Open Collaboration

There is a new form of production in the world, now in addition to "markets" and "firms", we now have "peer production in the Commons".  All of these forms can be seen as ways to collaborate.  In a market, prices are used as signals to organize production and work to allocate resources by having many agents producing and transferring those resources based on price and exchange.  In a firm, individual transactions are replaced with contracts, ongoing relationships (employment) and markets are replaced with command and control systems within the organizations.  What drives this is mostly "transaction costs", where it costs more to negotiate the market for each component of production than it does to have your own plant.  Unfortunately what also drives it is the tendency of firms towards monopoly, which is why de Landa refers the firms as "anti-markets" because they work continuously against market forces, often by force or coercion. --reference

We find that there is another possibility.  In peer production, you don't have market setting prices or a firm creating contractual supply chains and employment relationships. Instead, you have assets that are held in common by a community, and the productive work of the community extracts a living from the commons while also maintaining the commons as a productive asset for generations to come.  The production and reproduction of the environment is not separate from the production and reproduction of the community.  Humans have historically been able to move into new territories when the productivity of their environment declined, but that is a short term strategy.  Species that are in balance with their environment can endure for tens, even hundreds of millions of years.  Can we achieve that balance?

 The most prominent examples of peer production often have the peers as volunteers.  Take Wikipedia for example, some core staff members are paid, and gifts pay for that and the costs of hosting.  Everyone else is a volunteer, although community members can occasionally become staff, this isn't a way earning of a living except for a few people at the core.  Most open source projects are similar, although it is common for contributors to be paid to work on particular modifications that are important for their employers because they depend on those components functioning in particular ways.  The companies may have a business strategy involving the open project, for example they may sell consulting services based on their intimate knowledge and ability to apply an open source tool in new ways.

This if far from the limits of what is possible from these forms.

 

Rethinking the Possible

 

Imagine how financial services may work in a peer production model.  A network of community based banks or credit unions could operate totally on open source software developed in a commons.  Funds are raised and time investors are recruited to develop the systems and software.  First just basic banking and other financial services, but with a very different approach to managing assets.  People are talking about this in terms like "slow money" or with the idea of investing with the purpose of growing the local economy as well as your own business.  Knowing that our investments are staying in our community, I know that whatever I don't take now will come back to me more abundantly.  If I help my neighbor stay in business, his spending comes around to mine.

If the financial instruments, the money, we use to finance our businesses comes from the community and goes back the community we have a virtuous circle that builds things up rather than tears them down, an upward spiral develops.  Understanding how money is created in financial transactions and that we can create money based on assets instead of debt gives us the tools to do this.

If a community had to use conventional financing to build their barns, the bank would end up owning them.  I'd need cash to buy the wood, nails, paint and pay the workers, and the workers need to bring their lunch, and I'd owe the bank a big chunk of money and start paying interest right off.  I'd have to sell all or most of my first crops to pay principle and interest to the bank.  Instead of all the resources coming from the community and then returning there, they still come from the community, but the money leaves.  The workers bring the money home to their community where the bank extracts their interest on his property as well.  The lumber might come from a community a thousand miles away because what is important is price so I have the least interest to pay, not that I and my neighbors can't produce it locally from our surplus.  We are always living in scarcity when our environment is abundant.  What is abundant is worthless in a scarcity. It may be priceless like clean air and water and healthy stands of woodland and rain forest, but it is nothing on a balance sheet.  Unless I can destroy enough of it to make it scarce.