The Political Economy of Peer Production (part one)

by Michel Bauwens

Not since Marx identified the manufacturing plants of Manchester as the blueprint for the new capitalist society has there been a deeper transformation of the fundamentals of our social life. As political, economic, and social systems transform themselves into distributed networks, a new human dynamic is emerging: peer to peer (P2P). As P2P gives rise to the emergence of a third mode of production, a third mode of governance, and a third mode of property, it is poised to overhaul our political economy in unprecedented ways. This essay aims to develop a conceptual framework (‘P2P theory’) capable of explaining these new social processes.

Peer to Peer

P2P does not refer to all behavior or processes that takes place in distributed networks: P2P specifically designates those processes that aim to increase the most widespread participation by equipotential participants. We will define these terms when we examine the characteristics of P2P processes, but here are the most general and important characteristics.

P2P processes:
produce use-value through the free cooperation of producers who have access to distributed capital: this is the P2P production mode, a ‘third mode of production’ different from for-profit or public production by state-owned enterprises. Its product is not exchange value for a market, but use-value for a community of users.

are governed by the community of producers themselves, and not by market allocation or corporate hierarchy: this is the P2P governance mode, or ‘third mode of governance.’

make use-value freely accessible on a universal basis, through new common property regimes. This is its distribution or ‘peer property mode’: a ‘third mode of ownership,’ different from private property or public (state) property.

The Infrastructure of P2P

What has been needed to facilitate the emergence of peer to peer processes? The first requirement is the existence of a technological infrastructure that operates on peer to peer processes and enables distributed access to ‘fixed’ capital. Individual computers that enable a universal machine capable of executing any logical task are a form of distributed ‘fixed capital,’ available at low cost to many producers. The internet, as a point to point network, was specifically designed for participation by the edges (computer users) without the use of obligatory hubs. Although it is not fully in the hands of its participants, the internet is controlled through distributed governance, and outside the complete hegemony of particular private or state actors. The internet’s hierarchical elements (such as the stacked IP protocols, the decentralized Domain Name System, etc…) do not deter participation. Viral communicators, or meshworks, are a logical extension of the internet. With this methodology, devices create their own networks through the use of excess capacity, bypassing the need for a pre-existing infrastructure. The ‘Community Wi-Fi’ movement, Open Spectrum advocacy, file-serving television, and alternative meshwork-based telecommunication infrastructures are exemplary of this trend.

The second requirement is alternative information and communication systems which allow for autonomous communication between cooperating agents. The web (in particular the Writeable Web and the Web 2.0 that is in the process of being established) allows for the universal autonomous production, dissemination, and ‘consumption’ of written material while the associated podcasting and webcasting developments create an ‘alternative information and communication infrastructure’ for audio and audiovisual creation. The existence of such an infrastructure enables autonomous content production that may be distributed without the intermediary of the classic publishing and broadcasting media (though new forms of mediation may arise).

The third requirement is the existence of a ‘software’ infrastructure for autonomous global cooperation. A growing number of collaborative tools, such as blogs and wiki’s, embedded in social networking software facilitate the creation of trust and social capital, making it possible to create global groups that can create use-value without the intermediary of manufacturing or distribution by for-profit enterprises.

The fourth requirement is a legal infrastructure that enables the creation of use-value and protects it from private appropriation. The General Public License (which prohibits the appropriation of software code), the related Open Source Initiative, and certain versions of the Creative Commons license fulfill this role. They enable the protection of common use-value and use viral characteristics to spread. GPL and related material can only be used in projects that in turn put their adapted source code in the public domain.

The fifth requirement is cultural. The diffusion of mass intellectuality, (i.e. the distribution of human intelligence) and associated changes in ways of feeling and being (ontology), ways of knowing (epistemology) and value constellations (axiology) have been instrumental in creating the type of cooperative individualism needed to sustain an ethos which can enable P2P projects.

