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Going to the bookstore has become a depressing experience. While television and the tabloids are busy with the usual- advertising, celebrity culture and home decoration- books seem to probe more deeply into the our collective anxiety. In consequence bookstores, at least in the UK, are filled with titles that propose the end of something or other, oil, food, energy, credit, affluence, globalization, security, civilization or even human kind as such. (One of the recently most successful products in this genre was a combined book and documentary exploring what the world would look like if -or when, this was at least the implication- human beings had disappeared.) Together with the rise of religious and secular doomsday prophets, eco-relativists pointing at our cosmic insignificance and Hollywood's enduring fixation with disaster and apocalypse -Disney's new cartoon features a cute robot who is cleaning up the debris left behind on a post-human planet- the abundance of such titles create an enduring perception of looming disaster and overwhelming crisis, at least among those who have the time and energy to care. More dramatically, there is a shared perception that none of our existing political and economic systems, or even ideas are able to redeem this threat. Instead they appear to be part of the problem. (Will existing political and economic systems manage to reduce even the speed of increase in global carbon emissions? Probably not.) It seems that civilization as we know it is going straight to hell (in 2012, perhaps!), and nobody knows how to even slow down, much less stop the ride. This crisis is real enough. Only twenty years ago global capitalism stood out as the only realistic alternative, and promised to achieve wonders in alleviating poverty and democratizing the access to basic necessities, promoting double-digit growth rates across Asia and creating a new global middle class with identical tastes for McDonald's Hamburgers and Nike sneakers.[i] With the exception of Africa and parts of the Middle East, this 'flat world' seemed to have the potential to involve everyone in a new affluent global eucumene of consumer culture, thus realizing the rosy predictions of global affluence and convergence on the part of the American 'Cold War Left' in an enduring pax americana [ii] Now it is clear that this last boom of global growth (the belle époque of the 1990s) was living on borrowed time; that its fundamental productive synergies- global brands with global supply chains- depended on cheap fossil fuels, which are both running out and creating an ever more tangible environmental disaster; and that its consumerist boom built on an ingenuous and hyper-complex but in the end unsustainable credit bubble. In fact, globalization is now slowing down; US steel production is increasing as transport costs make it to expensive to produce such basic commodities in China.[iii] And with the possible off-set of more rapid sea-passage enabled by an ice-free Arctic region, this slow-down is set to continue, and move up the value chain until nothing but very labour intensive goods can be profitably produced in Asia for the European and US markets. This will spell disaster for consumer capitalism as we know it. (No more IKEA!) However beneath the shiny surface of shopping malls and global brands (that managed to blind intellectuals, and have them obsess about 'postmodernism' or even the 'end of history' for almost a decade) global capitalism is far too locked into its oligarchic interests to alter its basic modus operandi. Consequently it will not kick its addiction to fossil fuel, despite noble albeit vague pronouncements to the contrary [G8 in Japan], but continue to wage wars for control of oil access and push new exploration into as yet untouched areas, creating a hundred new Nigerias and Iraqs, and in the process further increase inequalities globally as well as nationally, to the point where the privileged elites have no choice but closing themselves off into gated islands of luxury in a sea of militarized slums- like a 1970s horror movie come true! [iv] This is already happening, in the US income inequality is at its highest level since 1928 (the year before the Great Depression!), and the number of gated communities and private security firms is rising continuously: the poor and the rich become increasingly spatially segregated, inhabiting different worlds (and the tendencies are similar in developing economies like China or Turkey.) [v] Figure I. US income inequality as measured by the top 1 per cent's share of total pre-tax income, 1913-2005, including capital gains. Data elaborated from Piketty, T. & Saez, E. 'Income Inequality in the United States, 1913-1998' Quarterly Journal of Economics, 118(1), 2003: pp-pp. Updated to 2005 at http://emlab.berkeley.edu/users/saez, available at http://www.demos.org/inequality/numbers.cfm , accessed 14/7-08. Even worse, perhaps, this situation seems to be thoroughly ungovernable. National and international politics is ever more blatantly a playground for elite and oligarchic interests and democracy a media-show to deceive the masses (Iraq docet!). Consequently the masses abandon politics, voting figures are steadily declining in the US and Western Europe, making 'democracy' but a shallow catchword to be used with the utmost cynicism (as in 'spreading democracy to Iraq'). Even sincere politicians are too closed up within old, ever more irrelevant ideologies that at best have nothing to say about today's realities and, at worst, turn into almost Orwellian variants of NewSpeak, like 'New Labour' or 'Communist China'. The only thing left are irrational and extreme populist movements, xenophobia, neo-nazism, and the worst kinds of religious bigotry as in Muslim and Christian fundamentalism, with their various charismatic and apocalyptic manifestations. This move away from politics is understandable and entirely rational since states are less and less able to or even interested in doing something to benefit the average citizen, and in particular the poorer-than-average citizen. BOX: similar dynamics of muslim and Christian fundamentalism. Decline economic growth middle east, decline US bue collar workers, Saudi Arabia finances mosques proseltimsa s political constituency, chirstian funadamentealism cynically maipulatd by political establishment. The problem is that not much else seems to be able to offer anything in its place. Everyday life at the turn of the century is marked by a widespread social disintegration, anomie and loneliness, paired with a generalized existential anxiety and fear, manifest in mass prescriptions of anti-depressants, tranquilizers and other forms of psycho-pharmaca (the prescription of anti-depressants in the UK more than doubled between 1991 and 2001) and wide-spread eating disorders and other forms of destructive behaviours. [vi] The most profound crisis perhaps is intellectual. Within an environment of trash culture intellectuals seem unable to rise above the fray. Instead they are either too overwhelmed with the general situation of despair, too disillusioned by the failure of their