Why you should own the beercompany you design for

In 2007, OSP met with venture communist Dmytri Kleiner and his wife Franziska, ¹ late at night in the bar Le Coq in Brussels. Kleiner had just finished his lecture InfoEnclosure-2.0 at Verbindingen/Jonctions and we wanted to ask what his ideas about peer production could mean for the practice of designers and typographers. Referring to Benjamin Tucker, Yochai Benkler, Marcel Mauss and of course Karl Marx, Kleiner explains how to prevent leakage at the point of scarcity through operating within a total system of worker owned companies. Between fundamentals of media- and information economy, he talks about free typography and what it has to do with nuts and bolts, the problem of working with estimates and why the people that develop Scribus should own all the magazines it enables.

First of all we have to be clear, our own company is very small and doesn't actually earn enough money to sustain itself right now. We sustain our company at this point by taking on other projects; for example we are here for a project that has really little to do with Telekommunisten, where we're helping a recruiting company in Canada, I'm in the UK for a very different reason than Telekommunisten, doing independent software development for a private company. So we're still self-funding our company. So we haven't yet got to a stage where our company can actually sustain itself from our own peer production, which is our goal. But how we plan to realize that goal, is through peer production. To start we can sketch out a simple economic model, to understand how the economics work. Economics work with the so called factors of production: you have land, labour and capital. Land is natural resources, that which occurs naturally, that which nobody produces, that just sort exists. Land, electromagnetic frequencies, everything which naturally exists. Labour is work, something that people do. Capital is what happens when you apply labour to land, and you create products. Some of these products have to be consumed, and some of those products are to be used in further production, and that's capital. So capital is the result of labour applied to land that create output that is used for further production, and that's tools, machines and so forth. This system produces commodities which are consumed in the market. In this system the dominating input in the production owns the final product, and all of the actual value of the products is captured at that stage. So whoever sells the product in the marketplace captures the full value of that product, the full marginal value, or use value. All of the inputs to that process can never make anymore than their own cost of reproduction, make their own subsistence cost. So if as a worker you're selling your labour to somebody else who owns the product, you're never going to capture anymore than your subsistence cost.

Well, the reason that people need design is because there's some product that in the end requires design as an input. For instance, a simple case is obviously a magazine, in which design is a major input. The value is always going to be captured by the people selling the magazine. All of the inputs to that magazine, including design, journalism, layout, administration, are never going to capture more than their reproduction costs. So in order for any group of workers to really capture the value of their labour, they have to own the final product. Which means that they can't just simply be isolated in one field, like design. It means that the entire productive cycle has to be owned collectively by the workers. The designers, together with the journalists, together with the administrators, have to own the magazine, otherwise they can't capture their full value. As a group of designers this is very difficult, because as a group of designers you're only selling an input, you're not at the end owning a product. The only way to do this is by forming alliances with other people, and not based on wages, not based on them giving you an arbitrary amount of money for that input, which will never be higher than reproduction cost, but based on owning together the final product. So you contribute design, somebody else contributes journalism, somebody else contributes administration and together you all own this magazine. Then it is this magazine that is sold on the market that is your wage, the value of the magazine on the market. That is the only way that you can capture the marginal value of your labour. You have to sell the product, not the input, not labour. Marx talks about labour being itself a commodity, and that means that you can never capture its marginal contribution of production, you can only capture its reproduction cost. Which means what it would cost to sustain a designer. A designer needs to eat, a designer needs a place to live, to have a certain lifestyle to fit in the design community and that's all you get by selling your labour. You won't get anymore because there is no reason for the owner of the product to give you anymore. The only way you can get more is if you own the product itself, collectively with the other labour inputs. And I know that's a bad answer, nobody wants to hear that answer.

This estimate is at the start in the possibility. Because the whole point of a creative project is that you're doing something that hasn't been done before. And we have all struggled with this before. There's two things you don't know at the beginning of a contract. The first is how long it will take and the second is what the criteria of being finished will be. You don't know either of those two things, and, since you don't, determining the value upfront of that is a complete guess. Which means that, when you agree to a fixed-price term, you are agreeing to take on yourself the risk of the delivery of the project. So it's a transfer of risks. Of course the people that are buying your labour as commodity want to put that risk back on you. They don't want to take the risk so they make you do that, because they can't answer the question of how much does it cost and how long it will take. They want a guarantee of a fixed price and they want you to take all the risk. Which is very unfair because it's their product in the end; the end product is owned by them and not by you. It's a very exploitative relationship to force you to take the risk for capitalizing their product. It's a bad relationship from the beginning. If you're good at estimating and you know your work and your limits and the kind of work you can do, you can make that work, and make a living by being good at this estimates; but still first of all you're taking all the risk unfairly, and second you can't make anything more than a living. While if we're going to build any kind of movement for social change with these new forms of organization, we have to accumulate. Because the political power is an extension of economic power. So if we actually think that our peer production communities are going to have political power and ultimately change society, that can only happen to the degree that we can accumulate. Which means capturing more than the reproduction costs of our labour input, it means actually capturing the full value of our labour's products. The Benjamin Tucker quote I mentioned before is a good way to keep it in mind. The natural wage of labour is its product. The natural wage of labour isn't 40€ an hour, it isn't some arbitrary number. The natural wage of labour is its product.

