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Archive for February, 2008

Book of the Week: Hacking Capitalism. Part Three: From class struggle to play struggle

photo of Michel Bauwens

Michel Bauwens
29th February 2008


We continue our presentation of Johan Soderbergh’s book with a last excerpt about perhaps the key concept of the book: Play Struggle.

Johan Soderbergh:

“The notion of hackers becoming ‘revolutionaries just for fun’ would have appealed to the eighteenth century poet Friedrich Schiller. Disappointed by the failure of the French Revolution, he sat down to ponder over how to make it work better the next time. Friedrich Schiller saw the ‘aesthetic play-drive’ as the primary force which could foster a more wholesome human being, whose maturing would also create and be able to sustain a post-revolutionary aesthetic state. Schiller meant that the aesthetic education of man was necessary to heal the rift within man caused by specialisation: “[. . .] If man is ever to solve the problem of politics in practice he will have to approach it through the problem of the aesthetic, because it is only through Beauty that man makes his way to Freedom.” Both adherers and critics of Schiller have pigeonholed him in the tradition of romanticism. Marxist scholars have followed Marx’s lead and passed over Schiller’s work as a footnote in German, idealist philosophy. The noteable exception was Herbert Marcuse. He declared his indebtedness to the old poet for his own life-long investigation into the liberating potential of aesthetics and play. Shiller’s philosophy ought to be reclaimed from the fine art scene and high-browed poetry. It would do him more justice if his words were applied to the politics that flow from the ‘beauty of the baud’ and the play with source code in the computer underground.

Herbert Marcuse is best known for deploring the one-dimensional rationality of technology. Today, with the rise of a ‘creative industry’ and a cultural economy, art, language, and fantasy too have been put to work and incorporated in instrumentalist thinking. Conversely, however, technology is aestheticised and put to play. A hacker does not speak about a program script in terms of functionality. Neat source code is a matter of good taste. Aesthetics is the organising principle of their play, which, mostly by accident, also produces working computer applications. A paraphrase of Friedrich Schiller can underline the ramifications of what just has been said: The object of hackers’ play is the beauty of the baud and its goal is software freedom. This reasoning is also consistent with how Marcuse envisioned that the instrumentality of technology could be resolved in modern society. Technology had to be returned to its origin in craftsmanship. Since the day when techne was split between useful arts and fine art proper, technological development has been defined by utilitarianism, while poetry has been relegated to the domain of the unreal and inconsequential. At least that is how things generally come across. A closer look will reveal that a play element has persisted throughout the history of technology. To the side of industrial and military innovations, there have also been innovations made purely for the sake of amusement. These technologies flourished in the renaissance courts. It was here that engineers of the day found their outlet since they were kept at bay from entering the industry by trade guilds. Architecture, gardens, water works, pyrotechnics, and automata are some examples. Moreover, to the list can be added cabinets, bestiaries, and scientific experiments that were as much performed as researched. It is this marginal and aristocratic lineage of technological development that has been picked up, and, to some degree, democratised, by hackers, by radio amateurs, and hobbyists.

The first generation of hackers nurtured a dream of making computer resources accessible. Members in the Homebrew Computer Club envisioned a small computer ‘able to run on the kitchen table’. They were in part motivated by a desire to play with those machines; in part they were aware of the political importance of democratising computer technology. Present-day hackers pursue the same mixture of play and politics within the technological platform of small computers and open-edited software handed down to them by the first generation. The passion for writing software code is contagious and easily spills over to other fields of doing. A popular sideline within the computer underground is to build mechanical replicas of classic computer games and exhibit these gadgets at hacker conferences. The step is a short one to more ambitious hardware projects, such as the OScar project. It is a collaboration between car engineers and tinkerers to design an ‘open source car’. What is gradually taking shape within the hacker movement at this moment is an extension of the dream that was pioneered by the members of the Homebrew Computer Club. It is the vision of a universal factory able to run on the kitchen table. The idea is not as far-fetched as it first might seem. Development trends towards flexible production within industry are pushing in the same direction. Researchers at the MIT laboratory, for instance, have experimented with computer-aided manufacturing facilities small enough to fit into a single room and easy enough to operate by lay people after a short, introductory course. The facility can be used to cut, solder, cast, compress, etc. almost any material into a finished product. Likewise, a group of engineers in Brighton try to construct a ‘self-replicating ‘rapid prototyper’ that can mould everyday items out of plastic. The performance and significance of these research projects are open to dispute. In most cases, hardware developed from below will proceed through the novel combination of mass-produced, off-the-shelf electronic parts. More important than the individual technologies is that these dreams are now being articulated. This is not how cadres of revolutionaries visualised the ‘expropriation of the expropriators’. Nonetheless, the desire for a ‘desktop factory’ amounts to the same thing as the reappropriation of the means of production. The seizure is unfolding as new productive relations are being invented in play.”

Book: Johan Söderberg. Hacking Capitalism: The Free and Open Source Software (FOSS) Movement. Routledge, 2007

Posted in Free Software, P2P Books, P2P Culture, P2P Politics, P2P Theory, Uncategorized | 1 Comment »

Podcast: Interview with Michel Bauwens, P2P and spirituality

photo of James Burke

James Burke
29th February 2008


A interview between James Burke and Michel Bauwens on participative spirituality and the relationship of P2P with religion and religious practice.

This podcasts clarifies and adds to a recent series of posts including, The next Buddha will be a collective.