youthful political ideals, too corrupt or too locked into an ever more scholastic academia to be have anything to say about the world around them. Life at the turn of the century is lonely, insecure, anxiety ridden and devoid of any source of meaning or direction, apart from the shopping mall and the mega-church. At the same time, however we are in the midst of what can very well be described as a new enlightenment. Like the diffusion of print media in the 18th and 19th centuries, the spread of networked information and communication technologies (Ict's) have produced a massive empowerment of collective intelligence on a planetary level. Millions of people contribute regularly to blogs and act as citizen journalists, and just as many produce and distribute their own music or video, millions take part in discussion groups and online fora for a exchanging ideas an knowledge on everything from cake-design to alternative treatments for diabetes; and hundreds of thousands contribute to more specialized pursuits like writing Wikipedia or Linux code, or engaging in enlightened debates on spirituality, environmental sustainability and the habits and intentions of space-aliens. Within this massive socialized productivity new kinds of social relations are forming: young people travel and make friends all over the world through Couchsurfing, a site where people offer their hospitality all over the globe, organic farms recruit voluntary labour power on Wwoof; people keep in touch on Facebook, and lonely people find real partners on dating sites or virtual ones in artificial worlds like Second Life. The statistics clearly indicate that we are witnessing a massive spread of a new, participatory culture: in 2006, according to the Pew internet survey, 49 per cent of the American population had contributed to creating online content, and (in 2007) 64 per cent of all teenagers, today the figures are probably even higher as the participation rates as well as the productivity of this collective intelligence are increasing exponentially (see Figure x in Chapter I). [vii] [Box: three enlightenment: speech, writing, print and ICts] Like in the first enlightenment, this flowering of collective intelligence is linked to the arrival of a new medium. Then, mass printing enabled a (by then) enormous number of people to become authors, producing literature and, more importantly perhaps, pamphlets and learned treatises on a multitude of subjects that led to a massive acceleration in scientific, scientific and technological and philosophical. And this flowering of collective intelligence made possible by a new medium lead to a number of new social, economic and eventually political practices: the coffeehouse with its free space for political and philosophical discussion, the large industrial firm with its precise bureaucratic systems of management, and eventually, nation states and democratic mass politics. Today we can see a number of such new social and economic practices emerging around new information and communications media. Food production systems are being re-organized all around the world, taking advantage of new media to combine the quality and transparency of local production with the economics of new computerized distribution system. Community Supported Agriculture, the fastest growing element of the US food economy enables thousands of people to regularly receive fresh, high quality produce made in a sustainable way in exchange for a few hours of farm labour. In the poor 'South' new media are used in innovative ways to keep farmers abreast of world market prices for their produce and taking charge of marketing themselves, thus bypassing middlemen. Innovative systems like Prosper and Kiva coordinate the cash needs of poor entrepreneurs with thousands of micro-donors. This way you can pair up with 10 strangers to lend a Vietnamese small-scale pig farmer the cash needed to invest in a new fence! Along side multitude of forms of cooperation are flowering linking poor producers, rich consumers, social entrepreneurs and corporations in new and innovative ways.[viii] In big cities in the North there is a flowering of creative production as more and more young people chose artistic careers (see Figure x Ch I), using cheap and ubiquitous digital technologies to create music, design and art and distributing their works and coordinating their collective effort through the internet. All across the North, people are coming together in a multitude of self-organized productive activities, communal gardening, time-banks, reading groups, New Age and other spiritual pursuits, the realization of 'kinky' sexualities, producing and circulating recipes, and improving on and altering sporting goods like skate-boards or Mountain bikes. Surveys show that between 58 and 79 per cent of the adult population of Western European cities take part in some such activity of social production. And they do it not only because of need or desire for a particular good or product (be this better skateboards or organic carrots), but also because taking part in such practices of social production is an excellent way to create networks and friendships in the face of the looming loneliness that has become an intrinsic feature of the modern world. (Our survey in the Swedish city of Malmö indicated that xxxxxx) So as older forms of civic participation based on the political party, the labour union with its associated organizations like the evening school or cultural association are dwindling, new civic culture based on self-organized forms of social production, enabled and empowered by new media, is emerging. People might 'bowl alone' but they socialize around farmer's market and the online forum.[ix] It seems clear, and ever more people are recognizing this, that it will be thes new forms of self-organized production that will offer the blueprints and inspiration for how to achieve the necessary re-orientation of our global system in a more sustainable way. The business world has definitely recognized this radical potential. In fact social production has acquired a sizeable economic importance as large companies, from Nokia to Procter & Gamble, tend to progressively include consumers in the processes that produce value. In the last decade these strategies have evolved from the indirect inclusion of consumers as co-producers of the symbolic and affective status that give value to brands, to their direct involvement in user-led innovation systems, 'crowdsourcing' and viral marketing. Procter & Gamble has allegedly improved the productivity of its Research and Development department by 30 per cent, by systematically involving consumers in the development of new brands, packaging and even products. In Latin American and across Asia companies are involving poor people themselves in co-producing services like insurance and banking for the enormous markets at the 'bottom of the pyramid'. Other companies like IBM has reorganized its entire business model around the provision of services around a product, open source software that is produced in autonomous networks of social production. [x] In the Web 2.0 economy entire business models, like YouTube or Facebook build on the cultivation of user-generated content, and through the spread of contemporary convergence culture, such business models are becoming increasingly influential in the mainstream media industry as well.