Phyles: Economic Democracy in the Network Century - by David de Ugarte

We are in the process of going from a world of decentralised networks to a world of distributed networks. This is evidenced in communication as a crisis in the information systems of agencies and newspapers; in the cultural sphere as a crisis in the current industrial model for films, books, and music; in democracy as citizens' cyberthrongs; and in war as a new paradigm. This shift leads us to a new paradigm, seen in the complex world of collective identities in the increasingly important role of a new kind of community, communities which are closer to the old real, contiguity-based communities than to the great nationalistic imaginaries of Modernity. We are experiencing, in that area, another shift, one taking us from nations to networks.

Studying this latter dimension, the changes in the identity patterns of our time, we discover a new kind of socio-economic organisation: the phyle. The phyle is much more than a kind of business; it has, among its main features, all the elements that articulate our time – it is born from the experience of socialisation in virtual communities, it is transnational, and it vindicates new forms of economic democracy which, in turn, link it to traditional cooperativism.

Part I: Hierarchy vs. Community

Abundance logic is a seminal concept introduced by Juan Urrutia as the basis on which to understand what was then known as the "new economy". The classic example is the comparison between newspapers and the blogosphere. In a newspaper, with a limited paper surface, publishing one more line in an article entails suppressing a line somewhere else as in a zero-sum game. By contrast, in the blogosphere, a space where the social cost of an extra post is zero, any blogger's publishing his or her information does not decrease anyone else's publication possibilities. The marginal cost is zero. The need to collectively decide what is published and what is not simply disappears. As opposed to scarcity logic, which generates the need for democratic decision, abundant logic opens the door to pluriarchy. In such a universe, every collective or hierarchical decision on what to publish or not can only be conceived as an artificial generation of scarcity, a decrease in diversity, and an impoverishment for all.

For a generation and a professional domain whose work tools work under such a logic, even economic democracy must be seen as a lesser evil, a truce with reality in those social spaces – such as business – where scarcity still prevails. In that way, innovators in the domain of social networks or Internet design rediscover traditions as old as cooperatives from a new perspective.

So-called netocrats are really context gardeners, information processors, communicators, hackers, bricoleurs who develop, transmit, or give value to contexts: who overlap them or break them in the organic dance of the great social digestion of information. They have been professionally born and raised in a world in which the irreducible nature of diversity is obvious, where everything is both collaborative and identitarian, but where value is after all given by the coherence of the community they are members of and the recognition they obtain from it. Recognition and hierarchy do not go well together. Forced cohesion tends to dissolve in a world where nothing is easier than jumping from one network to another own, than identifying with and plunging within an alternative context. Netocrat companies tend towards horizontality and the almost complete lack of hierarchies, as these are counterproductive when it comes to attaining the kind of incentives which motivate netocrats. For this reasons, Juan Urrutia proposes differentiating them from entrepreneurs and seeing them as we see scientists. They intend to make a living, but that is not their final goal. What they really want is recognition and the possibility of continued learning. In the midterm, netocrats feel more comfortable with the idea of living in an economically autonomous business community than creating communities around companies whose deep structure will still follow the industrial and hierarchical logic of the old world. Those business-empowered communities are what are known as phyles.

In a world where the largest portion of any product’s value arises from innovation, and therefore from the creative part of the production process, valuegenerating incentives are not those aimed at managers, but those which nurture community interaction and recognition. This friction has now moved to the world of traditional business, as every restructuring of the incentive system ends up modifying the property structure. A business must be valuable to those who work, live, and trade with it. And its value derives, above all, not so much from bonuses and incentives as from a way of life. Netocrats, Neo-Venetians, regard business management as one more duty of their community citizenship. Just as time is no longer split between work time (divine punishment) and life time (leisure), community and management are no longer mutually alienated, but rather are fused in a space that can only be described as fraternity.

Fraternity, which provides the foundation, beyond liberty and equality, for economic democracy, is based precisely on what business organisations need to survive in a global market which is undergoing a crisis and is, moreover, doomed to change: an identity which makes it possible to attain assignations otherwise unattainable in its absence and a taste for work in common which makes the existence of a balance easier.

