[p2p-research] Seeds of a new growth cycle

Tue May 26 07:12:03 CEST 2009

Hi Ryan,

as far as I know, the long wave theory is well established with statistical
evidence, but controversial as to its causes

but you have to distinguish:

- the deep undercurrent of the long wave

- many ups and down cycles and crises both on the way up and down, and a
major crisis mid-point (1973 oil crises) for us

Still more deeply, underneath it all, the growing climate crisis.

So, there is a systemic long wave crisis, partly related to climate change,
but which would also have happened anyway.

The climate change complicates the solution of the long wave, and points to
a more final crisis of the infinite growth system in 2-3 (4 at most) decades
...

that's my understanding for now,

Michel

On Mon, May 25, 2009 at 10:41 PM, Ryan Lanham <rlanham1963 at gmail.com> wrote:

> Michel:
>
> I read with interst your essay on the new long way.
>
> I think I agree thoroughly with the conclusions.  I am less convinced of
> the causal explanation.
>
> Overall, it feels "Newtonian" in an Age of the Quantum.  I don't get the
> sensation of waves long or short describing the sort of frenetic and
> immediate jumps in society that seem to be occurring with some regularity.
>
> My own view is that climate change is the dominant theme of our times and
> will be more so.  I don't see that environmental crisis playing a central
> role in your theory at present.  Yes, the discussion of green industry is
> there, but not complete worldview alteration of humans having to actively
> manage the biosphere...that is far more fundamental than a mere move to
> green power because fossil fuels are in decline.
>
> There are 1/10 the number of fishes in the oceans now that there were in
> 1950.  That is standard and accepted oceanographic fact.  So, it is not just
> energy that is in play.  Population must also factor and the diet of a world
> that is getting wealthier.
>
> That said, I believe the conclusions are precise and accurate.
>
> Ryan
>
> Ryan Lanham
> rlanham1963 at gmail.com
> Facebook: Ryan_Lanham
>
>
>
> On Sun, May 24, 2009 at 11:50 PM, Michel Bauwens <michelsub2004 at gmail.com>wrote:
>
>>  Dear friends,
>>
>> It's becoming clear to me that the next phase of my own p2p work is geared
>> towards a operational policy that can serve as a transitional program to a
>> new growth cycle.
>>
>> The following is an early short synthesis, and of course reactions are
>> welcome,
>>
>> Michel
>>
>> <http://blog.p2pfoundation.net/debating-parecon-4-final-response-to-parecons-challenge-to-p2p-theory/2009/05/24>
>>
>> Conditions for the next long wave <http://blog.p2pfoundation.net/?p=3234>
>> [image: photo of Michel Bauwens] Michel Bauwens
>> 25th May 2009
>>
>>  This is a somewhat more fleshed out version of my previous thoughts
>> <http://blog.p2pfoundation.net/the-next-long-wave-what-comes-next-after-the-current-meltdown/2009/05/15>on
>> the conditions for a next long wave.
>>
>> *Text:*
>>
>> This is a general presentation of the nature of the present crisis, and
>> how we can realistically expect a renewed period of growth, and on the role
>> that peer production can play in this process.
>>
>> *The Nature of the Present Crisis*
>>
>> My understanding of the present crisis is inspired by the works on long
>> waves by Kondratieff, and how it has been updated in particular by Carlota
>> Perez, in her work: Technological Revolutions and Financial Capital. This
>> work has recently been updated and re-interpreted by Badalian and
>> Krovorotov.
>>
>> The essential understanding of these approaches that economic history can
>> be understood as a series of long waves of technological development,
>> embedded in a particular supportive institutional framework. These long
>> waves inevitably end up in crisis, in a Sudden System Shock, a sign that the
>> old framework is no longer operative.
>> These waves have a certain internal logic. A period of gestation, in which
>> the new technology is established, creates enthusiasm and bubbles, but
>> cannot really emerge because the institutional framework still reflects
>> older realities.
>>
>> This is followed by a period of maturation, marked by institutional
>> adaptation, massive investment by the state, and productive investment by
>> business, leading to a new growth cycle.
>>
>> Finally, this is followed by a period of relative decline, in which the
>> state retreats, business investments become parasitic, leading to a
>> contraction cycle with speculative financial bubbles, which ends in a Sudden
>> Systemic Shock (1797, 1847, 1893, 1929 or 2008).
>>