The Characteristics of P2P

P2P processes occur in distributed networks. Distributed networks are networks in which autonomous agents can freely determine their behavior and linkages without the intermediary of obligatory hubs. As Alexander Galloway insists in his book on protocollary power, distributed networks are not the same as decentralized networks, for which hubs are obligatory. P2P is based on distributed power and distributed access to resources. In a decentralized network such as the U.S.-based airport system, planes have to go through determined hubs; however, in distributed systems such as the internet or highway systems, hubs may exist, but are not obligatory and agents may always route around them.
P2P projects are characterized by equipotentiality or ‘anti-credentialism.’ This means that there is no a priori selection to participation. The capacity to cooperate is verified in the process of cooperation itself. Thus, projects are open to all comers provided they have the necessary skills to contribute to a project. These skills are verified, and communally validated, in the process of production itself. This is apparent in open publishing projects such as citizen journalism: anyone can post and anyone can verify the veracity of the articles. Reputation systems are used for communal validation. The filtering is a posteriori, not a priori. Anti-credentialism is therefore to be contrasted to traditional peer review, where credentials are an essential prerequisite to participate.
P2P projects are characterized by holoptism. Holoptism is the implied capacity and design of peer to processes that allows participants free access to all the information about the other participants; not in terms of privacy, but in terms of their existence and contributions (i.e. horizontal information) and access to the aims, metrics and documentation of the project as a whole (i.e. the vertical dimension). This can be contrasted to the panoptism which is characteristic of hierarchical projects: processes are designed to reserve ‘total’ knowledge for an elite, while participants only have access on a ‘need to know’ basis. However, with P2P projects, communication is not top-down and based on strictly defined reporting rules, but feedback is systemic, integrated in the protocol of the cooperative system.

The above does not exhaust the characteristics of peer production. Below, we will continue our investigation of these characteristics in the context of a comparison with other existing modes of production.

P2P and the Other Modes of Production

The framework of our comparison is the Relational Models theory of anthropologist Alan Page Fiske, discussed in his major work The Structure of Social Life. The fact that modes of production are embedded in inter-subjective relations — that is, characterized by particular relational combinations — provides the necessary framework to distinguish P2P. According to Fiske, there are four basic types of inter-subjective dynamics, valid across time and space, in his own words:

People use just four fundamental models for organizing most aspects of sociality most of the time in all cultures. These models are Communal Sharing, Authority Ranking, Equality Matching, and Market Pricing. Communal Sharing (CS) is a relationship in which people treat some dyad or group as equivalent and undifferentiated with respect to the social domain in question. Examples are people using a commons (CS with respect to utilization of the particular resource), people intensely in love (CS with respect to their social selves), people who “ask not for whom the bell tolls, for it tolls for thee” (CS with respect to shared suffering and common well-being), or people who kill any member of an enemy group indiscriminately in retaliation for an attack (CS with respect to collective responsibility). In Authority Ranking (AR) people have asymmetric positions in a linear hierarchy in which subordinates defer, respect, and (perhaps) obey, while superiors take precedence and take pastoral responsibility for subordinates. Examples are military hierarchies (AR in decisions, control, and many other matters), ancestor worship (AR in offerings of filial piety and expectations of protection and enforcement of norms), monotheistic religious moralities (AR for the definition of right and wrong by commandments or will of God), social status systems such as class or ethnic rankings (AR with respect to social value of identities), and rankings such as sports team standings (AR with respect to prestige). AR relationships are based on perceptions of legitimate asymmetries, not coercive power; they are not inherently exploitative (although they may involve power or cause harm).

In Equality Matching relationships people keep track of the balance or difference among participants and know what would be required to restore balance. Common manifestations are turn-taking, one-person one-vote elections, equal share distributions, and vengeance based on an-eye-for-an-eye, a-tooth-for-a-tooth. Examples include sports and games (EM with respect to the rules, procedures, equipment and terrain), baby-sitting co-ops (EM with respect to the exchange of child care), and restitution in-kind (EM with respect to righting a wrong). Market Pricing relationships are oriented to socially meaningful ratios or rates such as prices, wages, interest, rents, tithes, or cost-benefit analyses. Money need not be the medium, and MP relationships need not be selfish, competitive, maximizing, or materialistic — any of the four models may exhibit any of these features. MP relationships are not necessarily individualistic; a family may be the CS or AR unit running a business that operates in an MP mode with respect to other enterprises. Examples are property that can be bought, sold, or treated as investment capital (land or objects as MP), marriages organized contractually or implicitly in terms of costs and benefits to the partners, prostitution (sex as MP), bureaucratic cost-effectiveness standards (resource allocation as MP), utilitarian judgments about the greatest good for the greatest number, or standards of equity in judging entitlements in proportion to contributions (two forms of morality as MP), considerations of “spending time” efficiently, and estimates of expected kill ratios (aggression as MP).[1]

