For the first time in more than eleven years, the oldest corporate blog in the world will have a professional director. The Library of the Indies will finance the effort.
Alan Furth will direct “El Correo de las Indias”
Today, this blog premieres much more a few minor changes in the template. Beginning today, and for the first time since it started more than eleven years ago, it will have a professional director, Alan Furth, who will be in charge of coordinating and editing Indianos and guest bloggers to accomplish its new mission:
to open conversations, generate ideas, and develop thoughts that serve you in your efforts to make your life an interesting life.
For almost a month, unavidainteresante, tried out a path on which we learned more than a few things. In the first place, that the concept, more than any other, identified to our readers the values that we had been projecting in our posts for more than a decade. Secondly, that we needed to apply our narrative to ourselves, and, once and for all, face the change in the way we write that many of you have asked for: to communicate more directly, to stop writing for long-time readers, and to do so with more regularity.
And we started working: first, updating and integrating the Indianopedia into the blog and then debating among ourselves until we reached the conclusion that it didn’t make sense to maintain “two faces”: El Correo de las Indiasis, and must do a better job representing, the task and the thought that make up the Indiano ideal of an interesting life.
A bet that we take very seriously
The new stage required a new outlook and professional dedication, and no one could do better than Alan, the disseminator of existential minimalism and one of the main writers for the C4SS in Spanish, at directing the blog with these objectives. Financial support from the the Library of the Indies makes it possible, and beginning today, Alan will coordinate both us Indianos and the people we invite to present new topics, will publish as one of the writers, and above all, will help us give meaning and coherence to what has been published, without losing the diversity of a community whose main capital is born of the freedom of its members and the wealth of their conversations.
The new stage also opens with small changes to the masthead and layout: you’ll be able to read us better on a tablet or cellphone. But, above all, through this blog, from now on, you’ll be able to peek much more comfortably into a world of actions and thoughts dedicated to sharing with you the search for an interesting life.
Then, he also identifies complementary revenue channels, which could include things related to the productive capacity of your house, or little rents from sharing your car, tools or Thermomix [a sophisticated kitchen appliance not available in the US]. But it seems to me that the powerful part of the model is not there, but rather in the possibilities that disintermediation and the network offer to go out into a market in continuous innovation.
immersing himself in new ideas and frameworks that offer promise
The need for promise
Before getting into the contents of the blog, I think that it would be worthwhile to turn the concept around. For years, John split his time between market entrepreneurship and the analysis of new forms of conflict and insurgency on “Global Guerrillas.” But this research is now basically closed: all that’s left is to point out the repetition of the pattern:
open source warfare — a form of warfare where many participants, motivated for very different reasons, join together to take on a larger foe — now dominates modern conflict
those improvements often lead to a lower dependence on an infrastructure that is declining inevitably towards bankruptcy.
It seemed that John was going to find, on the borders between P2P and localism, a new space in which to think. But “Resilient Communities” is not a blog of thoughts, like Global Guerrillas, but rather a ezine with novelties, examples of ingenious uses and news related to what John understands as a “resilient lifestyle.” Basically, it has earned a large number of followers, but it “doesn’t go anywhere,” it’s not a road on which new concepts will come, or new knowledge beyond hacks on crops or the achievement of domestic energy.
And of course, that’s not good enough for John. Why? Because to learn, to build knowledge, it’s important be going somewhere. It is that perspective, that promise, that allows us to understand reality dynamically, and understand the things that surround us, not only for what they are and how they affect us today, but for how they could provide a way–or block the way–to what we aspire to. As an old cyberpunk slogan went, “the future conditions the present more than the past.”
It’s a problem similar to what we studied in The Coming Futures: with the three large promises of redistribution of power opened after the fall of the wall now failed, substituted by galloping decomposition, which is nothing more than the simultaneous destruction of state and market, widespread incredulity, and consensus around the idea that “the system isn’t going anywhere” filter into every social conversation. The culture of decomposition is a culture of disillusion and an inability to establish commitments; ultimately, the main everyday point of institutional reference, the State, leaks, collapses, and is captured. And in that framework of the legitimation of “every man for himself,” localism, degrowth… are presented as alternatives, as the hope that a smaller, more manageable world–and inevitably economically and intellectually poorer–offer at least some safe reference points, a vital framework.
