Dear Kevin, I'm publishing this on the 22nd, and it would be great to add a considered comment of you ..<br><br>See:<br><br>(from <a href="http://cuhistory.blogspot.com/2011/05/coming-micro-ownership-revolution.html">http://cuhistory.blogspot.com/2011/05/coming-micro-ownership-revolution.html</a>)<br>
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<p class="postTitle"><a href="http://blog.p2pfoundation.net/?p=20232" rel="bookmark" title="Permanent Link to The P2P-driven fall in transaction costs and
the coming Micro-Ownership Revolution">The P2P-driven fall in
transaction costs and the coming Micro-Ownership Revolution</a></p><br>
<p><strong>THIS IS A MOST IMPORTANT ARGUMENT AND CRUCIAL ASPECT OF
THE ‘P2P Revolution’!!</strong></p>
<p>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.</p>
<p><a href="http://cuhistory.blogspot.com/p/about-credit-union-history.html">Excerpted</a>
from <strong>Matt Cropp:</strong></p>
<p><em>“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.</em></p>
<p><em>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.</em></p>
<p><em>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.</em></p>
<p><em>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.</em></p>
<p><em>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.”</em></p><br clear="all"><br>-- <br>P2P Foundation: <a href="http://p2pfoundation.net" target="_blank">http://p2pfoundation.net</a> - <a href="http://blog.p2pfoundation.net" target="_blank">http://blog.p2pfoundation.net</a> <br>
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