Solving the Crisis of Extractive Capitalism

A new post-capitalist ecosystem of value creation

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By Michel Bauwens and Vasilis Kostakis

Our world is once again hurled into a deep socio-economic crisis, in which the current extractive model of value creation is facing a series of structural crises. But as the old world is dislocating, the seeds of a new one are being sown.

The peer-to-peer capacity to relate to each other over the Internet entails the emergence of what Yochai Benkler in the The Wealth of Networks called ‘commons-based peer production’ (CBPP). CBPP is a new pathway of value creation and distribution, where peer-to-peer infrastructures allow individuals to communicate, self-organize and, ultimately, co-create non-rivalrous use value, in the form of digital commons of knowledge, software and design. Think of the free encyclopedia Wikipedia, the myriad of free/open-source projects or open design communities such as Wikihouse and Farmhack.

CBPP is fundamentally different from the incumbent models of value creation under industrial capitalism. In the latter, owners of means of production hired workers, directed the work process, and sold products for profit. Such production is organized by allocating resources through price signals, or through hierarchical command. It is a system based on subordinate labor forced to sell its work power to the owners of the companies that employ them.

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CBPP is open to anyone with skills to contribute to a common project: the knowledge of every participant is pooled. These participants may be paid, but not necessarily. Precisely because CBPP projects are open systems in which knowledge can be freely shared and distributed, anyone with the right knowledge and skills can contribute, either paid by companies, clients, or not at all. In these open systems, there are many reasons to contribute beyond or besides that of receiving monetary payment.

CBPP allows contributions based on all kinds of motivations, but most importantly on the desire to create something mutually useful to those contributing. This also generally means that people contribute because they find it meaningful and useful. From the point of view of the contributing communities as well as simple users, the orientation of their work is most often on use value creation, not exchange value.

Transparent heterarchy

Of course, in CBPP many people are actually paid but, through collaboration with groups and individuals that are not, they produce commons. This means that the work cannot generally be directed by the corporate hierarchies, but through the mutual coordination mechanisms of the productive community. This is possible because CBPP is based on open and transparent systems, in which everyone can see the signals of the work of others, and can therefore adapt to the needs of the system as a whole.

CBPP projects do have systems of quality control that represent a kind of benevolent hierarchy or heterarchy. These ‘maintainers’ or ‘editors’ protect the integrity of the system as a whole and can refuse contributions that endanger the integrity of the system. However, and this is crucial, they do not coerce work. CBPP is based on: open input; a participatory process of coordinating the work; and a commons as output.

Through CBPP we observe the creation of new institutions. The first institution is the ‘productive community’, consisting of all the contributors to a project. The members of this community may be paid or may volunteer their contributions because of some kind of interest in the use value of this production.

Where profit comes in and where it does not

The second institution is the ‘entrepreneurial coalition’, which attempts to create either profits or livelihoods by creating added value for the market, based on these common resources. Contributors can be paid by the participating entrepreneurs. What is crucially important in the relation among the entrepreneurs, the community and the commons on which they depend, is whether their relation is generative or extractive.

Extractive entrepreneurs seek to maximize their profits, and generally do not sufficiently re-invest in the maintenance of the productive communities. Like Facebook, they do not share any profits with the co-creating communities on which they depend for their value creation and realization. Like Uber and AirBnB, they tax exchanges but do not contribute to the creation of transport or hospitality infrastructures.

Generative entrepreneurs do create added value around these communities. Seed-forms of commons-oriented entrepreneurial coalitions create added value on top of the commons that they co-produce and upon which they are co-dependent. In the best of cases, the community of entrepreneurs often coincides with the productive community. The contributors build their own vehicles in order to create livelihoods while producing the commons. They re-invest the surplus in their own well-being and the overall commons system they are co-producing.

For-benefit associations

The third institution created with the emergence of CBPP is the ‘for-benefit association’. Many CBPP ecosystems not only consist of productive communities and entrepreneurial coalitions, but also have separate governance institutions that support the infrastructure of cooperation and, thus, empower the capacity for CBPP. Though they often take the form of nonprofits, they do not command and direct the CBPP processes itself. For example, the Wikimedia Foundation, as the for-benefit association of the CBPP project Wikipedia, does not coerce the production of Wikipedia producers. Likewise, the free and open-source software Foundations that often manage the infrastructure and networks of the projects.

By way of contrast, traditional NGOs and nonprofits operate in a world of ‘perceived’ scarcity. They identify problems, search for resources, and allocate those resources in a directive manner to the solving of the issues they have identified. This approach arguably offers a mirror image to the for-profit mode of operating.

For-benefit associations operate from a point of view of abundance. They recognize problems and issues, but believe that there are enough contributors that desire to assist in solving these issues. Hence, they maintain an infrastructure of cooperation that allows contributive communities and entrepreneurial coalitions to engage in CBPP processes vital for solving these issues. Not only do they protect these commons through licenses, but may also help manage conflicts between participants and stakeholders, fundraise, and assist in the general capacity building necessary for the commons in particular fields of activity (for example, through education or certification).

So, this micro-economic triarchy of institutions corresponds to the three great spheres of social life: civil society with its citizen-contributors; the economic society of market entities; and the political society of the state. In this context, the for-benefit association is like the polity or even ‘state’ for CBPP, in that it theoretically and practically serves the ‘common good’ of the whole system.


As an example of such a CBPP ecosystem we may take the Enspiral network. A broad community of contributors are pooling their skills and creative energy to create commons, including knowledge and software. Around these commons a web of business ventures creates livelihoods for the contributors, by offering tools and services that enable creative communities like their own to address certain challenges related to democratic governance. For example, Loomio is a participatory platform for democratic decision making, while Enspiral Academy offers intensive training courses on web development.

At the time of this writing, there are about 300 people participating in an entrepreneurial coalition serving the Enspiral Foundation comprising more than 15 social business ventures, which aim to create livelihoods around ‘stuff that matters’. The individuals and the ventures make financial contributions to the Foundation, a cooperative of about 40 members, which manages the whole Enspiral network and its infrastructures. Almost half of the funds cover the operational costs of the Foundation, while the rest is invested in projects proposed by the community, through collaborative funding.

Obviously, Enspiral fits well within the parameters of our description, like many free/open-source software projects and an increasing number of open design projects that are building the world they want, within the confines of the world they want to transcend.

Note: This article is based on a working paper of the authors provisionally titled “The Ecosystem of Commons-Based Peer Production”.

Originally published here.

2017 January 14

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