Social Democracy and the Network

We know information technologies are broadening the channels of political participation (Obama’s election in 2008, the Arab Spring, the Spanish Indignados movement, Occupy Wall Street, etc.). What is less apparent —and I would argue even more consequential— is the fact they are restructuring the economic fabric of societies —particularly in advanced economies. The political effects of this transformation will be far reaching and, to face them, we need a political class that is up to par. Much less complacent, much better informed, infinitely more imaginative. As the running joke during the SOPA hearings last year in Washington went: “Dear Congress: It is no longer ok to not know how the Internet works.”

The spread of the Internet in the 1990s inadvertently established the foundations of a distributed form of capitalism that is breaking from the forms and principles that have traditionally structured economic organization. Industrial capitalism —vertical, centralised and structured around the exploitation of marginal costs— has suddenly been confronted by a new decentralized model that changes both the form and logic of production. The network and its nodal architecture have woven the bases of an infrastructure and a set of economic practices that undermine the industrial production model of the 20th century. The ultimate effect of this change, I would argue, is not on business and its management, but on political discourse, public institutions and, ultimately, the state.

The origin of the change lies in the virtually unlimited possibility of collaboration between peers (peer-to-peer) ushered in by the internet: global, ubiquitous, decentralised and bidirectional. Both the logic of production and added value are being rethought and reconfigured. The vertical and centralised model designed to control every step of production and distribution is being confronted with a decentralised and horizontal model that fragments the process into multiple parts and is fed by a much wider and diverse set of inputs. In other words, closed processes, organized through pyramidal managerial schemes and protected by tortuous (and now anachronistic) intellectual property regulations are giving way to models that are open and encourage collaboration between peers (not only between individuals: universities with universities, between disciplines, among businesses, organizations, even ministries).

This transformation offers one of the starkest opportunities in many years for social democratic parties and organizations to rethink their postulates and win back lost ground. An historical opportunity to redesign policies and adapt them to a new environment that is redefining much more than just the ways we communicate and consume information; it is an opportunity to shift gears and pass from defence to offence by establishing the terms of a debate that will ultimately transform social structures. A political opportunity arises, thus, to model a new system of production based less on the excesses of financial capitalism and more on a market economy rooted in the logic of cooperation between peers.

For scholar and network theorist Yochai Benkler, “we are in the midst of a technological, economic, and organizational transformation that allows us to renegotiate the terms of freedom, justice, and productivity in the information society.” For Benkler, “how we shall live in this new environment will in some significant measure depend on policy choices that we make over the next decade or so.”

This is the crux of the question: political decisions —not the false notion of technological determinism— will eventually shape the outcome. It will be in the wider realm of politics and its ramifications —institutional, regulatory, and even moral— where this new environment will be defined, regulated and managed.

We have begun to see, for example, new ways of creating wealth and adding value that circumvent traditional market mechanisms. In the scientific world collaboration spaces that were unimaginable just a few years ago are beginning to spring up —redefining the way knowledge is shared and marketed. Universities are starting to open up their research data, share methodologies and exchange results in a virtuous circle of collaboration and dissemination of knowledge. They are creating, in other words, “open information markets” in which the currency is shifting from profit-maximization centric approaches to schemes that put different forms of social return at the centre.

The business world is taking note. More and more initiatives are emerging that leave behind the highly restrictive industrial model of the 20th century. The sacrosanct economies of scale and mass consumption are slowly being displaced by peer-to-peer schemes that revolve around communities that share goods and resources. For Benkler, the fundamental change in a networked information economy lies in the fact that decentralised individual action plays a much more important role than it used to play —or could have played— in the industrial production model. Or, as economist Tyler Cowen would put it, “‘production’… has become interior to the human mind rather than set on a factory floor”.

In Gerhard Schröder’s 2003 wise words, “Either we modernize ourselves… or others will modernize us, and by that I mean unchecked market forces which will simply brush aside the social element.” Opening a broad debate on the consequences and implications of this transformation has become one of the most urgent tasks for those who seek to extend the reach of democracy and the equitable distribution of wealth. For now, the window of opportunity to mold this new realm is open. It will not remain that way for long.