John’s new area of development is that much more interesting because it represents an organized and serious attempt to coordinate a line of thought that recognizes the bite of the crisis and decomposition, recovers the central elements of the promise of distributed networks, globalization of the small, and the dissipation of rents. The key concept is the “Direct Economy,” an economy that
minimizes the formal structures used by bureaucracy and markets based on decision-making. (…)
It minimizes the role of intermediaries. Finance, retail commerce, lawyers, state. The customs officers of the old world.
It unravels the things that we used leave to the industrial bureaucracy of the past. From education to science, including manufacturing and…
[It is a] blind spot. It’s something that the entire edifice of the old economy can’t see, so don’t bother trying explain it. There’s also an overlap between the two economies, but sooner than later, the “direct economy” will eclipse the old (in terms of value for those who participate in it, and of the rate of innovation to which it will give place)
This program, which is a research program but also a “market activism” program, is much more than an update of the line of thought of the power of networks of nearly a decade ago. It is a program for the construction of an environment “in parallel” with decomposition. And like every program, a possible future, a place to reach. Surely, this is the most valuable thing that can be offered at a time when decomposition is undermining culture like never before. And more important still: it offers a task and an autonomy that are already possible today. It invites not adherence, but rather, interaction, starting now, in a market with different rules.
Michel Bauwens is opening a discursive path which, in my judgement, prepares new consensuses and tools broad social and ideological sectors fit into. It would be a mistake to see it as something “passing” or as a mere ideological expression. It’s still in an early state, but it’s quite possible that, in the near future, it may bring together or constitute broad opinion trends.
Netarchical Capitalism= centralized control of infrastructure + an orientation towards accumulation of capital (whose current model/vector would be the face books)
Distributed capitalism= distributed control focused on the accumulation of capital. Bitcoin and Kickstarter would be the current seeds.
Local resilient communities= localism + circulation of social benefit (led today by ecovillages and “transition towns,” the children of degrowth and localism, which point to a sort of neo-feudalization).
Global commons= globalism + circulation of social benefit. This scenario, the most desirable to Bauwens, would combine phyles as a distributed form of enterprise and transnational political control of common goods.
Under the global domain of current capitalist production
With an emergent P2P mode of production, but still under the conditions of private capitalism.
Under conditions of a strong presence of P2P production, but under civic control
Michel Bauwens is opening a discursive path which, in my judgement, prepares new consensuses and tools that broad social and ideological sectors fit into. It would be a mistake to see it as something “passing” or as a mere ideological expression. It’s still in an early state, but it’s quite possible that, in the near future, it may bring together or constitute broad opinion trends. It would be most accurate, surely, to compare it with the birth of German social democracy in the first decades of the telegraph, and, of course, to include it in the logic of the new political movements that are characteristic of network society that Bruce Sterling announced a decade ago.
Our goal is not to assume leadership of existing institutions, but rather to render them irrelevant. (…) We don’t want to take over corporations and make them more ‘socially responsible.’ We want to build a counter-economy of open-source information, neighborhood garage manufacturing, permaculture, encrypted currency and mutual banks, leaving the corporations to die on the vine along with the state.
The idea, as Tuttle develops it in the same post, would be something like what Juanjo Pina calls market activism:
Challenging established groups to update their game and break their preconceived limits by offering them competition. The state is sinking in a hole of total surveilance and captured economies. We need preemption, dislocation and disruption – now! We want virtualization, repetition and coopetition… now! We are dedicated to finding the cracks in the state’s system, wedging them open, freeing all prisoners and pulverizing the foundations. We are calling this project: Entrepreneurial Anti-Capitalism.
Which, in practice, leads them to finance projects like Dark Wallet:
Beyond this activist vision and really, over the long term, Carson has also dedicated a lot of work to the emergence of a new institutionality of the P2P mode of production. It’s not for nothing that his last book, The Desktop Regulatory State, is subtitled The Countervailing Power of Networks and Super-Empowered Individuals. His fourth chapter, “Basic Infrastructure,” needs to be pointed out, with its extensive development of the concept of phyles, the different expressions of their transnational dimension, and the different approaches to creators and cooperators.
