THE “New Depression” has suddenly made poverty fashionable. After a decade in which wealth ruled and the needs of the majority succumbed to those on top of the pile — the elite few, capable of leveraging assets and staking future earnings against the bond market — the realisation has dawned — today’s economy no longer resembles the pyramid scheme invented by Capitalism. Power is no longer in the hands of stuffy bankers. There is a “new world order” and it is not based upon tangible assets, real-world property prices, or even monetary value inside the banking system. It is a virtual economy that includes the rest of us, and it is based upon a collective notion of the digital commons, advocated by electronic pioneers and visionaries like Lawrence Lessig, John Perry Barlow, Richard Stallman and Joichi Ito.
Whether or not you own a computer, enjoy your own Internet access or just know about the Net because of the prevalence of Internet Cafes, you undoubtedly share in the collective wealth of the millions of people who have chosen to share their Intellectual property via the Creative Commons and other forms of digital distribution systems. The GNU open source license advocated by Richard Stallman and the Free Software Foundation, for example, gives users of software carrying a free and open source logo, the ability to modify, redistribute and alter the software, which on the whole is freely available. The net worth of the free Linux computer system for instance has been estimated to run into the billions.(1) Ubuntu, a South African distribution of Linux which has taken the computer world by storm, is said to have increased the wealth of its billionaire founder, Mark Shuttleworth, a thousand-fold.
This is not value in any normal sense of the word. Neither the Creative Commons, nor the GNU-Linux scheme refer to actual monetary gain. Rather, they are what Lawrence Lessig refers to as the increasing prevalence and importance of non-rivelrous resources, a new social good that is infinitely reproducible and whose substance reflects a fundamental shift away from capitalist power relations which rely on scarcity (and rivalry) towards a new world in which abundance and post-scarcity have become buzz words.
The problem with our current banking system and financial markets which rely upon securities, stocks and bonds is that none of these terms reflect anything tangible in the real world. This is through no fault of our own, but rather the propensity to treat everything online, as somehow absent, as if it did not exist. As John Perry Barlow says, “there is no there over there in cyberspace”. The abolition of property in favour of a new virtual economy in which digital assets are freely available threatens to turn Capitalism on its head. How are we to value the entirety of the World Wide Web, the grand social project we call the NET without taking into account all those who stand to benefit in the future, as well as the current users of today?(2)
It was not so long ago that a part of the online world experienced what was known as the Dot.Com Bubble. For a short while, there was a rapid increase in stock prices associated with companies with online profiles such as Microsoft and Yahoo. The boom was short-lived. The first virtual economy based upon growth in terms of new electronic objects which were still valued in the old way (in which shares price was supposed to reflect consumer demand), turned out to be unsustainable.
In fact, the selfsame reason there had been a boom to begin with — the infinite potential of the online world (which could never match profit vs consumer demand in terms of capitalist scarcity)- turned out to be its very downfall, and like tulipmania and the South Sea Island Bubble, the contradiction was unable to be resolved and so the first Dot.Com bubble economy faded away.
On the ruins of this first virtual world experiment, the new social order of Web 2.0 was laid. No longer would there be single celled corporate organisms delivering goods and services, rather, like the ubiquitous Google, we would all share in the collective wealth and potential, whether this be via the simple monetization of websites via point-and-click advertising which translated into pennys-per-view paid by the Google company, or the redistribution of wealth via changes in the legal framework governing copyright — For instance a recent class action law-suite may unleash every book in the world and exempt publishers from their responsibilities by placing copyright in the hands of service providers (who will ostensibly provide knowledge along with Internet services) — the new economy has became an exercise in Utopian Socialism, as well as an abject lesson in the shortcomings of the current world economic view, or as some might argue, an ever-diminishing piece of the ever-increasing pie, rendering everyone equally poor.
