Contemporary Value Crisis and the Search for ‘Value Sovereignty

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Michel Bauwens and Vasilis Niaros:

"Our common world is faced with huge questions regarding the evolution of value. Amongst the important questions we can think of are the following:

What is value, specifically in the context of the allocation of resources in human societies, and perhaps even more specifically, in more ‘digitalized’, ‘networked’ societies where emerging knowledge commons are playing an ever more important role?

What ‘should’ be value, in a world marked by ecological and resource constraints that are now operating at a global scale ? Can we imagine a value system that rewards generative instead of extractive activities and exchanges ?

In a world of social, cultural and institutional diversity, can a new ‘value system’ ever incorporate the multiple values that are not recognized by capitalism, such as the care economy and domestic work ?

David Graeber’s book, Towards an Anthropological Theory of Value, is a deep historical and anthropological survey of ways of dealing with value reviewing anthropological research and approaches, and is itself a testament to the wide variety of value practices and explanations. It’s main underlying thesis, if I understood it correctly, is that value is related to ‘making society’ and that we need value regimes that allow us to direct attention and energy to what we commonly value. Value comes into being through social practices. This stands in paradoxical contrast with the capitalist value regime, which seems to lead to avenues that no one in society, or perhaps only the very few, really want.

There is of course no consensus about what value is, and what economic value is derived from, neither cross-historically, nor amongst analysts and commentators of contemporary capitalism. What human individuals and societies are willing to put their attention and energy to, and the ‘rules of the game’, through which resources are allocated, varies amongst cultures, amongst various regions, amongst ideological groups within a society, and amongst various historical times.

The debate therefore rages on whether what determines value is located in the objective sphere (reflecting an amount of labor, energy, capital, resources …), such as is claimed by the labor value theory (LVT), or those arguing that value (and money) should now be tied to biomass or energy expenditure; or is it located in the subjective sphere (the marginalist school, austrian economics and its influence on mainstream neoclassical economics), whether as a simple correlation of individual desires, or as a conscious collective decision and social contract (many monetary reformers and for example Modern Monetary Theory would adhere to that view).

There is certainly a revival of interest in Marx, and in the labor value theory, though the general literature of current Marxism is still very poor in looking at how ICT and digitization would affect its understandings.

A recent exception is the work of Christian Fuchs. A common characteristic of these approaches is the claim that despite technological changes, capitalism itself is intact, and therefore, the analytical tools of Marx and the LVT are still essential. Fuchs also published a number of books looking at how digitalisation, the emergence of social media and of peer production and its derivatives, are changing capitalism. Within that tradition, Fuchs stresses that the ‘audience labour’ of social media users is ‘productive labour’, and that Facebook and other platforms are capitalist platforms are extracting surplus value from the labour. This also means that social media users are considered as part of the class struggle within capitalism.

There is a second stream, located with the labour theory of value, represented by authors like Jakob Rigi or Olivier Fraysse, who stress that the production of use value does not directly create surplus value, and that the platforms are extracting rent. Facebook is not selling what we produce on social media, which is about sharing ‘use value’ to peers, what they are selling are derivatives from our sharing, i.e. data about our likes and interests, essentially to advertisers. They are operating not in the production of value, but in the sphere of realization or circulation of value, i.e. helping sell what capitalism produces, and operating like media did before the internet, through audience work that insures the presence of attention.

The third stream, though linked to Marxism, is the post-autonomist tradition, derived from the autonomist social movements of Italy in the seventies, with authors like Michael Hardt and Toni Negri, and the analysts of the French-Italian school of cognitive capitalism,Yann-Moulier Boutang, Andrea Fumagalli, Christian Marazzo. Adam Arvidsson is broadly making the same argument.