Let’s take a tour to look for the relationship between collectivization, the new commons, and the P2P mode of production. To do so, we’re going to jump back in time. We find ourselves in the Middle Ages. In the ninth and tenth centuries, it was a habitual practice among kings and nobles in the Cantabrian cornice, and as far as the borders of the Muslim kingdoms, to offer land to communities of freed servants.
To grant this right, two kinds of charters were used:
the “village charter” or “population charter,” which was a contract between the owner of the land and the community
the “municipal charter,” which also contributed certain legal and self-government privileges, and which needed of the consent of the king.
In both cases, the custom was to give a plot to each family, and the land to the community, which divided it for use during fixed periods among all the members. Besides agriculture, there are records of communities of shepherds in the Pyrenees, and even today, there are still communal grazing systems throughout the peninsula.
In almost all languages, we find a word to refer to communal work. In Asturian, we call it andecha; in Portuguese, mutirão; in Euskera [Basque], auzolan; in Russian, toloka; in Finnish, talkoot; in Norwegian, dugnad… Also for common goods: the comunal or procomún [in Castillian], “iriai” in Japanese, and the “commons” in English, are the basic way to refer to a public non-state good.
However, what turns out to be significant in the story of the communities on the peninsula is that, whether it is communal grazing systems, cultivation of the land, or harvesting of the sea, what’s important is economic organization and the development of a system of social well-being designed to fit the community. We’re talking about a system based on production and cooperation.
These forms, active since the Middle Ages, would resist Modernism with relative strength until the “amortizations” of the first liberalism in power forced them to evolve into modern cooperativism.
Such is the case of Port de la Selva, a town organized around a fishing cooperative. The cooperative owned the ships, nets, factories, stores, refrigerators, and transportation vehicles. And not only the production chain, but also the cafe, theater and meeting room – leisure– and a system of social provision, with insurance against death, accident or loss of boats. As Gerald Brenan described it in The Spanish Labyrinth,
Port de la Selva was a libertarian republic in miniature, and was realizing the ideal of all those towns of Catalonia, Andalusia and Castile itself, which, at different times over the past century, had proclaimed their independence and proceeded to divide up the land and issue their own currency.
So, I don’t think it’s necessary to insist on the relationship between these community models and the communities of the Civil War you’ve worked on in these days. Community production has a “before” and an “after,” which is our “now.” I just want to save three ideas that will serve us later in studying the P2P mode of production, to understand the points of continuity and the changes.
The classic agrarian commons are based on a series of capital goods (land, fishing or farming implements), which are released for their use, exploitation and maintenance by the community.
By doing that, we’re really seeing a community that gives itself its own economic organization,
…and where the wealth that is generated reverts to the community.
But before returning to these three points, we’re going to study the other origin of the new commons: economic and technological development bequeathed to us by the industrial world… and its collapse.
The legacy of industrial capitalism and the crisis of scale
Let’s think about the car.
The great symbol of industrial capitalism is the automobile industry. Applying state-of-the-art technology, intensive capital, a new organization of work (“Taylorism”) and a large-scale approach to both production and market, something incredible at the time was obtained: making the automobile -a sophisticated machine- into a consumer product that was accessible to the masses of the middle class.
What did the car represent for the world back then, which was still fundamentally agrarian?
In the first place, a prodigious, even drastic, increase in productivity. If there’s anything representative of what capitalism has historically meant, it is the development of productivity. And productivity, in the end, is technology. But technology also influences the system through other variables. The most important, maybe, is optimal scale.
What is optimal scale? The optimum size for the use of resources, starting with capital itself, that are used as means of production. Logically, scale is optimal for a particular market size and for a given technology.
If markets do not grow sharply, starting at a certain level of economic development, all the force of technological evolution will tend to reduce the optimum scale of production. Those who continue producing above that scale, using excessive capital, with larger dimensions, simply will accumulate inefficiencies.
That’s why technological development negatively affected the countries of the Soviet bloc first. Why? Because of the way they had developed, and because of the centralized nature of their economy. Both inertia and gigantism were in the DNA of their industrial organization. By the ’70s, the situation was so bad that the USSR had to assure its basic supply by buying grain from the US. The protest movements in Poland, and strikes in Russia, were the product in the ’80s of a shortage that seemed to have no remedy. The centralized system of State property was leaking everywhere. It wasn’t President Reagan who “overthrew” the Soviet bloc, but nor was it the popular protest movements. The Soviet system crumbled after dragging growing inefficiencies for two decades.
