[p2p-research] labour, capital and p2p

[Wittel, Andreas]

Hi Michel, 
 
thanks for this reply, I agree with many things obviously, but do have some questions and need some clarifications. I have not read Carlota Perez, it is on my to-do-list, and your introduction to her work makes a lot of sense to me.
 
Maybe it is not important if the dominance and relative autonomy of the financial markets was an illusion or a reality for the last 4 decades that has come to end but could be resumed sooner rather than later. Basically we all agree (I would suppose) that this relative autonomy of the financial markets is a very bad thing. 
 
So how can we prevent this? My answer at the moment: by establishing a fairer system for the value of  labour on a global scale. I have a huge amount of respect for Obama, but he does not seem to willing to engage with this issue at all. And if he doesn't, nobody else of those in political power will do so.
 
You say: 'But the point is that the specific way that the financial, and money systems, are organized and designed, is crucial for the way the production system is organized. If we want to  have a more 'fair' labour system, even within capitalism, we need to tackle the financial system.'
 
This is a point I don't understand. How can new financial and monetary systems (do you make a distinction between financial and monetary?) lead to a closing of the ever increasing gap between the rich and poor? And what would these strategies look like? And how could these 'small and emerging' p2p strategies compete with the hegemonic financial system in place? 
 
Andreas

________________________________

From: Michel Bauwens [mailto:michelsub2004 at gmail.com]
Sent: Fri 15/05/2009 04:24
To: Wittel, Andreas
Cc: Peer-To-Peer Research List; Andrea Fumagalli; Vasilis Kostakis; andrew paterson; Franz Nahrada; Samuel Rose; Kevin Carson
Subject: Re: labour, capital and p2p


(Hi Andrea (Fumagalli), I was wondering if you could forward a copy of this discussion to the 2 russian authors, as they might find if of interest how their analysis inspires our own community)

Hi Andreas (Wittel),

Let me first say that I completely agree with your analysis. Of course the financial system is rooted in the exploitation of labour, it is a specific way of extracting value from it. That's actually what relative (not absolute) autonomy means, that it is interlocked in a complex feedback loop with the other sectors. But the point is that the specific way that the financial, and money systems, are organized and designed, is crucial for the way the production system is organized. If we want to  have a more 'fair' labour system, even within capitalism, we need to tackle the financial system. (not alone of course, as part of an integrative strategy)

I'm not sure how familiar you are with my own take on the different cycles of capitalist development, but I recently updated my insights after reading the following, i.e. one of the essays in the journal I sent you yesterday, and which I already commented upon here, 

see http://blog.p2pfoundation.net/peer-money-as-the-solution-for-sudden-system-stock/2009/05/14

The essay is:

Badalian L., Krivorotov V., "Technological shift and the rise of a new finance system <http://ejess.revuesonline.com/article.jsp?articleId=13147> : the market-pendulum model", European Journal of Economic and Social Systems, Vol. 21, No. 2, 2008, p. 231-264.

And here are my own thoughts, on how 'p2p' is connected with such a transition to a new wave of development:

The authors continue the work on understanding 'long waves', pioneered by Kondratieff, continued by Schumpeter and recently summarized and updated by Carlota Perez.

The important thing is this, every long wave of appr. 50-60 years has been based on a combination of 1) a new form of energy the UK domination = coal, the US domination is oil); 2) some radical technological innovations; and 3) a new 'hyperproductive' way to 'exploit the territory'; and 4) an appropriate financial system. An important insight in the latter, is that what enables growth in a first phase, becomes an unproductive burden in the second declining phase of the wave.

Each wave has been dominated by a particular great power as well. And each wave ends with a Systemic Sudden Stop (3S), like the one we are in now. (and, each transition needed a war, as this seems impossible today, it will probably the global struggle against the climate change catastrophes that will mobilize the global energies).

So we have to think, what new combination is in the works now.

For energy, in the context of Peak Oil, it can only be renewable energies, like solar and wind etc... New technologies: essentially it will be based on the global internetworking, augmented by what it enables (bio, nano, etc..). That much is clear, but then the question is: how can we more efficiently 'exploit the territory'.

