Concept use by the Oekonux group, i.e. Stefan Merten and Stefan Meretz.
They write: "The concept of Selbstentfaltung has been used in the Oekonux discussion a lot and also in earlier works for instance in Holzkamp's work (as »generalized action potence«). Since there is no appropriate word in English and also because the concept of Selbstentfaltung used here is somewhat new even in German we decided to use the term in English as well."
"Here, something Marx' called the »universal development of individuals« comes into play -- or with a special german word »Selbstentfaltung«. The concept of Selbstentfaltung is similiar to self-realization, however, it overcomes its limitations. Bourgeois society needs the free individual only in a restricted sense: The individual should be free to sell its labour power or to command alien labour power. However, the restriction comes from the enclosure of the valorisation logic, in which workers and capitalists took opposite functions, but which forms a unique shell for both. Neither of them can escape, both of them have to function according to their »character masks«.
Marx recognized, that the societal relationships are constitued by objective relationships based on the exchange of commodities. This »fetishism« (Marx) is the alienated enviroment, wherein the individual can self-realize. However, the logics of the commodity framework, of selling and buying, can not be overcome within this environment. The basic logic is exclusion. Within the exclusion structure it is only possible to »self-realize« on the expense of others. The »free« individual is at the same time an isolated one, isolated from others and from whole society. To pull oneself at one owns hairs out of the swamp seems impossible.
The solution to this dilemma is the individual itself, and Selbstentfaltung is the mode. In contrast to self-realization the condition of Selbstentfaltung is not to exclude, but to include others. Selbstentfaltung creates a room of mutual support and enhancement. Having fun and being responsible joins, because responsiblility is not a moral add-on, but it is the built-in pre-condition for success. Well known »flow experiences« can be described as a result of Selbstentfaltung. Wikipedia describes this experience very well: »Flow is the mental state of operation in which the person is fully immersed in what he or she is doing, characterized by a feeling of energized focus, full involvement, and success in the process of the activity.« [Wikipedia-FlowExperience]
Selbstentfaltung is not a rare personal property of few people, it is a genuine mode of individual development of all humans. However, it needs a special social environment enhancing the inclusion logic. This environment must minimize alienation and indirection. Capitalism being based on a few abstract principles contradicts this requirement. The fetishism in bourgeois society produces alienated relationships. The use value of a commodity is a subordinated means to realize exchange value on markets. Thus, making more money from money is the alienated and indirect form of producing goods the people need.
Selbstentfaltung on the contrary requires direct relations to the products, to other producers, and to users. The product itself is the primary goal, not generating profit via selling the product as a commodity on markets. The cooperation with other peer producers is essential to get the tasks done, because the peer network is the social environment wherein the individual acts. And the direct relation to users is the way getting feedback and reputation. The better the product, the better the cooperation. And the better the user relations, the more people join the process and the higher the possibility to accomplish the goals of the project. The logic of successively including more people, knowledge, and experiences is a compelling power overcoming the exclusive principles of capitalist society. The core of this inclusion logic is Selbstentfaltung, which can now be defined in a short way: The Selbstentfaltung of the individual is the precondition of the Selbstentfaltung of others--and vice versa.
Due to Selbstentfaltung being primarily oriented in the use of the product, the quality is superior. This follows from the fact, that design and realization of the product is not limited by marketing considerations. While exchange value orientations results in relative quality, the quality orientation in free production modes based on Selbstentfaltung is absolute. Richard Sennet compared these modes with crafts, with »doing something well for its own sake«. In Free Software and free cultural works like Wikipedia he sees this »enduring, basic human impulse« re-emerging, which all people have and can bring out. Internal openness allows for contributions from all sources. People are invited to contribute, user innovation is employed (Hippel-Democratizing Innovation). Superior availability is a direct result of external openness. Often, the improvement rate is very high.
Universal development is an end in itself. Selbstentfaltung brings out the best qualities of humans, and at the same time, it is the best mode of living for humans. Individual being and social embedding, the one and the many are no longer opposites. However, Selbstentfaltung contradicts many capitalist principles. Capitalism does not allow for unlimited inclusion, because it is based on exclusion. Capitalism only uses cooperation, in order to reach better competitiveness to better prevail on the expense of others. Efficiency is not oriented in a good living for all, but simply in maximizing profit as an end in itself. Thus development and production is oriented in goals raising from a »cybernetic« valorisation cycle, what Marx called »objective dependence« , or with another word: alienation.
Using an systemic perspective during the industrial period, alienation is not really a problem, because industrial working with matter can be commanded. And alienation was personally acceptable, because the »objective dependence« was highly outweighed with good wages. But high-tech capitalism is based on working with information. Creativity and individual free development are needed--but they can not be commanded. At the same time huge industrial structures are separated into smaller parts, each of them directly subordinated under the market claims. Class relations which once have been clearly visible dissolve, each single group and each individual has to be an entrepreneur, capitalist and worker at the same time. Alienation is carried to the extremes: Self-valorisation and Selbstentfaltung become antagonist requirements." (http://en.wiki.oekonux.org/StefanMerten/CapitalAndClass/PotentialOfPeerProduction)