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June 3, 2008

Are Online Commons a Boon or a Threat to the Market System?

A simmering debate starts to heat up.

There is a simmering debate in certain tech circles that is starting to come to a boil. It concerns the significance of Web 2.0 to the political economy. Web 2.0, refers to websites like Wikipedia, MySpace, Facebook, among thousands of others, where people can self-organize themselves into communities and share stuff for free, without the blessings of a marketplace.

Is this a boon or a threat to the market system? Is the information that people contribute to Web 2.0 sites the ultimate capitalist scam – because investors are able to seize control of, and make money from, work that the commoners contribute for free? Amazon elicits and compiles customer’s freely made product recommendations in order to stimulate more sales. Facebook uses its enormous database of personal information to sell to targeted advertisements and sophisticated demographic data to market research firms. MySpace and blog software makers make money by hosting people’s blogs and personal rants.

By fxp via Flickr, under a CC BY-ND license.

Alternatively, do online communities represent a crisis for capitalism as many commons become able to independently generate “socially created value” and protect it from capitalist predators? Wikipedia has succeeded because it uses a license to prohibit private appropriation of the content. Hackers have been able to create protected commons of software code like GNU/Linux (among thousands of others) because they use the General Public License (GPL) or other licenses to protect the commons. Musicians and video-makers use Creative Commons licenses to assure that their works will remain available for sharing.

Let’s hear first from the critic of the Internet as a boon to the commoners. Jasper Bernes, a left-leaning poet and blogger, challenges the liberalizing ideology of the Internet in a recent blog post (brought to my attention via Jonathan Taplin’s excellent blog). Bernes’ full essay is worth a read, but a critical passage that reflects one school of thought, is this:

Essentially, with the Internet, capitalism gifts the masses with a false commons where people can work, off the clock, creating information and relationships that the ruling class can enclose, appropriate, commodify, and sell back to us at a later date. It’s a way of letting the process of primitive accumulation work as a perpetual, and because of the stagnation of the economies in the advanced capitalist countries, vital, supplement to the mechanism of exploitation, and one that should be seen alongside the other forms of primitive accumulation that are occurring right now and are, for sure, much more important: the direct seizure of Iraqi resources, the copyrighting and commodifying of the material of our bodies, and most obviously, the accumulation by dispossession that is occurring in Africa, in China, in Latin America, as capitalism pushes to its limits and attempts to expunge from the earth any trace of commonly-held land.

Yet there is another emerging school of thought that argues that the new online communities constitute a serious threat to the neoliberal market economy because they represent a powerful alternative type of (non-monetary) economy. The commons represents a competitive source of value-creation.

This economy is variously called a commons, a “gift economy,” or an “ethical economy” (because relationships are coordinated by personal and moral factors like respect, trust and reputation). But some theorists argue that the properly structured commons cannot necessarily be corrupted by the market (“enclosed”), because the community has the means (licensing schemes, social sanctions) to protect itself.

So, for example, Adam Arvidsson writes about the “Crisis of Value and the Ethical Economy,” cited by Michel Bauwens on his blog. (A tip of the hat to the provocative and thoughtful Peer to Peer Foundation blog for alerting me to this piece and others).

Arvidsson writes that “the ethical economy presents a problem of measure for the capitalist monetary economy because it largely unfolds beyond its direct control.” For example, people can create their own blogs and share their own amateur videos on YouTube without having to enter into “the market.” People have a great deal of freedom to amuse or enlighten themselves with their own writings, music and video, without having to buy anything. It represents a kind of post-market “folk culture.”

The market economy desperately wants to “capture” this folk culture (“user generated content”) and “monetize” it – but to do so risks killing the golden goose. If a company encloses a cultural commons, it can undermine the integrity of the social community that helps draw people to it. (People will not want to participate in Second Life, the immersive online environment, for example, if the host company can simply seize the things that people create there. On Facebook, users have already objected to data-mining and advertising practices that they consider a violation of their privacy.

So a conundrum arises: How to “respect” the sovereignty of an online community while also making money off of it?

Arvidsson argues that there is a tacit war underway. The market economy wants consumers to stay in the market economy, and not drift off into a competitive alternative universe of sharing and social community: “We can understand intellectual property legislation and digital rights management systems as attempts not only to enforce property claims, but also to restrict the circulation of such property to circuits in which measurable values are created.” (Measurable value = money.) The market economy wants us to remain as loyal consumers, and not become commoners.

What’s fascinating is that the commons is developing its own alternative metrics for naming and “measuring” social value. Slashdot, a hacker site, has a “karma system” for rating a person’s reputation and credibility. eBay has its own system of user ratings of sellers that is essential to people’s willingness to do business with strangers in online auctions. Arvidsson explains:

Such alternative, emergent measurements systems significantly empower the ethical economy by endowing it with its own means of organization. Indeed, the next thing on the horizon are the alternative or Open Money systems that are emerging all across the globe. These can accomplish the coordination of scarce resources by means of media that are both disconnected from the global capitalist economy and thus oriented to alternative value flows, and that provide different protocols for action.

It is easy to become lost in abstract theorizing when discussing the competitive tensions between the commons and markets. All sorts of old-school agendas (Marx, Ayn Rand, Adam Smith) tend to make an appearance. Yet it also seems true that the “co-creation of value” – the co-mingling of markets and commons – is fraught with lots of unresolved issues, including the long-term viability of the commons.

A final quote from Arvidsson: “The present model of capitalism is rapidly losing legitimacy. It begins to be obvious to more and more people that a model that builds on the creation of an artificial abundance of non-renewable natural resources and an artificial scarcity of easy-to-renew immaterial resources, is not only unsustainable but also ethically corrupt.”

My first concentrated exposure to this debate was in an Aspen Institute conference for which I wrote a report, as rapporteur. Download The Rise of Collective Intelligence

This is a conversation worth tracking.