[xi] Overall marketing theorists are thinking ever more in terms of a fusion of the once neatly separated areas of consumption and production. People are becoming 'prosumers', 'prod-users', or 'professional amateurs' and they are contributing ever more to the production of the goods or brands that they consume. As Chapter II will discuss in more detail, contemporary capitalism is becoming increasingly dependent on social production, on what it sees as the free labour of a connected multitude of consumers. [xii] However, this capitalist dependency on social production does not mean that social production- the archipelago of self-organized productive practices that have emerged around new information and communications media- are part of, or even easily compatible with the capitalist economy. Indeed, as this book will argue throughout, social production follows a value-logic that is radically different from that of the capitalist economy. As the founding fathers of modern social science- from Adam Smith to Karl Marx and Max Weber- have all argued, the capitalist economy is unique in that it institutionalizes the maximization of private profit- to get rich- as the overall aim for economic activity. (While there has always been people who have striven to get rich; this ambition was socially marginal before the arrival of modern capitalism, and generally looked down at or shunned. Most production of goods of everyday use occurred locally according to in quantities and qualities that were, by and large, determined by tradition, see Chapter III for a further development of this argument.) This way, for the first time in history, the production of goods and services to satisfy needs and wants becomes simply a side effect of the urge to make an ever-greater profit. However participants in social production are generally not motivated by the desire to make a profit in terms of private accumulation of monetary gain. (True, the money motive is there, but in most surveys it emerges as relatively unimportant, see Chapter III.) Instead they take part in activities of social production for principally two reasons: First, they want to realize themselves and make the most of their talents or interests, and they want these efforts to be recognized by people that they themselves recognize as their peers. Second, they sympathise with a cause, identify with a productive community, have a strong feeling of affinity or affiliation with a brand or company, or simply want to make friends and expand their social life, and contribute their time and energy to its cause because of this. We can rephrase this to two primary- and interconnected- motives for taking part in efforts of social production: socially recognized self-realization and the desire to matter to other people and have and impact. Conversely, people who engage in social production are not primarily valued according to the amount of money they make, but according to how much they matter to the particular productive community or the causes that it embraces. The currency of value are networks and respect, and the people how are at the top of these -often strongly hierarchical- fields tend to have the largest networks and command the greatest amounts of respect. Now networks and respect are both media that communicate how much an actor matters to other actors in a particular productive community. Networks are a quantitative medium that vary with the amount of people you matter to, respect, on the other hand is a qualitative medium: respect depends on the quality of impact you have on those people's lives. So in contrast to the capitalist economy, actors are not valued in terms of the amount of private property that they can accumulate, but in terms of the amount of public recognition- we call it ethical capital- that they can acquire. If you matter a lot to many people (large networks and a lot of respect) you tend to be a highly valued individual, at the top of your field, ad conversely endowed with a great amount of ethical capital, that you can mobilize in making things happen and thus matter even more. (Think of a respected fashion critic who can act as a gatekeeper, making and breaking careers because of her large networks and the influence she can exercise because she is so respected.) We will come back to a more detailed analysis of the value-logic of social production in Chapter II, but the point here is to argue that social production unfolds according to a particular value-logic, which is different from that of the capitalist economy: people do not engage in these practices in order to get rich, but in order to get recognition, their value is not dependent on the input of labour time or other privately owned resources, but on their ability to make a difference; to contribute to the strength and vivacity of a community and to, more generally matter positively in people's life. What is more, this value logic is already institutionalized, it is inscribed in the -however embryonic- media and organizational forms that coordinate social production: it is becoming objective, independent of people's subjective wishes. The fact that this value logic is becoming institutionalized- that it is becoming something more than mere subjective motivation, that it is becoming what Emile Durkheim called a 'social fact'- means that social production is part of a new and distinct economy. This is something quite revolutionary: social production is not just a new way of producing (mostly immaterial) wealth, it also harbours the possibility of a new way of organizing economic- and by implication- social and political relations. So if the first enlightenment, contributed greatly to giving birth to the industrial capitalism that has conditioned our social existence for more than a century, this second enlightenment seems to harbour the possibility of a new economy that might be equally influential in determining the course of the 21st century. This new economy follows a value logic that is based on matter, not money. Precisely because of this we call this emerging, still embryonic- or perhaps 'possible' is a better term- economy and 'ethical economy', and this book is dedicated to understanding how it works, how it can be strengthened and empowered and what uses and implications it might possible have. The ethical economy and the capitalist economy are not two, neatly separated things. In most concrete cases there is an overlap between the two. People want to make money and to expand their networks, they want to have a corporate career and a positive social impact. This is nothing new, in itself. What we are seeing though is more than a shift of emphasis. It is increasingly becoming the case that the way to make money is to expand one's networks, or that the way to have a corporate career of business success in general is to have a positive ethical impact. That is, in simple terms, ethical value, value in the ethical economy is increasingly becoming a precondition for commercial value. This is evident form the expanding fields of ethical consumerism, corporate ethics and socially responsible investment. (In the UK, according to the Cooperative Bank’s 2007 report, the ‘ethical sector’ was worth £ 29 billion, more than the markets for alcohol and tobacco together.