Christian Siefkes, The issue defined:
"Is a society possible in which peer production is the primary mode of production? If so, how could such a society be organized?
There appear to be two fundamental problems that would need to be solved to generalize peer production into further areas of the physical world, beyond information production:
1. How to coordinate the producer side (”fun and passion”) of peer production with the consumer side (”needs and desires”)?
2. How to allocate limited resources and goods?" (cited at http://blog.p2pfoundation.net/book-of-the-week-towards-an-economy-of-contributions-1/2007/12/10)
A series of five blog articles on Material Peer Production written by Christian Siefkes, introducing the core ideas of the Peerconomy model:
- Part 0: Traits of Peer Production
- Part 1: Effort Sharing
- Part 2: Free Cooperation
- Part 3: Commons and Possession
- Part 4: What Difference Does It Make?
Christian Siefkes Definition of Peer Production
"1. Peer production is based on contributions (not on exchange). Peer projects have a common goal (produce a software, share content, discover extra-terrestrials, whatever…) and every participant contributes to this goal in some way or other. People contribute to a project because they want it to succeed, not because they need or want to make money — it is use value, not exchange value, that motivates participants. Sometimes contributions are tied to benefits (as in the case of BitTorrent), sometimes they are not (as in the case of free software), but in any case the effort required to reach the common goal is shared among those who care enough to contribute. That’s why I also use the term “effort sharing” to refer to this mode of production.
2. Peer production is based on commons and possession (not on property). Benkler talks about “commons-based peer production” to emphasize the important role of the commons (goods and resources without owners who can control how they can be used). Generally, commons such as free software and open knowledge play an important role as input or output (or both) of peer projects.
Where things are not commons, they generally matter as possession (something that can be used), not as property (something that can be sold). In current peer projects, resources such as computing power and Internet access are typically privately owned, but they are used and shared for reaching the goals of the projects, they aren’t employed for financial gain. And, as noted above, participation in peer projects is motivated by use value, not by exchange value — goods are produced to be used (as commons or possession), not be be sold (as property).
3. Peer production is based on free cooperation (not on coercion or command). Nobody can order others to do something, and nobody is forced to obey others. This does not mean that there are no structures — on the contrary, usually there are maintainers or admins who can decide, for example, which contributions to accept and which to refuse. But nobody can compel others to do anything they do not want to do. Moreover, you are never forced to accept the existing structures as they are. If participants of a project are unhappy about some aspects of the project they can try to convince the others to change them. If that fails, they can still fork the project: they can break away from the others and do their own thing. This absence of coercion and command is probably the reason why Benkler talks about cooperation among equals, about “peers”.” (http://www.keimform.de/2008/01/21/material-peer-production-part-0-traits-of-peer-production/)
Aspects of the Peer Economy
Note: what follows are some excerpts from the introductory article series listed above. To get a complete picture, it's better to read the full series.
Hint-based stigmergic systems
“The first characteristic of peer production is that the effort required to reach the goals of a project is shared among those who care enough to contribute. How this sharing is organized depends on the kind of project.
Projects creating free software or open knowledge use a style which Francis Heylighen  describes as “stigmergic” (hint-based). The work done in in such projects leaves “stimuli” or hints motivating others to continue. Examples of such hints are to-do lists, bug reports, and feature requests in free software projects; or “red links” to missing articles and listings of “most wanted articles” in the Wikipedia. They point participants and potential participants to the tasks that are worth doing.
This hinting system also serves as an informal mechanism for prioritizing tasks: the more people care for a task, the more likely it is to be picked up by somebody (since the corresponding hints tend to become more visible and explicit, and since people are more likely to pick up a task they wish to be done). And since everybody is free in choosing the tasks they want to do, participants will generally be more motivated than in a market-based system, where they have to follow the orders of their boss or customer. They also tend to pick up those tasks they think they are good at, ensuring that the different talents and skills of people are applied in the best possible way.
For projects producing freely copyable goods, such a hint-based system with unconditional access and voluntary contributions is very reasonable. There is no need to exclude non-contributors from the benefits from the project, since admitting them doesn’t cause any additional cost (or only a very small one), and every additional user might sooner or later decide to follow one of the hints and become a contributor. And even non-contributing users are often beneficial for the project, since they might increase the motivation of contributors (it feels good to know that there are people out there using your software or reading your texts).
Things change if the costs of admitting additional users become so high that you can no longer rely on mere hints and voluntary contributions to make up for them. In such cases, more explicit agreements about how to distribute effort will become necessary. In the BitTorrent example, admitting more users mainly requires additional _bandwidth_, hence users are expected to contribute bandwidth. In material production, a main bottleneck is _effort_–time spent on behalf of a project, doing tasks that are required for reaching the goals of the project (in the bicycle example, such tasks might include designing, assembling, and producing bicycles; and building, cleaning, and maintaining a factory where the bicycles are produced). Everybody who wants to benefit from the project (to get a bike) might thus be expected to _contribute some effort_ to the project (other resources are required as well, but this will be a topic for later). Thus, the tasks required to reach the goals of the project are distributed among those who want to benefit.” (http://www.keimform.de/2008/01/29/material-peer-production-part-1-effort-sharing/)
Distributing Tasks through Weighted Labor
“There are several ways of tying the contributions people are expected to make to the benefits they want from a project. The first decision a project will have to make is whether it wants to _correlate_ the amount of contributions to the amount of benefits.