But was it different in Europe or the USA?
No, and in fact, it is precisely because of that crisis of scale that big economic changes happened in the ’80s and ’90s. What is usually known neoliberalism.
What is neoliberalism, really? A set of policies oriented towards breathing life into an over-scale of capital. What do Thatcher, Reagan and finally, Clinton do?
Deregulate, feed the large consortia of the military and aerospace industry, in the case of the two first, and of intellectual property in the third… modify international agreements in favor of big interests… in a word, generate rents from states who compensate for the inefficiencies of Big Businesses
Expand the size of markets, so over-scaled big businesses would make sense, which was called globalization
Capital itself was more and more over-scaled. New companies in new sectors require less and less scale, and therefore, less capital. In the ’80s, gigantic funds began to appear, masses of capital that looked for places to go.
They have to to distribute their risks in ever more places. And that means management costs and growing inefficiencies. These are typical symptoms of a problem of over-scaling. So, the neoliberal state helps, through financial deregulation and the opening of borders to capital flows, giving rise to new financial areas that will group sectors and entire regions through securitization, financialization, and a whole new series of financial products that distribute and globalize risks, making them, in the end, as we’ve seen, systemic.
But in the world of the ’90s, other things are happening at the same time.
The Internet and the logic of distributed production
In the first place, the structure of communications changes. We’re going from a decentralized world (the world of the telegraph and of nations) towards a distributed model of communication (the world of the Internet).
Without getting into detail, that new distributed structure makes scale independent from scope. A small Chinese enterprise, such as the one that created the vuvuzela, or that created the EGo, the standard for electronic cigars, can sell throughout the world. Of course, it won’t be able to meet all the demand, but hundreds of other small businesses will emerge that will meet it quickly.
So, at least in part, the opening of commercial barriers in the ’90s will backfire for neoliberalism’s corporate objectives. The result has been a constant increase in commerce based above all, in the emergence of new, smaller-scale, less capital-intensive, agents, at the periphery. It’s what is known as globalization of the small.
The direct consequence has been the greatest reduction of poverty in human history, but also a remarkable growth of inequality and a growing economic instability — why?
Capital, far from adapting to the reduction of scale, has continued increasing it, resorting to “financialization” and “securitization,” separating from the productive system, and regularly creating bubbles to put that surplus of capital in.
In these graphics, the evolution of trade versus capital flows is seen. While commerce maintains constant growth, capital grows exponentially. We can see also how the peaks coincide with the bubbles.
From the point of view of the organization of production, what happens is that technological change is drastically reducing the efficient size of scale. But this causes a real problem for capital: the closer to individualized production we are, the less necessary it turns out to be. It begins to accumulate large funds of financial capital that can’t be directly integrated into production. Capital has fewer large projects to invest in, and starts to move more and more quickly, more sensitive to changes in opportunities, as we can see in history of international capital flows.
Its strategy of forcing scale to ensure rents, has had weighty consequences, such as the restriction on intellectual property, the unnecessary “redefinition” of the Internet to make sense of recentralizing infrastructure (Google, Facebook, etc.), and above all, it has been able to to multiply the pressure to capture the State.
That strategy can only lead to the simultaneous destruction of the market and the state, a phenomenon that we call “decomposition,” and which is parallel to the destruction of productive capacity brought about by crises and the wars that precede and accompany them.
And there’s still more.
The Internet isn’t just a communication phenomenon. With free software, whose development and spread are its product direct, a new mode of producing and distributing has appeared. Given the deficiencies of national accounting systems, we can only intuit the true impact that free software has had so far. We only know partial things, such as, for example, the value earned by countries in development through the incorporation of free software to their industries and administrations has exceeded all development aid, both public and private, sent throughout history from the central countries.
What is the production cycle of free software?
In the first place, capital, market and benefit will be completely redefined.
The center of the system is no longer the accumulation of capital, but of the “commons,” a form of capital: knowledge, universal and free access to for anyone.
What goes to market? Maintenance, customizations, private developments… and then they are set free, incorporated to the commons, and available to all.
