Michel Bauwens is the Founder of the P2P Foundation. He presents a 30 minute keynote entitled “Infrastructure, Communities and Corporations: is There a Middle Way Between Open and Closed?” at the Emerging Communications (eComm) conference held in Mountain View, California, on Friday 14th March 2008. Telecom operators take note!

As a frequent speaker on peer to peer issues, there is always a temptation to settle into routines, and if you do so many lectures, there is always a danger that your memory turns originally distinct experiences into a single blur.

There is one event in the year where I think this will not happen, and these are the memorable experiences of the annual gathering of the Center for the Experience Economy.

I attended last year’s event more intensively than my shorter stay this year, and I still remember it as one of the most convivial learning experiences that I have been able to attend. The setting, the beautiful Castell d’Empordo in the Spanish/Catalan countryside around Girona, certainly plays a role, perched as it is above a splendid valley. Albert Boswijk each year assembles the most interesting combination of pioneers in the field, and the limited number of attendees guarantees that the exchanges are continuous and intensive. Last year I remember especially a Dutch restaurant owner preparing dinner in a balloon, and one of the highlights was Mark Hansen, director of Business Development at Lego, who has been focusing his life’s work on spurring co-creation processes between Lego as a corporate community and the legions of fans that are normally operating independently of the company. This year Mark Hansen gave us an equally fascinating account of his progress. I have no longer any doubt that Lego is simply, at least if Mark’s projects can be further carried out, the paradigmatic example of the mutual adaptation of a business with its surrounding communities. Rather than prohibiting user involvement, Mark’s instinct go into the opposite direction of learning to tap further and further into it, and to develop mutually beneficial relationships.

I would like to recall my own Three Laws of Co-Creation.

Law 1 states that any for-profit company that uses closed proprietary content, and excludes participation, will tend to loose from competing for-benefit institutions that can count on a community of voluntary contributors and uses open proprietary formats.

Law 2 states that, when two for-profit companies are competing, the one opting for open and participatory strategies will outcompete those who do not adopt such practices.

Law 3 states that communities of peer producers which successfully can ally themselves with an ecology of business practicing benefit-sharing with the commons they are deriving value from, will be more successful that those that remain isolated.

In his presentation, Mark Hansen first highlighted the 3 communities that play a role for Lego: the young kids, the mature community of almost exclusively male enthusiasts, and parents/mothers as gift givers. Lego’s first experience with co-creation was when it decided not to fight Lego Mindstorm hackers, but to honour their innovation; Lego has now instituted a formal Mindstorms NXT Developers Panel which selected 100 of 9600 candidates, but Mark is now convinced that this process has probably been too selective and that the company should have a even more inclusive process to tap into the co-creative processes.

Lego is also surrounded by an enormously active constellation of Lego User Groups (for example LUGNet), which operate totally independently of the company, and exchange and show designs amongst themselves. This is of course a prototypical example of peer producing commons-oriented fan communities at work.

Mark was then instrumental in developing the Lego Factory model, which is a crowdsourcing model, whereby the creativity of users is integrated within Lego’s own value chain. Fans can design new kits, post them on the site, where they can be ordered. Lego produces and distributes the kits, but giving the fan-designers a stake in the sale (5%).

Mark has a vision of the evolution of user involvement which is very congruent with my own ladder of participation modeling of open business models.

He distinguishes the following phases:

- LEGO developed + LEGO Published, the classic consumption model

- Co-developed + LEGO Published, co-design

- User-developed + LEGO Published, Lego is here only a platform for user-design (Lego Factory)

- User-developed + User published

- User enterprise + LEGO supported

We could argue about the logic of the last two phases, and it would be legitimate to consider that user-development/publishing is the more logical endpoint, but the logic of temporality is correct. Indeed, peer communities are not waiting for the corporations permission to do their own thing, but businesses can then subsequently adapt, and become a platform of support and development which users can use to develop their own enterprises.

