Home > Uncategorized > A new mode of production?

A new mode of production?

from Donald Gillies 

If a new mode of production is really going to supersede capitalism, then it is likely that we can find examples of this way of producing already coming into existence, though perhaps not yet in fully developed form. Paul Mason draws attention to a striking example, namely Wikipedia. This is what he says (p. 128):

“Wikipedia is the best example. Founded in 2001, the collaboratively written encyclopaedia has, at the time of writing, 26 million pages and 24 million people registered to contribute and edit – with about 12,000 people regularly editing and 140,000 people vaguely taking part. 

Wikipedia has 208 employees. The thousands who edit it do so for free. … With 8.5 billion page views per month the Wikipedia site is the sixth most popular in the world – just above Amazon the most successful e-commerce company on earth. By one estimate, if it were run as a commercial site, Wikipedia’s revenue could be $2.8 billion a year. 

Yet Wikipedia makes no profit. And in doing so it makes it impossible for anybody else to make a profit in the same space.” 

Paul Mason goes on to say that Wikipedia is organized (p. 129): “in a decentralized and collaborative way, utilizing neither the market nor management hierarchy.” This really is a new way of organizing production, which is at the same time much more efficient than more standard systems. Paul Mason emphasizes this by the following thought experiment (p. 129):

“… imagine if Amazon, Toyota or Boeing tried to create Wikipedia.

Without collaborative production and Open Source there would be only two ways to do so: by using either the market or the command structures of a corporation. Since there are maybe 12,000 active writers and editors of Wikipedia, you could hire that number, and maybe get away with some of them being outworkers in the sweatshop economies of the world, controlled by a better-paid managerial layer in the American sun-belt. Then you could incentivize them to write the best possible encyclopaedia on the web. You could give them targets, bonuses, promote teamwork through quality circles, etc.

But you could not produce anything as dynamic as Wikipedia. Getting a 12,000-strong corporation to produce 26 million pages of Wikipedia would be… pointless… A 208-strong foundation would always do it better. And even if you could produce something just as good as Wikipedia, you would face a massive problem: Wikipedia itself, your major competitor, doing it all for free.”

This is a very forceful argument. Big capitalist organisations are bureaucratic and authoritarian. A hierarchy of managers, leading up to the CEO, plan what is to be done, and assign tasks to the workers. Interestingly, hitherto existing forms of socialism have also had this bureaucratic, authoritarian and hierarchical character. This is obviously true of communism, but also holds of the productive organisations of social democracy. For example, a nationalized industry, such as the former coal industry in Britain, was run by a bureaucratic hierarchy of managers. The appearance of these bureaucratic forms in both capitalism and socialism shows that they were indeed suited to production, given the then development of the productive forces and the type of good being produced. However, Paul Mason’s thought experiment shows that these bureaucratic forms are not suitable for the production of digital goods in the era of the internet. For the production of such goods, as the example of Wikipedia shows, we need a networked, collaborative group of workers who agree among themselves what is to be done and by whom, without the intervention of any managerial hierarchy or bureaucracy. The same message comes out clearly from other examples such as the free software movement.

Here then we have in embryo the PostCapitalist mode of production. However, there is one feature of the Wikipedia and free software examples, which must be removed if this type of production is to become general. Those who contribute to Wikipedia and free software projects are not paid, and so have to do this work in their spare time, while earning their livings in some other activity. It is remarkable that such numbers of skilled people are willing to do this, but the lack of pay sets a limit on the extent to which this mode of production can become general, since obviously most people have to earn their living in some way. The question then arises: if groups of workers are going to be paid to produce digital goods, who is going to pay them? Clearly no one in the private sector is going to pay them, because of the difficulty of producing digital goods under capitalism. It follows therefore that they must be paid by the state.

This leads me to a conclusion, with which Paul Mason might not perhaps agree, namely that the PostCapitalist mode of production will turn out to be a form of socialism, but one which differs from the earlier forms of bureaucratic socialism by being more egalitarian and libertarian. This type of socialism I think could be called networked socialism. Paul Mason writes (p. xvii): “info-capitalism has created a new agent of change in history: the educated and connected human being.” Of course the overwhelming majority of educated and connected human beings are white-collar workers. So networked socialism is based on white-collar workers in contrast to earlier forms of socialism, which were based on manual (blue-collar) workers.

