We envision a scalable economic model based on participatory economic theories that can sustain the distributed design and production of software and hardware based on the free and open-source ethos. Beyond licensing, we imagine a model that rewards people making contributions to projects for which free markets have a demand. The underpinnings of our model are abundance and shared information, whereas we see scarcity and accumulation of knowledge as the shortcomings of economic models currently applied to most free markets. We name this model Creative Flows, and we propose it for adoption in the Fab City network through the implementation of Fab City OS.
5.1 The Knowledge Commons
This article is a production-oriented approach to the theoretical context of future knowledge-based economies (Slater, 2005). We profile the application of a new form of economic and social organization for the stewardship of knowledge commons to manage collective knowledge resources and digital infrastructures (Bria, 2019).
On theoretical grounds, our proposal opposes what is known as cognitive capitalism. As argued by different scholars (Vercellone, 2005; Fumagalli, 2010), the starting point of cognitive capitalism is a radical critique of the apologetic vision of the actual mutation entailed by the new liberal theories of knowledge-based economy. In this new stage of industrial capitalism, the central stake of value capturing, and accumulation leads to the privatization of the collective production of knowledge towards the accumulation of a fictitious good as capital. We think such approaches are counterproductive as they move on to strengthen intellectual property rights and consequently drive revenue mechanisms to render artificially rare resources that would otherwise be abundant, such as knowledge and information (Gorz & Salsano, 2003; Lucarelli & Fumagalli, 2008).
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As a viable alternative to this sterile evolution of the industrial model (Rifkin, 1996, p. 400) we propose the development of a federation of intensive knowledge communities (Diez, 2012) mostly related to activities linked to the informational revolution, as with the exemplary model of the free software and the copyleft (Stallman, 2002).
5.1.1 Beyond Scarcity and Accumulation
Our stage is that of physical labs whose mission is to innovate local production by means of a federated networking and a shared pool of global knowledge: what may be defined as the counter-infrastructure for an operation of critical empowerment and emancipation in a networked world (Dragona, 2016). This scenario poses a challenge: apply a transparent and participatory budgeting process to the distribution of wealth that needs to be redistributed to all people active in a Fab City (De Paoli et al., 2017), turning the perception of work as the origin of money and wealth from sacrifice (von Braun, 2015) to participation in a commoning process.
Here we suggest an economic model that offers a progression into the context of “free and open source software” (FOSS) towards a more generic dimension that can work both as a community ethos and as an economy (Coleman & Golub, 2008). We will proceed to elaborate on the economic aspect and offer a helpful categorization to reference the economic underpinnings of this model.
To describe the Creative Flows economic underpinning, we’ll use Greimas’ Semiotic Square (Greimas et al., 1989) as a narratological device to organize four central moments of the knowledge commons lifecycle described as Creation, Appropriation, Sharing and Distribution (Roio, 2018) (Fig. 5.1, “1. Definition”).
Fig. 5.1
Greimas Semiotic Square: (1) Definition, (2) Modern industry implementation, (3) Creative Flows proposition
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Greimas’ Semiotic Square
Definition of the knowledge commons lifecycle, the four nouns describing the four moments:
Creation is the inception and realization of digital products.
Appropriation is the adaptation of digital products to a specific context.
Sharing is the circulation of digital products, open to the study by others.
Distribution is the packaging and documentation of digital products.
Arguably industrial powers are historically established by the application of an economic system based on trade secrets and piracy (Ben-Atar, 2008) where values flow counterclockwise through these four moments.
Modern Industry Implementation
The configuration shown in figure (Roio, 2018) (Fig. 5.1, “2. Modern industry implementation”) represents how modern industries implement their business model in a capitalist economy when dealing with immaterial production, for instance, art, entertainment, or software. The Creation moment is often branded as “authorship” and deals with the Appropriation and author rights management. Appropriation is a legal problem where rights are reserved for the producer, while detailed deals may be between the producer and the author. The link between Creation and Appropriation is not generating value but consolidating an agreement on how Distribution follows value creation. The passage between Appropriation and Distribution is where the proprietary industry generates profits: it distributes packaged products to a large audience of consumers. The products may be material (CD, DVD, mass storage supports, etc.) or immaterial (like online shops and proprietary markets like iTunes, Spotify, etc.).
Further on, there may be different agreements on how the acquired materials can be shared from Distribution to Sharing. Such contracts may vary in nature and quality of implementation and are often a contested ground since it is in the industry’s interest to regulate heavily, to monitor and sanction the violation of restrictions put in place here. To this link belongs the techno/political debate about DRM (Digital Restrictions Management), the right to copy and share with friends, the potential regulation for clubs of people sharing content, and also the way Public Libraries function.