Foundations that define a community:

  • The set of users of a service does not constitute a community. For a group of people to form a community, there must be a common identity, a clear definition of who is part of the demos and a mutual knowledge among them (they must form a distributed network). The community may grow afterwards, but what is clear is that human communities are not formed around services, and even less, around webs.

  • Communities use services, but are not defined by them. In the same way as there is no community of National Health Service or public transport users, there is no community of feevy, flick, or bloggers users, or of users of any service we can create, even bearing a very specific profile in mind.

  • Participation is not the same thing as interaction. Interactivity among its members can be a measurement of the power of a community, or the adequacy of a service for given network, but it has nothing to do with participation. One interacts with others, but participates in the host's offers. Interaction has a distributed logic, participation has a centralised logic. When interacting we are owners, but when participating we are followers. The culture of participation has nothing to do with the interaction way of life. The obsession with polls not only can involve not the artificial generation of scarcity, but can easily generate a perverse logic in which one-off expression replaces deliberation and exchange, which is very far from community logic.

  • Voting is for solving conflicts and nothing else. Voting mechanisms are the essence of participation: you participate in what belongs to others, but do not make it your own, you do not interact with others, no common life experience which strengthens your ties to others is generated. If voting is our way of relating to others, those others will never have a face and name of their own for us. Voting alienates from the interpersonal human relationship: it neither generates nor strengthens the community; on the contrary, voting represents the community as something abstract and alien to people. Let us not forget that, in a community, what is essential is not the mechanism for solving conflicts (occasional polls), but the definition of the demos. We are not equal because we take part in the same assembly – rather, we take part in the same assembly because we previously acknowledge each other as equals.

  • Platforms are a success or a failure in relation to a community, not in the abstract. If I have a community, a small network of equals who know each other and interact every day, arguing, exchanging messages and links, and I start a service to make what they already do easier for them, it will most likely be a success. But what does success mean in this context? Just that it will be useful for them when it comes to interacting with each other. What is expected is not to have many users, bringing many people into the same framework, creating cattlelike fences: rather, the aim is to aid in the development of a previously existing interaction. If our link website suddenly attracts many new users, people who try it or use it for themselves or to share with their own networks, but it does not work properly or is not used by the members of the original community, the service will fail.

  • People don't exist. Things are not done for people, there is no such demos as "people". If we open up a space for people or invite people to vote or decide on a given topic, we will really be inviting any previously organised group or network to present their own interests or viewpoints as those of the whole of society, if not to break the limits of a community which really exists. This is the usual trap of scarcity generation. Not defining the demos is the most typical way of passing as communitarian and democratic what in reality is their complete opposite. For example: making polls on the future Monopoly game or the Eurovision representative open to people yields paradoxical results because what we are doing is precisely breaking the limits of the demos of Monopoly players or Eurovision fans.

  • A community is not an interest. Offering services or contents for a specific interest profile does not generate a community. At the very most, it will attract one, or, with luck, several already existing communities, although it probably won't integrate them.

  • Communities do not spring artificially just because we had the idea of providing a platform for them. If we want to create a community, it isuseless to start creating services, because it won't work. Services serve a community, they don't generate it. To create a community is to create an identity. It has to do with shared values and experiences, something which develops and grows through interaction. Only then are services useful, not before. Want to create a community? Then go offline again and find a specific cause so powerful that after a virtual campaign those taking part in it feel so emotionally and intellectually linked to each other as to want to keep on doing things together every day.

The quest of community by transnational companies, what is known as Neo-Venetianism, and the building of companies by Neo-Venetianist communities are two movements which are only apparently convergent. Both take as their starting point the distinction between the respective spaces and social rules of community and business. Nonetheless, while companies subordinate the community to the increasingly empty generation of value for stockholders, Neo-Venetianists subordinate their economic tissue to the space of greater personal freedom: community life. No two more different attitudes could be found. In the widespread text "How to become a hacker", Eric S. Raymond lists the five defining features of the bricoleur attitude.

