[P2P-F] keimform.de: The Emergence of Benefit-driven Production

Tue Aug 9 11:02:11 CEST 2011

URL: http://www.keimform.de/2011/benefit-driven-production/

The following paper was written for the Proceedings
<http://sunsite.informatik.rwth-aachen.de/Publications/CEUR-WS/Vol-739/> of
the 6th Annual Open Knowledge Conference (OKCon 2011)
<http://okcon.org/2011> which took place about a month before in Berlin. It
is also available in PDF format <http://ceur-ws.org/Vol-739/paper_9.pdf>.

Abstract
--------

The free software and free culture movements have radically changed the
ways of producing software and knowledge goods. In many cases,
participation in such project is benefit-driven rather than profit-driven.
Participants get involved in order to realize some practical or social
benefit, not because of monetary gains. Another difference from market- and
firm-based production is that peer production is non-hierarchical: people
voluntarily cooperate as peers; there are no fixed employer/employee or
client/contractor relationships. And peer production is based on commons:
goods which are jointly developed and maintained by a community and which
are shared according to community-defined rules.

Peer production is not just about producing knowledge: Hackerspaces and Fab
Labs are the first forerunners of a commons-based production
infrastructure. While commons-based peer production reaches beyond
capitalism, the preconditions of its development are created by capitalism
itself. The paradoxical relationship of capitalism to human labor leads to
developments that might make the concept of labor (as we know it today)
obsolete, and with it capitalism itself.

Keywords: peer production, benefit-driven production, commons, commonism,
stigmergy, capitalism

Benefit-driven Production
-------------------------

The *free software* and *free culture movements* have radically changed the
ways of producing software and knowledge goods. These changes have caused
some markets--such as those for Internet software, programming tools and
encyclopedias--to shrink considerably or disappear altogether. These areas
have become dominated by free programs such as Apache, Firefox, WordPress,
non-proprietary programming languages such as Python, open development
environments such as Eclipse, and by the free Internet encyclopedia
Wikipedia. They have largely driven out competing offers which (as usual in
capitalism) are only available for sale.

Sometimes, free software is produced by companies that use it to indirectly
make money, e.g. by selling support, documentation, or suitable hardware.
But many projects are driven by communities of people that contribute
voluntarily and without pay. Participants may be motivated by the desire to
use the software they help creating or they may simply enjoy doing what
they do. Others participate in order to improve their knowledge, to
demonstrate their skills, or to give something back to the community
(Lakhani and Wolf 2005). Free software and free culture projects are thus
frequently *benefit-driven* rather than *profit-driven*: Participants get
involved in order to realize some practical or social benefit (getting
useful software, learning, getting community recognition, doing something
pleasurable), not because of monetary gains.

Modern, neoclassical economy theory sees companies as a means of reducing
so-called transaction costs (Coase 1937). As a company owner, I can assign
tasks to my staff instead of having to buy and negotiate each small service
individually. The employees benefit by knowing in advance how much they
will earn, instead of having to sell themselves day by day in the market,
with uncertain results. But they have to accept subordinate positions in a
hierarchy and must follow the orders of the management. Market relations,
on the other hand, take part between actors who are formally (though often
not actually) equal, but they are always merely functional: I'm not
interested in the others as human beings, I merely see them as potential
trading partners, potential buyers and sellers.

Standard neoclassical theory doesn't know ways of interaction beyond the
market and the firm, but the communities of people who produce on the basis
of voluntary cooperation indicate that it missed something. Since everybody
participates voluntarily, nobody can order the others around. The term
*peer production* has been coined by Yochai Benkler (2006) to express this
stark contrast to the hierarchical nature of firms: participants work
together on an equal footing, as peers.

And in contrast to the market, others aren't merely potential trading
partners, but people cooperating with me in order to reach a common goal.
Peer production is based on contributions, not on exchange. And while trade
(exchange) tends to be a zero-sum game, contributing isn't. If I make a
"good deal," it quite often means that my trading partner made a bad one.
But if somebody contributes something useful, everybody wins.

A world where producers have to sell what they produce and users have to
buy what they want to use, inevitably creates antagonisms. One person's
income is another person's cost. And an increased market share for one
producer means that the others producing the same goods will earn less,
hence producers are forced to compete with each other. The same conflict of
interest as between sellers and buyers in general exists between employees
and employers: the former want to sell their labor power as dearly as
possible, while the latter strive for a maximum of labor at minimal cost.
Benefit-driven production doesn't know these antagonisms, since fulfilling
my needs doesn't have to come at the cost of your needs. On the contrary,
peer production works so well because the participants help each other to
reach their goals and fulfill their needs. Everybody benefits.

