2011-06-24

Alternative Economy Cultures PART 2 - Michel Bauwens

Alternative Economy Cultures PART 2 from pixelACHE festival on Vimeo.

here's the transcript I made:

Michel Bauwens on Alternative Economy Cultures

First a little reaction to what I heard; I will appear very moderate now after Michael, but my first reaction is the following, 2500 years ago, Buddha had a vision, and 2000 years ago, Jesus had a vision, but how many people today are able to live that vision in practice? So, having a vision is of course very important, I would say I also have a vision and in many ways there are similarities, but the important question is how do we eventually realise this kind of life? I am to young to be a boomer, I was 10 years old in 68, and at least in my generation, maybe 25 percent of young people had really similar inspirations and visions, but when we created a commune –I lived in two communes – we screwed it up, nobody wanted to do the dishes. So again, having a vision is important and inspiring, but how do we actually make it happen is something humanity is wrestling with for a long time.
Now, my reasoning is the following, and this is also a dialogue with the socialist tradition if you like, how does social change really happen? This is a really important question. The socialist idea was basically we have capitalism; it creates a new class, this class can become self-aware of its own interest, can organise, can fight for political power, and then change the very structure of society. I think that was the key idea that inspired the different wings of the socialist movement. But I think if we look to history, there is no historical precedent for such a kind of change. I want to give two examples. Imagine we are living in the fifth century AD at the time of the collapse of the Roman Empire. What we would have seen happen there is the following: it became to costly to conquer new lands, to get new slaves, the price of slaves was going up, it became to costly to maintain large standing armies, so the repressive coercive apparatus of the Roman Empire was weakening, you had barbarian invasions and a whole series of problems. And some people, faced with that kind of challenge, including slave owners, said, since I can not maintain enough of an army, I will “free” my slaves. That is, I take them into colony, give them the right to marry and have kids, they will have land, they will work their land and they will give me fifty percent of what they produced. And some other people started to think differently about religion, the Christians, in other words, within that society, patterns where being created that were reacting to the challenges of that particular society, but very importantly, we had a congruent change from the bottom and the top at the same time. So we had slave owners becoming domain holders, and we had slaves becoming serves. Eventually, all those patterns would coalesce and in 975, I forgot who wrote the book The First European Revolution, there’s a large social movement, backed by the Catholic Church; that symbolically means a phase transition between the old system and an new institutionalised feudal system. Then after that we have tree centuries of doubling population, increased growth of productivity, etc. So what happens there is very clear: a congruent change towards new patterns that eventually form a new logic.
I think we can pretty much say the same thing when we look at the transition from feudalism to capitalism. In the 12the century somebody finds double book keeping accounting, in the 15the century Gutenberg invents the printing press, people start change the patterns of information diffusion, Luther changes the way we think about religion, so again, we have emerging patterns of alternatives, which start to coalesce with each other, and in the 16th century when things get globalized and the feudal system is getting into trouble, we see again that smart land owners, noble people would say, well, if I invest in this merchant, in this particular factory, I will be better of then if I don’t do it, and actually the nobles who didn’t do it, who stayed attached to the land, started to disappear. Only after a long maturation of two, tree centuries a phase change happened through the French and other revolutions. So there is no precedent for saying, here’s a new class, that hasn’t proven anything, that takes power and changes everything. There is no historical precedent for that particular vision. So what if I would tell you that today, I think that’s the good news, there are such patterns, that people trying to invent, faced with all the challenges that are facing us, are inventing new patterns, and that these patterns are coalescing and forming the blueprint for a new type of civilization and a new type of economy. So this is basically what my talk is about.