The market of free software starts with that universal accessibility, which is to say, with the elimination of rents from intellectual property, from position, etc. The only extraordinary benefit that a developer of free software can have, which is minimal and extremely temporary, comes from having innovated and improved something. But it lasts a short time as rent. When you make something good and you release it, you’ll earn prestige, and you’ll get more orders… for a time. These are rents that extinguish themselves. As a medium, the free software market remunerates those who produce in it for the value of their work, with a little extra if they innovated enough to “make a name for themselves.”
The good news is, this cycle isn’t exclusive to free software.
First, there were other intangible goods based on knowledge, from music to novels to textbooks. But in the last three years, more and more projects that seek to build things have taken off.
Ultimately, the value of an object on the market today is mostly design, technology, engineering… all of which are also intangibles.
That’s why we no longer talk about the system of free software production, but of the P2P mode of production, and just as it serves to produce software, it serves to produce material objects and all kinds of services.
In the last three years, industrial manufacturing projects based on the possibilities of high productivity on a small scale from a technical knowledge commons have multiplied. That is: small scale of production, huge scope (because the commons is, by definition, universal).
The “Open Source Ecology” project alone is working on the design of 40 free basic industrial machines: from a wind generator to a tractor to a brick-making machine.
We think that these technologies, while still a bit green, can be a valid basis to confront the effects of the financial crisis in the traditional local productive community, that of the micro and small industrial enterprise, from neighborhood workshops to component factories.
And finally, let’s go back to the traditional communal system. Both the historical model and P2P are based in a different kind of property: the commons.
But, while in historical communities, the subjects of that property, the ones who could exploit and use it, were a concrete community of people physically united in a locality, but now:
that possibility of use and exploitation is universal
the work and communities who do so are not necessarily defined by their locale, in a territory, but rather on a network, as can be seen in any free software project or P2P industry
and what each one does, what anyone provides, reverts directly to everyone through the new knowledge commons, which, by its own nature, is universal.
The P2P mode of production is the heir to a rich communalist tradition that comes out of premodernity. But it is also the child of modernity, and of the incredible development of productivity capitalism has left us. It has its own logic, logic that based on abundance, and not on the scarcity of the old systems of political management, even at the community level. It is a big machine to create public and universal goods without the need for the State. It distributes development and the possibility of producing without confining the people in a territory or assigning them to a community by birth.
Definitely, we can be very proud of the communal ways of the past; now, the P2P mode of production points the way to a future that, surely, old generations libertarian would have loved to have dreamed of.
To rethink of the city as knowledge capital, based on the commons and creative industries, is no longer a experimental line of thought, but rather an urgent matter accelerated by the European crisis.
One of the most interesting things about living in Bilbao is being able to see, up close, the configuration of one of the branches of the new European map of cities: From Bordeaux to Toulouse, on the one hand, and Bilbao, on the other, and from these to Zaragoza in the East and Coruña to the West. In this framework, the other day, Andoni Aldekoa, the highest director of City Hall told us about Bilbao:
We are at the moment when we can become a metropolis, or a provincial capital. And there’s nothing in between.
And I think I know exactly he meant.
While capitals are defined by series: Territory (nation), law , taxes (the capital is, first and foremost, the physical place of legislative and taxation power) and homogeneity (of the imaginary nation); the metropolises are defined by: Network(international), trust (network and trust are paramount among the values of maritime Renaissance trade, which operated without States or international legal rules), exchange (commerce, again) and difference (individual). Like a vine, and not like a tree, 2003
What configures a metropolis?
It is no coincidence that Bordeaux, Bilbao or Zaragoza bet on creative industries as the linchpin of their economic development policies.
The world tends to organize itself more and more like a free software community, and there is a profound economic reason for this: as scientific and creative components have more value with each passing day in global production, the organization of that production tends towards the work styles of academics and artists, the Academy and Republic of letters. Like a vine, and not like a tree, 2003
But what makes a city more attractive than another when it comes time to serve as a base for industries that are creative and high-value, but also small-scale? Basically, what the consultants rather bombastically call “talent.” And if there’s one thing that isn’t talent, it’s accumulating graduates, and the same goes for managing “human resources.” Rather, it has a lot of life stories, capacity, and autonomy for people to think of interesting lives…
We must rethink public installations, transcend the logic of buildings as mere markets of cultural consumption, to transform them into centers of prosumption, where the citizen becomes producer and consumer at the same time. Networks have given us the keys: Exchange between peers (P2P, crowd), transparency, deliberative democracy and open culture (open source, open goverment) and bottom-up planning.
