Capitalism fights us now

This post was motivated by a documentary that you can watch on Youtube: Counterfeiting. 

First, they don't take you seriously. Later, they laugh at you. Then they fight you, and after you win. I think the new economy (call it multitude or p2p) is one step away from going mainstream.

When society reaches a tipping point, all the absurdities of the old system become apparent. This time around, our global society is undergoing profound transformations because the new technology introduces new possibilities, which in turn affect the way we produce and distribute value. But the conflict between those invested in the old system and the proponents of change opens along ethical issues and values. When did we start to call sharing of designs, counterfeiting?

If you read history books you will not be able to miss the importance of diffusion of technology across continents. Marco Polo is depicted as a hero, because he embarked on a 24 year long and very dangerous voyage from Venice to China and back, and enriched Europe with new technology from the East.  How can a culture consider Marco Polo a hero because he copied the Chinese, but at the same time consider the Chinese thieves, because they copy technology and designs from the west? There is nothing important to understand there, other than the fact that our modern society is undergoing a crisis, a major transformation.

Copying and sharing are essential to development. If an economy starts to vilify essential things like copying and sharing, it is just a matter of time before it collapses, because by denying essentials it will start to accumulate ineficiencies.

Why do we need a contribution accounting system?

First published on 3 January 2014 and last modified on 8 January 2018

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NOTE: Before 2017 SENSORICA used the expression ''value accounting system''. The current expression in use is ''contribution accounting system''. See more on the OVN wiki. The origin of this modification is a redefinition of value, inspired by Tibi's essay ''Scale of social structures''.

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With the advent of the Internet and the development of new digital technologies, the economy is following a trend of decentralization. The most innovative environments are open source communities and peer production is on the rise. The crowd innovates and produces. But the crowd is organized in loose networks, it is geographically dispersed, and contributions to projects follow a long tail distribution. What are the possible reward mechanisms in this new economy?

Our thesis is that in order to reward all the participants in p2p economic activity, and thus to incentivise contributions and make participation sustainable for everyone, we need to do contribution accounting: record everyone's contribution, evaluate these contributions, and calculate every participant's fair share. This method for redistribution of benefits must be established at the beginning of the economic process, in a transparent way. It constitutes a contract among participants, and it allows them to estimate their rewards in relation with their efforts. We call this the contribution accounting system.

For the rest of this article we will try to explain why a contribution accounting system is needed in a more decentralized economy, and unavoidable in a p2p economy.

How value networks can articulate with the present economy - an example in food preparation and distribution

Yesterday I had a conversation with my friend Paul about the advantages of open value networks (OVN) over classical structures, including co-ops.

picture comes from this website

Context

Paul is involved in #occupy Montreal and they are now organizing a center for preparation and distribution of vegan food in Montreal. They also want it to be very local. This operation would require gathering products from different local farmers, cooking/preparing, packaging and distributing raw or prepared food. 

Question

Should they create a co-op or an OVN? 

My answer 

They can have a co-op embedded within a value network. 

Value Networks, about commercializing their products

We take the example of a specific value network, SENSORICA.

The problem

One of SENSORICA’s main reason for existence is to provide for its members/affiliates the means of subsistence and well-being. This is to say that the surplus value that is created by the network must be exchanged on the market against other values, which are to be redistributed to participants based on their relative contribution. This redistribution is done according to the value accounting system, to which all members must adhere. The goal here is to establish a channel of distribution for SENSORICA’s products. The problem is that there are laws and regulations which makes it difficult for a non-legal entity like SENSORICA to sell certain products. Someone must take the blame if those products don't respect established standards, and our society doesn't know how to interface with things like SENSORICA.

Solution 

In the current situation, we need to create legally recognizable forms to channel products through them. This is actually the role Tactus Scientific Inc. plays for the Mosquito Scientific Instrument System, designed for the scientific instrument market segment.

How to play the open game in the present and future economy

This is the fifth draft; it will evolve based on your feedback.
First published on 6/19/12. Last modified on Oct 10, 2024.

Come back later for more...  

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More and more solutions to our problems today come in the form of open artifacts, i.e open source software and hardware, created by online communities and networks. Traditionally, most of these communities have relied on voluntary participation or some type of gift economy, i.e. the developers do not expect a direct or immediate tangible reward for their contributions. These open artifacts have been regarded as marginal, mostly intended for amateurs and hobbyists. How can one expect serious things to come out from loose organizations that don't use the prescribed governance and methodologies, and don't have access to large budgets? At least that was the unadvised belief, until we realized that critical infrastructure, like the Internet, runs mostly on open source software, created and maintained by these unorthodox organizations. The helicopter drone, Ingenuity, which is part of the Perseverance mission to the planet Mars, operates on Linux, which is an open source operating system. Bitcoin, runs on open source software and is maintained by an open group of people, who can be practically anyone with a computer and an Internet connection. Since the launch in 2009, no one has succeeded in hacking Bitcoin, despite the astronomical reward, ranging in the tens of billions of dollars, if we only consider the abandoned accounts of Satoshi Nakamoto, the creator of the network. So some open artifacts developed by unorthodox organizations are pretty serious. There are also lots of crappy ones, as there are crappy products offered by serious companies.

