Internet

Mutualized Solutions for the Precariat

Large companies have long sought to boost profits by converting their employees into “independent contractors,” allowing them to avoid paying benefits.  The rise of the “gig economy” – exemplified by digital platforms such as Uber and Airbnb – has only accelerated this trend.  Business leaders like to celebrate the free agent, free market economy as liberating -- the apex of American individualism and entrepreneurialism.  But the self-employed are more likely to experience a big loss of income, security and collegiality.  There is a reason that this cohort is called “the precariat.”

A new report by Co-operatives UK called “Not Alone:  Trade Union and Co-operative Solutions for Self-Employed Workers” offers a thoughtful, rigorous overview of this neglected sector of the economy.  Although it focuses on the UK, its findings easily apply internationally, particularly for co-operative and union-based solutions. 

The author of the report, Pat Conaty, notes that “self-employment is at a record level” in the UK – some 15% of the workforce – and rising.  While some self-employed workers choose this status, a huge number are forced into through layoffs and job restructuring, with all the downward mobility and loss of security implied by them. 

Few politicians or economists are honestly addressing the implications.  They assume that technological innovation will simply create a new wave of jobs to replace the ones being eliminated, same as it ever was.

The sad truth is that investors and companies benefit greatly from degrading full-time jobs into piecemeal, task-based projects tackled by a growing pool of precarious workers.  This situation is only going to become more desperate as artificial intelligence, automation, driverless vehicles and platform economics offshore and de-skill conventional jobs if they don't permanently destroy them.  

The City as Platform

In the age of ubiquitous Internet connections, smartphones and data, the future vitality of cities is increasingly based on their ability to use digital networks in intelligent, strategic ways. While we are accustomed to thinking of cities as geophysical places governed by mayors, conventional political structures and bureaucracies, this template of city governance is under great pressure to evolve. Urban dwellers now live their lives in all sorts of hyper-connected virtual spaces, pulsating with real-time information, intelligent devices, remote-access databases and participatory crowdsourcing. Expertise is distributed, not centralized. Governance is not just a matter of winning elections and assigning tasks to bureaucracies; it is about the skillful collection and curation of information as a way to create new affordances for commerce and social life.

That's the opening paragraph from my new report for the Aspen Institute, “The City as Platform: How Digital Networks Are Changing Urban Life and Governance.”  (pdf file download here). The report synthesizes discussion at an Aspen Institute Communications and Society conference last July. About thirty technologists, urban planners, policy experts, economic analysts, entrepreneurs, and social justice advocates shared insights into how networking technologies are transforming urban life, commerce and government.

I wrote the report as a rapporteur, not a commons advocate, but it’s abundantly clear that the sharing and collaboration facilitated by digital networks are spawning all sorts of new commons and hybrids (e.g., government/commons and government/corporate collaborations). The focus of the conference was mostly on US cities, but these things are happening worldwide, especially in cooperation-minded global cities such as Amsterdam, Barcelona and Seoul.  In the US, San Francisco and Los Angeles are in the vanguard, in part because of San Francisco’s proximity to Silicon Valley tech firms and in LA, because everyone there lives on their smartphones.

The backlash to the corporate “sharing economy” is gaining momentum, and one key player is the movement to develop “platform cooperativism.”  The New York Office of Rosa Luxemburg Stiftung has released a report critiquing the “sharing economy” and describing the alternatives.  It’s called “Platform Cooperativism:  Challenging the Corporate Sharing Economy” (pdf file).  and it’s written by Trebor Scholz, an associate professor at the New School. 

Scholz and journalist Nathan Schneider were co-organizers of a November 2015 conference that served as an historic flashpoint on this topic.  People are starting to realize the many anti-social effects of the “gig economy,” as typified by Uber, Airbnb, TaskRabbit and Mechanical Turk, but the development of workable alternatives is barely underway.

The first half of the report addresses the many deficiencies of the so-called sharing economy.  First of all, it’s not about sharing at all. It’s an “on-demand service economy” that relies on the same exploitative techniques of conventional capitalism, but with powerful tech enhancements. 

While the system delivers amazing convenience and efficiencies, it also preys upon those who cannot obtain good-paying stable jobs with benefits.  It re-introduces piecework on a massive scale, this time with sophisticated computer algorithms to ratchet down wages to below minimum wage.  Since everyone is nominally considered an independent contractor, corporate platforms can shrug and exonerate themselves by saying that everyone is “free to choose” their working circumstances, in Milton Friedman’s classic phrase. 