The problem with all philanthropic endeavors, measured as they are, on the one hand in the pennys, liens and servitudes given to beneficiaries or users, and on the other, the completely disproportionate wealth accumulated usually by those in control, is that our banking system has failed to adapt. Instead of valuing each and every individual by the sum total of human knowledge available online in the collective common wealth, we continue to support an economic system in which only those who possess stock i.e. property, are allowed to derive any further monetary benefit. In effect we are penalising those who participate in the system by hanging onto private property at the exact time at which private property is no longer an indication of wealth.
Let us not underestimate the pennys given to Google Adsense users in Mongolia for example. But we are all impoverished by a system that preaches 21st Century Digital collectivism on the one hand, and 19th Century Mercantile privateering on the other. The two systems are incongruous, more so now, than they were during the 20th Century. What would happen if we reinvented ourselves? Created new banking and financial systems based upon Open Source assets and Creative Commons production? The resulting collective economy would be staggering.
Imagine if we reorganised Detroit on an open-source model, instead of the old system? Would consumers cease being consumers and participate in the design process? Would parts for cars be delivered by online collectives which cooperated on issues in the industry instead of competing? Would there be a completely different means of creating finance, based not on money, but on personal input into the system?
Another example of how solutions in the online world are making their way into the real world is the growing open-source hardware movement. From the Arduino circuit board whose creators freely encourage others to reproduce and whose blueprints have been ‘given away” to the peer-2-peer hardware bank that is funding open-source hardware initiatives that imitate the open-source software movement. Such initiatives are anything but the coercive capitalism of the past.
The new world of Web 2.0 offers startling examples of post-capitalist successes. It is only a failure of the imagination which has prevented us from drawing inspiration from Ubuntu Linux, Free and Open Source Software and the sharing of creativity via the Creative Commons. Yes, we are still going to be faced with the problems of our age, despite our best intentions. Property is not going to simply grind to a halt. Washington is still propping up a Trillion Dollar insurance scheme based upon value derived from the securitisation of property. Instead we are likely to see the renegotiation of virtual instruments in a more egalitarian sense. If we all own a part of Google, or all have a part to play in the Creative Commons and Ubuntu, then surely we are all part of a new system?
Before we can find a solution, we have to understand how we got here. According to economists, property prices are dropping. Analysts thus began to predict that property would lose value and this in turn drove down the price of property, causing banks to fail and the World Bank and Federal Reserve to step in. In essence, the value of real world goods no longer reflected their book value and thus an entire futures market based upon the the strange premise of infinite expansion, came to a sudden and abrupt end.
The deflation that has occurred in the West and which is unleashing havoc in developing nations in the South, is merely symptomatic of a much larger systemic and institutional problem. The inability of our banking system to adapt to changing circumstances — the refusal to define property within any terms other than the crude materialism of gold bars and scientific weights and equations that have their root not in the Twentieth Century but the 19th and 18th Centuries.
Infinite expansion can only happen if there is continual development of the instruments of exchange, and in our case, the social mechanism in which such exchange happens. The financial world is thus at a dead end — a result of the failure of an economic model based upon social inequality and mercantile Capitalism, the way things are bought and sold. Instead of a new world beyond commerce, an economy of social capital in which each and every person is considered in possession of inalienable rights, as an integral part of the collective system, there is the stark refusal of the current monetary market to see us as anything other than private debt, consumers at best, lifelong debtors at worst.
The Creative Commons in this Manichean view is anything but a philanthropic exercise. In a sense, the system we have is based upon wage slavery. Some have more rights than others. The economy, according to the bankers, is as separated from the social order as it was when it was first proposed. To give an indication, there is not even sufficient debate about the forces which created our epoch, nor trenchant argument about the changes that have yet to come. Talk, when it happens, happens behind closed doors.
