New words expressing new concepts usually indicate stirrings at other levels of reality. So when we read of widespread ‘peer-to-peer’ activity (sharing without central authorities) and the spread of ‘open source’ (the mutuality of creativity), or come across seemingly paradoxical concepts such as ‘produsers’ (users producing value as they use), or entirely new concepts such as ‘phyles’ (transnational networks of small companies in which the values of the commons are predominant), we should find out about the innovations that old language does not capture.
We are witnessing the emergence of a new ‘proto’ mode of production based on distributed, collaborative forms of organisation. It is developing within capitalism, rather as Marx argued the early forms of merchant and factory capitalism developed within the feudal order. In other words system change is back on the agenda but in an unexpected form, not as a socialist alternative, but as a commons-based alternative.
Capitalism in its present form is facing limits, especially resource limits, and in spite of the rapid growth of the BRICS (Brazil, Russia, India, China and South Africa) economies, is undergoing a process of decomposition. The question is whether the new proto-mode can generate the institutional capacity and the alliances able to break the political power of the old order.
One way to describe the changes now taking place is as a shift away from a context in which the technological and economic advantage lies with economies of scale and mass production that depend on cheap global transportation and, thus, the continuous availability of fossil fuels. The move is to ‘economies of scope’, where bringing down the cost of common infrastructure for networked enterprises brings competitive advantages.
It is in achieving these economies of scope that the distributed, peer-to-peer forms of production made possible by new information and communication technologies can be deployed.
Distributed production: who has control?
The ecological and resource scarcity crisis makes the shift to economies of scope seem all but inevitable. Such a shift takes two major forms: the mutualising of knowledge, which is the ‘open source’ model; and the mutualisation of physical resources, which takes the form of ‘collaborative consumption’ in order to mobilise idle resources. Both occur in the greater context of the horizontalisation of human communication and the common value creation that have been enabled with the internet. These involve forms of mutual accommodation between centralised institutions (such as corporations and states) and decentralised, interconnected productive publics (such as open source software producers and social network users). In such accommodations there is a clear divide between those contexts where control is firmly vested in the companies, and is disadvantageous to the workers/producers, and forms in which the community dynamics remain dominant, and institutions have to adapt to the rules and norms of a community.
In the sphere of immaterial production, Facebook and Google are representative of forms in which individuals share their expressive output but do not collaborate with each other on common objects. Typically, such platforms will use business models that do not return the value to the users who have actually created it.
Commons-based peer production, by contrast, is emerging as a proto-mode of production in which the value is created by productive publics or ‘produsers’ in shared innovation commons, whether they are of knowledge, code or design. It occurs wherever people can link up horizontally and without permission to create common value together. It has the most potential as a leverage to transform what is now a proto-mode of production into a real mode of production beneficial to workers and ‘commoners’. To achieve this, strategic and tactical breaks with capitalism are necessary, though not necessarily with market forms.
How does commons-based peer production work?
Generalising from practice in the sphere of immaterial production, the new system functions as follows.
The contributors are either volunteers, or paid employees of collaborating companies. The infrastructure of cooperation is often maintained by a new type of ‘for-benefit’ association, such as the Wikimedia Foundation, which oversees Wikipedia, or the so-called FLOSS (Free/Libre and Open Source Software) Foundations such as the Apache Foundation, which provides organisational, legal, and financial support for software that powers much of the web.
These foundations do not command and control the labour of production but enable and empower its emergence and the social allocation of resources by the associated producers. Around these commons, we see the emergence of entrepreneurial coalitions. These consist of enterprises that create market value ‘on top of the commons’.
An example here would be the open source provider Red Hat, which distributes and supports a commercial version of the free Linux operating system. Their role in the feedback loop of value creation consists in making possible the individual social reproduction of the commoners/contributors, and often sustaining the for-benefit associations that also act as buffer between the community of peer producers and the entrepreneurs.
This new emerging modality tends to out-cooperate and out-compete classic modes of capitalist production. This is because of its higher innovation potential (there is no privatisation of innovation); the ability for distributed parallel development on a global scale without the use of costly bureaucracies of control (as with Wikipedia, every module can be worked on separately, by any contributor with the necessary skills); and the much cheaper production costs due to price structures free of the rent of ‘intellectual property’ (IP). Where these new forms occur – in knowledge production, free software production and now emerging in physical production – they tend to displace proprietary and IP-based modes. A study by the Computer and Communications Industry Association estimates that the US ‘fair use’ economy, based on shared, ‘balanced copyright’ knowledge, already employs 17.5 million people and accounted for one sixth of GDP in 2007.
Replacing capitalism?