But as more jobs are sent abroad to countries that pay lower wages and have few worker protections, workers are in many cases victimized by a global race to the bottom.  Corporate platforms act as lucrative intermediaries that shed the costs of conventional businesses – the capital infrastructure, regular paychecks and employee benefits.

Every time Uber, the Web-based taxi intermediary, enters a new city, it provokes controversy about its race-to-the-bottom business practices and bullying of regulators and politicians.  The problem with Uber and other network-based intermediaries such as Lyft, Task Rabbit, Mechanical Turk and others, is that they are trying to introduce brave new market structures as a fait accompli. They have only secondary interest in acceptable pay rates, labor standards, consumer protections, civic and environmental impacts or democratic debate itself. 

Rather than cede these choices to self-selected venture capitalists and profit-focused entrepreneurs, some European cities and regional governments came up with a brilliant idea:  devise an upfront, before-the-fact policy framework for dealing with the disruptions of the “sharing economy.”

If we can agree in advance about what constitutes a socially respectful marketplace – and what constitutes a predatory free-riding on the commonweal – we’ll all be a lot better off.  Consumers, workers and a community will have certain basic protections. Investors and executives won’t be able to complain about “unlevel playing fields” or unfair regulation. And public debate won’t be a money-fueled free-for-all, but a more thoughtful, rational deliberation.

Now, if only the European Union will listen to the Committee of the Regions (CoR)!  The CoR is an official assembly of regional presidents, mayors and elected representatives from 28 EU countries. It routinely expresses its views on all sorts of major policy issues that may have local or regional impacts. In December, the CoR submitted a formal statement about the “sharing economy” to the EU in an opinion written by rapporteur Benedetta Brighenti, the deputy mayor of the municipality of Castelnuovo Rangone, in the province of Modena, Italy. 

Universitat de Oberta Catalunya -- Open University of Catalonia -- just published the following essay of mine as part of its "Open Thoughts" series.  The UOC blog explores the benefits and limitations of various forms of peer production: well worth a look!

From open access platforms to managed digital commons: that is one of the chief challenges that network-based peer production must meet if we are going to unleash the enormous value that distributed, autonomous production can create.

The open platform delusion
We are accustomed to regarding open platforms as synonymous with greater freedom and innovation. But as we have seen with the rise of Google, Facebook and other tech giants, open platforms that are dominated by large corporations are only “free” within the boundaries of market norms and the given business models. Yes, open platforms provide many valuable services at no (monetary) cost to users. But when some good or service is offered for at no cost, it really means that the user is the product. In this case, our personal data, attention, social attitudes lifestyle behavior, and even our digital identities, are the commodity that platform owners are seeking to “own.”

In this sense, many open platforms are not so benign. Many of them are techno-economic fortresses, bolstered by the structural dynamics of the “power law,” which enable dominant corporate players to monopolize and monetize a given sector of online activity. Market power based on such platforms can then be used to carry out surveillance of users’ lives; erect barriers to open interoperability and sharing, sometimes in anticompetitive ways; and quietly manipulate the content and “experience” that users may have on such platforms.

Such outcomes on “open platforms” should not be entirely surprising; they represent the familiar quest of capitalist markets to engineer the acquisition of exclusive assets and monetize them. The quarry in this case is our consciousness, creativity and culture. The more forward-looking segments of capital realize that “owning a platform” (with stipulated terms of participation) can be far more lucrative than owning exclusive intellectual property rights for content.

So for those of us who care about freedom in an elemental human and civic sense — beyond the narrow mercantilist “freedoms” offered by capitalist markets — the critical question is how to preserve certain inalienable human freedoms and shared cultural spaces. Can our free speech, freedom of association and freedom to interconnect with each other and innovate flourish if the dominant network venues must first satisfy the demands of investors, corporate boards and market metrics?

For the Uncommons conference in Berlin on October 23, Michel Bauwens recently distilled his years of thinking about digital collaboration into a short text, “Ten Commandments of Peer Production and Commons Economics.”  The document describes the key pillars of “a mode of production and value creation that is free, fair and sustainable.”  I am reproducing his entire text here because I think it is so succinct and seminal.

As we have tried to show elsewhere, the emergence of Commons-Oriented Peer Production has generated the emergence of a new logic of collaboration between open productive communities who created shared resources (commons) through contributions, and those market-oriented entities that created added value on top or along these shared commons.

