[ox-en] keimform.de: The Emergence of Benefit-driven Production

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URL: http://www.keimform.de/2011/benefit-driven-production/

The following paper was written for the Proceedings
<http://sunsite.informatik.rwth-aachen.de/Publications/CEUR-WS/Vol-739/> =
of
the 6th Annual Open Knowledge Conference (OKCon 2011)
<http://okcon.org/2011> which took place about a month before in Berlin. =
It
is also available in PDF format <http://ceur-ws.org/Vol-739/paper_9.pdf>.=


Abstract
--------

The free software and free culture movements have radically changed the
ways of producing software and knowledge goods. In many cases,
participation in such project is benefit-driven rather than profit-driven=
=2E
Participants get involved in order to realize some practical or social
benefit, not because of monetary gains. Another difference from market- a=
nd
firm-based production is that peer production is non-hierarchical: people=

voluntarily cooperate as peers; there are no fixed employer/employee or
client/contractor relationships. And peer production is based on commons:=

goods which are jointly developed and maintained by a community and which=

are shared according to community-defined rules.

Peer production is not just about producing knowledge: Hackerspaces and F=
ab
Labs are the first forerunners of a commons-based production
infrastructure. While commons-based peer production reaches beyond
capitalism, the preconditions of its development are created by capitalis=
m
itself. The paradoxical relationship of capitalism to human labor leads t=
o
developments that might make the concept of labor (as we know it today)
obsolete, and with it capitalism itself.

Keywords: peer production, benefit-driven production, commons, commonism,=

stigmergy, capitalism

Benefit-driven Production
-------------------------

The *free software* and *free culture movements* have radically changed t=
he
ways of producing software and knowledge goods. These changes have caused=

some markets--such as those for Internet software, programming tools and
encyclopedias--to shrink considerably or disappear altogether. These area=
s
have become dominated by free programs such as Apache, Firefox, WordPress=
,
non-proprietary programming languages such as Python, open development
environments such as Eclipse, and by the free Internet encyclopedia
Wikipedia. They have largely driven out competing offers which (as usual =
in
capitalism) are only available for sale.

Sometimes, free software is produced by companies that use it to indirect=
ly
make money, e.g. by selling support, documentation, or suitable hardware.=

But many projects are driven by communities of people that contribute
voluntarily and without pay. Participants may be motivated by the desire =
to
use the software they help creating or they may simply enjoy doing what
they do. Others participate in order to improve their knowledge, to
demonstrate their skills, or to give something back to the community
(Lakhani and Wolf 2005). Free software and free culture projects are thus=

frequently *benefit-driven* rather than *profit-driven*: Participants get=

involved in order to realize some practical or social benefit (getting
useful software, learning, getting community recognition, doing something=

pleasurable), not because of monetary gains.

Modern, neoclassical economy theory sees companies as a means of reducing=

so-called transaction costs (Coase 1937). As a company owner, I can assig=
n
tasks to my staff instead of having to buy and negotiate each small servi=
ce
individually. The employees benefit by knowing in advance how much they
will earn, instead of having to sell themselves day by day in the market,=

with uncertain results. But they have to accept subordinate positions in =
a
hierarchy and must follow the orders of the management. Market relations,=

on the other hand, take part between actors who are formally (though ofte=
n
not actually) equal, but they are always merely functional: I'm not
interested in the others as human beings, I merely see them as potential
trading partners, potential buyers and sellers.

Standard neoclassical theory doesn't know ways of interaction beyond the
market and the firm, but the communities of people who produce on the bas=
is
of voluntary cooperation indicate that it missed something. Since everybo=
dy
participates voluntarily, nobody can order the others around. The term
*peer production* has been coined by Yochai Benkler (2006) to express thi=
s
stark contrast to the hierarchical nature of firms: participants work
together on an equal footing, as peers.

And in contrast to the market, others aren't merely potential trading
partners, but people cooperating with me in order to reach a common goal.=

Peer production is based on contributions, not on exchange. And while tra=
de
(exchange) tends to be a zero-sum game, contributing isn't. If I make a
"good deal," it quite often means that my trading partner made a bad one.=

But if somebody contributes something useful, everybody wins.

A world where producers have to sell what they produce and users have to
buy what they want to use, inevitably creates antagonisms. One person's
income is another person's cost. And an increased market share for one
producer means that the others producing the same goods will earn less,
hence producers are forced to compete with each other. The same conflict =
of
interest as between sellers and buyers in general exists between employee=
s
and employers: the former want to sell their labor power as dearly as
possible, while the latter strive for a maximum of labor at minimal cost.=

Benefit-driven production doesn't know these antagonisms, since fulfillin=
g
my needs doesn't have to come at the cost of your needs. On the contrary,=

peer production works so well because the participants help each other to=

reach their goals and fulfill their needs. Everybody benefits.

