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The Idea of the Commons & Future of Capitalism - Yochai Benkler


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Yochai Benkler
Harvard Law School & Berkman Center for Internet and Society, Harvard University

Creative Commons Global Summit 2015, Seoul, Korea

Published in: Economy & Finance
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The Idea of the Commons & Future of Capitalism - Yochai Benkler

  1. 1. The idea of the commons and the future of capitalism ________________________________________________________________________________________________________________________________________________________________________________________ Yochai Benkler Harvard Law School & Berkman Center for Internet and Society, Harvard University Creative Commons Global Summit Seoul, Korea, October 15, 2015
  2. 2. Pikkety, 2014 1980s an inflection point Stress on the social environment Stress on the natural environment
  3. 3. Pikkety, 2014 Mostly in the US, UK, and Anglo world; but Emerging countries seem to be following a similar pattern Europe struggling with internal North / South divide (Greece; Spain; new members) and with migration to and within the EU
  4. 4. Outcomes 99/90 99.9/99 99.99/99.9 90/50 50/10
  5. 5. Practices 99/90 99.9/99 99.99/99.9 90/50 50/10 CEO pay Superstar pay Reference group pay Contingency; alt. work arrangements Diminished bargaining power Globalization & offshoring Unemployment and underemployment Low wages Outcomes OECD Report: Divided We Stand, Why Inequality Keeps Rising (2011)
  6. 6. Practices 99/90 99.9/99 99.99/99.9 90/50 50/10 CEO pay Superstar pay Reference group pay Contingency; alt. work Diminished bargaining power Globalization & offshoring Unemployment and underemployment Low wages Outcomes Inst. Mechanisms Stock options Norms/ Experts/ compensation committees Financialization Tax rates: top personal; corporate Capital; international trade Weak labor standards & lax enforcement Deunionization; “right to work” Reduced welfare payments reduces staying power in negotiations Expansions of free trade rules Immigration policy Fed policy aimed at inflation; Austerity Minimum wage laws
  7. 7. “Ideology” in the colloquial sense is displaced by “ideology” in the Gramscian sense: deregulation, free markets, “Washington Consensus” shifts from being a right wing ideology to being an accepted “expert” position Reagan-Thatcher Clinton-Blair One dimension of the future of capitalism: The neoliberal trajectory: greater concentration of wealth; Oligarchic / crony capitalism born of rational investment in maintaining rents Ike, JFK, LBJ Nixon, Carter
  8. 8. Practices 99/90 99.9/99 99.99/99.9 90/50 50/10 CEO pay Superstar pay Reference group pay Contingency; alt. work Diminished bargaining power Globalization & offshoring Unemployment and underemployment Low wages Outcomes Institutions Stock options Norms/ Experts/ Comp. Comms. Financialization Tax rates labor standards & lax enforcement Deunionization Reduced welfare free trade Immigration policy Fed policy Min. wage Ideas Rational actor model: 1. Incentives 2. Shareholder value 3. Agency theory 4. Collective action; agency capture => Deregulation 5. Efficient markets Shareholder value Efficient markets Efficiency & growth primary goals, distribution will follow
  9. 9. A certain view of humanity and social-economic organization takes hold
  10. 10. Romer, Commentary, Fed. Res. Bank of St. Louis Rev. 2005 Hyper inflation hits at the idea of an expertly-managed progressive state
  11. 11. It is then translated into discrete theories of how the world works, and from there, to practical recommendations for how well-adjusted executives and organizations should be managed Agency theory
  12. 12. Pillars of neoliberalism ● Uncertainty and complexity => economic planning impossible => Only prices in markets produce good information – Deregulation; financialization; tax cuts; lower inflation trumps lower unemployment ● Rationality = self-interest – Stock options; shareholder value vs. stakeholders => disinvestment in workers; contingent work ● Collective action fails => corrupts into illegitimate power => deregulation ● Liberty depends on choice in markets ● Property rights + market incentives necessary and adequate to achieve human welfare ________________________________________________________________________________________________________________________________________________________________________________________
  13. 13. Commons studies ● Facts, facts, and damn facts... ________________________________________________________________________________________________________________________________________________________________________________________
  14. 14. Free/Open Source Software________________________________________________________________________________________________________________________________________________________________________________________ Proprietary FOSS FOSS Custom Linux based
  15. 15. Free/Open Source Software ________________________________________________________________________________________________________________________________________________________________________________________
  16. 16. Weber / Schumpeter Taylor/Williamson Second Industrial Divide decentralized centralized Market-based Non-market ________________________________________________________________________________________________________________________________________________________________________________________