See related posts below:
part 1:Spiritual expression in the peer to peer era
part 2: Towards a theory of the spiritual commons
part 3: Commons-oriented approaches: Working the “we field” through peer circles, The development of intersubjective facilitation, Chaos religions on the internet, Open Source Religions, Towards a contributory spirituality

Posted in P2P Spirituality, P2P Subjectivity, Podcasts, Uncategorized | No Comments »

Stan Rhodes: Advertising is waste

photo of Michel Bauwens

Michel Bauwens
28th February 2008


Republished from Stan Rhodes:

You’d think that everyone that’s ever seen an advertisement would know this, but no one seems to want to say it. We’re all thinking it, aren’t we?

Advertising, at its root, is waste.

Advertisements are waste.

Right now, we have an arms race between what a person wants to pay attention to and what someone else wants them to pay attention to. The companies competing see that usability rules the day, but they’re in a tough spot, because advertisements are poor usability: I should only see what I’ve asked to see. That arms race continues because the communication lines are privatized. If they were not, if we owned and supported our use of communication lines, advertising would wither, because it has no place. It’s not just annoying, it’s inefficient. It’s waste!

In some commons, companies already have complete monopolies. In other commons, companies have to compete, and they compete by having a bit better usability, being a bit more streamlined, and feigning a commons model. The commons model is the most efficient, so they are inevitably drawn toward it unless or until they can attain a monopoly. That closed, privatized property can never truly be a commons–truly be open and for the public good only–is their fatal flaw. I mean property in the broadest sense: goods that are both property and goods that are not (like information), but are legally treated like property (“intellectual property”). Companies exist for profit, and they’ll be tempted to impose on users to gain it. If users were to hold the commons, this would all be irrelevant. Companies would have to provide the service of creation, and everyone would be better off. Google is a for-profit company, and cannot help but be evil, even if they try to stave it off. They are evil by design; their goals are inherently contrary to the public good.

By owning the commons, the public retains control of the purposes of business. The public says “We need this.” Today it’s backwards, business own the commons and they tell us “You need this.” We need their products, we need their services, we need their jobs, we need their vision of ourselves to define our own damn identity.

Enough.

Posted in P2P Business Models, P2P Commons, Uncategorized | 3 Comments »

Charles Leadbeater’s book on mass innovation, We Think, is out!

photo of Michel Bauwens

Michel Bauwens
28th February 2008


Announcement from the author:

WE THINK: mass innovation not mass production - is published this week.

The book was partly written online and incorporates readers’ comments on a draft released on the web in late 2006.

The first three chapters of the finished book can be downloaded from my website, where you can also comment.

There’s a short animation explaining the book on my YouTube Channel.

You can buy a copy from Amazon here.

Posted in P2P Books, P2P Business Models, P2P Culture, Uncategorized | No Comments »

The Medium is the Mess…

photo of Simon Edhouse

Simon Edhouse
27th February 2008


This is an adaption of a recent entry on my own blog in which I discuss the nature of ‘The Web’ and why it needs to be seen as quite distinct from ‘The Internet’. The focus of this piece is a little different, as I believe there is particular relevance to the P2P movement, in that the term ‘P2P’ when used to refer to P2P-technology, has high relevance to the discussion about ‘Web vs Internet’, and some focus may be needed to differentiate this specific application of the term P2P, from its many other close derivatives. This then is a reference point to keep in mind in relation to the following discussion.

Although Web leviathans like YouTube, MySpace and Facebook all clearly leverage aspects of the many-to-many/ peer-to-peer trend, they also usurp and plunder many aspects of the contributions freely given by their users via constraining them inside the legacy client-server system of the web. However, most web users blindly accept the Web’s plutocratic rules of engagement hook-line-and-sinker and are locked-in to its operational logic which is still very much the antithesis of a peer-to-peer orientated approach.

The concept of P2P on the Web is actively stigmatized from many quarters, mainly by the Music and Movie industries that would like to bury the whole idea, or work out a way to buy and control it. (both unlikely) The difficulty is, that on the pro-P2P side, discussions of the broad applicability of the ‘P2P-Meme’ to so many diverse aspects in our culture, might have the unintended consequence of making the term almost apply to everything and (possibly) nothing at the same time. In other words, the P2P meme’s pluralistic tendencies tend to see the term ‘P2P’ applied in ever increasing ways, arguably diluting some of its power and potential, and its valid heritage as a technical-system born of the Internet that actually predates ‘The Web’ by about 20 years. (my concern is not about ‘history’ so much as the future, as I see P2P-Technology as one of the most compelling potential agents of change in this now fundamental global arena)

From where I stand there is a clear ‘value-axis’ existing on the Internet, and a rather peculiar ‘Cargo-Cult’ type adherence to a dominant cultural meme called “The Web” which as a term is used too often interchangeably with the term “Internet”. This simple semantic muddle must end, as it is the source of a lot of confused reasoning.

Value AxisThere are three primary components in a value-axis of the Internet, Connectivity, Communications and Transactions. Of these three, Connectivity is the most fundamental, with the next most fundamental factor being Communications and then Transactions with all other general applications, (information, entertainment, blogs, websites, web2.0 etc) sitting above these three. This simple taxonomy ranks factors in terms of which is more primary in its ability to ‘enable’ the others.

Websites, Portals (Facebook, MySpace, Saleforce, etc) are at the upper end of this scale of importance. (ie least fundamental) This does not mean to imply that consumer or business websites and ASP-based web-services are not important, but rather that as a rule these sites function atop a foundation of established connectivity, communications and transaction protocols, and are not in themselves ‘fundamental’ in the sense that they exclusively enable higher applications.

The Web itself sits on layer 2, ‘Communications’. After all, the Web, for all the hype associated with it, really just resembles a massive Amusement Park accessed by obtaining a ‘Browser’ ticket. In other words the Browser is your ticket, and you ride this communication platform which is actually built on the more fundamental Connectivity layer. Its no secret where the value truly resides in this mega-market duality. Browsers are free, Connectivity you pay for, and the ‘Attention Economy’ (acknowledgement to Umair Haque) sits like an ecosystem above all that, with Google currently at the top of the food-chain.

