For projects like Kickstarter to scale they can not depend on the limited funds workers are able to divert from consumption, and must tap into the real source of accumulation: Surplus Value.

I’m currently involved in a discussion on the Empyre mailing list with Tiziana Terranova, Adam Hyde and others. The topic of Kickstarter and simular sites came up, as I’ve been meaning to address these sorts of projects, both for their potential and their limitations, I though I’d repost an excerpt of my response here:

I love Kickstarter and similar sites, like Flattr, Goteo, etc. If you are a cultural worker or free software producer I highly recommend using these, as they are generating a fantastic community of cultural production, which is great to be part of, if you can.

Yet, it’s a very small community. So the vast majority of production can not be funded by these sites. It’s exactly the kind of token or fringe alternatives that we must not mistake as a genuine embodiment of social change, as cool as it is for the few it can support.

Kickstarter, for example, has raised $125 million dollars in it’s history. In total. This seems like a rather impressive sum until you remember that it’s just over half the budget of “Spiderman 2,” which is one movie, and not an especially high-budget one.

Visit the video store and walk down the aisles, imagine that each of the titles you see on the shelf had budgets more similar to Spiderman 2 than to anything funding by Kickstarter. Now imagine the total number of workers employed by the budgets of the movies you see in the video store, compared to the number of workers employed by projects funded by Kickstarter and you can see what I mean.

Does Kickstarter work? Sure! Does it fund amazing projects? Yes! Should you use it? Absolutely! Will it change the way culture is produced? No. It wont. And even imaging it could assumes a massive descaling of cultural employment. Would we even want that?

Now, you might believe that this is merely a temporary situation, that Kickstarter and similar sites can grow and grow until they can reach a similar scale to capital funded culture, but that is not possible. Why? Because “Spiderman 2” is funded from accumulated capital, while Kickstarter is funded from the retained earnings of workers. This is a rather important difference.

What it means is that the limits of the amounts of funding available for each model are a function of the structure of wealth in society. The total pool of accumulated capital vs the total amount of retained earnings workers are able to consistently divert from consumption. The former is orders of magnitude larger than the later. In fact, the workings of the labour market will tend to push the later towards 0.

For projects like Kickstarter to scale they can not depend on the limited funds workers are able to divert from consumption, and must tap into the real source of accumulation: Surplus Value. In other words, only when money available for Kickstarter investment can be reproduced from the captured profits of the works they fund. To achieve that, Kickstarter would need to become not much different than the industry as it exists today.

Sorry if this breaks your heart. It breaks mine. But as much as I love our hacker and free culture community, let’s not mistake our subculture with a new mode of production, doing so will only make us complacent, content with our lack of complicity in evil proprietary culture, instead of standing with the great majority of cultural producers and consumers and demanding nothing less that the complete transformation of cultural production, which means the abolition of capitalism.

For the rest of this ongoing discussion, see the Empyre archives:

http://lists.cofa.unsw.edu.au/pipermail/empyre/

 

10 comments

  1. Andrew de Andrade

    Accumulated value is orders of magnitude greater than the retained earnings of workers that can be diverted to cultural production.

    As a society, we should be asking (1) why is this the way things are? (2) Is there an alternative? (3) if there is an alternative, would we be better off under that alternative? and (4) If we would be better off under that alternative how do we achieve it?

    A good portion of accumulated capital today exists because current structures support idle money and rent seeking. Copyright monopoly with terms that far outlive the amount of time necessary to recoup the original investment is one example of a structure that encourages value accumulation.

    How could we reduce the accumulation of value so that most value is always in circulation? A billion middle class workers deciding how to allocate $1 can more effectively allocate a billion dollars than one hedge fund manager.

  2. Dmytri

    Hey Andrew, yet if those middle class workers don’t capture profits on the $1 they invest, this model of finance will always be limited to the total amount that middle class workers can consistently divert from consumption. In other words, it will always remain marginal. Unless they employ capitalist mechanisms and do capture profit, or they find a way to sustain themselves without selling their labour on the labour market.

    Best,

  3. @collentine

    thanks for sharing some thoughtful ideas.

    Question is how close alternative funding models need to get to the traditional way of funding projects. Having a big budget definitely helps but is not always needed.

    In some ways I believe a complete transformation of cultural production is under way. The rise of CC, wikipedia or forums like thingiverse shows that capital is not always needed to create something. With a new generation growing up, focusing less on getting a life-long job to provide capital, the focus shifts towards a knowledge economy where learning is more important than being well paid.

    e.g. young workers today often claim personal development to be more important than having a good paycheck.