Voluntary Production for Others
-------------------------------

Benefit-driven production shouldn't be misunderstood as production merely
for oneself. It is true that peer producers often begin by "scratching a
[...] personal itch," as Eric Raymond (2001) put it; but at the same time,
what they do is also useful for others. And people frequently engage not
because of their consumption needs, but because of their productive needs:
They contribute because they enjoy the tasks they are doing, because they
learn something, or because they want to give something back to the other
contributors.

The fact that peer production is always production for others refutes the
popular conception that without a market system, people would have to fall
back into some kind of Robinson mode: Everybody would only produce for
themselves or their family and large-scale cooperation would cease to
exist. It's pretty clear that such a solitary way of production wouldn't
get one very far. Another well-known alternative are centralized planned
economies--the former "real socialism." In such economies, society as a
whole functions like a big company. Management (the planners) decides what
should be done, assigns the required tasks, and monitors that they are
executed correctly. This alternative hasn't worked well in the past and
doesn't sound very attractive: You are still a dependent employee (though
now of the state) and must follow the orders of your superiors.

Peer production, on the other hand, is production for others which is
neither based on coercion nor motivated by monetary gain. Peers produce for
others because they can, and because it is a way for them to find further
contributors. The more people use the results of a project, the more
potential contributors exist, since people who decide to join forces as
occasional or regular contributors are typically already users of the
project they choose to support. If a project doesn't share with others by
coproducing for them, it endangers its opportunity to win new members.

To distribute tasks, peer producers use an open process that has become
known as "stigmergy" (cf. Heylighen 2007). Participants leave hints (Greek
*stigmata*) about started or desired activities, encouraging others to
follow these hints and take care of the desired tasks. Such hints, e.g.
to-do lists and bug reports in software projects and "red links" pointing
to missing articles in the Wikipedia, constitute an important part of the
communication.

All participants follow the hints that interest them most. This leads to an
automatic prioritization of tasks (the more people care for a task, the
more likely it is to be picked up by somebody). It also ensures that the
different talents and skills of contributors are applied in a more or less
optimal way (since people tend to pick up those tasks they think they are
good at). And since everybody is free in choosing the tasks they want to
do, participants will generally be more motivated than in a market-based
system or a planned economy, where they have to follow the orders of their
supervisor or client.

The Emergence of a Commons-based Production Infrastructure
----------------------------------------------------------

Peer production is thus radically different from the "normal," market- and
firm-based mode of production that dominates our society. Production is
mainly for benefit instead of profit; and people voluntarily cooperate as
peers rather than being part of hierarchical employer/employee or
client/contractor relationships.

Another thing that's different is the way in which people relate to nature
and to the products of their activities. Under capitalism, ideas, products,
and natural resources are usually treated as *property.* Property means the
legal right to exclude or include others from using a good, allowing the
owner to use, sell, or monetize their property at will.

Peer production is primarily based on *commons,* therefore Benkler (2006)
talks about *commons-based peer production.* Commons are goods which are
jointly developed and maintained by a community and which are shared
according to community-defined rules (cf. Ostrom 1990). Water, air,
forests, and land were managed as commons in many societies. Free software
and open content are a kind of commons that everybody is allowed to use,
improve and share. But the relation between peer production and commons is
not one-sided: Peer production is not only based on commons, it also
creates new ones and maintains the existing ones, as the examples of free
software, open content, and *open hardware* (blueprints and descriptions of
physical items that everyone can use to produce, utilize, and maintain
these items) show. All these projects contribute to a knowledge commons
that can be used, shared, and improved by everybody.

Peer production cannot just produce knowledge, it can also produce
infrastructure and physical goods. For example, *community wireless
networks* have formed in many cities; they allow everyone in their
neighborhood free network access. Many of these projects are organized as
*mesh networks*: all participating computers will actively transfer data,
removing the need for privileged servers. Such self-organized,
decentralized networks can create a shared infrastructure for Internet and
telephony (cf. Rowe 2010, 2011); similar networks might supply people with
energy or water. Community projects organizing access to water as a commons
exist in South America (cf. De Angelis 2010).

Open facilities for the production of material goods are emerging as well.
*Hackerspaces* and *Fab Labs* are typically run by volunteers; they often
have computer-controlled machines--including milling machines and fabbers
("3D printers")--which allow the largely automatized production of
individual items or small series. If possible, the utilized machines are
open hardware, meaning that their blueprints can be freely used and
improved by everyone. Another goal is the creation of machines that can
produce machines that are at least as powerful as the original ones, thus
allowing Fab Labs to produce the equipment for further Fab Labs. In this
way, commons-based peer production is starting to create the tools that
will allow it to spread even further, at the same time starting to supply
people with what they need to live.

A Commonist Future?
-------------------

Nick Dyer-Witheford (2007) has proposed the term *commonism* for a society
where the basic social form of production are the *commons* (while in
capitalism, *commodities* are the basic social form). As the success of
commons-based peer production shows, commons and peer production go
together very well. We can therefore expect peer production to be the
typical form of production in a commons-based society. Commonism would be a
society where production is organized by people who cooperate voluntarily
and on an equal footing for the benefit of all.

