Michel Bauwens, a Belgian Peer-to-Peer theorist and an active writer, researcher and conference speaker on the subject of technology, culture and business innovation and the founder of the peer to peer foundation, recently spoke at the Harvard Berkman Center to give his overall analysis of the economic and social transition now underway.

Bauwens has authored a number of essays, including The Political Economy of Peer Production, and has taught at Payap University and Dhurakij Pandit University’s International College, as well as IBICT, Rio de Janeiro. In his talk, the theorist described the main characteristics of an important shift happening in society. According to Bauwens, that epochal shift has to do with how value is created:

“We’re in a period of history in which a marginal system of value is moving to the center of value-creation.”

Bauwens anchors his analysis on anthropologist Alan Page Fiske’s Relational Grammar of four structures of social life according to 4 main ways to allocate resources:

equality matching. In this type of relationships there is no authority between people nor is there the deeper responsibility towards one another as in the communal sharing model. People collaborate around shared goals and help one another on the basis appeals and of a loose exchange of favors. A good example of this type of relationships are work peers and sports team mates. authority ranking corresponds to a society that redistributes according to a hierarchical society pre-capitalist Market pricing – In the market pricing model, the relationship is based around a transaction, where the parties exchange substantive items, often with money being a part of the transaction. Such relationships may be shorter than others and more formal, even with an explicit or implied contract to formalize the exchange. Market pricing is where we live today. communal sharing is when one doesn’t expect anything directly. A great example of communal sharing are families, as you see the family as a whole. Communal sharing is said to be what worked the first 2000 years of society.

Bauwens mentions as well Kojin Karatani recent book entitled The Structure of World History: From Modes of Production to Modes of Exchange , which he considers as a paradigm-shifting work.

In that book, Kojin Karatani re-reads Marx’s version of world history, shifting the focus of critique from modes of production to modes of exchange. Karatani seeks to understand both Capital-Nation-State, the interlocking system that is the dominant form of modern global society, and the possibilities for superseding it. The books traces different modes of exchange, including the pooling of resources that characterizes nomadic tribes, the gift exchange systems developed after the adoption of fixed-settlement agriculture, the exchange of obedience for protection that arises with the emergence of the state, the commodity exchanges that characterize capitalism, and, finally, a future mode of exchange based on the return of gift exchange, albeit modified for the contemporary moment. He argues that this final stage—marking the overcoming of capital, nation, and state—is best understood in light of Kant’s writings on eternal peace.

The Structure of World History is in many ways the capstone of Karatani’s brilliant career, yet it also signals new directions in modes of exchange. According to the Japanese philosopher there are 4 modes of exchange:

Mode A: Reciprocity of the gift

Mode B: Ruling and protection

Mode C: Commodity exchange

Mode D: A mode that transcends and integrates the other three

Michel Bauwens uses Karatani´s thought to conclude how capitalism is very strong, not because it is one mode of production but three in one. Capitalism assembles capital, state and nation. All exist at the same time. Traditionally any transformation of the current system involved a social movement that seized state power and then installed another system. The emerging world of peer production is based on another vision which is to build an alternative economy outside the circuits of capitalism, or at least insulated from its exploitation, and then develop its own functionalities and moral authority.

If the major transitions of the past were from nomadic communities to clans; from clans to class-based, pre-capitalist societies; from pre-capitalism to capitalism, there is now a new type of society where the attractor becomes the commons more than the market.

The Commons and The Sharing Economy

The Commons started during the XIIth century. From 2005 to nowadays, the quantity of people involved in change and different modes of value creation and peer production became exponential, due to massive mutual coordination. There are now massive open contributory systems and contributory based value creation and no labour dependency. We are now, says Bauwens, creating the commons and becoming more aware that “Capitalism has become a scarcity-engineering system. He says:

“You always design for scarcity, when you design for the market. That is why you create waste.”

Commons-based economies are hyper-productive, as people don’t have to waste time and resources reinventing the wheel. The credibility and power of this paradigm shift is confirmed by the massive shift of capital toward social sharing—a system that Bauwens calls “netarchical capitalism.” But a crucial and important question to be asked is if capital is subsuming these new modalities… Unfortunately the aswer is yes, they are subsuming these to capital accumulation.

How can we do it the other way around?

Capital used to result from enclosing the commons and paying labour. But if you look at airbnb and uber is that these companies are allowing us to use peer to peer commons, and engage in exchange processes, extracting value from our production. That by itself, is already a recognition that peer to peer is a real thing.

The problem is that “sharing” economy companies like Uber and Airbnb are not reinvesting in the human capital. The current system is capable to increase and create use value directly and to exchange it with our peers, whereas the capacity to monetize only increases linearly and it is extracted by corporations that do not reinvest in the reproduction of the system. It brings precarity in terms of labour. Paradoxically, peer production produces a form of hyper liberalism. You don’t even need to pay people anymore. But it doesn’t need to be that way and what is key is to find new solutions.

Some of those solutions are the emergent ownership revolution and ethical entrepreneurial coalitions around commons production.

Examples of ethical entrepreneurship

A good example of an ethical company experimenting with new alternatives is Enspiral, a company based in New Zealand. Enspiral started as a small group of contracting computer programmers who wanted to organise their working life to put more time and energy into making a positive social impact. It has since developed to becoming an experiment on how to create a collaborative network that helps people do meaningful work.

One thing done by Enspiral is the creation of ventures. For example, Bucky Box is a venture that builds cloud software for an emerging food system that is designed to tackle the food distribution problem. Loomio works to empower communities to take action together and participate in decision making. Metric Engine allows companies to compare their performance with similar organisations so that they can identify ways in which they can improve, meanwhile Enspiral Accounting offers accounting services to those that place social responsibility in pride of place. Enspiral Legal focuses on providing legal documentation and support to technology start ups. Dev Academy has become New Zealand’s first Developer Academy which allows people to be able to “radically upskill” their tech skills in a nine week boot camp.

Enspiral is an example of a company working with an integration of karatani´s mode A (reciprocity) of exchange into mode D.

The bumps along the way

If the landscape of new types of organizations is quite exciting, there are some conundrums that need to be tackled. Bauwens points out how if you want to make physical things you need to buy raw material and as such, you need capital. A good example of one company that evolved in a rather conventional way due to this issue, is makerbot.com. Makerbot was a commons 3 D printer, but at the moment it decided to expand by acquiring venture capital, the investors first demand was enclosure. The company was no longer a commons.

What is key therefore is to reintroduce in the market the demand of reciprocity, for an ethical market approach. Other examples of companies working through this mindset are las indias sensorica, ethos and others.

Historically transitions have happened because the old system doesn’t work anymore or because the new system is so much better that logically we just shift to the new system. The new system is open, mutualized. The various names used to denominate it are the solidarity economy, cooperative economy and others. This landscape of new systems is still fragmented which can be somewhat confusing. In Spain, for example, there are 12 different softwares to order food … fragmentation in between.

Peer production doesn’t solve inequalities. Software production is very male dominated… It is necessary to produce capacitation building. We need the state to make sure everyone can contribute in optimal ways to building share resources. As opposed to the model, common in England, which says you can all do it yourselves which is a standpoint a bit reactionary… You can self organize now, they say. So it’s the encapsulate of the same words and vocabulary with a different political agenda…

Ultimately what is important is to question and shift from the scarcity mindset to the abundant one.

The whole talk is available online: