Commons and Blockchain

Parallel 38°
Oct 4, 2018 · 8 min read
Fire side chat in Commons Foundation lounge.

Michel Bauwens, founder of P2P Foundation, had a fireside chat in the Korea office on Oct 2. Titled “Blockchain and commons, the connecting link” the discussion focused mostly on the origin of commons and the open source movement.

Michel Bauwens interview in Germany during the meetup of PlatformCoop-Berlin

Below a partial summary of the lecture. For the last decade the Belgian activist has been researching how open source communities work and function. Market economies and capitalism are fundamentally based on the double entry ledger accounting, separation of capital and labor, private corporations, financing as well as technological breakthroughs from steam engine to internet. Open source communities are permissionless aggregations of people working on common projects, based not on commodity or labor, but based on contributions to create shared resources. These free aggregations around mutualized resources have no command hierarchy, but only a control hierarchy (i.e. there are gatekeepers, often called ‘maintainers’, who protect the integrity of the ecosystem). Open source communities are more inclusive, but also more competitive at the same time. When innovation becomes collective, they can outcompete isolated private companies, having more global and broader base of contributors than any single R&D department, no matter how big the company: e.g. Wikipedia is an open source encyclopedia that can not easily be replicated by private enterprises, nor even by the state. Commons are shared resources, managed by stakeholders or the communities of contributors in peer to peer (P2P) networks and governed by the norms and rules of the communities they serve. Primary ways people interacted through history were commons as in clans and tribes of the premodern collectivism era and later with corporative guilds in twelfth century Europe. According to Mr Bauwens capitalism deprived commons of natural resources: for example the common land in agriculture has seen its spaces appropriated through private property, while the excess number of landless farmers were forced to migrate and develop the industrial cities. There are four phases or types of commons: natural resources, social, open knowledge and urban commons. The latter are recently increasing exponentially in mobility, housing, food and energy projects to such an extent they are present in nearly every provisioning system where citizens can now choose between private, public and commons options. For example, in mobility there are private cars, public transportation but also shared transportation systems such as nonprofit or cooperative car-sharing; similarly for housing there are privately owned houses, public housing but also social or cooperative housing. When and where markets and states fail, civic associations are created to cope and this is what happened after the crisis of 2008, when urban commons started mushrooming. Urban commons are not generally producing but usually only redistributive initiatives, for example car sharing solutions redistribute mobility, but do not yet make cars. However food and energy commons are the two exceptions: organic agricultural commons do not split between consumption and production, but use commonly managed ecosystems, while renewable energy localize energy production closest to where consumption is needed. “Cosmo-local” production system can be simplified as follows: “everything light is shared and global, everything heavy is local” says Mr Bauwens. In this model, there is a convergence of social commons with the distributed manufacturing systems, that are currently coming online with the new technologies around 3D printing and which is distinct from the protectionist economic agenda of the Trump administration to repatriate manufacturing factories back to the US. In the cosmo-local model, intellectual property (IP) is globally shared in global open design communities.

, How the blockchain will radically transform the economy — TED 2016

“What do you need to do to scale this system globally?” Open source already means the cooperation and coordination of immaterial production at global scale, but in order to shift this model to physical production, it is necessary a particular kind of knowledge intermediation, i.e. accounting, and this is where the blockchain revolution comes in, by making possible global open and shared distributed ledgers where every transaction for physical goods can be verified. Accounting is at the core of civilization as it created the state system (the first writing found where ledgers in the Temple states of Sumer), while double entry book accounting, invented by , a Franciscan monk in 15th century Venice, sees the world in terms of the growth and accumulation of private assets, making possible the development of capitalism. Blockchain in this respect can be seen as making possible new forms of digital accounting that consist of ‘post-double-entry’ bookkeeping, namely: 1) open and contributive accounting (such as practiced by the Canadian project), 2) (resource event action) ecosystem accounting, which let us see flows in shared circular economies involving multiple players and 3) biocapacity accounting, which is based on direct vision of the flows of matter and energy and therefore not only financially driven. Open shared ledgers are a key mutual coordination mechanism to shift open source coordination from software to manufacturing. This contributive accounting allows fairness, openness, transparency, security and environmental friendliness. All the necessary technologies and tools are already existing or in development, but are fragmented and not integrated yet. One P2P interoperable ledger for all could be scalable infinitely if it used the right distributed ledger technology. Asset based coins and mutual credit cryptocurrencies are necessary, since they link directly to natural resources and human labor, while purely supply-demand driven digital assets are mostly speculative and do not give a view of the real world.

