Commons Boundaries and Postcapitalism

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Sam Dallyn, Fabian Frenzel:

"While there is now an expansive literature on the commons, there is a reoccurring ambiguity around the distinction between non-capitalist and anti-capitalist commons. Commons today have been positioned as a clear adversarial alternative to capitalism (De Angelis 2017b; Ruivenkamp and Hilton 2017:7); or, as essentially non-capitalist (Ostrom 1990). The term postcapitalist commons adds an important additional nuance to these conceptions since it denotes a commons which recognises its own hybridity, in being both against but simultaneously operating within capitalism, with all of the accompanying challenges this gives rise to. This postcapitalistic aspect of FairCoop was neatly reflected by Chris from Decentrale, Mont-Soleil, Jura, Switzerland. Decentrale is a space for diverse self-organised and cooperative projects in the region. Chris has been heavily involved in FairCoop since 2016 and he saw strong potential overlaps with FairCoop’s efforts to generate transitional alternatives: It offers an opportunity to create something that interacts with the capitalist system to some extent and interacts with a new reality that is postcapitalistic that can be created, and I see FairCoin as a bridge element between the two.

This “bridge element” in the transition from within capitalism to generate alternative futures after capitalism, is a strategic and practical one that can only be built through risk taking and experimentation (see Chatterton 2016) in postcapitalist commons. In Chatterton and Pusey’s (2020:40) helpful outline of different streams in the postcapitalist literature, the work related to autonomous postcapitalist commons is characterised by analysis of “novel forms of community-based doing and common ownership of the economy that has the potential to scale beyond self-governing micro-local experiments”.

Yet it should be noted that capital in the form of state backed fiat currency is often required in some form due to “the vast array of useful products that commons do not have any other ways of procuring but through engaging in monetary payments” (De Angelis 2017a:334). This gives rise to the central problematic of postcapitalist commons that we investigate here: How can commons filter in enough capital to be resilient and sustainable, but at the same time be sufficiently bounded from capital to prevent the ideals and practices of the commons becoming endangered through the predominance of money in the form of state backed fiat currency (see De Angelis 2017a:317)? The shape and form of the “filtering membrane” (De Angelis 2017b:228–229) through which capital enters into—and is extracted from—the commons must be decided and monitored by actors to ensure that capital does not endanger the commons, for example, through an unsustainable extraction of the dominant state sanctioned currency, in the case of FairCoop, Euros. There are a variety of different ways in which capital can be filtered into the commons in a manner that maintains some boundaries, including crowdfunding (although there are obvious limits to the extent to which this can be repeatedly used), membership contributions, the commons itself producing and selling particular goods and services for state backed fiat currency, or potentially through monthly instalments from participants who have a steady and sufficient income in state backed fiat currency (see Fairo 2019).

One interesting example of filtering capital into a postcapitalist commons is the case of the Low Impact Living Affordable Community (LILAC) housing cooperative in Leeds, UK (Chatterton 2016), in which all residents pay 35% of their net income in equity shares into a Mutual Home Ownership Society (MHOS) (Chatterton 2016:408). This presents an innovative way of filtering capital into the commons but keeping this bounded so that property speculation and private incentives around house price increases do not crowd out the shared values and practices of the commons. Since rather than contributing a certain amount of money in monthly instalments to paying off a private mortgage, residents are contributing a fixed proportion of their income to the shared commons resources of the MHOS. While LILAC presents an interesting, important and innovative case of a bounded postcapitalist commons, it is also a “single-place based experiment” (Chatterton 2016:410), and there are thus limits to its scalability (see Chatterton 2016:409; Gerhardt 2020).

The filtering membrane (De Angelis 2017b:228) through which capital is brought into the commons must be monitored to ensure that sufficient capital is entering for the commons to be sustainable. Furthermore, if there is a significant reduction of capital inflow, the scale and size of the postcapitalist commons will require adjustment and/or scaling back. Ostrom’s (1990) famous account of common pool resources (CPRs) provides further clarification. CPRs are natural resources that are self-governed by communities, in which the exclusion of beneficiaries is costly and in which the exploitation by one user reduces resource availability for others (Ostrom et al. 1999). By thinking through the experience of individuals in field settings, Ostrom is able to identify some design principles for CPRs to be self-governed in a manner which is viable and sustainable. It is the first of these principles that is most relevant to our investigation of postcapitalism and commons boundaries: “Individuals or households who have rights to withdraw resources units from the CPR must be clearly defined, as must the boundaries of the CPR itself” (Ostrom 1990:90).