And if this sounds radical, in that it showcases knowledge capital, it still needs to go farther. To wonder things like what support the city makes to the commons, what place it occupies in its productive cycle. And let’s not even talk about municipal employment agencies: if online services change, adding functionalities and developing new architectures to incorporate the stories the people create about their lives, and to be able manage talent, can cities continue thinking of their employment agencies the way they’ve thought about INEM of all of its life?
The list of tasks doesn’t end there: there’s a lot to investigate and experiment, from rethinking self-employment with the globalist logic of the Direct Economy to promoting the city as a portfolio of talent. The possible perspective is full of beautiful challenges and incredible possibilities. The alternative is simply distressing: vegetate our way through the crisis, letting the current leave entire economic regions to chance. It’s time for a radical change of perspective.
It’s no coincidence that they are happening in the heart of two “emerging” states that try to follow alternative models and social discourse, and try to combine a strong internal nationalism with a policy of regional hegemony. But the leaders — and beneficiaries — of this growth, a precarious first generation of a new middle class, lives a hard, intense life, between low-paying jobs and constant training. And they don’t see themselves reflected or recognized in the social discourse, which is now outdated. The struggles for public space in Istanbul or for access to transportation in Sao Paulo are a lot more than mere municipal policies:
Being ‘class C’ in Brazil is not a benefit. It is a life of hardship and sacrifices. No one can be satisfied or happy by the meager gains that have been achieved in recent years in terms of reducing poverty or inequality. Brazil, fundamentally, is still one of the most unequal countries in the world, and therefore, one of the most inequitable countries in the world. It is still a country where rights and services are denied to a portion of the population.
Lower middle class youth are moved by the anguish of little sleep, having to be on time at work, leaving work and arriving on time at college or school. The tragedy of transit and public transportation taking time does not complete the picture. These are young people who need to work, study, have fun and sleep, the main thing feeding the protests. If you take into account on one hand, the quality of public transportation that is offered, and on the other, the value of the ticket, the time lost and how unpleasant it is to ride the bus, subway and train, the protests are more than justifiable. The amazing thing is that they haven’t been going on longer.
[S]ince the nation-state derives most of its legitimacy from its ability to deliver security to citizens, this failure is more proof that the nation-state is in decline as a form of governance.
And, in reality, the fact that these urban, “municipal” mobilizations, have taken the place of big, national mobilizations,” is the best possible confirmation of his thesis.
As we’ve seen, we are far — socially and strategically — from the US’s “Occupy,” from the May 15th movement, and from its forerunners (housing demonstrations), but surely not so far from the “French November” of 2005 and unfairly reviled “macrobotellones” of 2006 in Spain. What was then, in media discourse, movements on the digital, social and even geographic periphery, have created their own centrality and their own logic, which we can summarize in three points as we look to the future:
The starting point and point of conflict with power is in the closest urban policies. The political map of globalization is a map of cities, not territories.
The demands are concrete and clear, and could, in fact, be satisfied by a local administration, but they summarize a much broader social situation — they describe a way of life and a relationship with work and training.
When the debate is expanded by the very repercussions of the demonstrations, it turns toward the authoritarian development of the nation-state in broad terms (control systems, “moralizing” laws, etc.), and only in the framework of the inevitable street repression of the mobilizations, does it become significant and receive widespread disapproval.
Istanbul and Sao Paulo are a step into a new phase of distributed social movements, with new political scenarios and new points of convergence, but also new social profiles and incipient discourse on the State, its nature, and its future.
Do you need to fit into businesses, or do you need to fit the business model into what you believe and what you want? Today, we’ll take a look at the the main models within reach, and their relationship with knowledge, conversation, and those things we value.
The idea of fleeing the dysfunctional labor market is something you share with many, but, you ask, what are the alternatives? The truth is that the range is immense, but it’s worthwhile to pause a moment on the “big models” we’re offered out there.