Voluntary Production for Others
-------------------------------

Benefit-driven production shouldn't be misunderstood as production merely=

for oneself. It is true that peer producers often begin by "scratching a
[...] personal itch," as Eric Raymond (2001) put it; but at the same time=
,
what they do is also useful for others. And people frequently engage not
because of their consumption needs, but because of their productive needs=
:
They contribute because they enjoy the tasks they are doing, because they=

learn something, or because they want to give something back to the other=

contributors.

The fact that peer production is always production for others refutes the=

popular conception that without a market system, people would have to fal=
l
back into some kind of Robinson mode: Everybody would only produce for
themselves or their family and large-scale cooperation would cease to
exist. It's pretty clear that such a solitary way of production wouldn't
get one very far. Another well-known alternative are centralized planned
economies--the former "real socialism." In such economies, society as a
whole functions like a big company. Management (the planners) decides wha=
t
should be done, assigns the required tasks, and monitors that they are
executed correctly. This alternative hasn't worked well in the past and
doesn't sound very attractive: You are still a dependent employee (though=

now of the state) and must follow the orders of your superiors.

Peer production, on the other hand, is production for others which is
neither based on coercion nor motivated by monetary gain. Peers produce f=
or
others because they can, and because it is a way for them to find further=

contributors. The more people use the results of a project, the more
potential contributors exist, since people who decide to join forces as
occasional or regular contributors are typically already users of the
project they choose to support. If a project doesn't share with others by=

coproducing for them, it endangers its opportunity to win new members.

To distribute tasks, peer producers use an open process that has become
known as "stigmergy" (cf. Heylighen 2007). Participants leave hints (Gree=
k
*stigmata*) about started or desired activities, encouraging others to
follow these hints and take care of the desired tasks. Such hints, e.g.
to-do lists and bug reports in software projects and "red links" pointing=

to missing articles in the Wikipedia, constitute an important part of the=

communication.

All participants follow the hints that interest them most. This leads to =
an
automatic prioritization of tasks (the more people care for a task, the
more likely it is to be picked up by somebody). It also ensures that the
different talents and skills of contributors are applied in a more or les=
s
optimal way (since people tend to pick up those tasks they think they are=

good at). And since everybody is free in choosing the tasks they want to
do, participants will generally be more motivated than in a market-based
system or a planned economy, where they have to follow the orders of thei=
r
supervisor or client.

The Emergence of a Commons-based Production Infrastructure
----------------------------------------------------------

Peer production is thus radically different from the "normal," market- an=
d
firm-based mode of production that dominates our society. Production is
mainly for benefit instead of profit; and people voluntarily cooperate as=

peers rather than being part of hierarchical employer/employee or
client/contractor relationships.

Another thing that's different is the way in which people relate to natur=
e
and to the products of their activities. Under capitalism, ideas, product=
s,
and natural resources are usually treated as *property.* Property means t=
he
legal right to exclude or include others from using a good, allowing the
owner to use, sell, or monetize their property at will.

Peer production is primarily based on *commons,* therefore Benkler (2006)=

talks about *commons-based peer production.* Commons are goods which are
jointly developed and maintained by a community and which are shared
according to community-defined rules (cf. Ostrom 1990). Water, air,
forests, and land were managed as commons in many societies. Free softwar=
e
and open content are a kind of commons that everybody is allowed to use,
improve and share. But the relation between peer production and commons i=
s
not one-sided: Peer production is not only based on commons, it also
creates new ones and maintains the existing ones, as the examples of free=

software, open content, and *open hardware* (blueprints and descriptions =
of
physical items that everyone can use to produce, utilize, and maintain
these items) show. All these projects contribute to a knowledge commons
that can be used, shared, and improved by everybody.

Peer production cannot just produce knowledge, it can also produce
infrastructure and physical goods. For example, *community wireless
networks* have formed in many cities; they allow everyone in their
neighborhood free network access. Many of these projects are organized as=

*mesh networks*: all participating computers will actively transfer data,=

removing the need for privileged servers. Such self-organized,
decentralized networks can create a shared infrastructure for Internet an=
d
telephony (cf. Rowe 2010, 2011); similar networks might supply people wit=
h
energy or water. Community projects organizing access to water as a commo=
ns
exist in South America (cf. De Angelis 2010).