As with the proto-capitalist modes under feudalism, today’s new forms co-exist with the dominant modality and may at first even strengthen it. In peer production today, the individual workers are still employed by capital – but at the same time the role of the commons and the community, and its explicitly co-operative, non‑capitalist logic, is a core aspect of the new organisation of production. Peer producers are knowledge workers and an integral part of the working class, while the entrepreneurial coalition is often dominated by a ‘netarchical’ capitalist class – a new category of capitalist that is no longer dependent on the ownership of IP rights but rather on the development and control of participatory platforms such as Facebook. This netarchical class knows how to capture value out of social production for the benefit of capital.
The new mode of peer production has features that prefigure a new productive system in the sense that the sharing of knowledge, code or design essentially follows a logic similar to communism as described by Marx: anyone can contribute, and anyone with access to the network can access the resource. Resources are allocated socially, through the decisions of the contributors to allocate their skills and energy to a particular part of the project. The solutions are added back to the same commons, and can be used by all, even where they have been created by developers who are also employees of capitalist companies.
The paradox, of course, is that this really-existing communism is interdependent with the really-existing capitalism of the entrepreneurial coalition that works with that particular commons. This makes the transitional mode of peer production a new terrain of social tension, struggle and, eventually, adaptation between various social forces.
Ultimately, the potential of the new mode is the same as those of previous proto-modes of production – to emancipate itself from its dependency on the old decaying mode, so as to become self-sustaining and thus replace the ‘circulation of capital’ with an independent ‘circulation of the common’. In a circulation of the common, the value that is created by the commoners for the commons would directly contribute to the further strengthening of the commons, without dependence on capital. How could this be achieved?
Critically, it would require an amendment of the existing sharing licenses, to prevent the value capture (without retribution) of capital – for example, the use of the ‘peer production’ or ‘copy-far-left’ licence, as proposed by Dmytry Kleiner and chosen by the P2P Foundation.
Our proposal is that the users of the commons should be commons-friendly enterprise structures and not profit-maximising companies. These ethical companies, whose members are the commoners/contributors themselves, would be organised as global open design companies. These would be linked to networks of small factories that produce on the basis of shared values and could more easily adopt open-book management, open recruiting and open supply lines, ensuring transparency to the whole network, in order to create maximum mutual alignment between participants. This is simply an extension of the existing organisational practices of ‘immaterial commons production’, which combines full transparency of all actions with negotiated coordination.
In order to turn peer production from a transitional mode within capitalism to a potential new dominant mode of production, we have to bring together the commonist aspects of immaterial cooperation with manufacturing companies that do not reward shareholders and owners of capital but rather the value creators themselves. By interconnecting these emerging players we will create a powerful seed form for the future.
One possible way of doing so is through a conversion of the existing social/solidarity economy towards shared innovation commons. If social economy actors adopted shared innovation commons, they would become hyper-cooperative, and hence effectively competitive with multinational corporations, which they would outperform in terms of speed and depth of innovation, as well as price, since they would operate without intellectual property mark-ups. From what Marx called ‘dwarfish forms’, they would transform into powerful global players.
How does this apply to manufacturing?
A corporate-driven move to distributed forms of production has been underway for some time. When this ‘classic’ distributed manufacturing is coupled with the principle of shared innovation commons – that is, as the distributed production of ‘open hardware’ – much more dramatic changes could be afoot. Marcin Jakubowski of the Open Source Ecology project, which develops about 50 types of open hardware-based production machinery (open source tractors, bricklaying machines and so on), and Wikispeed, the open source car project, have announced the development of an ‘extreme manufacturing’ platform.
We regard this as the peer production equivalent of the invention of the assembly line by Henry Ford. It inserts the rapid production methodologies that have proven themselves in open source software production (such as ‘extreme programming’) into the world of machine design, and links it directly to microfactories and distributed enterprise.
As Jakubowski explains this model, it directly addresses the issue of economies of scope by offering a globally mutualised production infrastructure: ‘Extreme Manufacturing (XM) is an open source hardware development methodology, which focuses open source design and collaboration, and the revenue model is distributive enterprise . . . The magic of this method lies in synergistic, lively, distributed, parallel development.’ He explains how it is lean in its organisation but ‘maintains sufficient structure for scalability’.
This sort of distributed system can operate within a capitalist framework but can also, when linked with shared innovation commons, provide a new form of open and distributed manufacturing centred on social, rather than profit-driven, value creation. The bases for an integrated distributed manufacturing system are currently under rapid development. They include distributed access to machinery: 3D printing and other forms of personal fabrication, such as currently developed in FabLabs and hackerspaces, as well as in emerging microfactory models such as Wikispeed and Local Motors.
It requires distributed access to physical places for collaboration – co-working centres – as well as the widespread possibility for peer learning. Distributed access to financial capital is a further condition, notably crowd-funding, social lending and distributed, decentralised currencies such as cryptography-based digital money Bitcoin. The spread of these peer to peer forms of funding has already attracted the attention of the Bank of England executive director, Andrew Haldane, who has suggested that peer to peer finance models could sweep away the inefficient retail banks before too long.