[1]) But it is also evident from the new importance given to corporate ethics as a strategic management tool - both in relation to employees and external stakeholders; from the growing capitalization on 'ethical' intangibles like reputation and brand value, and even, as the following chapters will argue, from the development of new business models primarily but not exclusively within the creative industries, that aim at capitalizing on and monetizing reputation and networks. What is perhaps even more crucial is that the relative weight of this ethical economy is set to increase in the future. In part this will follow from the further diffusion on information and communication technologies. (The so-called digital divide is closing down rapidly as mobile phones spread among the South f the world. Within a decade they will all have mobile internet as standard, connecting the poor masses of Africa and Asia to the internet.[2]) In part this has to do with the nature of knowledge production itself. In a situation with limited physical resources- already reflected in rising energy and raw material prices- any further economic expansion will probably mostly take the form of immaterial values: new and valuable forms of knowledge, experiences, aesthetics. But in the field of such immaterial production, the ethical economy is much more efficient than the capitalist economy. This is because it works with a logic of sharing, co-division and free circulation. Now the very productivity of immaterial assets is based on their ability to circulate. If I let you have access to my new recipes, then you can use them and improve on them. If everybody has access to them, than everybody can do this. New productive configurations and networks can form freely across geographical and institutional borders. The fantastic productivity of modern science comes precisely from the fact that it has institutionalized the free circulation of knowledge through the peer review system. The capitalist economy, on the other hand builds its value form- property- precisely on the ability to limit or control the circulation of objects, which diminishes its relative efficiency in generating economic development that is primarily based on immaterial production. In this situation, the strategic weight is bound to shift over in favor of the ethical economy. To create ethical value will ever more crucial for commercial success, and it will no longer be possible to sustain, as Milton Friedman famously did in 1962, that the only social responsibility of business is to increase its profits.[xiii] The concrete outcomes of this situation are difficult to envision (the Concluding chapter will present an attempt in that direction): it could mean that capitalism itself will reformed in a more 'ethical' direction, through a sort of new global New Deal. It could also mean that the capitalist economy will be out-competed and marginalized by new economic systems organized around an ethical logic of value. (This has certainly happened before, the capitalist industrialization process of the 18th and 19th centuries reduced the feudal economy to a mere memory.) Whatever the outcome, it seems clear that a through understanding of the workings of the ethical economy is necessary to anyone - and perhaps businesspeople in particular- who has an interest and a stake in the future. We will start this journey on the conceptual level, trying to give a primary definition to the term 'ethical economy'. Ethical Economy Let us start with the term 'economy'. We use the term ethical economy to indicate that we are dealing with something more than a new mode of production. A lot of people has pointed at this later fact for quite some time now, emphasising how new collaborative forms of production- social production- are changing the way capitalism works and how wealth is produced more generally. There has been a lot of talk about 'social production', 'wikinomics', 'prosumerism', WeThink' and so on. By using the term 'economy' we want to suggest that we are dealing with something more than this. The term economy goes back to the Greek oikonomeia, which meant 'government of the household' (from oikos- 'household' and nomos- 'law' or 'rule'). So a new economy is not just a matter of a new way of producing wealth, but of a new way of governing the production of wealth: in more precise terms, an new economy implies a new, institutionalized logic of value. This way the capitalist economy is not distinguished by a particular mode of production. Although industrial wage labour- what Marx called the 'capitalist mode of production proper' -has mainly developed with capitalism, the capitalist economy has always encompassed a number of different modes of production: a feudal mode of production in the home, slavery (which has never disappeared), and particularly in the post-War period, the kinds of collaborative immaterial labour that we tend to associate with the ethical economy (see Chapter I for a more detailed analysis of this). What unites the capitalist economy, indeed what defines capitalism, is that all these modes of production operate with a common institutionalized value logic, they all operate in order to generate return on investment in the form of a monetary profit. What defines the capitalist economy is then the institutionalized primary imperative to make a profit. Although many academic economists would argue that the drive to make a profit, in some form, is close to a human universal; that people have always lived by this imperative, or even that it is inscribed in their genetic 'program', sociologists, historians and anthropologist, who have actually studied other societies that our capitalist market society, contest this. They ague that the drive to make a profit, although always present in human societies, remained a fairly marginal, and generally socially illegitimate motivation- the business of traders, pirates and merchants- up until the commercial revolution of the 18th century. Up until then most people produced what they used locally, according to traditional prescriptions. In the European peasant village, a substantial part of the land was used in common, and its produce divided according to a complex moral economy infused with traditional rights and obligations. The feudal lord had his traditional rights to parts of the surplus, which could only be increased with great difficulty (hence the general impoverishment of the aristocracy in the 18th and 19th century when other more efficient systems of exploitation developed). Markets, where wealth was traded as property, were rather infrequent and in any case marginal phenomena: on the market you traded with strangers, with members of other communities, and not with your peers from the village. For the nobility, wealth was squandered in battles and costly public spectacles that served to maximize ones public standing, it was not generally accumulated in order to be reinvested. Similarly, in the so-called ‘primitive’ societies that European anthropologists began to study in the 19th century, it was relatively rare to find the accumulation of private property as the main economic motivation. Rather, wealth was often produced in order to be given away; like the produce of the yam gardens where men took pride in sweating away, or the pigs that important Big Men often exchanged as public gifts (and women reared) across Melanesia. As Polish/British anthropologist Bronislaw Malinowski observed about yam gardening in New Guinea, that all, or almost all of the fruits of his work, and certainly any surplus which he can achieve by extra effort, goes not to the man himself, but to his relatives-in-law. Without entering into details [..] it may be said that about three quarters of a man’s crops go partly as a tribute to the chief, partly as is due to his sister’s (or mother’s) husband and family. and very little was saved for private consumption or trade.