When Capitalism Ends and P2P Markets Thrive

MIT's Club of Rome report this past April confirms Bauwens' dire predictions and warns of a 'Great Crisis' by 2030, at which time, they claim, there will be no oil, no fertiliser, no industrial agriculture and all the compounding problems this lack of resources will bring.

By | Thu 26 Apr 2012

Chiang Mai resident Michel Bauwens, is listed 82nd on the (En)Rich List, which “celebrates a wealth of inspirational individuals. Collectively, the people highlighted […] present a rich tapestry that points to globally prosperous and sustainable futures.”

Unlike the Forbes rich list of billionaires, this lesser-known list spotlights the endeavours of people who look towards the future – thinkers, economists, philosophers, journalists, sociologists, religious leaders – people whose ‘richness’ are not defined by their bank balances, but by what they can offer back to humanity. Belgian Bauwens’s name sits alongside such icons as Mahatma Ghandi, Eleanor Roosevelt and the Dalai Lama, as well as being amongst equally obscure, but no less impactful individuals from a variety of fields.

Co-founder of the Foundation for Peer-to-Peer Alternatives, which researches peer production, governance, property and the open/free participatory modes of human cooperation, 54 year old Bauwens is a theorist, writer, researcher and conference speaker on technology, culture and business innovation.

“After working in the corporate world for many years, I burned out, or it was a midlife crisis, I am not sure which, or maybe it was both,” Bauwens said of his move to Chiang Mai ten years ago, where he is now married to a Thai lady and has four children. “I got dissatisfied with corporate life and decided to do something different. I saw that the internet would change the world, cutting out intermediaries and allowing us to talk on a horizontal basis. My foundation has a new model to envision business. I call myself a civic entrepreneur.”

“We at P2P are philosophical and social critiques,” continued Bauwens. “Our analysis is that nature is finite; but capitalism treats it as if it were infinite, and therefore energy and resources will inevitably be depleted. Most of us are contributing to these problems, but while a few are finding solutions, often they cannot be shared because of intellectual property rights. There is, in general, a strong consensus among researchers and theorists around the world in these principles: that knowledge should be shared and the limits of nature should be respected. We should only take out what can be regenerated. It is a fact that humans are using the planet’s resources at one and a half times its capacity. If humanity continues at this rate, globally we will need two earths to support us by 2030. If the entire population of the world uses oil at the same volume as the UK and the US, we will run out of oil completely in 11 years. It is simply not viable.”

MIT’s Club of Rome report this past April confirms Bauwens’ dire predictions and warns of a ‘Great Crisis’ by 2030, at which time, they claim, there will be no oil, no fertiliser, no industrial agriculture and all the compounding problems this lack of resources will bring.

“We must learn from history,” insists Bauwens. “The Roman Empire couldn’t expand; they couldn’t find slaves, they ran out of gold and eventually it collapsed. But what the remaining feudal domains had in common was the Christian church. The monks created a basis for the revival of civilisations from the 10th century onwards based on the sharing of knowledge in Europe, and the existing Christian infrastructure helped them to survive: parish food distribution routes, churches’ network, and educational institutions.” Similarly Bauwens believes that when – not if – the end of capitalism forces us to change, it will be established shared infrastructure that will be our salvation. “This is what is going to happen again, our network of shared information, will be our route out of this crisis.”

“I haven’t invented this system,” explains Bauwens, “I took it from such models as Linux. Unlike the Windows operation system, there are also free alternatives to our existing system. It is free because you can adopt what is there, adapt it to your needs and pay it forward, so to speak. 90% of the internet is based on free software, my model comes from looking at how they did it. What is typical is that there is no intellectual property rights, instead there is a common code. Like Linux, any company which takes its software and develops it, puts it back into the pot for the common good. All companies can benefit from all of the advances of other companies. This model is estimated to contribute to one sixth of the US GDP already. Because the common pool is digital and abundant, you can’t sell it, but you can make money out of the derivative services. For instance IBM has essentially become a Linux consulting company, so what they do is bring their expertise into how to adapt the free software available.”

“Today, if you want to design your own product, you make it as hard as possible so that no one can copy it. But you can also choose for a shared design and couple it with a system of small microfactories. You don’t make money from designing the product but you can make money from selling the products that you manufacture. Embellishing doesn’t require much investment, so for instance, two thirds of car engineers in Detroit are now out of a job. But they are beginning to get together to build small businesses based on their common knowledge. They are not going to get rich, but they will get by. Similarly, 50% of youth in Spain are unemployed. They can either remain unemployed or adopt this method of community centred enterprise model to start small businesses.”

“You can’t live on copyright,” insists Bauwens. “It doesn’t work. In fact only 1000 creators in France make a living through copyright. While people like Lady Gaga make millions, the millions of other musicians do not. The money goes into corporate pockets, not creators. So, using this common system, you can build a reputation, build a fan base, establish your market, organise a concert and develop your own market activities through a community. To compete today you need to do an economy of scale; get big, lower prices and sell more. It is almost an obligation to exploit nature. But with new models such as WikiSpeed, if you need to build a car, you can do it in a micro factory, drawing on available product creation knowledge online, scaling from one. The competitive advantage is relying on bringing down the cost by using a common infrastructure. Mutualising knowledge and infrastructure, using replicable designs and the same machines will still require people will skill. This means that you can still compete on the basis of skill and merit. The business doesn’t need to get bigger, it simply needs to survive.”

