Authors: Jeremy Rifkin
The Rise of the Collaborative Commons
Lost in all of the excitement over the prospect of the Internet of Things is that connecting everyone and everything in a global network driven by extreme productivity moves us ever faster toward an era of nearly free goods and services and, with it, the shrinking of capitalism in the next half century and the rise of a Collaborative Commons as the dominant model for organizing economic life.
We are so used to thinking of the capitalist market and government as the only two means of organizing economic life that we overlook the other organizing model in our midst that we depend on daily to deliver a range of goods and services that neither market nor government provides. The Commons predates both the capitalist market and representative government and is the oldest form of institutionalized, self-managed activity in the world.
The contemporary Commons is where billions of people engage in the deeply social aspects of life. It is made up of literally millions of self-managed, mostly democratically run organizations, including charities, religious bodies, arts and cultural groups, educational foundations, amateur sports clubs, producer and consumer cooperatives, credit unions, health-care organizations, advocacy groups, condominium associations, and a near endless list of other formal and informal institutions that generate the social capital of society.
The traditional democratically managed commons is still found in scattered communities on every continent. Local rural communities pool their common resources—land, water, forests, fish and game, pastures, etc.—and agree to use them collectively. Decisions regarding the expropriation, cultivation, distribution, and recycling of resources are made democratically by the members of the Commons. In addition, sanctions and punishments for violating the norms and protocols are built into the governing codes, making the Commons a self-managing economic enterprise. The Commons has proven to be a relatively successful governing model in subsistence-based agricultural communities where production and consumption are primarily for use rather than exchange. They are the early archetypes of today’s circular economy.
The success of the Commons is all the more impressive given the political circumstances that gave rise to them. For the most part, commons management emerged in feudal societies where powerful overlords pauperized local populations and forced them to pay tribute by either working the manorial fields or handing over part of their production in the form of a tax. Coming together in a sharing economy became the only viable way to ensure the meager largesse they were left with would be optimized.
The takeaway lesson is that a democratic form of self-management and governance designed to pool and share “commons” resources proved to be a resilient economic model for surviving a despotic feudal system that kept people locked in bondage.
The great Enclosure Movements across Europe that led to the downfall of feudal society, the rise of the modern market economy, and eventually the capitalist system, put an end to rural commons but not the sharing spirit that animated them. Peasant farmers took their lessons learned to the new urban landscapes where they faced an equally imposing foe in the form of factory overlords of the industrial revolution. Urban workers and an emerging middle class, like their peasant serf forbearers, pooled their common resources—this time in the form of wages and labor skills—and created new kinds of self-governing Commons. Charitable societies, schools, hospitals, trade unions, cooperatives, and popular cultural institutions of all kinds began to take root and flourish, creating the foundation for what came to be known as the civil society in the nineteenth century. These new Commons institutions were lubricated by social capital and driven by the democratic spirit. They came to play a key role in improving the welfare of millions of urban dwellers.
In the twentieth century, civil society became institutionalized in the form of tax-exempt organizations and was partially rebranded as the nonprofit sector. Today, we use the terms
civil society
and
nonprofit sector
interchangeably, depending on whether we are referring to their purely social function or their institutional classification. Now, a new generation is beginning to move beyond these older distinctions, preferring to use the term
social Commons
.
In the long passage from the feudal commons to the social Commons, successive generations have effectively honed the principles of democratic self-governance to a fine art. Currently, the social Commons is growing faster than the market economy in many countries around the world. Still, because what the social Commons creates is largely of social value, not pecuniary value, it is often dismissed by economists. Nonetheless, the social economy is an impressive force. According to a survey of 40 nations conducted by the Johns Hopkins University Center for Civil Society Studies, the nonprofit Commons accounts for $2.2 trillion in operating expenditures. In eight countries surveyed—the United States, Canada, Japan, France, Belgium, Australia, the Czech Republic, and New Zealand—the nonprofit sector makes up, on average, 5 percent of the GDP.
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Its portion of the GDP in these countries exceeds the GDP of all utilities, is equal to the GDP of the construction industry, and is nearly equal to the GDP of banks, insurance companies, and financial services.
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The social Commons is where we generate the good will that allows a society to cohere as a cultural entity. Markets and governments are an extension of a people’s social identity. Without the continuous replenishment of social capital, there would be insufficient trust to enable markets and
governments to function, yet we pejoratively categorize the social Commons as “the third sector” as if it were less important than markets or governments.
However, were we to wake up one day to find that all of our civil society organizations had vanished overnight, society would quickly wither and die. Without places of worship, schools, hospitals, community support groups, advocacy organizations, sports and recreation facilities, and arts and other cultural institutions, we would lose our sense of purpose and identity and the social ties that unite us as an extended human family.
While the capitalist market is based on self-interest and driven by material gain, the social Commons is motivated by collaborative interests and driven by a deep desire to connect with others and share. If the former promotes property rights, caveat emptor, and the search for autonomy, the latter advances open-source innovation, transparency, and the search for community.
What makes the Commons more relevant today than at any other time in its long history is that we are now erecting a high-tech global technology platform whose defining characteristics potentially optimize the very values and operational principles that animate this age-old institution.
The IoT is the technological “soul mate” of an emerging Collaborative Commons. The new infrastructure is configured to be distributed in nature in order to facilitate collaboration and the search for synergies, making it an ideal technological framework for advancing the social economy. The operating logic of the IoT is to optimize lateral peer production, universal access, and inclusion, the same sensibilities that are critical to the nurturing and creation of social capital in the civil society. The very purpose of the new technology platform is to encourage a sharing culture, which is what the Commons is all about. It is these design features of the IoT that bring the social Commons out of the shadows, giving it a high-tech platform to become the dominant economic paradigm of the twenty-first century.