Developing open artifacts (based on open source technologies) relying on unorthodox organizations and being able to make a living is what I call playing the open game.

There are a few important components to the open game... 

 

First, there's the nature of the solution, or more precisely, its intellectual property regime. Open source means that no one can create a temporary economic monopoly on a particular solution, as it is the case with products based on patented technologies. The immediate reaction of some people is: how can one make money developing open source technologies. My first reaction to this question is to point to the obvious: 

• IBM has invested billions of US dollars in Linux and other open source technologies. ref
• Google has gained mobile dominance by opening Android, the mobile operating system. 
• Tesla has engaged in a hybrid IP strategy, open source patented.  

It is obviously possible to generate wealth while developing open source technologies, if the business model is not simple and linear. Then one can dive into some examples to understand the second order and even the third order positive effects on the overall business. In other words, in most cases, whatever is open source is not the product, but by open sourcing some technology in the IP portfolio, these companies produce some effects within their ecosystem, which they can harvest or leverage for their core business. In the case of Google, opening Android increased its adoption rate, while propagating some core Google functionalities, thus putting Google services in billions of mobile devices, which then could be monetized using Google's core business model. We also see a second order kickback pattern with online services like Google and Facebook for example, where free access is given to a digital service (search or connecting and interacting with people), while making money from selling users' generated data or attention. So we need to stop thinking about business as a simple and linear process, product-exchange. 

Now, the previous examples are easier to understand for most people, since they can relate the story to their own work experience. But what about people who develop Tiki for example, an open source wiki CMS groupware? The model here is most probably less known by commons people, but it is the best known by those who use open source technologies. The wealth generation model is similar to Red Hat, the poster child, based on support, training, and consulting services around the core open artifact, which is offered for free. 

 

At this point, I find that is it important to raise to your awareness the fact that the wealth generation model is not the same when the technology is software or hardware. It is beyond the scope of this post to dive deeper into this distinction, but if you're interested, we can discuss in the comments.

We can go even further into more esoteric wealth generation models, some of which are not even well understood by people who participate in the development of open source technologies. You have probably vaguely sensed by know that I deliberately use the term open artifact instead of product and the expression wealth generation instead of business model. The reason for that is to avoid, as much as possible, what I call cognitive interference. When we say product people think about commodity, something that you can buy/sell on the market. But you cannot sell the Linux operating system, because the open source license gives the right to anyone to make a copy, use and modify. In this IP regime, it becomes an abundant, non-rivalrous resource, like the air that we breath. One cannot sell it, its price is zero according to the law of supply and demand. Even though, unlike the air, we need to deploy efforts to produce functional software, once it is made, its costs of reproduction (copy/paste) and distribution (download) are negligible. This is not the same for open source hardware, which has higher costs for reproduction and distribution. But since everyone has access to the design, anyone can make it too. I also like to say that open artifacts disseminate, they are not distributed as products through the market. In other words, software can be found online and downloaded by people and in the case of hardware, anyone can download the model and make it themselves, which has become much easier nowadays, with the use of digital fabrication techniques (3D printing, CNC, etc.). So what about the expression wealth generation? When we say wealth most people think about money and I want to avoid this association. In more esoteric models, people are seeking other forms of wealth, for what they are, or for a later transmutation into money. For example, someone may want to contribute to an open source project to learn new skills, to develop new relations with people that have specific skills or share specific values, or to build reputation.

 

 

The second component of the open game story is the type of organization that produces the open artifact.

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Recently, we have witnessed the emergence of new economic models that brake away from the gift economy, directly rewarding those who contribute (with time, financial capital, social capital, ...) to open projects. The open artifact is gradually becoming sustainable. The first step in this direction can be illustrated by Open Source Ecology, which designs open hardware for farming, construction and manufacturing. The designs are  entirely open and free, but the Open Source Ecology community is not interested in commodification, i.e. market exchanges, their designs made with DIY (Do It Yourself) in mind, destined to be produced by the user, or very close to the point of use. In the case of Open Source Ecology their model for subsistence is based on revenues in fiat currency, from donations or educational services.

Open crowdsourcing is another model in which designers, part of an (open) community, are rewarded to complete a project. This scheme doesn't only rely on donations or voluntary participation, since those who contribute are rewarded in exchange with some symbolic gifts (tokens of recognition), reputation tokens, job opportunities, etc. Arduino is an example of such model, a hybrid between the open (value) network OVN and a traditional business, which relies on a vast community of enthusiasts to propose new designs, find and eliminate bugs, engage in promotion, etc. 