  1. The world is full of fascinating problems to be solved.

  2. No problem should ever have to be solved twice.

  3. Boredom and drudgery are evil.

  4. Freedom is good.

  5. Attitude is no substitute for competence.

The fifth point is particularly striking: attitude is no replacement for competence. Or put in the terms used in this book: identities are not taken, but developed as a continual demonstration. As proven by the experience of conversational communities, a network environment where the cost of changing nodes or creating new ones is relatively low generates a continual bubbling of communities and initiatives, an ecosystem which, in William Gibson's words, behaves like a deranged experiment in Social Darwinism, designed by a bored researcher who kept one thumb permanently on the fast-forward button. When the social interaction level is so high, a node's persistence in time is something valuable in itself. It makes it possible to face midterm projects and locate the work within a lifestyle perspective. And yet there is no room for the illusion of a work post. With information flowing from all to all, with a demos taking on collective management, there is no room in the business for invisibility or dependence on the organisation. Bottlenecks last as long as it takes for the email reporting the existence on one to be read and absorbed by everyone else. The world of the coming capitalism is a world in which, in Juan Urrutia's words, income dissipates. Success is a statistical ratio. The more you play and the more you explore, the more certain it is that a contribution of yours will join the community history as part of its identity. It is not only the attitude (learning, experimenting, persevering, making new things with old tools). It is a matter of casting the dice of your wit and perseverance as many times as it takes for a season not to go by without results, without a new concept, a new product or a new organisational or administrative improvement. Competence is knowledge. Knowledge is interaction and intelligence within a context. Technical skills can be outsourced. The skills sought are those which arise from looking at the available tools in a new way. That's why they are shared, because they cannot be integrated without being shared.

Industrial-age business was based on specialisation. The magic words were scale, expertise, and so on. By contrast, phyles are based on interconnection and innovation. Value lies in unexpected crossings, in new applications, in the recycling and cross-breeding of knowledge. This is not an engineers' but a hackers' world. Creativity is not a gift but a practice, an experience which is earned by exploring new fields, de-specialising in order to become what Juan Urrutia calls plurispecialists.

Communities develop in a social space (the Internet for deliberative communities, the market for phyles) which is defined as a function of the freedom it gives people to go in and out, create new communities or businesses, sell, buy, etc. Communities are deliberative spaces which are by their very nature pluriarchical, and as such are based on the two features which define fraternity:

  • a taste for being together

  • a shared real identity.

Within a community there is a subset, the demos, defined by the indifference principle, that is by the equality between its members. The demos constitutes an optimal cluster for the management of scarcity, that is, an optimal space for democratic decision making.

Clearly separating the spaces of liberty, fraternity, and equality, and those who participate in each of them, is the key for a community to work.

The guilds were much more than those privileged structures that monopolised the crafts in the cities. Every guild was really a knowledge community. The entire structure of the community revolved around knowledge transmission. That knowledge was partly technical and specialised, but it was also linked to a particular work ethic, to the construction of a moral discourse from the symbolism of tools and daily life.

The key is to think from abundance, from diversity: anything which today looks like a game, an experiment, a hobby, tomorrow may be a product that is profitable for the community, if the community is used to digesting innovation as part of its metabolism. That’s why the key is, once again, deliberation. In a phyle, everything is deliberated in common, without expecting or needing consensus on most things. Common decisions are only made with regard to what is scarce, basically economic matters. And given that what is scarce constitutes natural grounds for conflict, it requires an even more documented and powerful deliberation. Deliberation is a sign and a materialisation of that taste for being together among those who share an identity which we call fraternity, and which delimits a community. One does not deliberate in order not to have to decide: one deliberates to reduce the scope of democratic decision – and thus of the weight of the economic in management – to a minimum, keeping the margins of individual decision as broad as possible, encouraging diversity, and, at the same time, encouraging cohesion. It is this equilibrium that we call "politics" in phyles.