Funnily enough, I was invited to the Vatican in May last year, which is the longest standing hierarchical organisation in the West and maybe in the world, and I talked to them about pique hierarchy. And basically the theory is the following: until today, if you were a small organisation, a small nation, you would loose from a bigger organization, a bigger nation. Hierarchy trumps decentralisation, distribution. The thesis, the hypothesis of pique hierarchy is that today, distribution beats hierarchy. So more and more, if you distribute your forms of organisation, your networks, you will actually be stronger than if you stay in a hierarchical mal. And the reason we have that is that until today, we did not have a technological affordance to be in that state, in other words, distributed mechanisms were limited in time and space to small groups. And if you are familiar with Dunbar who says that if you move from –a typical human brain can only manage about 150 relationships- so if you move to a bigger level of complexity, you need a hierarchy. He also says based on anthropological research, that above 500 people you need a hierarchy to sustain social organisation. But what we have now is very important; we now have something that allows on to globally scale small group dynamics. Linux is not –there are companies involved, there are communities involved- but what we can say for sure, it’s not one central organisation using command and control, that is making this very complex operating system. Wikipedia, whatever we may critique it, it’s not a large organisation with central command and control that is producing it. It is a multitude of individuals and small groups coordinating itself on a global scale. And this is a very important change that we have. And it is not just the technology, it is to tell you that we are not just witnessing change in the objective possibilities, we are actually witnessing the birth of a new structure or design, of a new type of mentality accompanying these possibilities. I show you here a trust barometer; it’s two years old. Over a period of four years they would ask people: who do you trust? And in 2002 people said I trust institutions. I trust the doctor, the hospital, the teacher, the newspaper… the answer would be institutional answers. Only four years later, and this is not only in the West, it includes China and probably also Japan, only 28 to 30 percent of all people would say that. And 60 to 70 percent answered: I trust peers, people like myself. And last week there was a big fairly study published showing that in media consumption that is already the case, so people today read and watch and listen to things that are in majority recommended by their peers, mostly social media; this is already the case today.
So the way I define peer-to-peer is the relation dynamic at work in distributed networks, and a very important thing is to make a difference with decentralised network where we simply decentralise power – peer-to-peer is a relational dynamic that has to be permissionless, in other words, the individual agent has to be able to freely engage in actions and freely engage in relationships. So if you take the plane from New Orleans to New York, and it goes down in Atlanta, it is a decentralised hub, you don’t have any choice, you have to go down with everybody else. If you take the car, the hub is still there, but you can go around it. So the network map is the same, but the difference is that in distributed networks the hubs are created through voluntary choices even though most of the time most people would choose the same things. But this is a crucial difference.
And so, what I’m saying is that this peer-2-peer relation dynamic is creating three new social processes, if you like three new patterns or three new templates of human activity. Peer production is the ability to produce in common, peer production, the ability to self manage these processes, peer governance, and the ability to protect this common value creation from private appropriation, peer property. And just a few words to show how different this is from traditional conception. First of all is that it actually abolishes the division of labour. It does not want to do it; it does it! If you look at peer production, the basis is quit different from traditional industrial production. I’m an entrepreneur; I need a marketer. And there is an inspired speaker, Michael Albert, I am going to judge him as a person, as a whole, wither he fits that role. Then I am going to put him in a division of labour and I am going to pay him, and he is going to be dependant on me for his survival. If I do it in a peer production way, it will be entirely different. What I basically do is I design a social system which allows him to self allocate his skills and contributions to a particular part of that broader project, so I am going to broadcast the task witch I will organise in a modular way and people will self allocate their perceived skills and capacities. Some people call this equipotentiality, because basically the human vision is not a human vision based on Michael in a totality, but basically what I am saying philosophically Michael, I know that you are better in some stuff than I, and I know in some other stuff I am better than you. So let’s design a social system, which allows each of us to allocate or best skills to a common project. Which is quit a different philosophy of life. And in other words, if you do that, I am not judging you as a superior or inferior human being, as a whole, I just recognize that we have different skills and that it is good to have a system that allows us to bring these skills to common projects. The design of these projects is totally different. Industrial systems, modern systems, are always based on a priori selection, credentialism, there is a process to determine wither you can participate or not in the process. Peer production abolishes that. It basically says: you self-allocate your skills and time and only afterwards we will commune and validate the quality and excellence of your contribution. In other words, the filtering processes are moved to the back of the process rather than in the beginning of the process. It is also, again, transparent. The whole process of peer production is, by definition, constitutionally build in the design of the collaborative tools themselves, fully transparent. So any change in Wikipedia, any change in the software is visible. And again, we turn it around from the industrial system and say –in the industrial system we say everything we do is private, if you want to share, you have to make an effort. In peer production we say everything is open, if you don’t want to be open, you’ll have to make an effort. So we can create these polarities that is quit different from the way we used to do things.