Traditional small industry
Most industrial SMEs still have a model, a common conception, of business that goes beyond the relationships between the people who work in it or its legal structure. It’s an old model inherited from nineteenth-century capitalism, but above all, from the breaking of the production chains in the automotive industry and other big industries at the end of the ’70s. At that time, a lot of big brands chose to close workshops and subcontract what was done in them to companies and cooperatives that employed the same workers. What did they have to do? Simply, the same thing they’d always done. But if demand dropped off, or if you wanted a better salary, it was no longer Fiat or Volkswagen’s concern — it was internal to the workshop, your workshop. Inspired by the Japanese idea of keiretsu, big brands diversified their providers, and made themselves relatively immune to labor conflicts. Industrial organization, which up until then had served to concentrate power, laid the foundation for a new form of production, which was atomized, but rigidly hierarchical. One Toni Negri became famous by theorizing about the world that would come out of the new Fiat.
In this model, a businessperson is a gentleman who buys a machine that produces something, hires people to run it, and sells the result. Nothing more. Along the manufacturing path of, for example, a car or an airplane, there will be various partial assemblers in a structure in which changes are guided by big brand names. Innovating in this framework means buying the machines necessary to respond to the new demands that come from “above.” The key is in planning well for future income against payments and the financial costs of buying them, and the salaries that remunerate the workers. That’s why it’s possible, in this context, to talk about things like “planned innovation,” which is an oxymoron in the real world we know. Certainly, when reality doesn’t adjust to the plan, the businessperson can’t ask for more “flexibility,” which is to say, co-responsibility from the salaried workers and their incomes in the process. This is the framework of a good part of the traditional union debate, and of the alternatives in industrial organization.
The effect of the reduction of the optimal scale of production on this kind of business does not have the liberating effect that it promises for the rest of society. On the contrary, since they are “one-technology businesses,” and they are not part of developing that technology, if the optimal scale of that technology falls (which is happening, for example, in many of the machines that make parts for a multifunction, programmable robot), certain costs make it quit likely that their clients will simply integrate it into their internal process, reducing risks of hold-ups in delivery… even if costs remain competitive. Technological development, the underlying innovation, doesn’t appear as somthing that can be contributed to or oriented, much less something whose orientation it make sense to discuss, but as something that is often negative: almost always dangerous — if you don’t have the wherewithal to buy the latest machine the assembler above you asks for — and other times, fatal — if they decide to buy it themselves.
Under a model like this, knowledge is knowing how to use a machine or carry out a process you didn’t design. Or, when things go badly, the process might belong to an alternative, lower-cost provider in an emerging market. But there’s no relationship between the knowledge that’s developed and the evolution of the technology or the tools. That’s why the industrial conversation is not about technology or innovation. It simply wouldn’t provide them with anything — they are consumers, not agents, of technological change that comes from outside, from the upper levels of the chain. That’s why, as Juan says, the industrial world doesn’t value abstract knowledge, but applied knowledge.
That’s also why the industrial conversation is centered on where knowledge itself can be incorporated into the productive process, because there’s enough autonomy in the organization to do it and have an impact on the results: the organization of work and the relationships between the people that make up the business. This is where to learn from the industrial world. And believe me, there are jewels.
When the social use of the Internet began to expand, and capital began to flow towards the web, before the “dot-com bubble,” that model changed… but only superficially. The business model that emerged then was the “start-up.” It was based on the technology being “new,” and whoever has “vision” could become a leader or primary assembler of new industries. It was no longer about buying the machine, it was now about buying an entire embrionic business. The new models were ranked to facilitate investment, and a whole ecosystem of investors emerged for different stages (seed capital, risk, etc.).
Investors in start-ups needed knowledge. But beware, their business consists of revaluing their investments, their shares, to be able to sell them to the next level up the pyramid, not the product. The knowledge this requires is really not knowledge of the technology or its social impact, but of what moves other investors. As Keynes once said about the stock exchange, it’s like a beauty contest where we have to vote not for who we think is the most beautiful, but who we think others will vote for as most beautiful.
Investors in start-ups want two kinds of knowledge: one, located in the business, and well-guarded by ever-more restrictive legislation on intellectual property, takes the form of patents. It can even be measured numerically in patents, because it isn’t the creation of knowledge, but rather the walls that prevent its use by anyone else, that will allow the business to sell what’s been developed to other companies — like those described above — who apply it to machines and processes. No one cares what that means or about its social impact. In fact, it’s better not to know.
