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Previous part: Commons and Possession
We have seen that it is indeed possible to generalize peer production to material production in such a way that its essential traits—it is based on contributions, on free cooperation, and on commons and possession—are preserved. So far, peer production has been largely limited to the immaterial sphere of information goods, but this limitation is not essential and might sooner or later disappear.
At this point, the reader might be inclined to ask: So what? So we can either have an economy based on markets (a market economy, a.k.a. capitalism) or an economy based on peer production (a peer economy), but, in the end: what difference would it make?
The core difference is that the peer economy directly achieves the goal which the market achieves only indirectly (if at all): fulfilling people’s needs and desires, making it possible for them to get what they want to have and to live the way they want to live. In the peer economy, you cooperate with others to get the goods you like to have, while in the market economy you produce one thing to get money which then allows you to get other things. Peer production cuts out the middle layer—the need to sell so you can buy. This change goes very deep, since in capitalism the apparently harmless middle layer (the need to make money) takes over and becomes the primary goal of production, shifting the original goal (fulfilling people’s needs and desires) into the background.
In the market, you need money to get the goods you like to buy. If you don’t have enough money, you need to sell something, and if you don’t have anything else, you need to sell your own labor power. But if nobody wants your labor power, you are out of luck. You are unemployed and will generally remain poor and unable to get most of the things you would like to have.
In peer production, there is no exchange, and hence no need to have anything to sell. You will often be expected to spend some effort to get the things you like to have, but this is only to contribute your share to the overall effort. If there is nothing left to do, there is no reason to work, hence the term “unemployment” does not even make sense in the context of a peer economy. People might expect you to contribute (in order to reduce their own workload), but they will also allow you to contribute (for the very same reason).
With exchange, you must have something to sell that others want to buy (your labor power, if nothing else), and you have to compete with others who have to do the same. But in a contribution-based economy, you don’t have to out-compete your co-contributors: instead, they will just “move over” to let you take your part of the overall effort, because it makes sense for them to do so. In the peer economy, there is no need to out-compete the others. But there are still incentives to do better, such as your desire to decrease your workload or to increase your reputation.
This is due to the fact that peer production is demand-driven, while market production is profit-driven. In peer production, things are produced and services are organized if there are people who want to have them and who are willing to jointly spend the effort that is necessary to get them. There is no need to out-compete anybody in order to reach these aims—on the contrary, cooperation with those who pursue similar goals will generally be advantageous for reaching your goals, since it can allow you to improve your efficiency and reduce your workload.
On the other hand, in the market economy, which is based on the exchange of products produced by independent private producers competing with each other, each producer must try to out-compete its competitors, otherwise they will fail to sell their products and lose in the market. Companies have to reduce the cost of production as far as possible, or else the customers will tend to flock to competitors who are able to produce and hence sell cheaper. And they have to keep their level of profits similar to those of competing companies and of other sectors, or the capital they need to keep or extend their market share will tend to flow elsewhere. The rules of market competition ensure that companies must think primarily of their profits, if they want to survive as market players. They cannot choose to cut profits out of other considerations, unless all their competitors do the same (which they will hardly do, unless forced by law).
The necessity to outdo your competition ensures that prior demand is neither a sufficient nor a necessary condition for market production. On the one hand, a company might work very hard on instilling demand in potential customers, if it feels it can make a profit from selling a line of products. On the other hand, demand, no matter how urgent, is not enough to get a good produced. The market will not satisfy demand if potential producers cannot make a profit from selling to those who have the demand, or if they can make a higher profit by producing something else.
Profit is not just an arbitrary personal goal that market producers might or might not choose to pursue—it is a forced upon them by the rules of the market. Personally, market producers might consider their participation in the market just as a means to an end (to get what they want or need), but the market forces them to consider profit as an end of its own, if they want to succeed. Peer production is not organized by private producers who try to sell something and have to compete with others who try to do the same, but by people who cooperate which each other, who join forces in order to help each other reach to their goals, because it makes sense for them to do so. In peer production, there are no intermediate means that might become an end of their own.
In peer production, it is reasonable to cooperate instead of competing, to share your knowledge and experiences instead of keeping them secret. Therefore, innovations will spread much faster. The tendency of the market to keep innovations secret or to treat them as property imposes a large amount of additional labor that is unnecessary in a peer economy. In peer production, there is no need to reinvent any wheels that have already been invented by others.
And there are lots of other activities that are necessary or useful in a market context but won’t be needed in a peer economy. Peer projects have little or no reason to instill demand for their products. The whole overhead of acquiring and retaining capital and keeping shareholders happy will be gone, and so will be the necessity to manage money and profits, which keeps a whole industry busy as of today.
Capitalism also entails a huge overhead outside the regular production process. People spend innumerable hours trying to look for a job (especially those who cannot find one) or training for better jobs without getting them, and a huge bureaucracy is needed to deal with the jobless. The control structures imposed by current society—laws, police, prisons, governments—are mainly needed to upkeep the private property regime that the market requires (to prevent people from selling or using things that are supposed to be owned by others) and to prevent people from acquiring money in ways that are considered socially unacceptable. A peer economy, where there is no need to earn money and where people can get whatever they want by contributing to a project of their choice, will only need much leaner versions of such structures, if at all.
Not only will peer production grant people an unprecedented amount of control over their own lives, it will also require much less work for doing so. Without the need for all the overhead activities imposed by the market and the private property regime, peer production can reach an efficiency the most ardent advocates of the market cannot even dream of.