In capitalism we have the circulation of capital, starting with money, making more money at the end, so we have the accumulation circle, so how does peer production socially reproduce itself? So Nick Dyer-Witherford came up with the circulation of the Common, and basically the circulation of the common is how the system of peer production endures in time, right? And it is very important to understand hat because it also shows why all these social movements are occurring that we monitor at the p2p foundation Wiki. So first of all, what do we need to collaborate? We need to have access to raw material, we need open and free raw material. If I have to ask your permission, because it is copyrighted or trademarked, or patented, I cannot permissionlessly cooperate. So open and free, even if we make it ourselves, we create it, or we need to access it, a pre-existing base, it is crucial part, so the input part is open and free. Open text books, open access, open source software, open yoga, open Wiki, open ayurveda, open Anabaptism, you can imagine any word that’s in your mind, you add open or free to it, I can guarantee you 90 percent chances you can find in our Wiki which has 7000 pages of existing practises open and free participatory and commons oriented.
Participation is the process phase. Designing for inclusion. And the third phase is the output, which has to be commons oriented, in other words, a universal availability of the output is a necessity and that creates the circle, right? So you have the commons orientated output, which creates a new layer of open and free input for the next iteration and this is how the system reproduces itself.
I want to make a fairly strong claim. Because again, if you look at the history and the example I am trying to give you of the phase change from slavery to feudalism and from feudalism to capitalism, the reason why there were congruent conversions of the top and the bottom of the social pyramid, is that because at the end, those new processes were more productive than the old. So that’s why there is this bind, right? Now, if we look at the history of cooperation in the productive process, I think the first thing we can say is, -I’m not talking about tribal systems but of post-tribal systems- they start with coercive systems. The motivation to work in a slavery or serve based social system is fear. If you don’t work, if you not contribute, they cut your hand of. They lash you. So that means that if the boss is not looking, you’re not going to work, basically. So these are systems that, well, work, but they work at a very low level of productivity and at a fairly low level of innovation. The genius of capitalism if I may say, at least in theory, but I think also in practice, you know the liberal idea, is let’s change the system from extrinsic, outside, negative motivations, fear, to intrinsic, positive motivations, self-interest. So the ideal of capitalism is I will exchange with you something with equivalent value, and we have a win-win situation. We both benefit from that situation. And however imperfectly it is realized in practice, we do, see a quantum jump in productivity and innovation in the capitalist system. So it works at a certain level. But it has in-build limitations. And the first limitation is, if I work with Michael on the basis of self-interest, and there is no self-interest, I am not going to do it. If there is no money, I am not going to do it. The second limitation is, if I work with Michael and I sell him an AK47, I am happy that I get the money, he’s happy that he can shoot people, but there is a problem, right, that AK47 will do a lot of damage. But we don’t care, our mutual self-interest has been satisfied by the market transaction, in other words, the market transaction, by definition, can not take into account social externalities.
These problems do not exist in peer-production, because what you do in peer-production is, you have structurally eliminated extrinsic motivation, and the only ones that remain, are positive, intrinsic motivations, in other words, passion. And you know, that’s the wet dream of every HM manager. If you can have workers that are passionate… That’s what you want. Of course, it does not work in a for-profit system where it nearly works, but it works by definition because it is the only way it works in a peer production project. And the fundamental thing why it is really hyper productive is that a peer production project works with absolute quality motivation. A for-profit company can only work with relative motivation: I want to be better than the next guy. As soon you have a monopoly, which is of course the aim of your activity, to have a temporary monopoly over your competition, you stop innovating. When Microsoft wins over Netscape, Explorer stagnates for seven years. There’s no reason to; they didn’t have competition. Firefox comes along, the move along to, right? This is very important because we are now in a situation where by for-profit companies striving for relative quality, and you know, you have to stress relative because, I’ve been in business for 20 years, we know that we spend as much in making a product bad than we spend to make it good, you know, planned obsolescence. It’s part of the game. You don’t want the best product. You want a product that is difficult to copy, that nobody else can do, you know you don’t make the best possible product, by definition. But if you are faced with a competitor who does that, you’re going loose.
