Economic inclusion
Value of production
Creative productions are increasingly moving to crowdfinancing platforms to fund their activities. In these platforms productions show themselves as pre-offering/sale of products. Via this form of offering myriad kinds of most bizarre productions have been able to bootstrap themselves into existence. The success is partially a result of the capability of offering ideas to be valued directly by end-users who value the production itself and not the monetary return that it may produce. This is opposite to the scenario where projects pitch themselves for investors who are after monetary return and who evaluate the risks of projects in monetary terms. In crowdfunding, ideas are evaluated and valued within the subjective perception of value by the end-users whom the product serves. Its almost cutting away the middleman (financier) who makes production decisions based on ROI. With this paradigm shift the rules of financing can change when financing as activity is not about evaluating risks of monetary success but rather about being enabler for things that matter for people. The shift is in the operative framework for value.
Networks
This is of course not rocket science. It has always been possible to have an idea and offer consumer products or services based on the idea. This is how businesses operate in consumer society. For instance, if John want to bake he can bake breads and offer them as end user products at local shops or sell directly to people passing by he’s bakery. Things get a little bit more muddy if John has an idea for a groundbreaking musical instrument that he tries to offer. This is because it is not very likely that many people in the local area are interested in groundbreaking musical instruments. This is not say that groundbreaking musical instruments would be nonsense but just that their end user based is narrower. This is where digital platforms such as Kickstarter and indieGOGO have made it possible niches to come together and make things happen.
Relation to production
Pre-buying in crowdfunding gives value for ideas and makes them possible, but it is limited to a producer-to-consumer relation. It means that funding the production is same as consuming endproducts (consumerism) and therefore there are no economic reasons for people to fund more than their personal demand even though they would want to support or enable the idea more. Enabling a idea above individual demand would be “altruistic” support i.e. donation. Problematics in donations is that they don’t create reciprocal economic relations (no economic feedback) and therefore are not desirable or even feasible for masses. In current economics if people would be donating to all the thing that they like and want to see happening they would simply be bankrobbed.
Producer-to-consumer relation results as interest network´s economic capabilities reduction to 1 peer = 1 product which to enable certain production requires very generalised idea (lack of novelty) or sky high product price. Current mode of crowdfunding is also problematic when the value of the production is difficult or impossible to be predetermined by financial terms that follow from immediate product sales. This is especially true for creative productions where value giving networks can emerge over time and utilise the production by using, re-using, interpreting, remixing and copying it in ways which can not be anticipated.
Businesses have tackled this issue by publicly offering stakeholding/equity from themselves in addition to offering sales profit producing consumer products. In this way, peers become stakeholders of the organization and share the emerging economic future of production. By becoming a stakeholders, the peers are not anymore consumers (creating value for organisation by buying its commodity) or workers (creating value from work) but rather producers who give value to production itself.
In the industrial era, issuing shares has been limited to companies and the offering of stakes (shares of company) has abstracted productive capital into financial instruments/relationships. This model has become obsolete, since forms of value creation in the knowledge economy are not subject to value creation from end-product consumption, but rather rely on the “consumers” participation in the value creation. For instance, content produced on digital platforms is created and valued by users. The value of the content is in flux and based on the attention that it gathers — which again has led to apparently free products which extract value from attention via making attention itself a commodity. This means that information as product can not be valued as commodity that has a predetermined value based on production costs. Rather, the value is generated by attention which is generated by the “workers” (users of platforms) — who, in turn, miss the upside of this production of attention.
Building new relations
The limitations of production are now changing via decentralised technologies. Offering economic stakeholding is not anymore limited to offering a speculative financial share of the company but can mean offering the intrinsic value of production (use value) as stakeholding. This merges the ideas of investing into productive capital (financial value) and acquiring a product (intrinsic value for user) into a new form.
It would be interesting to offer creative productions like books, games, videos/films, music as partnerships for users who then become stakeholders in the production whose value they create by acquiring and using the end product. This type of offering is already used in token offers (ICOs) such as the one by Ethereum which offer tokens that can appreciate in value as well as carry the use value of a product (gas). Basically these tokens represent both “product” (use value) and equity (financial value). Over time people who have acquired these tokens can use or liquidate them with a market value. This is almost like acquiring 10 books or pieces of film instead of 1 to enable the production of it, but also to allow the rest of the acquired products to be liquid in similar manner as shares of company.
Joining in
An emerging stakeholder network can also have a role in the governance of the production itself. For instance, if the production is a comic book, the stakeholders could join in the design of characters, visuals or agenda (to name few) and have an effect on the value of production. These models mean that the value that the production is going to produce is dependent on the networks co-productive capability. Basically it is possible for the governing network to turn the production into something that no one else is interested in and diminish the possibility of token value appreciation, but still create something that corresponds 100% of the token holders.
Offering productions in this way is therefore a question of designing organisations and processes for creative cooperation. The landscape of these organisations can be anything from fully artist centered/driven to completely distributed ones where an artist/artists merely facilitates the process. These two polarities could be seen as 1. distributed network where creativity is in the center and governing the production (whose value is recognized surrounding network) and as 2. a decentralised network where each individual user governs and values the production equally.
The latter case raises a political question of power relations. In typical organisation models people who have more financial stakes in play also have greater power in the governance. The problems of transporting this type of power asymmetry in to creative p2p organisations must be taken seriously and new type of governance models are to be considered when designing organisations for economic cooperation rather than offering end products. In most cases, the emerging network is sharing an interest/affect in the intrinsic value of the production and the financial success that it may bring. Therefore the quest for designing these organisations is about economic inclusion.
Thanks to Tere Vadén and Esko Kilpi for collaboration around this article.