There is an emphasis in Ostrom’s account on limiting extraction to ensure the sustainability of resources within the commons. The two key principles of CPR boundaries can be summarised as exclusion, in which some actors are unable to extract the shared resources from the CPR system; and subtraction in which the limited nature of the resource means excessive extraction by some will limit the availability of the resource for others (O’Mahony 2003). The crucial and scarce commons resource within FairCoop—as it sought to build and spread FairCoin as an alternative currency to help generate a transition to postcapitalism—was money in the form of state backed fiat currency, predominantly Euros, as this was the dominant currency in the regions where FairCoin was most widely used, including Spain, Greece and Italy.

Alternative currencies like FairCoin are non-exclusive since it is difficult to prevent someone acquiring an alternative currency; and they can also be non-subtractive since the rate of release and issuance of the currency can be determined by the commons itself. However, if the commons promises to exchange the alternative currency for state backed fiat currency (in this case Euros)—as FairCoop did—a subtraction of limited capital resources is enabled through the commons. This highlights how money in the form of state backed fiat currency presents a significant challenge in regard to commons boundaries. Postcapitalist commons must find a way to filter state backed fiat currency money into the commons, and limit its extraction, so that it sustains and does not weaken the cooperative and convivial aspects of the commons.

Ostrom focuses on non-capitalist CPRs and her work has little critical engagement with the role of money (Vercellone et al. 2015:22). Her approach has also been characterised as overly rationalist and methodologically individualist (O’Dwyer 2015; Ruivenkamp and Hilton 2017:3; Vercellone et al. 2015). Yet we argue here that these critiques do not invalidate the relevance of her work for thinking through the basis for more radical and sustainable postcapitalist commons. Ostrom’s framework does not require individuals to be rationalist in any purely individualist sense but allows for more collectivist and convivial values such as mutual aid, shared love and solidarity to sustain commons (see De Angelis 2017a:158). The crucial element of Ostrom’s account is identifying appropriate design principles. Postcapitalist commons which to some extent rely on capital (a subtractable resource) must have boundaries and design principles in place to guard against the self-interested extraction of capital by (a) given actor(s) who may conceivably enter and seek to extract capital from the commons at some future point. The search for additional design principles to better secure the sustainability of scalable postcapitalist commons will be at the core of the following analysis of FairCoop."


Boundaries in Postcapitalist Commons

Sam Dallyn, Fabian Frenzel:

"The argument here is not that postcapitalist commons cannot seek to extract capital from external markets, but that sustainable postcapitalist commons need to be far more resilient to unfavourable dynamics in relation to capital, and that this resilience could be better secured through more clearly rule bound and delimited capital filtering. Returning to Ostrom’s (1990) principle of commons boundaries, a key component of which is delimiting how resources are extracted, one of the key resources here is capital, in the form of Euros. Ostrom’s efforts to deduce from empirical cases some design principles for sustainable CPRs is an approach that helps us to think differently about how self-organised postcapitalist commons can be made sustainable and we thus propose some additional postcapitalist design principles in light of the clear limits of the FairCoop case.

The first additional design principle of postcapitalist commons boundaries is that there must be a more resilient relation to capital, one which is not ultimately dependent on increasing capital returns. Alternative economic proposals have emerged for discussion within FairCoop in light of the problems of the two-price model. As FairCoin continues to receive little investment on cryptocurrency exchanges, proposals have been developed to try to take FairCoin off exchanges entirely and develop it into a fully-fledged mutual credit system known as FairCredit (Monteiro and James 2018). Here the GetFairCoin website and local node POE would provide the means to exchange from government backed fiat currency to FairCoin, and users would then be able to transfer their FairCoin into a negative value in FairCredits, which could then be exchanged for goods and services with other participants. One counter argument against moving to a fully-fledged mutual credit system that has been raised within the community is that it would be impossible to remove FairCoin from cryptocurrency exchanges entirely and some trading would inevitably continue. To have any hope of addressing this aspect the FairCredit system would have to have tighter relations of reciprocal obligation and exchange based on clear commons boundaries, probably with a membership structure of some description; but it remains to be seen how this would operate in practice. In another relatively popular but rather complex proposal known as the Fairo, FairCoin would fluctuate in a logarithmic rate around 35% above cryptocurrency exchange market price, and goods and services would be priced in Fairo (Fairo 2019). The Fairo could be a thousandth of the basic cost of living in a given region agreed upon by consensus in different local nodes. Thus, it would be a three-way process of pricing: Price good or service in Fairo; convert Fairo to FairCoin (with FairCoin priced 35% above the current external cryptocurrency exchange rate); exchange in FairCoin to complete transaction. This would better address the challenges around diverging and unsustainable price differences that emerged within the two-price model, since FairCoin’s value within FairCoop would hover 35% above its external cryptocurrency exchange market value, while FairCoop merchants would price and exchange in Fairo, which would give them some protection from the volatility of FairCoin trading on external cryptocurrency exchanges. While the Fairo proposal is clearly complex, one key aspect of Ostrom’s (1990) CPR self-governance cases is that the models necessary to ensure a sustainable commons are often complex. Both these economic models seek to address a broader design principle, which is that the sustainability of postcapitalist commons cannot be dependent on an increasingly favourable valuation by capital; such commons should have the potential to accommodate and adjust to a less favourable valuation by capital.