So, I will come up with three laws of asymmetrical competition that I think will drive the change towards peer production. And the first is, if a for-profit company, using proprietary intellectual property, having to pay every worker that works on their innovation, is faced with a competition which combines an open community with a non profit association –I call them for-benefit associations- that manages the infrastructure of cooperation, and an ecology of business that work around a value created by that commons, that the first will loose from the second. The second law, if two corporations compete with each other and one stays close and the other opens up, the second wins.
Third, and this shows the hybridity of the system, if an open community successfully allies itself with an ecology and another does not, the first wins, the second looses. So that creates a congruent interest between open communities and businesses that are changing toward this new mode. And I will formulate the hypothesis of netarchical capitalism, which is a new branch of capitalist enterprise, which enables and empowers sharing to occur, by creating platforms, and no longer relies essentially on intellectual property. Now, companies will always have a dual attitude. I usually explain it by saying they have a shark gene and they have a dolphin gene. The dolphin gene says, in order to enable sharing, I need to open up, create an open platform, but because I am competing with others, I need to be a shark and close down some parts, in other words, openness creates value but closeness captures the value. So companies are always going to behave dually with open communities but the open communities are not powerless because open communities who want to preserve their way of working will select companies that respect this culture and those norms, so they continue to work. So there is a mutual agitation going on in peer production.
And basically we see two modes emerging. One I call a sharing mode, it’s the YouTubes and the Googles and the Flickers etc. which basically says – it’s a sharing mode, why is it a sharing mode? Because people express their individual creative expression, we do not construct something in common, therefore we have weak networks with each other and we need a third party to create our platforms which role is played by these companies. But these companies no longer create value themselves; this is the important shift that we are witnessing, right? Google does not create value. You do. The only thing Google does is representing to ourselves the documents we have produced. YouTube does not create value. It’s merely reshowing us the videos that we have produced. Flickr is not creating value, it’s merely reshowing us the pictures that we have produced. So this is a fundamental change already.
The commons form is more radical I think because there we have communities building something in common and therefore creating strong links with each other. Therefore, develop the ability to create their own infrastructures, in the form of these foundations, Linux foundation, Eclipse foundation, Gnome foundation… and I am sure there is a group of foundations, I mean, there are like two dozen of them in the free software world, and they manage the infrastructure of the cooperation, but they do not command and control the process f production. That’s a very important thing. And then the third player is the company that profit from the commons and that practice benefit sharing, and basically what they will do is that they will fund the platform of cooperation, which sustains the model.
So, it’s clear, this answers some of the critics, yes, this system is embedded in capitalism, absolutely, it is been used by the capitalist system just as smart feudalists used capitalist innovation and smart slave owner started creating colony systems instead of slave systems. But this is the very condition for the success of it. It is because of this congruent change that these new alternative templates are being created. And so the main contradiction for me is not between workers and company owners that was the old one from the industrial society, is between the communities and the platform owners or between the communities and the business ecologies. And there is a neutral adaptation going on, we have collective interests, I think most people on YouTube say thank you YouTube to allowing us to share, because we couldn’t do it before, and a lot of Linux programmers, 75% of them now are paid by companies, say thank you IBM because now we can make a living doing this, so there are all kinds of adaptations occurring which are actually the condition for the change to occur. And off course the community becomes self-aware of its self-interest, start making demands, start selecting those companies that work with them in a certain way and stop working with others that not work in that particular way. So again, we have a mutual adaptation.
Now, I would argue that it is pretty clear that this system is going to work quit well for immaterial production. Wikipedia beats Britannica, Linux beats Microsoft, Firefox beats Explorer, I mean, we can see a increasing number examples where this is occurring. So this is no longer theory, this is no longer wishing, this is what we can witness. So the big question is, in terms of social change, how will the system work with the physical system? And your natural reaction might be, well, it will not work. Because, yes, in immaterial production it is easy to understand, we are no longer classical workers, we are more like craftsmen are. People like here in the room Cause quit frankly, we are the 20%, not the 80%. The 80% is cleaning your office. So we are the 20%, however precarious our living may be today. But we, this 20%, have our brains, so we have our primary means of production, we have our computers, cheap enough so we can buy them all, and we have access to a socialized network. The Internet, that allows us to cooperate. So we can freely aggregate our resources to create peer production projects.