Finally, the link between Sharing and Creation is broken, with some rare exceptions. Authors are inspired by a shared cultural context (from Sharing to Creation). Still, in a capitalist economy based on scarcity, authors and industry have a mutual interest in denying this link and blocking most “derivative” works, denying that many “original” works are derivatives of works shared in the wild.
Our objective here is to go beyond this economic configuration and leverage the actual abundance of production and re-production found in free and open-source economies, where the flow turns clockwise, proposing an economic model based on commonfare (Fumagalli et al., 2019).
Creative Flows Proposition
In this circle shown in figure (Fig. 5.1, “3. Creative Flows proposition”) every moment can be the starting point for agencies that focus on the process rather than the result. The ideal starting point is Sharing and is furthest from Appropriation: it represents the space for an assortment of resources to be configured and manipulated in an infinite number of ways, further in the flow, by distributed Creation, Appropriation and Distribution.
The Distribution moment acquires the form of a free and open market where interactions can be structured, traced, and categorized: the precise notarization of historical revisions made on projects by programmers and participants in Fab City networks offers a brilliant example of this. Appropriation thus becomes not a moment for the restriction and management of author rights but brings us back to the meaning of “Appropriate Technology” (Schumacher, 2011) and includes the contextual and distributed agency for translations, adaptations, customizations, and user experience improvements within specific communities.
Creation now follows Appropriation and indicates that the moment of authorship is closely bound to that of appropriated education as an intelligible passage of values between a concrete instance of knowledge and the individual. The individual or collective moment of Creation is less isolated from other moments and, rather than representing the enclosing act of “intellectual property”, it highlights that Creation by individuals or collectives depends on a vibrant and resourceful Sharing and adequate and effective Appropriation.
The last closing passage from Creation to Sharing is an economic moment characterized by mechanisms of reputation and curatorial activities intended to facilitate and relate to authors. Sharing is, in fact, crucial to the very existence of authorship.
This study lays down the terminology and general context for describing the free open-source economies praised for their principles of commons-based peer production and virtue (Benkler & Nissenbaum, 2006). This model provides a limited idiolect for its dynamics that we use to define our implementation of Creative Flows.
5.1.2 Commoning for Creativity and Balance
“It is necessary to prescribe beforehand certain definite principles of policy, particularly in regard to the maximum limits of permitted overdraft and the provisions proposed to keep the scale of individual credits and debits within a reasonable amount, so that the system is in stable equilibrium with proper and sufficient measures taken in good time to reverse excessive movements of individual balances in either direction.” – J. M. Keynes (1941)
The monetary circuit we are developing assumes recognition not only of collective work but also of positive externalities due to the new knowledge that arises from the creative atmosphere and the sharing of projects in open space. Ongoing activities positively affect each other. Also, a project owes part of its success to the failing attempts at developing other projects in the same beautiful place. Therefore, the value of the work done must also consider the time it takes to establish a creative atmosphere, which we consider a positive externality. If we give a measure to these positive externalities, we will have a chance to recognize the value added by all participants. The need to keep the creative atmosphere alive and to take positive externalities into account leads to the proposal of a transactional scheme organized as Creative Flows.
Incoming amounts paid for a Fab City product go to the common credit account of a clearing house. This will then redistribute these amounts to participants based on the performed activity. Using idea/strength points is instrumental in avoiding accumulation, thus decreasing the transactional potential associated with tokens; there is a cyclical resetting of their value inspired by the demurrage principle. A common internal credit unit (redeemable currency) is created at every cyclical reset.
Each person can decide whether to take these resources and reinvest them in the ecosystem to invent new projects or to redeem them and use them personally. In the likely case of a private company being responsible for the sale and redistribution of products developed by people in a Fab City, it would pay back liquidity to a legal entity (a Fab City association) which would then apply its internal redistributive logic as Creative Flows.
The people participating in the creative activities of a Fab City are also the beneficiaries of a redeemable credit unit. Still, they cannot accumulate the token above a certain threshold, or the principle of demurrage is triggered. The Fab City manages cyclical demurrage (Kennedy & Kennedy, 1995) to become a forced reinvestment above a profit threshold (Lietaer & Dunne, 2013). The principle of reciprocity in Creative Flows can be expressed as “commoning yields to commoning,” believing that only commoning nurtures the creative atmosphere (Teli et al., 2020).