These analysts argue that the labour theory of value is no longer the primary driver of cognitive capitalism, and that the productivity of cognitive labour cannot be compared in socially necessary labour time. Creating symbolic, creative, esthetic, cognitive value is highly contextualized and independent of the expenditure of time. They also argue that the production of value has spread to the whole of society, to what they call the ‘social factory’. Labour has become “biopolitical” because work and life have fused and become indistinguishable. Now that the production of value occurs in the ‘social factory’, value is extracted from the totality of life, in a kind of bio-cognitive capitalism. The value produced by society as a whole is what Hardt and Negri call the common, and the value of that common is extracted and ‘translated’ from ‘outside’ of the conventional production process–essentially through the financial sector, in ways that create and reinforce the inequity of our economic system.

There are of course major differences between the fundamental approach of these authors as well. The Negrian school is clearly an anti-capitalist school, and believes local and global rebellions and revolutions of the ‘multitude’ are needed to break the stranglehold of finance over the common. Adam Arvidsson’s concern in The Ethical Economy is to make the new types of value (which are independent of labour time) measurable and recognizable in the current economy, so that this new value can have its legitimate piece of the distributional pie.

What all these authors agree on however, is that there is a ‘crisis of value’, i.e. that the old value regime does not adequately recognize and reward the new value that is created.

The diagnosis is that we are transitioning to an economy with an evern increasing number of collaborative eco-systems, where the common value is produced through numerous contributions, which are most often not measured or recorded, but that value is then realized or captured through our financial systems. Value is increasingly created through the contributions of the many, but realized for the benefit of the few. However, the concern for this imbalance may entirely stay within the sphere of commodification. In this case, we would simply replace commodified labor with commodified contributions.

The authors of this report however, take a different position. Rather than discussing what the new value means for capitalism, we ask instead: What does that new value represent for a shift towards post-capitalist practices? What if the common, or the commons more precisely, actually represents a new economy that is being born within the old? This changes the perspective because it reorients discussion around commons-producing ‘peer producers’. If one adopts this perspective(we are anticipating later parts of this report), two main avenues would be open to us.

The first avenue would be to think about ‘reverse co-optation’ of value, from the ‘old’ system to the new. Can the emerging commons-centric economy, which creates value in and through the commons, use capital from the capitalist or state system, and subsume capital to the new logic? This premise proceeds from the realistic position that the new system does not have the power (yet?) to change the overall logic of the present system, but it can carve out relatively protected niches within it.

The second avenue goes one step further, within the confines of the already existing commons economy: Can broader streams of value be recognized, and become the basis of a new distribution of value that recognizes the commons and its distinct species of value-creation?

The third step will be the most difficult, if commons communities succeed in both reverse cooptation and new value distribution strategies within the confines of their communities, how does it become the basis of a wider system change, that would affect the very domination of the capitalist market and its value regime ?

The first option is represented by the ‘transvestment’ strategy of the Enspiral open cooperative, using external investments with capped returns, and also insulating their purpose-driven activities from capitalist extraction. The second option is represented by Sensorica, which internally creates a value-sovereign distribution through its open value accounting system. The key to more fundamental change however, will be the capacity to have this newly recognized value, be recognized by the system as a whole.

Before we proceed in documenting precisely such practices, we need to deepen our understanding of the value crisis.

Analysing the Value Crisis

A spate of recent books has used derivations of the labour theory of value to highlight a ‘value crisis’:

Adam Arvidsson’s book The Ethical Economy, in a thesis earlier outlined in a joint essay by Michel Bauwens, is one of many treatises stressing that contemporary capitalist value-practices are no longer able to determine what value is. Value is now more than ever essentially co-created in the civic and social sphere, and it cannot be restricted to economic value as recognized by the system of capital. The material value of products and services, and the corporations that sell them, represent only a fraction of the total value that is somehow generated by economic forces, as evidenced by the ‘goodwill’ value of stocks, which vastly exceeds the value of the material resources. The stock market is no longer an adequate way to recognize and gauge that social value; new value-measures may need to be developed, but also a recognition that many human activities are beyond ‘value’ and cannot, or should not, be measured. Many of the new value-measures that are presently being developed and experimented with, will be post-monetary ‘current-sies’, as Arthur Brock of the MetaCurrency Project calls it — systems that enable communities to see flow, and react to it.