Access to distributed forms of energy and raw materials will also be fundamental. Here too there are established trends in this direction. For instance, half of Germany’s solar energy is produced by community‑owned local cooperatives. The availability of appropriate legal forms to allow for entrepreneurship in this new modality will be necessary.
If it is true that the capitalist mode of production is reaching its limits, and that this emerging new mode of value creation creates significant opportunities for commons-centred production, then we need to seize this opportunity – not just at the micro-level as a new social practice, but as a societal project for emancipation.
How would peer production be extended to the whole of society?
The current capitalist system is based on two entirely erroneous premises: first, that nature is abundant and can be infinitely exploited to obtain endless growth; and second, that sharing of innovation, culture and science should be hampered through privatisation of intellectual property – an imposition of artificial scarcity. These macro-economic principles are then written into the ‘constitutions’ of profit-maximising corporations, which are legally obliged to enrich their shareholders by maximising social and environmental externalities.
Peer production models show us a new possible reality in which the democratic civic sphere, productive commons and a vibrant market can co-exist for mutual benefit. This model has three dimensions. At the core of value creation are various commons, where innovations are deposited for all humanity to share and build on.
These commons are facilitated and protected through non-profit civic associations, with the ‘partner state’ as their territorial equivalent, empowering and enabling that social production. Around the commons emerges a vibrant economy undertaken by different kinds of ethical companies, whose legal structures tie them to the values and goals of the commons communities, not absentee and private shareholders’ intent of maximising profit at any cost.
Where the three circles intersect, there are the citizens deciding on the optimal shape of their provisioning systems. This is what happened when the counter-power structure of Occupy Wall Street in New York decided to complement its free provisioning of food with the Street Vendor Project, enabling supporters to buy food from local street vendors. This was a conscious, citizen-driven choice for an ethical economy subsumed under the citizenry and its political commons. Occupy and the indignados signify the birth of digital-native social movements, and a necessary politicisation around the new productive and social possibilities.
While the shift to distributed production may be inevitable, the form it takes is open to evolution. This will be determined not just by the social construction of alternatives, in which communities, corporations and the state intersect, but also by outright social struggle, including in the field of political representation.
A political expression of the commons
New social movements always start first as a new subculture, consisting of people who invent new social practices. The file sharing communities at the root of the Swedish Pirate Party initially consisted simply of music lovers who wanted to share their music and discoveries. These communities discovered that such sharing was actually illegal, because the laws still attached to intellectual property do not give the user sovereignty over their acquired material but subject it to a prohibition on sharing, in order to ensure a guaranteed rent income to entertainment corporations.
At first, such communities did not directly attack the system that repressed their freedom to share. Instead they started building their own infrastructure. This included the new type of creative commons and other ‘copyleft’ licenses that formalise the right to share.
However, there is a stage in the evolution of a new social movement and culture when political power is crucial to ensure its survival and development. It is not enough to create new institutions on the margins of society; effective defence mechanisms against the constant attacks of the dominant powers become a necessity. This means building a political coalition.
The Pirate parties, one of which is expected to carry 10 per cent of German voters in the next election, are the first political expression of free culture. The Pirates are the natural defenders of the digital commons at the heart of the new mode of production. Sociologically, they attract the votes of the precarious youth generations that are most involved in the new productive modalities.
The Greens and ecological parties also claim to be the natural defenders of the commons. They are often the parties of choice of older, highly educated, knowledge workers.
The left and social justice parties, some of which have made significant gains in recent elections in in Europe, are of course parties of the productive commons. They could be a force that understands the advantages of distributed production that can be accessed and owned by the workers-producers themselves. They often receive the votes of government employees and industrial workers who are still loyal to the older labour traditions.
A final element in a new political coalition would consist of progressive liberal forces. For example, in Denmark, culture minister Uffe Elbaek is known for his commons-friendly approach. Such parties can represent a link with socially progressive entrepreneurs who create enterprises around the commons.
From these diverse roots, a new progressive majority can be created around free culture, respect for nature and its limits, the necessity of social justice and ethical entrepreneurship. This ‘grand coalition of the commons’ can create a new political majority for social change.
While none of the parties involved is as yet quite ready for it, a convergence of commons-friendly forces could create the conditions for a new social hegemony that could challenge the current dominant players and potentially re-arrange both peer production and a commons-centred society, so that it is driven by the commoners and operates in their interest.

