Peer-to-Peer Economy and New Civilization Centered Around the Sustenance of the Commons

Michel Bauwens & Franco Iacomella

The “peer to peer” and commons-oriented vision for a new type of civilization and economic system starts from an analysis of what is fundamentally wrong with the current economic system. Rather than put forward a utopian ideal, the P2P vision is based on generalizing the already emerging forms of peer production, peer governance, and peer property.1It makes three primary critiques of the dys­functions of the present system:

  1. The current political economy is based on a false idea of material abundance. We call it pseudo-abundance. It is based on a commitment to permanent growth, the infinite accumulation of capital and debt-driven dynamics through compound interest. This is unsustainable, of course, because infinite growth is logically and physically impossible in any physically constrained, finite system.2
  2. The current political economy is based on a false idea of “immaterial scarcity.” It believes that an exaggerated set of intellectual property monopolies – for copyrights, trademarks and patents – should restrain the sharing of scientific, social and economic innovations.3 Hence the system discourages human cooperation, excludes many people from benefiting from innovation and slows the collective learning of humanity. In an age of grave global challenges, the political economy keeps many practical alternatives sequestered behind private firewalls or unfunded if they cannot generate adequate profits.
  3. The pseudo-abundance that destroys the biosphere, and the contrived scarcity that keeps innovation artificially scarce and slow, does not advance social justice. Although people may have a formal legal equality of civil and political rights, serious and increasing material inequalities make those rights more nominal than real. At the other extreme, the polity explicitly grants human rights to the artificial legal construct of the for-profit corporation, a pathological institution that is solely beholden to its shareholders, and is constitutionally unable to take into account the common good.

The present corporate form is a machine designed to deny and ignore negative environmental and social externalities as much as possible. Because it is driven by profit-maximizing corporations, capitalism is not just a scarcity-allocation mech­anism, but a mechanism for engineering artificial scarcities, as epitomized in the sterile Terminator Seeds developed by Monsanto.4 Such seeds are specifically designed so that they can’t reproduce themselves, which not only kills cycles of abundance in nature, it also makes farmers permanently dependent on a corporation.

The above analysis suggests that any solution to contemporary capitalism needs to address these three issues in an integral fashion, i.e., production that allows the continued survival, sustainability and flourishing of the biosphere; protecting and promoting the free sharing of social innovations and knowledge; and the recognition that social and economic justice will not be achieved unless we first recognize the actual scarcity of nature and the actual abundance of knowledge and innovation.

Vision, values and objectives

Contemporary society is generally seen as consisting of a public sphere, dominated by the state and public authorities; a private sphere, consisting of profit-maximizing corporations; and a subordinated civil society where the less privileged sectors have great difficulties in ascertaining and asserting their rights and interests.

The peer-to-peer vision relies upon the three major sectors of society – the state, market and civil society – but with different roles and in a revitalized equilibrium. At the core of the new society is civil society, with the commons as its main institution, which uses peer production to generate common value outside of the market logic. These commons consist of both the natural heritage of mankind (oceans, the atmosphere, land, etc.), and commons that are created through collective societal innovation, many of which can be freely shared because of their immaterial nature (shared knowledge, software and design, culture and science). Civil society hosts a wide variety of activities that are naturally and structurally beneficial to the commons – not in an indirect and hypothetical way, as claimed by the “Invisible Hand” metaphor, but in a direct way, by entities that are structurally and constitutionally designed to work for the common good. This sphere includes entities such as trusts, which act as stewards of physical resources of common use (land trusts, natural parks), and for-benefit foundations, which help maintain the infrastructure of cooperation for cultural and digital commons.

The Wikimedia Foundation, which maintains the funding for Wikipedia’s technological development is a well-known example in the domain of open knowledge. In like fashion, the Linux Foundation and Apache Foundation support two leading software development communities. It is important to note that these entities do not function as classic NGOs that use “command and control” management and salaried personnel to allocate resources to projects; rather, they use their resources and credibility to help paid and unpaid contributors continue to develop their commons according to their own consensus judgments.

Around this new core is a private sphere, where market entities with private agendas and private governance can still create added-value around the commons by producing relatively scarce goods and services. However, because of the pathological and destructive nature of profit-maximizing corporations, in the P2P economy this private sphere is reformed to serve more ethical ends by using proper taxation, revenue and benefit-sharing modalities to help generate positive externalities, e.g., infrastructure, shareable knowledge, and by using taxation, competition, and rent-for-use to minimize negative externalities, e.g., pollution, overuse of collective resources.5

Cooperative enterprises are the more prominent and developed form of private organization in this new economy. While corporations continue to exist, their operating logic is made to serve the values of the commons. Once the commons and the commoners are at the core of value creation, commoners can be expected to opt for those types of entities that maximize the value system of the commons itself. Today, the open source economy of shared innovation commons and the “ethical economy” of reformed market entities exist as separate spheres. Both need to develop and mature. An early example of this dynamic is IBM’s adaptation to the norms and regulations of the Linux community, which showed that even large, old-style corporate entities are capable of transforming themselves.

We believe that new forms of cooperative and distributed property will emerge along these lines, a trend explained by Matt Cropp in his article, “The Coming Micro-Ownership Revolution.”6 Cropp’s article explains the direct link between P2P-driven declines in transaction costs and the shift to more distributed forms of ownership. The new corporate forms will no longer be based on shareholder-based ownership, but on common capital stock, held by the commoners themselves. These new entities constitute the “third commons” of “created materiality,” i.e., humankind’s productive machinery (in other words, capital), which joins the first two commons, the inherited material commons of nature and created “immaterial” cultural commons. The new forms of distributed individual property, which can be freely aggregated into collectives, emulate the free aggregation of effort already dominant in peer production rather than the older forms of collectivized and socialized public property.

How commons “out-compete” by “out-cooperating”

It can be argued that the collaborative economy is hyperproductive in comparison to the traditional industrial-capitalist modality of using a private company, wage labor, and proprietary controls such as patents and copyrights. Commons-based peer production allows rapid sharing of innovation and very low cost mutual coordination on a global scale. It also elicits passionate, voluntary engagement from large networks of contributors as well as rapidly established quick connections between emerging problems and valuable expertise. It is this hyperproductivity of commons-oriented practices and solutions that has led some observers to see commons as “out-competing” or “out-cooperating” conventional capitalism, and peer production as an attractive alternative to investments of shareholder and venture capital in private ventures. IBM is a well-known example of the realignment of a classic for-profit enterprise to the new modality of value creation. The company not only decided to use and contribute to Linux, but also to abide by the open development process of Linux, as well as the norms and rules of that community.

Obviously, when we use the concept of out-competing, we stress the role that emergent peer production plays in the capitalist, for-profit system; we stress that incorporating community dynamics in the overall production process is a better and more efficient way of doing business. This is exactly the argument of the open source movement, which stresses efficiency. The free software movement, by contrast, stresses the ethical imperative of freedom in both its creative and political sense. To talk about “out-competing” allows one to build bridges to the existing mentalities prevalent in the older institutional forms of corporations and government. By contrast, to talk about “out-cooperating” stresses the “transcendent” aspects of peer production, those aspects which are non-capitalist, perhaps even post-capitalist. It stresses the open and free cooperation of producers who are creating a commons together and its transformative potential.