Producing Industrial Goods Through the Commons

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Discussion

Wouter Tebbens:

"It seems to be increasingly possible to produce industrial goods through the Commons. The main function of industrial production can be organised as a commons by applying straightforward rules to share knowledge. The Commons offers – at least potentially – the following advantages for industrial manufacturing over the proprietary model.

   No need for profit
   Low overhead
   No “Intellectual Property” costs, no monopoly rent
   Takes intangible assets out of the RoI equation (*)
   The result of all this is that much less financial resources are needed.

Regarding the functions of industrial production organisation, we have seen the following changes:

   Production: from mass scale towards flexible, small-scale, production and in distributed networks
   This can lead to relocalisation
   R&D: knowledge can be shared as a knowledge commons for design files, manufacturing information etc
   Marketing: community members interested in the project and its results help spread the word through social networks, no (big) marketing budgets needed.
   Customers turn into users, co-owners, participants, True Fans (Clay Shirky: a free culture project just needs 1000 TrueFans to sustain themselves)
   Finance: Crowdfunding, donations, market exchange
   Organisation: distributed networks of individuals, companies, cooperatives, associations, foundations

(*) While intangible assets can be taken out of the business equation, this does not mean that the costs of producing the needed knowledge becomes zero. As observed by David Jacovkis and Javi Creus during the session, researchers, developers etc are very much needed. But instead of accounting their value as “intangible” assets of the conventional company, their results become available to all at low cost and in such way that no such assets can be accounted for in conventional book keeping. There’s simply no proprietary hook that allows for exploiting the product and obtain serious margins: if there was, anyone with the right interest and capacities could do the same and drive the margins to zero. So at least in theory there is no place for these intangible assets in the books.

We may ask if there is a threat of not providing the necessary incentives to generate the necessary R&D for society’s needs. While most areas of knowledge are taken care of by people with direct needs to solve a personal or community need, there maybe areas where additional incentives are needed. Think of certain medicines that aren’t developed if society doesn’t designates special funds or privileges to develop them. As has been shown by several researchers, the current situation doesn’t resolve these needs very adequately either, where medicines for non-western diseases in low-income countries are hardly invested in by the pharmaceutical industry. Several solutions have been proposed. One could be to designate public or collective funds for particular developments in areas of high social needs, and assure that the results are equally available to all companies and individuals.

Arguably the biggest threat to developing a vision along these lines comes from Patents. Patents are a system of state-granted private monopoly that may have served its purpose in the past, but is becoming a growing obstacle to the commons (and society at large). Incumbents use them to threaten new entrants and to protect their dominance in a particular market. Patents provide at least two obstacles for the Commons. First, a person or group with an interesting idea may be tempted to register a patent to get at least the illusion of one day becoming rich. Fortunately it’s very costly and time-consuming to acquire and effectively use a patent for a new entrant. Second, many ideas have already been patented, which can be an obstacle for designing and building practical solutions for everyday needs (a legal mine field). While patents generally expire after 20 years in most cases, this can be a problem in the case of new technologies. And even more so when we consider that patent descriptions are often rather vague to be as widely applicable as possible. One way to go around this is to build for yourself and avoid market exchange. Possible patent infringement can hardly be effectively checked for personal use or within a community. Better would be to get rid off the patent system at all…


Demands to the State

A libertarian would say: we just need the state to take her hands off of the commons. Current reality has however many state interventions, like patents. We should work for 1) breaking down this kind of corporate privilege, and 2) positive policies towards the commons.

   Pro-Commons
   Stop relying on (or eliminate!) patents
   Right-to-Repair
   Open Standards, compatibility
   Require published specifications
   Favour non-market sharing
   Public funded research into OA repository

How to get started?

We need basically three things: Spaces, People and Resources. Spaces where we can get together, learn, experiment and produce. People specialised in various areas and with different interests: some might want to take the lead, others follow, some may want to experiment, test and produce and make a living of these activities, while others may just want to consume its results. Resources can be the tools and raw materials or the financial resources to obtain them.

Additionally we need a general vision, rules and governance frameworks. Find some in general aspects. I set up a library with some links to web sites in these categories. You’re welcome to enjoy it and help me build that library.


Conclusions

We have seen how the paradigm of free knowledge and the commons are demonstrating successful in various domains. The oceans, air and woods are long time commons, often threatened by privatisation. In more recent years, the Internet, Wikipedia and Free Software have emerged as the most visible ones of the knowledge commons. Recently physical products and electronic hardware are increasingly designed according to the same principles and rules as found in the free knowledge commons.

The industrial sector – despite its decline in favour of the service sector – is still dominant in economic terms and arguably the hardest one to organise as a commons. In this post we reviewed the main shortcomings of the industrial production model as we know it and discussed the way in which we can imagine a commons-based industrial production taking shape. In order to do so, we reviewed the ways in which some well known free hardware projects are organised in comparison with the conventional industrial model.

In short, in a commons-based industrial production model we see how the knowledge is shared as a commons: R&D and manufacturing knowledge is as much as possible shared through Internet platforms. Given the distributed nature of participants and projects, one builds on top of the works of others, develops and publishes improved iterations which in turn are also available to next generations of users. Communication goes by word of mouth, assisted by ever smarter social networks, while the community may run campaigns to get a sufficient number of users or investors in a crowd-funding campaign. The production doesn’t need large scale factories any longer for most types of products. Small and mid-sized batch production is done in flexible job shop facilities, which can rapidly adjust to new demands and don’t need much capital to start off. Though a fully commons-based, cooperative structure might make the production facility itself more a commons, this is not needed to shift towards the envisioned commons-based industrial sector. After all, some may produce to satisfy their own needs – as we saw in the Open Source Ecology vision – while others may produce for the market. When the knowledge itself becomes truly a commons, market exchange can allow people to produce and consume what they need according to their interests and specialisations.

We saw how commons-based production tends to reduce the market-size. Indeed, when a commons-based project becomes successful, there is an exodus from the market where those services/goods had been produced previously, to the commons. See Wikipedia vs. Brittanica or Free Software for that matter. When the commons makes its inroads in the industrial production, we can expect the same to happen. This promises to make socially attractive products and solutions available for much lower costs than they cost today. Think for example renewable energy, electric vehicles and food production technology. Once a sufficient number of people directs their attention to these areas, we can see better and cheaper solutions. In fact the increasing number of renewable energy projects in the free hardware community, of permaculture and “open source cars” suggests exactly that." (http://microfactoria.wordpress.com/2012/06/04/free-knowledge-and-commons-perspectives-for-industrial-production/)