Michel Bauwens’ commons-centric interpretation is that human societies, through commons-based peer production and related modalities of creating value, are now able to exponentially increase use-value production outside of corporations and markets. However, because abundant, digitally reproduced immaterial use-value is generated outside of the commodity form, it moves to the periphery of market production, and therefore ever greater amounts of use-value production are no longer recognized through monetization. This is creating a crisis of capital accumulation (as it becomes harder for capital to discover reliable sources of return), but also of precarious livelihoods.

It is not difficult to see that answers to this conundrum could tilt towards either more intensive capitalist responses, or to the commons. One of the solutions, as advocated by Jaron Lanier, is to monetize and commodify the digital economy through micro-payments. This is similar to the familiar efforts to value “nature’s services” through contrived markets, such as for pollution rights, and we can see similar efforts advocated in the care economy. In these visions, markets and capitalism are seen as the inescapable horizon of societies and their economies for which greater commodification is the natural, inescapable answer. Capitalist players assimilate the new value streams on the old, familiar terms. Of course, there are many other valuation proposals that do not proceed from a desire for marketization, but for the justified desire to create a flow of resources and income to the digital commons, the care economy, and people involved in managing and protecting natural resources. A key question here is, can efforts to valuation lead to any other reality than commodification ?

Jeremy Rifkin, in his book The Zero-Marginal Cost Society, argues that the trend of de-commodification seen in intangible realms (software, social networking) now extends to ‘material’ production. Distributed renewable energy creates, once the initial investment is made, an abundant flow of energy which destroys its monetary value. New manufacturing techniques such as 3D printing, create a similar effect for many material goods. Hence Rifkin predicts a future economy where demonetized collaborative commons are at the core of production, and market functions operate at the periphery.

Paul Mason, in his book Post-Capitalism, uses the labor theory of value to make a similar argument. Software and design, he argues, once they become produced through open and collaborative commons that can be abundantly reproduced, should be considered as ‘virtual machines’. This means that once labor is used to produce new software, very little new labor is needed to reproduce it, and therefore, the input of labor is minimized. This makes software companies that operate under the average socially necessary labor hyper-competitive vis a vis their competitors, but, because they are able to eliminate labor cost in production. They are also reducing the overall pool of profit for entire sectors of the economy, creating a crisis of capital accumulation through falling rates of profit.

Perhaps the most influential book of the last decade has been Race Against The Machine, by Erik Brynjolfsson and Andrew MacAfee, which points to the danger of increased automation. Automation has now moved to knowledge work, and threatens to destroy millions of jobs. As products become ever more abundant and cheaper, they argue, with less and less human labor needed to produce them, there will be fewer and fewer humans as consumers, and capitalism as we know it will cease to operate. The book has led to a broad re-assessment of value practices, and to calls for initiating a basic income, including from leaders of Silicon Valley, who are more keenly aware than others of the potential for this wave of automation to disrupt the stability of the capitalist economy.

So, at least amongst the authors reviewed here, there seems to exist an increasing consensus that we are going through a ‘value crisis’, and that a new value regime has to be invented.

Feminist authors have been stressing the other side of this value crisis, which has been a constant characteristic of capitalism and even one of the conditions of its existence, as Slivia Federici argues in her magisterial The Caliban and the Witch. That argument is of course that capitalism cannot exist without externalizing costs and appropriating “free” resources (such as the social reproduction that occurs through families and care work). Not recognizing and not valuing domestic care work, the labour of love that is so crucial to human survival. is one of the key processes that maintain this unjust system. The broader forms of care that capitalism’s value system does recognize, and commodifies as labor for hire, are at the very bottom in terms of value recognition, most often considered to be the simplest form of exchangeable labor.

There is a parallel here with work for the commons, or commoning.