[xiv] The point is that the motivations and values that guide human productive activity are not eternally given, they are social and historical constructs and, consequently, they change over time. In this light, an 'economy' denotes precisely such a socially and historically distinct logic of value. We have now lived in a society dominated by the capitalist value-logic for more than a century. Now we are seeing the emergence of a new value logic which has the potential to develop to parallel or even rival that of capitalism: the ethical economy. Production for profit becomes institutionalized as a socially sanctioned value logic through the development and becoming mainstream of the capitalist economy from the 16th century onwards. German sociologist Max Weber has produced a wonderful analysis of this. He argues that while the first generations of capitalist entrepreneurs were mainly driven by religious motivations (the protestant drive to improve the world in the name of God), these external motivations were no longer necessary once the capitalist economy had reached a certain level of maturity. Once a competitive market society had developed in the early 19th century- continuous improvement and rationalization became a necessity, if you did not engage in it you quickly lost out and eventually went bust. So the value logic of capitalism became institutionalized, it became part of what Weber called the 'iron cage': the set of seemingly immutable social laws that guide human action and that we, as individuals are forced to abide. A further point with using the term ethical economy is thus to argue that something similar is happening today: that the logic of matter is on its way to becoming institutionalized as the 'iron cage' of a new, ethical economy, and that (as Chapter V will suggest) it is in our interest to speed up and strengthen this process. A new, institutionalized economic value logic also tends to support a new moral and political value system. If nothing else because people are now systematically encouraged to do or desire certain things, and that such actions and desires trend to crystallize into habits, which support 'values' in the philosophical sense of that term. Thus, for example the merging capitalist economy supported a class of people - the bourgeosie- who were habitually desired the freedom to pursue their own business, and to improve on methods and institutions without the heavy-handed interference of the guilds or other sources of traditional privilege. Eventually this value structure developed into the ideology of liberalism, which became the rallying cry for the ascendant bourgeoisie throughout the 18th and 19th centuries. Today we can see a similar development, the global knowledge class, which is the core carrying strata of the ethical economy is ever more habituated to valuing self-realization and peer recognition. The new middle class of knowledge workers, symbol analysts or 'cultural creatives' are abandoning the values of individual achievement and material acquisition that were central to industrial society. Instead they embrace a value structure that combines personal self-realization and individual authenticity with a planetary consciousness. [box statistics on value shift: cultural creatives, Inglehardt Eurobarometer surveys] Today's middle classes are the first major social group in the history of humanity to relate their actions and intentions, not to only to their importance for family, friends or village, but to their impact on the planet as a whole and their consequences for the long-term survival of humanity. At the same time, they are the first major social group (since the Athenian aristocracy perhaps) to exhibit a profoundly ethical consciousness. For the cultural creatives, there are no given moral rules. Instead these rules have to be made up as one goes along. The ethical consequences of each action; as well as the authenticity of each personal relation need to be continuously evaluated without reference to any fixed standards. The middle classes are free, and at the same time responsible as they need to confront and navigate the moral ambiguity of human existence on an everyday basis. And they do this in a situation where humanity and the planet, not family, community or nation, are the only reasonable limits for ethical engagement. The kinds of people who have embraced this new value structure most strongly, knowledge workers and the new 'web generation' are also generally the people who are most heavily engaged in new forms of social production. There is a strong connection between these two phenomena: Engagement in social production presupposes a constant ethical engagement with other people and an opening up to relations of proximity with distant others, regardless of their social or cultural allocation. This productive experience forms a social basis for the emergence of a 'post-materialistic' value structure on the other. (Just like the like the experience of working together with others in a factory, sharing the same condition of exploitation formed a basis for the emergence of a proletarian class consciousness that Marx referred to in the quote above.) Post-materialism is the kind of consciousness that naturally arises from engagement with social production At the same time the expansion of a global media culture has increased the speed of information transfer and connected people more closely to, often suffering, 'distant others' who present themselves as ethically significant subjects.