Peer Production as Neoliberalism

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Peer Production as Neoliberalism

Mike (Mr. Teacup?) in Peer Production as an Illusion:

"The de-commodification of intellectual labor that we see with the rise of peer production does not represent a countervailing trend to the neoliberalism, it is very much a part of it. Neoliberalism privatizes profits and socializes costs, and peer production is an even more radical implementation of that idea, but taking it one step further. Normally, socializing of costs means government pays for something – for example, bailing out failed banks. Since this money comes out of a tax system that is at least moderately progressive, we can regard it as an attempt by the rich to recover wealth lost to taxation.

As a method for socializing costs on to civil society, peer production is far more radical, a way of appropriating from the people what little remaining resources they have after being exploited in the workplace. It requires a transformation in the ideology of civil society, which is normally used as form welfare provision of the people, particularly the poor, to justify lowering taxes and shrinking the size of the state. P2P ideology takes a radical step by not just being content to relieve the rich of their tax burden, but squeezing civil society even more by turning into a source of corporate profits as free labor.

If the empirical evidence shows that a large role for civil society is associated with greater freedoms for capitalism, the Beachhead Hypothesis is not only false, it points in the opposite direction, to a further rolling back of the social democratic welfare state and intensification of neoliberal exploitation. In Commons-based Peer Production and Virtue Yochai Benkler and Helen Nissenbaum suggest that the use of peer production systems may encourage pro-social and public-spirited virtues – the same virtues that motivate charitable volunteering and giving – but express this tentatively because they can’t find a causal mechanism. But perhaps it may be found in the old-fashioned Marxian observation that morality and social norms are influenced by the prevailing economic system.


Rather than mitigating the problems of neoliberalism, the new charitable ethic makes it function more smoothly by obscuring the true cause of the problem. Similarly, the altruism of individuals participating in P2P gift economies obscures their role as free labor for capitalism.

In 2002, Benkler wrote Coase’s Penguin, or Linux and the Nature of the Firm, a heavily-cited paper that argues that the rise of peer production represents the “emergence of a new, third mode of production in the digitally networked environment.” In fact, this third mode is not new, it is simply the expansion of the so-called Third Sector of civil society after being turned to an even more profitable direction." (

Open source's integration in business motivations

"The picture we have of open source software development is that it is the spontaneous activity of volunteer programmers collaborating together in a gift economy with no financial incentives and creating software that’s comparable or better than what’s produced by large for-profit proprietary software vendors like Microsoft. The reality is somewhat different – although this gift economy model is accurate in some cases, most of projects of modest size are funded by corporations in one way or another. This is certainly true of every open source “success story” where the open source product has achieved greater market share than the proprietary one.

The precise form of corporate sponsorship varies: in some situations, the bulk of the code by programmers who are employed by corporations who pay them to contribute to the project. This describes the Linux project. According to an analysis by Linux kernel contributor Jonathan Corbet, 75% of code is written by paid developers working for IBM, Red Hat, Novell, etc. – companies who compete with each other in the marketplace, but cooperate by funding development of the Linux kernel. Another example is WebKit, the main technology behind Google’s Chrome browser, which is run by programmers from Apple, Google, Nokia, Palm, Research in Motion, Samsung and others. The domain is owned by Apple and the corporate connection is apparent on the Contributing Code page, which says “If you make substantive changes to a file, you may wish to add a copyright line for yourself or for the company on whose behalf you work.”

A more common business model is services-and-support – a company owns the copyright for the software, pays for and organizes much of development. This is profitable because the company uses almost as a form of advertising to help sell support and consultation services to large businesses who want to use the software. This describes MySQL, PHP, Red Hat, Ubuntu and many others.

These business models evolved in the late 90s and early 2000s, when the question of how open source could be profitable was a hot topic of debate on internet fora. Rarely, someone asked whether open source should be profitable and questioned its inclusion into capitalism, but they were always shouted down. The conclusion to be drawn is that open source software does attract volunteers, but not for serious projects that are competitive with proprietary software. These almost always have substantial corporate backing.