In his illuminating article ‘Content is Not King’ written in 2001, Andrew Odlyzko nailed it with prescient clarity, even though he, like so many, has used the term Internet, when he could well have been referring to the Web.

“The Internet is widely regarded as primarily a content delivery system. Yet historically, connectivity has mattered much more than content. Even on the Internet, content is not as important as is often claimed, since it is e-mail that is still the true “killer app.”
- Andrew Odlyzko, First Monday: www.firstmonday.org/issues/issue6_2/odlyzko/

Email (by the way) has the same status as the Web, it is a communication platform on layer two. Andrew Odlyzko does not distinguish between Communications and Connectivity. In his article referred to above, they are to all intents and purposes the same, yet his message is clear. Its the connectivity between people that is more fundamental (and valued) than the content exchanged.

The Web and the Internet are not interchangeable concepts

So we need to appreciate that the internet and the World Wide Web are quite different things. The internet is a network that is in fact a loose array of interconnected networks. The Web has been superimposed on this global network, and is the dominant overlay-system, but it is not the only possible system that can utilize that network. The web has allowed many hundreds of millions of people to download information from ‘servers’ via protocols like DNS, (domain name system) and communicate between each other via email by use of DNS and SMTP (simple mail transfer protocol). However these protocols, serve to lock users into the ‘client’ paradigm where ‘clients’ have to accept the terms of the businesses that control the web servers. Albert Benschop pulls back the curtains in this slightly ominous description.

“The exponential growth and far-reaching commercialization of the web have lead to an ever-stronger manifestation of the power structures of society in the virtual world. At present specialized computers channel the data traffic on the Internet and portals and search machines such as AOL, Google and Yahoo! dominate and exploit the market of the internet-dollars. Strongly concentrated hubs have arisen that play a crucial role in the Internet traffic. They are monster-servers, diverting their information to millions of regular web-users.”
- Albert Benschop, Peculiarities of CyberSpace- University of Amsterdam

The client/server paradigm of the World Wide Web, overlaid on the internet in the late 1980‘s, with its multiple layers of servers sitting on their underlying enabling protocols (DNS, SMTP, FTP etc) represented, at the time, a ground-breaking innovation and has gone on to become a global phenomenon. However, as the Web has grown, its hierarchical structure, identity and addressing protocols have also facilitated many of its almost intractable negative externalities. (Spam, Spy-Ware, Email-Born-Viruses, D.O.S. Attacks, Invasive Key-Stroke-Logging, Phishing (Banking Fraud), Packet-Sniffing, Trojan-Horses, Identity-Spoofing etc)

For all the web’s vulnerabilities to attack and corruption, there is considerable ‘lock-in’ to WWW legacy systems, with the marketplace in general having built up a history of blind-acceptance trust and familiarity with it’s processes. This is a large part of the conundrum that is represented by the search for solutions to the web’s problems.

Projects like APML (Attention Profiling Mark-up Language), BCCF (the Buyer Centric Commerce Forum) and Project VRM (Vendor Relationship Management) are all well intentioned projects by switched-on people who want to do something about the inherent inequities and privacy problems of the web, and are arguably contained within this larger P2P pluralism. But… with the greatest respect, they all miss the point. Doing it actually ‘on the Web’, is self-defeating because its not a level playing field. There’s an orthodoxy present on the Web almost as dominant as the Catholic Church during the middle ages.

This is where an understanding of the pure definition of P2P, as it has developed on the Internet, may provide an instructive counter-weight, and clues to dealing with the over-hyped and over-rated orthodoxies of the web.

Posted in P2P Epistemology, P2P Politics, P2P Technology, Uncategorized | 13 Comments »

Book of the Week: Hacking Capitalism. Part Two: Hacking as a labour movement

photo of Michel Bauwens

Michel Bauwens
27th February 2008


Book: Johan Söderberg. Hacking Capitalism: The Free and Open Source Software (FOSS) Movement. Routledge, 2007

We continue our presentation with an excerpt on the topic of “Hacking and Capitalism”, which stresses the continuation between the hackers and the labour movement.

Johan Soderbergh:

“The skirmishes between the hacker movement and corporations and governments have deeper roots than is shown by the confrontations over treacherous code, hostile legislations, and public smear campaigns. More fundamental is that the norms and aspirations motivating people to be hackers are at odds with at least some aspects of capitalism. The central claim of this book is that the hacker movement is part of a much broader undercurrent revolting against the boredom of commodified labour and needs satisfaction. These sentiments, however, can be made to cut in two ways. In business literature, managers are often advised to encourage a ‘hacker spirit’ among their employees. Dennis Hayes gives a good account of how such a hacker spirit among engineers in Silicon Valley educes them to work harder without asking for anything in return. While he acknowledges the autonomy that software engineers enjoy, he doubts that any serious political agenda can arise from it. “Capital and modern technology apparently have seduced the computer builder with rare privilege: a genuine excitement that transcends the divide between work and leisure that has ruptured most industrialized civilizations. [...] When computer-building becomes an essential creative and emotional outlet, any politics larger than those governing access to work and tools seem distant concerns” Dennis Hayes’ doubts are very justified, though his observations are limited to in-house programmers. The demand for ‘access to tools’ becomes political dynamite once it is articulated outside the wage relation, i.e. by people who are denied access to the tools. When the ‘hacker spirit’ sticks among workers with no foothold in the creative business, the spirit warps into a ‘refusal of work’.