[xv] This means that we stand in front of something much deeper and more structurally profound than simply the effects of technological change and a new information environment. Like in the times of the bourgeois-capitalist revolution of the 17th and 18th centuries we are facing something quite revolutionary a new moral and political consciousness that is strongly tied to, indeed part of a new economic regime. This makes it incredibly powerful. So far this new economy has not translated into many new political institutions (although the emergent forms are there in the various structures of peer governance), but that needs to and will happen. It is only by finding a political form that this post-materialist value-structure proper to the ethical economy can become something more than a mere source of subjective frustration and disappointment; only this way can it have a real impact on the course of human development over the next century. There is however reason to believe that this political transformation will come about in new, unprecedented ways. After all, there is no longer any Bastille to storm, and the experiment of the French revolution can not be replicated (and the most important attempt to perform such a reprise, the Soviet revolution of 1917- ended in tragedy.) A radical novelty with the ethical economy is that it is based on a new convergence of economic and politics. If producing commercial value is increasingly based on the production of social value, on matter, then this means that the political pursuit of constructing a new, and hopefully better society, becomes the same thing as the economic pursuit of generating wealth, and eventually profits. We are seeing a convergence of economics and ethics in ways that are unprecedented since the bourgeois revolution in the 18th century. Indeed for Aristoteles, with whom most of the modern discussion of ethics begins, the sphere of ethics was radically separate from that of economics. Economics was about governing the production of material wealth that took place in the private sphere of the household. The household was a private space in the classic sense of that term, it was closed off from the realm of the polis, and hence beyond the rule of law. In the private sphere of the oikos, the master of the house ruled with absolute power and most household members were his private property. (Indeed private come the latin privare which means something close to 'deprive'. In Roman law privatus meant 'deprived from the common cause' the res pubblica.) Ethics (ethika) on the other hand belonged to the public sphere of the city (polis), and it was primarily about organizing the interaction between free actors (in his case, men), in the absence of any pre-established hierarchies. In the oikos this was not a problem, slaves simply had to obey, their relations with their Maters were not ethical in the strict sense of the term. But free men had a choice; there was an element of contingency. Hence for Aristoteles, ethics was not primarily about separating 'good' from 'bad', it was about solving the difficult question of how free men could live together in the absence of established obligations. Indeed ethika is closely related to ethos, which means something like 'mood' or 'character'; and ethics was to a large extent about managing one's affective relations to others (like anger, desire, or, crucially friendship, philía) in was that permitted a peaceful, balanced and harmonic co-existence in the polis (eudaimonia- and the separation of 'good' form 'bad' followed from the resolution of this problem). With the development and institutionalization of a capitalist economy this separation of economics and ethics has persisted and grown even stronger. Capitalist development has meant both a privatization of economic affairs, and their subtraction from the field of public debate where ethics and values were articulated. The production of everyday necessities no longer unfolded within the ‘moral economy’ that had characterized pre-capitalist peasant society. Instead it took place in a privately owned factory where labour and machinery was subject to the owners personal control, and motivated by an overarching goal that was considered beyond ethical deliberation: the continuous accumulation of monetary wealth and capital. Similarly the life-goals of the wealthy merchant changed, as Max Weber described it, from being oriented to the preservation of a traditional style of life, anchored in a living community, to aiming towards the endless accumulation of private wealth, with more or less disastrous consequences for that community. Economic life was ‘disenchanted’ stripped of its ethical context and guided only by the cold rationality of endless accumulation.[xvi] In the post-War year most sociologists and moral philosophers agreed on this functional separation of economics from he sphere of ethics and politics. Socially concerned intellectuals argued that the growing influence of an a-moral economic ‘privatism’ meant that public and political life was crippled. Instead of using their capacity for ethical reflection and political action, people divided their lives between the equally ‘mindless’ activities of production: the everyday tedium of a standardized job motivated only by the need for money; and consumption: the private accumulation of mostly useless objects driven mainly by empty individual hedonism; non of which allowed for any reflection on the overall goals of life or the general direction of social development. [xvii] In the ethical economy this separation has been overcome. In part this is because this economy is largely driven by people who have strong ethical motivations. More importantly however, it is because success in these pursuits is contingent on the construction of ethically significant ties, of creating sustainable ways of living and producing together in an environment of free actors who have no apriori obligations to each other, whether this be a functioning project team or an enduring open-source project. So economic success is actually contingent on resolving the ethical problem, as posed by Aristoteles: of creating the strong ties and philía that make a sustainable polis possible. In the ethical economy the construction of economic value and the construction of ethical value has become the same thing, of to put it in different terms: economics and politics have converged. In a way this also resembles the revolutionary phase of modern capitalism. To the emerging bourgeois entrepreneurs of the 17th and 18th centuries, economic pursuits were also attempts to create a new, more liberal and more rational modern society. There are however three important differences. First, for the 18th century bourgeois entrepreneurs, large parts of humanity (women, slaves, colonized peoples) remained outside of the realm of ethical consideration. The new, liberal society was not built for them and it did not concern them. Today's ethical economy on the other hand unfolds in an environment of planetary cosmopolitism, where (potentially) all of humanity has a voice, and where it is simply not possible to legitimize the intentional exclusion of anybody. This means that the diversity of the ethical economy is much greater, which increases its versatility, creativity and productive potential. Second, today's ethical economy is simply much larger. As Chapter II will argue it is the fruit of centuries of capitalist expansion that has included people all across the world in its participatory networks. By compassion, the industrial enlightenment that drove the British industrial revolution in the 19th century built on some 3000 active participants. Today's open source movement alone dwarfs this figure and it is quickly accelerating. Figure I. Millions of source lines of code