>> To understand the current period, some dates are important:
>>
>> - 1929 as the Sudden Systemic Shock of the previous period
>> - 1929-1945: gestation period of the new system
>> - 1945-1973: maturation period, the high days of the Fordist system based
>> on cheap domestic oil in the US
>> - 1973: inflationary oil shock, leading to outward globalization but also
>> speculative investment and the downward phase ending in the
>> - Sudden Systemic Shock of 2008
>>
>> 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* (f.e. the UK domination was based on coal, the
>> US domination was based on oil); in the beginning of a new wave, the newly
>> dominant power has particular privileged access to a cheap domestic supply,
>> which funds its dominance; when that cheap supply dries up, a (inflationary)
>> crisis ensues, which forces that power outwards, to look for new supplies.
>> This results in both dynamic globalization, but also in the awakening of a
>> new periphery. This newly awakened periphery is the germ of a newly emergent
>> power for a new long wave.
>>
>> 2) *some radical technological innovations* (no more than 3 according to
>> the authors);
>>
>> The 3 last ones were: 1830: Steam and railways • 1870: Heavy engineering •
>> 1920: Automotive and mass production
>>
>> 3) *a new ‘hyperproductive’ way to ‘exploit the territory’*; This is
>> where land use comes in. In the last period: industrial agriculture and the
>> ‘Green Revolution’ where responsible for a hyperproductive (though
>> ultimately self-destructive) agriculture
>>
>> 4) *an appropriate financial system*: the new public companies, New Deal
>> type investments (such as the Marshall Plan) in the growth cycle phase,
>> morphing into the parasitic investments of casino capitalism in the second
>> phase. Importantly, Badalian and Krovorotov note that each new financial
>> system was more socialized than the previous one, for example the joint
>> stock company allowing a multitude of shareholders to invest.
>>
>> 5) *a particular social contract.* Here also, we can see waves of more
>> intensive ‘socialization’. For example, the Fordist social contract created
>> the mass consumer in the first phase, based on social peace with labour,
>> while in the second parasitic phase, the part going to worker’s was
>> drastically reduced, but replaced by a systemic indebtedness, leading to the
>> current Sudden System Shock.
>>
>> 6) As we mentioned above, *each wave has been dominated by a particular
>> great power* as well, and in the second phase of expansion, a new
>> periphery is awakened.
>>
>> *Roots of the current crisis*
>>
>> It is important not to forget the essential characteristics of the
>> contraction cycle:what enables growth in a first phase, becomes an
>> unproductive burden in the second declining phase of the wave.
>>
>> If we review the 6 factors, it’s easy to see where the problems are:
>>
>> 1) *The era of abundant fossil fuels is coming to an end*; after Peak
>> Oil, oil is bound to become more and more expensive, making oil-based
>> production uneconomical
>>
>> 2) *The era of mass production, based on the car, requires a too heavy
>> environmental burden to be sustainable*
>>
>> 3) *Industrial agriculture destroys the very soils that it uses and is
>> less productive than smart organic agriculture*
>>
>> 4) *The financial system is broken and the $10 trillion bailout drains
>> productive investments towards unproductive parasitic investments*
>>
>> 5) *The Fordist social contract, broken in the 80s, has led to the
>> increased weakening of the Western middle class and a generalized precarity
>> *, which no longer functions after Sudden System Shock
>>
>> 6) The old dominant power, *the U.S. can no longer afford its dominance*,
>> and has awakened the periphery.
>>
>> *Seeds of the new*
>>
>> 1) The technology for *renewable energ*y has been developed, but needs at
>> least $150b annual investments in the U.S. alone, in order to become
>> ‘economic’. A Green New Deal would jumpstart the new energy era. The
>> wasteful heavy energy usage of the fossil fuel era will need to be replaced
>> by smart precision-based energy usage.
>>
>> 2) The era of mass production is ready to be replace by *more local
>> production in small series*, based on developments such as flexible and
>> rapid prototyping based manufacturing, mass customization, personal
>> fabrication and additive fabrication, multi-purpose machinery
>>
>> 3) *Post-industrial smart organic agriculture* has already proven more
>> productive than destructive industrial agriculture, but needs to be
>> generalized; land use needs to be re-expanded within cities where vertical