In 2005, Bruce Perens, co-founder of the Open Source Initiative and coiner of the term “open source”, wrote The Emerging Economic Paradigm of Open Source to explain why it is profitable for corporations to fund open source projects, specifically addressing and refuting the claim that open source software is a gift economy. This claim was made by OSI co-founder Eric Raymond in one of the most well-known explication of open source philosophy, The Cathedral and the Bazaar. Perens says:

- Raymond did not attempt to explain why big companies like IBM are participating in Open Source, that had not yet started when he wrote. Open Source was just starting to attract serious attention from business, and had not yet become a significant economic phenomenon. Thus, The Cathedral and the Bazaar is not informed by the insight into Open Source’s economics that is available today. Unfortunately, many people have mistaken Raymond’s early arguments as evidence of a weak economic foundation for Open Source. In Raymond’s model, work is rewarded with an intangible return rather than a monetary one. Fortunately, it’s easy to establish today that there is a strong monetary return for many Open Source developers. But that return is still not as direct as in proprietary software development.

Perens goes on to argue that open source is economically rational for certain classes of software that he calls non-differentiating: technology that is used to support the functions of a business, but isn’t a competitive advantage. These are things like computer operating systems, web servers, web browsers, database software, word processors, spreadsheets, etc. which can be considered part of the infrastructure of a business. Often, differentiating technology is build out of these components, and Perens uses the example of Amazon’s book recommendation software – customers might go to Amazon because of this feature, which Barnes & Noble does not have, so this should be kept proprietary. But customers don’t shop at Amazon because of its amazingly flexible and efficient web servers, so it makes sense for them to collaborate with Barnes and Noble (and vice versa) on this part of their business.

He claims that something like 90% of software is infrastructure, which is a useful analogy. Corporations don’t create their own private roads, they effectively collaborate with their competitors by funding public roads through their tax dollars. Historically, corporations have used private, closed consortia to collaborate on software infrastructure – member companies agree to fund the development of software and make it available to each member. In many cases these have become outmoded and replaced with open source projects, and Perens lists some examples: the Taligent consortium to standardize Unix has been replaced by the open source Linux project, and the Common Desktop Environment was replaced by the open source GNOME Project. But the consortium model continues to be relevant in other areas, especially in developing industry standards: the Unicode Consortium, the World Wide Web Consortium, the Internet Systems Consortium are all funded and staffed by major internet companies.

The history of software consortia is sometimes forgotten even in academic accounts of the open source movement. We’re often presented with an appealing but simplistic David-and-Goliath narrative of a few individual hackers refusing to bend to the trend of proprietary software." (


From the comment area of the same article.


"As far as your Marxist analysis of peer production, I think that sometimes peer production most obviously functions as worker exploitation, but not always, and the "not always" forms the basis for genuine optimism about P2P and open source movements. In fact I'd go further and say that even when P2P involves some exploitation it can still be a source of genuine optimism, for to participate cooperatively in the creation of structures for society in itself is a good thing and we feel good when contributing to something larger than ourselves...even when our contributions are difficult and others sometimes benefit disproportionately from them. In addition we should also recognize these inequalities and exploitative structures and seek to remediate them whenever possible, but we needn't wait until the world is perfectly equitable before enjoying our labors and contributions. We can for instance genuinely enjoy volunteering while working towards a world in which what we are volunteering for is more adequately provided for through a better social structure.

In this sense, I disagree that an outpouring of volunteerism in the Haitian earthquake necessarily obscures the structural causes of Haitian poverty. In the case where we have caused structural violence, the context is such that the violence is already done. We cannot act ethically based on what should have been, only on what is now, which involves both ethical duties to provide care in the immediate, but also long-term duties to fix broken and violent structures. I think the solution is not to condemn volunteerism but to encourage deeper participation. When people go deeper into helping they frequently confront the problems in providing aid and begin to see the structural forces that prevent effective solutions. If they persist even deeper they can start to work on the deeper elements of the problems.

I do very much agree with your notion that P2P is far from some revolutionary and radical new mode of production, an idea I find terribly naïve and worthy of critique. My own experience of volunteering and participating in P2P projects is not kindergarten-like and infantile however, but life-enriching and deeply heartwarming, connecting the experience of caring for family into wider circles of care. "