Open facilities for the production of material goods are emerging as well=
=2E
*Hackerspaces* and *Fab Labs* are typically run by volunteers; they often=

have computer-controlled machines--including milling machines and fabbers=

("3D printers")--which allow the largely automatized production of
individual items or small series. If possible, the utilized machines are
open hardware, meaning that their blueprints can be freely used and
improved by everyone. Another goal is the creation of machines that can
produce machines that are at least as powerful as the original ones, thus=

allowing Fab Labs to produce the equipment for further Fab Labs. In this
way, commons-based peer production is starting to create the tools that
will allow it to spread even further, at the same time starting to supply=

people with what they need to live.

A Commonist Future?
-------------------

Nick Dyer-Witheford (2007) has proposed the term *commonism* for a societ=
y
where the basic social form of production are the *commons* (while in
capitalism, *commodities* are the basic social form). As the success of
commons-based peer production shows, commons and peer production go
together very well. We can therefore expect peer production to be the
typical form of production in a commons-based society. Commonism would be=
 a
society where production is organized by people who cooperate voluntarily=

and on an equal footing for the benefit of all.

Some people may claim that such a society must be impossible because it
never existed or because it is against human nature. But that something
didn't happen in the past doesn't mean it won't become real in the future=
,
and arguments about "human nature" miss the fact that people are formed b=
y
society just as well as they are forming society. Changing social
structures also changes people's behavior.

Nevertheless, commonism would have to remain an abstract idea if it didn'=
t
have the potential to develop out of the current social system, capitalis=
m.
New ways of production can only emerge when "the material conditions for
their existence have matured within the framework of the old society," as=

Karl Marx (1859, Preface) expressed it.

There are two preconditions which I consider most relevant for the
development of commonism: (1) Human labor disappears from the production
processes, being replaced by automation and joyful doing. (2) Everyone ha=
s
access to resources and means of production. Developments within capitali=
sm
favor the partial emergence of these conditions, though their full
realization would make capitalism impossible.

How these conditions change the processes of production becomes already
visible in the digital realm, where commons-based peer production
flourishes. But as argued above, it's unlikely to stop there. Peer
production reaches beyond capitalism, by being benefit-driven and
non-hierarchical rather than profit-driven and hierarchical and by
obsoleting and destroying markets formerly dominated by commodity
production (such as programming tools and encyclopedias). And yet, the
preconditions of this development are created by capitalism itself.

A paradox of capitalism is that human labor is its very foundation but al=
so
a cost factor which every company has to reduce as much as possible. Labo=
r
creates surplus value and thus profit, but at the same time, each company=

can increase its profit (at least temporarily) by cutting down the amount=

of labor required, thus achieving a cost advantage compared to its
competitors. One way of reducing labor costs is outsourcing to low-cost
countries, but in many cases, capitalists can achieve even higher cost
savings by replacing human labor with machines, or by getting customers t=
o
voluntarily take over activities that formerly had to be paid.

Until some decades ago, machine usage and human labor were usually tightl=
y
coupled, e.g. in assembly lines. But increasing levels of automation mean=

that more and more routine activities can be performed without any human
labor. The remaining activities tend to be difficult to automate because
they require creativity, intuition, or empathy. Hence modern capitalism i=
s
often referred to as a "service economy" or "information society," since
most non-automatable tasks are from these areas.

A related trend is the delegation of tasks to the customers themselves,
thus further reducing the required labor power. Thanks to self service,
supermarkets need fewer salespeople; online shopping and online banking
avoid the need for salespeople and tellers altogether; firms like Ikea
leave the final assembly of the furniture to their customers, thus reduci=
ng
labor and transportation costs.

But these developments also change the relationship between people and
their actions. As an employee I work in order to earn money. But if I
assemble my own furniture or if I browse the Internet for products I want=

to have, I'm interested in the *result* of my actions. And thanks to high=
er
levels of automation, boring routine activities (which you wouldn't do
unless "bribed" by money) are increasingly replaced by more creative and
more interesting tasks.

For such tasks, payment is a nice plus (provided you live in a money-base=
d
society), but not a necessary condition, as became apparent during the la=
st
decades to the surprise of many economists, when voluntary, benefit-drive=
n
peer projects started to spring up in all corners of the Internet. These
developments are only possible because the participants have access to th=
e
necessary means of production (such as computers and Internet access). Th=
is
precondition may seem to be a serious limitation of the free, commons-bas=
ed
mode of production, since capitalism is characterized by the fact that mo=
st
means of production are concentrated in a few hands. It's possible to
jointly produce software and knowledge where the necessary means of
production are relatively small and already available to large numbers of=

people; but what about things that require huge factories?