There are also closed and non-transparent crowdsourcing initiatives, such as prizes, in which only the best contributors are rewarded. Contributors are often placed in competition against each other. The resultant designs or artifacts are closed and remain under the control of the initiator. We are definitely against this new form of human exploitation, as you can see in this post. 

Sensorica is based on a more radical model, referred to as an open value network (OVN), which implements commons-based peer design production. It is in fact a mix between a gift economy and a transaction-based, or market economy. Sensorica can produces open artifacts that can either be exchange on the market or disseminated as DIY open designs. Various forms of rewards (including revenue from market exchanges or donations) are redistributed to all contributors in proportion to their contributions, based on a Benefit Redistribution Algorithm, which is at the heart of the Network Resource Planning and Contribution Accounting system (NRP-CAS). 

P2P

a post by Poor Richard

What is peer-to-peer (P2P)  culture?
P2P culture is the post-capitalist framework that makes the most sense to me. It includes but transcends capitalism; and encompasses many hybrids of open and closed, public and private, hierarchical and egalitarian associations.

photo by Ian McCalister

P2P emphasizes cooperation, openness, fairness, transparency, information symmetry, sustainability, accountability, and innovation motivated by the full range of human aspirations even including, but definitely not limited to, personal financial gain.

I call p2p a “post-capitalist framework” because many of us are quite happy to abandon capitalism’s euphemisms and reductio ad absurdum altogether. However, other 99%-ers still consider it a major factor in lifting millions from poverty. They would rather reform and adapt it to humanitarian and ecological ends than to abandon it for something novel. I think it is entirely possible to craft forms of capitalism which “do no harm”, and I think there is ample room in the p2p community for such “diversity of tactics.”
Read more on Richard's blog... 

By AllOfUs

New economy - how things will be designed, produced and distributed in the future

Here's another example of the newly emerging pattern of design, production and distribution.

We are glad to see that our vision of the new economy is finally materializing. In 2008 we proposed the Discovery Network concept (see the post describing the initial motivation behind it). In 2010 we launched our first pilot project for the new economy a commons-based peer production system the Matchmaking Device System. It failed...  : (    but we learned a lot.

In 2011 we launched the second pilot project SENSORICA, which evolved into an open, decentralized and self-organizing value network.  SENSORICA is increasing in value and potential since its creation. 

Also in 2011, the know how developed within  SENSORICA spilled over to glocal food systems. In Ohio, USA local food systems are now morphing into value networks, see Greener Acres.

Furthermore, early this year we initiated another project in Montreal, through the #occupy movement, to implement value networks in clothing design and manufacturing. This is the #occupy Fashion project.

In the following weeks we will publish a few videos and documents detailing how value networks form, self-organize, and operate. This information will be put into context based on our new understanding of the new economy.

By t!b!

What are the #occupy camps?

The Occupation camps across the world are not just protest sites. They are not just new political spaces. They are in fact embryos of the emergent new world.

They are emergent cities
If you go to the nearest camp you'll find in there everything you'd need to survive, even during a Canadian winter. For example, only two days after it's initiation the Montreal camp had already a health center, a kitchen that fed easily over 500 people the very first evening, a center of communication and coordination, an information and donation center, a political space (where the assemblies take place), a cultural space (where people play drums, dance, paint...), and obviously a housing space. Believe it or not, we even have the protection of the militia (the Quebecois patriots), who put their tent across the street from the main camp, having great visibility over the area.

The kitchen, first day

New Economy, New Wealth

This presentation by Arthur Brock is really nicely done. It pretty much summarizes everything. Send it to your friends who think you're crazy...   : )

New Economy, New Wealth on Prezi

By AllOfUs

Wikinomics in 5 minutes

By AllOfUs

The Discovery Network Back Office Catalog

A new component was added to the Discovery Network concept, the The Back Office Catalog. To participate, go to the FORUM.  

Click to open document 

Visit Multitude Innovation

By AllOfUs

Rachel Botsman: The case for collaborative consumption

The Multitude Social Movement seen from the consumption point of view.

Visit Economical Alternatives

By AllOfUs

Symbionomics: Stories of a New Economy

Visit Economical Alternatives

By AllOfUs

ReMade: The Rebirth of the Maker Movement

The multitude movement takes over innovation and production. 

The economy belongs to the MULTITUDE!

ReMade: The Rebirth of the Maker Movement (1st Trailer) from Electromagnate on Vimeo.

By AllOfUs

Using Technology to Start a Successful Business in (Spite of) a Depression

An interesting article about technological skills you NEED to survive this economical storm. The world in changing, you need to adapt! 