Some people may claim that such a society must be impossible because it
never existed or because it is against human nature. But that something
didn't happen in the past doesn't mean it won't become real in the future,
and arguments about "human nature" miss the fact that people are formed by
society just as well as they are forming society. Changing social
structures also changes people's behavior.

Nevertheless, commonism would have to remain an abstract idea if it didn't
have the potential to develop out of the current social system, capitalism.
New ways of production can only emerge when "the material conditions for
their existence have matured within the framework of the old society," as
Karl Marx (1859, Preface) expressed it.

There are two preconditions which I consider most relevant for the
development of commonism: (1) Human labor disappears from the production
processes, being replaced by automation and joyful doing. (2) Everyone has
access to resources and means of production. Developments within capitalism
favor the partial emergence of these conditions, though their full
realization would make capitalism impossible.

How these conditions change the processes of production becomes already
visible in the digital realm, where commons-based peer production
flourishes. But as argued above, it's unlikely to stop there. Peer
production reaches beyond capitalism, by being benefit-driven and
non-hierarchical rather than profit-driven and hierarchical and by
obsoleting and destroying markets formerly dominated by commodity
production (such as programming tools and encyclopedias). And yet, the
preconditions of this development are created by capitalism itself.

A paradox of capitalism is that human labor is its very foundation but also
a cost factor which every company has to reduce as much as possible. Labor
creates surplus value and thus profit, but at the same time, each company
can increase its profit (at least temporarily) by cutting down the amount
of labor required, thus achieving a cost advantage compared to its
competitors. One way of reducing labor costs is outsourcing to low-cost
countries, but in many cases, capitalists can achieve even higher cost
savings by replacing human labor with machines, or by getting customers to
voluntarily take over activities that formerly had to be paid.

Until some decades ago, machine usage and human labor were usually tightly
coupled, e.g. in assembly lines. But increasing levels of automation mean
that more and more routine activities can be performed without any human
labor. The remaining activities tend to be difficult to automate because
they require creativity, intuition, or empathy. Hence modern capitalism is
often referred to as a "service economy" or "information society," since
most non-automatable tasks are from these areas.

A related trend is the delegation of tasks to the customers themselves,
thus further reducing the required labor power. Thanks to self service,
supermarkets need fewer salespeople; online shopping and online banking
avoid the need for salespeople and tellers altogether; firms like Ikea
leave the final assembly of the furniture to their customers, thus reducing
labor and transportation costs.

But these developments also change the relationship between people and
their actions. As an employee I work in order to earn money. But if I
assemble my own furniture or if I browse the Internet for products I want
to have, I'm interested in the *result* of my actions. And thanks to higher
levels of automation, boring routine activities (which you wouldn't do
unless "bribed" by money) are increasingly replaced by more creative and
more interesting tasks.

For such tasks, payment is a nice plus (provided you live in a money-based
society), but not a necessary condition, as became apparent during the last
decades to the surprise of many economists, when voluntary, benefit-driven
peer projects started to spring up in all corners of the Internet. These
developments are only possible because the participants have access to the
necessary means of production (such as computers and Internet access). This
precondition may seem to be a serious limitation of the free, commons-based
mode of production, since capitalism is characterized by the fact that most
means of production are concentrated in a few hands. It's possible to
jointly produce software and knowledge where the necessary means of
production are relatively small and already available to large numbers of
people; but what about things that require huge factories?

Once more, the productive forces of capitalism come to the rescue. The PCs
and laptops of today are the progeny of the room-filling mainframes of 50
years ago. Similarly, other productive machines have started to become more
and more accessible and affordable for individuals and small groups.
Inexpensive, but flexible CNC (= computer-controlled) machines increasingly
replace the huge and cumbersome large-scale industrial facilities of the
past. The emergence of a commons-based production infrastructure is a
consequence of these developments, which originate in capitalism but allow
people to go beyond it.

Challenges to Commonism
-----------------------

But will commonism really be able to replace capitalism at some point?
Aren't there areas where it necessarily falls short? Two frequently raised
objections are the problem of unpleasant tasks (which nobody wants to do)
and the question of how to handle allocation and deal with the limitedness
of natural resources, if private property and money cease to matter.