LEGO has not undertaken the last step, but Mark then showed an advanced prototyping of the very ambitious virtual world system that LEGO will be launching soon, i.e. Lego Universe. It will offer a combination of already prepared worlds, but also allow for new universes to be created by users; and there will be ultimately a full integration with production capabilities which could be user-initiated. In other words,it will be possible to physically produce successful virtual user-led creations.

If LEGO pulls this off, it will really have established itself as the paradigmatic example of business adaptation to the challenges and opportunities presented by the emergence of peer production.
Because LEGO is very much a physical product, it gives us an early indication of the interplay between design by open communities, and the physical production processes undertaken by companies.

These were not the only interesting presentations at this year’s gathering, but because of my shorter stay, I only witnessed only two other highlights. ID & T and Q-Dance showed how a dance event which can attract up to 60,000 participants (Sensation White) can become an instant success (tickets are sold out almost as soon as the date is posted), can achieve such a traction with internet only communication amongst targeted micro-communities, while Olaf Boswijk showed a beautiful example of benefit-sharing by a corporation. The Red Bull Music Academy is an annual gathering of young deejays and older legendary musicians which is meant to repay the dance communities that established the success of the brand, which does not stress any public brand advantages but rather a general support for cultural and creative development, that creates a strong network amongst the participants and creates long-lasting cooperative and creative projects.

Writer Micheal Edwards’ recent book www.justanotheremperor.org/ takes a critical look at the hype surrounded the emerging phenomenon that some are calling “philanthrocapitalism”: using business and market systems to affect social change. The main criticism from Edwards can be summed up in his opendemocracy.net article:

“My worry is that the hype surrounding philanthrocapitalism will divert attention from the deeper changes that are required to transform society, reduce decisions to an inappropriate bottom line, and lead us to ignore the costs and trade-offs involved in extending business principles into the world of civil society and social change. I’m concerned that these questions, and the evidence that underpins them, are not being given a fair hearing. And I want to provoke a conversation in which different positions can be aired and listened to. The only way that philanthrocapitalism will be able to fulfill its considerable potential is by moving beyond the hype.”

Mohammed Yunus has also recently written a book that looks at how Social Enterprise can affect change. Yunus argues:

“The social business dollar is much more powerful than the charity dollar [..] Whereas the charity dollar can be used only once, the social-business dollar recycles itself again and again, ad infinitum, to deliver benefits to more and more people.”

Although, I’ll also point out that Social Entrepreneurship is different than “Philanthrocapitalism”. Social Entrepreneurship as discussed by Yunus covers many scales, from small to large business. While, “Philanthrocaptialism” is defined by Edwards as:

• “Resources: very large sums of money being committed to philanthropy, mainly the result of the remarkable profits earned by a small number of individuals in the IT and finance sectors during the 1990s and 2000s.
• Methods: a claim that methods drawn from business can solve social problems, and are superior to the other approaches used in the public sector and in civil society.
• Achievements: a claim that these methods can achieve the transformation of society, rather than increased access to socially-beneficial goods and services – a noble goal for sure, but insufficient to lever deeper changes in the distribution of power and resources across the world.”

Both Edwards and Yunus appear to be right, in my estimation. Yunus is right that there is much power in entrepreneurship, in the freedom to create wealth for yourself and others. Yet, Edwards is right that (in my words) there is also a huge machine, which is a combination of broadcast media corporations, and a plethora of big businesses and wealthy people around the world, that seek to co-opt social emergences, so as to funnel money, human energy, and control over domains towards their market corrals.

This is nothing new. With every social movement, from the early 1960′s, to the “creative class” of the early 2000′s, there have been people trying to capitalize on, and co-opt the symbols and energy of emergent social movements. (see www.press.uchicago.edu/Misc/Chicago/259919.html for a look at the origins of the phenomenon). Social entrepreneurship, or “philanthrocapitalism” is really no different. When a social phenomenon starts out in a “democratized” way (as they often actually do), meaning that most, or all of the building blocks are already present for individuals to participate in self-sustaining ways, that would let people bypass or obsolete their need for mass pre-produced solutions, the big companies must act to keep people buying something, or risk being obsoleted from their lives. This basically means that corporate spending of public money is sold to the public as a project to make it easier for them to be more “creative”, more socially or environmentally responsible, or more philanthropic. This, I believe is the danger that Edwards is warning us about. That we’ll just leave it up to “business” to take the lead in social enterprise.