PART II: INTER-COOPERATION AND GROWTH

In the end, the key to inter-cooperation and the development of societal networks for mutual support is to manage community growth and the multiplicity of demoi without a degradation of interaction. If intra- and intercommunity interaction becomes degraded, identity will fade away or the community will break up.

Mondragón is an atypical case of inter-cooperative success. One just has to take an informal sampling of any cooperative federation of associated work to realise that the industrial sector is not the medium where the emergence of inter-cooperation is most predictable. On the contrary, it is in socio-cultural industries (social integration and intervention, cultural and leisure activities, training and education, etc.) and, more recently, free software circles, where it is most frequent for cooperatives to emerge, or for them to reach stable agreements between each other. They are, after all, ideological activities with a strong tradition of theoretical reflection on their own meanings, which in turn are often framed in terms of wider social and political worldviews.

The very blogosphere is an ocean of identities and conversation in perpetual cross-breeding and change from among which the great social digestion periodically distils stable groups with their own contexts and specific knowledge. These conversational communities which crystallise, after a certain point in their development, play the main roles in what we call digital Zionism: they start to precipitate into reality, to generate mutual knowledge among their members, which makes them more identitarially important to them than the traditional imaginaries of the imagined communities to which they are supposed to belong (nation, class, congregation, etc.) as if it were a real community (group of friends, family, guild, etc.) Some of these conversational networks, identitarian and dense, start to generate their own economic metabolism, and with it a distinct demos – maybe several demoi – which takes the nurturing of the autonomy of the community itself as its own goal. These are what we call Neo-Venetianist networks.

Through this kind of experience we can glimpse the scenario for future phyles: identitarian communities with their own economic metabolism, based on an internal democratic system and surrounded by a network of other similar communities in conversational meta-identities which are, in turn spaces for trade, innovation, and knowledge generation. New Venices weaving new hansas. New maps for a relational world that ignores territories.

Nothing is more relevant to contemporary phyles than the institution of the passagium, those months in a nomadic life which were devoted to weaving networks, seeking customers, suppliers and alliances, sometimes tens of thousands of kilometres away. Neo-Venetians become the gardeners of creeper which is all the more valuable the more diverse it is. Once the distinction between trader, manufacturer and diplomat is blurred, each passagium feeds and determines the catalogue of projects and offers for the year, the map of the network of partners, allies and representations which will determine the course of the commercial year.

Whereas in the past it was markets and the arrival of caravans that were the attraction, in the era of cheap transport and distributed communications it is congresses, fair, meetings and conference cycles organised by enterprises and local and academic institutions, eager to import new ideas and technological usages, that order the Neo-Venetian flows.

For a phyle, being a native speaker of a Latoc variety – be it Portuguese, Galician, Spanish or Catalan – is like having a port in the Mediterranean in the 12th century.

The title of this chapter ["Like An Ivy, Not Like a Tree"] was the title of a 2003 collaborative book in which the Spanish cyberpunks tried for the first time to reflect about what made the world which arose from the development of the Internet and the emergence of distributed social networks different. The metaphor, years later, is still perfectly valid to explain the mode of growth of phyles. Like a creeper, each node, every small business in the phyle is itself an economic democracy with its own community and demos; each one is autonomous and could reinitiate by itself the original process which gave rise to the creeper-phyle as a whole. That is, each node has a limited growth horizon in itself, but can result in new shoots. The creeper, like the ivy, grows reproducing nodes and connecting new nodes to previous ones. Wondering about the size limit for each node actually amounts to wondering whether there is a maximum size at which a distributed social network loses effectiveness.