So, the problem of social reproduction of peer production is that it is sustainable collectively but not individually. That’s our problem, right? As long as for every 20% people who stop working for Wikipedia they find another 20%, Wikipedia is sustainable. But it is not individually sustainable because we cannot volunteer all the time without an income. That’s an issue that we probably should discuss, maybe later.
Now, the thing is with material production that there is a difference. I think that what we need to see is that we have a scale between abundance and scarcity. And peer production works naturally with abundance, with digital freely copyable at marginal transactional, coordination and communication costs. That’s when it works best. It works more difficultly or not at all when we move to the polarity of scarcity. But what we have to see is how interrelated they are. Anything I want to make physically, I have to design. And designing a car is not fundamentally different. There are pragmatic problems, but it is not fundamentally different from brains working with each other over computers. That’s what design is.
So, I was at the Oekonux conference in Manchester last week (Oekonux means Linux economy) and we had a speaker from the Common Car, and this is one of the eight –maybe more now- open source car groups, designing a car, and claiming –and he was very convincing- that by 2011 they will actually make this car. So that means that peer production is absolutely related to physical production through the design.
So to go back to the Roman vision –I don’t know why I have this obsession with Rome- what happened? Rome had a problem with extensive globalisation. At some point, the cost of maintaining the slave-based empire becomes greater than the profit from conquering new raw material –slaves. And then it starts going bad. Normally barbarians invade and they start again, a new empire is born. In the West something weird happens, which is the following: barbarians invade, yes, but they create a new system. And what is that new system? The new system is from globalized slave empire to re-localised farming around the domains. But crucially with an open designed community called the Catholic Church. This is the fundamental basis of the growth of the feudal system that it combines re-localisation of production with an open design community, with all the monks travelling in Europe sharing their innovations. And we know that for example the Cistercians were absolutely crucial in our cultural innovation during that time. So this is actually my vision for the future. And I think we have the same crisis. Capitalism is facing a crisis of extensive globalisation. If not today, and off course the crisis is very serious, in thirty years, maximum. Right? We cannot have the four planets that India and China need to attain our living standards, we do not have them. So we do have a crisis of extensive globalization.
At the same time, what happened with computers –and this is very important- is now happening with physical production. In other words, miniaturization, rapid tuning, rapid manufacturing, multi-purpose machinery, personal fabricators, 3d printing, all these trends show us that we have the technical possibility to redesign our machines, so that they become technological affordances for more localised communities to undertake their own production. So what I propose –and I don’t have a full answer to how this would work- but what I propose – is off course the connection between the open design communities, and we know they work, and we know they work better at innovation an quality than the for-profit system and find a connection with the forces that are aiming to re-localised, balanced, sustainable, physical production. And naturally this drives us then to the question of how can we create more distributed infrastructures, and this is also what the p2p-movement is about, so we are thinking about how we do that. And I can assure you that an open design community thinks totally different about production right, because if I am for-profit, I am going to build thresholds in the system that do not allow my competitors to play the game. So I am going to design very specialized machinery, that is very expensive, that you can only buy with a lot of capital, that can not be copied easily, that do not take into account environmental externalities, but once an open design community sets itself to the task of thinking –let’s say- let’s find an open source solar panel, they start thinking completely differently. They think: let’s make modules, that everybody in the world can improve upon, we need low capital to go in that system, right? And so, we are working on this open distributing manufacturing, we are working on –this is a little bit more controversial, especially with my Marxist friends- open and distributed monetary systems. My vision is simple: peer production is about production of value by the social field. We have state production, private production, and we have social production. That’s what peer production is about. So today money is build by a combination of state and private –actually banks are really the ones creating money today. I want the right for communities to create their own monetary systems. And it is very logical, it is happening today. We have one group I met last week when I was in Milan, Arduino, Arduino is a community of open designers making circuit boards. So they work with an open design, meaning anyone can improve on their designs, take the circuit board, and make some special adaptations for some special needs. And Arduino makes a living making and selling the boards. Because it’s open design, Chinese companies are also making and selling the boards. Because they do not have the fully contextual knowledge, they do not make as good boards, so the people who are buying the Chinese boards usually come back to Arduino and actually they have a ‘made in Italy’ stamp on it as a guarantee of excellence. But anybody can make the board because it is an open design.