The problem is that when we leave social transformation to business, we end up with a society that is structured by the principles of business management. Edwards’s book contends that there is evidence that the mission “drifts” away from social change, and towards profit, efficiency, and sometimes corruption. What is lacking in these situations is a social basis for social change.

The market, and while being a powerful force, is no basis for sustainable social change. The atomization of business infrastructure to an individual level is but one building block towards real social change that is enabled in part by social enterprise. The next step is the atomization of social infrastructure. People must learn to cooperate and collaborate together in equitable ways. People must learn to co-manage common infrastructure, and common resources in a democratic and transparent way. Accessing and employing the efficient production and distribution systems of business and the market is not enough. Those who rely on those systems must also have co-control of them.

This means that everyone in the “chain” gets a say, from grower/builder/laborer, to the person that buys a finished product. This means that a person’s “job” is not just to specialize in being a lawyer, baking bread, or hauling garbage, but also in direct civic participation and oversight of the systems that feed, clothe, and house you. How can you know that the companies your are buying from, or are employed by, are working equitably? You are involved in making sure that they are. Adam Arvidsson’s Valuing the Ethical Economy offers some deep insights into how this is plausible. Adam writes:

” What creates these ethical values? They are not the direct results of investments in labor time. You can work as much as you want on your music and style, that, in itself will not make you a rock star. Rather, suddenly something happens and then, you’ve made it. What determines your value are the quality and quantity of affect (attention) that you have been able to accumulate. The relation between the productive time invested in a project and the mass affect that it is able to attract is non-linear, or viral, to use a popular marketing term.[2] Models could be found in contemporary mathematical theories of network dynamics, and perhaps in Gabriel Tarde’s theories of the role of public sentiment.[3] Indeed, the logical relation between value and labor is rather the reverse of that usually associated with the capitalist economy. Once you have a sufficiently attractive brand, you will attract an abundance of free labor as well as other resources. Linux has no problems recruiting new programmers: people want to work for them for free; people pay to use brands in their everyday life and thus freely co-produce their ethical value through their constructive consumer practices. On financial markets, capital flows to the most attractive brands. More means more in this case, if you have accumulated a significant stock of ethical capital, people will freely give you their time and further attention, or, on financial markets, their capital.”

To sum it up, in order for markets to really help change society, we first need to create social infrastructure that allows us to value the ethical capital of the companies that we are doing business with. We need to democratize and equitably control these infrastructures on the level/scale of voluntarily cooperating and collaborating individuals. This will then create a conduit of ethics, and social focus, through which we all can pursue market exchanges. Markets measured against our real social interests, not just made to appeal to our base needs, or fool us into thinking they will solve our social problems.

See also:

• p2pfoundation.net/Civil_Corporation
• p2pfoundation.net/Civil_Regulation
• p2pfoundation.net/Collaborative_Standards_Initiatives

“Matt Mason’s keynote on The Pirate’s Dilemma, his book on how to compete with piracy, filmed at The Medici Summit, March 3rd 2008, Scottsdale, Arizona. Mason discusses why piracy can be an opportunity as well as a threat, how pirates innovate outside of the marketplace and how legitimate businesses can respond. Using examples from music, fashion, software and the video game industry (to name just a few of the topics covered), Mason makes the case that it is possible to beat pirates offering the same products for free, and that when pirates are adding value to society in some way, society will get behind them, at which point the only way companies can beat them is by compete with them in the marketplace. More on the book here: www.amazon.com/Pirates-Dilemma-Culture-Reinv“

We’ve never even talked about Clay Shirky’s landmark book Here Comes Everybody. I guess the reason is that it was already so present everywhere, that I did not feel it needed added backup from our own limited means.