And then, of course, there’s personal knowledge. There, what matters is intuiting just ahead of the overwhelming wave of hype, styles, and buzzwords(web 2.0, nanotechnology, biotechnology, cloud, etc.) what’s going to guide buying and high-risk investors. Again, it doesn’t matter what the socialmeaning might happen to be. That doesn’t have the slightest influence on its success.
In one case after another, investor knowledge in start-ups is as passive about its meaning as it is in a traditional business.
But the development of distributed communication and the shrinking optimum scale of production brought other worlds. The more the optimum scale shrinks, the more viable it became, and in more fields, to have a new business model based on a new work ethic, in which knowledge plays a central role. A new commons appears, a mass of knowledge and free (in both sense of the word) tools, maintained and developed by large, distributed communities of people who work with them and erode the centrality of monetary capital to the founding of a business. The central concern of businesses becomes the need differentiate themselves, which equates improving the commons. And with that differentiation based on support of the commons, they go to market… to sell hours of labor, not to harvest rents. The commons, then, defines, a new form of capital (and market) which radically changes the rules of the game.
But if we observe these businesses, whatever they might do (software, psychology, vehicles, advanced services, property, design, architecture, or whatever), we see that what’s important is their relationship with knowledge. In fact, we could say that their focus is not on having extremely specialized knowledge, but in capturing new knowledge and learning to provide something back to the already-existing knowledge commons (in their field or in others).
So, they are small-scale businesses, generally more or less “flat,” based on conversations — learning processes — more than on processes. They are about knowledge that provides tremendous value and which extends to understanding, in fact, even to causing social change, because, thanks to renouncing intellectual property, its use is socialized immediately, diluting its own advantageous position into mere prestige (useful for selling hours of labor, but not for charging much more for them than the market average, at least not for long).
But a conversation is not something that is produced simply because a businessperson hired a bunch of people to develop or do something. These models, which are cooperatives, even if they’re LLCs or even corporations on paper, emerge from discussions in networks, from debates that are ongoing among friends, family, and close-knit affinity groups. They emerge from real community, and provide it with sovereignty of different kinds (from those that are limited to sharing some infrastructure and costs to those that function as a community of goods). That’s why we call them community companies.
Anyway, it’s unlikely that the first model will give you a job before it pulls out of the crisis. The second isn’t creating any huge number of jobs, either. And in any case, who wants to be a wage slave to a bunch of speculative investors, when you could be an equal among peers who learn every day?
Let’s be honest. For you, someone who’s not among the new “hijos d’algo” of globalization, for your whole generation, what’s coming is a horror. Socially and personally. And there’s no sense hoping “it will all just blow over.”
Because if unemployment comes together with temp work, what we’re seeing is not temporary, it’s a process of dualization. Generational dualization: the children compensate, through salary reductions and temp contracts, the costs of firing the parents. Additionally, it’s sectoral dualization: services compensate through price for the inefficiencies of the surviving obsolete industries.
Result: jobs with higher qualifications and productivity become lower-paid than industrial jobs, overqualified children make less than their parents for the same work, the discontinuity in employment raises the retirement age, and the new home with adult children and even grandchildren, becomes the major investment of the family unit.
The hunger for home ownership is awakened and becomes an intergenerational cause: renting is dangerous when you can’t make long-term plans, so entry and part of the transition costs are borne by the parents. Mommy will fill the fridge with food in Tupperware on Mondays.
And if we look at it from the point of view of businesses, the picture is completed. On the one hand, you have social expenses: workers negotiate their salaries for what they make, but what the business pays is almost a third more. It’s a classic bargaining model. On the other hand, signaling mechanisms are broken, university degrees don’t indicate people’s capacities, even they themselves don’t seem able to do it in many cases… and yet, ever more ITC businesses understand the necessity of of understanding interrelationships, and that their costliest move is hiring the wrong person. And it’s not even because of the severance pay, but, above all, because in a world with dissipation of rents, a step backwards means a lot in opportunity costs. And this is all the more true, the smaller your scale, because when “people” doesn’t mean a universalist and abstract aggregate reducible to statistics, but rather a group of real names, a real community, a person, the geometry of the conversation changes.
Result: when you have a market that’s increasingly temporary, with people who are better-trained, and — as such, we assume — more versatile, but with higher transaction costs, businesses will necessarily appear who see a market for mediating and assuming part of these costs as a financial risk. In the ’90s, it was temp agencies. Today, it’s freelancer agencies.