  4. Enric Senabre Hidalgo

    Very interesting issues. I agree with the analysis about the current problem of scale with crowdfunding, as well as its disconnection from capital accumulation, not to mention the long term implications of producers limited to use it only once or twice, while their needs are permanent (if they want to live more or less from what they do).

    However I think we’re at an early stage of this “new” paradigm (at least new in the digital world) of crowdfunding, and there’s probably still a loot of room for experimentation and combination with other models. From Goteo we’re trying on one hand to apply also the logics or mass collaboration (which I think have a different scale, rate of success and ways to grow) as something working in parallel to monetary needs.

    On the other hand, we have tried and plan to activate more the potential of “feeder” capitals (http://www.goteo.org/service/resources?lang=en) to approach somehow the kind of surplus value you talk about, from organizations connected to our Foundation goals (which are to promote and protect the Commons). For example experimenting with CSR or RD of corporate/influential players we should be able to reach, sooner or later.

    Related to the issue of backers capturing profits, I think there’s a legal framework preventing that, rather than technical. We opened only two months ago but even giving the option of offering money in return, still there’s no project or experience we can approach as example, probably being one of the reasons the disconnection to cooperatives or other ways of organizing providing/receiving capital (even if it is very small), which still has no clear connection to all this.

    Finally, I also wonder how would it be if projects after reaching their minimum and optimum goals of monetary needs (rather than being achieved) stay like “incubated” in a platform on the long term, or for example jump to a kind of online shop for its regular selling, even with other forms ans sources of investment.

    Well, now all this are still more questions than answers :) But as I said I think there’s room (and hopefully time) for many things to explore yet around the crowdfunding model “by default”…

  5. Dmytri

    Hey Eric, thanks and I want to make it very clear that I fully support the crowdfunding model, the challange is is how to improve the class conditions of workers to give crowd funding the space to grow.

  6. Dmytri

    Hey Josef, there can be a complete transformation of cultural production underway, but this new mode will need to prevail in it’s conflict with the old mode, which is a political struggle we must face.

  7. Pingback: P2P Foundation » Blog Archive » Crowdfunding, scale & surplus value
  8. pit

    thanks. after talking to a former daimler benz manager who opened a crowdfunding metoo platform in germany, i had my doubts already. one can apply your critique to almost any social democrat project approach. but for a real leftist, why opening up your own startup applies to the workers unite model? start your own factory? does it scale? is the idea good? the “let a million startups bloom” model is a by origin a capitalist model. a good digital maoists works at wikipedia, or anonymously somewhere in the open source mills, i must admit, wikipedia’s work or the linux ecology has more impact than all of the projects crowdfunding was able to fund, plus probably a few commercial incubators included, plus media culture as a whole including a few conferences. well meant, good people, but where is the impact? – compare wikipedias cost effectiveness to the one of google.. human volunteers vs. algorithm – and the google plus recruitement camp is doomed to fail. what i want to say, probably we need to think less about leftist entrepreneurship, but rather how to join the large ‘good’ non-profit factories, and try to change and extend them from within, to become a data-ecology – instead of ideosyncratic art politics, invest were it’s worth. wikipedia is far from beeing perfect, but its much more effective working on wikipedia data compatibilty than just extending the myth that every individual social business idea (no matter how lame and ideosyncratic or redundant and affirmative) can make it, if it just finds its well meaning funding crowd. well meaning discourse, or well meaning media conference to support it. who does the reality check you do here about the media culture institutions? it is this myth of individualisation and 15 minutes of fame media craze which is induced by capitalism. and institutional media culture is the interface to mediate and pacify.

  9. Dmytri

    Hi Pit, thanks for the comments. I need to make it more clear that what we are talking about is our “effective working capital,” which is not only the money divertable from consumption, but also available goods and labour. In any case, the principles apply to the large “good non-profit factories” too.

    The amount of volunteer time workers can sustainably divert from working is just as fixed an amount as the amount of money can sustainable divert from consumption.

    Thus, this volunteer driven forms of production are also fixed in potential size by the structure of wealth, just as much a mutually financed ones.

    The point is that within a capitalist mode there is a fixed limit on the workers ability to engage in “un-productive” consumption, that is consumption that does not reproduce capital, or even “destructive” consumption, that is consumption that displaces productive consumption. Productive consumption is the kind that does reproduce capital.

    What’s more, this limit is driven towards zero by the function of the labour market, and is only kept above zero by the level of social power workers can mobilize to struggle against capital.

    Wether this working capital is applied to making “free factories” like wikipedia or tries to make a “million startups bloom,” the total, combined economic size of potential investment in what could be called an autonomist or mutualist or “p2p” economy is limited by the structure of wealth, and only expandable (at its base, we’ve not yet addressed leverage) by political stuggles that expand wages and benefits.

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