The ranks of these people by far outnumber those of the professionals in the media and information sector. And even among the lucky few who enjoy stimulating jobs, many of them will in due time find themselves deprived of their privileges. Programmers are being thrown into the lower tier of the labour market since the computer industry is maturing. Occupations that recently were felt as gratifying, such as writing software code, are becoming as routinised as any other field of activity that has fallen under the spell of exchange value. Ironically, the deployment of computer technology has been decisive in degrading work elsewhere in the economy. The growth of the software sector, which is providing exciting new jobs for computer programmers, rests in no small part on the usefulness of software as a means for deskilling the workforce in other sectors. This connection is laid bare when we consider the role of the first computer engineers employed by the industry. These programmers worked in the same company and side-by-side with the blue-collar workers who were subjected to computerisation. David Noble has documented how the embryo of computer software: templates, hole cards, recordable tapes, and numerical control (N/C), was deployed in heavy industry exactly for the purpose of intensifying the techniques of Taylorism. “By making possible the separation of conception from execution, of programming from machine operation, N/C appeared to allow for the complete removal of decision-making and judgement from the shop floor.

Such ‘mental’ parts of the production process could now be monopolized by managers, engineers, and programmers, and concentrated in the office”. Crucial to this strategy was to keep the workers ‘in the dark’ about the source code. In the same breath as N/C technology was designed to lock workers out, workers were held in contempt for being too simple-minded for programming tasks. Nonetheless, supervisors attested that workers learned on their own to read the program language backwards. It was useful for them to know the program in order to anticipate the next move by the machine, and to foretell malfunctions and possible accidents. Workers were not meant to have this knowledge though. The routine was that upon discovering a bug, the worker had to report it to an engineer. It was a cumbersome and frustrating procedure to both the worker and the programmer. Instead of following the correct procedures, workers often showed ingenuity in fixing bugs by themselves. Such initiatives by workers were beneficial to the bottomline of the firm. In order to take full advantage of the N/C technology it had to be opened up to allow feedback loops from the workers back into the work process. But managers had embraced the technology for exactly the opposite purpose. The machinery had been devised to regulate the performance of workers and to force a higher work pace upon them. With insight into how the machinery and the software functioned, workers also knew how to use the technology to their own advantage. They could now alter the instructions of the machinery and reduce its speed. This practice spread spontaneously yet rapidly in factory districts and was occasionally discovered and documented by supervisors. Managers fought back by trying to make the clockwork of the machinery impregnable and incomprehensible. Antagonism between capital and labour was contested on code level and ‘access to tools’ was the name of the game.

The dream of managers to build away workers’ discontent through black-box technologies has continuously been frustrated by hacking. Computerisation has not eradicated workers’ resistance but displaced it, from the execution stage to the conception stage. When more and more people are assigned to conceptualise rather than execute work processes, capital must economise this labour force too. The same tight regime is imposed on engineers and programmers as has previously been, with their help, forced upon blue-collar workers. At this point, however, Taylorism runs into its own limits. There is no easy way to deprive ‘knowledge workers’ of knowledge and still have them working. One unexpected outcome from the mechanisation of the office is that the opportunities for hacking and sabotage abounds. The fact that these attacks are charged with labour discontent almost always goes unreported. Managers are anxious not to inspire other employees to work the same deed. With these reflections in the back of the mind, Andrew Ross insists that the perspective on hacking must be broadened. The media image of hackers as apolitical, juvenile pranksters belittles the issues at stake: “While only a small number of computer users would categorize themselves as ‘hackers,’ there are defensible reasons for extending the restricted definition of hacking down and across the case hierarchy of systems analysts, designers, programmers, and operators to include all high-tech workers—no matter how inexpert—who can interrupt, upset, and redirect the smooth flow of structured communications that dictates their position in the social networks of exchange and determines the pace of their work schedules.”

Employees crashing the computer systems of their employers gives a clear indication of that hacking can be an act of labour resistance. How does this observation reflect upon hacking done by students, unemployed, and sparetimers, in other words, hacking unrelated to the workplace? After all, both the self-image and the stereotype of the hacker portray someone positioned outside and against the profession. The conflict over surplus labour that characterises the antagonism between labour and capital at the workplace has little explanatory power in the computer underground. Hackers volunteer to write software applications. They are more likely to be happy about spending an extra hour in front of the computer than trying to sneak a shortcut. As far as money is concerned, many hackers couldn’t care less if a corporation profits from a project that they have contributed to. From the perspective of a trade unionist, amateurs labouring for free are nothing short of alarming. The unsuspecting hacker is ripe for exploitation, and what’s more, while working away he is weakening the bargain position of employed programmers too. What hackers do care about, mainly free access to information, seems peripheral in comparison to social, labour, and environmental concerns. The glaring ignorance towards labour issues in the hacker movement has convinced Alan Liu to write off cyber-politics as subcultural ‘bad attitude’. He charges that the demands for free information are individualistic, consumerist and entrepreneurial. Alan Liu is mistaken because he portrays information in the same way as ‘content providers’ do, as merely a consumer product. From this perspective, the hacker’s wish to have information for free appears like just another angry customer demanding more value for his money.

