital networks have appeared not only in official political and finance circles, but also as grassroots forms of coexistence, solidarity and innovation. People have come together, experimenting in unconventional ways of collaboration and bundling their activities in different physical and digital networks. They seek answers to problems caused by the crisis, but they are also concerned about issues due the new technical composition of the world. In doing so they produce and share knowledge.”

George Papanikolaou of the P2P Foundation in Greece describes how peer production is fundamentally altering labor practices and offering hope:  “For the first time, we are witnessing groups of producers having the chance to meet up outside the traditional frameworks – like that of a corporation, or state organization.  People are taking initiatives to form groups in order to produce goods that belong in the commons sphere.”

Michel Bauwens and Vasilis Kostakis have just published a new book that offers a rich, sophisticated critique of our current brand of capitalism, and looks to current trends in digital collaboration to propose the outlines of the next, network-based economy and society.

Network Society and Future Scenarios for a Collaborative Economy is a scholarly book published by Palgrave Macmillan. If you’d like to look at a working draft of the book, you can find it online here.

Bauwens is the founder of the P2P Foundation, and Kostakis is a political economist and founder of the P2P Lab. He is also a research fellow at the Ragnar Nurkse School of Innovation and Governance at Tallinn University of Technology, Estonia. 

Kostakis and Bauwens write:

The aim of this book is not to provide yet another critique of capitalism but rather to contribute to the ongoing dialogue for post-capitalist construction, and to discuss how another world could be possible. We build on the idea that peer-to-peer infrastructures are gradually becoming the general conditions of work, economy, and society, considering peer production as a social advancement within capitalism but with various post-capitalistic aspects in need of protection, enforcement, stimulation and connection with progressive social movements.

The authors outline four scenarios to “explore relevant trajectories of the current techno-economic paradigm within and beyond capitalism.” They envision the rise of "netarchical capitalism," a network-based capitalism, that sanctions several types of compatible and conflicting forms of capitalism – what they call “the mixed model of neo-feudal cognitive capitalism.”  There are variations that are possible, including "distributed capitalism, resilient communities and global Commons."

I'm happy to announce that a new collection of essays that I've co-edited with John Clippinger, executive director of ID3, has been published. It's called From Bitcoin to Burning Man and Beyond The fifteen essays in the book explore a new generation of digital technologies that are re-imagining the foundations of digital identity, governance, trust and social organization.

ID3 is a Boston-based nonprofit affiliated with the M.I.T. Media Lab, and was co-founded by Clippinger and social computing and data expert, Professor Pentland, who directs M.I.T.’s Human Dynamics Laboratory. 

The book is focused on the huge, untapped potential for self-organized, distributed governance on open platforms. There are many aspects to this challenge, but some of the more interesting prospects include evolvable digital contracts that could supplant conventional legal agreements; smartphone currencies that could help Africans meet their economic needs more effective; the growth of the commodity-backed Ven currency; and new types of “solar currencies” that borrow techniques from Bitcoin to enable more efficient, cost-effective solar generation and sharing by homeowners. 

A chapter on the 28-year history of Burning Man, the week-long encampment in the Nevada desert, traces the arc of experimentation and innovation in large communities devising new forms of self-governance.

I co-authored an essay in the book, "The Next Great Internet Disruption:  Authority and Governance," which appeared in an earlier form here.

The book is published by ID3 in association with Off the Common Books, and is available in print and ebook formats from Amazon.com and Off the Common Books. A free, downloadable pdf of the book is available at the ID3 website.  (The book is licensed under a Creative Commons BY-NC-SA license.)

Among the contributors to From Bitcoin to Burning Man and Beyond are Alex “Sandy” Pentland of the M.I.T. Human Dynamics Laboratory; former FCC Chairman Reed E. Hundt; long-time IBM strategist Irving Wladawksy-Berger; Silicon Valley entrepreneur Peter Hirshberg; monetary system expert Bernard Lietaer; journalist and author Jonathan Ledgard; and H-Farm cofounder Maurizio Rossi. 

 In addition to explorations of self-governance, From Bitcoin to Burning Man and Beyond introduces the path-breaking software platform that ID3 has developed called “Open Mustard Seed,” or OMS.  The just-released open source program enables the rise of new types of trusted, self-healing digital institutions on open networks, which in turn will make possible new sorts of privacy-friendly social ecosystems.

Eben Moglen: "Snowden and the Future"

The ongoing Snowden revelations about NSA surveillance have all sorts of implications for the rule of law, constitutional democracy, geopolitical alignments, human rights and much else.  The disclosures deserve our closest attention for these reasons alone.  But what do these revelations have to do with the commons?

If we regard the act of commoning as a genre of citizenship – acts of voluntary association and action that are critical to human freedom and democracy – we can see that snooping by both the NSA and its corporate brethren are profoundly hostile to the future of the commons.  They violate some fundamental notions of human rights, civil freedoms and the ability of individuals to protect their privacy and thus their sovereignty.

If the market/state apparatus can digitally monitor our reading habits and telephone calls, email correspondence and purchases, physical movements and much else, then it has effectively snuffed out the sovereignty of a free people. The barrage of the successive Snowden disclosures has been followed by a relentless government propaganda war, cable TV denunciations and even attacks on Greenwald by the liberal nomenklatura (Michael Kinsley, George Packer). It’s as if "respectable opinion" did not care to note or defend the elemental human freedoms that a functioning democracy requires.