Once more, the productive forces of capitalism come to the rescue. The PC=
s
and laptops of today are the progeny of the room-filling mainframes of 50=

years ago. Similarly, other productive machines have started to become mo=
re
and more accessible and affordable for individuals and small groups.
Inexpensive, but flexible CNC (=3D computer-controlled) machines increasi=
ngly
replace the huge and cumbersome large-scale industrial facilities of the
past. The emergence of a commons-based production infrastructure is a
consequence of these developments, which originate in capitalism but allo=
w
people to go beyond it.

Challenges to Commonism
-----------------------

But will commonism really be able to replace capitalism at some point?
Aren't there areas where it necessarily falls short? Two frequently raise=
d
objections are the problem of unpleasant tasks (which nobody wants to do)=

and the question of how to handle allocation and deal with the limitednes=
s
of natural resources, if private property and money cease to matter.

Unpleasant Activities
~~~~~~~~~~~~~~~~~~~~~

Lets assume a society based wholly on peer production, where all tasks ar=
e
distributed among volunteers by stigmergic self-selection. What happens i=
f
there are no volunteers for certain tasks, because everyone considers the=
m
unpleasant, dangerous or otherwise unattractive? A monetary system forces=

the weakest members of society to handle these tasks--those who have no
other options for earning money. Only cynics would say that's a good
solution--but what is the alternative?

Some of these tasks would probably turn out to be dispensable. If that's
not the case, automation, reorganization, and fair sharing remain as
solutions.

Automation has had an enormous impact since the start of the "industrial
revolution"--increasing parts of production have become automated in part=

or in total. But in capitalism, the potential of automation is limited by=

the height of wages. The less well paid a job is, the more difficult it
becomes to automatize without extra cost. Therefore, the automation of ma=
ny
unpleasant tasks (such as cleaning) isn't worthwhile under capitalist
logic. With peer production, the situation is different: If there are tas=
ks
that all or most people want to have done, but nobody wants to do, then t=
he
incentive to wholly or partially automatize them is very high. And since
the automation of activities tends to be an exciting and challenging task=
,
the chances of finding volunteers for doing so are much higher.

If automation is impossible, it's often possible to reorganize activities=

in a way that makes them more agreeable. In capitalism, the working
conditions for some jobs are very bad--for example, office cleaners
typically have to work very early in the morning, long before other peopl=
e
get up. People cooperating voluntarily as peers would find different
arrangements.

Automation and reorganization can also be combined. For example, some
Spanish cities employ garbage trucks with automated forks that can be
remote-controlled from the driver's cab to automatically pick up and dump=

the rubbish bins. Hence nobody has to handle the garbage directly and was=
te
collection becomes almost like a video game, making it easier to find
volunteers.

Activities that cannot be automated away or reorganized may become
candidates for a pool of unpleasant tasks, out of which everybody picks a=

few now and then. If everybody (or everybody who cares) does a small part=

of such tasks, they can be dealt with without causing much trouble to
anybody.

Allocation and the Limited Availability of Resources
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The fear that allocation without money is an unsolvable problem mainly
stems from a confusion between production for profit and production for
usage, or benefit. I can *sell* a practically unlimited amount of edibles=
,
but I can only *eat* so many of them before I'm full. The same is true fo=
r
all other goods: every desire to actually use them is limited. The only
thing that's potentially infinite is the possibility to turn them into
money (as long as there are buyers). But that possibility vanishes in a
world where production is benefit-, rather than profit-driven, and where
nobody is forced to buy and sell anymore.

Organizing production in such a way that everybody earns enough money is
indeed an unsolvable problem, since there is never a clear end point wher=
e
it would be enough. In a money-based society, money cannot only be turned=

in any other good (commodity), it can also be employed for making more of=

it, turning the money one already has into even more money one might
potentially be able to use in the future. And money is a form of power, i=
t
allows influencing others, buying their labor power, and making them do a=
s
one wishes.

