Distribute Commons, Not Commodities

By Nathan Schneider

This is the first in a series of guest blog posts exploring the real-world implications of the Decentralized Web Principles.

The following piece is by Nathan Schneider, an assistant professor of media studies at the University of Colorado Boulder, where he leads the Media Enterprise Design Lab. His most recent book is Everything for Everyone: The Radical Tradition that Is Shaping the Next Economy.

In his sweeping book Fulfillment, Alec MacGillis tours the America that Amazon has re-made. Many of his stories are about warehouse workers in places once home to unionized manufacturing jobs that paid multiples more than what Amazon doles out today. MacGillis focuses on what is, instead of what could be. Yet one passage stuck with me especially, a signpost of what might have been, of where this whole mess might have instead led:

as the former U.S. labor secretary Robert Reich noted, if Amazon employees owned the same proportion of their employer’s stock as Sears workers did in the 1950s–a quarter of the company–each would, by 2020, own shares worth nearly $400,000.

From Fulfillment by Alec MacGillis

The tech economy has generated wealth like the world has never seen, producing the richest companies and individuals in history. All this wealth, as MacGillis and Reich remind us, could have been distributed differently. It could have produced a revival of prosperity as data centers and logistics routes began populating the Rust Belt. Regions now home to endemic poverty could have had a critical mass of upwardly mobile consumers. Instead, a relatively small coterie of elite technologists get stock options, founders start space companies, and everyone else can hardly afford to enjoy the tech their labor makes possible.

DWeb Principle: Distributed Benefits

The DWeb Principles call for “distributed benefits.” Companies like Amazon remind us why. The people contributing their work, their data, and their imagination to make technology valuable should receive value in return. All of us, no matter what we contribute, should benefit because a truly distributed web should be a commons for everyone.

Long before calls for a distributed web, there was a political philosophy called “distributism”–an outgrowth of Catholic social teaching in the Gilded Age. As they confronted the horrors of factory labor and recognized the advance of automation, distributists recognized that if you distribute ownership, distributed control over technology will follow. More than focusing on the design of the technology, they were concerned with how it is owned.

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“In the E2C vision, successful startups would aim toward becoming owned not by a new round of speculative investors but by the people who love and rely on them.”

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For years now, I’ve been working with tech startups that are trying to build on the long tradition of cooperative business–businesses owned and governed by the people who use them, rather than outside investors just seeking to turn a profit. This isn’t easy, because the dominant venture capital investment model encourages centralized power and centralized benefits above all else. VCs push companies to “exit” into either an acquisition by a bigger company or an IPO on Wall Street. Lately, my collaborators and I have been working to advance the possibility of a new option: “exit to community,” or E2C for short.

Exit to Community (E2C)

In the E2C vision, successful startups would aim toward becoming owned not by a new round of speculative investors but by the people who love and rely on them. This isn’t as out-there as it might sound. Since the 1970s, thousands of companies have become employee-owned through Employee Stock Ownership Plans (ESOPs), often using bank loans that don’t cost employees a cent upfront. Cooperative businesses like Ace Hardware and the original Visa enabled small businesses to control national-scale networks. New blockchain-based tokens could introduce even more possibilities for enabling users to co-own their tech.

As the E2C idea spreads, I have started to worry about how some are interpreting it. When people think of communities owning companies, more and more, they think of something like GameStop — swarms of small investors pumping and dumping stock on apps like Robinhood. That is not what I mean. I do not hope for a world where we are all crypto day-traders; that’s a job best left to well-governed robots. Finance is hard, single-minded work mostly detached from reality. And in decentralized finance (or DeFi), as in most financial markets, a few players will likely reap most of the wealth.

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“Speculation is a game of profiting at the expense of whoever comes later, pilfering from other people’s grandkids. Community ownership, in contrast, means that those who come after us can share the benefits of what we have built.”

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I fear the distributed benefits that a lot of DWeb projects envision are of the GameStop sort. Everything becomes a market: storage space, processing power, code contributions — the works. Crypto-tokens matter less for what they are for than what they might someday be worth. Speculation is a game of profiting at the expense of whoever comes later, pilfering from other people’s grandkids. Community ownership, in contrast, means that those who come after us can share the benefits of what we have built.

Open Source software has in some respects modeled a world where we don’t need money to motivate us, where we don’t hide behind artificial scarcity and needless monopolies. The cooperative tradition involves shared ownership and shared wealth, but rather than encouraging speculation, it invites solidarity. Co-op shares usually can’t be traded on an exchange. They are, so to speak, true utility tokens, but with long-term benefits. Cooperativism is the ultimate HODL.

Wrap Markets in Democracies

The old offline world had a pretty sensible idea: When you want to set up markets, enclose them in a democracy that sets the rules. Wall Street was even more dangerous than it is today, before elected governments put limits on what it could do. Flea markets follow the rules of the cities where they operate. This is a principle that DWeb projects should strive for as well.

Consider, for instance, the blockchain project Cambiatus, which has helped communities in Latin America set up their own cryptocurrencies. Before deploying the tech, Cambiatus works with the communities to develop goals and governance processes; the crypto serves the communities, rather than the other way around. Here in the United States, the labor-market startup Opolis is wrapping its token economy within the overarching legal structure of a cooperative. (I recently became a member — my first co-op membership paid for with crypto!) With these kinds of democracy-first designs, we can steer our distributions of benefit more toward the common good than toward the cleverest gamblers.

The six-figure dream of front-line worker-owners is not a fantasy. One of my favorite breweries here in Colorado, New Belgium, was recently acquired by a multinational beer company. This was a disappointing outcome to those of us who prize local business. But it was not the usual corporate acquisition. Rather than leaving workers in the lurch, as buyouts usually do, New Belgium’s current and former employees saw six-figure payments, at least. Why? It was 100% employee owned, through a trust the employees shared. From the CEO to the forklift drivers, the wealth that they had created, in the end, was theirs, together.

For too long, we have hoped that distributed technology would produce distributed power. Again and again, the tech alone doesn’t cut it. The web won’t be truly distributed until the wealth it creates is.

One thought on “Distribute Commons, Not Commodities

  1. Aileen Brent

    An eye-opener, thank you. At this rate, the divide between the rich and poor will only widen. Mountain Equipment Co-op of Canada, was done in by Covid, after 50 years of existence. Unfortunately, I read that the deal did not go the way New Belgium went. I hope we can work on a more egalitarian world for future generations.

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