Open Source Capitalism

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* Essay: Nic Wistreich. Open Source Capitalism.


Winner of the 'Co-operative Alternatives to Capitalism' essay prize. [1]


"The co-operative movement and the open source movement both create complex, world-class organisations motivated by social rather than financial goals. From Wikipedia and Linux to Mondragon and the Co-operative Bank, both movements offer coherent alternatives to the kind of business-as-usual profit-seeking structures which are driving the world to the brink of ecological collapse.

Yet they are separate and largely independent from each other. Why is this? What might the potential be if they joined forces? Could we be within the grasp of a real alternative to capitalism?" (


"The web, as the biggest experiment in decentralised global collaboration in history, is powered by two concepts – open source software and motivation via social rather than monetary capital – which have more in common with co-operative values than the free market. Noreena Hertz recognised in her essay for Co-Operatives UK that co-ops are the ‘open source version of capitalism’. For those coming from open source software development, it could also be said that open source is the co-op version of capitalism.

For open source communities the legal status of the vehicle co-ordinating large global collaborations seems less critical to success than the style of management and methodology used, and co-ops are rare. But while there are many thousands of open source products which may not need a legal structure to create or distribute them, there are not yet many open source services.

While co-ops and open source both exist within capitalism, they run contrary to its orthodoxy and could offer each other much: making the web more publicly controlled, and mobilising networked people to solve complex real world problems. Utilising motivators of human labour and innovation that are more powerful than the profit motive, and understanding how open source management empowers large decentralised collaborations to deliver solutions to problems, could be the key for co-operatives to not just flourish in the 21st century, but to address and solve many of the complex, interdependent problems facing the world.


In his book Drive [2], summed up at an RSA lecture “The Surprising Truth About What Motivates Us” 10 Daniel Pink pointed to a major MIT study from 1969 that found money motivated people only up to a certain level. Beyond this, performance deteriorated, regardless of the poverty or nationality of those being tested. The conclusion was that once people have their basic human needs covered – food, shelter, the ability to provide for their family and so on, money was no longer an incentive for better work – indeed the more money that was at stake, the worse decisions people made. “The best use of money as a motivator, is to pay people enough to take the issue of money off the table so that they are not thinking about money, but they are thinking about work” he said.

Pink describes three key factors that motivate people once basic financial needs are addressed and which lead to both better performance and personal satisfaction:

•autonomy – our desire to be self-directed, shaping our own lives

•mastery – our urge to get better at something

•purpose – our desire to work on something with meaning, values or a greater impact.

From Wikipedia to the open source movement, people have autonomous roles, and the chance to become better at something – be it their knowledge of a subject or coding skills. There is also a strong purpose – to help educate the world or provide useful software for people who can’t afford it. As Pink points out, the people who volunteer for these projects, often up to 20-30 hours a week, are mostly highly-skilled and in-demand individuals with jobs.

Of course this activity is from a mostly educated minority of the population – can similar non-market motivators be seen in the wider population? An obvious space would be the three billion human hours spent each week playing video games – an activity with huge autonomy and mastery, alongside a clear purpose – that for the period of playing the game at least – is normally to defeat ‘evil’ or solve problems.


A YouTube owned by filmmakers and cinemas could be just as popular and exciting as an Amazon owned by authors and independent book-shops – but in both cases success would only occur if the new services could match functionality and stability, with an easy way for people to migrate and a strong reason to do so beyond the virtuous (i.e. unique functions or features).

Another approach would be to educate and promote the benefits of switching to a co-op for existing web services, while encouraging new start-ups to consider taking that approach, and to make it easier (and clearly beneficial) to do so.


Co-ops are well positioned to apply open source thinking as the idea all members can contribute to improving the service or product is central. At the same time, co-ops sometimes have tensions between management and members: management would rather not seek approval for every decision, while members need to feel the direction is moving as they want in order to invest their energies. Open source projects seem to avoid this conflict, even though they may have a few core developers – often just one – who will know the code and integrate submissions of updates. There may be thousands of contributors, but there is still a central ‘maintainer’ who has a near totalitarian control over the direction of the project.

Arguably what keeps management responsive to their users/members, and their members feeling their voluntary work isn’t at risk of going to waste through bad decisions, is that with an open license (like the GPL or MIT)24 at any point anyone can take the software and ‘fork it’ into a new version they can adapt and work on. The core maintainer is just a maintainer, not a feudal overlord owning the land on which all else toil for free.