, How the blockchain is changing money and business — TED 2016

“How do we reward for these structured regenerative activities?” Capitalism rewards only extractive activities without consideration for externalities (in Microeconomics courses externalities are studied as cases of market failures). In welfare state model the state is outside the capitalist model, in a market model the role of the state is weakened even further. One solution could be to internalize externalities directly in the production system. Mr Bauwens mentions that a study on the top forty companies in France revealed that none of them would be profitable, if they internalized pollution costs. As an example of a potential alternative methodology to fund regenerative activities in a systematic way, Mr Bauwens mentioned the , which proposes the concept of an “ecological state protocol”, verifying the state of an ecological resource, lodging it on the blockchain and tokenizing that value creation. For example, organic farming results in less polluted water, with water agencies saving millions of Euro, but these environmental benefits cannot be rewarded in the present system. There is a need for structured funding of regenerative work and activities, that minimize the human impact on the environment and reduce the use of limited natural resources. Market economies reward only values created within markets, redistributing them in the best case scenario, while other kind of values are ignored. Value creation should be centered around commons.

“What to do with the private sector?” Societies need to establish new economies for the common good, which can be made explicit with new indicators and metrics [Economy for the Common Good (CG) has developed a full CG financial reporting with balance sheet and a whole new more ethical economic model]. Economies should serve communities as constitutions already mandate that the economy should serve the common good : e.g. corporations performing common good results could be entitled to pay less taxes. “In France the Napoleonic code established in 1804 did not recognize commons, allowing only public or private aggregations; in US, whose legal framework was developed later in time, regulations are even more purely market based” said Mr Bauwens.

has developed a full CG financial reporting with balance sheet and a whole new ethical economic model

Capitalism is in structural crisis amidst combined environmental problems and social tensions (increased income inequality and youth under/unemployment). Mr Bauwens suggests that capitalist market economies should transform in ethical market economies, in which markets are embedded and society functions around commons: if the final goal of companies is to maximize value for stakeholders, the definition of value should not be restricted to profits, but include broader social and ecological impacts. States should also facilitate the transition to commons oriented sharing economies without commanding, but by incentivizing mutualization in a shared and contributed way. A non profit car sharing program requires only one hundred cars for one thousand persons, ceteris paribus guaranteeing full mobility with only 20% of the ecological footprint.

“What to do with the liberated resources from automation and optimization?” Basic income could be an alternative, although commons economies can redeploy work forces in different sectors: e.g. organic farming requires 12% of workforce in the countryside, compared to the current 2% occupied in the agricultural sector. According to Mr Bauwens organic small sized farming is profitable or breaking even, while extensive industrial farming is losing money (he says in Europe industrial farmers would have negative incomes without European subsidies, a statement to be verified). “How to drive the transition from market centric to commons centered societies and economies?” To indicate the potential speed of change, Bauwens says that guilds in the twelfth century Europe were formed in the span of seventy years, for example in Ghent a progressive and innovative area in Belgium. Today digital nomads are spread around the world, collaborating in co-working spaces scattered globally: in Thailand (where Mr Bauwens lived extensively in) there is a community of open source activists and software developers of the Mozilla Foundation for instance and many are already making a living through the token economy or bounties. This under the radar trend may transform from translocal civic power to a transnational one, aiming to change entire metropolitan areas: redefining societies and economies in two hundred cities can have eventually a global impact. Mr Bauwens is convinced that shared economies are scalable and replicable anywhere, leading to a broader social change. He stresses that commons are not utopia, commons are not necessarily ideally inclusive and the network status of individuals can be fluid, contentious and difficult: but even if they are not ideal, they are necessary to transition to new systems.

Michel Bauwens: Are We Shifting to a New Post-Capitalist Value Regime? — Berkman Center for Internet & Society at Harvard University.

The two hours dense of unconventional and anticonformist concepts and ideas from different fields (anthropology, history, economics, finance, sociology and technology) provoked many questions in the participants, but time was limited and translation consumed more than half of the time available. However good discussions usually end with more open questions than definitive answers, in this respect the fireside chat with Mr Bauwens was very insightful and stimulating to maintain a sane about the future: to suspend judgement and keep on searching.


Article revised on Oct 9 by Michel Bauwens and Ann Marie Utratel to clarify some of the point of views expressed during the lecture and following Q&A discussions.

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