Another feature of networked socialism is that it is international. In the networks, which produce Wikipedia, free software etc., there are members from all over the world. What is important is whether someone is good at doing the job. Where they happen to live is an irrelevance. Capitalism too has gone international with the rise of the multi-national (or transnational) corporations. All this shows that the economic foundations of nationalism are being eroded.  http://www.paecon.net/PAEReview/issue73/Gillies73.pdf

  1. Craig
    March 13, 2019 at 1:36 am

    What’s workable would be if you simply made the money and financing system a not for profit publicly administered utility that was fully funded by the government and firmly guided by a high ethic. The networked aspect of it is unrealistic and problematic for the money and financial system because its not an encyclopedia that can be endlessly mentally compartmentalized without negative effect. Also, Wikipedia while a useful product, is a messy project. Messiness is the last thing we need in an already messy part of life.

  2. March 13, 2019 at 3:21 am

    A nonhierarchical seven facet social flow diagram that might be pertinent is here.


  3. A.J. Sutter
    March 13, 2019 at 5:58 am

    Two brief points:

    1. Why should we be attracted by a libertarian form of socialism? I’d thought one of the main benefits of socialism is solidarity.
    2. You can’t eat digital goods. Nor can they keep you dry and warm in winter. Seems to be forgotten here.

    • March 19, 2019 at 10:32 pm

      The libertarian impulse is about decreasing authority, hopefully without decreasing solidarity. Perhaps the optimism about solidarity being something that can be horizontal is misplaced, but you know how it is, got to have some way to persuade myself to keep going another day. For better or for worse, optimism is my drug.

    • Robert Locke
      March 20, 2019 at 10:03 am

      If you live in countries that have experienced the age of the democratic revolutions (1760-1860), the libertarian impulse is in your culture, if you live in countries that experienced no age of democratic revolution, the libertarian impulse is not part of the culture of modernization.

      • A.J. Sutter
        March 20, 2019 at 4:03 pm

        @Robert: Not sure whether you’re offering an explanation for the author’s position, or commenting on mine. If the latter, then: I grew up in the USA. Yes, there’s lots of libertarian stuff in American culture. So too a love of guns and Monster Truck rallies. Of all those, occasionally I can be momentarily entertained by Monster Trucks, perhaps, but that’s about it. I imagine that very few people endorse everything in “their” culture — and all the less so people who read heterodox economics blogs.

      • Robert Locke
        March 20, 2019 at 5:45 pm

        I drew this conclusion after studying 19th Century French political history, where those who could be called modernizers in the industrial-economic sense, were not the same as those who could be called democratize-rs. The petit bourgeois who dominated French 3rd Republican democratization, were economically rooted in the past. The monarchists, who wished to restore the Legitimate Monarch, that people called anachronisms, were often very modern men economically.

  4. dmf
    March 13, 2019 at 8:17 pm

    Wikipedia has hierarchies, management, cliques, and bureaucracies all of its own, plus who is free to do this kind of voluntary labor and what is required to enable this freedom?

  5. Ikonoclast
    March 17, 2019 at 9:13 am

    I agree with the above article. There is some hope for some socialist production in the Wikipedia model. At least it is a space kept free from rampant commercialism. It’s a commons of sorts.

    I also see some hope in the prosumer model. Certainly, people with solar powered houses have found a financially viable way of consuming energy they produce and selling some surplus back to the grid. It works well and can be financially viable, even without government subsidies. There are certainly ways to make it work if it is a marginal proposition. Shift from being a two-car to a one-car family and put the money saved into solar power. It’s not that hard to do and the reduction in carbon footprint is significant. The household savings are very significant.

    I also agree that the money and financing system should be entirely a public utility. It’s a natural monopoly in today’s networked world. Indeed, all natural monopolies should be re-nationalized, IMHO.