It should be noted that the capitalism renders the commons economy invisible in much the same way that it ignores the value of domestic work. The digital value crisis has similar roots: the increase in free labour goes unrecognized. Capitalism doesn’t here just ignore negative environmental and social externalities, it profits from positive social externalities generated by care work, the commons and digital communities. This is the core achievement of the new netarchical capitalism: it has learned to profit directly from the positive social externalities of commons-based peer production, just as it has always profited from unrecognized domestic work. An interesting idea here is that some of the solutions invented by peer production communities could be of interest in the care economy as well, and perhaps, vice versa.

I would propose that the concepts of the care economy and that of a commons(-centric) economy are converging in the same general direction. As Peter LInebaugh has noted, the commons requires the activity of commoning, which is nothing other than caring for a joint resource or common social object. Care-givers are often giving energy and attention to unrecognized commons, such as the family commons. Authors from the care economy, such as Ina Praetorius call for a return of ‘economics’ to its original function of providing for human needs and for recognizing all those who contribute to the general welfare. Moving towards a commons economy moving to a economy centered around commoning, i.e. caring, where people can freely choose their object of care, be recognized for it, and be rewarded for it so that they can maintain fulfilling lives. Especially in the light of the re-emergence of digital knowledge commons, as being increasingly central to the organisation of our social lives, it would seem that where the new commons are essentially about our social and ‘psychological’ reproduction, the care economy rightly focuses on its conditio sine qua non, our even more basic need for physical and affective reproduction. Both need to go hand in hand, and a dialogue between the commons ‘economists’ and the care ‘economists’ seems long overdue. Both ‘movements’ may have a lot to learn from each other. For example, both are facing the fact that most resources are controlled by the state and market, and the transvestment strategies of commoners (see below), have also been invented by reproductive care workers. Both movements are interested in re-creating meaningful autonomous work, something that both child-care collectives and digital commoners, have been successful at creating. And as Massimo de Angelis and Silvia Federici (et al.) write in the preface and introduction to a special issue of the Commoner on ‘Care Work and the Commons’, many new social movements and initiatives with the sphere of reproductive care work, are actively creating new social commons. The solutions that are found and developed within commons-creating peer to peer communities are therefore of the greatest possible interest in terms of how to support the care economy as well. Caring and commoning bring affectivity at the core of production.Perhaps as importantly, the capacity for the ‘global scaling of small group dynamics’, one of the key characteristics of commons-based peer production (CBPP) brings back the community dynamics of our original hunter-gathering anthropological condition, but adds the logic of affinity to the original logic of kinship. Bringing the commons back to the core of value creation and distribution, in the context of small group dynamics, brings care back at the center of production.

But let’s now move to a perhaps even more important central issue of the current value crisis, since it involves our very ‘survivability’, i.e. our connection to the natural world, in which we are embedded, and of which we are a substantial, not separate, part.

It seems clear that the current value regime rewards ‘extractive’ production and consumption activities. This increasingly endangers the ‘sustainability’ of the planet, or rather the capacity of the planet to sustain the current level of human activities. This points to the necessity of a shift in value regime, from ‘extraction’ to ‘generation’ (and regeneration).

Linking value to its expression in our monetary systems, ecologist John D. Liu suggests that:

“If we say that money comes from ecological function instead from extraction, manufacturing buying and selling, then we have a system in which all human efforts go toward restoring, protecting and preserving ecological function. That is what we need to mitigate and adapt to climate change, to ensure food security, to ensure that human civilizations survive. Our monetary system must reflect reality. We could have growth, not from stuff, but growth from more functionality. If we do that and we value that higher than things, we will survive.” ( )

We can apply this principle to ‘social extraction’ as well, and relate it to the potential shift towards a commons and care economy. How do we move from a extractive to a generative economy as it relates to human communities and their commons? Indeed, the ‘value crisis’ as we described above, means that more value is extracted from generic productive activities, and less value is flowing back. The current format of ‘netarchical capital’ — in which capital no longer produces commodities for sale through commodified labor, but ‘enables’ peer to peer commons production and peer to peer ‘exchanges’ in order to extract rent from it — is similarly ‘socially’ unsustainable.