  17. 17. decentralized centralized Market-based Non-market ________________________________________________________________________________________________________________________________________________________________________________________ 1980s-90s: Privatization
  18. 18. Networked Information Economy decentralized centralized Market-based Non-market ________________________________________________________________________________________________________________________________________________________________________________________
  19. 19. decentralized centralized Market-based Non-market Networked Information Economy Citizens connect ________________________________________________________________________________________________________________________________________________________________________________________
  20. 20. CC-BY CC-NC CC-SA CC-ND CC-PD “Mine” does not mean “for sale”; Sharing does not mean erasing the self A robust system of social exchange independent of market exchange; Building our own commons An ethic of reciprocity NOT collectivism; insistence on choice and self-authorship Creativity, freedom of speech and thought, depend on a robust public domain
  21. 21. Three schools of the commons ● CPRs ● Common property regimes ● Institutional Analysis and Development ● Local knowledge; effective self-governance ● Information commons / open access ● Open access / public domain ● Growth-oriented: roads and navigable waterways; innovation & creativity; infrastructure; education & science ● Not in the periphery, but at the core of the most advanced economies ● Global commons ● Stewardship ________________________________________________________________________________________________________________________________________________________________________________________
  22. 22. Uncertainty and complexity ● IAD ● Uncertainty and complexity => standardized property packets are lossy ● Local institutions can provide better resource management and utilization than either central planning or property-based markets ● Information commons / innovation ● Public domain / common-based exploration allows for diverse people, using diverse resources, to apply diverse knowledge and experiment; an evolutionary model of learning; property hampers learning ________________________________________________________________________________________________________________________________________________________________________________________
  23. 23. Resource space (who knows what?) Project space (what shall we do?)Predictable, well defined diverse, uncertain, complex Routine Knowledge Intensive; Innovative; Diverse insights; Tacit High, concentrated Exploration; experimentationinnovationoptimization Appropriability Freedom to operate Diversemotivations Incentives Tradeoffs Risk Uncertainty Incontractible insights Commons / Public Domain
  24. 24. Commons-based production • Production based on • Utilizing inputs from a resource set in which no one exerts exclusive rights • Appropriating outputs without asserting exclusive property rights in them • Can be individual or collective, commercial or noncommercial • Examples • Classic views of science • Trucking, as opposed to railroads • Party in a park, instead of a backyard ________________________________________________________________________________________________________________________________________________________________________________________
  25. 25. Commons-based production ● Individual or collaborative ● Commercial or noncommercial ● increases the diversity of actors, motivations, transactional forms ● Important because it decentralizes authority to act, paralleling what technology/economy has done for practical capacity to act ________________________________________________________________________________________________________________________________________________________________________________________
  26. 26. Commons and Capitalism • Ostrom Commons: • Discrete, stable communities that overcome the logic of collective action, or the systematic failure to organize absent property and markets, or states • Open Commons; knowledge & networks • Public domain central to innovation • Challenge to the unique role of exclusive property in the creation of growth and welfare • Rejection of the logic of accumulation and its dominance over all other values; embedding production in the social ________________________________________________________________________________________________________________________________________________________________________________________
  27. 27. Smart grid communications: Critical Infrastructures________________________________________________________________________________________________________________________________________________________________________________________ Silver Spring Networks 20.00% Itron 19.00% Trilliant 1.00% Elster 4.00% Aclara 6.00% Tantalus 1.00% Landis & Gyr 17.00% Sensus 20.00% SmartSync 3.00% Echelon 3.00% Unknown 6.00% Market share by company and technology Market share of Smart Grid Commnuications Q1 2012 Pike Research
  28. 28. Mission Critical: Wireless Healthcare ________________________________________________________________________________________________________________________________________________________________________________________ Market share Wireless Healthcare Kalorama Information September 2011