  6. Ken Zimmerman
    March 25, 2019 at 12:58 pm

    The notion of socialism goes back deep into human history, as historians and anthropologists have confirmed. At its core, it is based on the notion that wealth of every sort must be shared as equally as possible between the rich and the poor. In some versions of socialism shared so that poverty is wiped out. Numerous major religions have emphasized this point, criticizing greed and preaching the necessity for “all God’s children” to share in the world’s abundance. The goal of increased economic equality has also mobilized numerous social movements and revolutions.

    The biggest topic for socialism to address is how to achieve this sharing of wealth. Religions often emphasized charity. Social movements create communitarian living arrangements. Revolutions seize the property of the rich and redistribute it. And governments set aside portions of the economy to enhance the welfare of the public, rather than the profits of the wealthy few.

    In the USA, a public sector was created alongside private enterprise. Public institutions became embedded in American life. The American Constitution established a postal service, which quickly took root in American life. Other public enterprises followed, including publicly-owned and operated lands, roads, bridges, canals, ports, schools, police forces, water departments, fire departments, mass transit systems, sewers, sanitation services, electric and gas utilities, credit unions, savings banks, dams, libraries, parks, hospitals, food and nutrition services, colleges and universities, and so called “cooperative” enterprises of many sorts (farm, ranch, electric, food banks, etc.). Many of these operated on a local level, but others were nationwide in scope and became substantial enterprises, including Social Security, Medicare, National Public Radio, the National Institutes of Health, and the U.S. armed forces. In short, over its history the USA has created what is often termed “a mixed economy,” as have many other countries.

    Most other nations took a similar path to socialize (or share) the wealth. They enabled the organization of unions and cooperatives, established a minimum wage, unemployment insurance, and a progressive tax policy―one with the highest levies on the wealthy and their corporations. Over the course of US history, these policies, sometimes termed “social democracy,” have enriched the lives of most Americans and have certainly not led to dictatorship and economic collapse. They are also the kind championed by Bernie Sanders and other democratic socialists around the world.

    Why, then, does a significant portion of the American population view socialism as a dirty word? One reason is that most of the wealthy fiercely object to sharing their wealth and possess the financial resources to manipulate public opinion and push American politics rightward. After all, they own the corporations that own television and radio networks, control most of the major newspapers, dominate the governing boards of major institutions, and can easily afford to launch vast public relations campaigns to support their economic interests. In addition, as the largest source of campaign funding in the United States, the wealthy have disproportionate power in politics. So, it’s to be expected that their values are over-represented in public opinion and in election results. Other factors have also poisoned socialism in the USA. The bad reputation it received by being confused with communism, and the several dictatorial governments that claimed to be communist turned many Americans away from socialism. This included a 50-year “Cold War” between the USA and the “Communist” nations of the world. Also, large corporations and America’s wealthy have hammered immigration and immigrants repeatedly to push Americans away from socialism and toward capitalism.

    By contrast, the democratic socialists―condemned and snubbed by the Communists―did a remarkably good job of governing their countries. In the advanced industrial democracies, where they were elected to office on numerous occasions, they nurtured greater economic and social equality, substantial economic growth, and political freedom. Their impact is particularly impressive in the Scandinavian nations. For example, about a quarter of Sweden’s economy is publicly-owned. In addition, Sweden has free undergraduate college/university tuition, monthly stipends to undergraduate students, free postgraduate education (e.g., medical and law school), free medical care until age 20 and nearly free medical care, thereafter, paid sick leave, 480 days of paid leave when a child is born or adopted, and nearly free day-care and preschool programs. Additionally, Sweden has 70% union membership, high wages, four to seven weeks of vacation a year, and an 82-year life expectancy. It also boasts the ninth most competitive economy in the world. Democratic socialism has produced similar results in Norway and Denmark. A slightly less socialized economy has made Germany the second largest exporting nation in the world.

    So, what’s to hate about democratic socialism, apart from the name, if that bugs you? A visit to Sweden, Norway, Denmark, or even Germany would go a long way toward answering some the questions asked here. Call it on-the-job-training. Something with which I know many economists lack familiarity. But like they say, you’re never too old to learn.

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