added in Open Source Projects, 1993-2008[xviii] This larger scale is to a large extent the effect of new information and communicating technologies that allow the radical geographical extension of productive networks and the scaling of what used to be feasible as local forms of participation, up to a global level. Third and finally, today's forms of social production satisfy an ever-greater desire for sociality and companionship. Taking part ins these processes is not only a convenient way to obtain useful goods, it is also a way to make friends, expand one's social horizons and overcome the loneliness and alienation that are an intrinsic part of contemporary societies. Consequently people have profound affective motivations to engage in the ethical economy. It follows that the ethical economy is something fairly radical. It represents a reunification of the political practice of constructing new ways of living together, and the economic practice of producing value, on a global scale. A new, post capitalist civilization is actually constructed here and now, in the open source movement, in the mash up between social movements and entrepreneurship that makes up web 2.0, in the flourishing local economies that ICTs have made possible, in the social entrepreneurship movement, and in the growing number of partnerships between business and NGOs. And this ethical economy represents a progressive alternative to a neoliberal global capitalism which is ever more dependent on vanishing reserves of cheap energy. It is progressive because the ethical economy is the organizational form that naturally emerges from the new and more advanced relations of production that have developed from within capitalism itself- the extension of social production and the ensuing activation of social life into a productive 'mass intellectuality' that has built on the diffusion of a new technological framework: networked information and communication technologies. And since these developments show no signs of receding, it is probable that the ethical economy will become even more central in the future. It will become an important factor in the economic ecology of the 21st century: either as an alternative to global capitalism based perhaps on re-localized production systems or as the driving force of a reform of capitalism, a sort of global new deal organized around ethics and sustainability, or as some combination of the two (see the concluding chapter for a further elaboration of these scenarios). Whatever the outcome, the ethical economy is no utopian construct. It represents the real and emerging institutional form that naturally arises from relations of production that have grown too advanced to be contained within the capitalist mode of production. This book is an attempt to come to terms with this new reality: to propose a first, and admittedly sketchy, conceptual articulation, a theory, that can serve as the beginnings of a self- understanding. But it is not just a neutral observation Just as Adam Smith was convinced that strengthening the institutions of market society was a progressive cause, so we believe that giving further coherence and above all objectivity to the so far implicit and emergent logic of the ethical economy is a desirable pursuit for anyone who has an interest and stake in the future. So this book will both suggest an analysis of how the ethical economy operates today and, departing form this analysis, propose how its development can be further empowered. The Argument Next chapter provides an introduction to the concept of social production by critically analysing how this phenomenon has featured in the contemporary business litrature. A multiplicity of books like Wikinomics, WeThink, The Wisdom of Crowds, Revolutionary Wealth etc, have pointed to this new phenomenon. While all of these books have made interesting and useful observations, they all share a fundamental misunderstanding of social production. To these business writers, as well as to most academics social production basically appears as a free resource that has no intrinsic value. We argue that this is a mistake that naturally leads on to four cardinal misunderstandings, which make for poor analysis and judgement. Having thus exposed the errors of existing approaches, Chapter II goes on to provide the beginnings of a theory of social production by looking at its emergence in the post-War years. It shows how contemporary forms of social produciton are the dialectical outcome of the progressive socialization of the capitalist production process- its extension to encompass ever more social relations, and how this radically changes the foundations for its value logic. The chapter goes on to show how this emergence of social production has been intimately tied to the affirmation of a new, post-materialist value structure, in particular among its chief carrying stratum: the knowledge class. Chapter III goes on to further elaborate a theory of the ethical economy by putting its emergence within the framework of the general dynamics of post-War capitalism, in particular the emerging issue of 'intangibles' and accompanied forms of immaterial production. It concludes that the rising importance of intangibles reflects an increasing dependence on the ethical economy on the part of capitalism itself, and shows how the capitalist modus operandi is already hevily influenced by an ethical value logic. Chapter IV provides an nalysis of the modus operandi of the ethical economy and arrives at some fundamental points about its actually existing value logic. The conclusions are that essentially social production unfolds in an environment of abundance, not scarcity. Its basic productive resources , knowledge, skills, creativity and connectivity are abundant . Furthermore these resources are social, not individual, they are not the property of particularly talented individuals, but more or less inscribed in the social environment in which we all live and work. This means that, contrary to the logic of the capitalist economy that is based on the scarcity of productive factors - beginning with labour- and individual talent, social production presupposes the abundance and hence the close to zero value of these factors. What is scarce is rather the ability to give organization and direction to these abundant resources, to give them productive organization. This takes place through an ethical practice, that transforms an abundant connectivity of weak ties, in ethically significant strong ties. The chapter goes on to show that the value currencies actually at work in social production- chiefly reputation and networks- are reflections of the ability to do this. Chapter V elaborates on how new social media can serve as an embodiment of these, so far, embryonic value forms giving them coherence and transparency to become part of a globally relevant objectified value logic. It elaborates on what properties social media systems that perform this must have. Chapter VI suggests how such an objectified ethical economy can cast new light on umber of policy issues and business opportunities, while the concluding Chapter VII draws out the more philosophical implications.