The creativity of labour

Hilary Wainwright poses some questions about how to achieve a commons-based alternative to capitalist production
he work of Michel Bauwens and the P2P Foundation on a peer to peer/commons approach to production is important for several reasons. First, it draws attention to the fact that the new information, design and communication technologies make possible economies of co-ordination and transaction that provide potentially historic opportunities for scaling up, spreading and expanding the many dispersed economic initiatives driven by social values rather than profit maximisation.
Bauwens identifies this potential in the full knowledge that these same technologies enable the canniest corporations to become increasingly powerful while at the same time minimising their costs. Distributed, decentralised production is for Bauwens a contested terrain, full of ambivalences and risks as well as opportunities for transformative politics.
The second reason for the importance of his work is his focus on the growth of a commons of knowledge and design, in both immaterial and increasingly material production, as a development of immense strategic significance and with an already transformative character. In itself this commons is no island of unalienated work, however. Take open software development, for example: the success of Apple, Google and IBM is based on a business model, as Bauwens implies, that gives these companies access to creative labour while leaving responsibility for productivity with the developers themselves. In doing so, they avoid incurring the costs of recruitment, training, pensions, childcare leave or other means of sustaining labour.
Bauwens claims to provide a complete design for a new model of production: ownership, management structure, distribution system and all. His strength is his specific focus on the knowledge and design commons but at the same time an openness to the wider connections that will help realise its transformative potential .
Some questions, then, from a sympathetic point of view, to help to take the argument further. First, if the most intelligent predator companies are already exploiting commons production, what is to stop the corporations from fencing this commons in? What wider connections to what countervailing forces, initiatives and sources of support could enable this commons to contribute to a wider challenge to the capitalist firms?
I’m thinking here of connections within the economy, as distinct from – but not opposed to – the kind of political alliance that Bauwens interestingly but a little optimistically sketches. For example, what possibilities are there of linking up with and strategically enhancing the co-operative and solidarity economy discussed by Robin Murray and others in the previous issue of Red Pepper?
Is there a role for the unions in developing such an alternative? Levels of unionisation are low among IT workers. Open software developers, though, have a variety of strong networks of their own that act as sources of recognition and employment, and provide a degree of protection, bargaining power and sometimes a basis for campaigning on issues of common concern – for example, in opposition to attempts to impose proprietary enclosures. Could unions learn from experiences of supporting organisations of the self-employed, such as Streetnet in South Africa and Sewa in India, or from other unions such as the National Union of Journalists that have supported freelance workers for a long time? How would unions have to change to make the issues of control over the use and purpose of human creativity as important as the struggle over employment conditions and payment? Would it help to see labour as human creativity as itself a commons?
It would lead to asking: what are the institutional, including financial, conditions for nurturing and realising the creativity of each for the benefit of all? This would apply at micro levels – how enterprises should be organised – and at the macro. What means of livelihood, with what public support, would be required to have some autonomy from the labour market? What legislative frameworks would be needed; what support for education, training, sabbaticals? And how can we envisage non-capitalist market forms that can be experimented with here and now as part of the contestation and competition with capitalist forms?
Above all, though, as the left shows tentative signs of electoral recovery, we must learn the lesson of how social democracy has been bulldozed or captured by corporate power. This is in no small part due to the fact that its programmes of redistribution were not rooted in a distinct strategy for production, with the creativity and solidarity of labour at its centre. Bauwens offers an opportunity for thinking and acting over production beyond capitalism. We should grasp it in all its complexity.