What we will loose in terms of 'gross power' that we had with oil, will have to be compensated by IT-generated greater precision, in the application of that power, once we  have renewables. In other words, the engine of growth will be the systematic integration of artificial and human intelligence in our productive activities.

They also say that a post-3S transition, the cost of the transition is to high for the market and requires state intervention.

So now my take on this. What global internetworking enables is open and global design communities. This means that information is no longer physically constrained, but can flow 'anywhere', and this is crucial, be used by local communities. Second, the same technological developments lead to more precision manufacturing, that can be done in a distributed fashion. This means again, that the cost of capital is dramatically declining and becomes affordable for the 'periphery. Again this empowers local communities. Finally on the energy level, distributed energy machinery can also empower the local communities. And finally there is the new financial system, and here is where the peer money movements come in, to create flows of financing right where they are needed, and not just in the unproductive casino capitalism that enriched the current oligarchy.

Each long wave is also marked by a changing of the guard in the kind of institutions and the kind of ruling elite.

Each wave was also based on more inclusion, for example the integration of labour in the Fordist system was much broader than in the 19th Smithian system, BUT, in the declining phase, the social contract breaks down and this is what Richard Wolff described as what happened under the neoliberal financial system.

So:

- renewable distributed energy

- distributed manufacturing (linked to much more distributed ownership modes)

- an organic farming revolution based on high info input instead of high petrochemical input

- new stakeholder oriented global institutions

- a new elite of netarchical capitalists

- a new social contract based on broader inclusivity that will be beneficial to global open design communities

- a new financial system, based on a redesign of the monetary system, a diversity of localized and affinity-based community currencies,  a new credit commons and hopefully: a basic income (nobody by the way is suggesting 'tinkering' on that level, it needs a radical reformation)

- a geographic shift to the periphery, i.e. East Asia as the newly dominant power of the next ascending wave

Many of the above things are strongly related to what we talk about under the name of 'p2p' or distribution. I don't expect this to be dominant, but I expect that the new social contract will have to accept a major upgrade of inclusion to achieve its hyperproductive aims, while in a later stage, a phase transition may occur to a fuller p2p regime.

A crucial aspect is the combination of global open design and knowledge communities, to the more distributed modes of precision manufacturing, which because of their more distributed aspects (much lower capital requirements), are favourable to the self-aggregation of smaller businesses, which could be organized on a new basis (cooperatives, solidarity economics, etc...).

But can all this be tackled by 'p2p alone'? and you doubt rightfully that this can be done.

I think it needs a combination of three movements:

- the specific p2p movement for open and free exchange of innovation (tackling artificial scarcity in innovation)

- the environmental movement, tackling the negative externalities creating biospheric destruction

- the social justice movement (labour, agricultural, knowledge workers and precariat), fighting for inclusion

It is the combination of these 3 social movements, and their mutual interpenetration and infusion, which can have the necessary force to obtain  change and a new more favourable and inclusionary social contract, in combination with the efforts of the netarchical capitalists. This sector of capital is both friend and foe, depending on specific contexts, but I would suggest that such an alliance is crucial for success. They are going to be at the core of the next 'accumulation engine' (the concept used by the authors above to denote the full integrated system).

These 3 movements need each other, and need to be fused in one global effort. They can't win without p2p, and 'p2p' can't win without them.

None of the above is automatic, and the transition to a new ascending phase is complicated by the global energy and climate crisis, but it has a realistic chance of being achieved, which also depends on us, as the p2p meme is a crucial variable in the success of that transition.

Michel


On Fri, May 15, 2009 at 4:15 AM, Wittel, Andreas <andreas.wittel at ntu.ac.uk> wrote:


	This is an attempt to revive the debate without using the poisonous apple tree metaphor any longer. Let's start instead with the sun and earth example used by Christian. In his reply Michel says:
	
	
	
	'This means that the financial and monetary systems have a real relative autonomy and a real influence on behaviour and choices. If this is true then financial and monetary regulations and design make a difference, both in observable reality and in the unseen structural rules.'
	