Are 80 and 150 the maximum limits for demos and community, respectively? We cannot tell for certain, of course, but what is true is that certain group sizes seem to consistently repeat themselves, and no doubt we intuitively understand that, beyond certain limits, a human community cannot remain cohesive without a bureaucracy, which are probably related to the intensity of the interaction and the degree of coordination required to reach certain efficiency levels. What is crucial is understanding that not to grow beyond certain levels (and 80/150 seems a sensible maximum level) is also an efficiency objective. The creeper does not grow stronger if some of its leaves suffer from gigantism, but if new shoots spring strongly, linking up with previous branches

PART III: A WORLD WITH PHYLES

One of the most important characteristics of phyles is their transnational nature. Phyles don't think, or are thought, from the nation or from the state. The We in a phyle has no national adjectives. The cohesion born within the fraternity of a community and, even further within it, from the equality of the demos ignores the dividing lines between imaginary national communities. If there is something a full member of a phyle is very clear about, it isthe phyle demos and its origins, which lie not in any nation but in the free interaction among a group of specific people, in a real community, in a material process of knowledge generation. A knowledge that is closer, more tangible, practical and identificatory than any national imaginary which might want to absorb it. Whereas nations are what we invented to understand the material origin of our lives in the intangible and distant world of the emergence of national markets and early capitalism, phyles explain it all over again in the specific terms of the real community, of the people we know by their names and surnames and whom we come into contact with, even if only virtually. Whereas nations turned us into the product of a national spirit, the democracy of phyles makes us the main characters in a History that is no longer a parody of classical theogonies (deified nations, heroic leaders), but a little Bible for domestic use, the tale of the origins of a tribe that decided to be its own tutelary deity. From the constructs which are the product of nations we move on to a world of phyle creators and protagonists. Whereas nations represented the world as a jigsaw made up of many flat pieces, each one in its own colour, phyles narrate it as a series of alliances, routes and journeys through time which leave a sediment of consensual, open knowledge.

Inside or outside the community, my community: that is the only dividing line that affects my real accountancy, not inside or outside the state where we legally start a business.

Nobody knows very well what the so-called national fraternity consists in and what the obligations it places on us are – beyond paying taxes. Nationalists often invoke feelings in the face of historical landscapes, mass phenomena or injustices, imaginary subjects and forces which are personalised under pressure because to us they really lack a real face and biography. Nationalism, any national identity, makes us the children of gods with whom we will never be able to speak or interact. It replaces our biological genealogy with a mythological genealogy, constraining our intellectual genealogy in an education process which, in the best scenario, we will leave as mediums of the national being, the spirit of the national history, and not as true subjects, as the original protagonists of our contributions.

The fraternity of the phyle, of a real community, the equality of the demos through which we organise the material production of our needs, send us back, by contrast, to the humbleness of workshops, to the personal, distinct and small contribution of the guild master, to the permanent learning of the context weaver, the arranger of experiences and knowledge. And that's precisely why it sends us back to our real size: that of gods in the tribal pantheon in which fraternity daily materialises into complicity and small objects, whether material or not; in which being retrieves its true nature: doing. Doing together.

Why a phyle? Because no traditional business would have given us the chances to learn that we have had while building ours. But, above all, because there is no going back. Once your life has come together, once work and life cease to oppose each other, there is no way to think of a different life. Not that it is idyllic: there are still differences, conflicts and annoyances, but they are to do with your own stuff in a territory which is your own and within a group of people whom you really regard as your equals. Why a phyle? Because you can leave. Because you can do different things if you don't leave. Because you shape it as much as anyone else. Because both if things go well and if they go wrong, your effort matters and makes a difference. Because all that put together means that phyles offer more freedom than any other form of work organisation I have ever known. And above all because, as any Neo-Venetianist would say, it works for us. It is not imposed, it is not even offered. It is made and built. In community. From a real community, with the specific names, faces and gestures of people we know and to whom we are bound by the manufacture of welfare and abundance.

The phyle is the most radical and simple of all materialisations of the new distributed world, as well as the one that owes most to all the others. It is the child of free software, of the blogosphere, of cyberactivism, of virtual communities, of the globalisation of the small. The phyle is a lifestyle that makes it possible for hackers, bricoleurs and libertarians to go on being what they are and to grow. To leave a legacy. A legacy of knowledge, yes, but also a legacy of maps – the maps of the new world, the maps that are drawn not to describe what cannot be moved, but to be built by people and inhabited by their lives.