5.2 Creative Flows in Fab City OS
In the scope of the INTERFACER1 project with Fab City Hamburg (Fabcity Foundation, 2016), we took the occasion to render a simple implementation of the Creative Flows economic model we are proposing at an experimental stage. Hence, we consider this implementation a pragmatic appendix to this theory to be adopted and developed in the future, based on the idea of a digital currency that leverages participation and reputation in a peer-production community whose network dynamics (Roio & Beneti, 2018) are functional to the preservation and further development of the common.
We based our current implementation on previous research and development work done on the concept of “Social Proof of Work” in two different EU projects: one focused on “Decentralized Citizen Engagement Tools”2 (D-CENT H2020/CAPS grant nr. 610349) and the other on “Poverty, Income and Employment News”, also known as Commonfare.3 When we piloted these projects a decade ago (Bassetti, 2019), it was already evident that the technological advancements in cryptocurrency were not aligning with equivalent innovations in economic models. What Bertolt Brecht once named “Umfunktionierung” (Benjamin, 1969 [1935]) seems to us to be a missed opportunity today: we can progress on the socio-economic dynamics linked to technological innovations rather than apply old capitalist models based on scarcity and accumulation.
In practical terms, we based our implementation on the organization of meaningful data and interactions for which the Fab City OS constitutes an advanced accounting system (Fritsch et al., 2021). We organize the record of all exchanges according to a Resource-Event-Agent accounting system (REA; McCarthy, 1982) whose data rests on a Graph database that documents all relationships and offers an easy way to search through them. Then we apply the Valueflows vocabulary (Foster et al., 2017) as one possible semantic organization of this data (see Chap. 8 in this publication: Roio et al., Digital Product Passport). By doing so, we use “points” to the interactions between agents, for instance, the agreed offer and provision of contributions to projects. There are two different kinds points to map two different dimensions in Keynesian economics:
I.
Idea points → debt
II.
Strength points → credit
This configuration (Fig. 5.2) contemplates the existence of agents acting as Entrepreneurs within a network and proposing their “ideas” as possible projects on which the collective (one or more federated Fab Cities) may decide to invest.
Fig. 5.2
Initiation of the Creative Flows process
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Idea points (I., II.) are assigned during the proposal process (Fig. 5.3). The result of this consists of a given credit to ideas that entrepreneurs (named Ada in our illustrations) have developed. This credit is equivalent to Ada’s debt to the community and will be used to pay people who can help with the work.
Fig. 5.3
Creative flow – strength points
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Work takes time, so this process will unfold across a timeline that, when lacking liquidity, creates a risk for entrepreneurs and, consequently, their contracted workers. The collective can overcome this scarcity by applying a monthly calculation of produced or consumed points. Based on this calculation, the collective can give an income to Ada and all those who have consumed or produced a certain number of points, perhaps above a certain established threshold (Fig. 5.4). Once calculated, the strength points can be reset to zero since accumulation does not count in this system: the points only help the collective to account for each person’s participation.
Fig. 5.4
Creative flow – distributed income
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This system does not represent its liquidity by points: they are not the money that pays for the participant’s time and fuels its economic growth. We may define I. idea and II. strength points in cryptonomics terms as “non-fungible tokens” that are “burned” using a “peg” linking them to an amount of money (or fungible tokens) at the beginning of every new cycle (Fig. 5.5). The pegged value will vary depending on the liquidity available to the collective, and in case of scarcity, it may be mitigated by an existing federation. In any case, the collective administration of this liquidity rate will help the bootstrap of new collectives while keeping a balance with a basic income based on shared savings.
Fig. 5.5
Creative flow – trace record
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In the graph, we realized this implementation in our Fab City OS software by creating points when certain exchanges take place as approved contributions. The software can then visualize the graph of contributions related to a given project that has taken place within a certain amount of time. Based on that visualization and other flexible data models obtained via GraphQL queries, the collective can decide to assign participants a “social proof of work”.
5.3 Outlook
There is still room for improvement: this implementation needs piloting on a larger scale to focus on details in particular use cases and automatize many of its calculations. While it was presented in the context of the INTERACER project in Hamburg, participants posed many helpful questions: we addressed only some of them with our current implementation or theoretical answers. Collectives will always need the flexibility to adapt Creative Flows to their production model or service provision dynamics. We are committed to distributing and maintaining our software implementation as free and open-source software and are also ready to offer all necessary technical support for an adoption. Strengthening these experiences can facilitate the transition from the system of ownership and exploitation of collective resources that characterizes cognitive capitalism to a real knowledge-based economy.
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