In our case the product is making phone calls. And we don't offer our labour in the form of software development, we are putting together a collective that can do everything, develop a software and bring it to the market. It is actually the consumer making telephone calls that will pay for it. As I said, with it we are not actually making a sustainable living from it right now. We are only building this. We are still making most of our sustenance by selling our labour.

That's where we are starting from. But because we are going for a model where the end product is sold directly to the consumer, there is not mediation. There is no capitalist owners that are buying our labour and owning the product and then selling the product for it's value to the market. We are selling the product directly to the consumers of the product, so there is nothing in-between. And all of the workers that contribute to the making of this product, whether they are programmers or into administration or designers, together own this product and own this company. If you're not selling the product, then what you're selling is behavioural control. If you're not paying for the magazine directly, it is paid for with the money coming from lobbyists or from advertisers that want to control the behaviour of the people perceiving that media, by making them buy some things or vote in a certain way or have a certain image of a certain state department or the role of the state. In the economical model where the actual magazine isn't being sold, where the media is free, in the way television is free, the base of that model is what Dallas Smythe calls 'audience power'. Smythe is one of the main writers about the politically economy of communications, and this is sort of referred to in his 'audience commodity' thing, which is very degraded and unfundamental discourse, but it's related. 'Audience power', ultimately, is just behavioural control. There is money to be made by changing the behaviours of others. And this is the fundamental source of media funding, sometimes it is commercials to sell an actual product by ads and sometimes it is more subtle, like legitimizing a political system or getting people to think favourably about a party or a state department or a government.

All the artists and the designers of the poster and the people that come to the event, they have all kinds of motivations, use value. But the exchange values, where the money comes from, the people buying the checks, what they are buying is behavioural control, is to be represented in this context. Through their commercial or political or legitimation purposes. The state has legitimation needs, the state needs to be something that is thought of as positive by people. And it does this by funding things that give a legitimacy, like art, culture, social services. What it is buying, is this legitimation. It is behavioural control. When an advertiser sponsors an art show or an event or a television program what they are buying is the chance to make people buy their product. So it is not that every single person, every single artists in the show was thinking about how to manipulate the audience. Not at all, they are just making art... But where the money comes from, what they are actually selling on the market, is behavioural control. It is the so called 'audience power'.

It changes the way you work, a lot. There are so many restrictions and limitations when you work on this model, on capital finance, because the medium is constantly subverted and subjugated by the mediation, the mediation is the message to make it a catch phrase. If you know that your art show is being funded by a certain agency, you're going to avoid talking critically about that agency, because obviously that is going to deny you funding further on. It's clear that the sources of funding affect the actual message that is delivered at the end. It's not possible to have SONY Records sponsor an art show that then tells you how SONY is evil. It is very unlikely that it is going to be funded again, maybe you can trick them once, but it's not going to be sustainable. We were joking before about how my use of anarchist and socialist terminology actually gets the most flak from other people in my own field. That's because they are trying to portray what we do in Free Software development and peer production as being unpolitical. With my saying that no, it's actually quite political, explaining why, they feel like I'm blowing their cover. Like I'm almost outing them as being leftist radicals and they don't want this image because they actually think they can fool this system. Which I think is delusional, I don't think you can fool this system. But that's a very clear example how it does actually change the context and change the message. Because you are always self-conscious of how you're going to pay your rent and how you're going to pay your bills. It's impossible to separate yourself from this context and if the funding is coming from these directions you're always going to self-censor and it's going to affect what you talk about in your choices that you make. What to present, what not to present, where to place the emphasis where not to place the emphasis, it will always be modified by the context you are producing in. And if what you're being paid for is essentially to make people like SONY or make people like the state then it's going to change the way you present what you are doing.

Yochai Benkler used the term 'commons-based peer production' and of course took great pains to avoid talking about communism and try to limit this only to information production. He's very clear, for him this is not for real material production. Because he's a liberal lawyer, working for a major university, in the states... so this is how he presents his work.