  29. 29. Mobile broadband ________________________________________________________________________________________________________________________________________________________________________________________ Share of iPhone data traffic Share of iPad data traffic Source: ComScore Digital Omnivores, Oct. 2011
  30. 30. Mobile Payments; Access Control; Inventory Management ________________________________________________________________________________________________________________________________________________________________________________________
  31. 31. Collective action ● Core target of Ostrom Commons studies ● Detailed studying showing the repeated stable success of collective action ● “Well-behaved” governance models; sanctions, proceedings, stable social norms ● Knowledge commons, culturally-constructed commons, peer production: rich new grounds for empirical refutation ________________________________________________________________________________________________________________________________________________________________________________________
  32. 32. Diffused Power, Degrees of Freedom ● Commons-based licensing ● Rough consensus/debate & discourse ● Shared normative framings ● Meritocracy ● Redundant spheres of nested and overlapping power ● Formal and semi-formal institutions ● Irreverence and resistance ● Leadership, but limited by the other pathways of self-governance and resistance ________________________________________________________________________________________________________________________________________________________________________________________
  33. 33. Homo Economicus, Self-interest with guile Homo Socialis: Diverse pro-social motivations; Competition & Cooperation Control in tightly coupled-systems Self-direction, experimentation, ethical engagement in loosely-coupled systems The Nature of Rationality________________________________________________________________________________________________________________________________________________________________________________________
  34. 34. Cooperative Human Systems  Conceptual: From “rationality” modeled as universal self-interest translated into material concerns to diversity of motivations and a preponderance of prosocial humanity sensitive to conditions  Design: Cooperative human systems design based on behaviorally realistic, evidence-based design; integrating multiple disciplines, susceptible of testing and implementation  Politics: We cannot separate out “incentives” from fairness, ethics, empathy, solidarity, even as a matter of effectiveness ________________________________________________________________________________________________________________________________________________________________________________________
  35. 35. Property-based incentives ● CPR studies ● “Washington Consensus” development interventions can and do muck things up. ● Lose local knowledge ● Crowd out motivations ● Atrophy social enforcement mechanisms ● Information commons / innovation ● Patents & Copyright systematically misallocate resources, undermine follow-on innovation ● Prices can crowd out volunteerism ● => Property is one tool in the institutional toolkit, to be used where and as appropriate, but susceptible to overuse ________________________________________________________________________________________________________________________________________________________________________________________
  36. 36. Freedom in the commons ● Information commons / innovation ● “Free as in free speech” => skepticism of proprietary models ● Monopoly, incumbency, market power are endemic; “free market” is a utopia, not a descriptively useful category ● Resistance to “planned economy vs. free markets” dichotomy; emphasis on self- organization alternatives ● Strong affirmative autonomy claims; self- expression and freedom to tinker ● Environmental commons ● Free markets lead to tragedy in the global commons absent a governance system ________________________________________________________________________________________________________________________________________________________________________________________
  37. 37. The Commons as Idea ● People can effectively act collectively to govern their utilization of resources ● We respond to diverse motivations, economic utility and a range of social, emotional, and rational ethical commitments ● Property and markets vs. state planning do not exhaust the means of achieving growth and material well-being ● Cooperative social action in commons can also support growth, be more efficient, and is sustainable ________________________________________________________________________________________________________________________________________________________________________________________
  38. 38. The Commons as Idea ● Production and resource management are socially embedded activities ● Social embeddedness is not something from which we need to free markets ● Freedom as effective self-governance, individual and collective ● Property-based markets can undermine freedom in both these senses ● Where markets disembed production, they can do more harm than good to both productivity and freedom ________________________________________________________________________________________________________________________________________________________________________________________
  39. 39. What is to be done?