Did you know that some of the most powerful entrepreneurial ideas in the lexicon of human knowledge arose from the ashes of economic catastrophe? It’s true. And the reason is a lot simpler than you think: when times get tough, unemployment increases. So what do people do? They become entrepreneurs.  Read more... 

By AllOfUs

The myth of autonomy debunked, what about the myth of initiative?

photo by r8r
We've all been conditioned into believing that only a small percentage of all people are able to work autonomously. The machine/control paradigm of management is founded in this belief. In order to make people productive apparently you need to tell them what to do and how to do it.

Classical hierarchical organizations work that way. The executive sets up goals and directions, managers translate them into concrete directives and actions and pass them to their employees. Employees execute these orders. The employee is seen as a mechanical piece, part of a complex mechanical system. The machine metaphor is clearly apparent here. He/she needs to execute the given tasks within the imposed constraints. Yes, there is feedback going from the employee to the manager, and up to the executive, but there is very little autonomy.

It turns out that human organizations behave quite differently from mechanical automata, especially when creativity is the goal of the game. First, an organization needs to win the cooperation of it's members. A mechanical piece has no consciousness, no free will. You put it into its place within the system and it turns the way it is supposed to. A human being has the choice to do a great job, or a crappy job. In order to gain the full cooperation, organizations must satisfy for the individual some fundamental psychological and material needs. The individual needs to perceive that his/her contribution is important, that he/she is part of something bigger-a form of spirituality. The individual needs to perceive that he/she is respected, valued, appreciated. The individual must also believe that his/her contribution is justly rewarded, etc. etc. Second, it is now well understood that the working environment and all the psychological needs of the individual affect creativity in a major way. Even if you gain the full cooperation of your employees, you are still not sure that the creative juices are flowing to the optimal capacity.

Google understood all this! Among all the successful companies, their employees have the greatest autonomy. On Google's campus you find cafes, bars, swimming pools, game rooms, parks, you name it. You can take your laptop and work from the swimming pool, and your boss is not going to be there to pass you the sunscreen. Google understood that they can get more from their employees if they only emphasize on the job that has to get done, and let the employee decide how to do it. And it works! The myth of autonomy was debunked.

But there is another myth. We are told that the great majority of us have no initiative. If we are not given directions we don't know what to do. We might be autonomous, i.e. able to organize ourselves once we know what has to be done, but the majority of us are apparently incapable of setting goals and directions. What about Linux? Who tells developers which directions they should take? This myth is about to be debunked as well.

I am not advocating that all human beings are autonomous and show initiative. But what is the real percentage? The opposition to my argument brings up statistics, scientific studies made on our actual society, showing only a very small percentage of driven individuals with initiative. But wait a second! There is something scientifically wrong here, the method could be good, but the conclusions are false. The logic used is flawed. We are talking about what us humans are capable of, about our potential, we are NOT describing our actual society. We've seen that before. A scientific study on black slaves on a plantation in South Carolina USA, at the beginning of the century, would most probably reveal that the majority of these individuals were submissive and dependent. Can we conclude that it is in the nature of a black person to be submissive and dependent? Of course NOT! We know that humans are malleable. Put a child into slavery and he/she will adopt a slave mentality. It is a matter of adaptation! You don't comply you die! It is about adaptation, it is a force rather than a weakness. This shows the capacity of all humans to thrive in harsh situations. But once slavery was abolished these same people rapidly acquired the skills to live in society. They become teachers, business man, scientists, doctors, and even presidents.

Our actual system has made us dependent! Our masters only need us to produce, not to be autonomous, not to show too much initiative. We have bee conditioned into being docile and dependent. The scientific data describing individuals only describe the actual system, NOT the our potential.

What is the percentage of autonomous individuals with initiative, potentially speaking, within a culture of freedom and self-determination? If YOU are not a such person you may want be become one, YOU CAN. 

By AllOfUs

The Multitude Project is building the engine of the new economy

This is an experiment of historical proportions. A strong and diverse group was formed to build the infrastructure of a new kind of economical entity. We called this new institution, which is a global collaborative innovation network capable of putting an idea on the market, a "Discovery Network". 

The Discovery Network is a value-based structure as opposed to a power-based structure. It is a decentralized network as opposed to a hierarchical centralized organization. The core values are sharing, collaboration, openness. The Discovery Network is kept together by symbiotic relations, interdependency, synergy. This new form of organization will enable an individual in a poor country, possessing only brilliant ideas and sharp social skills, to generate tremendous wealth for his local community. 

We are testing the Discovering Network architecture for the first time on the Matchmaking Device System, an invention of Multitude Project's founder Tiberius Brastaviceanu. You can read more about the "Discovery Network" concept here.      

   

Anybody interested can join our group as an active participant or just as an observer. You can do so by filling the form on the Matchmaking Device System homepage. 

By AllOfUs