If we acknowledge that information also is a means of production, it becomes clear that the demand for free information is the same thing as ‘access to tools’. With free licenses the tools to write software code are made accessible to everyone, thus they are free as in free from knowledge monopolies, white-collar professionals, and corporate hierarchies. Hacking undermines the technical division of” labour that is pivotal to Taylorism. Furthermore, the failure of hackers to mention labour issues is consistent with the fact that their politics is the politics of ‘zero work’. At first it might sound odd, but the statement above is consistent with the extreme motivation and discipline of many hackers when they develop software code. The radicalism of the FOSS development model springs exactly from the distance it places between ‘doing’ and the wage relation. Hackers are contributing to radical social change because they prevent the labour market from being the sole determinant over the allocation of programming recourses in society. As a consequence, the economic rationality and instrumentality of technological development can not be taken for granted anymore, at least not in the computer sector. The model for developing technology invented by hackers is guided by the most non-instrumental of human activities: the play-drive. Software code is not the end-purpose of hacking but rather an excess flowing from the playful form of life that hackers are choosing for themselves. Hackers may or may not be conscious about and motivated by the wider political implications from promoting access to computer tools. Linus Torvalds, for instance, has repeatedly proven his political innocence in rows with the Free Software Foundation. Nonetheless, he made the key decision to license the Linux kernel under a free license. The demand for free information is not grounded in ideological convictions as much as in the fact that the public space that hackers draw from can be sustained only if software technology stays open and accessible. It is the form of life of hackers that command resistance. Their commitment to sustaining the FOSS community is in conflict with at least some priorities of capital, though, admittedly, it also plays into the hands of capital in other respects. Would it not be fair to object that with corporations making millions of dollars out of FOSS applications, the liberating potential of hacking has been lost? In that case we must also say that the struggle of waged employees is non-existent since corporations make millions of dollars out of them. The fact that the hacker movement has partially been recuperated by capital does not falsify hacking as a radical praxis, unless we badly want to think so. The hacker movement is in continuation with more than two hundred years of labour struggle.”

Posted in P2P Books, P2P Politics, P2P Theory, Uncategorized | No Comments »

Arguments againsts patents and copyright

photo of Michel Bauwens

Michel Bauwens
26th February 2008


Via Graham Seaman:

“The final version of Levine and Boldrin’s book on ‘IP’ (which they call ‘intellectual monopoly’) has been made available as a pdf (it’s not out in print till the summer)

They are marginalist economists who are against patents, claiming they are unnecessary even within capitalism as it is. It’s not at all an oekonux-like argument, but I think it’s interesting as there are so few people around with specific arguments about patents, and not just copyright.”

Posted in P2P Public Policy, Uncategorized | No Comments »

Chris Cook’s critique of Carbon Trading : If you want to keep a donkey healthy, you don’t regulate what comes out of it, but what goes in

photo of Michel Bauwens

Michel Bauwens
26th February 2008


From the very beginning of our work at the P2P Foundation, we were in touch with Chris Cook, who has been working on open capital formats, a kind of peer to peer based market reform, which could be enabled by new methods of corporate governance, such as the UK-based Limited Liability Partnerships.

I’m must admit I still have a difficult time grasping what it is about, but I’m assuming that at least a few of our blog readers have a better understanding of market economics, and I wanted to mention Chris Cook’s work again, as he is involved in work in the sensitive Middle Eastern region.

What follows is first a general explanation of his approach, then the specifics of the proposed Gulf initiative. His work also has an interesting critique of carbon trading, since Kyoto thought as the panacea against global warming. The whole issue is reported here, in the Gulf Research Council’s Research Bulletin.

1. Introduction to Open Capital

Both Debt and Futures contracts require future performance of an obligation at a fixed price. Both result in a multiplication of risk known as “gearing” and require risk management through the use of risk capital by a credit intermediary (bank) or risk intermediary (Clearing House) as the case may be.

Such contracts, which rely upon the issue of a claim over value (IOU) by a Bank, or a “short sale” by a seller may be characterised as “Deficit-based” finance. Where a bank loan, or margin, is secured by collateral it may be said to be “deficit-based” but “asset-backed”.

Having spent much time in the study of Islamic finance in recent years I have yet to learn how “gearing” of any sort may be consistent with Islamic values.

“Asset-based” finance, on the other hand, is based upon investment through ownership of a productive asset and/or its’ production or revenues in a legal vehicle.

Conventional “Equity” finance is based upon ownership using the legal vehicle known as the “Joint Stock Limited Liability Company” or “Corporation”: however, the emerging use of unconventional legal vehicles is becoming a global phenomenon.

In Canada, for instance, virtually the entire Capital market now consists of two tiers, the first being shares in conventional listed Corporations, and the second being units in Income Trusts, whereby part of a Company’s gross revenues are committed into Trusts and units sold to investors.

The phenomenal growth of Income Trusts has been due to the appetite of Pension funds for gross revenues before company managements are able to access them: ie pre-distributed corporate revenues.

A similar outcome, but without the tax and management issues and complexities which make trusts so popular with lawyers, is also now possible using LLP’s (or in the US, LLC’s) to create “Capital Partnerships” whereby proportional units or “equity shares” in revenues or production are shared as between providers and users of capital. The outcome will be immediately recognisable to students of Islamic Finance as “Musharakah”.

The contracts I propose essentially consist of units in a “Pool” of commodity production constituted as a fund within a corporate “wrapper”.

Sellers will sell production into a Pool, and Buyers will buy production from the Pool, and the market price will be based upon an auction process established by reference to actual deliveries – the “spot” price.

Investors may buy and sell units in the Pool at any time but do not – by definition – participate in the auction.

The result is a new asset class not dissimilar to “Exchange Traded Commodity” funds. Producers may both “hedge” sales by selling production forward and receive what is in effect an interest-free loan: likewise consumers may hedge purchases by paying now for future consumption.

For investors the result is a simple new – un-geared, and hence suitable for “retail” investors – mechanism for investing in commodities.

The outcome is also of a continuous asset class of commodity “units”, as opposed to a fragmented and continually “rolling” series of contracts typically with monthly expiry dates. This will lead to dramatic savings in the transaction costs of holding an investment in commodities over time. If gearing is required units may be bought with borrowed money, or option contracts may be used.”

2. The rationale of a proposed Gulf Clearing Union

The Iranian OPEC representative informed us that he had advocated for some 20 years the institution of an “OPEC Bank” and related financial institutions.