So in conclusion, it would seem that the three issues we have discussed — i.e. the free labour of digital workers and social media users, the non-recognition of care work, and the ongoing ecological degradation of our planet and its resources — are all interlinked to the dominance of a system based on extractivism.

Therefore, the key underlying shift needed is one from extractive models, practices that enrich some at the expense of the others (communities, resources, nature) to generative value models, practices that enrich the communities, resources etc.. to which they are applied. This is what we could call the Value Shift.

A historical approach to shifts in modes of exchange

According to Kojin Karatani in, The Structure of World History: From Modes of Production to Modes of Exchange, there are four fundamental modes of exchange. The first is Mode A, which is based on the reciprocity of the gift and on the “community”. The second is Mode B, which is related to ruling and protection, and based on the “state”. The third is Mode C, which involves commodity exchange mediated by the “market”. Capitalism only emerges when the market becomes dominant and subordinates Mode A and B to its own needs.

The fourth is the hypothetical Mode D, which transcends all the other three. Each modality changes as it constrained by the domination of other modalities. For example, the form of community is first the band (under nomadism), then the tribe, then the agricultural or territorial community under imperial systems, which eventually becomes the nation under the domination of capitalist systems.


Concerning mode A, Karatani stresses that Marx did not distinguish between the pooling of resources in nomadic bands, and the reciprocity of the gift in tribal systems. He makes that distinction very clear, though he still uses the overall name and concept of mode A (the reciprocity of the gift) to refer to this joint period, which can sometimes cause confusion. But it becomes obvious that his description of mode D (the transcendental one) is very congruent with the thesis that we may currently be at the threshold of a new type of civilization and economy based on a new mode of exchange. Very specific about the argument of Karatani is that mode D is not just a return to the reciprocity of Mode A, nor a pure nomadic band structure, but a new structure which transcends all three preceding structures. Mode A is dominated by a new form of gift exchange based mainly on the pooling of resources, i.e. the digitized commons which enable all kinds of pooling of physical and infrastructural resources. In other words, mode D is an attempt to recreate a society based on mode A, but at a higher level of complexity and integration.

What this means in our context is that Karatani marshals considerable evidence for the existence of each modality, sourced in both anthropological and historical literature. He thus recognizes different major transitions:

A first transition occurs when the pooling of resources in nomadic bands is replaced as a dominant modality of exchange by the reciprocity-based gift economies of tribal systems. This allows a scaling from bands to clans, tribes and inter-tribal systems and, therefore, creates a world that consists of a collection of tribal mini-systems. A second transition occurs when the reciprocity-based systems of tribes are replaced by state systems, based on the logic of “plunder and redistribute” or “rule and protect”. This allows scaling to inter-tribal and inter-community levels and, thus, creates a world of world-empires that compete with each other. A third transition occurs when these systems are replaced by the market form as the dominant form of exchange. This creates a global world-market system in which nation-states compete with each other, which Karatani characterizes as a world-economy. Finally, he posits, and we agree with him, a new transition towards mode D, a mode of exchange that integrates the preceding ones but is dominated by the pooling that was originally dominant in the early nomadic groups. Karatani calls this modality “associationism”. It is important to stress the following point made by Karatani. To begin with, all systems are multimodal.The four modalities (or five according to our adaptation of Karatani’s scheme) exist in some form in all systems and it is only their mutual configuration which changes. This means that transitions depend on struggles for dominance among these modalities. This opens up thinking about the value shift or value transition, not just as the replacement of one system by another, but as an ongoing inter-modal struggle. The question then becomes, How can we think about a commons transition as a way for the commons to engage the other modalities? Just as the logic of capitalist markets attempts to commodify, the logic of the commons is an effort to commonify. There is evidence of this type of value shift in the current practices of peer to peer based, commons-producing communities.

The Current Value Shift The first underlying operating concept here is a quest for ‘value sovereignty’. Just as there is no consensus on what constitutes good food, so communities must decide for themselves how to regulate food provisioning, through ‘food sovereignty’. Similarly, communities that are already engaged in the value transition are opting for practices that advance their ‘value sovereignty’.