But what this means, commons-based production, means that the instruments of production are actually collectively owned but controlled by the direct producers, which means that nobody can actually earn money simply by owning the instruments of production. You can only earn money by employing the instruments of production in actually making something. So, commons-based peer production. You have common things like instruments of production, land and capital, they're are commonly controlled and commonly owned, and individual labour of peers is applied to that shared commons and the results of that labour is then owned by the actual producers. None of that product is owned by the people who are simply owning instruments of production. That is what is meant by commons-based peer production. But that's exactly what the anarchist and the socialist call communism. There is no actual difference. Communism in a text book example is the state less, property-less society. And that's what it means, commons-based peer production is a neologism, a modern way of saying communism because for political reasons, post-war rhetoric, these words are verboten and you can't say them. So people invent new words, but they're saying exactly the same things. The point is that producers require land and capital to produce. If certain private interest controls all of the access of direct producers to land and capital, then those private interests can extract the surplus value. Another great quote from Benjamin Tucker is whenever one person earns without sweating... ehm sorry, whenever one person earns without sweating, another person sweats without earning and that's fundamentally true. If anybody is earning revenue simply by owning instruments of production, that means that people actually producing are not capturing the value of their labour. And that's what commons-based peer production is. The idea that we have a commons which is all of our property, nobody controls our instruments of production, they're all our property together. Each of us have our labour and we apply that to the commons and we produce something and whatever we produce, that is ours. It's our own, provided that we are not taking anything away from anybody else, provided that we are not taking any exclusive control of the commons.

In the case of Free Software development, the Free Software itself is a commons. But things that you might make with Free Software are not part of the commons, they're your own. But the problem with software itself is that because software is immaterial and therefore has no reproduction costs, it can be reproduced with no costs, it also has no exchange value. So in order to convert it to exchange value you always have to apply other forms of property: land, capital, hard fixed property... And so, as commons-based peer producers in the Yochai Benkler world, we have our little internal communism, but we can neither live in it nor feed ourselves with it. So in order to actually sustain ourselves, to actually capture our material subsistence, we then have to deal with people that own land an capital; fixed, scarce properties, and we have no leverage in that negotiation. The only things we can get back from the people that consume the output of our labour, is our reproduction costs and nothing more, while they continue to capture and accumulate the extra value. Again, how that applies to design is another thing, I don't think you can isolate one kind of worker from the overall thing. The point is you have to think of where is the value coming from, what are you really selling? Because you're not really selling design, design is an input. What are you really...

Design is an input. The average consumer doesn't buy design. Nobody goes to a store and says I'd like a design. They only want the design because they want another product that has design as an input of that product. If you're making beer and you need a label, you find a designer to make the label. But what you're selling is beer, you're not selling design. So you always have to think about what are you really selling. What is the actual product that people is exchanging for, what is the source for the exchange value. And once you identify the source of the exchange value, you have to figure out how to create a direct relationship with all the other producers that are involved in the production cycle.

...You're now owning a magazine already with a couple of people. The next person asks you to design a beer label...

And then you need people and say I know how to make design, I need some people who know how to make beer. So then we have a beer factory.

And then you need people who drink the beer! Who's going to make the people that drink the beer?

But wait, there must be a little bit of difference, a modified option to this. For example...

In the scenario of commons-based peer production it's not that the designers have to own the beer factory, it's just that there can't be any capitalist in the middle that owns the land, it's enough if the designers and the beer makers both own the land together and the capital together...

So if the beer company is also worker-owned and you come to an arrangement... Isn't it the idea of shares? Applying labour and therefore having shares on something...

Yes, but it has to be equal. Shares in a capitalist system are unequal. That's the idea of copy-far-left. It's the idea of a public license that allows free use for non-alienated forms of production and denies free use for alienated forms of production. In the case of software, for instance, which is not the greatest application of copy-far-left, but is a good example to understand, the software would be usable by a workers' cooperative for free but a private corporation employing wage labour and private capital couldn't use it for free. They would have to either not use it at all or negotiate a different set of terms under which they could use it. So the question is how do we remove coercive property relationships. If you really have a situation of commons-based peer production, or communism, where there is no state, no property, the instruments of production are collectively owned, people just work together in a very kind of free way, than it could certainly work. But that's not the world we are living in, so we have to be defensive of our commons and how we produce in order for it to grow. We have to think about where the exchange value is and think about where the use value crosses into exchange value and make sure that the point is within our boundary. If we can do that, that's enough. If we have a worker-owned design collective that works with a worker-owned beer company, that's as good as together owning a beer company. But only if they also live on land and apartments that are also worker-owned, because otherwise the landlord will simply capture value; you have to look for the point of leakage. Even with a workers' design company and a workers' beer company living in Brussels renting from capitalist, then the people that own the apartment and the land will simply capture all the surplus value. The surplus value will always leak at the point of scarcity, so the system has to be complete, what Marcel Mauss calls a 'total system'. It has to be a total system, if it is not, if the entire cycle of production doesn't go through commons-based peer production hands, then it's going to leak at the first point of scarcity. Then whoever privately controls the one scarce resource through which all this cycle of production goes through, will capture all the surplus value.

