Michel Bauwens and the Peer Production Economy

Last week, in my post about "peak hierarchy," I referred to a talk by Michel Bauwens of The P2P Foundation at UMass Amherst on November 25. Bauwens, who lives in Chiang Mai, Thailand, is a leading student and proponent of "peer production" as a new paradigm of economics and culture. The term comes from the Internet culture and describes the ability of dispersed individuals to come together and collaborate on projects of shared interest.

While this may sound as familiar and prosaic as a garden club or local Kiwanis group, the Internet changes the dynamics of self-organization and production dramatically. There are at least one billion people in the world online right now, and their historic separation by time and space can be partially overcome through Web 2.0 software platforms. This enables all sorts of very specialized communities to arise from a global pool of people, who can now self-organize themselves into productive commons.

What follows is my summary of Bauwens’ vision of the p2p future and some of the deep implications that he points to. The PowerPoint slides for his talk can be found here. Bauwen’s entry on Wikipedia is here. This account of Bauwens’ talk has my gloss, so readers wishing a more direct account of Bauwens’ thoughts may wish to consult the P2P Foundation’s website and blog, which has a rich and exciting repository of materials on this subject.

One of the great gifts of distributed networks is their ability to give people their own agency and choice. People can undertake all sorts of activities without permission from "gatekeepers" or institutions. They can just do things themselves. On the Internet, everyone’s talents matter, said Bauwens. He quoted Jorge Ferrer and his "theory of equipotentiality," that "people [in a p2p environment] would experience others as equals in the sense of their being both superior and inferior to themselves in varying skills and areas of endeavor (intellectually, emotionally, artistically, mechanically, interpersonally, and so forth), but with none of those skills being absolutely higher or better than others."

So social systems in the p2p environment do not need a strict division of labor designed to yield maximum efficiency. On distributed networks, social systems "can harmonize individual and collective interests." The market may use the division of labor and the Invisible Hand to produce its version of the public good. But networks invite self-selection of roles and universe participation, and then rely upon a process of co-creation to produce results.

Peer production thus abandons "credentialism" -- a system of control used in modernity to protect information within a group, said Bauwens. Guilds, churches and universities are examples. In a p2p network, however, instead of making selections about work at the beginning, based on credentials, selection comes at the end, based on collective judgments.

In this alternative universe of production, there are no "final products" -- just unfinished "artifacts" that keep evolving. There is no a priori judgment, just a posteriori judgments made through distributed control. There is no panopticism from a centralized power, but rather "holoptism" from multiple sources. Content is not owned, but shared. The system is not about structuring the right incentives to elicit work, but rather about removing impediments to let people’s natural motivations express themselves.

The p2p world has a whole different calculus of motivation. If the pre-modern world used coercion to secure cooperation (think slavery and serfdom), and modern capitalism uses external "positive incentives" like money to elicit cooperation (the quid pro quo of markets), the p2p era relies upon "intrinsic positive motivations," Bauwens argues. People’s self-directed passions are the motive force.

In many online contexts -- free software, wikis, online archives and more -- this sort of motivation is proving to be the most efficient mode of innovation. The goal is not simply to "out-compete" (or "out-cooperate") the market with quality that is relatively better. The goal is to strive to provide the absolute best quality, and in a continuous fashion. That’s because, in a p2p world, people want to give their best. Markets that depend upon cash incentives have a harder time competing with people who want to do the absolute best, for their own personal reasons.

Bauwens noted that p2p networks are giving rise to a new sharing economy, or commons economy, that takes a number of forms. In one instance, companies and commoners have an implicit social contract. The commoners say to the company: "You give me a platform for my work and let me share with others, and I’ll let you 'rent’ my eyeballs to advertisers." This is essentially the model of Facebook and MySpace.

But it is also possible for the commoners to create their own platform, without a corporate host. Bauwens calls them "for-benefit" institutions instead of "for-profit" or "nonprofit." They consist of enterprises such as Craigslist and Wikipedia, which manage the infrastructure of cooperation for the benefit of the commoners, not for profit.

"This is a design for abundance," explained Bauwens, because "openness creates value, while closedness captures value." The community is preserved not through profit-sharing -- which tends to introduce jealousy and social divisions -- but through "benefit sharing." People can freely reap the fruits of the collective sharing so long as they abide by agreed-upon ground rules.

One of the more controversial claims that Bauwens makes is that peer production will alter physical production in conventional industries. He pointed out that design can be carried out cooperatively, on p2p networks, with manufacturing occurring later through "build-only markets" and "mail order machining."

The real challenge is to find new ways to integrate the digital commons with the "logical and physical processes" of production, Bauwens said. As examples, he cited Semapedia, a way to put Web hyperlinks on physical objects and "read" through through cell phones; the White Bicycle program in Germany, which allows people to share bicycles; and Bookcrossings , a Web system that lets more than 700,000 people in 130 countries share books.

Based on such examples, Bauwens envisions a new world of "re-localized production and open design communities, all of it globally organized."

One reason that this vision is likely to arise, believes Bauwens, is because the costs of expanding the conventional hierarchical system of production and distribution is getting to be too expensive relative to the benefits. He compares it to the Roman Empire’s reliance on slavery. At a certain point, maintaining a system of slavery -- by capturing new ones through conquest -- became more expensive and difficult than the alternatives, such as sharecropping. "Freeing the slaves could be more productive than slavery," he said. In a sense, the Roman Catholic Church in the medieval times can be conceived of as one big "open design community" that relied upon diverse sorts of feudal lords and their serfs.

In like fashion, the p2p community is increasingly out-performing the conventional market system. Linux, for example, has supplanted a $70 billion proprietary software business by spawning, instead, a $35 billion economy of software built around free, shared code.

The rise of the sharing economy as a competitive alternative to markets represents a "crisis of value" in the capitalist economy, said Bauwens. There is an exponential potential of growth in "use value" that is shared, but a relatively limited future market for monetizing proprietary product (the way that YouTube, Google and other open platform hosts do).

The sharing economy has another structural advantage over markets. It is based upon trusted communities and reciprocal giving of services. This is highly satisfying to many people because it generates a sense of belonging and meaning -- something that the market system can only simulate through branding and marketing.

The biggest impediment to a further growth of the sharing economy, Bauwens conceded, is finding the means to let people "move into and out of the market system." People still need to earn money and participate in markets. One possible template is a system that communities in Thailand use to contribute to young men who wish to become monks. In some nations, the movement for a "basic income" for all could be considered a similar model.

In any case, Bauwens envisions a scenario in which the market could be substantially supplanted as become a subsystem of p2p and its logic. While this possibility might sound fanciful, Bauwens pointed out its powerful appeal: It offers a credible path for the world’s growth economies to come to terms with a finite biosphere. It is also a way to move beyond the artificial scarcity that intellectual property imposes on the natural abundance that peer communities generate through sharing.

This is the general vision of p2p that Bauwens outlined: a bracing vision indeed! Skeptics can clearly raises many legitimate questions, some that have possible answers, and others that only time can resolve. But Bauwens’ vision of the p2p future has the virtue of explaining many existing trends in online commons that otherwise don’t make much sense within the neoliberal economic paradigm.