It was such a pleasure therefore to (belatedly) encounter a series of four lectures delivered last fall by Eben Moglen, a law scholar and historian at Columbia Law School, founder of the Software Freedom Law Center, and former general counsel of the Free Software Foundation.  The four talks -- "Snowden and the Future" -- offer one of the most eloquent and historically informed critiques of the Snowden revelations and their implications for freedom, democracy and – I would add – the capacity of people to common.

The French-based group OuiShare recognized five exemplary projects in the “collaborative economy” at its recent OuiShare Fest conference in Paris. The three-day event was itself was a remarkable gathering of more than 1,000 passionate fans of innovative models of sharing and mutual support. 

The OuiShare awards focused on five broad categories – collaborative consumption, open knowledge, crowdfunding and P2P banking, makers and open manufacturing, and open and horizontal governance.  With 127 applications from 31 countries, it was a rather competitive field.

The winners this year included one of my favorites, Guerrilla Translation, “a collaborative hub for authors and translators to network and share stimulating ideas internationally.”  The group describes itself as “exporters of fine interlinguistic memes,” adding: 

Guerrilla Translation is building bridges between cultures, starting with Spanish and English. We select written and video pieces with a focus on constructive change and long-range analysis, translate them, and share them.  We’re connecting authors with new audiences, and people with new ideas, shared through technology but created in a very personal, artisanal way.  We feel strongly that translation is best handled not by software, but instead, by committed and passionate translators working together to achieve the highest level of professional quality in our work.

The nine-month effort in Ecuador to develop a new vision and policy architecture for commons-based peer production is coming into much sharper focus.  To refresh your memory on this project, the Government of Ecuador last year commissioned the FLOK Society (FLOK = “Free, libre, open knowledge”) to come up with a thoughtful plan for enabling every sector of Ecuador to be organized into open knowledge commons, to the maximum degree possible.  The project has now released a transition plan accompanied by more than a dozen policy frameworks for specific social and economic domains.

The main document can be read here – and here is a version that anyone can comment upon.  Here is series of specific sectoral policy proposals.  

What makes the FLOK Society report so significant is its informed analysis of global trends in the production of knowledge and culture -- and its bold attempt to reformulate state policies to assure maximum social benefits flow from them. The “advanced” industrial economies continue to cling to archaic intellectual property regimes that ignore network dynamics and prey upon the value created by nonmarket communities.  But Ecuador’s path-breaking project seeks to go beyond neoliberal economics and policy. Many of us are excited because the FLOK Society report is a comprehensive, sophisticated and integrated synthesis for moving to the next stage of commoning and peer production on open networks.

A guiding idea in this effort is Buen Vivir (Sumak Kawsay) or “good living,” an indigenous peoples’ concept that refers to a life that balances material, social and spiritual needs and satisfactions (i.e., getting beyond compulsive material growth and consumerism).  FLOK Society researchers realize that Buen Vivir is impossible without Buen Conocer (Sumak Yachay), which is the idea of “good knowledge.”  Ecuadorian President Correa himself has urged young people to achieve and fight for this open knowledge societ

This and other questions are addressed in “The Weightless Marketplace:  Coming to Terms with Innovative Payment Systems, Digital Currencies and Online Labor Markets,” a just-released report that I wrote for the Aspen Institute’s Communications and Society Program. The report distills the more salient points raised at a three-day conference last August that brought together leading players in banking, financial services and online labor platforms.   

Most of the conference participants are in the business of inventing or adapting to new types of digital payment systems or data-based services. They include major players like JP Morgan Chase, Intuit and VISA as well as upstarts such as Bitcoin, ID3 and the identity-management service Personal.

The basic story in digital markets is the ongoing elimination of “friction” in making transactions – reducing the barriers of geography, time and transaction costs. Hence the title “the weightless marketplace.”  “Reducing economic friction” has been the story of the World Wide Web from its beginnings, of course, but the trend is now reaching new levels of intensity and disruption.  My role, as rapporteur, was to represent the diverse points of view while providing my own interpretive synthesis. 

Perhaps the most fascinating points of discussion revolved around Bitcoin.  Notwithstanding the controversy surrounding it, Bitcoin’s basic functionality and soaring popularity have some serious implications for banks, credit card companies, PayPal and other payment systems. Peter Vessenes of the Bitcoin Foundation noted that digital technology can move value to anywhere in the world, at any time, using just 100 bytes of data.  And it can do it at very little cost – much less than the per-transaction charges levied by credit cards, for example.

Critics charge that Bitcoin facilitates illicit transactions, money laundering and terrorist activity, not to mention tax evasion.  Vessenes replied that Bitcoin is “way less anonymous than cash” – because the permanent global ledger of transactions for each Bitcoin is accessible and can be used to help identify buyers and sellers.  Another reason that Bitcoin is controversial is that it represents a potential threat to the sovereignty of nation-states, because it could undermine their monetary and fiscal policies.  That’s why regulation of Bitcoin is inevitable, many agreed.

But apart from Bitcoin’s fate, the larger question may be how existing banks and financial companies will respond to the coming “democratization of money.”  Several factors are fueling this trend, according to Gartner, the consulting firm:  individual access to massive, high-speed flows of information, the proliferation of mobile computing (smartphones, tablets, etc.), the rise of the cloud, and the social commons of highly specialized communities of interest.

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