Due to its reliance on increasing returns via hacking the cryptocurrency markets, FairCoop was also insufficiently bounded in terms of value framing. The FairCoop principles were effective in attracting participants to the movement and these were based around Integral Revolution, P2P Collaboration and hacker ethics (FairCoop 2017a). But as the movement was essentially open and without formal membership (Duran 2018), there was no clear means of establishing how these values and ideals were incarnated into practices. FairCoop’s values were not made explicit and binding enough to deliver the aims of the project, which was to offer an alternative to capitalism. As Chris noted in respect of FairCoop “wanting to manifest a different reality separate from the capitalist system”: The expectation should be that we truly create the path in that direction that we truly manifest that new reality and not just at the end we’re still part of the capitalist system. I think it’s important that the expectation is that we make a great leap with what we are doing because if we are not expecting that from ourselves, we will not go far enough with it.

As FairCoop expanded in scale it became increasingly dependent on a favourable valuation of FairCoin on external cryptocurrency exchanges to meet its exchange commitments, thus diluting the principles of love, conviviality and solidarity (De Angelis 2017a:339) that give life to the commons (Interview, Chris, 2019; Interview, Pilikum, 2019). As a result, the social ties that bound the commons became increasingly cracked. As Maro—a FairCoop activist in Madrid who has been heavily involved in building FairCoop from 2015 onwards—described, “look at what happened to us, now we are fighting each other because of the fucking Euros”.

As Maro went on to explain, at times merchants were brought into FairCoop on the promise of FairCoin generating ever increasing returns in Euros on cryptocurrency exchanges. She added that the FairCoop promise to meet exchange commitments by converting FairCoin to Euros at a set rate led to a lack of appreciation of the risky and disobedient aspects of the project:

- Most of all in terms of disobedience … in the sense of, we are creating an alternative and we need to make some sacrifices. It means to have a cryptocurrency that you don’t know how much it’s going to be valued.

Part of the value framing of postcapitalist commons that was lacking—or at least insufficiently explicit—is the necessity that commons values must come before private incentives, which may entail unanticipated sacrifices in terms of capital.

In conjunction with clearer value framing, it also becomes necessary for the commons to ensure that these values are reflected and reinforced through alternative practices and technologies, which indicates a further principle of scalable and sustainable postcapitalist commons boundaries missing from the FairCoop example: Clear means of reputational feedback. Ostrom (1990) focuses on membership and sanction as design principles in CPR systems; but this is arguably counter to some of the more communal, inclusive and anti-authoritarian anarchist values in autonomous postcapitalist commons. That said, when making exchanges and when converting to a scarce resource like Euros, some criterion of access has to be established for the commons to remain sustainable. FairCoop itself made unsustainable commitments to exchange FairCoin back to Euros for all “FairCoop participants” (FairCoop 2019). We believe some means of peer2peer assessment and feedback could be deployed to evaluate relative contribution to the commons, which could form the basis of a collectively agreed system of resource allocation, based on human need and assessment of contribution. For example, if a developer had worked many hours and made a positive contribution—such as by significantly enhancing FairCoop’s online map software, which enables people to easily identify retail outlets that accept FairCoin in different cities—if this work was positively evaluated by the community they would then move higher in the list of people who would have the opportunity to exchange their FairCoin back to Euros. These exchanges back to Euros would have to work in a manner that is sustainable and affordable rather than on the basis of an unsustainable promise or guarantee. Within the Fairo proposal this would be at 35% above cryptocurrency exchange market rate and it would be funded at least partly through monthly payments to FairCoop from participants who receive a steady and sufficient income in state backed fiat currency to cover basic needs (see Fairo 2019). New peer2peer reputational feedback mechanisms—which would include scoring a participants' contribution to the commons—can be one means to determine access to limited commons resources (see Fairo 2019; Pazaitis et al. 2017:111). This would potentially help to make scalable postcapitalist commons more sustainable through positive feedback incentives that could support the boundaries underpinning the commons, because it would be a transparent means of determining how limited resources can be extracted.