Unpleasant Activities
~~~~~~~~~~~~~~~~~~~~~

Lets assume a society based wholly on peer production, where all tasks are
distributed among volunteers by stigmergic self-selection. What happens if
there are no volunteers for certain tasks, because everyone considers them
unpleasant, dangerous or otherwise unattractive? A monetary system forces
the weakest members of society to handle these tasks--those who have no
other options for earning money. Only cynics would say that's a good
solution--but what is the alternative?

Some of these tasks would probably turn out to be dispensable. If that's
not the case, automation, reorganization, and fair sharing remain as
solutions.

Automation has had an enormous impact since the start of the "industrial
revolution"--increasing parts of production have become automated in part
or in total. But in capitalism, the potential of automation is limited by
the height of wages. The less well paid a job is, the more difficult it
becomes to automatize without extra cost. Therefore, the automation of many
unpleasant tasks (such as cleaning) isn't worthwhile under capitalist
logic. With peer production, the situation is different: If there are tasks
that all or most people want to have done, but nobody wants to do, then the
incentive to wholly or partially automatize them is very high. And since
the automation of activities tends to be an exciting and challenging task,
the chances of finding volunteers for doing so are much higher.

If automation is impossible, it's often possible to reorganize activities
in a way that makes them more agreeable. In capitalism, the working
conditions for some jobs are very bad--for example, office cleaners
typically have to work very early in the morning, long before other people
get up. People cooperating voluntarily as peers would find different
arrangements.

Automation and reorganization can also be combined. For example, some
Spanish cities employ garbage trucks with automated forks that can be
remote-controlled from the driver's cab to automatically pick up and dump
the rubbish bins. Hence nobody has to handle the garbage directly and waste
collection becomes almost like a video game, making it easier to find
volunteers.

Activities that cannot be automated away or reorganized may become
candidates for a pool of unpleasant tasks, out of which everybody picks a
few now and then. If everybody (or everybody who cares) does a small part
of such tasks, they can be dealt with without causing much trouble to
anybody.

Allocation and the Limited Availability of Resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The fear that allocation without money is an unsolvable problem mainly
stems from a confusion between production for profit and production for
usage, or benefit. I can *sell* a practically unlimited amount of edibles,
but I can only *eat* so many of them before I'm full. The same is true for
all other goods: every desire to actually use them is limited. The only
thing that's potentially infinite is the possibility to turn them into
money (as long as there are buyers). But that possibility vanishes in a
world where production is benefit-, rather than profit-driven, and where
nobody is forced to buy and sell anymore.

Organizing production in such a way that everybody earns enough money is
indeed an unsolvable problem, since there is never a clear end point where
it would be enough. In a money-based society, money cannot only be turned
in any other good (commodity), it can also be employed for making more of
it, turning the money one already has into even more money one might
potentially be able to use in the future. And money is a form of power, it
allows influencing others, buying their labor power, and making them do as
one wishes.

The outcomes of benefit-driven production are instead specific benefits for
the people involved--software, knowledge, food, energy, connectivity,
mobility, care, shelter, clothing, etc. But it's not an unsolvable problem
to produce enough food for all--current society is doing that already, it
is only incapable of distributing it adequately, since those who would need
it most are unable to buy it. Realizing other benefits--producing energy,
mobility, care, shelter etc. for all--should be equally solvable once
production focuses on these benefits rather than on profit.

And peer production only works if you really treat the others as your
peers, as equally relevant. Nobody can self-actualize at the cost of
others, because the others aren't stupid and won't help them doing so--but
without the support of others, nobody will get very far. This means that
everybody's needs and desires matter. It's not a viable option for a
handful of peer producers to build giant houses for themselves and then let
the others worry about how to produce enough food in the remaining areas
that may no longer be sufficiently large. Peer production is about finding
solutions that work for all.

In commonism, as in any society, decisions on how to use the available
resources will be necessary. Is it preferable to produce food for all or
rather biofuel, allowing some to continue driving cars after oil reserves
have been exhausted? Should the energy supply be based on decentralized
renewable sources or rather on nuclear power, whose waste will be difficult
and dangerous to deal with for centuries to come? How to reconcile the
interests of the users of a good, who want new production facilities, with
the potential neighbors of these facilities, who might be annoyed by the
noise? Anyone who understands how and why peer production works, will be
able to imagine possible answers to these questions. But the most important
thing is that they can be raised and answered by the people concerned--all
of us.

References
----------

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- Marx, Karl (1859): *A Contribution to the Critique of Political Economy.*
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- Ostrom, Elinor (1990): *Governing the Commons: The Evolution of
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- Raymond, Eric S. (2001): The Cathedral and the Bazaar. In: *The Cathedral
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- Rowe, David (2010): *Baboons, Mesh Networks, and Community.* URL:
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-- 
|------- Dr. Christian Siefkes ------- christian at siefkes.net -------
| Homepage: http://www.siefkes.net/ | Blog: http://www.keimform.de/
|    Peer Production Everywhere:       http://peerconomy.org/wiki/
|---------------------------------- OpenPGP Key ID: 0x346452D8 --
If one cannot state a matter clearly enough so that even an intelligent
twelve-year-old can understand it, one should remain within the cloistered
walls of the university and laboratory until one gets a better grasp of
one's subject matter.
        -- Margaret Mead

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