Now, the difference between free software knowledge and open hardware is scarcity. You need a cost recovering mechanism in order to do open hardware, because you need to buy the plastic, you need to buy the metal, then if you do not do it well, it breaks down, you need to buy a new patch, you need money. Okay, question: which bank is going to fund open design? Answer: none. It does not make sense for them. What? You need money for innovation and you are not going to patent it? That does not make sense for them. So they just don’t find money. So what they do is they build their own mutual credit system called the open hardware reserve bank, it is in operation since about a month now, and so what I am trying to show is how these communities in their self-interest –because they want to reproduce their social practices- are building in a natural and organic way the things they need to continue. And this is what I am trying to say: we are building the seeds –distributed money, distributed manufacturing, open designs, free software, peer to peer learning, we are building all the things that we need, and all these patterns are coalescing with each other, and are creating in my view the template for the new society and a new civilisation.
I am going to stop with the explanation and just say a little bit about the politics. Let’s look at this slide; this is good for Michael because in a way it concerns the death of capitalism, or at least the death of one business model. So what do we have? We have four business models that are emerging and that exist today. And I am going to show you why the one we are used to is going to die. So we have four choices: you can do something for free, or you can ask money for it, and you can use open non-propriety designs or you can use closed intellectual property. We all know the first one on the right: paid and closed: you make an innovation, you patent it, you sell it. Today, with the digital possibilities, we already have one problem, which is expressed by the book Free that just came out by Chris Anderson. Basically if you work with anything immaterial, you will have a competitor who will say: if you ask money for it, I will give that for free and I will build my business model on some secondary aspect… so if Microsoft would want to sell Explorer, it wouldn’t work because somebody would give the programme for free. The people who sold stock information ten years ago for 30.000 dollars are all gone because some other people gave it for free. Good. First possibility. Second possibility is –and this is the Linux model- you have open designs but you get paid for your work. So you have a business model that is build around secondary services around the free software, which is integration, learning, a kind of an insurance system, you know, you make an annual version and you make sure that it works, there are all kinds of services but the basic design is free. The third one is basically even more interesting. Couch surfing, which is basically free service, for free. This is interesting as well. So you see a congruent development of three alternative business models, which are basically undermining the classic capitalist industrial way of doing business.
And more fundamentally, I want to say this, and I am working with a Swedish-Italian professor called Adam Arvidsson on this, we call it the crisis of value. What we have today is a system that allows us to exponentially grow use value, but we are only able to linearly increase the monetisation of that use value. For example Google: yes, they make a lot of money, but how many people are making documents on Google make money? It is just a fraction. Yes, YouTube make some money, but how many people making videos on YouTube make money? Right? So we see that today we have the ability to create value –directly use value- without passing through the commodity circle, but the ability to monetize it is very limited. And this is the problem of capitalism, right? First of all the extensive globalization, meaning they cannot grow physically anymore without destroying our planet. Second the dream that, we go from the material to the immaterial, well, guess what, the bad news is market disregards scarcity and the immaterial is abundance. So that is the basic crisis of value that it does not work, intensive globalization around the immaterial economy is not going to work. And my interpretation of the stock market crash is related to that. Why did we have all that value, well, because the system did not know any other way of valuing immaterial value, right? So we relied on the stock market to value all those new forms of value, as estimation, and because it is not a very good system, it can be gamed, it can be rigged, and eventually arrived at the system we have today.
So politically I would say the following. We now have a system, which to me looks pretty shitty, for the following reason. We think that nature is infinite and therefore we have a system that is based on infinite accumulation that needs to grow to survive. So we have pseudo abundance. And we also think that in the sphere of science, and culture, and innovation, we need to create artificial scarcity. So we combine pseudo abundance with pseudo scarcity. I do not think that this is a good idea. I think that we need a system that recognizes the finite aspects of nature and recognizes the abundant nature of intellectual and cultural and scientific cooperation. And this is what I think the peer to peer theory stands for, how do we do that, how do we change society to that level?