If it’s felt that the maintainer isn’t active or responding to users, then the project can split and a new version can continue separately, with a new name (as happened with Mambo becoming Joomla). This creates what is sometimes called a benevolent dictatorship - whereby the totalitarian authority of the maintainer is beholden to the collective needs of the contributing members, knowing they can leave at any point. The project maintainers, be it Matt Mullenweg for Wordpress or Dries Buytaert for Drupal have final say, but they have only got where they are – and stay there – by being responding to user needs and motivating developers.

This same freedom powers Wikipedia – if the management began to let the quality of editorial suffer, a group of disgruntled users could fork the entire site and run it under a new name with a different approach.

Wherever the creating, storing and copying of digital information is the main building asset of an organisation, the bazaar approach could be applied, and a co-operative seems a perfect vehicle to structure that within.

Where it is more challenging to consider is with physical goods. It would be as if a branch of the Co-op in Glasgow didn’t like the direction from head office and so could change the name of the shop and continue running – but with the logical paradox that such a split wouldn’t create any loss of stock, money or resources from head office or the store - just a loss of human skills. The bazaar model is easy to apply to with services, information, creative and intellectual property, where ideas, brands, content, designs, management approaches and so on can be shared – but is harder with limited physical goods and resources (until 3D printers become widespread).

The final vital key to an open source project using the bazaar approach is called a version control system - a practical way to share the changes that any individual makes through the whole system. Torvalds created a system called Git to handle this, which powers GitHub where the majority of open source projects are available.

Clay Shirkey made his 2012 TED talk about how open source’s version control system could transform society:

“a programmer in Edinburgh and a programmer in Tibet can get a copy of the same piece of software, each of them can make changes, and they can make changes after each other, even if they didn’t know of the other’s existence before hand. This is co-operation without coordination. This is the big change. Once Git allowed for co-operation without co-ordination you start to see communities form that are enormously large and complex.”

It is easy to imagine how finding a way to implement a system for ‘co-operation without coordination’ for social and environmental problems could be transformative.

To consider a hypothetical example dealing with climate change:

1)It would start with an itch to scratch, such as making Britain 100% renewably powered as soon as possible.

2)A respected and charismatic individual or small group, with good tech understanding, would need to propose through their networks an approach to solve the problem. This could be, for instance, a comprehensive website to understand the incentives, technologies and costsavings to convert their home, coupled with peer-to-peer lending to finance it and social media gamifaction to motivate and mobilise large national team of people to promote and encourage households to switch. This group would then need to have a system to facilitate co-operation without coordination.

3)By making all of the code powering their solution – from the database of green-tech installers to the infrastructure validating the micro-loans non-proprietary, the project team can motivate the large pool of people who care about climate change to contribute work that will have benefit regardless of the success of the project. This could be data entry, resourcewriting, infrastructure development, design or social media support. Mobilising, encouraging and integrating such numbers would invite the bazaar approach – invite and absorb submissions and trust (and encourage) people to improve on them if flawed rather than holding everything back and waiting until deemed perfect by the centre. As the public aren’t used to ‘beta’ releases in the way coders are, and could dismiss something that appeared halfbaked, the core team would need to stress this was a work in progress and only brand, design and push the core service once it was at a certain level.

4)Given that such a project would be more service than product, a co-op would offer an ideal structure to allow the army of volunteers to share in the ownership and success of it, perhaps proportional to their input, while also tracking the management expenses.

5)The bazaar model doesn’t assume the core team will have all the answers, in fact - most of the innovation would likely happen at the fringes in unexpected ways. In many ways the core team aren’t expected to be innovators beyond creating the project – instead they facilitate a collective action to solve a problem and encourage and incentivise that with recognition and, potentially, co-op shares or jobs.

Bringing together the lessons about what motivates us as individuals with the methods to mobilise and organise large distributed groups of people to address the urgent needs of our planet, seems our best hope to begin change quickly enough. This could come through co-ops, governments or the private sector. For as long a private enterprise is funded from sources far removed from users, workers and those impacted by a product or service, co-ops seem to be the structure least corruptible to shareholder interests and distorting influences to achieve that.

There is a co-operative alternative to capitalism, and it is working at a huge scale already, just outwith a co-operative structure. The challenge for the co-op movement is to apply these lessons and get closer to these communities. For those without a technical background it may seem daunting, which is why the motivation should be that people want to work differently, they want to co-operate and do work that solves problems, and want to enjoy that as summed up by Raymond:

“It may well turn out that one of the most important effects of open source's success will be to teach us that play is the most economically efficient mode of creative work.” (