Again, back to our very basic model. The price of anything is its reproduction cost, so the price of something that is immaterial is zero. So, since the beginning of mechanical reproduction, property-based interest groups have tried to create artificial barriers to production. When you have artificial barriers to reproduction the immaterial assets start to behave like material assets; this is where copyright and intellectual property come from. It's the desire of property groups, to make immaterial assets behave price-wise the same as material assets, the only way to do that is creating barriers to reproduction.

Typography obviously comes from this culture, like a lot of other media culture. There is rules about how you can reproduce it, and it creates the opportunity for the owners of these things to capture exchange value. Because the reproduction costs are no longer zero, because of artificial costs of reproduction. But in certain things the capitalists are not homogeneous, there's not just one group of capitalists. There is many different capitalists. Even though some make their living from typography, many more capitalists make their living by using typography, so with typography as an input. From the point of view of those capitalists, the ones trying to restrict the reproduction of typography are a problem. So if they can hire their own staff and develop free typography with other companies, they're not selling typography, that's just an input for them. Like for standardized nuts and bolts, one time this was true too, bolt-makers would make their nuts and bolt not fit, in the sense that if you wanted to use a nut from one company and a bolt from another you couldn't do so. They tried to create a barrier from this, but since the nuts and bolts industry is not the biggest in capital, because capital itself need nuts and bolts, the other companies got together and said wait a minute, let's just have standardized nuts and bolts, we don't want to make our money from nuts and bolts, we want to make our money off-stream, from the product we make from nuts and bolts. Typography falls into the same system. I imagine most of the people that are creating free typography work for companies and they have their salary paid by companies that use typography, not companies that sell typography. Companies that actually use typography in other production, whether it's publishing or whatever else they're making, so the reproduction costs of the typographers is paid for by not controlling the typography itself, but by employing it in production and using it in another field. The people that are still trying to hold on to typography as a product, as an end product that they capture from intellectual property, are being pushed out.

In other things this is not just the case. If you look at the amount of money that publishing companies spend on QuarkXpress, that's not really a big deal. From their point of view, they can hire some programmers and they can make their own QuarkXpress and work with five other publishing companies, but the amount of money that they spend on QuarkXpress overall, isn't that high...

So the same economy of scale doesn't apply. This is why commercial software is still hanging on in these niche markets where there isn't a broad enough market. It's not a broad enough input so that freedom is supported by the users of it. Typography is a very general input. It's like a nut or a bolt, while QuarkXpress is pretty specific. Franziska was saying that in her publishing company all they really need is two copies, or maybe one even, of the software, and the whole company can work with it. They just go to the computer with it when they need to do the layout, overall it's not a huge cost. They don't need it every time they publish a book. Whether if they had to pay for the font they used and every time they wanted to use a different font, and they had to pay for it again, that would be a problem, so they'd rather use a free font, and if that means hiring somebody to drop the pixels down for a new font once and then having it free forever, it can all make sense. That's why typography is different from software. And so the Scribus project has gone really far but the reason it's obscure is because except from the ideological case, they don't have a business case they can make for the publishers. Because for publishers they want a piece of software that works and if it costs 400$ once, who cares. It doesn't really affect their business model. You have to make the case for the publishers that if you form an association of all the publishers and you together develop some new Free Software to do publishing, that would be better and cheaper and faster. Then maybe eventually this case would be made and something like this would exist, but it's not like an operating system or a web browser, that is really used everywhere all the time, and would be really inconvenient to pay for every time. If companies had to pay every single time they put a web browser on their computer, that would be very inconvenient for them. Even Microsoft doesn't dare to charge money for Internet Explorer, cos they know people would just say Fuck off. They're not going to buy it. In more obscure areas, like publishing, 3D animation, film and video, it doesn't make so much of a difference. In those business models, for instance 3D animation, one of the biggest companies is Pixar. They make the movies! They don't make the software, they go all the way through the process and they make the movie! So they completely own everything. For that reason it makes sense for them, since they capture the full value of their product in the end, because they make the movies, that their software enables them to make. And this would be a good model for peer production as well, except obviously they're a capitalist organization and they exploit wage labour. But basically if Scribus really wanted to have a financial base, the people that develop Scribus would have to own a magazine that is enabled by Scribus. And if they can own the magazine that Scribus enables then they can capture enough of that value to fund the development of Scribus, and it would actually develop very quickly and be very good, because that's actually a total system. So right from the software to the design, to the journalism, to the editing, to the sale, to the capture of the value of the end consumer. But because it doesn't do that, they're giving Free Software away... To who? Where is the value captured? Where is the use value transferred into exchange value? It's this point that you have to get all the way to, and if you don't make it all the way there, even if you stop a mile short, in that mile all of the surplus value will be sucked out.

Why you should own the beer company you design for