This article addresses the emerging practices that should inspire these entities of the 'ethical' economy. The main aim is to create new forms that go beyond the traditional corporate form and its extractive profit-maximizing practices of value extraction. Instead of extractive forms of capital, we need generative forms, that co-create value with and for the commoners.

I am using the form of commandments to explain the new practices. All of them have already emerged in various forms, but need to be generalized and integrated.

What the world and humanity, and all those beings that are affected by our activities require is a mode of production, and relations of production, that are “free, fair and sustainable” at the same time.

OPEN AND FREE

1. Thou shall practice Open Business Models based on shared knowledge

Closed business models are based on artificial scarcity. Though knowledge is a non- or anti-rival good that gains in use value the more it is shared, and though it can be shared easily and at very low marginal cost when it is in digital form, many extractive firms still use artificial scarcity to extract rents from the creation or use of digitized knowledge. Through legal repression or technological sabotage, naturally shareable goods are made artificially scarce, so that extra profits can be generated. This is particularly galling in the context of life-saving or planet-regenerating technological knowledge. The first commandment is therefore the ethical commandment of sharing what can be shared, and only creating market value from resources that are scarce and create added value on top or along these commons. Open business models are market strategies that are based on the recognition of natural abundance and the refusal to generate income and profits by making them artificially scarce.

Thou shall find more information on this here at http://p2pfoundation.net/Category:Business_Models

FAIR

2. Thou shall practice Open Cooperativism

Many new more ethical and generative forms are being created, that have a higher level of harmony with the contributory commons. The key here is to choose post-corporate forms that are able to generate livelihoods for the contributing commoners.

Open cooperatives in particular would be cooperatives that share the following characteristics:

1) they are mission-oriented and have a social goal that is related to the creation of shared resources

2) they are multi-stakeholder governed, and include all those that are affected by or contributing to the particular activity

Today's post is the third in a four-part series derived from my strategy memo, "Reinventing Law for the Commons."  This excerpt continues with Part II, "Legal Innovations in Beating the Bounds," with "clusters" #5 through #9. The collection of entries here are now posted on a Commons for the Law wiki hosted by the Commons Transition website.

5.  Co-operative Law

There are a number of legal and organizational innovations transforming co-operatives these days, making them moreoriented to commoning and the common good than just marketplace success. However, these innovations are geographically dispersed and not necessarily widely known, even within the co-operative movement.  One of the most notable new organizational forms is the multistakeholder co-operative (or “social and solidarity cooperative”), which has been rapidly proliferating in recent years.  It got its start in Italy in 1963 when families in Italy joined forces with paid care workers to develop co-operatives to provide social care, healthcare and educational services. This new paradigm collectivizes and centralizes basic overhead services (administration, personnel, accounting, etc.) and in this way empowers smaller social economy ventures (similar to “omni-commons,” see section #8 below). 

In a sense, multistakeholder co-ops regularize governance for co-stewardship of commons spaces and moves away from rigid bureaucratic methods that increasingly don’t work.[1]  Multistakeholder co-ops now employ more than 360,000 in paid jobs, including the disabled, the formerly imprisoned and marginalized people, and more than 40,000 volunteers.  Social co-operatives have spread to all regions of Italy and today number more than 14,000, making it a significant sector of the Italian economy that is neither market- nor state-based.  Today there are multi-stakeholder co-operative movements in Quebec in Canada and in a wide number of countries in Europe including France, Spain, Poland, Hungary, Finland and Greece[2].

The Commons and EU Knowledge Policies

One of the great advantages of a commons analysis is its ability to deconstruct the prevailing myths of “intellectual property” as a wholly private “product” – and then to reconstruct it as knowledge and culture that lives and breathes only in a social context, among real people.  This opens up a new conversation about if and how property rights in knowledge should be granted in the first place.  It also renders any ownership claims about knowledge under copyrights and patents far more complicated -- and requires a fair consideration of how commons might actually be more productive substitutes or complements to traditional intellectual property rights.

After all, it is taxpayers who subsidize much of the R&D that goes into most new drugs, which are then claimed as proprietary and sold at exorbitant prices.  Musicians don’t create their songs out of thin air, but in a cultural context that first allows them to freely use inherited music and words from the public domain -- which future musicians must also have access to. Science can only advance by being able to build on the findings of earlier generations.  And so on.