In recent years we have seen proposals for a Gulf “Single Currency” among OCC states but this appears increasingly remote, particularly now that Kuwait has led the way in leaving the “Dollar peg”, and the dollar appears to be in secular decline in the absence of remedies the US is politically unable to apply.

While some commentators suggest that the Euro may come to replace the Dollar as a global reserve currency, the truth of the matter is that no deficit based currency is sustainable in the long term in a world of finite resources.

What then is an alternative?

Using the market and contract architecture outlined above it is possible to imagine how Gulf States, extending to Iran and Iraq, could commit a proportion of production of both crude oil and LNG to “Pools” the units of which could form a “Carbon dollar”.

In fact, I believe that it is only through the use of an “LNG Pool” in this way that a viable global market in LNG can ever be attained. This is due to the incompatibility between
• the need for spot cargo trading upon which to base a futures market; and
• the necessity to tie up production in long term contracts in order to obtain deficit-based infrastructure finance.

The “Carbon dollar” would initially be launched – in the same way that the Euro price was “frozen” in relation to all the national currencies of its participant Member states – by calculating the amount of carbon in each form of crude oil, LNG etc a dollar would buy on the launch date, or upon the accession of a new energy source to the Pool. “Carbon” Dollars would thereafter diverge from “Fed” dollars and would thereafter be a new “asset-based” globally “fungible” unit of exchange.

Transactions would be made upon a global market network, which, with the addition of a mutual guarantee would constitute the International Clearing Union which J M Keynes proposed at Bretton Woods in 1944 based upon an abstract “Value Unit” he called a “Bancor”.

Why would Banks possibly agree to such a radical structure?

In fact, we simply rephrase the question and ask Banks why they would wish to risk their capital by creating credit based upon it when in fact they may instead act as pure service providers:

(a) managing the bilateral creation of credit among trading counterparties – a classic “Trust Banking” approach;

(b) appraising investments, bringing investors together with investments and providing liquidity –a classic “Investment Banking” service.

So, in this model, Banks would have a future as a service provider rather than as an intermediary, and their interests are entirely aligned with those of other stakeholders as opposed to being in conflict with them.”

3. Proposed International Carbon Trading Union

The problem with the proposed global markets in “Carbon” eg emissions trading” and carbon offsets is that they are based upon markets in carbon emissions of CO2, as opposed to the carbon content of fuel.

The “deficit basis” of these carbon markets is best understood by an analogy overheard at a gathering of traders – always noted for the dispassionate and objective nature of their judgments:

“If you want to keep a donkey healthy, you don’t regulate what comes out of it, but what goes in”.

The Inconvenient Truth of these markets in carbon is that they were invented by trading intermediaries largely for trading intermediaries.

The use of Carbon dollars based upon the carbon in fuel as opposed to that in emissions essentially monetises Carbon, and means that to reduce Carbon use will – literally – be to save money.

There is a window of opportunity for Gulf States to lead the creation not only of a simple oil market architecture which is not dominated by manipulation and speculation by intermediaries, but also a new “asset-based” financial system based upon a “Carbon Dollar” value unit.

The use of this architecture in respect of LNG would combine both a new financing mechanism for the massive necessary investment in (and indeed refinancing of) global LNG infrastructure and a resulting new market in homogeneous undated and un-geared LNG “units” with vast potential.

Since LNG is a new market, without the sensitivities of the existing fragmented and opaque markets in crude oil so evident in the Iran Oil Bourse project, there is scope for development using the new “asset-based” architecture I describe above.

The concepts outlined in this article require an immense amount of research and development, in addition to diplomacy and statesmanship of a high order.

An International Carbon Clearing Union similar to the concept outlined by Keynes at Bretton Woods is both achievable and urgently necessary since no deficit-based financial system is in the long term sustainable in a world of finite resources.”

Posted in P2P Ecology, P2P Economics, P2P Public Policy, Uncategorized | 1 Comment »

Book of the Week: Hacking Capitalism. Part One: presentation

photo of Michel Bauwens

Michel Bauwens
25th February 2008


Book: Johan Söderberg. Hacking Capitalism: The Free and Open Source Software (FOSS) Movement. Routledge, 2007

We expressed our enthusiasm for this book before, so we would like to present it more formally here.

Below is the short description, followed by the chapter by chapter outline.

Short description:

“The Free and Open Source Software (FOSS) movement demonstrates how labour can self-organise production, and, as is shown by the free operating system GNU/Linux, even compete with some of the worlds largest firms. The book examines the hopes of such thinkers as Friedrich Schiller, Karl Marx, Herbert Marcuse and Antonio Negri, in the light of the recent achievements of the hacker movement. This book is the first to examine a different kind of political activism that consists in the development of technology from below.”

Chapter by chapter outline:

Johan Soderbergh:

“The first chapter starts out with providing a background dossier on the struggle of hackers. This is necessary since the public only has previous knowledge of hackers from the biased reporting in mainstream media. But it would be foolish to try to sum up in print a field which changes so fast. The aim is therefore not to ‘provide the dots’ but to ‘draw the lines’. Those lines run alongside two hundred years of labour struggle. With this perspective, the story of the hacker movement comes out very differently from how voices within the FOSS community present themselves. In particular, we must be more provisional when assessing the outcome of their endeavours. FOSS licenses might strengthen the position of labour by fostering open standards and free access to software tools. Capital’s strategy of Taylorism is set back by such computer architecture. It is equally possible, however, that alternative development models involving volunteer labour are in alignment with a restructured, post-Fordist production process. An unfortunate side effect of free and open licenses might then be intensified exploitation of waged and voluntary labour. Some clues can be found by analysing FOSS business models with Marxist theory.