How P2P works

P2P is based on free engagement, and hence represents non-alienated ‘work’, driven by personal interests and passion. Once a community establishes itself and gains sufficient traction, there are good reasons to believe that it becomes ‘hyperproductive’. Subjectively, because intrinsic and positive motivations are clearly preferable to extrinsic and negative motivations. Objectively, because the characteristics of such ways of working – equal participation, communal validation processes, distribution of tasks instead of division of labour, ad hoc meritocratic leadership, active engagement of users and a large base of contributors – are very hard to match by any for-profit competitor.

Such a community also needs an infrastructure of cooperation, so we usually get hybrid modes, where the self-managed community is coupled with a non-profit foundation that manages its infrastructure, as well as businesses operating on the basis of the wealth of the commons in the marketplace. Through the practice of benefit-sharing, these businesses support the common infrastructure, which in turn strengthens the community.

Once a for-profit business, relying on proprietary formats, faces such competition, it can pretty much close its doors.

Empirical examples are Microsoft’s Internet Explorer vs the Mozilla Foundation’s Firefox, and the proprietary Britannica vs the open Wikipedia. The p2pfoundation wiki has hundreds of other case studies, compiled by a global independent research community.

Hardware is harder

That dynamic is by no means limited to the production of immaterial goods, such as open content and free software, but is now rapidly moving to open and shared designs – what is often called ‘open hardware’. The reason is simple: anything that needs to be physically produced needs to be intellectually designed. Readers may want to look at http://p2pfoundation.net/Product_Hacking for a list of nearly 150 ‘open hardware’ projects, with a sizable number having already reached maturation.

But here comes the obstacle: whereas peer production of immaterial goods needs the free individual aggregation of immaterial means of production – brains, computers and access to socialised networks – physical production also needs cost-recovery methods.

This limit suggests that more fundamental change still requires fundamental changes in political and social power, so that peer production can be matched with cooperative production in the physical sphere. The alternative, which I think is likely in a transitional period, is ‘built-only capitalism’, driven by a sector of capitalists who, instead of relying on intellectual property, decide to ‘enable and empower participation’ – and profit from it.

Thus a new frontier of social cooperation and conflict is created, between proprietary platform owners and user communities (the sharing model); and between productive communities and the surrounding business ecologies (the commons model). The sharing model is based on the need and desire of individuals to share their creative production, the commons model is based on the creation of common artifacts. Both models have different logics, social structures, and underlying social contracts.

I think that social change will also emerge from a new structure of desire in contemporary youth. Once you have tasted ‘non-alienated’ voluntary participation in an online productive community, you are strongly motivated to extend it to the whole of life, and this drives the emergence of a powerful global movement that embraces three new paradigms of social organisation: open and free availability of ‘raw material’ for cooperation; participative modes of production impacting the design of techno-social cooperation; and commons-oriented output, available to all. The combination of these three principles creates a ‘circulation of the commons’ that ensures the social reproduction of P2P.

Value crisis

Under what conditions can this be facilitated? First of all, we have to understand that what happened with the computer and the networks – the ‘miniaturisation of the means of immaterial production’ – is going to happen, and in fact already is happening, in the sphere of the means of material production. The possibility arises of a combination of a new cooperative and relocalised economy, coupled with global and interconnected open design communities. If we can re-invent property modes away from the current monopolisation of financial property, such trends will be speeded up enormously.