Every type of society or civilization is a mixture of these four modes, but it can plausibly be argued that one mode is always dominant and imprints the other subservient modes. Historically, the first dominant mode was kinship or lineage based reciprocity, the so-called tribal gift economies. The key relational aspect was ‘belonging’. Gifts created obligations and relations beyond the next of kin, creating a wider field of exchange. Agricultural or feudal-type societies were dominated by authority ranking, that is, they were based on allegiance. Finally, it is clear that the capitalist economy is dominated by market pricing.

P2P and the Gift Economy

P2P is often described as a ‘gift economy’ (see Richard Barbrook for an example). However, it is our contention that this is somewhat misleading. The key reason is that peer to peer is not a form of equality matching; it is not based on reciprocity. P2P follows the adage: each contributes according to his capacities and willingness, and each takes according to his needs. There is no obligatory reciprocity involved. In the pure forms of peer production, producers are not paid. Thus, if there is ‘gifting’ it is entirely non-reciprocal gifting, the use of peer-produced use-value does not create a contrary obligation. The emergence of peer to peer is contemporaneous with new forms of the gift economy, such as the Local Exchange Trading Systems and the use of reciprocity-based complementary currencies; however, these do not qualify as peer production.

That is not to say that these forms are not complementary, since both equality matching and communal shareholding derive from the same spirit of gifting. Peer production can most easily operate in the sphere of immaterial goods, where the input is free time and the available surplus of computing resources. Equality matching, reciprocity-based schemes and cooperative production are necessary in the material sphere where the cost of capital intervenes. At present, peer production offers no solution to the material survival of its participants. Therefore, many people inspired by the egalitarian ethos will resort to cooperative production, the social economy, and other schemes from which they can derive an income, while at the same time honoring their values. In this sense, these schemes are complementary.

P2P and Hierarchy

P2P is not hierarchy-less, not structure-less, but usually characterized by flexible hierarchies and structures based on merit that are used to enable participation. Leadership is also ‘distributed.’ Most often, P2P projects are led by a core of founders, who embody the original aims of the project, and who coordinate the vast number of individuals and microteams working on specific patches. Their authority and leadership derives from their input into the constitution of the project, and on their continued engagement. It is true that peer projects are sometimes said to be ‘benevolent dictatorships’; however, one must not forget that since the cooperation is entirely voluntary, the continued existence of such projects is based on the consent of the community of producers, and on ‘forking’ (that is, the creation of a new independent project, is always possible).
The relation between authority and participation, and its historical evolution, has been most usefully outlined by John Heron:

There seem to be at least four degrees of cultural development, rooted in degrees of moral insight:

autocratic cultures which define rights in a limited and oppressive way and there are no rights of political participation;

narrow democratic cultures which practice political participation through representation, but have no or very limited participation of people in decision-making in all other realms, such as research, religion, education, industry etc.;

wider democratic cultures which practice both political participation and varying degree of wider kinds of participation;

commons p2p cultures in a libertarian and abundance-oriented global network with equipotential rights of participation of everyone in every field of human endeavor.”

These four degrees could be stated in terms of the relations between hierarchy, co-operation and autonomy.

Hierarchy defines, controls and constrains co-operation and autonomy;
Hierarchy empowers a measure of co-operation and autonomy in the political sphere only;

Hierarchy empowers a measure of co-operation and autonomy in the political sphere and in varying degrees in other spheres;

The sole role of hierarchy is in its spontaneous emergence in the initiation and continuous flowering of autonomy-in-co-operation in all spheres of human endeavor.[2]