	
	
	I would argue that this is what we all thought before the crash. We all thought that financial markets are (1) relatively autonomous from the realm of real production, and (2) anyway much more powerful than real production.
	
	
	
	But the financial markets crashed and suddenly it becomes clear that both, their strength and their autonomy was a bit of an illusion, similar to the idea of the sun turning around the earth. Financial markets proved to be unsustainable on their own. In order to avoid the collapse of global finance, taxpayer's money is needed. Suddenly capital seems to be very dependent on labour.
	
	
	
	The question is how this illusion has been created. In my view Richard Wolff comes up with a convincing explanation. http://www.mediaed.org/cgi-bin/commerce.cgi?preadd=action&key=139 <http://www.mediaed.org/cgi-bin/commerce.cgi?preadd=action&key=139>
	
	For those who don't want to see the full video, this is what Wolff says in a nutshell (focusing on the US but this would also be true for large parts of Europe): This crisis did not start with banking, but with something else. From the 1820s until the 1970s the workers enjoyed a rising standard of living, meaning: rising real wages. For these 150 years the growth of productivity corresponded with the rising level of real wages. This changed in the early 1970's, when a steadily increasing gap opened between these two graphs. Real wages stopped rising, while productivity continued to rise. Consequently workers had to borrow money and accumulate debts. The workers were given loans. For business however the last few decades have been like paradise. The gap between rising productivity and stagnating wages created spectacular profits. These profits were the precondition for financial markets becoming increasingly powerful. At some point interests from loans became financially more productive than the production of commodities, and so on.
	
	
	
	If we accept this story, we have to conclude that the increasing domination and independence of the financial market has one main cause: the exploitation of labour power.
	
	
	
	So why tinkering at the edges of a monetary system, why creating new ones? How could new monetary systems stop or even diminish the exploitation of labour power? If they can't, why bother? Of course I am not suggesting that work towards a new monetary system should be abandoned in the p2p community. I just don't see the point. I would like to focus my inquiries on the question how the p2p community can contribute to a fairer system of monetary exchange for labour (= value)
	
	
	
	I don't have any ideas at the moment (or better, I have abstract ideas, e.g. basic income for everybody, e.g. ownership of organisations by the workers and not the shareholders, but don't have a clue how to work towards realising these ideas). I hope that other people in this list have a lot to say about this.
	
	
	
	To be completely honest, I have some doubts that this goal (a fairer system of exchange) can actually be tackled in the p2p world alone. Open source and p2p communities have achieved mind-blowing results, but so far these are limited to non-rival goods (the digital stuff, software, music, ideas, news and so on). These achievements have been possible because open-source and p2p communities were able to operate largely outside the economy. Two reasons for this: (1) the means of production and distribution for non-rival or digital goods are available to many. (2) So all that is needed to produce and distribute digital things is the value of labour (Marco I know you disagree, I am merely simplifying this to illustrate the difference with material things). Open source and p2p communities are full of enthusiasts who are willing to contribute with their labour to the changes we have experienced, social changes, economic changes, political changes. This labour mostly is free labour.
	
	
	
	But how far can we go with free labour? As soon as it comes to the housing market, we can't do open source and p2p any more. We need to approach banks and ask for loans and live with debt and pay them back.
	
	
	
	I am not really sure where I am going with this: For me open-source and p2p represents a new form of resistance, a very constructive resistance, one that is not any more defined by public protests, and banners, and strike and opposition lone, but simply by doing things without asking anyone for permission and thus changing the world. (This would be my contribution to Ryan's p2p manifesto). But, as said above, this mostly refers to non-rival goods. A fairer exchange system for labour power, I believe, cannot be achieved with a new piece of software and a p2p community of several hundred (or even thousand) enthusiasts that uses this new software tool. For this to happen we need to develop strategies which are aimed at societies at large. Actually this comes across far too opinionated. It really is a question.
	
	
	
	Andreas
	
	
	
	
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