In the next chapter, the focus on the hacker movement is broadened, both theoretically and historically. Notions about the information age, which many hackers tend to draw from when conceptualising Internet-related issues, are contrasted with Marxist theory. It is argued that post-Fordist restructuring of the labour market provides a better backdrop against which we can assess the role of computer networks and digitalisation. This perspective calls into question many of the assumptions held in the computer underground, for instance, the willingness to attribute historical change to technology and the unique properties ascribed to information. Against those beliefs, it is contended that digitalisation originates in the antagonistic relation between labour and capital. Infinite reproducibility of digital information means the same thing as infinitely redundant labour. With a simple ‘copy-and-paste’, a given amount of objectified labour is instantly duplicated. Marxist theory suggests that this extreme form of automation in the computer sector forces capital to exploit living labour elsewhere in the economy. In the chapter it is proposed that the users have become a major source of surplus labour for capital. The enrolment of FOSS communities by corporations is part of a more general pattern in post-Fordist capitalism where audiences and users are ‘put to work’.

The third chapter is concerned with the commodification of information, and, more to the point, the commodification of the labourers producing information. In the final analysis it is the freedom of living labour, not the freedom of information, which is our concern. Commodification of labour occurs when a subjectivity of individual authorship is fixated over the labour process. In his function as an author the individual puts his efforts into producing commodities for a market. But the fixation of individual authorship is constantly challenged. In mainstream media the violations against intellectual property on the Internet are typically framed as a consumer revolt. With this interpretation the main issue becomes the price of information content. We will argue that the surge of filesharing networks is part of a more radical upheaval. Defiance against copyright law, the advancement of an open technological platform, and the assertion of the right to share information freely, are rejections of the commodity form as such. The individual author is under threat to be dissolved into the anonymous, ambulant, and playful authorship of user collectives.

Chapter four moves on to look at hacking from the perspective of consumption and satisfaction of needs. The hacker movement, like other subcultures, is intimately related to the surge of a consumer-driven capitalism. It is argued that, on one hand, the provision of material needs has enabled people to engage in hacking, and, on the other hand, people are motivated to do so because of the dearth of non-material needs in consumer society. Boredom with commodity relations, both in work and in consumption, is the driving force. It is the motto ”not bored” that points beyond the endless game of conspicuous and semiotic consumption. A categorical renunciation of consumer society will not do, however, since the resistance draws its resources from the same society. Without markets in consumer electronics there would not be a hacker movement. Parallels can be drawn between hacking and the subversion of commercial messages and goods by consumers. Studies of consumer resistance are often associated with the tradition of cultural studies. Labour theoreticians have reproached the cultural studies’ discipline for making too much out of the rebellion by consumers. They rightly insist that a serious challenge against capitalism can only be mounted from inside pro duction. Our argument here is that interesting things start to happen when consumer goods are taken by users as the departing point of a new cycle of production. Crucially, this cycle of consumption-production is disjointed from capitalist circulation. User-centred production models stand a good chance of outdoing markets in the provision of social needs. The reason is simple; it was the failure of markets in satisfying those needs that motivated users to side-step market relations in the first place.

Thus we are led over to the topic of the fifth chapter, production. The case is made that the success of the FOSS development model over proprietary software development is an important cursor. It tells us about the inadequacy of capitalist relations in organising labour in the information sector. The justifications for property-based research find little support in economic history, it is contradicted by empirical data, and it cannot even be convincingly argued in theory. The shortcomings of the proprietary development model translate into advantages for user-centred innovation models based on less strict license schemes. A paradoxical series of events have brought about user empowerment. We trace it to the termination of craft skills inside the capitalist production process. Deskilling of employees has come full circle with the reskilling of non-employees. Tools and skills are cheapened and spread from the capitalist production site to the whole of society. Arguably, the means of production are being re-appropriated by the proletariat in this way. It should be kept in mind, however, that user-centred innovation models are enrolled in capital’s valorisation process. Capital might have lost its monopoly over the means of software production, but it has other methods to discipline the ‘user force’. It can rely on its control over circulation, and, if worst comes to the worst, fall back on the state.

The sixth chapter approaches hacking from the perspective of circulation. Our discussion connects back to the century-old dispute between market liberals and state socialists on the most efficient method for distributing resources in society. The advent of filesharing networks has actualised the question if there could be a third way of allocating information resources, different from both markets in information and state planning. That model might be called an information commons, or, what amounts to the same thing, a high-tech, anarchistic gift economy. Hackers have borrowed the concept of a gift economy from anthropology in order to describe the economic activities in the computer underground. It goes without saying that gift economies in tribal societies and the giving of information on the Internet are essentially different. On closer inspection, we will find that filesharing networks are hybrids that combine the impersonality of market exchange with the non-coerciveness of gift giving. It is thus we can envision a third method for allocating resources that lies beyond both markets and planning.

The final chapter returns to the core argument of the book, that hacking is a showcase of play struggle. This struggle is at its heart a reaction against alienation. However, the resistance of hackers looks nothing like the kind of struggle we know from industrial conflicts. Instead of confronting the wage relation heads on, in strikes, sabotages etc., it attacks alienated labour by circumventing it. A different labour relation is being invented in the play of FOSS developers. The Utopian hopes of Friedrich Schiller and Herbert Marcuse are accentuated with the current development in the computer underground. The chapter reviews scholarly definitions of play, and calls attention to ludic forms of resistance against the factory discipline previously in history. The triviality commonly associated with play is owing to the fact that the activity is non-instrumental. In contrast, the development of technology is archetypical of instrumentality. The hacker movement has submitted the development of computer technology under a model determined by the play-drive. That can hardly be called trivial.”