The IoT enables billions of people to engage in peer-to-peer social networks and cocreate the many new economic opportunities and practices that constitute life on the emerging Collaborative Commons. The platform turns everyone into a prosumer and every activity into a collaboration. The IoT potentially connects every human being in a global community, allowing social capital to flourish on an unprecedented scale, making a sharing economy possible. Without the IoT platform, the Collaborative Commons would be neither feasible nor realizable.
The adjective
collaborative
didn’t even exist until well into the twentieth century. A check of Google Ngram Viewer’s word tracker is a powerful sign of the changes afoot. The Ngram Viewer allows a researcher to search five million books published between 1500 and 2008—now digitized—to see when a particular word was first used and to track the increase or decrease of its use over time. The word
collaborative
was first used, very spottily, in the 1940s and 1950s; then usage shot straight up from the late
1960s to today, paralleling the emergence of the computer and Internet technology as peer-to-peer interactive communications media.
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The Collaborative Commons is already profoundly impacting economic life. Markets are beginning to give way to networks, ownership is becoming less important than access, the pursuit of self-interest is being tempered by the pull of collaborative interests, and the traditional dream of rags to riches is being supplanted by a new dream of a sustainable quality of life.
In the coming era, both capitalism and socialism will lose their once-dominant hold over society, as a new generation increasingly identifies with Collaboratism. The young collaboratists are borrowing the principle virtues of both the capitalists and socialists, while eliminating the centralizing nature of both the free market and the bureaucratic state.
The distributed and interconnected nature of the Internet of Things deepens individual entrepreneurial engagement in direct proportion to the diversity and strength of one’s collaborative relationships in the social economy. That’s because the democratization of communication, energy, and logistics allows billions of people to be individually “empowered.” But that empowerment is only achievable by one’s participation in peer-to-peer networks that are underwritten by social capital. A new generation is coming of age that is more entrepreneurially self-directed by means of being more socially embedded. It’s no surprise that the best and brightest of the Millennial Generation think of themselves as “social entrepreneurs.” For them, being both entrepreneurial and social is no longer an oxymoron, but rather, a tautology.
Hundreds of millions of people are already transferring bits and pieces of their economic life from capitalist markets to the global Collaborative Commons. Prosumers are not only producing and sharing their own information, entertainment, green energy, 3D-printed goods, and massive open online courses on the Collaborative Commons at near zero marginal cost. They are also sharing cars, homes, and even clothes with one another via social media sites, rentals, redistribution clubs, and cooperatives, at low or near zero marginal cost. An increasing number of people are collaborating in “patient-driven” health-care networks to improve diagnoses and find new treatments and cures for diseases, again at near zero marginal cost. And young social entrepreneurs are establishing ecologically sensitive businesses, crowdfunding new enterprises, and even creating alternative social currencies in the new economy. The result is that “exchange value” in the marketplace is increasingly being replaced by “shareable value” on the Collaborative Commons. When prosumers share their goods and services on a Collaborative Commons, the rule book that governs a market-exchange economy becomes far less relevant to the life of society.
The current debate among economists, business leaders, and public officials on what appears to be a new type of long-term economic stagnation emerging around the world is an indicator of the great transformation
taking place as the economy shifts from exchange value in the marketplace to sharable value on the Collaborative Commons.
Global GDP has been growing at a declining rate in the aftermath of the Great Recession. While economists point to the high cost of energy, demographics, slower growth in the labor force, consumer and government debt, an increase in the share of global income going to the very wealthy, and consumer risk aversion to spending, among other causes, there may be a more far-reaching underlying factor, although still nascent, that might explain at least some of the slowing of GDP. As the marginal cost of producing goods and services moves toward near zero in sector after sector, profits are narrowing and GDP is beginning to wane. And, with more goods and services becoming nearly free, fewer purchases are being made in the marketplace, again reducing GDP. Even those items still being purchased in the exchange economy are becoming fewer in number as more people redistribute and recycle previously purchased goods in the sharable economy, extending their usable lifecycle, with a concomitant loss of GDP. A growing legion of consumers are also opting for access over ownership of goods, preferring to pay only for the limited time they use a car, bicycle, toy, tool, or other item, which translates to less GDP. Meanwhile, as automation, robotics, and Artificial Intelligence (AI) replace tens of millions of workers, consumer purchasing power in the marketplace continues to contract, further reducing GDP. Concurrently, as the number of prosumers proliferates, more economic activity is migrating from the exchange economy in the marketplace to the sharable economy on the Collaborative Commons, again shrinking the growth of GDP.
The point is, while economic stagnation may be occurring for many other reasons, a more crucial change is just beginning to unfold which could account for part of the sluggishness: the slow demise of the capitalist system and the rise of a Collaborative Commons in which economic welfare is measured less by the accumulation of market capital and more by the aggregation of social capital. The steady decline of GDP in the coming years and decades is going to be increasingly attributable to the changeover to a vibrant new economic paradigm that measures economic value in totally new ways.
Nowhere is the change more apparent than in the growing global debate about how best to judge economic success. The conventional GDP metrics for measuring economic performance in the capitalist marketplace focus exclusively on itemizing the sum total of goods and services produced each year with no attempt to differentiate between negative and positive economic growth. An increase in expenditures for cleaning up toxic waste dumps, police protection and the expansion of prison facilities, military appropriations, and the like are all included in gross domestic product.