Bauwens doesn’t believe that the economy, as is, will survive much longer. He also thinks that the time for what he calls ‘soft change’ has come and gone, warnings were ignored for too long to allow change to be gentle. But while he is concerned about ‘hard change’ he is one of many people with enough vision to have already begun the process of transition.

“We have a great horizontalisation of human relationships today, boycotting controlling mechanisms such as states and banks. The print revolution in the 16th century which destroyed the religious power monopolies in Europe ushered in great change but also three centuries of civil war between religious factions claiming to stand for absolute truth and depicting the other side as evil. So much hypocrisy that Adam Smith said that we needed a system based on self-interest i.e. capitalism, a cultural reaction to what had come before. Similarly we are now seeing that capitalism is no longer viable and is creating massive injustice as well as destroying our planet. Now we are beginning to react against capitalism. Capitalism is a cancer; it is about how we get as much out of the environment and sell it for the highest price. Your legal obligation to shareholders means that you are penalised for doing something good. I am not saying that we can make people altruistic; that would be utopian, and unrealistic. Instead we are designing social systems where individual interests converge with collective interests. Look at the articles in the Wikipedia, for instance. They may be written in self-interest, but you are still giving it out to the community and building an encyclopedia for everyone. Instead of the invisible hand [the self-regulation of markets], let’s design it into the social system and make it a visible hand.”

“What we are advocating is a system which comes down to three core components, the first is the community and the commons, where free information is available for the common good but yet there are costs to maintain such infrastructure. While the community provides content, code and designs, the second component required is the foundation, a new type of nonprofit. In Wikipedia’s case the Wikimedia Foundation raises money to fund the infrastructure. We then complete the system with the final component, the ‘entrepreneurial coalition’; this is where we take care of the livelihood of the people. In the case of the P2P Foundation, we have a co-op. Separate from the knowledge offered freely from the community and the fundraising by the foundation, the co-op can then take the content or design to adapt and sell. Once successfully achieved, these individuals can return their knowledge to the community and even donate to the foundation. Today we are regulated by government but if you have fair-trade, social entrepreneurship, co-ops then you have also your internal rules. We designed our co-ops so that it supports us as well as the commons. If we don’t do that then we violate our own statutes. We are not against markets or states, but we want to change them around two priorities; respecting nature and sharing knowledge.”

“Let’s go back to IBM,” explains Bauwens. “When IBM decided to support Linux, they were just one of hundreds of companies to do so, so they had to adopt the community norms. If they privatised the commons, then they would destroy the community and therefore their self-interest. This shows the model already works! I am trying to extend this to new sectors. A company will, by nature, not invest in anything which is more for the common good than for profit. So we have to invent a new kind of company. We don’t need 15% profit a year, we can generate slow money, like slow food. It is better for you.”

While Bauwens may have some doom and gloom predictions, he is about being positive and believes strongly in spreading the knowledge he already has gained for the greater good. Currently working on a collaborative economy project for Orange, he is travelling, at time of press, to join a Chinese think tank tasked by the government with advising it on its future based on distributed industrial structures. After which he will be participating in the Pontifical Academy of Social Science’s global governance seminar at the Vatican. Following his trip to the Vatican, he is returning to Brazil, on invitation from the government. When such giants as China, Brazil and the Vatican are looking towards Bauwens for solutions, he is hopeful that one day soon he, and others sharing his voice, will be heard by those other than the fringe.

“Our web site receives about 26,000 hits per day,” explains Bauwens, “we are small and big at the same time. We are beginning to have a broader impact and have been consulted by movements such as occupy; in that sense we are really in the zeitgeist, i.e. the spirit of the times.

“We are not an add-on; we believe that we are an alternative. It may take years of hardship but we believe that it is necessary to transition. By doing something different by sharing our successes and failures by using social media, we help other people to understand that they are not alone and that they can learn from our experiences. While many people don’t see it, change is already here. 10% of the Swedish and German vote went to the Pirate Party which calls for the abolition of copyright. This has political importance; it is already part of a debate.”

“The mainstream is telling us that they know it sucks, but there is no alternative,” says Bauwens. “But if we have a consistent message, we can gain traction, I am not here to antagonise people, I am here to distribute learning. In an ideal world society would consist of a series of commons; common codes, knowledge, design but also natural commons such as the atmosphere, water and other resources. We get them from nature so every human being should benefit from them. I advocate bio-regional management of resources like the Greater Mekong, which should become its own group of shared resources. The nation-state is weakening already. I am not saying it is disappearing tomorrow, but it is losing importance. I support an approach called the partner-state; whereby public authorities enable and empower social production. You help people create commons, you help them become entrepreneurial around the commons, you create infrastructure to help people create value and you reform the market.”

Bauwens epitomises the civic entrepreneur. He understands both the spirit of entrepreneurship and that of community. He understands our economic realities and embraces those realities while building a foundation for the future. While his end goal is self-interest; after all he is hoping for a better world for his children, he understands that we are all in this mess together and the only hope is to collaborate our way out of it.