If there is no correlation, the effort required to reach the goals of the project is shared more or less evenly among all who want to benefit, and every contributor takes as much from the outputs of the project as they like. I call this the _flat rate_ model since it resembles the flat pricing schemas popular, for example, for Internet access, where everybody who pays a flat price is entitled to using as much, or as little Internet connectivity, as they like.
Alternatively, projects can decide to correlate your contributions with the the benefits you’ll get (as BitTorrent does)–the more you want to take, the more you’ll have to contribute. If the effort required for production is about the same for all the goods produced by a project, this means that the effort you’ll have to contribute depends on the number of goods you want to get. All who want just a single bicycle contribute roughly the same effort (as in the flat rate model), but those who want _two_ bicycles now have to contribute twice as much, and so on. In this model (which I call _flat allocation_), the overall production effort is shared by dividing it by the number of produced goods, while in the flat rate model it is shared by dividing it by the number of participants.
If a project produces multiple kinds of goods with varying production efforts (bicycles, motorcycles, cars, and so on), they can generalize this model by taking the relative _production efforts_ of the different goods into account. If producing motorcycles takes (on average) three times as much effort as producing bicycles, everybody who wants a motorcycle will have to contribute three times as much as those who want a bike.
What if many people want a certain good and not all of their wishes can be satisfied, e.g., due to limited resources? For example, in a seaside community, more people might desire apartments and houses with sea view than the available space allows. One possible solution would be to distribute the available goods more or less arbitrarily, say by drawing lots. But it might be better to resolve such conflicting desires in a non-arbitrary way, by taking the respective strengths of people’s wishes into account–by asking them _how much they are willing to contribute_ in order to get the desired good. If there is more demand for a product than can be satisfied, the peer project can thus “auction” the product: it can raise the relative _cost_ (the amount of required contributions) of the product until sufficiently many of the prospective users get second thoughts. I call this the _preference weighting_ model since the preferences of people regarding the goods they want to get are “weighted” (similar to the “weighting” of different tasks in the _weighted labor_ model discussed above).
Note that it is the _relative_ cost that is modified–if the relative cost (expected amount of contributions) for one specific item is increased, the relative costs of all other items will automatically fall, since the overall production effort stays the same. With auctioning, the overall production effort is still distributed among all who want to benefit, but in a different way–those who get an auctioned good will have to contribute more, while those who want other goods (which can be produced in sufficient quantity) will all have to contribute less.
It is important to understand that no _exchange_ takes place between those who produce a good and those who use it: increasing the _cost_ (expected contributions) of a good won’t increase it’s _production effort_, and it is the production effort which the producers get recognized as contributions. If there was exchange, a higher cost for the consumers would go (wholly or in part) to the producers, but this is not the case.
Both the weighted labor model and these flexible allocation models ensure that everybody’s preferences have free play. Nobody is forced to do a task they do not really want to do or to live in conditions they don’t really like. You will hardly be able to get everything for free (as in free beer), since even projects choosing the flat rate model will probably have to ask for contributions to distribute the required effort. But with task weighting and preference weighting, you can freely choose whether you prefer more _luxury_ (and of which kinds) or more _laziness;_ whether you prefer spending more time doing the things you want to do, or working for the things you want to have; or whether you prefer living in a simple style or doing some “quick-and-dirty” tasks so you can spend most of your time in wholly other ways.” (http://www.keimform.de/2008/01/29/material-peer-production-part-1-effort-sharing/)
How the Peer Economy differs from the market model
"Markets are based on private, uncoordinated production using privately owned means of production, whose output is afterwards exchanged.
In the peer economy model, production is not private but social from the very start: Since the tasks necessary to satisfy peoples wishes are shared (divided up), producers always know that they are meeting an existing need, that there will be somebody who will use their products.
In the peer economy model, resources and means of production are commons. They may be used by projects (i.e. they become possession--something that is used), but they are never privately owned by anybody: nobody has the right or the effective means to sell them or withhold them until the others fulfill one's conditions. (Owners of resources and means of production have the means of backmail non-owners--that's never the case in peer production.)
So these, I think, are the fundamental differences between markets and the commons-based peer economy: production is social from the very start since tasks are shared; and production is based on commons, not on private property.
There are, of course, other important differences such as that, in a peer economy, nobody would need to suffer hunger or other basic wants due to being unable to successfully sell anything. But these differences actually follow from the differences outlined above, between sharing tasks (where there is a bit to do for everybody) and selling/exchanging stuff, as well as between private, exclusion-based access to resources and means of production vs. common, inclusion-based access."