This is the exact antithesis of an open source system. In the neoliberal, mercantile and monetarist banking view, the numbers are more important than social consequences. The Net is thus nothing more than a relic, or better yet, a useless part of the natural world to be exploited like every other rivelrous resource. Our monetary system has therefore failed to accept the basic premise, the mathematics behind the growth of the Web and the Information Age. Consider this. As the Web grows like a centipede continually casting off its carapace which is stored in a collective memory bank, the Net’s capacity to hold the collective reservoir of human potential — knowledge, discourse, education, entertainment, increases. From a mercantile view, this is terrifying, for this is exactly the opposite of what the cold discipline of economics has always determined to be the public good. In monetary terms, the Internet is destroying value and decapitating property as we know it.
There is no turning back. We have got to change the way we think about property in order to survive, and we can only do this if we begin to attach a value to the collective resource as a common good, for the benefit of future generations.
The 21st Century has brought with it a number of bugbears. Along with the decline of real world assets, the possibility of the end of money as a means of exchange. Imagine a world in which there was no need for money? A world of abundance painted by such documentaries as Zeitgeist and Hollywood pictures such as Star Trek. This is precisely the world which today’s career monetarists have rallied against, and which has driven bankers into apoplexy, like the end of time and the end of labour, what has become of the end of money as the sole means of exchange?
Instead of labour determining production, post-scarcity means that any human being can realise his or her potential without worrying about limitations within the particular resource (3). In an open source world for example, we are no longer restricted by the laws of exchange, supply and demand. The online world is just one example of what can be achieved, and we must not make the mistake of forgetting about this as the real world remains in crisis, while the online world booms.
Projects such as Ubuntu Linux, Creative Commons and Google Adsense, have shown the way. A solution to scarcity has already been implemented online and we all participate on a daily basis, whether we know it or not — whenever we compile software from source code, or download free books and music and engage in online discourse by following the instructions of the various organisations and systems which have all conspired to deliver us a post-scarcity world.
There is no possibility of return to the old order. We cannot exist without Google and the Creative Commons nor can we afford to simply forget about individual achievements — any one of the many contributions toward a freer world, our future wealth. However, if we all continue to follow the conventions of the current banking system, we are doomed. The system can only be changed if we insist, like Hakim Bey, that we are the heirs to an enormous fortune — the collective wealth of all those who have participated in the above experiments over the past decade. The goal is clear. Go to a bank and tell them, yes, I am worth billions on paper. My assets are determined by the collective works of Shakespeare and every writer who has ever existed whose work currently is in the public domain, and what is more, I am part of a world-wide movement which shares photographs, samples music and mixes video and to top this, we redistribute free software which we create entirely from Open Source, loan me a Million, what is the likely outcome?
An old-time banker is likely to call the cops, and accuse you of being a communist. A new-world banker might see things differently. Here is what an Open Source banking system based upon the Creative Commons might look like in the next couple of years. Suppose for argument sake that the entire Creative Commons output for the next ten years was valued at 10 Billion Euros. Then suppose one set up a system, an online registry to begin with,where each person who contributes something to the project could register their contribution. What would this contribution be worth to future generations? Would you be richer or poorer because of the contributions of generations before you? This is the challenge — to develop economic systems which allow us to unlock human potential, not simply online but in the real world too.
(1) The Linux Foundation has published the results of a study that the organization conducted in order to compute the approximate financial value of the Linux platform. Based on the results of the study, the Linux Foundation has concluded that it would cost $1.4 billion to develop the Linux kernel from scratch and $10.8 billion to develop the complete platform stack.http://arstechnica.com/business/news/2008/10/linux-foundation-the-kernel-is-worth-1-4-billion.ars
(2) A UK economist, Rufus Pollack has argued in a 2006 paper published by the Institute for Public Policy that the public domain produces considerable social and economic value, and that this value must be taken into account when crafting intellectual property law. http://arstechnica.com/tech-policy/news/2006/11/8292.ars
(3) As society becomes more efficient at recycling and technology develops, the time will come where the only limitations of the resource, are terrestrial, and even this limitation might disappear, if we create a sufficiently creative economic order able to explore the solar system without degrading the biosphere.