[P2P-F] An absolutely crucial argument for P2P Theory

[Michel Bauwens]

Dear Kevin, I'm publishing this on the 22nd, and it would be great to add a
considered comment of you ..

See:

(from
http://cuhistory.blogspot.com/2011/05/coming-micro-ownership-revolution.html
)

«

The P2P-driven fall in transaction costs and the coming Micro-Ownership
Revolution <http://blog.p2pfoundation.net/?p=20232>

*THIS IS A MOST IMPORTANT ARGUMENT AND CRUCIAL ASPECT OF THE ‘P2P
Revolution’!!*

While we should always be weary of technological determinism, the article
above makes a very cogent argument about how changing ‘p2p-driven’
transaction costs drive new distributed ownership models. It’s one of the
best takes on the subjects I’ve seen and makes a really crucial connection
for P2P Theory. Just add the necessity for social struggle and political
organisation to make sure such a change is not derided.

Excerpted <http://cuhistory.blogspot.com/p/about-credit-union-history.html>from
*Matt Cropp:*

*“If the cost of information, in fact, influences the optimal structure of a
firm in the economy, then the growth of the Internet over the last decade
should be understood as a signal that the traditional corporate model is
heading the way of the dinosaur. Indeed, there is plenty of evidence to
suggest that small to mid-size firms can use their flexibility to
outmaneuver the existing behemoths in many ways; however, there are certain
industries in which economies of scale will remain extremely important.
However, some very recent developments have to potential to radically alter
the ownership structures of such firms.*

*Of paramount importance is the emergence of peer-to-peer online monetary
systems such as Bitcoin. By drastically reducing transaction costs and
allowing for true micro-payments (on the order of hundred-thousandths of a
cent), such systems have the potential to drastically reduce the minimum
barrier to entry to obtaining an ownership stake in a firm. As a result, I
believe we might begin to witness the organic transformation of many large
firms to co-operative ownership.*

*The logic of such a transition is as follows. In a perfectly competitive
market, the margin of profit trends towards zero, with consumers obtaining
products at cost. In such a situation, the motivation for shareholders who
do not use the firm’s products to retain ownership is fairly low, while the
only tool left for a firm to attract customers away from its competitors
would be to offer them an ownership stake in the business, which would
guarantee that they would continue to receive the firms products at cost in
the future. As such, it would be reasonable to expect the gradual transition
of the ownership of many companies in the coming years from absentee
shareholders to consumers.*

*A possible objection to this scenario would be to inquire as to why such a
transition has not already occurred? The answer, I believe, lies in the
relative cost of ownership. In 1800, owning a share of a London blacksmith’s
shop while living in New York would have been prohibitively expensive, due
to the fact that the transaction costs necessary to receive the benefits of
ownership would eat up most, if not all, of the profits. However, once the
underseas telegraph cable was in place, such costs were reduced to the point
that such ownership became possible. It seems there is a similar dynamic at
play with co-operatives.*

*In the past, co-operatives have only been successful in economic sectors in
which the size of the economic relationship they have with their members is
sufficiently large to offset the transaction costs of ownership (i.e.,
groceries, insurance, feed for livestock), and they have often further
defrayed such costs through the use of volunteer labor. However, with such
technologies as Bitcoin sending transaction costs plummeting towards zero,
the range of firms that could be economically owned by their users/consumers
is drastically expanding. The logic is simple – why patronize a for-profit
firm when you can be assured you’re receiving goods and services at cost
from your co-op store/auto repair shop/social networking website. Just as
the first communications revolution gave birth to the age of the
corporation, the rapid changes that our contemporary world is experiencing
could be paving the way towards the age of the co-operative.”*


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