[2] 'African mobile subscribers surpass North America' , textually.org, 1May, 2008, http://www.textually.org/textually/archives/2008/05/019983.htm , accessed 22/7-2008

[i] See Fukuyama, F. The End of History and the Last Man, …. Friedman, T. The World is Flat….
[ii] See for example Rostow, …Stages of Economic Growth, Bell, … for a history of the 'Cold War Left' Barbrook, R. Imaginary Futures, London; Pluto, 2007. See also Hardt, M. & Negri, A. Empire, Harvard University Press, 2000.
[iii] Rubinn, J. & Tal, B. 'Will soaring transport costs reverse globalization?', StrategEcon, May 26, 2008. (available at http://research.cibcwm.com/economic_public/download/smay08.pdf accessed 11/7-08).
[iv] Klein, disaster capitlaims..
[v] big sort
[vi] 'Number of prescription items for antidepressant drugs 1991 to 2002. Social trends 33', http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=9917&More=Y , accessed 14/7-08.
[vii] Lenhart, A, Madden, M, Mcgill, A & Smith, A, 'Teens and social media', Pew Internet and American Life Project, December 19, 2007, http://www.pewinternet.org/PPF/r/230/report_display.asp , accessed 21/7-2008, Madden, M. & Fox, S. 'Riding the waves of Web 2.0, Pew Internet and American Life Project, My 5, 2006 http://www.pewinternet.org/PPF/r/189/report_display.asp , accessed 21/7, 2008.
[viii] McKibben, B. Deep Economy. The Wealth of Communities and the Durable Future, New York; Times books, 2007, Senge, P. The Necessary Revolution. How Individuals and Organizations are Working together to Create a Sustainable World, London; Nicolas Brealey, 2008.
[ix] Putnam, R. Bowling Alone, New York; Simon & Schuster, 2000.
[x] Balch, O. 'Latin America: Social Innovation. Giving the Majority a Stake' Ethical Corporation, June 10, 2008, http://www.ethicalcorp.com/content.asp?ContentID=5945&rss=ec-main.xml , accessed 21/7-08, Rometti, G. 2006, Expanding the Innovation Horizon. The Global CEO Survey 2006, IBM Enterprise Business Services, Huston, L. & Sakkab, N. 2006, ‘Connect and develop. Inside Procter & Gamble’s new model for innovation’, Harvard Business Review, March, pp. 58-66.
[xi] Jenkins, H. Convergence Culture….
[xii] Prahalad, C. & Ramaswamy, V. 2004. The Future of Competition. Co-creating Unique Value with Customers, Boston (Mass.); Harvard Business School Press, Tapscott, D. & Williams, A. 2006. Wikinomics. How Mass Collaboration Changes Everything. New York, Portfolio, Leadbetter: WeThink
[xiii] Friedman, M. Capitalism and Freedom, 1962
[xiv] Malinowski, B. Argonauts of the Western Pacific: An Account of Native Enterprise and Adventure in the Archipelagoes of Melanesian New Guinea, London: Routledge, 1922, pp. 60-61.
[xv] Benkler, Y. & Nissenbaum, H. 'Commons based peer production and virtue', The Journal of Political Philosophy, 14 (4), 2006:394-419, Boltanski, L. Distant Suffering, …
[xvi] Weber, M. The Protestant Ethic...
[xvii] See for example Arendt, H...
[xviii] Deshpande, A., Riehle, D. 'The total growth of Open Source' Proceedings of the Fourth Conference on Open Source Systems, (OSS 2008), Berlin; Springer Verlag, 2008:5.


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