Posted in P2P Books, P2P Politics, P2P Theory, Uncategorized | 1 Comment »

Marcin Jakubowski: an appeal for global collaboration on open product development.

photo of Michel Bauwens

Michel Bauwens
25th February 2008


From an appeal by Marcin Jakubowski, distributed by email:

Fellows,

I would like to raise the issue of wide collaboration for open source product development.

Sam Rose and I have been in a heated discussion regarding collaboration, and how to align a wide range of people to collaborate more deeply. We’d like to break the bounds to widespread collaboration to open source the entire economy.

We all know that with the success of ubiquitous open source production, the price of goods goes down drastically, everyone benefits, (and non-producers have to get a new job). Indeed, the promise of life beyond scarcity and transcendence to a culture of meaning emerges. I’m speaking to the choir here.

Here is what I think is possible for starting a venerable and world-class R&D process for open product development. Allow me to trace the logic for this possibility, and define the problem statement more clearly.

There is a number of open source projects out there already. The movement is relatively young. Much talent is available. Great toys are being made, much development leads nowhere, and some really important products are created as well. In general, the open source technique for developing products is far from being an effective method for developing economically significant products – ie, those products of wide use that meet real needs.

So I ask us all: “How do we raise the discussion and mobilize resources to propel the world to a much higher quality of life and freedom?” This is the case for open source product development and open enterprise that: (1), meets real needs, (2), is replicable, and as such, (3) begins to form a real, new engine of economics as we know them.

Given the feeble and infantile present status of open product development, let’s take it as a great opportunity, and start with the logic of why the OSPD (open source product development) movement has not taken us any farther, yet. The two main observations that I have are: (1) huge talents exist, and operate without pay, but are being dissipated on self-gratification, namely projects that are of high quality but do not lead society as a whole anywhere – Instructables is full of examples. (2) A large number of physical projects is not focused on interoperable design – or building blocks – pattern languages – for building a wide array of other devices.

The simle solution is to:

1. Align the talent

2. Build building blocks for new economies

Not difficult in theory, but how do we align leaders who are already doing their own non-interoperable endeavors? I’m convinced that there’s a way to align them to turn the entire economy upside down into the open source.

Here is the logic and assumptions. First, we assume that we will be working with a growing number of people who endorse the open source method of development fully. Let’s assume that the leaders want to achieve the highest possible impact with what they are doing. We assume that this impact is measurable. So we look at what each one is doing, and assuming that we can calculate their impact on society in some way, we measure their impact.

So the leaders talk to each other, evaluate what each one is doing, and potentially decide to join each others’ projects if they determine that some project has more potential. This would be an ideal situation.

I think most people do not have the selflessness to appreciate another person’s project if it appears to have higher impact, as people are entrenched in their work for reasons of ego and many other reasons.

So we can’t really rely on people switching over to focus on greater, more integrated, pattern-language-creating work. Many people don’t have the patience, vision, or selflessness. So they continue to compete for audiences, and the greater good is not addressed.

To start addressing the issue of gathering support for acting on the maximum good for the greatest number – i propose the following 3 steps.

1. Clarify to people what it means to have open source, physical products
2. Begin working on open source products. Start with a prioritized list.
3. Fund the project development and make turnkey products available

I explain a little more about this set of steps:

1. Focus on why openness is good, and explain what it really means to be open source. Open source works when someone is able to use a product at the end of the day. To help people understand what it means to have an open source physical product, we have coined OSE Specifications. It is a measure for how accessible and replicable a given physical product is. We have defined OSE Spec to define the highest level of access possible for open source products. See: openfarmtech.org/index.php?title=OSE_Specifications

2. Since we cannot start by working on all products at once, we must start with key products. These are ones that have the widest range of use, importance, ubiquity. To help identify these products, we have defined a Product Selection Metric, found in Section III of openfarmtech.org/OSE_Proposal.doc

3. Fund the projects by all means available. We should raise attention to align a large number of projects to begin and deliver those obvious choices around us – cars, renewable energy systems, etc. Write proposals, do microfunding, etc. Deploy a massive parallel effort so that many technologies may be developed at once.

I think we can rally around the OSE Spec. I can openly invite this standard to be change to anything that constitutes a set of criteria for maximum access to open products. I don’t care about the wording – I want people to understand what is required and what promotes the most replicable products. Since I know of no other applied, communicated criteria for open products, I went ahead to define them. I invite us to rate all known projects for their OSE Spec rating. Project leaders can respond and comment on our ratings. The rating will help people understand the status of a project more easily – for example, is documentation available, are the component proprietary or open source, is there someone who can produce the item for you, etc. This is important for me, for example- if a project is developed up to an open enterprise, and it’s a valuable product, then I’d be interested immediately in bringing that production to my local area. The OSE Spec tells you readily at what stage of development or access a given product is. It goes up to a 5 star rating.

The Product Selection Metric helps us define what is important to work on. It tells you, basically, if a certain product has a large market, and if it can be adapted readily to open source, flexible fabrication methods. The Product Selection Metric, a score from 0-60, can be measured. An OS car is a high priority item because cars enjoy a wide market, and also lend themselves to flexible fabrication (if we develop OS components). The selection metric will tell you that a true OS car rates at 60 or close to it. The metric goes so far as to consider how the particular product is made, such that a proprietary car made by GM scores only about 30.

So fellows, I propose that to start aligning deeper and more organized interest in world-class OS product R&D, we start with rating the projects out there. I am hoping that in the process of the work we do, we’ll generate significant interest, and resources will start flooding in, such that more people can benefit directly from the implementation of the open production models that we’re working on.

Posted in Open Design, Open Hardware, Open Models, P2P Business Models, P2P Event, Uncategorized | No Comments »