The outcomes of benefit-driven production are instead specific benefits f=
or
the people involved--software, knowledge, food, energy, connectivity,
mobility, care, shelter, clothing, etc. But it's not an unsolvable proble=
m
to produce enough food for all--current society is doing that already, it=

is only incapable of distributing it adequately, since those who would ne=
ed
it most are unable to buy it. Realizing other benefits--producing energy,=

mobility, care, shelter etc. for all--should be equally solvable once
production focuses on these benefits rather than on profit.

And peer production only works if you really treat the others as your
peers, as equally relevant. Nobody can self-actualize at the cost of
others, because the others aren't stupid and won't help them doing so--bu=
t
without the support of others, nobody will get very far. This means that
everybody's needs and desires matter. It's not a viable option for a
handful of peer producers to build giant houses for themselves and then l=
et
the others worry about how to produce enough food in the remaining areas
that may no longer be sufficiently large. Peer production is about findin=
g
solutions that work for all.

In commonism, as in any society, decisions on how to use the available
resources will be necessary. Is it preferable to produce food for all or
rather biofuel, allowing some to continue driving cars after oil reserves=

have been exhausted? Should the energy supply be based on decentralized
renewable sources or rather on nuclear power, whose waste will be difficu=
lt
and dangerous to deal with for centuries to come? How to reconcile the
interests of the users of a good, who want new production facilities, wit=
h
the potential neighbors of these facilities, who might be annoyed by the
noise? Anyone who understands how and why peer production works, will be
able to imagine possible answers to these questions. But the most importa=
nt
thing is that they can be raised and answered by the people concerned--al=
l
of us.

References
----------

- De Angelis, Massimo (2010): *Water Umaraqa.* URL:
  http://www.commoner.org.uk/blog/?p=3D241 (accessed 29 Apr 2011).
- Benkler, Yochai (2006): *The Wealth of Networks: How Social Production
  Transforms Markets and Freedom.* Yale University Press, New Haven. URL:=

  http://cyber.law.harvard.edu/wealth_of_networks/ (accessed 29 Apr 2011)=
=2E
- Coase, Ronald (1937): The Nature of the Firm. *Economica* 4(16):
  386--405.
- Dyer-Witheford, Nick (2007): Commonism. *Turbulence,* no. 1. URL:
  http://turbulence.org.uk/turbulence-1/commonism/ (accessed 9 May 2011).=

- Heylighen, Francis (2007): Why is Open Access Development so Successful=
?
  Stigmergic Organization and the Economics of Information. In: Bernd
  Lutterbeck, Matthias B=E4rwolff, Robert A. Gehring (eds.), *Open Source=

  Jahrbuch 2007.* Lehmanns Media, Berlin. URL:

http://www.opensourcejahrbuch.de/portal/articles/pdfs/osjb2007-02-04-en-h=
eylighen.pdf
  (accessed 29 Apr 2011).
- Lakhani, Karim R.; Robert G. Wolf (2005): Why Hackers Do What They Do.
  In: Joseph Feller; Brian Fitzgerald; Scott A. Hissam; Karim R. Lakhani
  (eds.), *Perspectives on Free and Open Source Software.* MIT Press,
  Cambridge, MA. URL:
  http://mitpress.mit.edu/books/chapters/0262062461chap1.pdf (accessed 5
  Jun 2011).
- Marx, Karl (1859): *A Contribution to the Critique of Political Economy=
=2E*
  Progress Publishers, Moscow 1977. URL:

http://www.marxists.org/archive/marx/works/1859/critique-pol-economy/pref=
ace.htm
  (accessed 29 Apr 2011).
- Ostrom, Elinor (1990): *Governing the Commons: The Evolution of
  Institutions for Collective Action.* Cambridge University Press, New
  York.
- Raymond, Eric S. (2001): The Cathedral and the Bazaar. In: *The Cathedr=
al
  and the Bazaar: Musings on Linux and Open Source by an Accidental
  Revolutionary.* O'Reilly, Sebastopol, CA, 2nd edition. URL:
  http://www.catb.org/~esr/writings/cathedral-bazaar/cathedral-bazaar/
  (accessed 29 Apr 2011).
- Rowe, David (2010): *Baboons, Mesh Networks, and Community.* URL:
  http://www.rowetel.com/blog/?p=3D124 (accessed 29 Apr 2011).
- Rowe, David (2011): *Dili Village Telco Part 11 -- State of the Mesh.*
  URL: http://www.rowetel.com/blog/?p=3D1447 (accessed 29 Apr 2011).

--=20
|------- Dr. Christian Siefkes ------- [email protected] -------
| Homepage: http://www.siefkes.net/ | Blog: http://www.keimform.de/
|    Peer Production Everywhere:       http://peerconomy.org/wiki/
|---------------------------------- OpenPGP Key ID: 0x346452D8 --
If one cannot state a matter clearly enough so that even an intelligent
twelve-year-old can understand it, one should remain within the cloistere=
d
walls of the university and laboratory until one gets a better grasp of
one's subject matter.
        -- Margaret Mead


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