>> agriculture can be developed more intensively
>>
>> 4) The seeds of *the new financial system, based on increased
>> socialization towards civil society*, have been developed in the last few
>> decades: 1) sovereign wealth funds re-insert the public good in investment
>> decisions; 2) Islamic banking and similar mechanisms avoids the
>> hyper-leveraging that destroyed the Wall Street system; 3) microfinance
>> broadens entrepreneurship and financing to the ‘base of the pyramid’; 4)
>> crowdfunding mechanisms, social lending and various credit commons
>> approaches expand the availability of credit; 5) flow money approaches
>> through a circulation charge to discourage parasitic investments
>>
>> 5) The periphery of newly emergent countries has been awakened and will in
>> all likelihood lead to a dominance of the East-Asian region.
>>
>> *Peer to peer and the new social contract*
>>
>> A new long phase has been historically associated with an upsurge of the
>> role of the state and the public sector, which alone can undertake the
>> necessary investments which private investment cannot take up in the early
>> phases.
>>
>> However, we need to be aware of one of the fundamental characteristics of
>> the new period, which is a revival of the role of civil society. The
>> internet has enabled the self-aggregation of civil society forces in the
>> creation of common value, i.e. to peer production. Global communities have
>> shown themselves capable to be hyperproductive in the creation of complex
>> knowledge products, free and open source software, and increasingly, open
>> design associated with distributed manufacturing.
>>
>> This means that a hybrid form of production has arisen that combines the
>> existence of global self-managed open design communities, for-benefit
>> associations in the form of Foundations which manage the infrastructure of
>> cooperation, and an ecology of associated businesses which benefit and
>> contribute from this commons-based peer production. These companies, which
>> enable and empower the social production of value, have become the seeds for
>> the dominant companies of the future (Google, eBay, etc..). Companies will
>> need to open up to co-design and co-creation, while the distribution
>> (miniaturization) of the means of physical production, liberates the
>> possibilities for smaller more localized production units to play more
>> essential roles. We believe that the role of solely profit driven
>> multinational companies, without any roots in local communities, is reaching
>> its historical end, and will be replaced increasingly by new models of
>> entities combining profit with the realization of social and public goods.
>> Socially-conscious investment, sovereign wealth funds, micro-finance, social
>> entrepreneurship, fair trade and the emergence of for-benefit entities point
>> to this new institutional future of entrepreneurship. For the state form,
>> this means morphing from the welfare or neoliberal state models, to that of
>> the Partner State, which enables and empowers social production.
>>
>> *The new social contract therefore will mean*:
>>
>> 1) Expanding entrepreneurship to civil society and the base of the pyramid
>>
>> 2) New institutions that do well by doing good
>>
>> 3) Social financing mechanisms based on peer to peer aggregation
>>
>> 4) Mechanisms that sustain social innovation (co-design, co-creation) and
>> peer production by civil society
>>
>> 5) Focus on more localized precision-based physical production in small
>> series, but linked to global open design communities
>>
>>
>> --
>> Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
>> http://www.dpu.ac.th/dpuic/info/Research.html -
>> http://www.asianforesightinstitute.org/index.php/eng/The-AFI
>>
>> Volunteering at the P2P Foundation:
>> http://p2pfoundation.net  - http://blog.p2pfoundation.net -
>> http://p2pfoundation.ning.com
>>
>> Monitor updates at http://del.icio.us/mbauwens
>>
>> The work of the P2P Foundation is supported by SHIFTN,
>> http://www.shiftn.com/
>>
>> _______________________________________________
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>>
>>
>

-- 
Working at http://en.wikipedia.org/wiki/Dhurakij_Pundit_University -
http://www.dpu.ac.th/dpuic/info/Research.html -
http://www.asianforesightinstitute.org/index.php/eng/The-AFI

Volunteering at the P2P Foundation:
http://p2pfoundation.net  - http://blog.p2pfoundation.net -
http://p2pfoundation.ning.com

Monitor updates at http://del.icio.us/mbauwens

The work of the P2P Foundation is supported by SHIFTN,
http://www.shiftn.com/
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