The great virtue of a new report recently released by the Berlin-based Commons Network is its application of a commons lens to a wide range of European policies dealing with health, the environment, science, culture, and the Internet.  “The EU and the Commons:  A Commons Approach to European Knowledge Policy,” by Sophie Bloemen and David Hammerstein, takes on the EU’s rigid and highly traditional policy defense of intellectual property rights.  Bloemen and Hammerstein are Coordinators of the Berlin-based Commons Network, which published the report along with the Heinrich Böll Foundation.  (I played a role in its editing.)  The 39-page report can be downloaded here -- and an Executive Summary can be read here

“The EU and the Commons” describes how treating many types of knowledge as commons could not only promote greater access to knowledge and social justice, it could help European economies become more competitive. If EU policymakers could begin to recognize the generative capacities of knowledge commons, drug prices could be reduced and climate-friendly “green technologies” could be shared with other countries. “Net neutrality” could assure that startups with new ideas would not be stifled by giant companies, but could emerge. And scientific journals, instead of being locked behind paywalls and high subscription fees, could be made accessible to anyone.

The latest issue of Boston Review has a lively forum on the growing power of network-based businesses such as Amazon, Uber and Airbnb.  These companies may not be monopolies in the strict conventional sense of the law, but they nonetheless use their market dominance and network platforms to extract all sorts of advantages from competitors, suppliers and consumers. 

K. Sabeel Rahman, a professor at Brooklyn Law School, presented his assessment of the situation, and then nine people of various persuasions (including me) responded.  Rahman stated the problem succinctly:

The kinds of power that Amazon, Comcast and companies such as Airbnb and Uber possess can’t be seen or tackled via conventional antitrust regulations.  These companies are not, strictly speaking, monopolies; Urban and Airbnb, in particular, do not engage in the kind of price-fixing or market dominance that is the usual target of antitrust regulation today.  These companies are better understood as platforms or utilities:  they provide a core, infrastructural service upon which other firms, individuals and social groups depend.

The problem is that conventional antitrust regulation isn’t really equipped to deal with information economy platforms, which tend to connect buyer and sellers in more efficient ways while offering very low prices. What’s the problem with that? Well, the problem is open networks paradoxically result in "power law" outcomes in which a minority of players tend to dominate the universe of users. Some companies have used this network-based advantage to limit competitors' access to the market, impose unfair conditions on consumers or producers, and evade consumer and labor-rights laws. 

Rahman calls for a re-purposing of Progressive era policies from a century ago that tamed large monopolies like railroads by subjecting them to public utility regulation. Is this the way to go? Juliet Schor of Boston College agrees that there is a problem, but considers the regulatory approach nostalgic and unimaginative. She argued: 

“Peer-to-peer structure and peer ownership of capital undermine the argument for private ownership of platforms and, by extension, for the public utility model.  This is not to say there isn’t a strong public interest in this sector – there is.  But the compelling feature of these entities is that most of the value in the market is produced by the peers, not the platforms.  This suggests that platforms can and should be owned and governed by users.  If they are, we can worry less about rent extraction, concentrations of political power, and the other concerns Rahman raises.”

Not so long ago, the language of “intellectual property” (IP) was the only serious way of talking about creative works and inventions.  Copyright and patents provided the default framework for explaining how someone’s bright idea grew into a marketable product, and how that in turn contributed to economic growth and human progress. It was a neat, tidy, reassuring story.  It had an irresistible simplicity – and the endorsement of the ultimate authority, government.

And then…. the pluriversal realities of life came storming the citadel gates!  Over the past fifteen or twenty years, the monoculture narrative of IP has been attacked by indigenous cultures, seed activists, healthcare experts, advocates for the poor, the academy, and especially users of digital technologies.  It has become increasingly clear that the standard IP story, whatever its merits on a smaller scale, in competitive industries, is mostly a self-serving, protectionist weapon in the hands of Hollywood, record labels, book publishers, Big Pharma and other multinational IP industries. 

We can thank the authors of a new anthology for helping to explain how the standard IP narrative is profoundly flawed, and how an array of challengers are showing how knowledge-creation so often emerges through social commons.

Free Knowledge:  Confronting the Commodification of Human Discovery, edited by Patricia W. Elliott and Daryl H. Hepting, provides a refreshing survey of the many realms in which corporations are enclosing shared knowledge -- and a sampling of commons that are democratizing the production and control of knowledge. (The book is published by University of Regina Press, and is licensed under a Creative Commons BY-NC-ND license.)

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