  40. 40. Peer cooperativism ● The core of Free Software (as opposed to Open Source) has been to build freedom into capabilities, under conditions that secure freedom to those who depend on what you build and would be subject to power were they dependent on a non-free capability ● TCP/IP, HTML, FOSS, Wikipedia, WiFi, show this is not a pipe dream ● Diaspora, Community Wireless, Firefox HTML 5 DRM implementation show it is far from easy or certain ________________________________________________________________________________________________________________________________________________________________________________________
  41. 41. decentralized centralized Market-based Non-market Networked Information Economy Citizens connect ________________________________________________________________________________________________________________________________________________________________________________________
  42. 42. Alienated labor? Social context and meaning at the core.
  43. 43. Battle over the idea of self-interested rationality as the core model of human motivation Subverting the possibility of socially- embedded exchange as a core model of provisioning in contra- distinction to the tyranny of the margin The “sharing economy”? Is the market adopting “embrace and extend” of the rhetoric of peer production and sharing while undermining its core?
  44. 44. Socially-embedded markets ● High-commitment, high-performance organizations offer a normative framing that undermines the self-interested view of “it's just business” ● Managerial and owner norms are important; there is enough slack in markets for moral commitments to make a difference ● Market outcomes will likely continue to be the dominant driver of economic security for a majority of people in the coming decades ● Will require battle of ideas; social pressure; and legal reform ________________________________________________________________________________________________________________________________________________________________________________________
  45. 45. One company at a time, But also the Fight for 15 and regulatory battles over minimum wage
  46. 46. Peer Pragmatism ● Citizenship modeled on peer self- governance ● Rejecting pure delegation conceptions of a republic. Building platforms for active engagement ● Skeptical, irreverent participation, committed to debate, reason, and willingness to state and defend normative commitments ● Nested, redundant, overlapping spheres of power; subsidiarity to spheres of contribution and knowledge ● Redundant pathways to invoke and avoid governance ________________________________________________________________________________________________________________________________________________________________________________________
  47. 47. Peer Pragmatism ● Citizenship modeled on peer governance ● A progressivism aware of the fallibility of the state ● Destabilizing power concentrations ● Caution about steering / paternalism ● Redistribution aimed at preserving autonomy, rather than finely tuned to secure incentives and supply predefined needs ● Investment in capabilities – education; infrastructure; health ________________________________________________________________________________________________________________________________________________________________________________________
  48. 48. Peer Pragmatism ● Citizenship modeled on peer governance ● A progressivism aware of the fallibility of the state ● A liberterianism aware of the fallibility of markets and the limits of mutualism ● Global public goods, like climate and the environment, global poverty and migration, war, all require government- and intergovernmental level collective action ● Effective institutions at all levels require continuous engagement, because they all unravel over time ________________________________________________________________________________________________________________________________________________________________________________________
  49. 49. At a societal level, beyond “State, Market, Society” to diverse, more granular definitions State Market Civil Society
  50. 50. The political system Education/ Academia Established Firms Operating In markets Administrative/ bureaucratic governance Small businesses Entrepreneurial firms Law Social circles Family Media State Market Civil Society Innovation State / municipal governments Religion Civic associations
  51. 51. Degrees of Freedom________________________________________________________________________________________________________________________________________________________________________________________ ● Diverse systems and subsystems are coming under diverse pressures ● Each subsystem that we stabilize as a commons, organize as a cooperative human system is one dimension in which we can anchor a socially-embedded productive life ● Bobbing and weaving between systems of constraint an affordance, leveraging those that are more resistant to power, disrupting flows of power, is the practice of freedom ● The stakes are not utopia, but an achievable renegotiation of the human condition under a more socially-embedded form of capitalism