Nevertheless, it is of course a hugely important book. To give you an idea, here Clay introduces the idea of the cognitive surplus, the huge amount of free cognitive time that was previously unavaillable, which becomes wasted at first, but when it comes truly into awareness, creates deep transformatory pressures in society.

The entire lecture this is coming from is a gem, we recommend reading it whole.

The cognitive surplus:

“So how big is that surplus? So if you take Wikipedia as a kind of unit, all of Wikipedia, the whole project–every page, every edit, every talk page, every line of code, in every language that Wikipedia exists in–that represents something like the cumulation of 100 million hours of human thought. I worked this out with Martin Wattenberg at IBM; it’s a back-of-the-envelope calculation, but it’s the right order of magnitude, about 100 million hours of thought.

It’s also become my motto, when people ask me what we’re doing–and when I say “we” I mean the larger society trying to figure out how to deploy this cognitive surplus, but I also mean we, especially, the people in this room, the people who are working hammer and tongs at figuring out the next good idea. From now on, that’s what I’m going to tell them: We’re looking for the mouse. We’re going to look at every place that a reader or a listener or a viewer or a user has been locked out, has been served up passive or a fixed or a canned experience, and ask ourselves, “If we carve out a little bit of the cognitive surplus and deploy it here, could we make a good thing happen?” And I’m betting the answer is yes..”

Does peer production hamper the monetary economy?

With Adam Arvidsson, I have been developing the concept of a crisis of value that will increasingly affect the workings of the current money-based system. The way I interpret this trend, is that while peer production causes the creation of use value to grow exponentially, only a part of this is being transformed into monetary value.

Yes, peer production creates value, and yes, a commons usually does create an economy around it, but the kind of value created tends to escape the confines of a capitalist economy.

This is both good and bad news. Value creation is of course good for a society, and current economic players have but little choice to engage in the various forms of social innovation that are emerging, but when that value cannot be captured through the main economic mechanisms, that does create a problem.

The problem is in a nutshell that the new forms of value take an overwhelming post-monetary, and hence, post-capitalist form.

Classic companies are endangered by the new practices, and peer producers do not get adequate benefits to sustain their practice.

I feel a recent number of reports strengthen this case, so hear me out while I marshall the evidence, proving both sides of the argument.

1. On the Use Value Creation side

First of all, a recent study confirms that free and open source software is growing at an exponential rate. It’s not a fluke.

Researchers Amit Deshpande and Dirk Riehle from SAP Research find that ” find that both the growth rate as well as the absolute amount of source code is best explained using an exponential model.”

This confirms the thesis of the exponential growth in use value production. Equally on the positive side, even open source hardware business models can now be adequately explained. See Edy Ferreira’s take in the April 2008 issue of the Open Source Business Resource. We can see this as confirmation of the creation of business models around the commons

2. On the Exchange Value Crisis side

However, the crisis of value thesis seems confirmed by the two following items.

Open-source software is successfully displacing proprietary applications in many large companies and eating into the annual revenues of proprietary software vendors by $60bn (£30bn) a year!!

According to the study from the Standish Group called Trends in Open Source , released this week, the losses of proprietary software makers are disproportionate to the actual spend on open-source software, which is a mere six percent of an estimated worldwide spend of $1 trillion per year. The researchers put this difference down to the fact that a large proportion of open source isn’t paid for, an intended result of the open-source licensing structure.

This is a rather striking confirmation of the crisis of value thesis, I would think, in line with Adam and my expectations.

In an earlier intervention, we pointed out that in peer production, being an entrepreneur is divorced from the need to be a capitalist.