Okay, finally a political intervention. So, my reading of the crisis is the following. It is based on a reading of Carlota Perez, the title is Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages, basically the idea is: we have these long cycles in capitalism, 60, 70 years, 30 years up-cycles, 30 years down-cycles, 45-74 up-cycle, 74 to now, down-cycle. Then things start breaking down. So the old system no longer works. Then you have big slumps, 7 to 15 years, historically. So this is what we are going through now: a very deep crisis, which can only be solved by new technological revolutions and by a new social compact.
So I have developed two scenarios, which I call the high road and the low road to peer to peer. The high road is: trust Obama, and the second road is don’t trust Obama, so what does that mean? Let’s assume that out of this mess we have a new phase of green capitalism. And this will only work if there is a new social compact, which in my view will be partly based on recognizing openness, participation, and commons orientation. The good news is that Chu, the environment minister of Obama already said we can’t solve the climate problem without open design and renewable energies, so that is a good sign. Another good sign is that those (?) capitalists we are talking about are now in power. The people behind Obama is Wall Street, this branch of capital, that is most aligned with peer production, the Googles and stuff, you know Eric Schmidt is always walking around Obama, and then you have the people who elected him through social media. These are the three sources of his power. So let’s assume he succeeds. What then happens is that the germ forms that I described to you, the emergence of peer to peer in all fields of human activity, in those three forms, open and free participatory commons orientation, can grow from a germ form to parity level. So we’ll have what we had in the 18th century, when the nobility was going down and the merchant class was going up and the kings had a lot of power because they had to arbitrage between both. We had a parity level between the old system and the news system. So imagine that we can have thirty years after this slump of a growth period: this is the positive scenario. Now, what is the negative scenario? The problem is the following: this normal cyclical evolution of capitalism is being made more difficult because we are facing at the same time non-cyclical problems. Climate change, resource depletion, is really fundamental problems that may impede the reconstruction of the system in a new positive phase. And then off course what Obama does, because of his links with Wall Street, is very worrying, because basically he is spending all our money trying to restore the system that is breaking down. Which is exactly what Hoover did, so the problem of Obama is that he came to early. The culture and the interests are not yet ready to accept fundamental structural reforms, so he is patching up the old stuff. Sending money in unproductive pursuits. And this is very dangerous for us because this means that we eventually can face governments, which have no money. And then we can have 5 million people in the street shouting and screaming, but they won’t be able to reform because there is just no money available to do anything else. So if this happens, if we have this problem combined with resource depletion and climate change, then we can have much more rapid dislocation than we expect. And then we’ll have what I call a low road scenario to peer to peer. And this is a little bit more like what happened after the fall of the Roman Empire; we had five centuries of misery basically. No roads, no pottery, no manuscripts, but what happened off course was in reaction to it, local communities were reorganising, you know, the feudal system, right? Now, there are some books out –that is to give you hope- that actually, if you were a farmer, you were better of. Because you were no longer a slave, you did not have to pay taxes; you were actually better of, even in those five centuries. So that is hopefully a positive sign.
But what will happen? If this happens, then that means that peer to peer will emerge not on a global scale but in the form of resilient communities. For example, if you want to save yourself from hyperinflation, what do you do? You create an alternative currency. It’s the only thing you can do, to insulate your community from hyperinflation. If the food system is in shatters, and I don’t know if you read that, we have three weeks of reserves in the West, right? So if we have a food crisis, it’s going to be fun: we have three weeks of reserves. Well, people are going to start growing again.
Now, just an anecdote, I find it a bit unbelievable but in China, it seems that the cities were self-sufficient until fifty years ago. They were actually growing enough food in the cities to sustain themselves, because of the garden systems, so what I am saying is that people will naturally look for localised peer to peer inspired alternatives to solve their practical problems. So we’ll still have peer to peer. So notice, the only scenario I am not adding is no peer to peer, because I think that is totally unrealistic. So we will have peer to peer, the question is: with how much dislocation is it going to be accompanied? I’m hoping, I am rueing for Obama, however na├»ve that may sound, but if not, we will just have to continue what we are doing, which is building the new society in the old. That’s what we are doing. We are building the template of the new within the old society so that when the global system collapses, the alternative template is there, right? And this is what the Frankish invaders did: basically the state was gone and they made a deal with the church, which became the template of the new system. Thank you very much.

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