It is important to understand that peer production creates a value crisis, a crisis of accumulation if you want, for the capitalist economy, of which both owners and producers are the victim. The reason is that more and more of the essential innovation becomes social, a result of the emergent networks of distributed collaboration in open communities. We have created the ability for an exponential growth in the direct creation of use value (think of the hundred million of downloaded videos via YouTube, a quantum leap in social production compared to the mass media model), but only a linear growth of monetisation. Google may be a giant, but only a fraction of websites can live from online advertising. So, while Linux creates a $40 billion economy, at the same time it destroys $65 billion annually in the proprietary software business. But undermining old business models in this way also creates precarity among the workers.

The short-term solution is organised benefit-sharing between productive communities, the non-profit foundations managing the infrastructure, and the businesses profiting from the commons. It works well for Linux, but is only reactive. Yet 75 per cent of Linux programmers are now paid, and recently, while I attended a free software congress in Ecuador, I was told that zero per cent of free software programmers in that continent are unemployed.

Ultimately, these ad hoc evolutions are not sufficient, and as countries and regions recognise that their ‘competitivity’ largely depends on such open innovation, they may start thinking in terms of basic income. The advantage of it, as recognition of the value each citizen creates for society through their natural participation in such networks, is that it creates a basis for workers to have some autonomy from the market. Such a basic income would not only benefit immaterial peer production, but also the experimentation with social and cooperative means of material production.

A partner state

We need a fundamental re-orientation of public policy, around the notion of a ‘partner state’, which enables and empowers direct social value creation.

I have proposed a set of three institutions to promote commons-based peer production: An institute for the creation and protection of the commons, which promotes and sustains the creation of new modes of value creation; an institute for open business, which promotes models of social entrepreneurship so that each commons can create an ecology of enterprises; and an institute for benefit-sharing and commons recognition, which focuses on patronage and various forms of support that do not destroy the P2P logic of voluntary contributions. It creates prizes, awards and bounties to support individuals involved in commons-based value-creation.

A partner state approach, combined with a strengthening of peer property formats, and new forms of capital ownership combined with mutual credit and non-capitalist money, would go a very long way in stimulating the autonomous sphere of production. Growing the counter-economy and a social life based on a new logic is not something to start after we gain political power, but right now.

At this stage we do not have a magic bullet solution in response to the disintegration of the neoliberal system. We should continue to furiously build the counter-society within the old. The emergence of open/free, participatory and commons-oriented movements, which has occurred in all fields but started around ‘immaterial’ cooperation, is now ready to be matched by their counterparts in the ‘physical world’. So I expect to see a speeding-up of real world alternatives in many different fields: more localisation efforts such as Transition Towns, more use of alternative currencies and mutual credit, and the rapid growth of global open design efforts with local partners in the field of real production.

One scenario is that the ‘enlightened part’ of the establishment, those with a long term vision who know the endgame is near, will push through a new global compact based on green capitalism, which simply cannot function without greater participation in social and political design. Compare it to the 18th century, which saw the downward trend of the nobles and the rise of the bourgeoisie, reaching a temporary point of equilibrium. Green capitalism would allow such a scenario, leading to a new surge of technological and social innovation. But if you believe, as I do, that capitalism as infinite growth is fundamentally unsustainable, this will then set the stage for a new transition phase, with P2P becoming the core social logic, with markets becoming subsystems for particular goods.

P2P as an alternative to capitalism

P2P involves the production of use-value through the free cooperation of producers who have access to distributed capital (essentially computers) 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 (for example in the sharing of film and music). It is governed by the community of producers (and users) themselves, and not by market allocation or corporate hierarchy. And it involves common property regimes by which the use of the service or product is freely accessible on a universal basis, through new common property regimes, different from private property or public (state) property.

There is a fundamental difference between the capitalist market and distributed P2P dynamics, which is exactly the reason it needs to replace market fundamentalism. A market is like the swarm of insects, and lacks intentionality. Participants only seek their own advantage, and the system cannot take into account any externalities, so the system destroys the biosphere and has a very high social cost. P2P dynamics are quite different: it’s a goal or object-oriented sociality, which unites people around the common object, which is almost generally the construction of a public or common good. Therefore externalities are built into the very fabric of P2P dynamics.

n Michel Bauwens is the director of the Peer to Peer Foundation – this article is based on an interview with Red Pepper. You can read Bauwens’ ‘Political Economy of Peer Production’ at www.ctheory.net