Another key design principle of securing sustainable and scalable postcapitalist commons boundaries and collectively establishing an appropriate “filtering membrane” (De Angelis 2017b:228–229) for capital is transparency. FairCoop’s original design had no shared or collectively transparent accounting system in which active participants in different regions were aware of the limits to commons resources. One element limiting this was a mystique that accompanied the principal founder of FairCoop, Enric Duran—who had personally risked a great deal to generate alternative postcapitalist commons experiments, particularly through his action against the banks in 2008. Yet this was also accompanied by a lack of collective understanding of the accounting processes, and what reserves FairCoop actually had.

As Guy noted:

- Everybody believed in Enric 100% and everyone was just like, if there was a conflict we’d just say: what do you think Enric? And just do what he said basically, you know, which is probably not the best way to do a decentralised project, but he definitely had the best kind of economic understanding of anybody at the time.

We would argue that a key principle for the sustainability of scalable postcapitalist commons is that of collective participation or at the very least awareness of the accounting process, principally through a collective understanding of risks and the level of limited resources, in this case Euros. Accounting transparency is a crucial factor in determining how capital can best be selectively filtered into and extracted from the commons, whilst retaining the sustainability of the commons itself."


Conclusions on the FairCoop and FairCoin case

"In reflecting on the FairCoop and FairCoin case, the movement could be described as a failure in that the initial model of hacking the cryptocurrency markets to build and sustain a postcapitalist commons clearly did not work as planned. That said, as Chatterton (2016) argues, postcapitalist commons are often characterised by risk taking and experimentation, and a key feature of experimentation is that particular projects may not work out as intended; experimentation in short is also about the freedom to fail, provided of course that things can be learnt from what did not work. Furthermore, as Khasnabish and Haiven (2015:24) note, it is a mistake to evaluate social movements only by their stated objectives, since this ignores the ways in which they generate and sustain progressive and radical platforms of “social relationality and reproduction”, which can generate future, improved commons experiments. Furthermore, from the lack of sustainability that was evident in the FairCoop case we can take some important lessons in terms of future efforts to generate scalable postcapitalist commons through peer2peer technologies.

This paper has highlighted a tension between postcapitalist commons expansion and boundaries. If a postcapitalist commons expands too quickly without sufficient boundaries from capital, its relation to capital is likely to become unsustainable. While there are clearly limitations to deducing design principles in terms of postcapitalist commons boundaries from a close investigation of a single case, we nevertheless think this is worth attempting because of the importance and distinctiveness of FairCoop in making a rare attempt through FairCoin to generate a postcapitalist commons alternative that is scalable (Chatterton and Pusey 2020; Gerhardt 2020; Griziotti 2019).

Having said this, and subject to further research into future postcapitalist commons experiments attempting to scale, we think that from this case it is possible to outline some additional design principles in regard to postcapitalist commons boundaries:

  • An economic model that is as resilient as possible to a divergent evaluation by capital and decreasing capital returns.
  • A clear value framing in which the values around the maintenance of the commons are placed above private interests in securing capital, and this must be true for new participants as much as existing ones.
  • Means to ensure that these commons principles are reflected in practices, we have suggested peer2peer reputational feedback as a potential way of doing this.
  • There must be transparency and clarity around the accounting process in which all participants are aware of how limited capital resources are and potential risks arising from this.

Gerhardt (2020:696) argues that overcoming “the apparatus involved in the monopolisation of monetary value” is a key task in building postcapitalist commons, but clearly our investigation into the FairCoop case has shown the considerable challenges of doing this. What the case also highlights is the partiality of postcapitalist alternative currencies, in restaging the fiction of the dominant monetary system (Maurer 2003) without transcending it. This is arguably a feature of postcapitalist projects in general, in operating within, while trying to work towards an after, capitalism. That said, the postcapitalist peer2peer alternative currency space is an experimental and generative one with continuing different lines of flight (see for example Economic Space Agency 2020; Fairo 2019; Holo 2018) that potentially take us beyond the confines of site-specific commons alternatives (Gerhardt 2020). In suggesting some further design principles for greater boundaries from capital in postcapitalist commons, which we argue are necessary to be both sustainable and scalable, we hope to have made a contribution to rethinking and advancing this vibrant field of activist experimentation."


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