An example of this is the open and contributory value accounting approach of Sensorica, an open scientific hardware community in Montreal, Canada. Its main aim is to create a wall between the various forms of income generated through the market or grants, and the actual distribution of it, i.e. a de-coupling of internal and external value. The aim is also to avoid rent extraction, not just by external forces, but by privileged internal forces, since the commons also have internal power dynamics. Thus, the system allows the identification of all types of contributions, in time, effort, but also for those contributing ‘space’ , or time on their instruments, etc. All contributions, all ‘capital’ is recognized, and through a combination of self-logging and peer review, contributors are given “karma points” to document their contributions. The social contract is that all external revenue shall flow back to all contributors, not just those directly connected to the market or government partners. It should be noted however, that the linking of contributions to income is controversial. Other approaches would de-link entirely the contributory sphere, and link income streams exclusively to the ‘added value’ services performed around the commons, in the cooperative sphere.

A slightly different approach is used by Ethos in the UK. Ethos recognizes two types of shares. Regular shares are given to those that directly create recognized market value, but virtual shares are granted to those who contribute in a generic way to the common resources that are used in specific projects. The social contract here is that these virtual shares will be recognized as legal shares in five years time, sold to the market, and therefore also realize (monetary) value. Thus the value is here eventually shared with all contributors. None of these solutions is of course perfect, but they attempt to create a form of value sovereignty, even as their members are obliged to engage with the market in order to create livelihoods.

Note here, though, an important shift — from the use of commodified labor to produce commodities sold on the market, to contributions that create common, shared value.

A second approach has been theorized by the Telekommunisten group in Berlin and by their main authors Dmytri Kleiner and Baruch Gottlieb. They propose an inter-modal approach of ‘reverse cooptation’ of value streams, called ‘transvestment’, i.e. the transfer of value from one modality of value creation to another. An example of this is the ‘capped returns’ model of the ethical entrepreneurial coalition Enspiral in New Zealand. In this model, a wall is created between the investors, whose returns are capped, and the autonomy of the purpose-driven social entrepreneurial ventures. Through this mechanism, external and potentially extractive capital is ‘subsumed’ and disciplined to become “cooperative capital.” Significantly, once the capped return contract has been fulfilled, the resources are then ceremoniously given to the commons.. We believe that the Rooted Internet model with Pedro Jardim, is linked to this practice as well. Investors in Rooted Internet ventures also are confined to capped returns, and cannot influence the management of the participating purpose-driven entities. It should be noted that in the introduction to the special issue of The Commoner on Care Work, Silivia Federici et al. mention very similar practices in the sphere of the social commons.

Silke Helfrich, in her keynote at the Urban Commons conference in Bologna last year, described the emergence of pooling strategies for material provisioning, called Pool&Share, which combine user communities with specific types of payment for goods and services. The goal is to prevent the creation of a producer-consumer divide. A well-known example of this are the Community-Supported Agriculture models, which create a solidarity between producers and consumers engaged in one joint network.

It should be stressed that these examples are not just marginal, but part of a broad gamut of self-organized civil initiatives. This has been shown by recent surveys by Tine de Moor, for the Netherlands (in the booklet ‘Homo Cooperans’), and confirmed by Oikos, a Belgian think tank, for the Flanders, which have seen an explosion of new provisioning systems and value practices.

However, it is clear that the individual initiatives we have described in this emerging sphere of a ‘commonified’ economy, and its value regimes, have as yet to reach a working rapprochement with the dominant extractive regime. And also, while it can recognize a much wider variety of contributions, it cannot as yet recognize the general conditions in which it has to operate, and that includes the unrecognized care work that commoners themselves benefit from. While grassroots experimentations can be imagined, this it seems to us, remains a job for the wider polity.

So we conclude with one of the leading questions: Can we imagine a value regime that seamlessly recognizes all contributions, direct and indirect, which create and maintain the wellbeing of all human subjects, and the wider natural environment that is the condition for human life?"