Boing Boing gives ammunition to this thesis , citing a Wired article , that concludes that ” Internet startups are so cheap to do these days that venture capitalists can’t find enough companies to take their money — it’s easier just to self-finance or raise the dough from friends and family”

3. Conclusion

1. Peer production creates exponential use value generation

2. This creates a certain amount of monetary value

3. But most of the created value is non-monetary

4. The monetary stream thus created may not compensate for the disruptive effects amongst pre-peer production economics

All of these points do not invalidate the law of asymmetrical competition that companies adapting various aspects of peer production will be more competitive that those who do not, and that the former will capture more of the derivative exchange value thus created, harming those who cannot.

But on a macro-scale, our societies need solutions that allow for the social reproduction of the peer producers, since the major part of the use value creation may not be naturally ‘monetized’.

My computer finished downloading the Graffiti Research Lab Movie Sunday morning. I stuck it on for a quick look and ended up watching the whole thing. The film is a testament to the cultural value of the hacker ethic and a free and open source approach in cultural production. GRL are an art group dedicated to outfitting graffiti writers, artists and protesters with open source technologies for urban communication. After quiting their ‘proper jobs’ Evan Roth and James Powderly founded The Graffiti Research Lab while working together at the Eyebeam OpenLab.

Eyebeam Mission Statement
“Eyebeam is an art and technology center that provides a fertile context and state-of-the-art tools for digital research and experimentation. It is a lively incubator of creativity and thought, where artists and technologists actively engage with culture, addressing the issues and concerns of our time. Eyebeam challenges convention, celebrates the hack, educates the next generation, encourages collaboration, freely offers its contributions to the community, and invites the public to share in a spirit of openness: open source, open content and open distribution.”

The Graffiti Research Lab approach the idea of graffiti in its widest sense. To give an example they make a really nice analogy in the film between street artists and hackers. “Hackers treat software the way street artists treat the city, they look for these systems they identify them then flip them a little bit to tell something that the city didn’t intend to tell”. Disrupting the flows of everyday life through creative and playful intervention, without seeeking permission.

In the spirit of openess the GRL publish the instructions and source code for their projects on the GRL website. The site lists many projects, some of the better known being ‘Throwies’ and ‘Laser Tagging’.
GRL invented ‘throwies’ a simple combination of an l.e.d with a battery and a magnet, colourful little lights that can be thrown in large amounts onto metal surfaces in public spaces, they can also be used to make images or text.

GRL also developed the amazing laser tagging system which allows for street artists to write or draw straight over the entire surface of a large building using a laser and a projector.

Publishing, sharing the know how to these projects online, putting it in peoples hands the projects and ideas take on and evolve a life of their own. This is one of the greatest things about the free and open source approach. However there is a flip side to this, which has been discussed on this blog before, that is the problem of the appropriation of commons based production by commercial interest. In the movie GRL discuss how big business has appropriated their projects for advertising and commercial purposes. Marketing strategists deperately looking for novel and fashoinable trends to associate their products with, paid to tune into whats happening on the ‘street’ twist what begin as antagonisitc counter cultural strategies to serve commercial interests. As soon as anything goes public it becomes vulnerable to appropriation and exploitation. Its perfectly legal for corporations to take innovations from the commons and alter it to suit their interests, but the opposite is true for the public for whom remixing innovation from the IP regulated domain of the corporations is illegal. This is not a two way conversation. Public space is contested space which in actuality is not public at all, but commercial space regulated on behalf of commercial interests. This needs to be challenged. GRL responds to this with further counter strategies and have declared a war for open urban space, on the logic that if street art and graffiti are illegal then advertising which appropriates the aesthetics of these art forms should be made illegal too.

Creative subversion of the status quo and the magical transformation of the everyday must go on.

To download the film and find out more about the GRL check out graffitiresearchlab.com/

GRL: The Complete First Season premiered at the Sundance Film Festival in 2008 and
will make its NYC premiere for PopRally at the Museum of Modern Art on May 4th @ 8PM + PARTY after the flick with Javelin and special, special guests.

From Kasper Souren:

“You heard about the SHE-conference? SHE stands for Sustainable Hospitality Exchange and is a conference that organised during the last weekend of June in Amsterdam (27-29 June). It is based in a local former squat that can host a hundred people and more. The goals of SHE is to increase exchange of knowledge on the different hospex-networks around the world & foster debate and change.

SHE wants to be an open-space conference on topics related to hospitality exchange. SHE wishes to enable face-to-face debates and workshops on how these networks are run, on best-practices, on volunteer-work, on empowerment, on community building and all other related topics. In addition, SHE also wishes to connect the praxis of hospitality exchange to a wider framework of cultural exchange, gift-economy, trust-metrics, sustainable traveling and living a joyful life because above everything SHE wishes to create the debate: what do we mean with sustainable hospitality exchange?

In the end though, SHE is how you envision her. Look her in the eyes and think what you could do with SHE! Imagine a space with enthousiastic people who are very eager to hear about the history of Hospitality Club, Couchsurfing & Bewelcome, as well as Servas and other networks of hosp-exchange. Imagine an open podium, space for art-installations & great food, a self-managed bar and lots of nice people that want to live & learn by sharing.

SHE is curious to know if you are interested. SHE is really looking forward to hear from people such as you to start thinking what you would like to do with her. Would you for example like to facilitate a workshop on any of the topics related to SHE? Or do you have any other groovy ideas that SHE might benefit from? Of course you do!

Workshops that SHE is already envisioning are for example: experiences on volunteer work, how to build up a local hospitality exchange community, sustainable traveling and hitchhiking, trust, hospitality exchange and money system, free software and coding, salsa, cultural western-centrism, history of any given network, et cetera.

The space for SHE is already organised. It has lots of room for plenary sessions & workshops. There are tables, chairs, a bar, a dj-set and a podium as well. But SHE also already exists in wiki-space. So why don’t you start getting into SHE? You can check her out for more information. You can also edit the pages and give your input straight away here.

For now SHE is being facilitated by a small but committed group of people who would love to hear from you. Please write SHE-assistants Kasper (kasper.souren@ gmail.com) or Robin (robokow@gmail. com) with your ideas and forward this e-mail to good people.

“Last week Tennent’s Lager launched Tennent’s Mutual, a new music venture that will ultimately result in a live music festival this fall, in which fans select artists, debate locations for gigs and call the shots on ticket prices. To kick off the effort, Tennent’s created a start-up fund of GBP 150,000. Fans who sign up before June 30th will be given founder member status and the right to vote on the “who, what, why, where?” of all decisions as to how that start-up money is invested. Counsel will be provided by the Rolling Stones’ Andrew Loog Oldham, Babyshambles’ Drew McConnell, journalist and broadcaster Keith Cameron, former Scots chart-topper Ken McCluskey and local musicians Stewart Henderson of Chemikal Underground and Johnny Lynch of The Fence Collective. Tennent’s Mutual is a not-for-profit enterprise, and no booking fees will be charged for shows. Ticket income, meanwhile, will be ploughed back into the central fund, creating a self-generating amount that will grow and continue to create yet more live events.

Chemikal Underground’s Stewart Henderson puts it nicely: “Generally speaking music has gone digital and you can’t put the genie back in the bottle. This is a total watershed time that we’re living in at the moment. It will change things completely—irreversibly. What Tennent’s has done is they’ve effectively set themselves up as patrons. It’s a positive thing as it allows things to happen that may not have otherwise.”

As fans and customers claim increasing control in the music industry and beyond, it’s a smart brand that will jump to the forefront with funds and a supporting model. Imagine the transformation in Microsoft’s image if it ponied up the funds and let users decide how they were spent! It’s just a matter of time before this comes to other countries and other industries; who else will stand up and be an early leader?”

I remember drinking Tennants beer as a young lad in the UK and especially remember Tennant’s Extra. It tasted disgusting and was a high alcohol percentage, which i think only drunks would choose. Random association complete;)

via Spingwise

tennentsmutual

And of course a link to the software, now available online, as a web application: Gap Minder. Also, not surprisingly, Hans Rosling’s Gap Minder software was bought by Google in 2007.
via TED